Item 1. FINANCIAL STATEMENTS (UNAUDITED)

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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 March 31,
20252024
Revenue$2,223$2,341
Costs of providing services
Salaries and benefits1,3241,342
Other operating expenses365457
Depreciation5459
Amortization4860
Restructuring costs—18
Transaction and transformation—125
Total costs of providing services1,7912,061
Income from operations432280
Interest expense(65)(64)
Other (loss)/income, net(64)26
INCOME FROM OPERATIONS BEFORE INCOME TAXES AND INTEREST IN EARNINGS OF ASSOCIATES303242
Provision for income taxes(65)(48)
INCOME FROM OPERATIONS BEFORE INTEREST IN EARNINGS OF ASSOCIATES238194
Interests in earnings of associates, net of tax1—
NET INCOME239194
Income attributable to non-controlling interests(4)(4)
NET INCOME ATTRIBUTABLE TO WTW$235$190
EARNINGS PER SHARE
Basic earnings per share$2.34$1.84
Diluted earnings per share$2.33$1.83
Comprehensive income before non-controlling interests$462$145
Comprehensive income attributable to non-controlling interests(4)(4)
Comprehensive income attributable to WTW$458$141

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)

March 31, 2025December 31, 2024
ASSETS
Cash and cash equivalents$1,507$1,890
Fiduciary assets10,2939,504
Accounts receivable, net2,3662,494
Prepaid and other current assets1,2951,217
Total current assets15,46115,105
Fixed assets, net667661
Goodwill8,8418,799
Other intangible assets, net1,2551,295
Right-of-use assets487485
Pension benefits assets550530
Other non-current assets803806
Total non-current assets12,60312,576
TOTAL ASSETS$28,064$27,681
LIABILITIES AND EQUITY
Fiduciary liabilities$10,293$9,504
Deferred revenue and accrued expenses1,4992,211
Current debt549—
Current lease liabilities120118
Other current liabilities923765
Total current liabilities13,38412,598
Long-term debt4,7615,309
Liability for pension benefits552615
Provision for liabilities359341
Long-term lease liabilities498502
Other non-current liabilities296299
Total non-current liabilities6,4667,066
TOTAL LIABILITIES19,85019,664
COMMITMENTS AND CONTINGENCIES
EQUITY (i)
Additional paid-in capital11,01710,989
Retained earnings51109
Accumulated other comprehensive loss, net of tax(2,935)(3,158)
Total WTW shareholders’ equity8,1337,940
Non-controlling interests8177
Total equity8,2148,017
TOTAL LIABILITIES AND EQUITY$28,064$27,681

(i)

Equity includes (a) Ordinary shares $0.000304635 nominal value; Authorized 1,510,003,775; Issued 99,210,847 (2025) and 99,805,780 (2024); Outstanding 99,210,847 (2025) and 99,805,780 (2024) and (b) Preference shares, $0.000115 nominal value; Authorized 1,000,000,000 and Issued none in 2025 and 2024.

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)

Three Months Ended March 31,
20252024
CASH FLOWS (USED IN)/FROM OPERATING ACTIVITIES
NET INCOME$239$194
Adjustments to reconcile net income to total net cash from operating activities:
Depreciation5459
Amortization4860
Non-cash restructuring charges—11
Non-cash lease expense2527
Net periodic cost/(benefit) of defined benefit pension plans88(4)
Provision for doubtful receivables from clients58
Benefit from deferred income taxes(23)(9)
Share-based compensation3724
Gain on disposal of operations(14)—
Non-cash foreign exchange loss/(gain)9(1)
Other, net98
Changes in operating assets and liabilities, net of effects from purchase of subsidiaries:
Accounts receivable162113
Other assets1(53)
Other liabilities(691)(426)
Provisions1613
Net cash (used in)/from operating activities(35)24
CASH FLOWS USED IN INVESTING ACTIVITIES
Additions to fixed assets and software(51)(60)
Acquisitions of operations, net of cash acquired(1)(15)
(Purchase)/sale of investments(32)1
Net cash used in investing activities(84)(74)
CASH FLOWS FROM FINANCING ACTIVITIES
Senior notes issued—746
Debt issuance costs—(7)
Repayments of debt(1)(1)
Repurchase of shares(200)(101)
Net proceeds from fiduciary funds held for clients3151,011
Cash paid for employee taxes on withholding shares(2)(5)
Dividends paid(88)(86)
Acquisitions of and dividends paid to non-controlling interests—(1)
Net cash from financing activities241,556
(DECREASE)/INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH (i)(95)1,506
Effect of exchange rate changes on cash, cash equivalents and restricted cash80(47)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD (i)4,9983,792
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD (i)$4,983$5,251

(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)

Shares outstandingAdditional paid-in capitalRetained earningsAOCL (i)Total WTW shareholders’ equityNon-controlling interestsTotal equity
Balance as of December 31, 2023102,538$10,910$1,466$(2,856)$9,520$73$9,593
Shares repurchased(374)—(101)—(101)—(101)
Net income——190—1904194
Dividends declared ($0.88 per share)——(91)—(91)—(91)
Dividends attributable to non-controlling interests—————(1)(1)
Other comprehensive loss———(49)(49)—(49)
Issuance of shares under employee stock compensation plans49——————
Share-based compensation and net settlements—16——16—16
Additional non-controlling interests (ii)—————33
Foreign currency translation—4——4—4
Balance as of March 31, 2024102,213$10,930$1,464$(2,905)$9,489$79$9,568
Balance as of December 31, 202499,806$10,989$109$(3,158)$7,940$77$8,017
Shares repurchased(607)—(200)—(200)—(200)
Net income——235—2354239
Dividends declared ($0.92 per share)——(93)—(93)—(93)
Other comprehensive income———223223—223
Issuance of shares under employee stock compensation plans12——————
Share-based compensation and net settlements—33——33—33
Foreign currency translation—(5)——(5)—(5)
Balance as of March 31, 202599,211$11,017$51$(2,935)$8,133$81$8,214

(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. In an acquisition, additional paid-in capital is adjusted as well to the extent that the consideration transferred differs from the carrying value of non-controlling interests prior to the acquisition.

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 approximately 49,000 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 control 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 or property loss control consulting), and analytical and advisory services (such as hazard modeling and climate risk quantification). We also assist our clients with managing incidents or crises when they occur. These services include contingency planning, security audits and product tampering plans.

We help our clients enhance their business performance by delivering consulting services, technology and solutions that help them anticipate, identify and capitalize on emerging opportunities in human capital management, as well as offer investment advice to help them develop disciplined and efficient strategies to meet their investment goals.

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.

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.

Note 2 — Basis of Presentation and Recent Accounting Pronouncements

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. 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. Certain prior-period amounts have been reclassified to conform to the current-period presentation. 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 25, 2025, 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, 2025 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 acquisition-related 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.

Recent Accounting Pronouncements

Not Yet Adopted

In March 2024, the SEC adopted final rules on the enhancement and standardization of climate-related disclosures for investors (the ‘SEC Climate Rules’). The SEC Climate Rules would require disclosure of certain climate-related information, including in the notes to the Company’s financial statements, in registration statements and annual reports on Form 10-K. Following a number of legal challenges, the SEC voluntarily stayed the SEC Climate Rules pending the completion of judicial review of such consolidated

petitions to avoid regulatory uncertainty for companies subject to the SEC Climate Rules. Although the litigation remains pending, in March 2025, the SEC voted to end its defense of the SEC Climate Rules. The Company is monitoring the outcome of the litigation.

In November 2024, the FASB issued ASU No. 2024-03, Disaggregation of Income Statement Expense, which is intended to provide transparency about the components of expenses included in the income statement. This ASU requires public companies to disclose additional information about certain expenses in the notes to the financial statements on a quarterly and annual basis, including purchases of inventory, employee compensation, depreciation, intangible asset amortization and depletion for each income statement line item that contains those expenses. The ASU requires a new tabular disclosure format that centralizes expense information and additional qualitative disclosure. The guidance does not change the existing income statement presentation. The annual requirements for this ASU become effective with the Company's 2027 Form 10-K, and for its interim periods beginning on January 1, 2028. Early adoption is permitted. The guidance is to be applied prospectively, with the option for retrospective application. The Company currently does not plan to early-adopt this ASU and is assessing the expected impact on its condensed consolidated financial statements.

Adopted

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which is intended to improve the transparency of income tax disclosures by requiring consistent categories and greater disaggregation of information within the income tax rate reconciliation and income taxes paid disclosures. It also includes certain other amendments intended to improve the effectiveness of income tax disclosures. Specifically, this ASU requires a tabular income tax rate reconciliation using both percentages and amounts disaggregated into specific categories with certain reconciling items at or above 5% of the statutory tax, further disaggregated by its nature and/or jurisdiction. Additionally, income taxes paid will be required to be presented by federal, state, local and foreign jurisdictions, including amounts paid to individual jurisdictions representing 5% or more of the total income taxes paid. This ASU became effective for the Company on January 1, 2025, at which time it was adopted. The Company will include the required disclosures within its 2025 Annual Report on Form 10-K.

Other Legislation

Pillar Two

On October 8, 2021, the Organisation for Economic Co-operation and Development (‘OECD’) announced an international agreement with more than 140 countries to implement a two-pillar solution to address tax challenges arising from the digitalization of the economy. The agreement introduced rules that would result in the reallocation of certain taxing rights over multinational companies from their home countries to the markets where they have business activities and earn profits, regardless of physical presence (‘Pillar One’) and introduced a global corporate minimum tax of 15% for certain large multinational companies starting in 2024 (‘Pillar Two’). On December 20, 2021, the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting released the Model Global Anti-Base Erosion (‘GloBE’) rules (the ‘OECD Model Rules’) under Pillar Two. On December 12, 2022, E.U. member states reached an agreement to implement Pillar Two and this agreement requires E.U. member states to enact domestic legislation to put Pillar Two into effect. In 2023, many E.U. countries enacted the necessary legislation (based on the OECD Model Rules) to implement Pillar Two in 2024. Ireland, in particular, enacted Pillar Two legislation by signing Finance (No. 2) Bill 2023 into law in December 2023. Other countries and territories have indicated they will introduce Pillar Two legislation beginning in 2025. The Pillar Two minimum tax is treated as a period cost beginning in 2024 and does not have a material impact on the Company's financial results of operations for the periods presented. The Company continues to monitor evolving tax legislation as well as additional guidance to enacted legislation in the jurisdictions in which we operate.

Note 3 — Acquisitions and Divestitures

The Company had no material acquisitions or divestitures, but had disposal price and other adjustments to the prior-year sale of TRANZACT resulting in a gain of $14 million for the three months ended March 31, 2025.

Note 4 — Revenue

Disaggregation of Revenue

The Company reports revenue by segment in Note 5 — Segment Information. 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, 2025 and 2024. Along with reimbursable expenses and other, total revenue by service offering represents our revenue from customer contracts.

Three Months Ended March 31,
HWCR&BCorporate (i)Total
20252024202520242025202420252024
Broking$146$335$790$742$—$—$936$1,077
Consulting679662119104—1798767
Outsourced administration2682662130——289296
Other63647371——136135
Total revenue by service offering1,1561,3271,003947—12,1592,275
Reimbursable expenses and other (i)1717331—2120
Total revenue from customer contracts$1,173$1,344$1,006$950$1$1$2,180$2,295
Interest and other income9924311064346
Total revenue$1,182$1,353$1,030$981$11$7$2,223$2,341

(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, adjustments to reserves and impacts from hedged revenue transactions.

Interest and other income is included in segment revenue and total revenue, however it has been presented separately in the above table because it does not arise directly from contracts with customers. The significant components of interest and other income are as follows for the periods presented above:

Three Months Ended March 31,
HWCR&BCorporateTotal
20252024202520242025202420252024
Book-of-business settlements$2$—$—$2$—$—$2$2
Interest income7922281063943
Other income——21——21
Total interest and other income$9$9$24$31$10$6$43$46

The following table presents revenue from service offerings by the geography where our work was performed for the three months ended March 31, 2025 and 2024. 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,
HWCR&BCorporateTotal
20252024202520242025202420252024
North America$645$840$326$306$—$—$971$1,146
Europe391372538511—1929884
International120115139130——259245
Total revenue by geography$1,156$1,327$1,003$947$—$1$2,159$2,275

Contract Balances

The Company reports accounts receivable, net on the condensed consolidated balance sheets, 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, 2025 and December 31, 2024:

March 31, 2025December 31, 2024
Billed receivables, net of allowance for doubtful accounts of $34 million and $36 million$1,606$1,604
Unbilled receivables538569
Current contract assets222321
Accounts receivable, net$2,366$2,494
Non-current accounts receivable, net$25$18
Deferred revenue$774$732

During the three months ended March 31, 2025, revenue of approximately $346 million was recognized that was reflected as deferred revenue at December 31, 2024.

During the three months ended March 31, 2025, the Company recognized no revenue 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, 2025 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 202520262027 onwardTotal
Revenue expected to be recognized on contracts as of March 31, 2025$462$508$605$1,575

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, 2025 have been excluded from the table above.

Note 5 — Segment Information

WTW has two reportable operating segments or business areas:

Health, Wealth & Career (‘HWC’); and

Risk & Broking (‘R&B’).

WTW’s chief operating decision maker (‘CODM’) is its chief executive officer. We determined that the operational data used by the CODM is at the segment level. Management bases strategic goals and decisions for these segments on the data presented below which 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 segment operating income performance and prospects on a pre-tax basis.

Under the segment structure and for internal and segment reporting, WTW segment revenue includes commissions and fees, interest and other income. U.S. GAAP revenue also includes amounts that were directly incurred on behalf of our clients and reimbursed by them (reimbursable expenses), which are not included in segment revenue. There is no significant segment revenue derived from transactions between the segments.

Following the adoption of ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (‘ASC 2023-07’), the Company has not presented any individual significant expense categories due to the following factors:

The CODM’s review focuses on segment operating income results in total, rather than on individual expenses to arrive at segment operating income. The CODM uses segment operating income to make decisions and allocate resources.

The CODM does not regularly review any individual significant expense categories at the segment level. Rather, the segment leaders are tasked with achieving the targeted segment operating income and have discretion to determine how to manage their respective expense categories to achieve the targets set by the CODM.

Instead, the CODM routinely reviews budgeted, forecasted and actual expense information at the consolidated level only and not at the individual segment level.

Segment operating income excludes certain costs, including (i) amortization of intangibles; (ii) restructuring costs; (iii) certain transaction and transformation expenses; and (iv) to the extent that the actual expense based upon which allocations are made differs from the forecast/budget amount, a reconciling item will be created between internally-allocated expenses and the actual expenses that we report for U.S. GAAP purposes. Although not reviewed individually by the CODM, amounts included in segment expenses may be determined on both a direct and allocated basis and are related to salaries and benefits, depreciation, corporate overhead charges

and other operating expenses, including for occupancy, colleague travel costs, legal, marketing, technology, professional fees and professional liability costs.

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, segment expenses and segment operating income for our reportable segments for the three months ended March 31, 2025 and 2024.

Three Months Ended March 31,
HWCR&BTotal
202520242025202420252024
Segment revenue excluding interest income$1,158$1,327$1,005$950$2,163$2,277
Interest income7922282937
Total segment revenue1,1651,3361,0279782,1922,314
Other segment expense8239697917631,6141,732
Depreciation313110124143
Total segment expense8541,0008017751,6551,775
Segment operating income$311$336$226$203$537$539

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 months ended March 31, 2025 and 2024.

Three Months Ended March 31,
20252024
Revenue:
Total segment revenue$2,192$2,314
Reimbursable expenses and other3127
Revenue$2,223$2,341
Total segment operating income$537$539
Amortization(48)(60)
Restructuring costs (i)—(18)
Transaction and transformation (ii)—(125)
Unallocated, net (iii)(57)(56)
Income from operations432280
Interest expense(65)(64)
Other (loss)/income, net(64)26
Income from operations before income taxes and interest in earnings of associates$303$242

(i)

Consists of costs associated with our Transformation program, which concluded during the fourth quarter of 2024.

(ii)

In addition to legal fees and other transaction costs, includes primarily consulting fees related to the Transformation program (see Note 6 — Restructuring Costs).

(iii)

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.

Below are our revenue (on the basis of where the work was performed) and tangible long-lived assets for Ireland, our country of domicile, countries with significant concentrations and all other foreign countries as of and for the periods ended as indicated:

RevenueLong-Lived Assets (i)
Three months ended March 31,March 31,December 31,
2025202420252024
Ireland$35$35$8$8
United States9321,101294307
United Kingdom451424500490
Rest of World805781352341
Total Foreign Countries2,1882,3061,1461,138
$2,223$2,341$1,154$1,146

(i)

Tangible long-lived assets consist of fixed assets and right-of-use (‘ROU’) assets.

Note 6 — Restructuring Costs

In the fourth quarter of 2024, the Company concluded a three-year ‘Transformation program’ designed to enhance operations, optimize technology and align its real estate footprint to its new ways of working. The program incurred cumulative costs of $1.115 billion and capital expenditures of $130 million, resulting in a total investment of $1.245 billion. Although the Transformation program concluded in 2024, we expect additional cash outflows in 2025 from the settlement of accrued costs.

The main categories of charges were in the following four areas:

Real estate rationalization — included costs to align the real estate footprint to the new ways of working (hybrid work) as well as breakage fees and the impairment of ROU assets and other related leasehold assets.

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

Process optimization — these costs were incurred in the right-shoring strategy and automation of our operations, which included optimizing resource deployment and appropriate colleague alignment. These costs included 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 were accounted for under ASC 420, Exit or Disposal Cost Obligation, and are included as restructuring costs in the condensed consolidated statements of comprehensive income. Restructuring costs were $18 million for the three months ended March 31, 2024. Other costs incurred under the Transformation program are included in transaction and transformation and were $119 million for the three months ended March 31, 2024.

A rollforward of the liability associated with cash-based charges related to restructuring costs associated with the Transformation program, including costs paid and payable following the Transformation program’s conclusion on December 31, 2024, is as follows:

Real estate rationalizationTechnology modernizationProcess optimizationOtherTotal
Balance at December 31, 202432——5
Cash payments(3)———(3)
Balance at March 31, 2025$—$2$—$—$2

Note 7 — Income Taxes

Provision for income taxes for the three months ended March 31, 2025 was $65 million compared to $48 million for the three months ended March 31, 2024. The effective tax rate was 21.5% for the three months ended March 31, 2025 and 19.9% for the three months ended March 31, 2024. 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 current-year quarter’s

effective tax rate is higher primarily due to a change in the distribution of geographical income as well as net unfavorable discrete tax items.

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-U.S. 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. We have liabilities for uncertain tax positions under ASC 740, Income Taxes of $82 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 $1 million to $6 million, excluding interest and penalties.

Note 8 — Goodwill and Other Intangible Assets

The components of goodwill are outlined below for the three months ended March 31, 2025:

HWCR&BTotal
Balance at December 31, 2024:
Goodwill, gross$7,276$2,796$10,072
Accumulated impairment losses(911)(362)(1,273)
Goodwill, net - December 31, 20246,3652,4348,799
Foreign exchange152742
Balance at March 31, 2025:
Goodwill, gross7,2912,82310,114
Accumulated impairment losses(911)(362)(1,273)
Goodwill, net - March 31, 2025$6,380$2,461$8,841

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, 2025:

Client relationshipsSoftwareTrademark and trade nameTotal
Balance at December 31, 2024:
Intangible assets, gross$3,135$730$1,036$4,901
Accumulated amortization(2,497)(727)(382)(3,606)
Intangible assets, net - December 31, 202463836541,295
Intangible assets acquired1——1
Amortization(37)—(11)(48)
Foreign exchange7——7
Balance at March 31, 2025:
Intangible assets, gross3,1687381,0384,944
Accumulated amortization(2,559)(735)(395)(3,689)
Intangible assets, net - March 31, 2025$609$3$643$1,255

The weighted-average remaining life of amortizable intangible assets at March 31, 2025 was 11.2 years.

The table below reflects the future estimated amortization expense for amortizable intangible assets for the remainder of 2025 and for subsequent years:

Amortization
Remainder of 2025$138
2026166
2027150
2028134
2029114
Thereafter553
Total$1,255

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 sheets. 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, 2025 and December 31, 2024 had total notional amounts of $162 million and $176 million, respectively, with a net fair value asset of $2 million and a net fair value liability of $2 million, respectively.

At March 31, 2025, the Company estimates, based on current exchange rates, there will be $1 million of net derivative gains 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, 2025, 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, 2025 and 2024 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, 2025 and 2024.

Three Months Ended March 31,Gain recognized in OCI (effective element)
20252024
Forward exchange contracts$3$—
Location of gain/(loss) reclassified from Accumulated OCL into income (effective element)Gain/(loss) reclassified from Accumulated OCL into income (effective element)
20252024
Revenue$1$(1)
Salaries and benefits(1)1
$—$—

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 March 31, 2025 and December 31, 2024, we had notional amounts $821 million and $1.2 billion, respectively, with net fair value liabilities of $1 million and $3 million, respectively. Such derivatives typically mature within three months.

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, 2025 and 2024 are as follows (see Note 16 — Other (Loss)/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):

Gain recognized in income
Three Months Ended March 31,
Derivatives not designated as hedging instruments:Location of gain recognized in income20252024
Forward exchange contractsOther (loss)/income, net$2$1

Note 10 — Debt

Current debt consists of the following:

March 31, 2025December 31, 2024
4.400% senior notes due 2026$549$—
$549$—

Long-term debt consists of the following:

March 31, 2025December 31, 2024
Revolving $1.5 billion credit facility$—$—
4.400% senior notes due 2026—549
4.650% senior notes due 2027747746
4.500% senior notes due 2028598598
2.950% senior notes due 2029725725
5.350% senior notes due 2033742742
6.125% senior notes due 2043272272
5.050% senior notes due 2048396396
3.875% senior notes due 2049543543
5.900% senior notes due 2054738738
$4,761$5,309

At March 31, 2025 and December 31, 2024, 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:

Mutual funds, exchange-traded funds and certificates of deposit are classified as Level 1 because we use quoted market prices in active markets in determining the fair value of these securities.

Commingled funds are not leveled within the fair value hierarchy as the funds are valued at the net value of shares held as reported by the manager of the funds. These funds are not exchange-traded.

Hedge funds are not leveled within the fair value hierarchy as the fair values for these investments are estimated based on the net asset values derived from the latest audited financial statements or most recent capital account statements provided by the funds’ investment manager or third-party administrator, as a practical expedient.

Market values for our derivative instruments have been used to determine the fair values of forward and option 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.

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, 2025 and December 31, 2024:

Fair Value Measurements on a Recurring Basis at March 31, 2025
Balance Sheet LocationLevel 1Level 2Level 3Total
Assets:
Available-for-sale securities:
Mutual funds/exchange traded funds (i)Prepaid and other current assets and Other non-current assets$109$—$—$109
Fiduciary assets336——336
Commingled funds (i) (ii)Other non-current assets———18
Hedge funds (i) (iii)Other non-current assets———18
Short-term investment (held to maturity):
Certificates of deposit/term deposit (iv)Prepaid and other current assets$30$—$—$30
Derivatives:
Derivative financial instruments (v)Prepaid and other current assets and Other non-current assets$—$3$—$3
Liabilities:
Contingent consideration:
Contingent consideration (vi) (vii)Other current liabilities and Other non-current liabilities$—$—$40$40
Derivatives:
Derivative financial instruments (v)Other current liabilities and Other non-current liabilities$—$2$—$2
Fair Value Measurements on a Recurring Basis at December 31, 2024
Balance Sheet LocationLevel 1Level 2Level 3Total
Assets:
Available-for-sale securities:
Mutual funds/exchange traded funds (i)Prepaid and other current assets and Other non-current assets$108$—$—$108
Fiduciary assets337——337
Commingled funds (i) (ii)Other non-current assets———18
Hedge funds (i) (iii)Other non-current assets———17
Derivatives:
Derivative financial instruments (v)Prepaid and other current assets and Other non-current assets$—$1$—$1
Liabilities:
Contingent consideration:
Contingent consideration (vi)Other current liabilities and Other non-current liabilities$—$—$39$39
Derivatives:
Derivative financial instruments (v)Other current liabilities and Other non-current liabilities$—$6$—$6

(i)

With the exception of the funds included in fiduciary assets, the majority of these balances are held as part of deferred compensation plans with related liabilities in other current liabilities and other non-current liabilities on the condensed consolidated balance sheets.

(ii)

Consists of the Towers Watson Global Equity Focus Fund, for which redemptions can occur on any business day, and require a minimum of one business day’s notice.

(iii)

Consists of the Towers Watson Alternative Credit Fund, for which the redemption period is generally quarterly, however requires a 50-day notice.

(iv)

Consists of investments with maturity dates of up to 90 days.

(v)

See Note 9 — Derivative Financial Instruments for further information on our derivative investments.

(vi)

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 13.41% and 13.43% at March 31, 2025 and December 31, 2024, respectively. The range of these discount rates was 11.00% - 13.80% at March 31, 2025. Using different probability weightings and discount rates could result in an increase or decrease of the contingent consideration payable.

(vii)

Consideration due to be paid across multiple years until 2029.

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, 2025
Balance at December 31, 2024$39
Obligations assumed—
Payments—
Realized and unrealized losses (i)—
Foreign exchange1
Balance at March 31, 2025$40

(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 three months ended March 31, 2025

Non-recurring Fair Value Measurement

The Company has assets that may be required to be recorded at fair value on a non-recurring basis. These assets are evaluated when certain triggering events occur (including the planned disposal of a business or a decrease in estimated future cash flows) that indicate their carrying amounts may not be recoverable.

Fair Value Information about Financial Instruments Not Measured at Fair Value

The following tables present our assets and liabilities not measured at fair value on a recurring basis at March 31, 2025 and December 31, 2024:

March 31, 2025December 31, 2024
Carrying ValueFair ValueCarrying ValueFair Value
Assets:
Note receivable$78$75$74$70
Liabilities:
Current debt$549$548$—$—
Long-term debt$4,761$4,540$5,309$5,052

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 short-term note receivable are considered Level 2 financial instruments as they are corroborated by observable market data.

Note 12 — Retirement Benefits

Defined Benefit Plans

WTW sponsors both qualified and non-qualified defined benefit pension 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 98% of WTW’s pension obligations and are disclosed herein.

Components of Net Periodic Benefit (Income)/Cost for Defined Benefit Pension Plans

The following table sets forth the components of net periodic benefit (income)/cost for the Company’s defined benefit pension plans for the three months ended March 31, 2025 and 2024:

Three Months Ended March 31,
20252024
U.S.U.K.OtherU.S.U.K.Other
Service cost$10$1$3$11$1$4
Interest cost3629649287
Expected return on plan assets(55)(42)(10)(76)(39)(10)
Settlements823————
Amortization of net loss915—914—
Amortization of prior service credit—(1)——(3)—
Net periodic benefit cost/(income)$82$5$(1)$(7)$1$1

Employer Contributions to Defined Benefit Pension Plans

The Company did not make any contributions to its U.S. plans during the three months ended March 31, 2025 and currently does not anticipate making contributions over the remainder of the fiscal year. The Company made contributions of less than $1 million to its U.K. plans for the three months ended March 31, 2025 and anticipates making additional contributions of $2 million for the remainder of the fiscal year. The Company made contributions of $5 million to its other plans for the three months ended March 31, 2025 and anticipates making additional contributions of $1 million for the remainder of the fiscal year.

Annuity Purchase

In February 2025, the Company’s Willis Towers Watson Pension Plan for U.S. Employees, a qualified pension plan (‘the Plan’), purchased a nonparticipating single premium group annuity contract from a third-party insurance company and irrevocably transferred to that insurance company approximately $423 million of the Plan’s defined benefit pension obligations and related plan assets, thereby reducing the pension obligations and assets of the Plan by this same amount. The group annuity contract was purchased using assets of the Plan and no additional funding contribution was required by the Company. As a result of this transaction, WTW recognized a one-time, non-cash pre-tax pension settlement charge of $82 million in the first quarter of 2025, attributable to the accelerated recognition of accumulated actuarial losses of the Plan.

Defined Contribution Plans

The Company had defined contribution plan expense of $40 million and $43 million during the three months ended March 31, 2025 and 2024, respectively.

Note 13 — Leases

The following table presents lease costs recorded on our condensed consolidated statements of comprehensive income for the three months ended March 31, 2025 and 2024:

Three Months Ended March 31,
20252024
Finance lease cost:
Amortization of right-of-use assets$—$1
Operating lease cost2942
Variable lease cost1014
Sublease income(6)(5)
Total lease cost, net$33$52

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, with the exception of $15 million incurred during the three months ended March 31, 2024 that were included in restructuring costs (see Note 6 — Restructuring Costs) that primarily related to the acceleration of amortization of certain abandoned ROU assets and the payment of early termination fees.

Note 14 — Commitments and Contingencies

Indemnification Agreements

WTW has various agreements with third parties pursuant to which 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 sale of the TRANZACT business. 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, the limited history of prior indemnification claims, and the unique facts of each particular agreement and each indemnification provision therein (even where such indemnification provisions are subject to a maximum liability limit). However, as of March 31, 2025, we have not incurred a material loss with respect to the indemnification of such third parties. In addition, as of March 31, 2025, we do not believe that any potential liability that may arise from such indemnity obligations is probable or will be 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. 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 March 31, 2025 and December 31, 2024 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 a particular quarterly or annual period.

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.

Deferred revenue and accrued expenses consist of the following:

March 31, 2025December 31, 2024
Accounts payable, accrued liabilities and deferred revenue$1,007$1,053
Accrued discretionary and incentive compensation220835
Accrued vacation167154
Accrued 401(k) contributions2163
Other employee-related liabilities84106
Total deferred revenue and accrued expenses$1,499$2,211

Other current liabilities consist of the following:

March 31, 2025December 31, 2024
Dividends payable$112$107
Income taxes payable128105
Interest payable3661
Deferred compensation plan liabilities1617
Contingent and deferred consideration on acquisitions3333
Accrued retirement benefits2828
Payroll and other benefits-related liabilities305166
Other taxes payable9998
Derivatives25
Third-party commissions12197
Other current liabilities4348
Total other current liabilities$923$765

Provision for liabilities consists of the following:

March 31, 2025December 31, 2024
Claims, lawsuits and other proceedings$297$284
Other provisions6257
Total provision for liabilities$359$341

Note 16 — Other (Loss)/Income, Net

Other (loss)/income, net consists of the following:

Three Months Ended March 31,
20252024
Gain on disposal of operations$14$—
Net periodic pension and postretirement benefit credits (i)(75)22
Foreign exchange (loss)/gain (ii)(4)3
Other11
Other (loss)/income, net$(64)$26

(i)

For the three months ended March 31, 2025, includes a pension settlement charge of $82 million. See Note 12 — Retirement Benefits.

(ii)

Includes the offsetting effects of the Company's foreign currency hedging program. See Note 9 — Derivative Financial Instruments.

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 table for the three months ended March 31, 2025 and 2024. This table excludes amounts attributable to non-controlling interests, which are not material for further disclosure.

Foreign currency translationDerivative instruments (i)Defined pension and post-retirement benefit costsTotal
20252024202520242025202420252024
Balance at December 31, 2024 and 2023, respectively$(1,020)$(816)$7$11$(2,145)$(2,051)$(3,158)$(2,856)
Other comprehensive income/(loss) before reclassifications109(63)3—92—204(63)
Loss reclassified from accumulated other comprehensive loss (net of income tax benefit of $6 and $5, respectively)————19141914
Net current-period other comprehensive income/(loss)109(63)3—11114223(49)
Balance at March 31, 2025 and 2024, respectively$(911)$(879)$10$11$(2,034)$(2,037)$(2,935)$(2,905)

(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.

Note 18 — Earnings Per Share

Basic and diluted earnings per share are calculated by dividing net income attributable to WTW 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, 2025 and 2024, there were 0.7 million and 0.5 million restricted performance-based stock units outstanding, respectively, and 0.3 million and 0.4 million restricted time-based stock units outstanding, respectively. The Company had no time-based share options or performance-based share options outstanding at March 31, 2025 and 2024.

Basic and diluted earnings per share are as follows:

Three Months Ended March 31,
20252024
Net income attributable to WTW$235$190
Basic average number of shares outstanding100103
Dilutive effect of potentially issuable shares11
Diluted average number of shares outstanding101104
Basic earnings per share$2.34$1.84
Dilutive effect of potentially issuable shares(0.01)(0.01)
Diluted earnings per share$2.33$1.83

There were no anti-dilutive restricted stock units or anti-dilutive options for the three months ended March 31, 2025 and 2024.

Note 19 — Supplemental Disclosures of Cash Flow Information

Supplemental disclosures regarding cash flow information are as follows:

Three months ended March 31,
20252024
Supplemental disclosures of cash flow information:
Cash and cash equivalents$1,507$1,893
Fiduciary funds (included in fiduciary assets)3,4763,358
Total cash, cash equivalents and restricted cash$4,983$5,251
(Decrease)/increase in cash, cash equivalents and other restricted cash$(411)$487
Increase in fiduciary funds3161,019
Total$(95)$1,506

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