Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This discussion includes forward-looking statements. See ‘Disclaimer Regarding Forward-looking Statements’ for certain cautionary information regarding forward-looking statements and a list of factors that could cause actual results to differ materially from those predicted in those statements.

This discussion includes references to non-GAAP financial measures as defined in the rules of the SEC. We present such non-GAAP financial measures, specifically, adjusted, constant currency and organic non-GAAP financial measures, as we believe such information is of interest to the investment community because it provides additional meaningful methods of evaluating certain aspects of the Company’s operating performance from period to period on a basis that may not be otherwise apparent under U.S. GAAP, and these provide a measure against which our businesses may be assessed in the future.

See ‘Non-GAAP Financial Measures’ below for further discussion of our adjusted, constant currency and organic non-GAAP financial measures.

Executive Overview

Market Conditions

Typically, our business benefits from regulatory change, political risk or economic uncertainty. Insurance broking generally tracks the economy, but demand for both insurance broking and consulting services usually remains steady during times of uncertainty. We have some businesses, such as our health and benefits and administration businesses, which can be counter cyclical during the early period of a significant economic change.

Within our insurance and brokerage business, due to the cyclical nature of the insurance market and the impact of other market conditions on insurance premiums, commission revenue may vary widely between accounting periods. A period of low or declining premium rates, generally known as a ‘soft’ or ‘softening’ market, generally leads to downward pressure on commission revenue and can have a material adverse impact on our revenue and operating margin. A ‘hard’ or ‘firming’ market, during which premium rates rise, generally has a favorable impact on our revenue and operating margin. Rates, however, vary by geography, industry and client segment. As a result, and due to the global and diverse nature of our business, we view rates in the aggregate. Overall, we are currently seeing a softening market.

Market conditions in the broking industry in which we operate are generally defined by factors such as the strength of the economies in the various geographic regions in which we serve around the world, insurance rate movements, and insurance and reinsurance buying patterns of our clients.

The markets for our consulting, technology and solutions, and marketplace services are affected by economic, regulatory and legislative changes, technological developments, and increased competition from established and new competitors. We believe that the primary factors in selecting a human resources or risk management consulting company include reputation, the ability to provide measurable increases to shareholder value and return on investment, global scale, quality of service and the ability to tailor services to clients’ unique needs. In that regard, we are focused on developing and implementing technology, data and analytic solutions for both internal operations and for maintaining industry standards and meeting client preferences. We have made such investments from time to time and may decide, based on perceived business needs, to make investments in the future that may be different from past practice or what we currently anticipate.

With regard to the market for exchanges, we believe that clients base their decisions on a variety of factors that include the ability of the provider to deliver measurable cost savings for clients, a strong reputation for efficient execution and an innovative service delivery model and platform. Part of the employer-sponsored insurance market has matured and become more fragmented while other segments remain in the entry phase. As these market segments continue to evolve, we may experience growth in intervals, with periods of accelerated expansion balanced by periods of modest growth. In recent years, growth in the market for exchanges has slowed, and this trend may continue.

Risks and Uncertainties of the Economic Environment

U.S. and global markets are continuing to experience uncertainty, volatility and disruption as a result of uncertain macroeconomic conditions including tariff actions and uncertainties relating to global trade, fluctuations in currency exchange rates, volatility in debt and equity markets, uncertainty around interest rates, softening consumer confidence and labor markets, recent government and policy changes in the U.S., and the ongoing Russia-Ukraine and Middle East conflicts, among other geopolitical tensions. Although the length and impact of these situations are highly unpredictable, the ongoing uncertainty and volatility of the global economy and capital markets, which has resulted in persistent inflation and fluctuating interest rates in many of the markets in which we operate, could accelerate recessionary pressures and continue to lead to further market disruptions. Further, in addition to the direct impact of the

dynamic tariff environment on our business (which we do not expect to be significant, so long as retaliatory actions do not extend to services), other indirect impacts such as changes in consumer sentiment, trade relations, economic activity, willingness to do business with U.S.-listed firms, inflationary pressures and employee distraction, could negatively affect our business, operations and financial condition.

These general economic conditions, including inflation, stagflation, political volatility, costs of labor, cost of capital, interest rates, bank stability, credit availability and tax rates, affect not only the cost of and access to liquidity, but also our costs to run and invest in our business, including our operating and general and administrative expenses, and we have no control or limited ability to control such factors. These general economic conditions impact revenue from customers, as well as income from funds we hold on behalf of customers and pension-related income. While parts of our business could benefit from uncertainty or regulatory change, we may see increased caution in spending on services we provide that are more discretionary in nature or where there are alternatives, such as self-insurance. Other parts of our business, such as M&A-related services, may be adversely impacted when there is lower economic activity or transaction volumes.

If our costs grow significantly in excess of our ability to raise revenue, whether as a result of the foregoing global economic factors or otherwise, 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.

See Part I, Item 1A ‘Risk Factors’ in our Annual Report on Form 10-K, filed with the SEC on February 25, 2025, for a discussion of risks that may affect, among other things, our growth relative to expectation and our ability to achieve our objectives.

Financial Statement Overview

The table below sets forth our summarized condensed consolidated statements of comprehensive income and data as a percentage of revenue for the periods indicated.

		Three Months Ended March 31,
		2025								2024
		($ in millions, except per share data)
Revenue		$	2,223				100	%		$	2,341				100	%
Costs of providing services
Salaries and benefits			1,324				60	%			1,342				57	%
Other operating expenses			365				16	%			457				20	%
Depreciation			54				2	%			59				3	%
Amortization			48				2	%			60				3	%
Restructuring costs			—				—	%			18				1	%
Transaction and transformation			—				—	%			125				5	%
Total costs of providing services			1,791								2,061
Income from operations			432				19	%			280				12	%
Interest expense			(65	)			(3	)%			(64	)			(3	)%
Other (loss)/income, net			(64	)			(3	)%			26				1	%
INCOME FROM OPERATIONS BEFORE INCOME TAXES AND INTEREST IN EARNINGS OF ASSOCIATES			303				14	%			242				10	%
Provision for income taxes			(65	)			(3	)%			(48	)			(2	)%
Interest in earnings of associates, net of tax			1				—	%			—				—	%
Income attributable to non-controlling interests			(4	)			—	%			(4	)			—	%
NET INCOME ATTRIBUTABLE TO WTW		$	235				11	%		$	190				8	%
Diluted earnings per share		$	2.33							$	1.83

Consolidated Revenue

Revenue for the three months ended March 31, 2025 was $2.2 billion, compared to $2.3 billion for the three months ended March 31, 2024, a decrease of $118 million, or 5%, on an as-reported basis. Adjusting for the impacts of foreign currency and acquisitions and disposals, our organic revenue growth was 5% for the three months ended March 31, 2025. The decrease in as-reported revenue was due primarily to the sale of our TRANZACT business on December 31, 2024. The increase in organic revenue was driven by strong performances in both segments. For additional information, please see the section entitled ‘Segment Revenue and Segment Operating Income’ elsewhere within this Item 2 of this Quarterly Report on Form 10-Q.

Our revenue can be materially impacted by changes in currency conversions, which can fluctuate significantly over the course of a calendar year. For the three months ended March 31, 2025, currency translation decreased our consolidated revenue by $36 million. The primary currency driving this change was the Euro.

The following table details our top five markets based on the percentage of consolidated revenue (in U.S. dollars) from the countries where work was performed for the three months ended March 31, 2025. These figures do not represent the currency of the related revenue, which is presented in the next table.

Geographic Region		% of Revenue
United States			42	%
United Kingdom			20	%
France			7	%
Germany			4	%
Canada			3	%

The table below details the approximate percentage of our revenue and expenses by transactional currency for the three months ended March 31, 2025.

Transactional Currency		Revenue				Expenses (i)
U.S. dollars			49	%			48	%
Pounds sterling			13	%			19	%
Euro			21	%			15	%
Other currencies			17	%			18	%

(i)

These percentages exclude certain expenses for significant items which will not be settled in cash, or which we believe to be items that are not core to our current or future operations. These items include amortization of intangible assets.

The following table sets forth the total revenue for the three months ended March 31, 2025 and 2024, and the components of the change in total revenue for the three months ended March 31, 2025, as compared to the prior-year period. The components of the revenue change may not add due to rounding.

												Components of Revenue Change
										As		Less:		Constant		Less:
		Three Months Ended March 31,								Reported		Currency		Currency		Acquisitions/		Organic
		2025				2024				Change		Impact		Change		Divestitures		Change (i)
		($ in millions)
Revenue		$	2,223			$	2,341			(5)%		(1)%		(4)%		(8)%		5%

(i)

Interest income did not contribute to organic change for the three months ended March 31, 2025.

Definitions of Constant Currency Change and Organic Change are included under the section entitled ‘Non-GAAP Financial Measures’ elsewhere within Item 2 of this Form 10-Q.

Segment Revenue and Segment Operating Income

The segment descriptions below should be read in conjunction with the full descriptions of our businesses contained in Part I, Item 1. ‘Business’, within our Annual Report on Form 10-K, filed with the SEC on February 25, 2025.

Segment revenue excludes amounts that were directly incurred on behalf of our clients and reimbursed by them (reimbursed expenses); however, these amounts are included in consolidated revenue, as required by applicable accounting standards and SEC rules. Segment operating income excludes certain costs, including (i) amortization of intangibles; (ii) restructuring costs; and (iii) certain transaction and transformation expenses, and includes certain expense amounts which may be determined on both a direct and allocated basis. See Note 5 – Segment Information within Part I, Item 1 ‘Financial Statements’ of this Quarterly Report on Form 10-Q

for more information about how our segment revenue and segment operating income are calculated and for a reconciliation to our GAAP results.

The Company experiences seasonal fluctuations in its revenue. Revenue is typically higher during the Company’s first and fourth quarters due primarily to the timing of broking-related activities.

For each table presented below, the components of the revenue change may not add due to rounding.

Health, Wealth & Career

The Health, Wealth & Career (‘HWC’) segment provides an array of advice, broking, solutions and technology for employee benefit plans, institutional investors, compensation and career programs, and the employee experience overall. Our portfolio of services supports the interrelated challenges that the management teams of our clients face across human resources and finance.

HWC is the larger of the two segments of the Company. Addressing four key areas, Health, Wealth, Career and Benefits Delivery & Outsourcing, the segment is focused on addressing our clients’ people and risk needs to help them succeed in a global marketplace.

The following table sets forth HWC revenue for the three months ended March 31, 2025 and 2024, and the components of the change in revenue for the three months ended March 31, 2025 from the three months ended March 31, 2024.

												Components of Revenue Change
										As		Less:		Constant		Less:
		Three Months Ended March 31,								Reported		Currency		Currency		Acquisitions/		Organic
		2025				2024				Change		Impact		Change		Divestitures		Change
		($ in millions)
Segment revenue excluding interest income		$	1,158			$	1,327			(13)%		(1)%		(12)%		(14)%		3%
Interest income			7				9
Total segment revenue		$	1,165			$	1,336			(13)%		(1)%		(12)%		(14)%		3%
Segment operating income		$	311			$	336

HWC segment revenue for the three months ended March 31, 2025 and 2024 was $1.2 billion and $1.3 billion, respectively. Health delivered organic revenue growth in all regions driven by solid client retention, new business and geographic expansion. Wealth generated organic revenue growth from higher levels of Retirement work in Europe and International, alongside growth in our Investments business due to the success of our LifeSight solution and capital market improvements. Career had modest revenue growth as increased advisory work was tempered by some postponements amid economic uncertainty. Benefits Delivery & Outsourcing revenue grew primarily from increased project and core administration work.

HWC segment operating income for the three months ended March 31, 2025 and 2024 was $311 million and $336 million, respectively. HWC segment operating income decreased due to the sale of TRANZACT. Excluding the impact of this sale, operating income improved primarily from transformation savings.

Risk & Broking

The Risk & Broking (‘R&B’) segment provides a broad range of risk advice, insurance brokerage and consulting services to clients worldwide ranging from small businesses to multinational corporations. The segment comprises two primary businesses - Corporate Risk & Broking and Insurance Consulting and Technology.

The following table sets forth R&B revenue for the three months ended March 31, 2025 and 2024, and the components of the change in revenue for the three months ended March 31, 2025 from the three months ended March 31, 2024.

												Components of Revenue Change
										As		Less:		Constant		Less:
		Three Months Ended March 31,								Reported		Currency		Currency		Acquisitions/		Organic
		2025				2024				Change		Impact		Change		Divestitures		Change
		($ in millions)
Segment revenue excluding interest income		$	1,005			$	950			6%		(2)%		8%		—%		8%
Interest income			22				28
Total segment revenue		$	1,027			$	978			5%		(2)%		7%		—%		7%
Segment operating income		$	226			$	203

R&B segment revenue for the three months ended March 31, 2025 and 2024 was $1.0 billion and $978 million, respectively. Corporate Risk & Broking had organic revenue growth driven by higher levels of new business activity and strong client retention globally. Insurance Consulting and Technology had organic revenue growth for the quarter driven by the Consulting and Technology practices.

R&B segment operating income for the three months ended March 31, 2025 and 2024 was $226 million and $203 million, respectively. R&B segment operating income increased due primarily to operating leverage driven by strong organic revenue growth and transformation savings which were partially offset by headwinds from decreased interest income and foreign currency fluctuations.

Costs of Providing Services

Total costs of providing services for the three months ended March 31, 2025 were $1.8 billion, compared to $2.1 billion for the three months ended March 31, 2024, a decrease of $270 million, or 13%. See the following discussion for further details.

Salaries and Benefits

Salaries and benefits for both the three months ended March 31, 2025 and 2024 were $1.3 billion, a decrease of $18 million. The decrease in the current year is primarily due to lower incentive and benefit costs for the period, partially offset by higher share-based compensation costs in the current-year period.

Salaries and benefits, as a percentage of revenue, represented 60% and 57% for the three months ended March 31, 2025 and 2024, respectively.

Other Operating Expenses

Other operating expenses for the three months ended March 31, 2025 were $365 million, compared to $457 million for the three months ended March 31, 2024, a decrease of $92 million. The decrease was primarily due to lower marketing expenses attributable to the sale of our TRANZACT business on December 31, 2024, and decreased local office expenses, partially offset by higher non-income-related tax expense for the current year as compared to the prior year.

Depreciation

Depreciation for the three months ended March 31, 2025 was $54 million, compared to $59 million for the three months ended March 31, 2024, a decrease of $5 million, or 8%. The year-over-year decrease was primarily due to a lower depreciable base of assets resulting from disposals associated with the Company’s Transformation program that concluded in the fourth quarter of 2024 and a lower dollar value of assets placed in service during the past few years.

Amortization

Amortization for the three months ended March 31, 2025 was $48 million, compared to $60 million for the three months ended March 31, 2024, a decrease of $12 million, or 20%. Our intangible amortization is generally more heavily weighted to the initial years of the useful lives of the related intangibles, and therefore amortization related to intangible assets has decreased and will continue to decrease over time.

Restructuring Costs

Restructuring costs for the three months ended March 31, 2024 were $18 million and primarily related to the real estate rationalization component of our now-completed Transformation program.

Transaction and Transformation

Transaction and transformation costs for the three months ended March 31, 2024 were $125 million and primarily included consulting and compensation costs related to our now-completed Transformation program.

Income from Operations

Income from operations for the three months ended March 31, 2025 was $432 million, compared to $280 million for the three months ended March 31, 2024, an increase of $152 million. This increase resulted primarily from lower transformation and transaction costs, and lower restructuring costs due to the completion of our Transformation program during the fourth quarter of 2024, and lower marketing expenses and decreased local office expenses in the current year, partially offset by lower revenue due to the prior-year sale of our TRANZACT business.

Interest Expense

Interest expense for the three months ended March 31, 2025 was $65 million, compared to $64 million for the three months ended March 31, 2024, an increase of $1 million, or 2%. This increase was primarily due to the higher interest rate-bearing senior notes issued by the Company during the last two years.

Other (Loss)/Income, Net

Other (loss)/income, net for the three months ended March 31, 2025 was a loss of $64 million, compared to income of $26 million for the three months ended March 31, 2024, a decrease of $90 million. The decrease was due primarily to lower pension income, which was attributable to a significant pension settlement in the current year, partially offset by a gain on disposal pertaining to favorable cost adjustments associated with the prior-year sale of our TRANZACT business.

Provision for 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, an increase of $17 million. 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.

Net Income Attributable to WTW

Net income attributable to WTW for the three months ended March 31, 2025 was $235 million, compared to $190 million for the three months ended March 31, 2024, an increase of $45 million, or 24%. This increase resulted primarily from lower transformation and transaction costs, and lower restructuring costs due to the completion of our Transformation program during the fourth quarter of 2024, and lower marketing expenses and decreased local office expenses in the current year, partially offset by lower revenue due to the sale of our TRANZACT business on December 31, 2024, and lower pension income, which was attributable to a significant pension settlement in the current year.

Liquidity and Capital Resources

Executive Summary

Our principal sources of liquidity are funds generated by operating activities, available cash and cash equivalents and amounts available under our revolving credit facility and any new debt offerings.

There has been significant volatility in financial markets, including occasional declines in equity markets, inflation and changes in interest rates and reduced liquidity on a global basis and we expect this volatility could continue, all of which may impact our access to liquidity.

Based on our current balance sheet and cash flows, current market conditions and information available to us at this time, we believe that WTW has access to sufficient liquidity to meet our cash needs for the next twelve months. Including our cash generated from operations, our liquidity also includes all of the borrowing capacity available to draw against our $1.5 billion revolving credit facility and the $750 million earnout related to the 2021 divestiture of Willis Re, which was received in April 2025. The use of these funds includes investments in the business for growth, scheduled debt repayments, share repurchases, dividend payments and general corporate purposes. Additionally, under our minority ownership interest in a joint venture with Bain Capital, in connection with which we re-entered the reinsurance broking space during the fourth quarter of 2024, we have an option to acquire a controlling interest in the joint venture in the future. Given the initial funding needs of a start-up venture, we expect to make certain capital contributions from time to time resulting in a headwind for earnings until such time as the joint venture generates sufficient revenue to be profitable.

During the first quarter of 2025, we repurchased $200 million of our outstanding shares and have authorization to repurchase an additional $1.2 billion under our share repurchase program (as further described below under ‘Share Repurchase Program’). We consider many factors, including market and economic conditions, applicable legal requirements and other business considerations, when considering whether to repurchase shares. Our Share Repurchase Program has no termination date and may be suspended or discontinued at any time.

Events that could change the historical cash flow dynamics discussed above include significant changes in operating results, the receipt of significant earnout payments related to past divestitures, potential future acquisitions or divestitures, material changes in geographic sources of cash, unexpected adverse impacts from litigation or tax or regulatory matters, or future pension funding during periods of severe downturn in the capital markets.

Undistributed Earnings of Foreign Subsidiaries

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.

We continue to have certain subsidiaries whose earnings have not been deemed permanently reinvested and for which we have been accruing estimates of the tax effects of such repatriation. Excluding these certain subsidiaries, we continue to assert that the historical cumulative earnings for the remainder of our subsidiaries have been reinvested indefinitely and therefore do not provide deferred taxes on these amounts. If future events, including material changes in estimates of cash, working capital, long-term investment requirements or additional legislation, necessitate that these earnings be distributed, an additional provision for income and foreign withholding taxes, net of credits, may be necessary. Other potential sources of cash may be through the settlement of intercompany loans or return of capital distributions in a tax-efficient manner.

Cash and Cash Equivalents

Our cash and cash equivalents at March 31, 2025 totaled $1.5 billion, compared to $1.9 billion at December 31, 2024. While cash from operations decreased as bonus and incentive payments more than offset collections from receivables, the decrease in cash from December 31, 2024 to March 31, 2025 was due primarily to $200 million of share repurchases, $88 million of dividend payments and $51 million of capital expenditures and capitalized software additions.

Additionally, we had all of the borrowing capacity available to draw against our $1.5 billion revolving credit facility at both March 31, 2025 and December 31, 2024.

Included within cash and cash equivalents at March 31, 2025 and December 31, 2024 are amounts held for regulatory capital adequacy requirements, including $103 million and $104 million, respectively, within our regulated U.K. entities.

Summarized Condensed Consolidated Cash Flows

The following table presents the summarized condensed consolidated cash flow information for the three months ended March 31, 2025 and 2024:

		Three Months Ended March 31,
		2025				2024
		(in millions)
Net cash (used in)/from:
Operating activities		$	(35	)		$	24
Investing activities			(84	)			(74	)
Financing activities			24				1,556
(DECREASE)/INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH (i)			(95	)			1,506
Effect of exchange rate changes on cash, cash equivalents and restricted cash			80				(47	)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD (i)			4,998				3,792
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 within Part I, Item 1 ‘Financial Statements’ within this Quarterly Report on Form 10-Q.

Cash Flows (Used In)/From Operating Activities

Cash flows used in operating activities were $35 million for the three months ended March 31, 2025, compared to cash flows from operating activities of $24 million for the three months ended March 31, 2024. The $35 million of net cash used in operating activities for the three months ended March 31, 2025 included net income of $239 million and $238 million of favorable non-cash adjustments, partially offset by unfavorable changes in operating assets and liabilities of $512 million. This decrease in cash flows from operations as compared to the prior year was primarily driven by the absence of cash collections related to TRANZACT, which the Company sold on December 31, 2024, and increased compensation payments in the current-year quarter as compared to the prior-year quarter.

The $24 million of net cash from operating activities for the three months ended March 31, 2024 included net income of $194 million and $183 million of favorable non-cash adjustments, partially offset by unfavorable changes in operating assets and liabilities of $353 million.

Cash Flows Used In Investing Activities

Cash flows used in investing activities for the three months ended March 31, 2025 were $84 million as compared $74 million for the three months ended March 31, 2024. The cash flows used in investing activities in the current year consisted primarily of capital expenditures, including software additions, and purchases of investments. The cash flows used in investing activities in the prior year consisted primarily of capital expenditures, including software additions.

Cash Flows From Financing Activities

Cash flows from financing activities for the three months ended March 31, 2025 were $24 million. The significant financing activities included net proceeds from fiduciary funds held for clients of $315 million, partially offset by share repurchases of $200 million and dividend payments of $88 million.

Cash flows from financing activities for the three months ended March 31, 2024 were $1.6 billion. The significant financing activities included net proceeds from fiduciary funds held for clients of $1.0 billion and $739 million of net proceeds from the issuance of debt, partially offset by share repurchases of $101 million and dividend payments of $86 million.

Indebtedness

Total debt, total equity, and the capitalization ratios at March 31, 2025 and December 31, 2024 were as follows:

		March 31, 2025				December 31, 2024
		($ in millions)
Long-term debt		$	4,761			$	5,309
Current debt			549				—
Total debt		$	5,310			$	5,309
Total WTW shareholders’ equity		$	8,133			$	7,940
Capitalization ratio			39.5	%			40.1	%

At March 31, 2025, our mandatory debt repayments over the next twelve months include $550 million outstanding on our 4.400% senior notes, which will mature during the first quarter of 2026. For more information regarding our current and long-term debt, please see ‘Supplemental Guarantor Financial Information’ elsewhere within this Item 2 of this Quarterly Report on Form 10-Q.

At March 31, 2025 and December 31, 2024, we were in compliance with all financial covenants.

Fiduciary Funds

As an intermediary, we hold funds, generally in a fiduciary capacity, for the account of third parties, typically as the result of premiums received from clients that are in transit to insurers and claims due to clients that are in transit from insurers. We also hold funds for clients of our benefits account businesses, some of which are invested in open-ended mutual funds as directed by the participant. These fiduciary funds are included in fiduciary assets on our condensed consolidated balance sheets. We present the equal and corresponding fiduciary liabilities related to these fiduciary funds representing amounts or claims due to our clients or premiums due on their behalf to insurers on our condensed consolidated balance sheets.

Fiduciary funds are generally required to be kept in regulated bank accounts subject to guidelines which emphasize capital preservation and liquidity; such funds are not available to service the Company’s debt or for other corporate purposes. Notwithstanding the legal relationships with clients and insurers, the Company is entitled to retain investment income earned on certain of these fiduciary funds in accordance with industry custom and practice and, in some cases, as supported by agreements with insureds.

At March 31, 2025 and December 31, 2024, we had fiduciary funds of $3.8 billion and $3.4 billion, respectively.

Share Repurchase Program

The Company is authorized to repurchase shares, by way of redemption or otherwise, and will consider whether to do so from time to time, based on many factors, including market conditions. There are no expiration dates for our repurchase plans or programs.

On November 20, 2024, the board of directors approved a $1.0 billion increase to the existing share repurchase program. This increase brought the total approved authorization, since the announcement of the program on April 20, 2016, to $10.2 billion.

At March 31, 2025, approximately $1.2 billion remained on the current repurchase authority. The maximum number of shares that could be repurchased based on the closing price of our ordinary shares on March 31, 2025 of $337.95 was 3,674,368.

During the three months ended March 31, 2025, the Company had the following share repurchase activity:

			Three Months Ended March 31, 2025
Shares repurchased			607,221
Average price per share			$329.37
Aggregate repurchase cost (excluding broker costs)			$200 million

Capital Commitments

The Company’s capital expenditures for fixed assets, capitalized software and software for internal use were $51 million during the three months ended March 31, 2025. The Company estimates that there will be additional such expenditures in the range of $175

million - $200 million during the remainder of 2025. We currently expect cash from operations to adequately provide for these cash needs. There have been no material changes to our capital commitments since December 31, 2024.

Dividends

Total cash dividends of $88 million were paid during the three months ended March 31, 2025. In February 2025, the board of directors approved a quarterly cash dividend of $0.92 per share ($3.68 per share annualized rate), which was paid on April 15, 2025 to shareholders of record as of March 31, 2025.

Supplemental Guarantor Financial Information

As of March 31, 2025, WTW has issued the following debt securities (the ‘notes’):

a)

Willis North America Inc. (‘Willis North America’) has approximately $4.5 billion senior notes outstanding, of which $1.0 billion were issued on September 10, 2018, $1.0 billion were issued on September 10, 2019, $275 million were issued on May 29, 2020, $750 million were issued on May 19, 2022, $750 million were issued on May 17, 2023 and $750 million were issued on March 5, 2024; and

b)

Trinity Acquisition plc has approximately $825 million senior notes outstanding, of which $275 million were issued on August 15, 2013 and $550 million were issued on March 22, 2016, and a $1.5 billion revolving credit facility, on which no balance was outstanding at March 31, 2025.

The following table presents a summary of the entities that issue each note and those wholly-owned subsidiaries of the Company that guarantee each respective note on a joint and several basis as of March 31, 2025. These subsidiaries are all consolidated by Willis Towers Watson plc (the ‘parent company’) and together with the parent company comprise the ‘Obligor group’. On December 16, 2024, TA I Limited, Willis Towers Watson UK Holdings Limited and Willis Netherlands Holdings B.V. ceased to be guarantors of our notes and are no longer part of the Obligor group, following the transfer of their respective properties and assets to other existing guarantors within the Obligor group. Further, Willis Towers Watson UK Holdings Limited was released from its guarantees under our credit agreement. TA I Limited and Willis Netherlands Holdings B.V. will be released from their guarantees under our credit agreement when they are fully liquidated.

Entity		Trinity Acquisition plc Notes		Willis North America Inc. Notes
Willis Towers Watson plc		Guarantor		Guarantor
Trinity Acquisition plc		Issuer		Guarantor
Willis North America Inc.		Guarantor		Issuer
Willis Investment UK Holdings Limited		Guarantor		Guarantor
Willis Group Limited		Guarantor		Guarantor
Willis Towers Watson Sub Holdings Unlimited Company		Guarantor		Guarantor

The notes issued by Willis North America and Trinity Acquisition plc:

rank equally with all of the issuer’s existing and future unsubordinated and unsecured debt;

rank equally with the issuer’s guarantee of all of the existing senior debt of the Company and the other guarantors, including any debt under the Revolving Credit Facility;

are senior in right of payment to all of the issuer’s future subordinated debt; and

are effectively subordinated to all of the issuer’s secured debt to the extent of the value of the assets securing such debt.

All other subsidiaries of the parent company are non-guarantor subsidiaries (‘the non-guarantor subsidiaries’).

Each member of the Obligor group has only a stockholder’s claim on the assets of the non-guarantor subsidiaries. This stockholder’s claim is junior to the claims that creditors have against those non-guarantor subsidiaries. Holders of the notes will only be creditors of the Obligor group and not creditors of the non-guarantor subsidiaries. As a result, all of the existing and future liabilities of the non-guarantor subsidiaries, including any claims of trade creditors and preferred stockholders, will be structurally senior to the notes. As of and for the periods ended March 31, 2025 and December 31, 2024, the non-guarantor subsidiaries represented substantially all of the total assets and accounted for substantially all of the total revenue of the Company prior to consolidating adjustments. The non-guarantor subsidiaries have other liabilities, including contingent liabilities that may be significant. Each indenture does not contain any limitations on the amount of additional debt that the Obligor group and the non-guarantor subsidiaries may incur. The amounts of this debt could be substantial, and this debt may be debt of the non-guarantor subsidiaries, in which case this debt would be effectively senior in right of payment to the notes.

The notes are obligations exclusively of the Obligor group. Substantially all of the Obligor group’s operations are conducted through its non-guarantor subsidiaries. Therefore, the Obligor group’s ability to service its debt, including the notes, is dependent upon the net cash flows of its non-guarantor subsidiaries and their ability to distribute those net cash flows as dividends, loans or other payments to the Obligor group. Certain laws restrict the ability of these non-guarantor subsidiaries to pay dividends and make loans and advances to the Obligor group. In addition, such non-guarantor subsidiaries may enter into contractual arrangements that limit their ability to pay dividends and make loans and advances to the Obligor group.

Intercompany balances and transactions between members of the Obligor group have been eliminated. All intercompany balances and transactions between the Obligor group and the non-guarantor subsidiaries have been presented in the disclosures below on a net presentation basis, rather than a gross basis, as this better reflects the nature of the intercompany positions and presents the funding or funded position that is to be received or owed. The intercompany balances and transactions between the Obligor group and non-guarantor subsidiaries, presented below, relate to a number of items including loan funding for acquisitions and other purposes, transfers of surplus cash between subsidiary companies, funding provided for working capital purposes, settlement of expense accounts, transactions related to share-based payment arrangements and share issuances, intercompany royalty and related arrangements, intercompany dividends and intercompany interest. At March 31, 2025 and December 31, 2024, the intercompany balances of the Obligor group with non-guarantor subsidiaries were net receivables of $1.0 billion at both periods and net payables of $15.4 billion and $15.1 billion, respectively.

No balances or transactions of non-guarantor subsidiaries are presented in the disclosures other than the intercompany items noted above.

Presented below is certain summarized financial information for the Obligor group.

`		As of March 31, 2025				As of December 31, 2024
		(in millions)
Total current assets		$	149			$	290
Total non-current assets			1,078				1,050
Total current liabilities			7,059				6,254
Total non-current liabilities			13,932				14,442

		Three months ended March 31, 2025
		(in millions)
Revenue		$	344
Income from operations			287
Income from operations before income taxes (i)			18
Net income			78
Net income attributable to WTW			78

(i)

Includes intercompany expense, net of the Obligor group from non-guarantor subsidiaries of $137 million for the three months ended March 31, 2025.

Non-GAAP Financial Measures

In order to assist readers of our condensed consolidated financial statements in understanding the core operating results that WTW’s management uses to evaluate the business and for financial planning purposes, we present the following non-GAAP measures and their most directly comparable U.S. GAAP measure:

Most Directly Comparable U.S. GAAP Measure		Non-GAAP Measure
As reported change		Constant currency change
As reported change		Organic change
Income from operations/margin		Adjusted operating income/margin
Net income/margin		Adjusted EBITDA/margin
Net income attributable to WTW		Adjusted net income
Diluted earnings per share		Adjusted diluted earnings per share
Income from operations before income taxes and interest in earnings of associates		Adjusted income before taxes
Provision for income taxes/U.S. GAAP tax rate		Adjusted income taxes/tax rate
Net cash from operating activities		Free cash flow

The Company believes that these measures are relevant and provide pertinent information widely used by analysts, investors and other interested parties in our industry to provide a baseline for evaluating and comparing our operating performance, and in the case of free cash flow, our liquidity results.

Within the measures referred to as ‘adjusted’, we adjust for significant items which will not be settled in cash, or which we believe to be items that are not core to our current or future operations. Some of these items may not be applicable for the current quarter, however they may be part of our full-year results. Additionally, we have historically adjusted for certain items which are not described below, but for which we may adjust in a future period when applicable. Items applicable to the quarter or full year results, or the comparable periods, include the following:

Restructuring costs and transaction and transformation – Management believes it is appropriate to adjust for restructuring costs and transaction and transformation when they relate to a specific significant program with a defined set of activities and costs that are not expected to continue beyond a defined period of time, or significant acquisition-related transaction expenses. We believe the adjustment is necessary to present how the Company is performing, both now and in the future when the incurrence of these costs will have concluded.

Gains and losses on disposals of operations – Adjustment to remove the gains or losses resulting from disposed operations that have not been classified as discontinued operations.

Net periodic pension and postretirement benefits – Adjustment to remove the recognition of net periodic pension and postretirement benefits (including pension settlements), other than service costs. We have included this adjustment as applicable in our prior-period disclosures in order to conform to the current-period presentation.

These non-GAAP measures are not defined in the same manner by all companies and may not be comparable to other similarly titled measures of other companies. Non-GAAP measures should be considered in addition to, and not as a substitute for, the information contained within our condensed consolidated financial statements.

Constant Currency Change and Organic Change

We evaluate our revenue on an as reported (U.S. GAAP), constant currency and organic basis. We believe presenting constant currency and organic information provides valuable supplemental information regarding our comparable results, consistent with how we evaluate our performance internally.

Constant currency change - Represents the year-over-year change in revenue excluding the impact of foreign currency fluctuations. To calculate this impact, the prior-year local currency results are first translated using the current-year monthly average exchange rates. The change is calculated by comparing the prior-year revenue, translated at the current-year monthly average exchange rates, to the current-year as-reported revenue, for the same period. We believe constant currency measures provide useful information to investors because they provide transparency to performance by excluding the effects that foreign currency exchange rate fluctuations have on period-over-period comparability given volatility in foreign currency exchange markets.

Organic change - Excludes the impact of fluctuations in foreign currency exchange rates as described above and the period-over-period impact of acquisitions and divestitures on current-year revenue. We believe that excluding transaction-related items from our U.S. GAAP financial measures provides useful supplemental information to our investors, and it is important in illustrating what our core operating results would have been had we not included these transaction-related items, since the nature, size and number of these transaction-related items can vary from period to period.

The constant currency and organic change results, and a reconciliation from the reported results for consolidated revenue are included in the ‘Consolidated Revenue’ section within this Form 10-Q. These measures are also reported by segment in the ‘Segment Revenue and Segment Operating Income’ section within this Form 10-Q.

A reconciliation of the as-reported change to the constant currency and organic changes for the three months ended March 31, 2025 from the three months ended March 31, 2024 is as follows. The components of revenue change may not add due to rounding.

												Components of Revenue Change
										As		Less:		Constant		Less:
		Three Months Ended March 31,								Reported		Currency		Currency		Acquisitions/		Organic
		2025				2024				Change		Impact		Change		Divestitures		Change (i)
		($ in millions)
Revenue		$	2,223			$	2,341			(5)%		(1)%		(4)%		(8)%		5%

(i)

Interest income did not contribute to organic change for the three months ended March 31, 2025.

For the three months ended March 31, 2025, our as-reported revenue decreased by 5% and our organic revenue grew by 5%. The decrease in as-reported revenue was due primarily to the sale of our TRANZACT business on December 31, 2024. The increase in organic revenue was driven by strong performances in both segments. For additional information, please see the section entitled ‘Segment Revenue and Segment Operating Income’ elsewhere within Item 2 of this Quarterly Report on Form 10-Q.

Adjusted Operating Income/Margin

We consider adjusted operating income/margin to be important financial measures, which are used internally to evaluate and assess our core operations and to benchmark our operating results against our competitors.

Adjusted operating income is defined as income from operations adjusted for amortization, restructuring costs, transaction and transformation and non-recurring items that, in management’s judgment, significantly affect the period-over-period assessment of operating results. Adjusted operating income margin is calculated by dividing adjusted operating income by revenue.

Reconciliations of income from operations to adjusted operating income for the three months ended March 31, 2025 and 2024 are as follows:

	Three Months Ended March 31,
	2025				2024
	(in millions)
Income from operations	$	432			$	280
Adjusted for certain items:
Amortization		48				60
Restructuring costs		—				18
Transaction and transformation		—				125
Adjusted operating income	$	480			$	483
Income from operations margin		19.4	%			12.0	%
Adjusted operating income margin		21.6	%			20.6	%

Adjusted operating income decreased for the three months ended March 31, 2025 to $480 million, from $483 million for the three months ended March 31, 2024. This decrease resulted primarily from lower revenue due to the sale of our TRANZACT business on December 31, 2024, partially offset by lower marketing expenses and decreased local office expenses in the current year.

Adjusted EBITDA/Margin

We consider adjusted EBITDA/margin to be important financial measures, which are used internally to evaluate and assess our core operations, to benchmark our operating results against our competitors and to evaluate and measure our performance-based compensation plans.

Adjusted EBITDA is defined as net income adjusted for provision for income taxes, interest expense, depreciation and amortization, restructuring costs, transaction and transformation, gains and losses on disposals of operations, net periodic pension and postretirement benefits, and non-recurring items that, in management’s judgment, significantly affect the period-over-period assessment of operating results. Adjusted EBITDA margin is calculated by dividing adjusted EBITDA by revenue.

Reconciliations of net income to adjusted EBITDA for the three months ended March 31, 2025 and 2024 are as follows:

		Three Months Ended March 31,
		2025				2024
		(in millions)
NET INCOME		$	239			$	194
Provision for income taxes			65				48
Interest expense			65				64
Depreciation			54				59
Amortization			48				60
Restructuring costs			—				18
Transaction and transformation			—				125
Net periodic pension and postretirement benefits			75				(22	)
Gain on disposal of operations			(14	)			—
Adjusted EBITDA		$	532			$	546
Net income margin			10.8	%			8.3	%
Adjusted EBITDA margin			23.9	%			23.3	%

Adjusted EBITDA for the three months ended March 31, 2025 was $532 million, compared to $546 million for the three months ended March 31, 2024. This decrease resulted primarily from lower revenue due to the sale of our TRANZACT business on December 31, 2024, partially offset by lower marketing expenses and decreased local office expenses in the current year.

Adjusted Net Income and Adjusted Diluted Earnings Per Share

Adjusted net income is defined as net income attributable to WTW adjusted for amortization, restructuring costs, transaction and transformation, gains and losses on disposals of operations, net periodic pension and postretirement benefits, and non-recurring items that, in management’s judgment, significantly affect the period-over-period assessment of operating results and the related tax effect of those adjustments and the tax effects of internal reorganizations. This measure is used solely for the purpose of calculating adjusted diluted earnings per share.

Adjusted diluted earnings per share is defined as adjusted net income divided by the weighted-average number of ordinary shares, diluted. Adjusted diluted earnings per share is used to internally evaluate and assess our core operations and to benchmark our operating results against our competitors.

Reconciliations of net income attributable to WTW to adjusted diluted earnings per share for the three months ended March 31, 2025 and 2024 are as follows:

		Three Months Ended March 31,
		2025				2024
		($ in millions)
NET INCOME ATTRIBUTABLE TO WTW		$	235			$	190
Adjusted for certain items:
Amortization			48				60
Restructuring costs			—				18
Transaction and transformation			—				125
Net periodic pension and postretirement benefits			75				(22	)
Gain on disposal of operations			(14	)			—
Tax effect on certain items listed above (i)			(28	)			(46	)
Adjusted net income		$	316			$	325
Weighted-average ordinary shares — diluted			101				104
Diluted earnings per share		$	2.33			$	1.83
Adjusted for certain items (ii) :
Amortization			0.48				0.58
Restructuring costs			—				0.17
Transaction and transformation			—				1.21
Net periodic pension and postretirement benefits			0.74				(0.21	)
Gain on disposal of operations			(0.14	)			—
Tax effect on certain items listed above (i)			(0.28	)			(0.44	)
Adjusted diluted earnings per share		$	3.13			$	3.13

(i)

The tax effect was calculated using an effective tax rate for each item.

(ii)

Per share values and totals may differ due to rounding.

Our adjusted diluted earnings per share was comparable for the three months ended March 31, 2025 and 2024, primarily due to a lower weighted-average outstanding share count due to our share repurchase activity over the last year, and lower marketing expenses and decreased local office expenses in the current year, partially offset by lower revenue due to the sale of our TRANZACT business on December 31, 2024.

Adjusted Income Before Taxes and Adjusted Income Taxes/Tax Rate

Adjusted income before taxes is defined as income from operations before income taxes and interest in earnings of associates adjusted for amortization, restructuring costs, transaction and transformation, gains and losses on disposals of operations, net periodic pension and postretirement benefits, and non-recurring items that, in management’s judgment, significantly affect the period-over-period assessment of operating results. Adjusted income before taxes is used solely for the purpose of calculating the adjusted income tax rate.

Adjusted income taxes/tax rate is defined as the provision for income taxes adjusted for taxes on certain items of amortization, restructuring costs, transaction and transformation, gains and losses on disposals of operations, net periodic pension and postretirement benefits, the tax effects of significant adjustments and non-recurring items that, in management’s judgment, significantly affect the period-over-period assessment of operating results, divided by adjusted income before taxes. Adjusted income taxes is used solely for the purpose of calculating the adjusted income tax rate.

Management believes that the adjusted income tax rate presents a rate that is more closely aligned to the rate that we would incur if not for the reduction of pre-tax income for the adjusted items and the tax effects of significant adjustments, which are not core to our current and future operations.

Reconciliations of income from operations before income taxes and interest in earnings of associates to adjusted income before taxes and provision for income taxes to adjusted income taxes for the three months ended March 31, 2025 and 2024 are as follows:

		Three Months Ended March 31,
		2025				2024
		($ in millions)
INCOME FROM OPERATIONS BEFORE INCOME TAXES AND INTEREST IN EARNINGS OF ASSOCIATES		$	303			$	242
Adjusted for certain items:
Amortization			48				60
Restructuring costs			—				18
Transaction and transformation			—				125
Net periodic pension and postretirement benefits			75				(22	)
Gain on disposal of operations			(14	)			—
Adjusted income before taxes		$	412			$	423
Provision for income taxes		$	65			$	48
Tax effect on certain items listed above (i)			28				46
Adjusted income taxes		$	93			$	94
U.S. GAAP tax rate			21.5	%			19.9	%
Adjusted income tax rate			22.7	%			22.3	%

(i)

The tax effect was calculated using an effective tax rate for each item.

Our U.S. GAAP tax rates were 21.5% and 19.9% for the three months ended March 31, 2025 and 2024, respectively. 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.

Our adjusted income tax rates were 22.7% and 22.3% for the three months ended March 31, 2025 and 2024, respectively. The current-year quarter’s adjusted tax rate is higher primarily due to a change in the distribution of geographical income as well as net unfavorable discrete tax items.

Free Cash Flow

Free cash flow is defined as cash flows from operating activities less cash used to purchase fixed assets and software. Free cash flow is a liquidity measure and is not meant to represent residual cash flow available for discretionary expenditures.

As a result of our change in presentation, free cash flow for the prior period has been adjusted to conform to the current period, which includes the deduction of our capitalized software costs.

Management believes that free cash flow presents the core operating performance and cash generating capabilities of our business operations.

Reconciliations of cash flows from operating activities to free cash flow for the three months ended March 31, 2025 and 2024 are as follows:

		Three Months Ended March 31,
		2025				2024
		(in millions)
Cash flows (used in)/from operating activities		$	(35	)		$	24
Less: Additions to fixed assets and software			(51	)			(60	)
Free cash flow		$	(86	)		$	(36	)

The decrease in free cash flow during the current-year period was primarily driven by the absence of cash collections related to TRANZACT, which the Company sold on December 31, 2024, and increased compensation payments in the current-year quarter as compared to the prior-year quarter.

Critical Accounting Estimates

There were no material changes from the Critical Accounting Estimates disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 25, 2025.