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Form 8-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): March 5, 2013

 

 

Willis Group Holdings Public Limited Company

(Exact name of registrant as specified in its charter)

 

 

 

Ireland   001-16503   98-0352587

(State or other jurisdiction

of incorporation)

  

(Commission

File Number)

  

(IRS Employer

Identification No.)

c/o Willis Group Limited, 51 Lime Street, London, EC3M 7DQ, England and Wales

(Address, including Zip Code, of Principal Executive Offices)

Registrant’s telephone number, including area code: (44) (20) 3124 6000

Not Applicable

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

Item 7.01. Regulation FD Disclosure.

On March 5, 2013, Willis Group Holdings Public Limited Company posted its Fact Book for the year ended December 31, 2012 to its website, which is attached hereto as Exhibit 99.1 and incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

 

Exhibit
Number

   

Description

99.1    Willis Group Holdings Fact Book for the Year Ended December 31, 2012

SIGNATURES

Pursuant to the requirement of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Date: March 5, 2013     WILLIS GROUP HOLDINGS PUBLIC LIMITED COMPANY
    By:  

/s/ Adam L. Rosman

      Adam L. Rosman
      Group General Counsel

INDEX TO EXHIBITS

 

Exhibit
Number

   

Description

99.1    Willis Group Holdings Fact Book for the Year Ended December 31, 2012
EX-99.1
WILLIS GROUP
HOLDINGS
Fact Book
Fourth Quarter 2012
March 2013
EXHIBIT 99.1

2
2012 C&F: $3.46 billion
Willis: A leading global insurance broker
Willis Subsidiaries and Associates
Willis
Global
Franchise
2012 Commissions and Fees by Segment
Broad range of professional insurance, reinsurance, risk management, financial and
human resource consulting and actuarial services
Global distribution capabilities to meet risk management needs of middle market and
large multinational clients
More than 400 offices in 120 countries, with over 17,000 employees
Strong sales culture and relentless focus on cost control

Summary Q4 2012 financial results
Q4 2012
Q4 2011
FY 2012
FY 2011
Organic
commission
and fee growth
7.5%
(2.3)%
3.1%
1.8%
Reported
operating
margin
(89.0)%
9.9%
(6.0)%
16.4%
Adjusted
operating
margin
19.1%
18.7%
21.6%
22.5%
Reported EPS
$(4.65)
$0.14
$(2.58)
$1.15
Adjusted EPS
$0.45
$0.45
$2.58
$2.74
See important disclosures regarding Non-GAAP measures starting on page 18
3

Organic Q4 2012 commissions and fees growth
Q4 2012
Q4 2011
Global
11.6%
6.3%
North America
5.0%
(9.4)%
International
7.4%
2.2%
Willis Group
7.5%
(2.3)%
Growth across all segments
Global
Growth in all Global businesses; strong
new business at Willis Faber & Dumas;
solid growth in Global Specialties and
Reinsurance; WCM&A closed delayed
deals
North America
Best quarter since 2006; growth in all
geographic regions; improvement in
construction business
International
Growth in all regions except
Australasia; double-digit growth in
Latin America, mid-single digit growth
in Europe, and continued improvement
in UK
See important disclosures regarding Non-GAAP measures starting on page 18
4

Reported operating margin (89.0)%; 19.1% adjusted operating margin
Adjusted operating margin up 40 bps from prior year quarter, primarily driven by:
Higher commissions and fees
Reduction in other operating expenses
Partially offset by higher salaries and benefits and lower investment income
Reported EPS  of $(4.65); Adjusted EPS of $0.45
Flat to prior year
Positive $0.01 impact from foreign exchange
Q4 2012 impacted by significant charges:
$200 million write-off of unamortized cash retention awards
$252 million accrual of 2012 cash bonuses
$492 million North America segment goodwill impairment
$113 deferred tax valuation allowance
See important disclosures regarding Non-GAAP measures starting on page 18
5
Q4 2012 financial results

Note:
Peer
averages
are
based
on
Willis
estimates
using
public
information
regarding
insurance
brokerage
operations
of
AJG,
AON,
BRO,
MMC
See important disclosures regarding Non-GAAP measures starting on page 18
6
Track record of organic commission and fee growth
Average 2007 –
2012 Willis  3% Peers  0%

See important disclosures regarding Non-GAAP measures starting on page 18
7
Adjusted operating margins
Average 2007 –
2012 Willis  22% Peers  20%
Note:   Peer averages are based on Willis estimates using public information regarding insurance brokerage operations of AJG, AON, BRO, MMC

($ millions)
Dividends $185 million
Capex $135 million
Share buyback $100 million
M&A expenditures of $69 million
8
Strong cash flow from operations
$85 million increase in cash flow from operations in 2012
$500 million of cash and cash equivalents at December 31, 2012
2012 corporate/non-operating  uses of cash

99
Debt / Adjusted EBITDA
Adjusted EBITDA $890 million in 2012, a decline of $22 million versus 2011
Debt outstanding $2.35 billion as at December 31, 2012
Further reduction of leverage ratio driven by improved operating
performance and effective capital management
(a)
Includes impact from acquisition of HRH as of 10/1/2008.
See important disclosures regarding Non-GAAP measures starting on page 18
Leverage ratios

SEGMENT OVERVIEWS

Extensive retail platform with Top 3
position in all major markets
Able to leverage industry and specialty
practice group expertise across Willis
network
Major practice groups include:
Employee Benefits (approximately 24%
of 2012 North America C&F)
Construction (approximately 14% of
2012 North America C&F)
Healthcare
Real Estate/Hospitality
Financial and Executive Risk
120
offices
across
Seven
regions
Other includes Canada and Mexico
Segment overview
2012 North America C&F: $1.31 billion
See important disclosures regarding Non-GAAP measures starting on page 19
11
Willis North America overview
2012 commissions and fees – by region

Segment overview
Retail operations in the United Kingdom,
Eastern and Western Europe, Asia
Pacific, the Middle East, South Africa
and Latin America
Provide services to businesses locally in
over 120 countries; leading positions in
UK, Scandinavia, China and
Russia
Offices designed to grow business locally
around the world, making use of the
skills, industry knowledge and expertise
available within segment and elsewhere
in the Group
2012 International C&F: $1.03 billion
See important disclosures regarding Non-GAAP measures starting on page 19
12
Willis International overview
2012 commissions and fees – by region

Segment overview
Reinsurance
Willis Re
One of only three global reinsurance
brokers
Significant market share in major
markets, particularly marine and
aviation
Cutting edge analytical and advisory
services, including Willis Research
Network
Complete range of transactional
capabilities including, in conjunction
with Willis Capital Markets & Advisory,
risk transfer via the capital markets
2012 Global C&F: $1.12 billion
See important disclosures regarding Non-GAAP measures starting on page 19
13
Willis Global overview
2012 commissions and fees – by business

Segment overview
Global
Specialties,
with
strong
global
positions in:
Aerospace/Inspace
FINEX
and
Financial
Solutions
–
political
risks
and UK financial institutions
Marine
Energy
Construction
Willis Faber & Dumas includes:
Faber
&
Dumas
-
wholesale
brokerage
including:
Glencairn
Limited
-
provides
access
to
London
& Bermuda markets
Niche –
Fine Art, Jewelry and Specie,
Bloodstock and Kidnap & Ransom
Global
Markets
International
-
provides
Willis Capital Markets & Advisory
Advises on M&A and capital markets products
See important disclosures regarding Non-GAAP measures starting on page 19
14
Willis Global overview (continued)
2012 Global C&F: $1.12 billion
access for retail clients to global markets
2012 commissions and fees – by business

APPENDIX

See important disclosures regarding forward-looking statements on page 18
The Willis Cause
16

Important disclosures regarding forward-looking statements
17
This presentation contains certain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934,
which are intended to be covered by the safe harbors created by those laws. These forward-looking statements include information about possible or assumed future results of our
operations. 
All statements, other than statements of historical facts, included in this document that address activities, events or developments that we expect or anticipate may occur in the future,
including such things as our outlook, potential cost savings and accelerated adjusted operating margin and adjusted earnings per share growth, future capital expenditures, growth in
commissions and fees, business strategies, competitive strengths, goals, the benefits of new initiatives, growth of our business and operations, plans, and references to future successes
are forward-looking statements. Also, when we use the words such as ‘anticipate’, ‘believe’, ‘estimate’, ‘expect’, ‘intend’, ‘plan’, ‘probably’, or similar expressions, we are making forward-
looking statements.
There are important uncertainties, events and factors that could cause our actual results or performance to differ materially from those in the forward-looking statements contained in this
document, including the following: the impact of any regional, national or global political, economic, business, competitive, market, environmental or regulatory conditions on our global
business operations; the impact of current financial market conditions on our results of operations and financial condition, including as a result of those associated with the current
Eurozone crisis, any insolvencies of or other difficulties experienced by our clients, insurance companies or financial institutions; our ability to implement and realize anticipated benefits
of any operational change or any revenue generating initiatives; volatility or declines in insurance markets and premiums on which our commissions are based, but which we do not
control; our ability to continue to manage our significant indebtedness; our ability to compete effectively in our industry, including the impact of our refusal to accept contingent
commissions from carriers in the non-Human Capital areas of our retail brokerage business; material changes in commercial property and casualty markets generally or the availability of
insurance products or changes in premiums resulting from a catastrophic event, such as a hurricane; our ability to retain key employees and clients and attract new business; the timing
or ability to carry out share repurchases and redemptions; the timing or ability to carry out refinancing or take other steps to manage our capital and the limitations in our long-term debt
agreements that may restrict our ability to take these actions; any fluctuations in exchange and interest rates that could affect expenses and revenue; the potential costs and difficulties in
complying with a wide variety of foreign laws and regulations and any related changes, given the global scope of our operations; rating agency actions that could inhibit our ability to
borrow funds or the pricing thereof; a significant decline in the value of investments that fund our pension plans or changes in our pension plan liabilities or funding obligations; our ability
to achieve the expected strategic benefits of transactions, including any growth from associates; further impairment of the goodwill of one of our reporting units, in which case we may be
required to record additional significant charges to earnings; our ability to receive dividends or other distributions in needed amounts from our subsidiaries; fluctuations in our earnings as
a result of potential changes to our valuation allowance(s) on our deferred tax assets; changes in the tax or accounting treatment of our operations and fluctuations in our tax rate; any
potential impact from the US healthcare reform legislation; our involvements in and the results of any regulatory investigations, legal proceedings and other contingencies; underwriting,
advisory or reputational risks associated with non-core operations as well as the potential significant impact our non-core operations (including the Willis Capital Markets and Advisory
operations) can have on our financial results; our exposure to potential liabilities arising from errors and omissions and other potential claims against us; and the interruption or loss of our
information processing systems or failure to maintain secure information systems. 
The foregoing list of factors is not exhaustive and new factors may emerge from time to time that could also affect actual performance and results.  For more information see the section
entitled ‘‘Risk Factors’’ included in Willis’ Form 10-K for the year ended December 31, 2012 and our subsequent filings with the Securities and Exchange Commission. Copies are
available online at http://www.sec.gov or www.willis.com.
Although we believe that the assumptions underlying our forward-looking statements are reasonable, any of these assumptions, and therefore also the forward-looking statements based
on these assumptions, could themselves prove to be inaccurate. In light of the significant uncertainties inherent in the forward-looking statements included in this presentation, our
inclusion of this information is not a representation or guarantee by us that our objectives and plans will be achieved.  Our forward-looking statements speak only as of the date made and
we will not update these forward-looking statements unless the securities laws require us to do so. In light of these risks, uncertainties and assumptions, the forward-looking events
discussed in this presentation may not occur, and we caution you against unduly relying on these forward-looking statements.

Important disclosures regarding Non-GAAP measures
This
presentation
contains
references
to
"non-GAAP
financial
measures"
as
defined
in
Regulation
G
of
SEC
rules.
We
present these measures because we believe they are of interest to the investment community and they provide 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 on a generally accepted accounting principles (GAAP) basis.  These financial measures
should be viewed in addition to, not in lieu of, the Company’s condensed consolidated income statements and balance sheet
as
of
the
relevant
date.
Consistent
with
Regulation
G,
a
description
of
such
information
is
provided
below
and
a
reconciliation
of
certain
of
such
items
to
GAAP
information
can
be
found
in
our
periodic
filings
with
the
SEC.
Our
method
of
calculating
these non-GAAP financial measures may differ from other companies and therefore comparability may be limited.
Adjusted earnings per share (Adjusted EPS)
is defined as adjusted net income per diluted share.
Adjusted
net
income
is
defined
as
net
income,
excluding
certain
items
as
set
out
on
pages
21
and
22.
Adjusted operating income
is defined as operating income, excluding certain items as set out on pages 19 and 20.
Adjusted
operating
margin
is
defined
as
the
percentage
of
adjusted
operating
income
to
total
revenues.
Adjusted
EBITDA
is
defined
as
Adjusted
operating
income,
excluding
depreciation
and
amortization
as
set
out
on
page
23
Organic commissions & fees growth
excludes: (i) the impact of foreign currency translation; (ii) the first twelve months of
net commission and fee revenues generated from acquisitions; (iii) the net commission and fee revenues related to
operations disposed of in each period presented; (iv) in North America, legacy contingent commissions assumed as part of
the HRH acquisition and that had not been converted into higher standard commission; and (v) investment income and other
income from reported revenues, as set out on pages 25 and 26.
Reconciliations to GAAP measures are provided for selected non-GAAP measures.
18

Important disclosures regarding Non-GAAP measures (continued)
Operating Income to Adjusted Operating Income
See related footnotes on page 24
19
2007
2008
2009
2010
2011
2012
(In millions)
FY
FY
FY
FY
FY
FY
Operating Income
$620
$503
$690
$753
$566
($209)
Excluding:
Goodwill impairment charge
(a)
-
-
-
-
-
492
Write-off of unamortized cash retention awards
(b)
-
-
-
-
-
200
2012 cash bonus accrual
(c)
-
-
-
-
-
252
Insurance recovery
(d)
-
-
-
-
-
(10)
Write-off of uncollectible accounts receivable and
legal fees
(e)
-
-
-
-
22
13
India JV settlement
(f)
-
-
-
-
-
11
2011 Operational review
(g)
-
-
-
-
180
-
Financial Services Authority regulatory settlement
(h)
-
-
-
-
11
-
Venezuela currency devaluation
(k)
-
-
-
12
-
-
Net (gain)/loss on disposal of operations
(2)
-
(13)
2
(4)
3
Salaries and benefits -
severance programs
(l)
-
24
-
-
-
-
Salaries and benefits –
other
(m)
-
42
-
-
-
-
HRH integration costs
(n)
-
5
18
-
-
-
Other operating expenses
(o)
-
26
-
-
-
-
Accelerated amortization of intangibles assets
(p)
-
-
7
-
-
-
Redomicile costs
(q)
-
-
6
-
-
-
Adjusted Operating Income
$618
$600
$708
$767
$775
$752
Operating Margin
24.0%
17.8%
21.2%
22.6%
16.4%
(6.0%)
Adjusted Operating Margin
24.0%
21.2%
21.8%
23.0%
22.5%
21.6%

Important disclosures regarding Non-GAAP measures (continued)
Operating Income to Adjusted Operating Income
2011
(In millions)
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
Operating Income
$239
$156
$90
$81
$317
$179
$70
($775)
Excluding:
Goodwill impairment charge
(a)
-
-
-
-
-
-
-
492
Write-off of unamortized cash retention awards
(b)
-
-
-
-
-
-
-
200
2012 cash bonus accrual
(c)
-
-
-
-
-
-
-
252
Insurance recovery
(d)
-
-
-
-
-
(5)
-
(5)
Write-off of uncollectible accounts receivable and
legal fees
(e)
-
-
-
22
13
-
-
-
India JV settlement
(f)
11
-
2011 Operational review
(g)
97
18
15
50
-
-
-
-
Financial Services Authority regulatory settlement
(h)
-
11
-
-
-
-
-
-
Net (gain)/loss on disposal of operations
(4)
-
-
-
-
-
1
2
Adjusted Operating Income
$332
$185
$105
$153
$330
$174
$82
$166
  Operating Margin
23.7%
18.1%
11.8%
9.9%
31.3%
21.3%
9.3%
(89.0%)
  Adjusted Operating Margin
33.0%
21.5%
13.8%
18.7%
32.6%
20.7%
10.9%
19.1%
2012
See related footnotes on page 24
20

Important disclosures regarding Non-GAAP measures (continued)
Net Income to Adjusted Net Income
See related footnotes on page 24
21
2007
2008
2009
2010
2011
2012
(In millions, except per share data)
FY
FY
FY
FY
FY
FY
Net Income
$409
$302
$434
$455
$203
($446)
Excluding the following, net of tax:
Goodwill impairment charge
(a)
-
-
-
-
-
458
Write-off of unamortized cash retention awards
(b)
-
-
-
-
-
138
2012 cash bonus accrual
(c)
-
-
-
-
-
175
Insurance recovery
(d)
-
-
-
-
-
(6)
Write-off of uncollectible accounts receivable and legal fees
(e)
-
-
-
-
13
8
India JV settlement
(f)
-
-
-
-
-
11
2011 Operational review
(g)
-
-
-
-
128
-
Financial Services Authority regulatory settlement
(h)
-
-
-
-
11
-
Deferred tax valuation allowance
(i)
-
-
-
-
-
113
Make-whole amounts on repurchase and redemption of Senior
Notes and write-off of unamortized debt costs
(j)
-
-
-
-
131
-
Net (gain)/loss on disposal of operations
(2)
-
(11)
3
(4)
3
Venezuela currency devaluation
(k)
-
-
-
12
-
-
Salaries
and
benefits
-
severance
programs
(l)
-
17
-
-
-
-
Salaries
and
benefits
–
other
(m)
-
30
-
-
-
-
HRH financing (pre-close) and integration costs
(n)
-
10
13
-
-
-
Other operating expenses
(o)
-
19
-
-
-
-
Accelerated amortization of intangibles assets
(p)
-
-
4
-
-
-
Redomicile costs
(q)
-
-
6
-
-
-
Premium on early redemption of 2010 bonds
(r)
-
-
4
-
-
-
Adjusted Net Income
$407
$378
$450
$470
$482
$454
Diluted shares outstanding
147
148
169
171
176
176
Net income
per diluted share
Adjusted net income
per diluted share
$1.15
$2.74
$2.66
$2.66
$2.75
$2.57
$2.77
($2.58)
$2.58
$2.78
$2.04
$2.55

Important disclosures regarding Non-GAAP measures (continued)
Net Income to Adjusted Net Income
See related footnotes on page 24
22
(In millions, except per share data)
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
Net Income
$35
$84
$60
$24
$225
$107
$26
($804)
Excluding the following, net of tax:
Goodwill
impairment
charge
(a)
-
-
-
-
-
-
-
458
Write-off
of
unamortized
cash
retention
awards
(b)
-
-
-
-
-
-
-
138
2012
cash
bonus
accrual
(c)
-
-
-
-
-
-
-
175
Insurance
recovery
(d)
-
-
-
-
-
(3)
-
(3)
Write-off
of
uncollectible
accounts
receivable
and
legal
fees
(e)
-
-
-
13
8
-
-
-
India
JV
settlement
(f)
-
-
-
-
-
-
11
2011
Operational
review
(g)
69
12
11
36
-
-
-
-
Financial
Services
Authority
regulatory
settlement
(h)
-
11
-
-
-
-
-
-
Deferred
tax
valuation
allowance
(i)
-
-
-
-
-
-
-
113
Net (gain)/loss on disposal of operations
(4)
-
-
-
-
-
1
2
Make-whole amounts on repurchase and redemption of
Senior
Notes
and
write-off
of
unamortized
debt
costs
(j)
124
-
1
6
-
-
-
-
Adjusted Net Income
$224
$107
$72
$79
$233
$104
$38
$79
Diluted shares outstanding
174
176
176
176
176
176
175
175
Net income 
per diluted share
Adjusted net income
per diluted share
$1.28
2011
$0.41
$1.29
$0.20
$0.14
$0.45
$0.48
$0.61
$0.34
$0.22
$1.32
2012
(4.65)
$0.45
$0.61
$0.59
$0.15

Important disclosures regarding Non-GAAP measures (continued)
Adjusted EBITDA and Debt/Adjusted EBITDA
See related footnotes on page 24
23
2007
2008
2009
2010
2011
2012
(In millions)
FY
FY
FY
FY
FY
FY
Operating Income
$620
$503
$690
$753
$566
($209)
Excluding:
Goodwill
impairment
charge
(a)
-
-
-
-
-
492
Write-off
of
unamortized
cash
retention
awards
(b)
-
-
-
-
-
200
2012
cash
bonus
accrual
(c)
-
-
-
-
-
252
Insurance
recovery
(d)
-
-
-
-
-
(10)
Write-off of uncollectible accounts receivable and
legal
fees
(e)
-
-
-
-
22
13
India
JV
settlement
(f)
-
-
-
-
-
11
2011
Operational
review
(g)
-
-
-
-
180
-
Financial
Services
Authority
regulatory
settlement
(h)
-
-
-
-
11
-
Venezuela
currency
devaluation
(k)
-
-
-
12
-
-
Net (gain)/loss on disposal of operations
(2)
-
(13)
2
(4)
3
Salaries
and
benefits
-
severance
programs
(l)
-
24
-
-
-
-
Salaries
and
benefits
–
other
(m)
-
42
-
-
-
-
HRH integration costs
(n)
-
5
18
-
-
-
Other operating expenses
(o)
-
26
-
-
-
-
Accelerated
amortization
of
intangibles
assets
(p)
-
-
7
-
-
-
Redomicile costs
(q)
-
-
6
-
-
-
Adjusted Operating Income
$618
$600
$708
$767
$775
$752
Add back
Depreciation
52
54
64
63
69
79
Amortization of intangibles
14
36
93
82
68
59
Adjusted EBITDA
$684
$690
$865
$912
$912
$890
Debt
1,250
2,650
2,374
2,267
2,369
2,353
Debt / Adjusted EBITDA
1.8x
3.8x
2.7x
2.5x
2.6x
2.6x

Important disclosures regarding Non-GAAP measures (continued)
Notes to the GAAP to non-GAAP reconciliations
24
(a)
Impairment charge to reduce carrying value of North America segment goodwill.
(b)
Charge to write-off unamortized balance of past cash retention awards
(c)
Accrual for 2012 bonuses to be paid in 2013
(d)
Insurance recovery related to previously disclosed improperly recorded revenue in Chicago
(e)
Write-off of uncollectible accounts receivable  balance, together with associated legal costs, related to a fraudulent overstatement of Commissions and Fees
from the years 2004 to 2011, in a stand-alone North America business.
(f)
Settlement with former partners related to the termination of a joint venture arrangement in India. In the third quarter of 2012, a $1 million loss on disposal of
operations was recorded related to this termination.
(g)
$180 million pre-tax charge in FY2011 relating to the 2011 operational review,  including $98 million of severance costs relating to the elimination of
approximately 1,200 positions in FY2011.
(h)
Regulatory settlement with the Financial Services Authority (FSA).
(i)
Valuation allowance against deferred tax assets
(j)
Make-whole amounts on repurchase and redemption of Senior Notes and write-off of unamortized debt costs
(k)
With effect from January 1, 2010, the Venezuelan economy was designated as hyper-inflationary. The Venezuelan government also devalued the Bolivar
Fuerte in January 2010. As a result of these actions, the Company recorded a one-time charge in other expenses to reflect the re-measurement of its net
assets denominated in Venezuelan Bolivar Fuerte.
(l)
Severance costs excluded from adjusted operating income and adjusted net income in 2008 relate to approximately 350 positions through the year ended
December 31, 2008 that were eliminated as part of the 2008 expense review. Severance costs also arise in the normal course of business and these
charges (pre-tax) amounted to $24 million and $2 million for the years ended December 31, 2009 and 2008, respectively.
(m)
Other 2008 expense review salaries and benefits costs relate primarily to contract buyouts.
(n)
2009 HRH integration costs include $nil million severance costs ($2 million in 2008).
(o)
Other operating expenses primarily relate to property and systems rationalization.
(p)
The charge for the accelerated amortization for intangibles relates to the HRH brand name.  Following the successful integration of HRH into our North
American operations, we announced on October 1, 2009 that our North America retail operations would change their name from Willis HRH to Willis North
America.  Consequently, the intangible asset recognized on the acquisition of HRH relating to the HRH brand has been fully amortized.
(q)
These are legal and professional fees incurred as part of the Company’s redomicile of its parent Company from Bermuda to Ireland.
(r)
On September 29, 2009 we repurchased $160 million of our 5.125 percent Senior Notes due July 2010 at a premium of $27.50 per $1,000 face value,
resulting in a total premium on redemption, including fees, of  $5 million.

Commissions and Fees Analysis
Important disclosures regarding Non-GAAP measures (continued)
25
2012
2011
Change
Foreign
currency
translation
Acquisitions
and 
disposals
Contingent
Commissions
Organic
commissions
and fees
growth
(a)
($ millions)
%
%
%
%
%
Three months ended
December 31, 2012
Global
$237
$213
11.3
(0.3)
-
-
11.6
North
America
(b)
331
316
4.7
(0.3)
-
-
5.0
International
299
281
6.4
(1.0)
-
-
7.4
Commissions and Fees
$867
$810
7.0
(0.5)
-
-
7.5
Twelve months ended
December 31, 2012
Global
$1,124
$1,073
4.8
(1.3)
-
-
6.1
North
America
(b)
1,306
1,314
(0.6)
-
-
-
(0.6)
International
1,028
1,027
0.1
(4.8)
-
-
4.9
Commissions and Fees
$3,458
$3,414
1.3
(1.8)
-
-
3.1
(a)
Organic commission and fees growth excludes: (i) the impact of foreign currency translation; (ii) the first twelve months of net commission and fee revenues
generated from acquisitions; (iii) the net commission and fee revenues related to operations disposed of in each period presented; (iv) in North America,
legacy contingent commissions assumed as part of HRH acquisition and that had not been converted into higher standard commission; and (v) investment
income and other income from reported revenues
(b)
Included in North America reported commissions and fees were legacy HRH contingent commissions of $nil in the fourth quarter of 2012  and the fourth
quarter of 2011 and $2 million in 2012 compared with $5 million in 2011. 

(a)
Included in North America reported commissions and fees were legacy HRH contingent commissions of $5 million in 2011 compared with $11
million in 2010 and $27 million in 2009.
Important disclosures regarding Non-GAAP measures (continued)
Commissions and Fees Analysis
2011
2010
Change
Foreign
currency
translation
Acquisitions
and 
disposals
Contingent
Commissions
Organic
commissions
and fees
growth
($ millions)
%
%
%
%
%
2011 Full year
Global
$1,073
$987
8.7
2.0
-
-
6.7
North America
(a)
1,314
1,369
(4.0)
-
(0.4)
-
(3.6)
International
1,027
937
9.6
4.8
-
-
4.8
Commissions and Fees
$3,414
$3,293
3.7
2.1
(0.2)
-
1.8
2010
2009
Change
Foreign
currency
translation
Acquisitions
and 
disposals
Contingent
Commissions
Organic
commissions
and fees
growth
($ millions)
%
%
%
%
%
2010 Full year
Global
$987
$921
7.2
-
-
-
7.2
North America
(a)
1,369
1,381
(0.9)
0.2
-
(1)
-
International
937
898
4.3
(1.8)
0.8
-
5.3
Commissions and Fees
$3,293
$3,200
2.9
(0.8)
-
-
3.7
26

WILLIS GROUP
HOLDINGS
WILLIS GROUP HOLDINGS
Fact Book
Fourth Quarter 2012
March 2013
WILLIS GROUP
HOLDINGS