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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): November 8, 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 November 8, 2013, Willis Group Holdings Public Limited Company posted its Fact Book for the quarter ended September 30, 2013 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 Quarter Ended September 30, 2013

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: November 8, 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 Quarter Ended September 30, 2013
EX-99.1
WILLIS GROUP
HOLDINGS
Fact Book
Third Quarter 2013
November 2013
Exhibit 99.1

With roots dating to
1828, Willis operates today on every continent, with more than
17,500 employees in over 400 offices
Across geographies, industries and specialties, Willis provides its local and multinational
clients with resilience for a risky world
Willis is known for its market-leading products and professional services in risk
management and risk transfer
Willis experts rank among the world’s leading authorities on analytics, modelling and
mitigation
strategies
at
the
intersection
of
global
commerce
and
extreme
events
Willis
Global
Franchise
2012 Commissions and Fees by Segment
2012 C&F: $3.46 billion
A leading global risk advisor, insurance and
reinsurance broker
|  2
Willis Subsidiaries and Associates
North
America
38%
International
30%
Global
32%

Summary Q3 2013 financial results
See important disclosures regarding non-GAAP measures starting on page 17
Q3 2013
Q3 2012
Reported
commission and
fee growth
5.6%
(0.5)%
Organic
commission and
fee growth
5.7%
2.2%
Reported
operating margin
9.4%
9.3%
Adjusted
operating margin
9.6%
10.9%
Reported EPS
$(0.15)
$0.15
Adjusted EPS
$0.19
$0.22
|  3
Positive Q3 2013 organic commission
and fee growth across all three
business segments
Q3 2012 reported and adjusted EPS
does not reflect the $0.07 negative
impact from the change in remuneration
policy

Organic Q3 2013 commissions and fees growth
Q3 2013
Q3 2012
North America
3.9%
(0.5)%
International
7.8%
4.9%
Global
6.4%
2.9%
Willis Group
5.7%
2.2%
Growth across all segments
North America
Growth was reported across most
geographic regions; Human Capital and
Construction up low single digits and mid-
single digits, respectively
International
Western Europe flat while Eastern Europe
grew low double digits; Latin America grew
mid-teens; Asia was up high double digits
and Australasia was up low double digits;
UK was down mid-single digits
Global
Led by Willis Re, with high single digit
growth; Global Specialty grew mid-single-
digits
See important disclosures regarding non-GAAP measures starting on page 17
|  4

Reported operating margin 9.4%; Adjusted operating margin 9.6%
Adjusted operating margin down 130 bps from prior year quarter, primarily driven by:
Higher salaries and benefits and other operating expenses
Partially offset by higher commissions and fees
Q3 2012 adjusted operating margin would have been 230 bps lower had the change to
compensation policy been in effect from start of 2012
Reported EPS of $(0.15); Adjusted EPS of $0.15
Reported EPS includes $60 million loss related to early extinguishment of debt and $1 million for
related fees
Adjusted EPS down $0.03 from Q3 2012
Q3 2012 results would have been $0.07 per diluted share lower had the change to remuneration
policy been in effect from start of 2012
See important disclosures regarding non-GAAP measures starting on page 17
Q3 2013 financial results
|  5

WSH & Peers –
Organic growth trends
|  6
Note:  Peer averages are based on Willis estimates using public information regarding insurance brokerage operations of AJG, AON, BRO, MMC
Average 2008-2012:
WSH: 3%
Peers: 1%
See important disclosures regarding non-GAAP measures starting on page 17
4%
2%
4%
2%
3%
4.1%
6.3%
5.7%
-1%
-2%
-1%
2%
4%
5.5%
4.8%
5.2%
2008
2009
2010
2011
2012
1Q13
2Q13
3Q13
WSH
Peers

($ millions)
2012 corporate/non-operating uses of cash
Dividends $185 million
Capex $135 million
Share buyback $100 million
M&A expenditures of ~$70 million
$86 million increase in cash flow from operations in 2012
$623 million of cash and cash equivalents at September 30, 2013
Strong cash flow from operations
|  7
$253
$419
$489
$439
$525
2008
2009
2010
2011
2012

Adjusted EBITDA $886 million in LTM September 2013
Debt outstanding $2.3 billion as at September 30, 2013
(a)
Includes impact from acquisition of HRH as of 10/1/2008.
Leverage ratios
|  8
See important disclosures regarding non-GAAP measures starting on page 17
3.8x
2.7x
2.5x
2.6x
2.6x
2.6x
2008 (a)
2009
2010
2011
2012
LTM Sep
2013

SEGMENT OVERVIEWS

Extensive retail platform
Able to leverage industry and specialty
practice group expertise across Willis
network
Major practice groups include:
Human Capital (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
6,000 associates
110 locations (Other includes Canada
and Mexico)
Willis North America overview
|  10
(1)
CAPPPS: Captives, Actuarial, Programs, Pooling and Personal Lines
Metro /
Northeast
14%
Midwest
17%
Atlantic
22%
West
14%
South
17%
CAPPPS
(1)
12%
Other
4%
2012 commissions and fees – by region
Segment overview
2012 North America C&F: $1.31 billion

Segment overview
Retail operations in
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
7,000 associates
170 offices in 43 countries
2012 International C&F: $1.03 billion
Willis International overview
|  11
Western and Eastern Europe
United Kingdom
Latin America
Asia Pacific
South Africa
Middle East
Latin America
17%
UK
18%
Western
Europe
42%
Australasia
7%
South Africa
2%
Asia
9%
Eastern Europe
5%
2012 commissions and fees – by region

Reinsurance, Specialty Insurance and
Capital Markets businesses
3,600 associates; clients around the globe
Willis Re
One of the world’s largest reinsurance
brokers with three divisions: North
America, International and Specialty
Strong market share in major markets,
particularly marine and aviation
Complete range of transactional
capabilities including, in conjunction with
WCM&A, a wide variety of capital markets
based products
Cutting edge analytical and advisory
services, including Willis Research
Network, the insurance industry’s largest
partnership with global academic research
2012 Global C&F: $1.12 billion
Willis Global overview
|  12
Segment overview
Aerospace /
Inspace
8%
Other
6%
Reinsurance
45%
Willis Capital
Markets
2%
Faber Global
17%
Finex
6%
Energy
5%
Construction
3%
Marine
8%
2012 commissions and fees – by region

Global Specialty, with strong global
positions in:
Marine & Energy
Construction
Financial & Executive Risks
Financial
Solutions
–
political
risks
and
UK
financial institutions
Faber
Global
–
wholesale
and
facultative
solutions through London, European & Bermuda
markets
Fine Art, Jewelry and Specie, Bloodstock and
Kidnap & Ransom
Placement
Specialist placement of risk into worldwide
insurance market
Willis Capital Markets & Advisory
Advises on M&A and capital markets products
Willis Global overview (continued)
2012 Global C&F: $1.12 billion
|  13
Segment overview
Reinsurance
45%
Other
6%
Aerospace /
Inspace
8%
Marine
8%
Construction
3%
Energy
5%
Finex
6%
Faber Global
17%
Willis Capital
Markets
2%
Aerospace
–
includes
Inspace
2012
commissions
and
fees
–
by
business

APPENDIX

The Willis Cause
|  15

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 expense reduction initiative, charge or any revenue generating initiatives; our ability to implement and fully realize anticipated benefits of our new growth strategy; 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; fluctuations in our earnings as
a result of potential changes to our valuation allowance(s) on our deferred tax assets; 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; 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 & 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 forward-looking statements
|  16

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 operating income
is defined as operating income, excluding certain items as set out on pages 18 and 19.
Adjusted operating margin
Adjusted net income
is
defined
as
net
(loss)
income,
excluding
certain
items
as
set
out
on
pages
20
and
21.
Adjusted earnings per share (Adjusted EPS)
is defined as adjusted net income per diluted share.
Adjusted EBITDA
is
defined
as
Adjusted
operating
income,
excluding
depreciation
and
amortization
as
set
out
on
pages
22
and 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;
and
(iii)
the
net
commission
and
fee
revenues
related
to
operations disposed of in each period presented, as set out on pages 24 and 25 .
Reconciliations to GAAP measures are provided for selected non-GAAP measures.
|  17
is defined as the percentage of adjusted operating income to total revenues.

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

2013
2012
(In millions)
3Q
3Q
Operating income
$75
$70
Excluding:
Fees
related
to
the
extinguishment
of
debt
(a)
1
-
India
JV
settlement
-
11
Loss on disposal of operations
-
1
Adjusted operating income
$76
$82
Operating margin
9.4%
9.3%
Adjusted operating margin
9.6%
10.9%
Important disclosures regarding non-GAAP measures (continued)
Operating income to adjusted operating income
|  19
See related footnotes on page 26
(h)

Important disclosures regarding non-GAAP measures (continued)
Net income (loss) to adjusted net income
See related footnotes on page 26
|  20
FY
2008
FY
2009
FY
2010
FY
2011
FY
2012
(In millions, except per share data)
Net income (loss)
$302
$434
$455
$203
($446)
Excluding the following, net of tax:
Goodwill
impairment
charge
(c)
-
-
-
-
458
Write-off
of
unamortized
cash
retention
awards
(d)
-
-
-
-
138
2012
cash
bonus
accrual
(e)
-
-
-
-
175
Insurance
recovery
(f)
-
-
-
-
(6)
Write-off
of
uncollectible
accounts
receivable
and
legal
fees
(g)
-
-
-
13
8
India
JV
settlement
(h)
-
-
-
-
11
2011 Operational review
(i)
-
-
-
128
-
Financial Services Authority regulatory settlement
-
-
-
11
-
Deferred tax valuation allowance
-
-
-
-
113
Make-whole amounts on repurchase and redemption of Senior Notes and write-
off of unamortized debt costs
-
-
-
131
-
Net (gain)/loss on disposal of operations
-
(11)
3
(4)
3
Venezuela
currency
devaluation
(j)
-
-
12
-
-
Salaries and benefits -
severance programs
(k)
17
-
-
-
-
Salaries
and
benefits
–
other
(l)
30
-
-
-
-
HRH
financing
(pre-close)
and
integration
costs
(m)
10
13
-
-
-
Other operating expenses
(n)
19
-
-
-
-
Accelerated
amortization
of
intangibles
assets
(o)
-
4
-
-
-
Redomicile
costs
(p)
-
6
-
-
-
Premium
on
early
redemption
of
2010
bonds
(q)
-
4
-
-
-
Adjusted net income
$378
$450
$470
$482
$454
Diluted shares outstanding
148
169
171
176
176
$2.04
$2.57
$2.66
$1.15
($2.58)
Net income (loss) per diluted share
$2.55
$2.66
$2.75
$2.74
$2.58
Adjusted net income per diluted share

Important disclosures regarding non-GAAP measures (continued)
Net income (loss) to adjusted net income
See related footnotes on page 26
|  21
(In millions, except per share data)
3Q 2013
3Q 2012
Net income (loss)
$(27)
$26
Excluding the following, net of tax:
Loss
on
extinguishment
of debt
(a)
60
-
Fees
related
to
the
extinguishment
of debt
(a)
1
-
India JV settlement
(h)
-
11
Loss on disposal of operations
-
1
Adjusted net income
$34
$38
Diluted shares outstanding
180
175
$(0.15)
$0.15
Net (loss) income per diluted share
$0.19
$0.22
Adjusted net income per diluted share

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

Important disclosures regarding non-GAAP measures (continued)
Adjusted EBITDA and Debt/Adjusted EBITDA
See related footnotes on page 26
|  23
2012
2013
(In millions)
4Q
1Q
2Q
3Q
LTM
Operating (loss) income
($775)
$287
$171
$75
($242)
Excluding:
Fees related to extinguishment of debt
-
-
-
1
1
Expense reduction initiative
(b)
-
46
-
-
46
Goodwill impairment charge
(c)
492
-
-
-
492
Write-off of unamortized cash retention awards
(d)
200
-
-
-
200
2012 cash bonus accrual
(e)
252
-
-
252
Insurance recovery
(f)
-5
-
-
-
-5
Net gain on disposal of operations
2
-
-
-
2
Adjusted operating income
$166
$333
$171
$76
$746
Add back
Depreciation
20
21
21
21
83
Amortization of intangibles
15
14
14
14
57
Adjusted EBITDA
$201
$368
$206
$111
$886
Debt
2,332
Debt / Adjusted EBITDA
2.6x
(a)

Important disclosures regarding non-GAAP measures (continued)
Commissions and fees analysis
|  24
2013
2012
Change
Foreign
currency
translation
Acquisitions
and 
disposals
Organic
commissions
and fees
growth
($ millions)
%
%
%
%
Three months ended
September 30, 2013
North America
$328
$315
4.1
(0.4)
0.6
3.9
International
213
199
7.0
(0.8)
0.0
7.8
Global
250
235
6.4
(0.8)
0.8
6.4
Commissions and Fees
$791
$749
5.6
(0.6)
0.5
5.7
2013
2012
Change
Foreign
currency
translation
Acquisitions
and 
disposals
Organic
commissions
and fees
growth
($ millions)
%
%
%
%
Nine months ended
September 30, 2013
North America
$1,024
$975
5.0
(0.1)
0.6
4.5
International
760
729
4.3
(0.4)
0.2
4.5
Global
938
887
5.7
(1.2)
0.2
6.7
Commissions and Fees
$2,722
$2,591
5.1
(0.5)
0.3
5.3

Important disclosures regarding non-GAAP measures (continued)
Commissions and fees analysis
|  25
2012
2011
Change
Foreign
currency
translation
Acquisitions
and 
disposals
Organic
commissions
and fees growth
($ millions)
%
%
%
%
2012 Full year
Global
$1,124
$1,073
4.8
(1.3)
-
6.1
North America
1,306
1,314
(0.6)
-
-
(0.6)
International
1,028
1,027
0.1
(4.8)
-
4.9
Commissions and Fees
$3,458
$3,414
1.3
(1.8)
-
3.1
2011
2010
Change
Foreign
currency
translation
Acquisitions
and 
disposals
Organic
commissions
and fees growth
($ millions)
%
%
%
%
2011 Full year
Global
$1,073
$987
8.7
2.0
-
6.7
North America
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

IImportant disclosures regarding non-GAAP measures (continued)
rtant disclosures regarding Non-GAAP measures (continued)
Notes to the GAAP to non-GAAP reconciliations
|  26
(a)
In August 2013, Willis bought back $521 million of outstanding 2015, 2017 and 2019 senior notes through a tender offer. In conjunction with this activity, the Company recorded
a loss on debt extinguishment of $60 million. Willis also recorded a $1 million expense for tender related fees (recorded within other operating expenses).
(b)
$46 million pre-tax charge associated with expense reduction initiative in 1Q13.
(c)
Impairment charge to reduce carrying value of North America segment goodwill.
(d)
Charge to write-off unamortized balance of past cash retention awards related to change in remuneration policy.
(e)
Accrual for 2012 bonuses paid in 2013 related to change in remuneration policy.
(f)
Insurance recovery related to (g) below.
(g)
Write-off of uncollectible accounts receivable balance, together with associated legal costs.
(h)
Settlement with former partners related to the termination of a joint venture arrangement in India.
(i)
$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.
(j)
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.
(k)
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 $6 million, $nil,
$15 million, $24 million and $2 million for the years ended December 31, 2012, 2011, 2010, 2009 and 2008, respectively.
(l)
Other 2008 expense review salaries and benefits costs relate primarily to contract buyouts.
(m)
2009 HRH integration costs include $nil severance costs ($2 million in 2008).
(n)
Other operating expenses primarily relate to property and systems rationalization.
(o)
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.
(p)
These are legal and professional fees incurred as part of the Company’s redomicile of its parent Company from Bermuda to Ireland.
(q)
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.

WILLIS GROUP HOLDINGS
Fact Book
Third Quarter 2013
November 2013