Document and Entity Information (USD $)	3 Months Ended
Document and Entity Information (USD $)	Mar. 31, 2011	Apr. 30, 2011	Feb. 18, 2011
Document and Entity Information [Abstract]
Entity Registrant Name	WILLIS GROUP HOLDINGS PLC
Entity Central Index Key	0001140536
Document Type	10-Q
Document Period End Date	Mar. 31, 2011
Amendment Flag	false
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	Q1
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float			$ 6,651,075,613
Entity Common Stock, Shares Outstanding		172,030,207

Condensed Consolidated Statements of Operations (Unaudited) (USD $)
In Millions, except Per Share data, unless otherwise specified

3 Months Ended

Mar. 31, 2011

Mar. 31, 2010

REVENUES

Commissions and fees

$ 1,000

$ 963

Investment income

Other income

Total revenues

1,008

972

EXPENSES

Salaries and benefits

(584)

(486)

Other operating expenses

(153)

(149)

Depreciation expense

(20)

(15)

^[1]

Amortization of intangible assets

(17)

(21)

^[1]

Net gain on disposal of operations

Total expenses

(770)

(671)

OPERATING INCOME

238

301

Make-whole on repurchase and redemption of senior notes and write-off of unamortized debt issuance costs

(171)

Interest expense

(40)

(43)

INCOME BEFORE INCOME TAXES AND INTEREST IN EARNINGS OF ASSOCIATES

258

Income taxes

(1)

(67)

INCOME BEFORE INTEREST IN EARNINGS OF ASSOCIATES

191

Interest in earnings of associates, net of tax

NET INCOME

211

^[1]

Less: net income attributable to noncontrolling interests

(8)

(7)

NET INCOME ATTRIBUTABLE TO WILLIS GROUP HOLDINGS

$ 34

$ 204

EARNINGS PER SHARE - BASIC AND DILUTED

Basic earnings per share

$ 0.2

$ 1.21

Diluted earnings per share

$ 0.2

$ 1.2

CASH DIVIDENDS DECLARED PER SHARE

$ 0.26

[1]	The 2010 Unaudited Condensed Consolidated Statement of Cash Flows has been recast to conform to the new balance sheet presentation. See Note 2 - Basis of Presentation and Significant Accounting Policies for details.

Condensed Consolidated Balance Sheets (Unaudited) (USD $) In Millions, unless otherwise specified	3 Months Ended	12 Months Ended
	Mar. 31, 2011	Dec. 31, 2010
CURRENT ASSETS
Cash and cash equivalents	$ 432	$ 316
Accounts receivable, net	992	839
Fiduciary assets	10,484	9,569
Deferred tax assets	27	36
Other current assets	369	340
Total current assets	12,304	11,100
NON-CURRENT ASSETS
Fixed assets, net	386	381
Goodwill	3,312	3,294
Other intangible assets, net	477	492
Investments in associates	193	161
Deferred tax assets	7	7
Pension benefits asset	202	179
Other non-current assets	357	233
Total non-current assets	4,934	4,747
TOTAL ASSETS	17,238	15,847
CURRENT LIABILITIES
Fiduciary liabilities	10,484	9,569
Deferred revenue and accrued expenses	349	298
Income taxes payable	29	57
Short-term debt and current portion of long-term debt	145	110
Deferred tax liabilities	8	9
Other current liabilities	343	266
Total current liabilities	11,358	10,309
NON-CURRENT LIABILITIES
Long-term debt	2,432	2,157
Liability for pension benefits	156	164
Deferred tax liabilities	65	83
Provisions for liabilities	187	179
Other non-current liabilities	371	347
Total non-current liabilities	3,211	2,930
Total liabilities	14,569	13,239
COMMITMENTS AND CONTINGENCIES
EQUITY
Preference shares, $0.000115 nominal value; Authorized: 1,000,000,000; Issued nil shares in 2011 and 2010	0	0
Additional paid-in capital	1,017	985
Retained earnings	2,125	2,136
Accumulated other comprehensive loss, net of tax	(509)	(541)
Treasury shares, at cost, 46,408 shares in 2011 and 2010 and 40,000 shares, Euro 1 nominal value, in 2011 and 2010	(3)	(3)
Total Willis Group Holdings stockholders' equity	2,630	2,577
Noncontrolling interests	39	31
Total equity	2,669	2,608
TOTAL LIABILITIES AND EQUITY	17,238	15,847
United States of America, Dollars
EQUITY
Ordinary shares, common stock	0	0
Euro
EQUITY
Ordinary shares, common stock	$ 0	$ 0

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical)	Mar. 31, 2011 USD ($)	Mar. 31, 2011 EUR (€)	Dec. 31, 2010 USD ($)	Dec. 31, 2010 EUR (€)	Mar. 31, 2011 United States of America, Dollars USD ($)	Dec. 31, 2010 United States of America, Dollars USD ($)	Mar. 31, 2011 Euro EUR (€)	Dec. 31, 2010 Euro EUR (€)
EQUITY
Common shares, par value					$ 0.000115	$ 0.000115	€ 1	€ 1
Common shares, Shares Authorized					4,000,000,000	4,000,000,000	40,000	40,000
Common shares, Shares Issued					171,718,273	170,883,865	40,000	40,000
Preference shares, Nominal Value	$ 0.000115		$ 0.000115
Preference shares, Shares Authorized	1,000,000,000	1,000,000,000	1,000,000,000	1,000,000,000
Preference shares, Shares Issued	0	0	0	0
Treasury Stock Nominal Value		€ 1		€ 1
Treasury stock, shares					46,408	46,408	40,000	40,000

Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $)
In Millions, unless otherwise specified

3 Months Ended

Mar. 31, 2011

Mar. 31, 2010

CASH FLOWS FROM OPERATING ACTIVITIES

Net income

$ 42

$ 211

^[1]

Adjustments to reconcile net income to total net cash provided by operating activities:

Net gain on disposal of operations and fixed and intangible assets

(4)

Depreciation expense

^[1]

Amortization of intangible assets

^[1]

Provision for doubtful debts

Benefit for deferred income taxes

(8)

(10)

^[1]

Excess tax benefits from share-based payment arrangements

(1)

^[1]

Share-based compensation

^[1]

Make- whole on repurchase and redemption of senior notes and write off of unamortized debt issuance costs

171

Undistributed earnings of associates

(16)

(20)

^[1]

Non-cash Venezuela currency devaluation

^[1]

Effect of exchange rate changes on net income

(8)

^[1]

Change in operating assets and liabilities, net of effects from purchase of subsidiaries:

Accounts receivable, net

(139)

(77)

^[1]

Fiduciary assets

(779)

(1,921)

^[1]

Fiduciary liabilities

779

1,921

^[1]

Other assets

(172)

(131)

^[1]

Other liabilities

^[1]

Movement on provisions

(20)

^[1]

Net cash provided by operating activities

^[1]

CASH FLOWS FROM INVESTING ACTIVITIES

Proceeds on disposal of fixed and intangible assets

^[1]

Additions to fixed assets

(20)

(29)

^[1]

Acquisitions of subsidiaries, net of cash acquired

(3)

(13)

^[1]

Acquisition of investments in associates

(2)

(1)

^[1]

Investment in Trident V Parallel Fund, LP

(1)

Net cash used in investing activities

(24)

(41)

^[1]

(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS FROM OPERATING AND INVESTING ACTIVITIES

(17)

^[1]

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from draw down of revolving credit facility

^[1]

Senior notes issued, net of debt issuance costs

788

Repayments of debt

(492)

(43)

^[1]

Make-whole on repurchase and redemption of senior notes

(146)

Proceeds from issue of shares

^[1]

Excess tax benefits from share-based payment arrangements

(1)

^[1]

Dividends paid

(45)

(44)

^[1]

Acquisition of noncontrolling interests

(7)

(4)

^[1]

Dividends paid to noncontrolling interests

(1)

^[1]

Net cash provided by (used in) financing activities

127

(17)

^[1]

INCREASE IN CASH AND CASH EQUIVALENTS

110

^[1]

Effect of exchange rate changes on cash and cash equivalents

(10)

^[1]

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD

316

221

^[1]

CASH AND CASH EQUIVALENTS, END OF PERIOD

$ 432

$ 222

^[1]

[1]	The 2010 Unaudited Condensed Consolidated Statement of Cash Flows has been recast to conform to the new balance sheet presentation. See Note 2 - Basis of Presentation and Significant Accounting Policies for details.

Nature of Operations

3 Months Ended

Mar. 31, 2011

Nature of Operations [Abstract]

NATURE OF OPERATIONS


1.	NATURE OF OPERATIONS

Willis Group Holdings and its subsidiaries provide a broad range of insurance and reinsurance broking and risk management consulting services to its clients worldwide, both directly and indirectly through its associates. The Company provides both specialized risk management advisory and consulting services on a global basis to clients engaged in specific industrial and commercial activities, and services to small, medium and major corporates through its retail operations.

In its capacity as an advisor and insurance broker, the Company acts as an intermediary between clients and insurance carriers by advising clients on risk management requirements, helping clients determine the best means of managing risk, and negotiating and placing insurance risk with insurance carriers through the Company’s global distribution network.

Basis of Presentation and Significant Accounting Policies

3 Months Ended

Mar. 31, 2011

Basis of Presentation and Significant Accounting Policies [Abstract]

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES


2.	BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

The accompanying condensed consolidated financial statements (‘Interim Financial Statements’) have been prepared in accordance with accounting principles generally accepted in the United States of America (‘US GAAP’).

The Interim Financial Statements are unaudited but include all adjustments (consisting of normal recurring adjustments) which the Company’s management considers necessary for a fair presentation of the financial position as of such dates and the operating results and cash flows for those periods. Certain information and footnote disclosures normally included in financial statements prepared in accordance with US GAAP have been condensed or omitted. However, the Company believes that the disclosures are adequate to make the information presented not misleading. The results of operations for the three month period ended March 31, 2011 may not necessarily be indicative of the operating results for the entire fiscal year.

These Interim Financial Statements should be read in conjunction with the Company’s consolidated balance sheets as of December 31, 2010 and 2009, and the related consolidated statements of operations, cash flows and changes in equity for each of the three years in the period ended December 31, 2010 included in the Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 25, 2011 and Current Report on Form 8-K subsequently filed on March 14, 2011.

Balance sheet presentation

As disclosed in the Company’s Form 10-K for the period ended December 31, 2010, the Company now provides additional disclosure within the unaudited condensed consolidated balance sheet of:


•	the Group’s non-fiduciary balances; and

•	the further distinction between those assets and liabilities that are expected to be realized within or later than twelve months of the balance sheet date.

The Company believes this amended presentation better reflects the Company’s liquidity position and exposures to credit risk. Accordingly, the unaudited condensed consolidated statement of cash flows for the three months ended March 31, 2010 has been recast to conform with the new balance sheet presentation.

Devaluation of Venezuelan currency

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 $12 million charge in other operating expenses in the three month period ended March 31, 2010 to reflect the re-measurement of its net assets denominated in Venezuelan Bolivar Fuerte at January 1, 2010.

Salaries and Benefits Expense

3 Months Ended

Mar. 31, 2011

Salaries and Benefits Expense [Abstract]

SALARIES AND BENEFITS EXPENSE


3.	SALARIES AND BENEFITS EXPENSE

Severance Costs

As part of the Company’s 2011 operational review the Company incurred severance costs of $46 million in the three months ended March 31, 2011. These costs relate to approximately 450 positions that have been eliminated.

$40 million of these severance costs for these employees were recognized pursuant to a one-time benefit arrangement, with the remaining $6 million recognized pursuant to the terms of employees’ existing benefit arrangements or employee arrangements. All of these costs have been recognized within salaries and benefits.

In addition to the severance incurred as part of the 2011 operational review, an additional charge of $2 million was recognised within salaries and benefits relating to the waiver of retention awards held on the balance sheet for the approximately 450 positions that have been eliminated.

At March 31, 2011, the Company’s severance liability under the 2011 operational review was:


	(millions)

Balance at January 1, 2011	$	—
Severance costs accrued		46
Cash payments		(16	)
Foreign exchange		—

Balance at March 31, 2011	$	30

It is estimated that a total of $62 million will be incurred under the 2011 operational review for severance throughout 2011 across the Group.

The Company evaluates the performance of its operating segments based on organic revenue growth and operating income. For internal reporting and segmental reporting, segmental management are not held accountable for certain items deemed to be centrally-controlled costs and initiatives, which includes the 2011 operational review. See Note 18—Segment Information for an analysis of centrally-controlled costs and initiatives, including the 2011 operational review costs, disclosed within ‘Corporate and Other’.

Severance costs also arise in the normal course of business and these charges amounted to $nil in the three months ended March 31, 2011 (2010: $8 million).

Other Salaries and Benefits Expense

The Company also incurred other salaries and benefits costs as part of the 2011 operational review of $34 million relating primarily to the buy out of previously existing incentive schemes and other contractual arrangements.

Cash Retention Awards

The Company makes annual cash retention awards to its employees. Employees must repay a proportionate amount of these awards if they voluntarily leave the Company’s employ (other than in the event of retirement or permanent disability) before a certain time period, currently up to three years. The Company makes cash payments to its employees in the year it grants these retention awards and recognizes these payments ratably over the period they are subject to repayment, beginning in the quarter in which the award is made. The unamortized portion of cash retention awards is recorded within other assets.

The following table sets out the amount of cash retention awards made and the related amortization of those awards for the three months ended March 31, 2011 and 2010:


	Three months ended
	March 31,
	2011		2010
	(millions)

Cash retention awards made	$	195	$	169
Amortization of cash retention awards included in salaries and benefits		44		28

Unamortized cash retention awards totaled $328 million as of March 31, 2011 (December 31, 2010: $173 million; March 31, 2010: $233 million).

Income Taxes

3 Months Ended

Mar. 31, 2011

Income Taxes [Abstract]

INCOME TAXES


4.	INCOME TAXES

The table below reflects the components of the first quarter 2011 tax charge:


	Three months ended March 31, 2011
	Income						Effective
	before tax			Tax			tax rate
	(millions, except percentages)

Ordinary income taxed at estimated annual effective tax rate	$	194		$	(48	)		25	%
Items where tax effect is treated discretely:
Make-whole expense on repurchase and redemption of senior notes and write-off of unamortized debt issuance costs		(171	)		47			27	%
Non-taxable gain on disposal of operations		4			—			—	%

As reported	$	27		$	(1	)		4	%

The estimated annual effective tax rate applicable to ordinary income of 25 percent includes the tax benefit of expenses relating to the 2011 Operational Review, which are generally relieved at a higher rate than the Company’s annual effective tax rate calculated excluding these expenses. Absent the impact of the 2011 Operational Review, the effective tax rate for the quarter ended March 31, 2011 would have been approximately 26 percent, broadly in line with full year 2010.

Earnings Per Share

3 Months Ended

Mar. 31, 2011

Earnings Per Share [Abstract]

EARNINGS PER SHARE


5.	EARNINGS PER SHARE

Basic and diluted earnings per share are calculated by dividing net income attributable to Willis Group Holdings by the average number of shares outstanding during each period. The computation of diluted earnings per share reflects the potential dilution that could occur if dilutive securities and other contracts to issue shares were exercised or converted into shares or resulted in the issue of shares that then shared in the net income of the Company.

At March 31, 2011, time-based and performance-based options to purchase 10.7 million and 9.4 million (2010: 12.7 million and 8.6 million) shares, respectively, and 1.7 million restricted stock units (2010: 1.9 million), respectively, were outstanding.

Basic and diluted earnings per share are as follows:


	Three months ended
	March 31,
	2011		2010
	(millions, except per share data)

Net income attributable to Willis Group Holdings	$	34	$	204

Basic average number of shares outstanding		171		169
Dilutive effect of potentially issuable shares		3		1

Diluted average number of shares outstanding		174		170

Basic earnings per share:
Net income attributable to Willis Group Holdings shareholders	$	0.20	$	1.21

Dilutive effect of potentially issuable shares		—		(0.01	)

Diluted earnings per share:
Net income attributable to Willis Group Holdings shareholders	$	0.20	$	1.20

Options to purchase 3.0 million shares were not included in the computation of the dilutive effect of stock options for the three months ended March 31, 2011 because the effect was antidilutive (2010: 14.2 million).

Pension Plans

3 Months Ended

Mar. 31, 2011

Pension Plans [Abstract]

PENSION PLANS


6.	PENSION PLANS

The components of the net periodic benefit cost of the UK, US and international defined benefit plans are as follows:


	Three months ended March 31,
	UK Pension						US Pension						Intl Pension
	Benefits						Benefits						Benefits
	2011			2010			2011			2010			2011			2010
							(millions)

Components of net periodic benefit cost:
Service cost	$	9		$	9		$	—		$	—		$	1		$	1
Interest cost		26			25			10			10			2			2
Expected return on plan assets		(40	)		(36	)		(11	)		(11	)		(2	)		(2	)
Amortization of unrecognized prior service gain		(1	)		(1	)		—			—			—			—
Amortization of unrecognized actuarial loss		8			9			1			1			—			—

Net periodic benefit cost	$	2		$	6		$	—		$	—		$	1		$	1

As of March 31, 2011, the Company had made contributions of $21 million, $8 million and $1 million to the UK, US and international defined benefit pension plans (2010: $20 million, $8 million and $2 million), respectively. The Company expects to contribute a total of approximately $92 million to the UK defined benefit pension plan, $30 million to the US plan and $7 million to the international plans for the full year 2011 (inclusive of amounts contributed in the first quarter).

Commitments and Contingencies

3 Months Ended

Mar. 31, 2011

Commitments and Contingencies [Abstract]

COMMITMENTS AND CONTINGENCIES


7.	COMMITMENTS AND CONTINGENCIES

Debt obligations and facilities

Changes in the Company’s debt obligations are set out in Note 14—‘Debt’ to the Condensed Consolidated Financial Statements.

Guarantees

Guarantees issued by Willis Group Holdings and certain of its subsidiaries with respect to the senior notes are discussed in Note 19—‘Financial information for parent guarantor, other guarantor subsidiaries and non-guarantor subsidiaries’ and Note 20—‘Financial information for parent issuer, guarantor subsidiaries and non-guarantor subsidiaries’.

The revolving credit facilities are fully and unconditionally guaranteed on a joint and several basis by Willis Netherlands Holdings B.V., Willis Investment UK Holdings Limited, TA 1 Limited, Trinity Acquisition plc, Willis Group Limited and Willis Group Holdings plc.

Other contractual obligations

In July 2010, the Company made a capital commitment of $25 million to Trident V Parallel Fund, LP. As at March 31, 2011 there had been approximately $2 million of capital contributions.

Claims, Lawsuits and Other Proceedings

In the ordinary course of business, the Company is subject to various actual and potential claims, lawsuits, and other proceedings relating principally to alleged errors and omissions in connection with the placement of insurance and reinsurance. Similar to other corporations, the Company is also subject to a variety of other claims, including those relating to the Company’s employment practices. Some of the claims, lawsuits and other proceedings seek damages in amounts which could, if assessed, be significant.

Errors and omissions claims, lawsuits, and other proceedings arising in the ordinary course of business are covered in part by professional indemnity or other appropriate insurance. The terms of this insurance vary by policy year and self-insured risks have increased significantly in recent years. In respect of self-insured risks, the Company has established provisions which are believed to be adequate in the light of current information and legal advice, and the Company adjusts such provisions from time to time according to developments.

On the basis of current information, the Company does not expect that the actual claims, lawsuits and other proceedings, to which the Company is subject, or potential claims, lawsuits, and other proceedings relating to matters of which it is aware, will ultimately have a material adverse effect on the Company’s financial condition, results of operations or liquidity. Nonetheless, given the large or indeterminate amounts sought in certain of these actions, and the inherent unpredictability of litigation and disputes with insurance companies, it is possible that an adverse outcome in certain matters could, from time to time, have a material adverse effect on the Company’s results of operations or cash flows in particular quarterly or annual periods.

The material actual or potential claims, lawsuits and other proceedings, of which the Company is currently aware, are:

Inquiries and Investigations

In connection with the investigation launched by the New York State Attorney General in April 2004 concerning, among other things, contingent commissions paid by insurers to insurance brokers, in April 2005, the Company entered into an Assurance of Discontinuance (‘Original AOD’) with the New York State Attorney General and the Superintendent of the New York Insurance Department and paid $50 million to eligible clients. As part of the Original AOD, the Company also agreed not to accept contingent compensation and to disclose to customers any compensation the Company will receive in connection with providing policy placement services to the customer. The Company also resolved similar investigations launched by the Minnesota Attorney General, the Florida Attorney General, the Florida Department of Financial Services, and the Florida Office of Insurance Regulation for amounts that were not material to the Company.

Similarly, in August 2005, HRH entered into an agreement with the Attorney General of the State of Connecticut (the ‘CT Attorney General’) and the Insurance Commissioner of the State of Connecticut to resolve all issues related to their investigations into certain insurance brokerage and insurance agency practices and to settle a lawsuit brought in August 2005 by the CT Attorney General alleging violations of the Connecticut Unfair Trade Practices Act and the Connecticut Unfair Insurance Practices Act. As part of this settlement, HRH agreed to take certain actions including establishing a $30 million national fund for distribution to certain clients; enhancing disclosure practices for agency and broker clients; and declining to accept contingent compensation on brokerage business. The Company has co-operated fully with other similar investigations by the regulators and/or attorneys general of other jurisdictions, some of which have been concluded with no indication of any finding of wrongdoing.

On February 16, 2010, the Company entered into the Amended and Restated Assurance of Discontinuance with the Attorney General of the State of New York and the Amended and Restated Stipulation with the Superintendent of Insurance of the State of New York (the ‘Amended and Restated AOD’) on behalf of itself and its subsidiaries named therein. The Amended and Restated AOD was effective February 11, 2010 and supersedes and replaces the Original AOD.

The Amended and Restated AOD specifically recognizes that the Company has substantially met its obligations under the Original AOD and ends many of the requirements previously imposed. It relieves the Company of a number of technical compliance obligations that have imposed significant administrative and financial burdens on its operations. The Amended and Restated AOD no longer limits the types of compensation the Company can receive and has lowered the compensation disclosure requirements.

The Amended and Restated AOD requires the Company to: (i) in New York, and each of the other 49 states of the United States, the District of Columbia and U.S. territories, provide compensation disclosure that will, at a minimum, comply with the terms of the applicable regulations, as may be amended from time to time, or the provisions of the AOD that existed prior to the adoption of the Amended and Restated AOD; and (ii) maintain its compliance programs and continue to provide appropriate training to relevant employees in business ethics, professional obligations, conflicts of interest, and antitrust and trade practices compliance. In addition, in placing, renewing, consulting on or servicing any insurance policy, it prohibits the Company from directly or indirectly (a) accepting from or requesting of any insurer any promise or commitment to use any of the Company’s brokerage, agency, producing or consulting services in exchange for production of business to such insurer or (b) knowingly place, renew or consult on or service a client’s insurance business through a wholesale broker in a manner that is contrary to the client’s best interest.

In 2006, the European Commission issued questionnaires pursuant to its Sector Inquiry or, in respect of Norway, the European Free Trade Association Surveillance Authority, related to insurance business practices, including compensation arrangements for brokers, to at least 150 European brokers including our operations in nine European countries. The Company filed responses to the European Commission and the European Free Trade Association Surveillance Authority questionnaires. The European Commission reported on a final basis on September 25, 2007, expressing concerns over potential conflicts of interest in the industry relating to remuneration and binding authorities and also over the nature of the coinsurance market. The Company co-operated with both the European Free Trade Association Surveillance Authority and the European Commission to resolve issues raised in its final report regarding coinsurance as required of the industry by the European Commission.

Since August 2004, the Company and HRH (along with various other brokers and insurers) have been named as defendants in purported class actions in various courts across the United States. All of these actions have been consolidated into a single action in the US District Court for the District of New Jersey (‘MDL’). There are two amended complaints within the MDL, one that addresses employee benefits (‘EB Complaint’) and one that addresses all other lines of insurance (‘Commercial Complaint’). HRH was a named defendant in the EB Complaint, but has since been voluntarily dismissed. HRH is a named defendant in the Commercial Complaint. The Company is a named defendant in both MDL complaints. Each of the EB Complaint and the Commercial Complaint seeks monetary damages, including punitive damages, and equitable relief and makes allegations regarding the practices and conduct that have been the subject of the investigation of state attorneys general and insurance commissioners, including allegations that the brokers have breached their duties to their clients by entering into contingent compensation agreements with either no disclosure or limited disclosure to clients and participated in other improper activities. The complaints also allege the existence of a conspiracy among insurance carriers and brokers and allege violations of federal antitrust laws, the federal Racketeer Influenced and Corrupt Organizations (‘RICO’) statute and the Employee Retirement Income Security Act of 1974 (‘ERISA’). In separate decisions issued in August and September 2007, the antitrust and RICO Act claims were dismissed with prejudice and the state claims were dismissed without prejudice from the Commercial Complaint. In January 2008, the Judge dismissed the ERISA claims with prejudice from the EB Complaint and the state law claims without prejudice.

Plaintiffs filed a notice of appeal regarding the dismissal of the antitrust and RICO claims and oral arguments on this appeal were heard in April 2009. In August 2010, the United States Court of Appeals for the Third Circuit issued its decision on plaintiffs’ appeal. The Court upheld the dismissal of all claims against HRH and the Company, with the exception of one RICO related claim. The Court remanded the RICO claim to the District Court for further consideration. The District Judge is allowing HRH and the Company (and the other affected defendants) to submit new motions to dismiss the remanded RICO claim. The motion has been filed, but a decision is not expected until sometime in 2011.

On March 18, 2011, the majority of defendants, including the Company and HRH, entered into a Memorandum of Understanding with plaintiffs that memorializes the basic terms of a settlement for monetary relief. The parties are currently drafting a more formal and complete settlement agreement to present to the Court for its approval. If approved by the Court, notice of the settlement will be sent to all members of the class and each member will have the opportunity to opt out of the settlement and pursue its own individual claim against any defendant. The amount of the proposed settlement to be paid by the Company and HRH is immaterial and was previously reserved.

Additional actions could be brought in the future by individual policyholders. The Company disputes the allegations in all of these suits and has been and intends to continue to defend itself vigorously against these actions. The outcomes of these lawsuits, however, including any losses or other payments that may occur as a result, cannot be predicted at this time.

Reinsurance Market Dispute

Various legal proceedings are pending, have concluded or may commence between reinsurers, reinsureds and in some cases their intermediaries, including reinsurance brokers, relating to personal accident excess of loss reinsurance for the years 1993 to 1998. The proceedings principally concern allegations by reinsurers that they have sustained substantial losses due to an alleged abnormal ‘spiral’ in the market in which the reinsurance contracts were placed, the existence and nature of which, as well as other information, was not disclosed to them by the reinsureds or their reinsurance broker.

A ‘spiral’ is a market term for a situation in which reinsureds and reinsurers reinsure each other with the effect that the same loss or portion of that loss moves through the market multiple times.

The reinsurers concerned have taken the position that, despite their decisions to underwrite risks or a group of risks, they are no longer bound by their reinsurance contracts. As a result, they have stopped settling claims and are seeking to recover claims already paid. The Company also understands that there have been arbitration awards in relation to a ‘spiral’, among other things, in which the reinsurer successfully argued that it was no longer bound by parts of its reinsurance program. Willis Limited, the Company’s principal insurance brokerage subsidiary in the United Kingdom, acted as the reinsurance broker or otherwise as intermediary, but not as an underwriter, for numerous personal accident reinsurance contracts. Due to the small number of reinsurance brokers generally, Willis Limited also utilized other brokers active in this market as sub-agents, including brokers who are parties to the legal proceedings described above, for certain contracts and may be responsible for any errors and omissions they may have made. In July 2003, one of the reinsurers received a judgment in the English High Court against certain parties, including a sub-broker Willis Limited used to place two of the contracts involved in this trial. Although neither the Company nor any of its subsidiaries were a party to this proceeding or any arbitration, Willis Limited entered into tolling agreements with certain of the principals to the reinsurance contracts tolling the statute of limitations pending the outcome of proceedings between the reinsureds and reinsurers.

Two former clients of Willis Limited, American Reliable Insurance Company and one of its associated companies (collectively, ‘ARIC’), and CNA Insurance Company Limited and two of its associated companies (‘CNA’) terminated their respective tolling agreements with Willis Limited and commenced litigation in September 2007 and January 2008, respectively, in the English Commercial Court against Willis Limited. ARIC alleged conspiracy between a former Willis Limited employee and the ARIC underwriter as well as negligence and CNA alleged deceit and negligence by the same Willis Limited employee both in connection with placements of personal accident reinsurance in the excess of loss market in London and elsewhere. On June 9, 2009, Willis Limited entered into a settlement agreement under which Willis Limited paid a total of $139 million to ARIC, which was covered by errors and omissions insurance. On September 11, 2009, Willis Limited entered into a settlement agreement under which Willis Limited paid a total of $130 million to CNA. The Company has substantially collected and believes it will collect in full the $130 million required under the CNA settlement agreement from errors and omissions insurers. The settlements include no admission of wrongdoing by any party. Each party also realized and waived all claims it may have against any of the other parties arising out of or in connection with the subject matter of the litigation.

Various arbitrations relating to reinsurance continue and, from time to time, the principals request co-operation from the Company and suggest that claims may be asserted against the Company. Such claims may be made against the Company if reinsurers do not pay claims on policies issued by them. The Company cannot predict at this time whether any such claims will be made or the damages that may be alleged.

Gender Discrimination Class Action

In March 2008, the Company settled an action in the United States District Court for the Southern District of New York commenced against the Company in 2001 on behalf of an alleged nationwide class of present and former female officer and officer equivalent employees alleging that the Company discriminated against them on the basis of their gender and seeking injunctive relief, money damages, attorneys’ fees and costs. Although the Court had denied plaintiffs’ motions to certify a nationwide class or to grant nationwide discovery, it certified a class of approximately 200 female officers and officer equivalent employees based in the Company’s offices in New York, New Jersey and Massachusetts. The settlement agreement provides for injunctive relief and a monetary payment, including the amount of attorney fees plaintiffs’ counsel are entitled to receive, which was not material to the Company. In December 2006, a former female employee, whose motion to intervene in the class action was denied, filed a purported class action in the United States District Court, Southern District of New York, with almost identical allegations as those contained in the suit that was settled in 2008, except seeking a class period of 1998 to the time of trial (the class period in the settled suit was 1998 to the end of 2001). The Company’s motion to dismiss this suit was denied and the Court did not grant the Company permission to immediately file an appeal from the denial of its motion to dismiss. The suit was amended to include one additional plaintiff and another filed an arbitration demand that includes a class allegation.

In January 2011, the Company reached an agreement with plaintiffs on a monetary settlement to settle all class claims and the claims of the individual named plaintiffs as well as the plaintiff that filed an arbitration demand. The amount of this settlement is not material. However, before this matter can be settled in its entirety, the Court must approve all terms of the settlement.

World Trade Center

The Company acted as the insurance broker, but not as an underwriter, for the placement of both property and casualty insurance for a number of entities which were directly impacted by the September 11, 2001, destruction of the World Trade Center complex, including Silverstein Properties LLC, which acquired a 99-year leasehold interest in the twin towers and related facilities from the Port Authority of New York and New Jersey in July 2001. Although the World Trade Center complex insurance was bound at or before the July 2001 closing of the leasehold acquisition, consistent with standard industry practice, the final policy wording for the placements was still in the process of being finalized when the twin towers and other buildings in the complex were destroyed on September 11, 2001. There have been a number of lawsuits in the United States between the insured parties and the insurers for several placements and other disputes may arise in respect of insurance placed by us which could affect the Company including claims by one or more of the insureds that the Company made culpable errors or omissions in connection with our brokerage activities. However, the Company does not believe that our role as broker will lead to liabilities which in the aggregate would have a material adverse effect on our results of operations, financial condition or liquidity.

Stanford Financial Group

On July 2, 2009, a putative class action complaint, captioned Troice, et al. v. Willis of Colorado, Inc., et al., C.A. No. 3:09-CV-01274-N, was filed in the U.S. District Court for the Northern District of Texas against Willis Group Holdings plc, Willis of Colorado, Inc. and a Willis associate, among others, relating to the collapse of The Stanford Financial Group (‘Stanford’), for which Willis of Colorado, Inc. acted as broker of record on certain lines of insurance. The complaint generally alleged that the defendants actively and materially aided Stanford’s alleged fraud by providing Stanford with certain letters regarding coverage that they knew would be used to help retain or attract actual or prospective Stanford client investors. The complaint alleged that these letters, which contain statements about Stanford and the insurance policies that the defendants placed for Stanford, contained untruths and omitted material facts and were drafted in this manner to help Stanford promote and sell its allegedly fraudulent certificates of deposit. The putative class consisted of Stanford investors in Mexico and the complaint asserted various claims under Texas statutory and common law and sought actual damages in excess of $1 billion, punitive damages and costs. On August 12, 2009, the plaintiffs filed an amended complaint, which, notwithstanding the addition of certain factual allegations and Texas common law claims, largely mirrored the original and sought the same relief.

On July 17, 2009, a putative class action complaint, captioned Ranni v. Willis of Colorado, Inc., et al., C.A. No. 09-22085, was filed against Willis Group Holdings plc and Willis of Colorado, Inc. in the U.S. District Court for the Southern District of Florida, relating to the same alleged course of conduct as the Troice complaint described above. Based on substantially the same allegations as the Troice complaint, but on behalf of a putative class of Venezuelan and other South American Stanford investors, the Ranni complaint asserts a claim under Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, as well as various claims under Florida statutory and common law, and seeks damages in an amount to be determined at trial and costs.

On or about July 24, 2009, a motion was filed by certain individuals (collectively, the ‘Movants’) with the U.S. Judicial Panel on Multidistrict Litigation (the ‘JPML’) to consolidate and coordinate in the Northern District of Texas nine separate putative class actions—including the Troice and Ranni actions described above, as well as other actions against various Stanford-related entities and individuals and the Commonwealth of Antigua and Barbuda—relating to Stanford and its allegedly fraudulent certificates of deposit.

On August 6, 2009, a putative class action complaint, captioned Canabal, et al. v. Willis of Colorado, Inc., et al., C.A. No. 3:09-CV-01474-D, was filed against Willis Group Holdings plc, Willis of Colorado, Inc. and the same Willis associate, among others, also in the Northern District of Texas, relating to the same alleged course of conduct as the Troice complaint described above. Based on substantially the same allegations as the Troice complaint, but on behalf of a putative class of Venezuelan investors, the Canabal complaint asserted various claims under Texas statutory and common law and sought actual damages in excess of $1 billion, punitive damages, attorneys’ fees and costs.

On or about August 10, 2009, the Movants filed with the JPML a Notice of Related Action that referred the Canabal action to the JPML. On October 6, 2009, the JPML ruled on the transfer motion, transferring seven of the subject actions (including the Troice and Ranni actions)—i.e., the original nine actions minus two that had since been dismissed—for consolidation or coordination in the Northern District of Texas. On October 27, 2009, the parties to the Canabal action stipulated to the designation of that action as a related case and properly part of the new Stanford MDL proceeding in the Northern District of Texas.

On September 14, 2009, a complaint, captioned Rupert, et al. v. Winter, et al., Case No. 2009C115137, was filed on behalf of 97 Stanford investors against Willis Group Holdings plc, Willis of Colorado, Inc. and the same Willis associate, among others, in Texas state court (Bexar County). Based on substantially the same allegations as the Troice complaint, the Rupert complaint asserts claims under the Securities Act of 1933, as well as various Texas statutory and common law claims, and seeks rescission, damages, special damages and consequential damages of $79.1 million, treble damages of $237.4 million under the Texas Insurance Code, attorneys’ fees and costs. On October 20, 2009, certain defendants, including Willis of Colorado, Inc., (i) removed the Rupert action to the U.S. District Court for the Western District of Texas, (ii) notified the JPML of the pendency of this additional ‘tag-along’ action and (iii) moved to stay the action pending a determination by the JPML as to whether it should be transferred to the Northern District of Texas for consolidation or coordination with the other Stanford-related actions. In November 2009, the JPML issued a conditional transfer order (the ‘CTO’) for the transfer of the Rupert action to the Northern District of Texas. On December 22, 2009, the plaintiffs filed a motion to vacate, or alternatively stay, the CTO, to which Willis of Colorado, Inc. responded on January 4, 2010. On April 1, 2010, the JPML denied the plaintiffs’ motion to vacate the CTO and issued a final transfer order for the transfer of the Rupert action to the Northern District of Texas.

On December 18, 2009, the parties to the Troice and Canabal actions stipulated to the consolidation of those actions and, on December 31, 2009, the plaintiffs therein, collectively, filed a Second Amended Class Action Complaint, which largely mirrored the Troice and Canabal predecessor complaints, but sought relief on behalf of a worldwide class of Stanford investors. Also on December 31, 2009, the plaintiffs in the Canabal action filed a Notice of Dismissal, dismissing the Canabal action without prejudice. On February 25, 2010, the defendants filed motions to dismiss the Second Amended Class Action Complaint in the consolidated Troice/Canabal action. On May 24, 2010, the plaintiffs in the consolidated Troice/Canabal action filed a motion for leave to file a Third Amended Class Action Complaint, which, among other things, proposed adding Willis Limited as a defendant and several Texas statutory claims.

On September 16, 2010, a complaint, captioned Casanova, et al. v. Willis of Colorado, Inc., et al., C.A. No. 3:10-CV-01862-O, was filed on behalf of seven Stanford investors against Willis Group Holdings plc, Willis Limited, Willis of Colorado, Inc. and the same Willis associate, among others, also in the Northern District of Texas. Although this is not a class action, the Casanova complaint is based on substantially the same allegations as the Second Amended Class Action Complaint in the consolidated Troice/Canabal action. The Casanova complaint asserts various claims under Texas statutory and common law and seeks actual damages in excess of $5 million, punitive damages, attorneys’ fees and costs.

On March 11, 2011, a complaint, captioned Rishmague, et ano. v. Winter, et al., Case No. 2011CI02585, was filed on behalf of two Stanford investors, individually and as representatives of certain trusts, against Willis Group Holdings plc, Willis of Colorado, Inc., Willis of Texas, Inc. and the same Willis associate, among others, in Texas state court (Bexar County). The Rishmague complaint largely mirrors the Rupert complaint and asserts claims under Texas and Colorado statutory law and Texas common law. It seeks, among other things, damages, special damages and consequential damages of $9.3 million, treble damages of $27.8 million under the Texas Insurance Code, attorneys’ fees and costs.

On March 29, 2011, the court granted the consolidated Troice/Canabal plaintiffs’ motion for leave to file their Third Amended Class Action Complaint, which they filed on April 1, 2011.

On April 11, 2011, certain defendants, including Willis of Colorado, Inc., removed the Rishmague action to the Northern District of Texas and notified the JPML of the pendency of this additional ‘tag-along’ action.

On April 13, 2011, the JPML issued a conditional transfer order for the transfer of the Rishmague action to the Northern District of Texas.

The defendants have not yet responded to the Ranni, Rupert, Casanova or Rishmague complaints. On May 2, 2011, the defendants moved to dismiss the Third Amended Class Action Complaint in the consolidated Troice/Canabal action.

Additional actions could be brought in the future by other investors in certificates of deposit issued by Stanford and its affiliates. The Company disputes these allegations and intends to defend itself vigorously against these actions. The outcomes of these actions, however, including any losses or other payments that may occur as a result, cannot be predicted at this time.

Derivative Financial Instruments and Hedging Activities

3 Months Ended

Mar. 31, 2011

Derivative Financial Instruments and Hedging Activities [Abstract]

DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES


8.	DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES

Fair value of derivative financial instruments

In addition to the note below, see Note 9 for information about the fair value hierarchy of derivatives.

Primary risks managed by derivative financial instruments

The main risks arising from the Company’s financial instruments are interest rate risk, liquidity risk, foreign currency risk and credit risk. The Company’s board of directors reviews and agrees to policies for managing each of these risks as summarized below.

The Company enters into derivative transactions (principally interest rate swaps and forward foreign currency contracts) in order to manage interest rate and currency risks arising from the Company’s operations and its sources of finance. The Company does not hold financial or derivative instruments for trading purposes.

Interest Rate Risk

As a result of the Company’s operating activities, the Company receives cash for premiums and claims which it deposits in short-term investments denominated in US dollars and other currencies. The Company earns interest on these funds, which is included in the Company’s financial statements as investment income. These funds are regulated in terms of access and the instruments in which they may be invested, most of which are short-term in maturity. In order to manage interest rate risk arising from these financial assets, the Company enters into interest rate swaps to receive a fixed rate of interest and pay a variable rate of interest denominated in the various currencies related to the short-term investments. The use of interest rate contracts essentially converts groups of short-term variable rate investments to fixed rates.

The fair value of these contracts is recorded in other assets and other liabilities. For contracts that qualify as cash flow hedges for accounting purposes, the effective portions of changes in fair value are recorded as a component of other comprehensive income.

At March 31, 2011, the Company had the following derivative financial instruments that were designated as cash flow hedges of interest rate risk:


		Notional
		Amount⁽ⁱ⁾		Fair value
		(millions)

US dollar	Receive fixed-pay variable	$	760	$	9
Pounds sterling	Receive fixed-pay variable		228		3
Euro	Receive fixed-pay variable		151		(1	)


⁽ⁱ⁾		Notional amounts represent US dollar equivalents translated at the spot rate as of March 31, 2011.

The Company’s operations are financed principally by $2,085 million fixed rate senior notes and $384 million under a 5-year term loan facility. Of the fixed rate senior notes, $35 million was repaid in April 2011, $350 million are due 2015, $300 million are due 2016, $600 million are due 2017, $300 million are due 2019 and $500 million are due 2021. At March 31, 2011, we had $100 million outstanding under our $300 million revolving credit facility and $nil outstanding under both our $200 million facility and our $20 million UK facility which is solely for use by our main regulated UK entity in certain exceptional circumstances.

The 5-year term loan facility bears interest at LIBOR plus 2.250%. Drawings under the revolving $300 million credit facility bear interest at LIBOR plus 2.250%. Drawings under the revolving $200 million credit facility bear interest at LIBOR plus a margin of either 1.750% or 2.750% depending upon the currency of the loan. This margin applies while the Company’s debt rating remains BBB-/Baa3. Should the Company’s debt rating change, then the margin will change in accordance with the credit facilities agreements.

During the three months ended March 31, 2010, the Company entered into a series of interest rate swaps for a total notional amount of $350 million to receive a fixed rate and pay a variable rate on a semi-annual basis, with a maturity date of July 15, 2015. The Company has designated and accounts for these instruments as fair value hedges against its $350 million 5.625% senior notes due 2015. The fair values of the interest rate swaps are included within other assets or other liabilities and the fair value of the hedged element of the senior notes is included within long-term debt.

At March 31, 2011 and December 31, 2010, the Company’s interest rate swaps were all designated as hedging instruments.

Liquidity Risk

The Company’s objective is to ensure that it has the ability to generate sufficient cash either from internal or external sources, in a timely and cost-effective manner, to meet its commitments as they fall due. The Company’s management of liquidity risk is embedded within its overall risk management framework. Scenario analysis is continually undertaken to ensure that the Company’s resources can meet its liquidity requirements. These resources are supplemented by access to a total of $520 million under three revolving credit facilities.

Foreign Currency Risk

The Company’s primary foreign exchange risks arise:


•	from changes in the exchange rate between US dollars and pounds sterling as its London market operations earn the majority of their revenues in US dollars and incur expenses predominantly in pounds sterling, and may also hold a significant net sterling asset or liability position on the balance sheet. In addition, the London market operations earn significant revenues in euros and Japanese yen; and

•	from the translation into US dollars of the net income and net assets of its foreign subsidiaries, excluding the London market operations which are US dollar denominated.

The foreign exchange risks in its London market operations are hedged as follows:


•	to the extent that forecast pound sterling expenses exceed pound sterling revenues, the Company limits its exposure to this exchange rate risk by the use of forward contracts matched to specific, clearly identified cash outflows arising in the ordinary course of business;

•	to the extent the UK operations earn significant revenues in Euros and Japanese yen, the Company limits its exposure to changes in the exchange rate between the US dollar and these currencies by the use of forward contracts matched to a percentage of forecast cash inflows in specific currencies and periods; and

•	to the extent that the net sterling asset or liability position in its London market operations relate to short-term cash flows, the Company limits its exposure by the use of forward purchases and sales. These forward purchases and sales are not effective hedges for accounting purposes.

The Company does not hedge net income earned within foreign subsidiaries outside of the UK.

The fair value of foreign currency contracts is recorded in other assets and other liabilities. For contracts that qualify as accounting hedges, changes in fair value resulting from movements in the spot exchange rate are recorded as a component of other comprehensive income whilst changes resulting from a movement in the time value are recorded in interest expense. For contracts that do not qualify for hedge accounting, the total change in fair value is recorded in interest expense. Amounts held in comprehensive income are reclassified into earnings when the hedged exposure affects earnings.

At March 31, 2011 and December 31, 2010, the Company’s foreign currency contracts were all designated as hedging instruments.

The table below summarizes by major currency the contractual amounts of the Company’s forward contracts to exchange foreign currencies for pounds sterling in the case of US dollars and US dollars for Euro and Japanese yen at March 31, 2011.


	Sell⁽ⁱ⁾		Fair value
	(millions)

US dollar	$	314	$	13
Euro		142		(1	)
Japanese yen		68		(4	)


⁽ⁱ⁾		Foreign currency notional amounts are reported in US dollars translated at contracted exchange rates.

Credit Risk and Concentrations of Credit Risk

Credit risk represents the loss that would be recognized at the reporting date if counterparties failed to perform as contracted and from movements in interest rates and foreign exchange rates. The Company does not anticipate non-performance by counterparties. The Company generally does not require collateral or other security to support financial instruments with credit risk; however, it is the Company’s policy to enter into master netting arrangements with counterparties as practical.

Concentrations of credit risk that arise from financial instruments exist for groups of customers or counterparties when they have similar economic characteristics that would cause their ability to meet contractual obligations to be similarly affected by changes in economic or other conditions. Financial instruments on the balance sheet that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, accounts receivable and derivatives which are recorded at fair value.

The Company maintains a policy providing for the diversification of cash and cash equivalent investments and places such investments in an extensive number of financial institutions to limit the amount of credit risk exposure. These financial institutions are monitored on an ongoing basis for credit quality predominantly using information provided by credit agencies.

Concentrations of credit risk with respect to receivables are limited due to the large number of clients and markets in which the Company does business, as well as the dispersion across many geographic areas. Management does not believe significant risk exists in connection with the Company’s concentrations of credit as of March 31, 2011.

Derivative financial instruments

The table below presents the fair value of the Company’s derivative financial instruments and their balance sheet classification at March 31, 2011 and December 31, 2010:


		Fair value
	Balance sheet	March 31,			December 31,
Derivative financial instruments designated as hedging instruments:	classification	2011			2010
		(millions)

Assets:
Interest rate swaps (cash flow hedges)	Other assets		15			17
Interest rate swaps (fair value hedges)	Other assets		13			14
Forward exchange contracts	Other assets		16			16

Total derivatives designated as hedging instruments		$	44		$	47

Liabilities:
Interest rate swaps (cash flow hedges)	Other liabilities		(4	)		(2	)
Forward exchange contracts	Other liabilities		(8	)		(10	)

Total derivatives designated as hedging instruments		$	(12	)	$	(12	)

Cashflow Hedges

The table below presents the effects of derivative financial instruments in cash flow hedging relationships on the consolidated statements of operations and the consolidated statements of equity for the three months ended March 31, 2011 and 2010:

Amount of

gain (loss)

Amount of

recognized

gain (loss)

in income

Amount of

reclassified

on derivative

gain (loss)

from

(Ineffective

recognized

accumulated

Location of gain (loss)

hedges and

in OCI⁽ⁱ⁾

Location of gain (loss)

OCI⁽ⁱ⁾ into

recognized in income

ineffective

on derivative

reclassified from

income

on derivative (Ineffective

element of

Derivatives in cash flow

(Effective

accumulated OCI⁽ⁱ⁾ into

(Effective

hedges and ineffective

effective

hedging relationships

element)

income (Effective element)

element)

element of effective hedges)

hedges)

(millions)

Three months ended March 31, 2011

Interest rate swaps

)

Investment income

)

Other operating expenses

—

Forward exchange contracts

Other operating expenses

)

Interest expense

Total

—

)

Three months ended March 31, 2010

Interest rate swaps

Investment income

)

Other operating expenses

—

Forward exchange contracts

)

Other operating expenses

Interest expense

—

Total

)

—

Amounts above shown gross of tax.


⁽ⁱ⁾		OCI means other comprehensive income.

For interest rate swaps all components of each derivative’s gain or loss were included in the assessment of hedge effectiveness. For foreign exchange contracts, only the changes in fair value resulting from movements in the spot exchange rates are included in this assessment. In instances where the timing of expected cashflows can be matched exactly to the maturity of the foreign exchange contract then changes in fair value attributable to movement in the forward points are also included.

At March 31, 2011 the Company estimates there will be $12 million of net derivative gains reclassified from accumulated comprehensive income into earnings within the next twelve months.

Fair Value Hedges

The table below presents the effects of derivative financial instruments in fair value hedging relationships on the consolidated statements of operations for the three months ended March 31, 2011 and 2010.


					Gain/(loss)			Ineffectiveness
					recognized			recognized in
	Hedged item in fair value	(Gain)/loss recognized			for hedged			interest
Derivatives in fair value hedging relationships	hedging relationship	for derivative			item			expense
		(millions)

Three months ended March 31, 2011
Interest rate swaps	5.625% senior notes due 2015	$	(11	)	$	10		$	(1	)

Three months ended March 31, 2010
Interest rate swaps	5.625% senior notes due 2015	$	2		$	(2	)	$	—

All components of each derivative’s gain or loss were included in the assessment of hedge effectiveness.

Fair Value Measurement

3 Months Ended

Mar. 31, 2011

Fair Value Measurement [Abstract]

FAIR VALUE MEASUREMENT


9.	FAIR VALUE MEASUREMENT

The following table presents, for each of the fair-value hierarchy levels, the Company’s assets and liabilities that are measured at fair value on a recurring basis:


	March 31, 2011
	Quoted
	prices in
	active
	markets		Significant		Significant
	for		other		other
	identical		observable		unobservable
	assets		inputs		inputs
	Level 1		Level 2		Level 3		Total
			(millions)

Assets at fair value:
Cash and cash equivalents	$	432	$	—	$	—	$	432
Fiduciary funds—restricted (included within Fiduciary assets)		1,479		—		—		1,479
Derivative financial instruments		—		44		—		44

Total assets	$	1,911	$	44	$	—	$	1,955

Liabilities at fair value:
Derivative financial instruments	$	—	$	12	$	—	$	12
Changes in fair value of hedged debt⁽ⁱ⁾		—		10		—		10

Total liabilities	$	—	$	22	$	—	$	22


⁽ⁱ⁾		Changes in the fair value of the underlying hedged debt instrument since inception of the hedging relationship are included in long-term debt.


	December 31, 2010
	Level 1		Level 2		Level 3		Total
	(millions)

Assets at fair value:
Cash and cash equivalents	$	316	$	—	$	—	$	316
Fiduciary funds—restricted (included within Fiduciary assets)		1,764		—		—		1,764
Derivative financial instruments		—		47		—		47

Total assets	$	2,080	$	47	$	—	$	2,127

Liabilities at fair value:
Derivative financial instruments	$	—	$	12	$	—	$	12
Changes in fair value of hedged debt⁽ⁱ⁾		—		12		—		12

Total liabilities	$	—	$	24	$	—	$	24


⁽ⁱ⁾		Changes in the fair value of the underlying hedged debt instrument since inception of the hedging relationship are included in long-term debt.

The estimated fair value of the Company’s financial instruments held or issued to finance the Company’s operations is summarized below. Certain estimates and judgments were required to develop the fair value amounts. The fair value amounts shown below are not necessarily indicative of the amounts that the Company would realize upon disposition nor do they indicate the Company’s intent or ability to dispose of the financial instrument.


	March 31, 2011				December 31, 2010
	Carrying		Fair		Carrying		Fair
	amount		value		amount		value
	(millions)

Assets:
Cash and cash equivalents	$	432	$	432	$	316	$	316
Fiduciary funds—restricted (included within Fiduciary assets)		1,479		1,479		1,764		1,764
Derivative financial instruments		44		44		47		47
Liabilities:
Short-term debt⁽ⁱ⁾	$	145	$	157	$	110	$	110
Long-term debt		2,432		2,521		2,157		2,450
Derivative financial instruments		12		12		12		12


⁽ⁱ⁾		March 31, 2011 fair value includes $12 million make-whole redemption on the $35 million 12.875% senior notes due 2016 which has been accrued for in interest payable.

The following methods and assumptions were used by the Company in estimating its fair value disclosure for financial instruments:

Cash and Cash Equivalents—The estimated fair value of these financial instruments approximates their carrying values due to their short maturities.

Fiduciary Funds—Restricted—Fair values are based on quoted market values.

Long-Term Debt excluding the fair value hedge—Fair values are based on quoted market values.

Derivative Financial Instruments—Market values have been used to determine the fair value of interest rate swaps and forward foreign exchange contracts based on estimated amounts the Company would receive or have to pay to terminate the agreements, taking into account the current interest rate environment or current foreign currency forward rates.

- Definition

This element represents the disclosure related to the fair value measurement of assets and liabilities which includes [financial] instruments measured at fair value that are classified in stockholders' equity. Such assets and liabilities may be measured on a recurring or nonrecurring basis. The disclosures which may be required or desired include: (1) for assets and liabilities measured on a recurring basis, disclosure may include: (a) the fair value measurements at the reporting date; (b) the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets or liabilities (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3); (c) for fair value measurements using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (i) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (ii) purchases, sales, issuances, and settlements (net); (iii) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs); (d) the amount of the total gains or losses for the period in subparagraph (c) (i) above included in earnings (or changes in net assets) that are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held at the reporting date and a description of where those unrealized gains or losses are reported in the statement of income (or activities); (e) the valuation technique(s) used to measure fair value and a discussion of changes in valuation techniques, if any, during the period and (2) for assets and liabilities that are measured at fair value on a nonrecurring basis (for example, impaired assets) disclosure may include, in addition to (a) above: (a) the reasons for the fair value measurements recorded; (b) the same as (b) above; (c) for fair value measurements using significant unobservable inputs (Level 3), a description of the inputs and the information used to develop the inputs; and (d) the valuation technique(s) used to measure fair value and a discussion of changes, if any, in the valuation technique(s) used to measure similar assets and/or liabilities in prior periods.

+ References+ Details

Goodwill

3 Months Ended

Mar. 31, 2011

Goodwill [Abstract]

GOODWILL

10. GOODWILL

Goodwill represents the excess of the cost of businesses acquired over the fair market value of identifiable net assets at the dates of acquisition. Goodwill is not amortized but is subject to impairment testing annually and whenever facts or circumstances indicate that the carrying amounts may not be recoverable.

When a business entity is sold, goodwill is allocated to the disposed entity based on the fair value of that entity compared to the fair value of the reporting unit in which it is included.

The changes in the carrying amount of goodwill by operating segment for the three months ended March 31, 2011 and the year ended December 31, 2010 are as follows:


				North
	Global			America			International			Total
				(millions)

Balance at January 1, 2010	$	1,065		$	1,780		$	432		$	3,277
Purchase price allocation adjustments		—			6			—			6
Other movements⁽ⁱ⁾		—			(3	)		—			(3	)
Foreign exchange		(2	)		—			16			14

Balance at December 31, 2010	$	1,063		$	1,783		$	448		$	3,294
Other movements^(i)(ii)		60			—			(61	)		(1	)
Foreign exchange		3			—			16			19

Balance at March 31, 2011	$	1,126		$	1,783		$	403		$	3,312


⁽ⁱ⁾		North America—$1 million tax benefit arising on the exercise of fully vested HRH stock options which were issued as part of the acquisition of HRH in 2008.

⁽ⁱⁱ⁾		Effective January 1, 2011, the Company changed its internal reporting structure; Global Markets International, previously reported within the International segment, is now reported in the Global division; and Mexico Retail, which was previously reported within the International segment, is now reported in the North America segment. As a result of these changes, goodwill of $60 million has been reallocated from the International segment into the Global segment for Global Markets International, and $1 million has been reallocated from the International segment into the North America segment for Mexico Retail. Goodwill has been reallocated between segments using the relative fair value allocation approach.

Other Intangible Assets, Net

3 Months Ended

Mar. 31, 2011

Other Intangible Assets, Net [Abstract]

OTHER INTANGIBLE ASSETS, NET


11.	OTHER INTANGIBLE ASSETS, NET

Other intangible assets are classified into the following categories:


•	‘Customer and Marketing Related’, including:


	•	client relationships;

	•	client lists;

	•	non-compete agreements;

	•	trade names; and


•	‘Contract based, Technology and Other’ includes all other purchased intangible assets.

The major classes of amortizable intangible assets are as follows:


								December 31, 2010
	March 31, 2011												Net
	Gross carrying		Accumulated					Gross carrying		Accumulated			carrying
	amount		amortization			Net carrying amount		amount		amortization			amount
						(millions)

Customer and Marketing Related:
Client Relationships	$	701	$	(227	)	$	474	$	695	$	(207	)	$	488
Client Lists		8		(7	)		1		9		(7	)		2
Non-compete Agreements		36		(36	)		—		36		(36	)		—
Trade Names		11		(10	)		1		11		(10	)		1

Total Customer and Marketing Related		756		(280	)		476		751		(260	)		491

Contract based, Technology and Other		4		(3	)		1		4		(3	)		1

Total amortizable intangible assets	$	760	$	(283	)	$	477	$	755	$	(263	)	$	492

The aggregate amortization of intangible assets for the three months ended March 31, 2011 was $17 million (2010: $21 million). The estimated aggregate amortization of intangible assets for each of the next five years ended December 31 is as follows:


	Remainder of
	2011		2012		2013		2014		2015		Thereafter		Total
					(millions)

Amortization of intangible assets	$	51	$	59	$	52	$	44	$	37	$	234	$	477

Debt

3 Months Ended

Mar. 31, 2011

Debt [Abstract]

DEBT


14.	DEBT

Short-term debt and current portion of the long-term debt consists of the following:


	March 31,		December 31,
	2011		2010
	(millions)

12.875% senior notes due 2016 (repaid on April 18, 2011)	$	35	$	—
Current portion of 5-year term loan facility		110		110

	$	145	$	110

Long-term debt consists of the following:


	March 31,		December 31,
	2011		2010
	(millions)

5-year term loan facility	$	274	$	301
Revolving $300 million credit facility		100		90
6.000% loan notes due 2012		4		4
5.625% senior notes due 2015		350		350
Fair value adjustment on 5.625% senior notes due 2015		10		12
12.875% senior notes due 2016		—		500
4.125% senior notes due 2016		298		—
6.200% senior notes due 2017		600		600
7.000% senior notes due 2019		300		300
5.750% senior notes due 2021		496		—

	$	2,432	$	2,157

The 5-year term loan facility bears interest at LIBOR plus 2.250% and is repayable at $27 million per quarter, with a final payment of $115 million currently due in the fourth quarter of 2013.

During the three months ended March 31, 2011, the Company issued $300 million of 4.125% senior notes due 2016 and $500 million of 5.750% senior notes due 2021. The effective interest rates of these senior notes are 4.240% and 5.871% respectively, which include the impact of the discount upon issuance. The proceeds were used to repurchase $465 million of 12.875% senior notes due 2016 including a make-whole payment, (representing a slight discount to the contractual make-whole amount) of $146 million. Following the repurchase the Company wrote off $13 million of unamortized debt issuance costs.

During the three months ended March 31, 2011 the Company irrevocably called the remaining $35 million of the 12.875% senior notes due 2016, which required a contractual make-whole redemption amount of approximately $12 million, expensed in first quarter 2011. The redemption was completed on April 18, 2011.

Supplemental Disclosures of Cash Flow Information

3 Months Ended

Mar. 31, 2011

Supplemental Disclosures of Cash Flow Information [Abstract]

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION


15.	SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

Supplemental disclosures regarding cash flow information and non-cash flow investing and financing activities are as follows:


	Three Months Ended
	March 31,
	2011			2010
	(millions)

Supplemental disclosures of cash flow information:
Cash payments for income taxes, net of cash received	$	24		$	29
Cash payments for interest		60			61

Supplemental disclosures of non-cash flow investing and financing activities:
Write-off of unamortized debt issuance costs	$	(13	)	$	—
Accrued debt fees		(3	)		—
Make-whole on redemption of senior notes		(12	)		—
Acquisitions:
Fair value of assets acquired	$	1		$	1
Less: Liabilities assumed		—			—

Net assets acquired, net of cash acquired	$	1		$	1

Comprehensive Income

3 Months Ended

Mar. 31, 2011

Comprehensive Income [Abstract]

COMPREHENSIVE INCOME


16.	COMPREHENSIVE INCOME

a) The components of comprehensive income are as follows:


	Three Months Ended
	March 31,
	2011			2010
	(millions)

Net income	$	42		$	211
Other comprehensive income, net of tax:
Foreign currency translation adjustment (net of tax of $nil; 2010: $nil)		40			(6	)
Pension funding adjustment (net of tax of $(1) million; 2010: $(3) million)		(5	)		6
Net loss on derivative instruments (net of tax of $2 million; 2010: $nil)		(3	)		—

Other comprehensive income (net of tax of $1 million; 2010: $(3) million)		32			—

Comprehensive income		74			211
Noncontrolling interest		(8	)		(7	)

Comprehensive income attributable to Willis Group Holdings	$	66		$	204

b) The components of accumulated other comprehensive loss, net of tax, are as follows:


	March 31,			December 31,
	2011			2010
	(millions)

Net foreign currency translation adjustment	$	(12	)	$	(52	)
Pension funding adjustment		(508	)		(503	)
Net unrealized gain on derivative instruments		11			14

Accumulated other comprehensive loss, attributable to Willis Group Holdings, net of tax	$	(509	)	$	(541	)

- Definition

This label may include the following: 1) the amount of income tax expense or benefit allocated to each component of other comprehensive income, including reclassification adjustments, 2) the reclassification adjustments for each classification of other comprehensive income and 3) the ending accumulated balances for each component of comprehensive income. Components of comprehensive income include: (1) foreign currency translation adjustments; (2) gains and losses on foreign currency transactions that are designated as, and are effective as, economic hedges of a net investment in a foreign entity; (3) gains and losses on intercompany foreign currency transactions that are of a long-term-investment nature, when the entities to the transaction are consolidated, combined, or accounted for by the equity method in the reporting enterprise's financial statements; (4) change in the market value of a futures contract that qualifies as a hedge of an asset reported at fair value; (5) unrealized holding gains and losses on available-for-sale securities and that resulting from transfers of debt securities from the held-to-maturity category to the available-for-sale category; (6) a net loss recognized as an additional pension liability not yet recognized as net periodic pension cost; and (7) the net gain or loss and net prior service cost or credit for pension plans and other postretirement benefit plans.

+ References+ Details

Equity and Noncontrolling Interests

3 Months Ended

Mar. 31, 2011

Equity and Noncontrolling Interest [Abstract]

EQUITY AND NONCONTROLLING INTERESTS


17.	EQUITY AND NONCONTROLLING INTERESTS

The components of stockholders’ equity and noncontrolling interests are as follows:


	March 31, 2011									March 31, 2010
	Willis									Willis
	Group									Group
	Holdings			Noncontrolling			Total			Holdings			Noncontrolling			Total
	stockholders			interests			equity			stockholders			interests			equity
	(millions)

Balance at beginning of period	$	2,577		$	31		$	2,608		$	2,180		$	49		$	2,229
Comprehensive income:
Net income		34			8			42			204			7			211
Other comprehensive income, net of tax		32			—			32			—			—			—

Comprehensive income		66			8			74			204			7			211
Dividends		(45	)		(1	)		(46	)		(44	)		(1	)		(45	)
Additional paid-in capital		32			—			32			9			—			9
Purchase of subsidiary shares from noncontrolling interests		—			—			—			—			(4	)		(4	)
Foreign currency translation		—			1			1			—			(1	)		(1	)

Balance at end of period	$	2,630		$	39		$	2,669		$	2,349		$	50		$	2,399

The effects of changes in Willis Group Holdings ownership interest in its subsidiaries on equity are as follows:


	March 31,		March 31,
	2011		2010
	(millions)

Net income attributable to Willis Group Holdings	$	34	$	204

Transfers from noncontrolling interest:
Decrease in Willis Group Holdings paid-in capital for purchase of noncontrolling interests		—		(13	)

Net transfers to noncontrolling interests		—		(13	)

Change from net income attributable to Willis Group Holdings and transfers from noncontrolling interests	$	34	$	191

- Definition

Disclosures related to accounts comprising shareholders' equity, including other comprehensive income. Includes: (1) balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings; (2) accumulated balance for each classification of other comprehensive income and total amount of comprehensive income; (3) amount and nature of changes in separate accounts, including the number of shares authorized and outstanding, number of shares issued upon exercise and conversion, and for other comprehensive income, the adjustments for reclassifications to net income; (4) rights and privileges of each class of stock authorized; (5) basis of treasury stock, if other than cost, and amounts paid and accounting treatment for treasury stock purchased significantly in excess of market; (6) dividends paid or payable per share and in the aggregate for each class of stock for each period presented; (7) dividend restrictions and accumulated preferred dividends in arrears (in aggregate and per share amount); (8) retained earnings appropriations or restrictions, such as dividend restrictions; (9) impact of change in accounting principle, initial adoption of new accounting principle and correction of an error in previously issued financial statements; (10) shares held in trust for Employee Stock Ownership Plan (ESOP); (11) deferred compensation related to issuance of capital stock; (12) note received for issuance of stock; (13) unamortized discount on shares; (14) description, terms and number of warrants or rights outstanding; (15) shares under subscription and subscription receivables; effective date of new retained earnings after quasi-reorganization and deficit eliminated by quasi-reorganization and, for a period of at least ten years after the effective date, the point in time from which the new retained dates; and (16) retroactive effective of subsequent change in capital structure.

+ References+ Details

Segment Information

3 Months Ended

Mar. 31, 2011

Segment Information [Abstract]

SEGMENT INFORMATION


18.	SEGMENT INFORMATION

During the periods presented, the Company operated through three segments: Global, North America and International. Global provides specialist brokerage and consulting services to clients worldwide for specific industrial and commercial activities and is organized by specialism. North America and International predominantly comprise our retail operations which provide services to small, medium and major corporates, accessing Global’s specialist expertise when required.

The Company evaluates the performance of its operating segments based on organic revenue growth and operating income. For internal reporting and segmental reporting, the following items for which segmental management are not held accountable are excluded from segmental expenses:


	(i)	costs of the holding company;

	(ii)	foreign exchange loss from the devaluation of the Venezuelan currency;


	(iii)	foreign exchange hedging activities, foreign exchange movements on the UK pension plan asset and foreign exchange gains and losses from currency purchases and sales;

	(iv)	amortization of intangible assets;

	(v)	gains and losses on the disposal of operations;

	(vi)	significant legal settlements which are managed centrally; and

	(vii)	costs associated with the 2011 operational review.

The accounting policies of the operating segments are consistent with those described in Note 2 — Basis of Presentation and Significant Accounting Policies to the Company’s Annual Report on Form 10-K for the year ended December 31, 2010. There are no inter-segment revenues, with segments operating on a revenue-sharing basis equivalent to that used when sharing business with other third-party brokers.

Effective January 1, 2011, the Company changed its internal and external operating structure; Global Markets International previously reported within the International segment, is now reported in the Global division. In addition, Mexico Retail, which was previously reported within the International segment, is now reported in the North America segment. Comparative data have been adjusted accordingly.

Selected information regarding the Company’s operating segments is as follows:


	Three Months Ended March 31, 2011
														Interest in
									Depreciation					Earnings of
	Commissions		Investment		Other		Total		and		Operating			Associates,
	and Fees		Income		Income		Revenues		Amortization		Income			net of tax
	(millions)

Global	$	358	$	3	$	—	$	361	$	4	$	175		$	—
North America		356		2		—		358		7		85			—
International		286		3		—		289		5		86			16

Total Retail		642		5		—		647		12		171			16

Total Operating Segments		1,000		8		—		1,008		16		346			16
Corporate and Other⁽ⁱⁱ⁾		—		—		—		—		21		(108	)		—

Total Consolidated	$	1,000	$	8	$	—	$	1,008	$	37	$	238		$	16


	Three Months Ended March 31, 2010⁽ⁱ⁾
														Interest in
									Depreciation					Earnings of
	Commissions		Investment		Other		Total		and		Operating			Associates,
	and Fees		Income		Income		Revenues		Amortization		Income			net of tax
	(millions)

Global	$	331	$	3	$	—	$	334	$	4	$	154		$	—
North America		365		3		—		368		6		93			—
International		267		3		—		270		5		87			20

Total Retail		632		6		—		638		11		180			20

Total Operating Segments		963		9		—		972		15		334			20
Corporate and Other⁽ⁱⁱ⁾		—		—		—		—		21		(33	)		—

Total Consolidated	$	963	$	9	$	—	$	972	$	36	$	301		$	20


⁽ⁱ⁾		Effective January 1, 2011, the Company changed its internal reporting structure; Global Markets International, previously reported within the International segment, is now reported in the Global division. In addition, Mexico Retail, which was previously reported within the International segment, is now reported in the North America segment. As a result of these changes, first quarter 2010 commissions and fees of $34 million, previously allocated to our International segment, have been included in Global: $30 million; and North America: $4 million. Operating income of $16 million has been allocated to our Global segment, with a corresponding reduction in International in first quarter 2010.

⁽ⁱⁱ⁾		Corporate and Other includes the following:


	Three Months Ended
	March 31,
	2011			2010
	(millions)

Amortization of intangible assets	$	(17	)	$	(21	)
Foreign exchange hedging		1			(5	)
Foreign exchange on the UK pension plan asset		1			5
Net gain on disposal of operations		4			—
Q1 2011 Operational Review		(97	)		—
Venezuela currency devaluation		—			(12	)

Total Corporate and Other	$	(108	)	$	(33	)

The following table reconciles total consolidated operating income, as disclosed in the operating segment tables above, to consolidated income before income taxes and interest in earnings of associates:


	Three Months Ended
	March 31,
	2011			2010
	(millions)

Total consolidated operating income	$	238		$	301
Make-whole on repurchase and redemption of senior notes and write-off of unamortized debt issuance costs		(171	)		—
Interest expense		(40	)		(43	)

Income before income taxes and interest in earnings of associates	$	27		$	258

Financial Information for Parent Guarantor, Other Guarantor Subsidiaries and Non-Guarantor Subsidiaries

3 Months Ended

Mar. 31, 2011

Financial Information for Parent Guarantor, Other Guarantor Subsidiaries and Non-Guarantor Subsidiaries [Abstract]

FINANCIAL INFORMATION FOR PARENT GUARANTOR, OTHER GUARANTOR SUBSIDIARIES AND NON-GUARANTOR SUBSIDIARIES


19.	FINANCIAL INFORMATION FOR PARENT GUARANTOR, OTHER GUARANTOR SUBSIDIARIES AND NON-GUARANTOR SUBSIDIARIES

Willis North America Inc. (“Willis North America”) has $350 million senior notes outstanding that were issued on July 1, 2005. On March 28, 2007, Willis North America issued further senior notes totaling $600 million. On September 29, 2009, Willis North America issued senior notes totaling $300 million.

Until December 22, 2010, all direct obligations under the senior notes were jointly and severally, irrevocably and fully and unconditionally guaranteed by Willis Group Holdings, Willis Netherlands Holdings B.V., Willis Investment UK Holdings Limited, TA I Limited, TA II Limited, Trinity Acquisition plc, TA III Limited, TA IV Limited and Willis Group Limited, the Guarantor Companies. On that date and in connection with an internal group reorganization, TA II Limited, TA III Limited and TA IV Limited transferred their obligations as guarantors to the Other Guarantor Companies. TA II Limited, TA III Limited and TA IV Limited entered voluntary liquidation on December 31, 2010. The assets of these companies were distributed to the Other Guarantor companies, either directly or indirectly, as a final distribution paid prior to their entering voluntary liquidation. As such, these transactions did not have a material impact on the guarantees of the senior notes and did not require the consent of the noteholders under the applicable indentures.

Presented below is condensed consolidating financial information for:


	(i)	Willis Group Holdings, which is a guarantor, on a parent company only basis;

	(ii)	the Other Guarantors, which are all 100 percent directly or indirectly owned subsidiaries of the parent and are all direct or indirect parents of the issuer;

	(iii)	the Issuer, Willis North America;

	(iv)	Other, which are the non-guarantor subsidiaries, on a combined basis;

	(v)	Consolidating adjustments; and

	(vi)	the Consolidated Company.

The equity method has been used for investments in subsidiaries in the condensed consolidating balance sheets of Willis Group Holdings, the Other Guarantors and the Issuer. Investments in subsidiaries in the condensed consolidating balance sheet for Other represents the cost of investment in subsidiaries recorded in the parent companies of the non-guarantor subsidiaries.

The entities included in the Other Guarantors column as of March 31, 2011 and December 31, 2010 are Willis Netherlands Holdings B.V., Willis Investment UK Holdings Limited, TA I Limited, Trinity Acquisition plc and Willis Group Limited.

Condensed Consolidating Statement of Operations


	Three months ended March 31, 2011
	Willis
	Group			The Other									Consolidating
	Holdings			Guarantors			The Issuer			Other			adjustments			Consolidated
	(millions)

REVENUES
Commissions and fees	$	—		$	—		$	—		$	1,000		$	—		$	1,000
Investment income		—			3			—			8			(3	)		8
Other income		—			—			—			—			—			—

Total revenues		—			3			—			1,008			(3	)		1,008

EXPENSES
Salaries and benefits		—			—			—			(593	)		9			(584	)
Other operating expenses		1			24			(45	)		(134	)		1			(153	)
Depreciation expense		—			—			(4	)		(16	)		—			(20	)
Amortization of intangible assets		—			—			—			(17	)		—			(17	)
Net gain on disposal of operations		—			—			—			6			(2	)		4

Total expenses		1			24			(49	)		(754	)		8			(770	)

OPERATING INCOME (LOSS)		1			27			(49	)		254			5			238
Investment income from Group undertakings		34			81			63			(7	)		(171	)		—
Make-whole on repurchase and redemption of senior notes and write-off of unamortized debt issuance costs		—			(171	)		—			—			—			(171	)
Interest expense		(2	)		(65	)		(36	)		(106	)		169			(40	)

INCOME BEFORE INCOME TAXES AND INTEREST IN EARNINGS OF ASSOCIATES		33			(128	)		(22	)		141			3			27
Income taxes		—			43			13			(50	)		(7	)		(1	)

INCOME BEFORE INTEREST IN EARNINGS OF ASSOCIATES		33			(85	)		(9	)		91			(4	)		26
Interest in earnings of associates, net of tax		—			—			—			14			2			16

NET INCOME		33			(85	)		(9	)		105			(2	)		42
Less: Net income attributable to noncontrolling interests		—			—			—			(8	)		—			(8	)
EQUITY ACCOUNT FOR SUBSIDIARIES		1			124			5			—			(130	)		—

NET INCOME ATTRIBUTABLE TO WILLIS GROUP HOLDINGS	$	34		$	39		$	(4	)	$	97		$	(132	)	$	34

Condensed Consolidating Statement of Operations


	Three months ended March 31, 2010
	Willis
	Group		The Other									Consolidating
	Holdings		Guarantors			The Issuer			Other			adjustments			Consolidated
	(millions)

REVENUES
Commissions and fees	$	—	$	—		$	—		$	963		$	—		$	963
Investment income		—		3			1			5			—			9
Other income		—		—			—			—			—			—

Total revenues		—		3			1			968			—			972

EXPENSES
Salaries and benefits		—		—			—			(491	)		5			(486	)
Other operating expenses		196		(34	)		2			(294	)		(19	)		(149	)
Depreciation expense		—		—			(2	)		(13	)		—			(15	)
Amortization of intangible assets		—		—			—			(21	)		—			(21	)
Net gain on disposal of operations		—		—			—			2			(2	)		—

Total expenses		196		(34	)		—			(817	)		(16	)		(671	)

OPERATING INCOME (LOSS)		196		(31	)		1			151			(16	)		301
Investment income from Group undertakings		—		333			56			423			(812	)		—
Interest expense		—		(132	)		(42	)		(57	)		188			(43	)

INCOME BEFORE INCOME TAXES AND INTEREST IN EARNINGS OF ASSOCIATES		196		170			15			517			(640	)		258
Income taxes		—		3			(7	)		(74	)		11			(67	)

INCOME BEFORE INTEREST IN EARNINGS OF ASSOCIATES		196		173			8			443			(629	)		191
Interest in earnings of associates, net of tax		—		—			—			20			—			20

NET INCOME		196		173			8			463			(629	)		211
Less: Net income attributable to noncontrolling interests		—		—			—			(3	)		(4	)		(7	)
EQUITY ACCOUNT FOR SUBSIDIARIES		8		35			5			—			(48	)		—

NET INCOME ATTRIBUTABLE TO WILLIS GROUP HOLDINGS	$	204	$	208		$	13		$	460		$	(681	)	$	204

Condensed Consolidating Balance Sheet


	As at March 31, 2011
	Willis
	Group			The Other			The					Consolidating
	Holdings			Guarantors			Issuer		Other			adjustments			Consolidated
	(millions)

ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	3		$	—		$	18	$	411		$	—		$	432
Accounts receivable		1			—			—		963			28			992
Fiduciary assets		—			—			—		11,119			(635	)		10,484
Deferred tax assets		—			3			—		24			—			27
Other current assets		1			86			41		329			(88	)		369

Total current assets		5			89			59		12,846			(695	)		12,304


Investments in subsidiaries		(1,003	)		3,972			1,470		3,872			(8,311	)		—
Amounts owed by (to) Group undertakings		4,467			(5,176	)		1,035		(326	)		—			—

NON-CURRENT ASSETS
Fixed assets		—			—			57		331			(2	)		386
Goodwill		—			—			—		1,698			1,614			3,312
Other intangible assets		—			—			—		477			—			477
Investments in associates		—			—			—		(35	)		228			193
Deferred tax assets		—			—			—		8			(1	)		7
Pension benefits asset		—			—			—		202			—			202
Other non-current assets		5			135			39		301			(123	)		357

Total non-current assets		5			135			96		2,982			1,716			4,934

TOTAL ASSETS	$	3,474		$	(980	)	$	2,660	$	19,374		$	(7,290	)	$	17,238

LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Fiduciary liabilities	$	—		$	—		$	—	$	11,119		$	(635	)	$	10,484
Deferred revenue and accrued expenses		4			—			—		343			2			349
Income taxes payable		—			—			—		79			(50	)		29
Short-term debt		—			35			110		—			—			145
Deferred tax liabilities		—			3			—		5			—			8
Other current liabilities		46			19			37		260			(19	)		343

Total current liabilities		50			57			147		11,806			(702	)		11,358

NON-CURRENT LIABILITIES
Long-term debt		794			—			1,634		4			—			2,432
Liabilities for pension benefits		—			—			—		156			—			156
Deferred tax liabilities		—			2			29		34			—			65
Provisions for liabilities		—			—			—		189			(2	)		187
Other non-current liabilities		—			11			6		354			—			371

Total non-current liabilities		794			13			1,669		737			(2	)		3,211

TOTAL LIABILITIES	$	844		$	70		$	1,816	$	12,543		$	(704	)	$	14,569

EQUITY
Total Willis Group Holdings stockholders’ equity		2,630			(1,050	)		844		6,792			(6,586	)		2,630
Noncontrolling interests		—			—			—		39			—			39

Total equity		2,630			(1,050	)		844		6,831			(6,586	)		2,669

TOTAL LIABILITIES AND EQUITY	$	3,474		$	(980	)	$	2,660	$	19,374		$	(7,290	)	$	17,238

Condensed Consolidating Balance Sheet


	As at December 31, 2010
	Willis
	Group			The Other			The					Consolidating
	Holdings			Guarantors			Issuer		Other			adjustments			Consolidated
	(millions)

ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	—		$	—		$	76	$	240		$	—		$	316
Accounts receivable		2			—			—		809			28			839
Fiduciary assets		—			—			—		10,167			(598	)		9,569
Deferred tax assets		—			—			1		35			—			36
Other current assets		—			23			57		293			(33	)		340

Total current assets		2			23			134		11,544			(603	)		11,100


Investments in subsidiaries		(1,039	)		3,814			1,455		3,855			(8,085	)		—
Amounts owed by (to) Group undertakings		3,659			(4,590	)		1,002		(71	)		—			—

NON-CURRENT ASSETS
Fixed assets		—			—			52		330			(1	)		381
Goodwill		—			—			—		1,696			1,598			3,294
Other intangible assets		—			—			—		492			—			492
Investments in associates		—			—			—		(51	)		212			161
Deferred tax assets		—			—			—		7			—			7
Pension benefits asset		—			—			—		179			—			179
Other non-current assets		—			166			41		149			(123	)		233

Total non-current assets		—			166			93		2,802			1,686			4,747

TOTAL ASSETS	$	2,622		$	(587	)	$	2,684	$	18,130		$	(7,002	)	$	15,847

LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Fiduciary liabilities	$	—		$	—		$	—	$	10,167		$	(598	)	$	9,569
Deferred revenue and accrued expenses		1			—			—		297			—			298
Income taxes payable		—			—			—		69			(12	)		57
Short-term debt		—			—			110		—			—			110
Deferred tax liabilities		—			3			1		5			—			9
Other current liabilities		44			15			38		189			(20	)		266

Total current liabilities		45			18			149		10,727			(630	)		10,309

NON-CURRENT LIABILITIES
Long-term debt		—			500			1,653		4			—			2,157
Liabilities for pension benefits		—			—			—		164			—			164
Deferred tax liabilities		—			3			26		54			—			83
Provisions for liabilities		—			—			—		183			(4	)		179
Other non-current liabilities		—			10			16		321			—			347

Total non-current liabilities		—			513			1,695		726			(4	)		2,930

TOTAL LIABILITIES	$	45		$	531		$	1,844	$	11,453		$	(634	)	$	13,239

EQUITY
Total Willis Group Holdings stockholders’ equity		2,577			(1,118	)		840		6,646			(6,368	)		2,577
Noncontrolling interests		—			—			—		31			—			31

Total equity		2,577			(1,118	)		840		6,677			(6,368	)		2,608

TOTAL LIABILITIES AND EQUITY	$	2,622		$	(587	)	$	2,684	$	18,130		$	(7,002	)	$	15,847

Condensed Consolidating Statement of Cash Flows


	Three months ended March 31, 2011
	Willis
	Group			The Other									Consolidating
	Holdings			Guarantors			The Issuer			Other			adjustments			Consolidated
	(millions)

NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES	$	39		$	67		$	2		$	(64	)	$	(37	)	$	7

CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds on disposal of fixed and intangible assets		—			—			—			2			—			2
Additions to fixed assets		—			—			(9	)		(11	)		—			(20	)
Acquisitions of subsidiaries, net of cash acquired		—			—			—			(3	)		—			(3	)
Acquisitions of investments in associates		—			—			—			(2	)		—			(2	)
Investment in Trident V Parallel Fund, LP		—			—			—			(1	)		—			(1	)

Net cash used in investing activities		—			—			(9	)		(15	)		—			(24	)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from draw down of revolving credit facility		—			—			10			—			—			10
Senior notes issued, net of debt issuance costs		788			—			—			—			—			788
Repayments of debt		—			(465	)		(27	)		—			—			(492	)
Make-whole on repurchase and redemption of senior notes		—			(146	)		—			—			—			(146	)
Proceeds from issue of shares		19			—			—			—			—			19
Amounts owed by and to Group undertakings		(798	)		551			(34	)		281			—			—
Excess tax benefits from share-based payment arrangements		—			—			—			1			—			1
Dividends paid		(45	)		—			—			(37	)		37			(45	)
Acquisitions of noncontrolling interests		—			(7	)		—			—			—			(7	)
Dividends paid to noncontrolling interests		—			—			—			(1	)		—			(1	)

Net cash (used in) provided by financing activities		(36	)		(67	)		(51	)		244			37			127

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		3			—			(58	)		165			—			110
Effect of exchange rate changes on cash and cash equivalents		—			—			—			6			—			6
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		—			—			76			240			—			316

CASH AND CASH EQUIVALENTS, END OF PERIOD	$	3		$	—		$	18		$	411		$	—		$	432

Condensed Consolidating Statement of Cash Flows


	Three months ended March 31, 2010 ⁽ⁱ⁾
	Willis
	Group			The Other									Consolidating
	Holdings			Guarantors			The Issuer			Other			adjustments			Consolidated
							(millions)

NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES	$	198		$	(15	)	$	(35	)	$	(78	)	$	(1	)	$	69

CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds on disposal of fixed and intangible assets		—			—			—			2			—			2
Additions to fixed assets		—			—			(8	)		(21	)		—			(29	)
Acquisitions of subsidiaries, net of cash acquired		—			—			—			(13	)		—			(13	)
Acquisitions of investments in associates		—			—			—			(1	)		—			(1	)

Net cash used in investing activities		—			—			(8	)		(33	)		—			(41	)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from draw down of revolving credit facility		—			—			65			—			—			65
Repayments of debt		—			—			(34	)		(9	)		—			(43	)
Proceeds from issue of shares		11			—			—			—			—			11
Amounts owed by and to Group undertakings		(209	)		15			(9	)		203			—			—
Excess tax benefits from share-based payment arrangements		—			—			—			(1	)		—			(1	)
Dividends paid		—			—			—			(45	)		1			(44	)
Acquisition of noncontrolling interests		—			—			—			(4	)		—			(4	)
Dividends paid to noncontrolling interests		—			—			—			(1	)		—			(1	)

Net cash (used in) provided by financing activities		(198	)		15			22			143			1			(17	)

(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS		—			—			(21	)		32			—			11
Effect of exchange rate changes on cash and cash equivalents		—			—			—			(10	)		—			(10	)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		—			—			104			117			—			221

CASH AND CASH EQUIVALENTS, END OF PERIOD	$	—		$	—		$	83		$	139		$	—		$	222


⁽ⁱ⁾		The 2010 Condensed Consolidating Statement of Cash Flows has been recast to conform to the new balance sheet presentation. See Note 2—Basis of Presentation and Significant Accounting Policies for details

- Definition

Text block that encapsulates the detailed table comprising the condensed financial statements (balance sheet, income statement and statement of cash flows), normally using the registrant (parent) as the sole domain member. If condensed consolidating financial statements are being presented, other domain members (in addition to parent) such as guarantor subsidiaries, non-guarantor subsidiaries, and the consolidation eliminations, will be included in order that the respective monetary amounts for each of the domains will aggregate to the respective amounts on the consolidated financial statements. The line items are the various captions used to compile the condensed financial statements. Using extensions, most, if not all, of the elements representing condensed financial statement captions will be the same as those used for the consolidated financial statements captions.

+ References+ Details

Financial Information for Parent Issuer, Guarantor Subsidiaries and Nonguarantor Subsidiaries

3 Months Ended

Mar. 31, 2011

Financial Information for Parent Issuer, Guarantor Subsidiaries and Nonguarantor Subsidiaries [Abstract]

FINANCIAL INFORMATION FOR PARENT ISSUER, GUARANTOR SUBSIDIARIES AND NON-GUARANTOR SUBSIDIARIES


20.	FINANCIAL INFORMATION FOR PARENT ISSUER, GUARANTOR SUBSIDIARIES AND NON-GUARANTOR SUBSIDIARIES

The Company may offer debt securities, preferred stock, ordinary stock and other securities pursuant to an effective shelf registration on Form S-3. On March 17, 2011, the Company issued senior notes totaling $800 million under its existing registration statement. The debt securities issued (‘Holdings Debt Securities’), are guaranteed by certain of the Company’s subsidiaries. Therefore, the Company is providing the condensed consolidating financial information below. The following 100 percent directly or indirectly owned subsidiaries fully and unconditionally guarantee the Holdings Debt Securities on a joint and several basis: Willis Netherlands Holdings B.V., Willis Investment UK Holdings Limited, TA I Limited, Trinity Acquisition plc, Willis Group Limited and Willis North America (the ‘Guarantors’).

The guarantor structure described above differs from the existing guarantor structure associated with the senior notes issued by Willis North America (the ‘Willis North America Debt Securities’) (and for which condensed consolidating financial information is presented in Note 19) in that Willis Group Holdings is the Parent Issuer and Willis North America is a subsidiary guarantor.

Presented below is condensed consolidating financial information for:


	(i)	Willis Group Holdings, which is the Parent Issuer;

	(ii)	the Guarantors, which are all 100 percent directly or indirectly owned subsidiaries of the parent;

	(iii)	Other, which are the non-guarantor subsidiaries, on a combined basis;

	(iv)	Consolidating adjustments; and

	(v)	the Consolidated Company.

The equity method has been used for investments in subsidiaries in the condensed consolidating balance sheets of Willis Group Holdings and the Guarantors. Investments in subsidiaries in the condensed consolidating balance sheet for Other, represents the cost of investment in subsidiaries recorded in the parent companies of the non-guarantor subsidiaries.

The entities included in the Guarantors column as of March 31, 2011 and December 31, 2010 are Willis Netherlands Holdings B.V., Willis Investment UK Holdings Limited, TA I Limited, Trinity Acquisition plc, Willis Group Limited and Willis North America.

Condensed Consolidating Statement of Operations


	Three months ended March 31, 2011
	Willis
	Group
	Holdings –
	the Parent			The						Consolidating
	Issuer			Guarantors			Other			adjustments			Consolidated
	(millions)

REVENUES
Commissions and fees	$	—		$	—		$	1,000		$	—		$	1,000
Investment income		—			3			8			(3	)		8
Other income		—			—			—			—			—

Total revenues		—			3			1,008			(3	)		1,008

EXPENSES
Salaries and benefits		—			—			(593	)		9			(584	)
Other operating expenses		1			(21	)		(134	)		1			(153	)
Depreciation expense		—			(4	)		(16	)		—			(20	)
Amortization of intangible assets		—			—			(17	)		—			(17	)
Net gain on disposal of operations		—			—			6			(2	)		4

Total expenses		1			(25	)		(754	)		8			(770	)

OPERATING INCOME (LOSS)		1			(22	)		254			5			238
Investment income from Group undertakings		34			144			(7	)		(171	)		—
Make-whole on repurchase and redemption of senior notes and write-off of unamortized debt issuance costs		—			(171	)		—			—			(171	)
Interest expense		(2	)		(101	)		(106	)		169			(40	)

INCOME BEFORE INCOME TAXES AND INTEREST IN EARNINGS OF ASSOCIATES		33			(150	)		141			3			27
Income taxes		—			56			(50	)		(7	)		(1	)

INCOME BEFORE INTEREST IN EARNINGS OF ASSOCIATES		33			(94	)		91			(4	)		26
Interest in earnings of associates, net of tax		—			—			14			2			16

NET INCOME		33			(94	)		105			(2	)		42
Less: Net income attributable to noncontrolling interests		—			—			(8	)		—			(8	)
EQUITY ACCOUNT FOR SUBSIDIARIES		1			133			—			(134	)		—

NET INCOME ATTRIBUTABLE TO WILLIS GROUP HOLDINGS	$	34		$	39		$	97		$	(136	)	$	34

Condensed Consolidating Statement of Operations


	Three months ended March 31, 2010
	Willis
	Group
	Holdings –
	the Parent		The						Consolidating
	Issuer		Guarantors			Other			adjustments			Consolidated
	(millions)

REVENUES
Commissions and fees	$	—	$	—		$	963		$	—		$	963
Investment income		—		4			5			—			9
Other income		—		—			—			—			—

Total revenues		—		4			968			—			972

EXPENSES
Salaries and benefits		—		—			(491	)		5			(486	)
Other operating expenses		196		(32	)		(294	)		(19	)		(149	)
Depreciation expense		—		(2	)		(13	)		—			(15	)
Amortization of intangible assets		—		—			(21	)		—			(21	)
Net gain on disposal of operations		—		—			2			(2	)		—

Total expenses		196		(34	)		(817	)		(16	)		(671	)

OPERATING INCOME (LOSS)		196		(30	)		151			(16	)		301
Investment income from Group undertakings		—		389			423			(812	)		—
Interest expense		—		(174	)		(57	)		188			(43	)

INCOME BEFORE INCOME TAXES AND INTEREST IN EARNINGS OF ASSOCIATES		196		185			517			(640	)		258
Income taxes		—		(4	)		(74	)		11			(67	)

INCOME BEFORE INTEREST IN EARNINGS OF ASSOCIATES		196		181			443			(629	)		191
Interest in earnings of associates, net of tax		—		—			20			—			20

NET INCOME		196		181			463			(629	)		211
Less: Net income attributable to noncontrolling interests		—		—			(3	)		(4	)		(7	)
EQUITY ACCOUNT FOR SUBSIDIARIES		8		27			—			(35	)		—

NET INCOME ATTRIBUTABLE TO WILLIS GROUP HOLDINGS	$	204	$	208		$	460		$	(668	)	$	204

Condensed Consolidating Balance Sheet


	As at March 31, 2011
	Willis
	Group
	Holdings –
	the Parent			The						Consolidating
	Issuer			Guarantors			Other			adjustments			Consolidated
	(millions)

ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	3		$	18		$	411		$	—		$	432
Accounts receivable		1			—			963			28			992
Fiduciary assets		—			—			11,119			(635	)		10,484
Deferred tax assets		—			3			24			—			27
Other current assets		1			127			329			(88	)		369

Total current assets		5			148			12,846			(695	)		12,304


Investments in subsidiaries		(1,003	)		4,598			3,872			(7,467	)		—
Amounts owed by (to) Group undertakings		4,467			(4,141	)		(326	)		—			—

NON-CURRENT ASSETS
Fixed assets		—			57			331			(2	)		386
Goodwill		—			—			1,698			1,614			3,312
Other intangible assets		—			—			477			—			477
Investments in associates		—			—			(35	)		228			193
Deferred tax assets		—			—			8			(1	)		7
Pension benefits asset		—			—			202			—			202
Other non-current assets		5			174			301			(123	)		357

Total non-current assets		5			231			2,982			1,716			4,934

TOTAL ASSETS	$	3,474		$	836		$	19,374		$	(6,446	)	$	17,238


LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Fiduciary liabilities	$	—		$	—		$	11,119		$	(635	)	$	10,484
Deferred revenue and accrued expenses		4			—			343			2			349
Income taxes payable		—			—			79			(50	)		29
Short-term debt		—			145			—			—			145
Deferred tax liabilities		—			3			5			—			8
Other current liabilities		46			56			260			(19	)		343

Total current liabilities		50			204			11,806			(702	)		11,358


NON-CURRENT LIABILITIES
Long-term debt		794			1,634			4			—			2,432
Liabilities for pension benefits		—			—			156			—			156
Deferred tax liabilities		—			31			34			—			65
Provisions for liabilities		—			—			189			(2	)		187
Other non-current liabilities		—			17			354			—			371

Total non-current liabilities		794			1,682			737			(2	)		3,211

TOTAL LIABILITIES	$	844		$	1,886		$	12,543		$	(704	)	$	14,569

EQUITY
Total Willis Group Holdings stockholders’ equity		2,630			(1,050	)		6,792			(5,742	)		2,630
Noncontrolling interests		—			—			39			—			39

Total equity		2,630			(1,050	)		6,831			(5,742	)		2,669

TOTAL LIABILITIES AND EQUITY	$	3,474		$	836		$	19,374		$	(6,446	)	$	17,238

Condensed Consolidating Balance Sheet


	As at December 31, 2010
	Willis
	Group
	Holdings –
	the Parent			The						Consolidating
	Issuer			Guarantors			Other			adjustments			Consolidated
	(millions)

ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	—		$	76		$	240		$	—		$	316
Accounts receivable		2			—			809			28			839
Fiduciary assets		—			—			10,167			(598	)		9,569
Deferred tax assets		—			1			35			—			36
Other current assets		—			80			293			(33	)		340

Total current assets		2			157			11,544			(603	)		11,100


Investments in subsidiaries		(1,039	)		4,429			3,855			(7,245	)		—
Amounts owed by (to) Group undertakings		3,659			(3,588	)		(71	)		—			—

NON-CURRENT ASSETS
Fixed assets		—			52			330			(1	)		381
Goodwill		—			—			1,696			1,598			3,294
Other intangible assets		—			—			492			—			492
Investments in associates		—			—			(51	)		212			161
Deferred tax assets		—			—			7			—			7
Pension benefits asset		—			—			179			—			179
Other non-current assets		—			207			149			(123	)		233

Total non-current assets		—			259			2,802			1,686			4,747

TOTAL ASSETS	$	2,622		$	1,257		$	18,130		$	(6,162	)	$	15,847


LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Fiduciary liabilities	$	—		$	—		$	10,167		$	(598	)	$	9,569
Deferred revenue and accrued expenses		1			—			297			—			298
Income taxes payable		—			—			69			(12	)		57
Short-term debt		—			110			—			—			110
Deferred tax liabilities		—			4			5			—			9
Other current liabilities		44			53			189			(20	)		266

Total current liabilities		45			167			10,727			(630	)		10,309


NON-CURRENT LIABILITIES
Long-term debt		—			2,153			4			—			2,157
Liabilities for pension benefits		—			—			164			—			164
Deferred tax liabilities		—			29			54			—			83
Provisions for liabilities		—			—			183			(4	)		179
Other non-current liabilities		—			26			321			—			347

Total non-current liabilities		—			2,208			726			(4	)		2,930

TOTAL LIABILITIES	$	45		$	2,375		$	11,453		$	(634	)	$	13,239

EQUITY
Total Willis Group Holdings stockholders’ equity		2,577			(1,118	)		6,646			(5,528	)		2,577
Noncontrolling interests		—			—			31			—			31

Total equity		2,577			(1,118	)		6,677			(5,528	)		2,608

TOTAL LIABILITIES AND EQUITY	$	2,622		$	1,257		$	18,130		$	(6,162	)	$	15,847

Condensed Consolidating Statement of Cash Flows


	Three months ended March 31, 2011
	Willis
	Group
	Holdings –
	the Parent			The						Consolidating
	Issuer			Guarantors			Other			adjustments			Consolidated
	(millions)

NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES	$	39		$	69		$	(64	)	$	(37	)	$	7

CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds on disposal of fixed and intangible assets		—			—			2			—			2
Additions to fixed assets		—			(9	)		(11	)		—			(20	)
Acquisitions of subsidiaries, net of cash acquired		—			—			(3	)		—			(3	)
Acquisitions of investments in associates		—			—			(2	)		—			(2	)
Investment in Trident V Parallel Fund, LP		—			—			(1	)		—			(1	)

Net cash used in investing activities		—			(9	)		(15	)		—			(24	)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from draw down of revolving credit facility		—			10			—			—			10
Senior notes issued, net of debt issuance costs		788			—			—			—			788
Repayments of debt		—			(492	)		—			—			(492	)
Make-whole on repurchase and redemption of senior notes		—			(146	)		—			—			(146	)
Proceeds from issue of shares		19			—			—			—			19
Amounts owed by and to Group undertakings		(798	)		517			281			—			—
Excess tax benefits from share-based payment arrangement		—			—			1			—			1
Dividends paid		(45	)		—			(37	)		37			(45	)
Acquisition of noncontrolling interests		—			(7	)		—			—			(7	)
Dividends paid to noncontrolling interests		—			—			(1	)		—			(1	)

Net cash (used in) provided by financing activities		(36	)		(118	)		244			37			127

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		3			(58	)		165			—			110
Effect of exchange rate changes on cash and cash equivalents		—			—			6			—			6
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR		—			76			240			—			316

CASH AND CASH EQUIVALENTS, END OF YEAR	$	3		$	18		$	411		$	—		$	432

Condensed Consolidating Statement of Cash Flows


	Three months ended March 31, 2010
	Willis
	Group
	Holdings –
	the Parent			The						Consolidating
	Issuer			Guarantors			Other			adjustments			Consolidated
	(millions)

NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES	$	198		$	(50	)	$	(78	)	$	(1	)	$	69

CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds on disposal of fixed and intangible assets		—			—			2			—			2
Additions to fixed assets		—			(8	)		(21	)		—			(29	)
Acquisitions of subsidiaries, net of cash acquired		—			—			(13	)		—			(13	)
Acquisitions of investments in associates		—			—			(1	)		—			(1	)

Net cash used in investing activities		—			(8	)		(33	)		—			(41	)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from draw down of revolving credit facility		—			65			—			—			65
Repayments of debt		—			(34	)		(9	)		—			(43	)
Proceeds from issue of shares		11			—			—			—			11
Amounts owed by and to Group undertakings		(209	)		6			203			—			—
Excess tax benefits from share-based payment arrangement		—			—			(1	)		—			(1	)
Dividends paid		—			—			(45	)		1			(44	)
Acquisition of noncontrolling interests		—			—			(4	)		—			(4	)
Dividends paid to noncontrolling interests		—			—			(1	)		—			(1	)

Net cash (used in) provided by financing activities		(198	)		37			143			1			(17	)

(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS		—			(21	)		32			—			11
Effect of exchange rate changes on cash and cash equivalents		—			—			(10	)		—			(10	)
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR		—			104			117			—			221

CASH AND CASH EQUIVALENTS, END OF YEAR	$	—		$	83		$	139		$	—		$	222