SEC Filing | Willis Towers Watson

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wltw-10q_20200630.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2020


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-16503

WILLIS TOWERS WATSON PUBLIC LIMITED COMPANY

(Exact name of registrant as specified in its charter)


Ireland (Jurisdiction of incorporation or organization)		98-0352587 (I.R.S. Employer Identification No.)

c/o Willis Group Limited 51 Lime Street, London EC3M 7DQ, England (Address of principal executive offices)		(011) 44-20-3124-6000 (Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

Symbol(s)

Name of each exchange on which registered

Ordinary Shares, nominal value $0.000304635 per share

WLTW

NASDAQ Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of ‘large accelerated filer’, ‘accelerated filer’, ‘smaller reporting company’, and ‘emerging growth company’ in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☑	Accelerated filer	☐	Non-accelerated filer	☐	Smaller reporting company	☐

Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

As of July 27, 2020, there were outstanding 128,858,414 ordinary shares, nominal value $0.000304635 per share, of the registrant.

WILLIS TOWERS WATSON

INDEX TO FORM 10-Q

For the Three and Six Months Ended June 30, 2020

		Page
Certain Definitions		3
Disclaimer Regarding Forward-looking Statements		4

PART I. FINANCIAL INFORMATION		6
Item 1. Financial Statements (Unaudited)		6
Condensed Consolidated Statements of Comprehensive Income - Three and Six Months Ended June 30, 2020 and 2019		6
Condensed Consolidated Balance Sheets – June 30, 2020 and December 31, 2019		7
Condensed Consolidated Statements of Cash Flows - Six Months Ended June 30, 2020 and 2019		8
Condensed Consolidated Statements of Changes in Equity - Six Months Ended June 30, 2020 and 2019		9
Notes to the Condensed Consolidated Financial Statements		11
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		34
Item 3. Quantitative and Qualitative Disclosures About Market Risk		53
Item 4. Controls and Procedures		53

PART II. OTHER INFORMATION		55
Item 1. Legal Proceedings		55
Item 1A. Risk Factors		55
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		56
Item 3. Defaults Upon Senior Securities		56
Item 4. Mine Safety Disclosures		56
Item 5. Other Information		56
Item 6. Exhibits		57
Signatures		58

Certain Definitions

The following definitions apply throughout this quarterly report unless the context requires otherwise:

‘We’, ‘Us’, ‘Company’, ‘Willis Towers Watson’, ‘Our’, ‘Willis Towers Watson plc’ or ‘WTW’		Willis Towers Watson Public Limited Company, a company organized under the laws of Ireland, and its subsidiaries

‘shares’		The ordinary shares of Willis Towers Watson Public Limited Company, nominal value $0.000304635 per share

‘Legacy Willis’ or ‘Willis’		Willis Group Holdings Public Limited Company and its subsidiaries, predecessor to Willis Towers Watson, prior to the Merger

‘Legacy Towers Watson’ or ‘Towers Watson’		Towers Watson & Co. and its subsidiaries

‘Merger’		Merger of Willis Group Holdings Public Limited Company and Towers Watson & Co. pursuant to the Agreement and Plan of Merger, dated June 29, 2015, as amended on November 19, 2015, and completed on January 4, 2016

‘TRANZACT’		CD&R TZ Holdings, Inc. and its subsidiaries, doing business as TRANZACT

‘U.S.’		United States

‘U.K.’		United Kingdom

‘Brexit’		The United Kingdom’s exit from the European Union, which occurred on January 31, 2020.

‘E.U.’		European Union or European Union 27 (the number of member countries following the United Kingdom’s exit)

‘U.S. GAAP’		United States Generally Accepted Accounting Principles

‘FASB’		Financial Accounting Standards Board

‘ASU’		Accounting Standards Update

‘ASC’		Accounting Standards Codification

‘SEC’		Securities and Exchange Commission

Disclaimer Regarding Forward-looking Statements

We have included in this document ‘forward-looking statements’ within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934, which are intended to be covered by the safe harbors created by those laws. These forward-looking statements include information about possible or assumed future results of our operations. All statements, other than statements of historical facts, that address activities, events or developments that we expect or anticipate may occur in the future, including such things as our outlook, the impact of the COVID-19 pandemic on our business, our pending business combination with Aon plc, future capital expenditures, ongoing working capital efforts, future share repurchases, growth in revenue, the impact of changes to tax laws on our financial results, existing and evolving business strategies and acquisitions and dispositions, demand for our services and competitive strengths, goals, the benefits of new initiatives, growth of our business and operations, our ability to successfully manage ongoing organizational and technology changes, including investments in improving systems and processes, and plans and references to future successes, including our future financial and operating results, plans, objectives, expectations and intentions are forward-looking statements. Also, when we use words such as ‘may,’ ‘will,’ ‘would,’ ‘anticipate,’ ‘believe,’ ‘estimate,’ ‘expect,’ ‘intend,’ ‘plan,’ ‘probably,’ or similar expressions, we are making forward-looking statements. Such statements are based upon the current beliefs and expectations of the Company’s management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. All forward-looking disclosure is speculative by its nature.

There are important risks, uncertainties, events and factors that could cause our actual results or performance to differ materially from those in the forward-looking statements contained in this document, including the following:

•

our ability to successfully establish, execute and achieve our global business strategy as it evolves;

•

changes in demand for our services, including any decline in consulting services, defined benefit pension plans or the purchasing of insurance;

•

changes in general economic, business and political conditions, including changes in the financial markets;

•

the risk that the COVID-19 pandemic substantially and negatively impacts the demand for our products and services and cash flows, and/or continues to materially impact our business operations, including increased demand on our information technology resources and systems and related risks of cybersecurity breaches or incidents;

•

the risks relating to or arising from our pending business combination with Aon plc announced in March 2020, including, among others, our ability to consummate the transaction, including on the terms of the business combination agreement, on the anticipated timeline, and/or with the required shareholder and regulatory approvals;

•

significant competition that we face and the potential for loss of market share and/or profitability;

•

the impact of seasonality and differences in timing of renewals;

•

the failure to protect client data or breaches of information systems or insufficient safeguards against cybersecurity breaches or incidents;

•

the risk of increased liability or new legal claims arising from our new and existing products and services, and expectations, intentions and outcomes relating to outstanding litigation;

•

the risk the Stanford litigation settlement approval will be overturned on appeal, the risk that the Stanford bar order may be challenged in other jurisdictions, and the risk that the charge related to the Stanford settlement may not be deductible;

•

the risk of substantial negative outcomes on existing litigation or investigation matters;

•

changes in the regulatory environment in which we operate, including, among other risks, the impacts of pending competition law and regulatory investigations;

•

various claims, government inquiries or investigations or the potential for regulatory action;

•

our ability to make divestitures or acquisitions and our ability to integrate or manage such acquired businesses (including the recently-completed acquisition in Latin America);

•

our ability to successfully hedge against fluctuations in foreign currency rates;

•

our ability to integrate direct-to-consumer sales and marketing solutions with our existing offerings and solutions;

•

our ability to comply with complex and evolving regulations related to data privacy and cyber security;

•

our ability to successfully manage ongoing organizational changes, including investments in improving systems and processes;

•

disasters or business continuity problems;

•

the impact of Brexit;

•

our ability to successfully enhance our billing, collection and other working capital efforts, and thereby increase our free cash flow;

•

the potential impact of the anticipated replacement of the London Interbank Offered Rate (‘LIBOR’);

•

our ability to properly identify and manage conflicts of interest;

•

reputational damage, including from association with third parties;

•

reliance on third-party services;

•

the loss of key employees;

•

doing business internationally, including the impact of exchange rates;

•

compliance with extensive government regulation;

•

the risk of sanctions imposed by governments, or changes to associated sanction regulations;

•

our ability to effectively apply technology, data and analytics changes for internal operations, maintaining industry standards and meeting client preferences;

•

changes and developments in the insurance industry or the U.S. healthcare system, including those related to Medicare;

•

the inability to protect the Company’s intellectual property rights, or the potential infringement upon the intellectual property rights of others;

•

fluctuations in our pension assets and liabilities;

•

our capital structure, including indebtedness amounts, the limitations imposed by the covenants in the documents governing such indebtedness and the maintenance of the financial and disclosure controls and procedures of each;

•

our ability to obtain financing on favorable terms or at all;

•

adverse changes in our credit ratings;

•

the impact of recent changes to U.S. tax laws, including on our effective tax rate, and the enactment of additional, or the revision of existing, state, federal, and/or foreign regulatory and tax laws and regulations;

•

U.S. federal income tax consequences to U.S. persons owning at least 10% of our shares;

•

changes in accounting principles, estimates or assumptions;

•

fluctuation in revenue against our relatively fixed or higher than expected expenses;

•

the laws of Ireland being different from the laws of the U.S. and potentially affording less protections to the holders of our securities; and

•

our holding company structure potentially preventing us from being able to receive dividends or other distributions in needed amounts from our subsidiaries.

The foregoing list of factors is not exhaustive and new factors may emerge from time to time that could also affect actual performance and results. For more information, please see Part II, Item 1A. ‘Risk Factors’ in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K, and our subsequent filings with the SEC, including definitive additional materials, the merger proxy statement and other filings generally applicable to significant transactions and related integrations that are or will be filed with the SEC. Copies are available online at http://www.sec.gov or www.willistowerswatson.com.

Although we believe that the assumptions underlying our forward-looking statements are reasonable, any of these assumptions, and therefore also the forward-looking statements based on these assumptions, could themselves prove to be inaccurate. In light of the significant uncertainties inherent in the forward-looking statements included in this document, our inclusion of this information is not a representation or guarantee by us that our objectives and plans will be achieved.

Our forward-looking statements speak only as of the date made, and we will not update these forward-looking statements unless the securities laws require us to do so. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this document may not occur, and we caution you against relying on these forward-looking statements.

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)

WILLIS TOWERS WATSON

Condensed Consolidated Statements of Comprehensive Income

(In millions of U.S. dollars, except per share data)

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
Revenue	$	2,113		$	2,048		$	4,579		$	4,360
Costs of providing services
Salaries and benefits		1,363			1,278			2,757			2,626
Other operating expenses		387			412			871			830
Depreciation		67			59			165			113
Amortization		119			123			240			250
Transaction and integration expenses		14			—			23			6
Total costs of providing services		1,950			1,872			4,056			3,825
Income from operations		163			176			523			535
Interest expense		(62	)		(56	)		(123	)		(110	)
Other income, net		76			67			168			122
INCOME FROM OPERATIONS BEFORE INCOME TAXES		177			187			568			547
Provision for income taxes		(75	)		(38	)		(153	)		(105	)
NET INCOME		102			149			415			442
Income attributable to non-controlling interests		(8	)		(11	)		(16	)		(17	)
NET INCOME ATTRIBUTABLE TO WILLIS TOWERS WATSON	$	94		$	138		$	399		$	425

EARNINGS PER SHARE
Basic earnings per share	$	0.73		$	1.06		$	3.08		$	3.27
Diluted earnings per share	$	0.72		$	1.06		$	3.07		$	3.26

x
Comprehensive income before non-controlling interests	$	158		$	132		$	251		$	447
Comprehensive income attributable to non-controlling interests		(8	)		(13	)		(15	)		(18	)
Comprehensive income attributable to Willis Towers Watson	$	150		$	119		$	236		$	429

See accompanying notes to the condensed consolidated financial statements

WILLIS TOWERS WATSON

Condensed Consolidated Balance Sheets

(In millions of U.S. dollars, except share data)

(Unaudited)

	June 30, 2020			December 31, 2019
ASSETS
Cash and cash equivalents	$	1,087		$	887
Fiduciary assets		16,042			13,004
Accounts receivable, net		2,430			2,621
Prepaid and other current assets		363			525
Total current assets		19,922			17,037
Fixed assets, net		989			1,046
Goodwill		11,196			11,194
Other intangible assets, net		3,257			3,478
Right-of-use assets		894			968
Pension benefits assets		975			868
Other non-current assets		877			835
Total non-current assets		18,188			18,389
TOTAL ASSETS	$	38,110		$	35,426
LIABILITIES AND EQUITY
Fiduciary liabilities	$	16,042		$	13,004
Deferred revenue and accrued expenses		1,504			1,784
Current debt		525			316
Current lease liabilities		144			164
Other current liabilities		804			802
Total current liabilities		19,019			16,070
Long-term debt		5,068			5,301
Liability for pension benefits		1,235			1,324
Deferred tax liabilities		575			526
Provision for liabilities		534			537
Long-term lease liabilities		906			964
Other non-current liabilities		317			335
Total non-current liabilities		8,635			8,987
TOTAL LIABILITIES		27,654			25,057
COMMITMENTS AND CONTINGENCIES
EQUITY ⁽ⁱ⁾
Additional paid-in capital		10,713			10,687
Retained earnings		2,015			1,792
Accumulated other comprehensive loss, net of tax		(2,390	)		(2,227	)
Treasury shares, at cost, 17,519 shares in 2020 and 2019, and 40,000 shares, €1 nominal value in 2019		(3	)		(3	)
Total Willis Towers Watson shareholders’ equity		10,335			10,249
Non-controlling interests		121			120
Total equity		10,456			10,369
TOTAL LIABILITIES AND EQUITY	$	38,110		$	35,426

(i)

Equity includes (a) Ordinary shares $0.000304635 nominal value; Authorized 1,510,003,775; Issued 128,762,994 (2020) and 128,689,930 (2019); Outstanding 128,762,994 (2020) and 128,689,930 (2019); (b) Ordinary shares, €1 nominal value; Authorized and Issued 40,000 shares in 2019; and (c) Preference shares, $0.000115 nominal value; Authorized 1,000,000,000 and Issued none in 2020 and 2019.

See accompanying notes to the condensed consolidated financial statements

WILLIS TOWERS WATSON

Condensed Consolidated Statements of Cash Flows

(In millions of U.S. dollars)

(Unaudited)

	Six Months Ended June 30,
	2020			2019
CASH FLOWS FROM OPERATING ACTIVITIES
NET INCOME	$	415		$	442
Adjustments to reconcile net income to total net cash from operating activities:
Depreciation		165			113
Amortization		240			250
Non-cash lease expense		74			72
Net periodic benefit of defined benefit pension plans		(92	)		(64	)
Provision for doubtful receivables from clients		28			10
Provision for/(benefit from) deferred income taxes		40			(41	)
Share-based compensation		28			27
Net loss on disposal of operations		2			—
Non-cash foreign exchange (gain)/loss		(12	)		13
Other, net		1			(6	)
Changes in operating assets and liabilities, net of effects from purchase of subsidiaries:
Accounts receivable		128			(82	)
Fiduciary assets		(3,200	)		(1,961	)
Fiduciary liabilities		3,200			1,961
Other assets		82			(164	)
Other liabilities		(417	)		(285	)
Provisions		3			18
Net cash from operating activities		685			303
CASH FLOWS USED IN INVESTING ACTIVITIES
Additions to fixed assets and software for internal use		(135	)		(120	)
Capitalized software costs		(33	)		(34	)
Acquisitions of operations, net of cash acquired		(66	)		(1	)
Net proceeds from sale of operations		2			13
Other, net		(17	)		(6	)
Net cash used in investing activities		(249	)		(148	)
CASH FLOWS USED IN FINANCING ACTIVITIES
Net payments on revolving credit facility		—			(106	)
Senior notes issued		282			—
Debt issuance costs		(2	)		—
Repayments of debt		(311	)		(3	)
Repurchase of shares		—			(51	)
Proceeds from issuance of shares		5			27
Payments of deferred and contingent consideration related to acquisitions		—			(47	)
Cash paid for employee taxes on withholding shares		(1	)		(12	)
Dividends paid		(171	)		(161	)
Acquisitions of and dividends paid to non-controlling interests		(14	)		(21	)
Other, net		(3	)		—
Net cash used in financing activities		(215	)		(374	)
INCREASE/(DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH		221			(219	)
Effect of exchange rate changes on cash, cash equivalents and restricted cash		(22	)		(2	)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD ⁽ⁱ⁾		895			1,033
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD ⁽ⁱ⁾	$	1,094		$	812

(i)

As a result of the acquired TRANZACT collateralized facility, cash, cash equivalents and restricted cash included $7 million of restricted cash at June 30, 2020 and $8 million at December 31, 2019, which is included within prepaid and other current assets on our condensed consolidated balance sheets. There were no restricted cash amounts held at June 30, 2019 and December 31, 2018.

See accompanying notes to the condensed consolidated financial statements

WILLIS TOWERS WATSON

Condensed Consolidated Statements of Changes in Equity

(In millions of U.S. dollars and number of shares in thousands)

(Unaudited)

	Six Months Ended June 30, 2020
	Shares outstanding		Additional paid-in capital			Retained earnings			Treasury shares			AOCL ⁽ⁱ⁾			Total WTW shareholders’ equity			Non-controlling interests			Total equity
Balance as of December 31, 2019		128,690	$	10,687		$	1,792		$	(3	)	$	(2,227	)	$	10,249		$	120		$	10,369
Net income		—		—			305			—			—			305			8			313
Dividends declared ($0.68 per share)		—		—			(88	)		—			—			(88	)		—			(88	)
Dividends attributable to non-controlling interests		—		—			—			—			—			—			(1	)		(1	)
Other comprehensive loss		—		—			—			—			(219	)		(219	)		(1	)		(220	)
Issuance of shares under employee stock compensation plans		36		3			—			—			—			3			—			3
Share-based compensation and net settlements		—		9			—			—			—			9			—			9
Foreign currency translation		—		4			—			—			—			4			—			4
Balance as of March 31, 2020		128,726	$	10,703		$	2,009		$	(3	)	$	(2,446	)	$	10,263		$	126		$	10,389
Net income		—		—			94			—			—			94			8			102
Dividends declared ($0.68 per share)		—		—			(88	)		—			—			(88	)		—			(88	)
Dividends attributable to non-controlling interests		—		—			—			—			—			—			(12	)		(12	)
Other comprehensive income		—		—			—			—			56			56			—			56
Issuance of shares under employee stock compensation plans		37		2			—			—			—			2			—			2
Share-based compensation and net settlements		—		12			—			—			—			12			—			12
Divestiture of non-controlling interests		—		—			—			—			—			—			(1	)		(1	)
Other		—		(3	)		—			—			—			(3	)		—			(3	)
Foreign currency translation		—		(1	)		—			—			—			(1	)		—			(1	)
Balance as of June 30, 2020		128,763	$	10,713		$	2,015		$	(3	)	$	(2,390	)	$	10,335		$	121		$	10,456

_________

(i)	Accumulated other comprehensive loss, net of tax (‘AOCL’).

WILLIS TOWERS WATSON

Condensed Consolidated Statements of Changes in Equity – (continued)

(In millions of U.S. dollars and number of shares in thousands)

(Unaudited)

	Six Months Ended June 30, 2019
	Shares outstanding			Additional paid-in capital			Retained earnings			Treasury shares			AOCL ⁽ⁱ⁾			Total WTW shareholders’ equity			Non-controlling interests			Total equity			Redeemable non-controlling interest ⁽ⁱⁱ⁾			Total
Balance as of December 31, 2018		128,922		$	10,615		$	1,201		$	(3	)	$	(1,961	)	$	9,852		$	119		$	9,971		$	26
Adoption of ASU 2018-02		—			—			36			—			(36	)		—			—			—			—
Net income		—			—			287			—			—			287			4			291			2		$	293
Dividends declared ($0.65 per share)		—			—			(85	)		—			—			(85	)		—			(85	)		—
Other comprehensive income/(loss)		—			—			—			—			23			23			(1	)		22			—		$	22
Issuance of shares under employee stock compensation plans		289			22			—			—			—			22			—			22			—
Share-based compensation and net settlements		—			(7	)		—			—			—			(7	)		—			(7	)		—
Balance as of March 31, 2019		129,211		$	10,630		$	1,439		$	(3	)	$	(1,974	)	$	10,092		$	122		$	10,214		$	28
Shares repurchased		(280	)		—			(51	)		—			—			(51	)		—			(51	)		—
Net income		—			—			138			—			—			138			9			147			2		$	149
Dividends declared ($0.65 per share)		—			—			(84	)		—			—			(84	)		—			(84	)		—
Dividends attributable to non-controlling interests		—			—			—			—			—			—			(19	)		(19	)		(2	)
Other comprehensive (loss)/income		—			—			—			—			(19	)		(19	)		2			(17	)		—		$	(17	)
Issuance of shares under employee stock compensation plans		52			5			—			—			—			5			—			5			—
Share-based compensation and net settlements		—			10			—			—			—			10			—			10			—
Foreign currency translation		—			(1	)		—			—			—			(1	)		—			(1	)		—
Balance as of June 30, 2019		128,983		$	10,644		$	1,442		$	(3	)	$	(1,993	)	$	10,090		$	114		$	10,204		$	28

_________

(i)	Accumulated other comprehensive loss, net of tax (‘AOCL’).

(ii)	The non-controlling interest was related to Max Matthiessen Holding AB. The remaining amount was purchased during the three months ended December 31, 2019.

See accompanying notes to the condensed consolidated financial statements

WILLIS TOWERS WATSON

Notes to the Condensed Consolidated Financial Statements

(Tabular amounts in millions of U.S. dollars, except per share data)

(Unaudited)

Note 1 — Nature of Operations

Willis Towers Watson plc is a leading global advisory, broking and solutions company that helps clients around the world turn risk into a path for growth. The Company has more than 45,000 employees and services clients in more than 140 countries.

We design and deliver solutions that manage risk, optimize benefits, cultivate talent, and expand the power of capital to protect and strengthen institutions and individuals.

Our risk management services include strategic risk consulting (including providing actuarial analysis), a variety of due diligence services, the provision of practical on-site risk control services (such as health and safety and property loss control consulting), and analytical and advisory services (such as hazard modeling and reinsurance optimization studies). We also assist our clients with planning for addressing incidents or crises when they occur. These services include contingency planning, security audits and product tampering plans.

We help our clients enhance business performance by delivering consulting services, technology and solutions that optimize benefits and cultivate talent. Our services and solutions encompass such areas as employee benefits, total rewards, talent and benefits outsourcing. In addition, we provide investment advice to help our clients develop disciplined and efficient strategies to meet their investment goals and expand the power of capital.

As an insurance broker, we act as an intermediary between our clients and insurance carriers by advising on their risk management requirements, helping them to determine the best means of managing risk and negotiating and placing insurance with insurance carriers through our global distribution network.

We operate a private Medicare marketplace in the U.S. through which, along with our active employee marketplace, we help our clients move to a more sustainable economic model by capping and controlling the costs associated with healthcare benefits. Additionally, with the acquisition of TRANZACT in July 2019 (see Note 3 – Acquisitions and Divestitures), we also provide direct-to-consumer sales of Medicare coverage.

We are not an insurance company, and therefore we do not underwrite insurable risks for our own account. We believe our broad perspective allows us to see the critical intersections between talent, assets and ideas - the dynamic formula that drives business performance.

Proposed Combination with Aon plc

On March 9, 2020, WTW and Aon plc (‘Aon’) issued an announcement disclosing that the respective boards of directors of WTW and Aon had reached agreement on the terms of a recommended acquisition of WTW by Aon. Under the terms of the agreement each WTW shareholder will receive 1.08 Aon ordinary shares for each WTW ordinary share. At the time of the announcement, it was estimated that upon completion of the combination, existing Aon shareholders will own approximately 63% and existing WTW shareholders will own approximately 37% of the combined company on a fully diluted basis.

The transaction is subject to the approval of the shareholders of both WTW and Aon, as well as other customary closing conditions, including required regulatory approvals. Meetings of the respective shareholders will be held on August 26, 2020. We are required to be in substantial compliance with the Request for Additional Information and Documentary Materials issued by the Antitrust Division of the U.S. Department of Justice on June 29, 2020, referred to as a Second Request. In addition, there are numerous other regulatory approvals and other closing conditions that need to be met. The parties expect the transaction to close in the first half of 2021, subject to satisfaction of these conditions.

Note 2 — Basis of Presentation and Recent Accounting Pronouncements

Basis of Presentation

The accompanying unaudited quarterly condensed consolidated financial statements of Willis Towers Watson and our subsidiaries are presented in accordance with the rules and regulations of the SEC for quarterly reports on Form 10-Q and therefore do not include all of the information and footnotes required by U.S. GAAP. In the opinion of management, these condensed consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, which are necessary for a fair presentation of the condensed consolidated financial statements and results for the interim periods. All intercompany accounts and transactions have been eliminated in consolidation. The condensed consolidated financial statements should be read together with the Company’s Annual Report on Form 10-K, filed with the SEC on February 26, 2020, and may be accessed via EDGAR on the SEC’s web site at www.sec.gov.

The results of operations for the three and six months ended June 30, 2020 are not necessarily indicative of the results that can be expected for the entire year. The Company experiences seasonal fluctuations of its revenue. Revenue is typically higher during the Company’s first and fourth quarters due primarily to the timing of broking-related activities. The results reflect certain estimates and assumptions made by management, including those estimates used in calculating acquisition consideration and fair value of tangible and intangible assets and liabilities, professional liability claims, estimated bonuses, valuation of billed and unbilled receivables, and anticipated tax liabilities that affect the amounts reported in the condensed consolidated financial statements and related notes.

Risks and Uncertainties Related to the COVID-19 Pandemic

The COVID-19 pandemic has had an adverse impact on global commercial activity, including the global supply chain, and has contributed to significant volatility in the financial markets including, among other effects, occasional declines in the equity markets, changes in interest rates and reduced liquidity on a global basis. In light of the effects on our own business operations and those of our clients, suppliers and other third parties with whom we interact, the Company has considered the impact of COVID-19 on our business. This analysis takes into account our business resilience and continuity plans, financial modeling and stress testing of liquidity and financial resources.

The analysis concluded that the COVID-19 pandemic did not have a material adverse impact to our financial results for the first quarter of 2020; however, we expected that the impact of COVID-19 on general economic activity could negatively impact our revenue and operating results for the remainder of 2020. During the second quarter of 2020, the COVID-19 pandemic had a negative impact on revenue growth, particularly in our businesses that are discretionary in nature, but otherwise it generally had no material impact on our overall results. Some of our discretionary, project-based businesses saw a reduction in demand, and potential negative impacts on our revenue and operating results may lag behind the developments thus far related to the COVID-19 pandemic. Also, the increased frequency and severity of coverage disputes between our clients and (re)insurers arising out of the pandemic could increase our professional liability risk. We will continue to monitor the situation and assess possible implications to our business and our stakeholders. The extent to which COVID-19 impacts our business and financial position will depend on future developments, which are difficult to predict. These future developments may include the severity and scope of the COVID-19 outbreak, which may unexpectedly change or worsen, and the types and duration of measures imposed by governmental authorities to contain the virus or address its impact. We continue to expect that the COVID-19 pandemic will negatively impact our revenue and operating results for the remainder of 2020 and potentially beyond.

The Company has considered multiple scenarios, with both positive and negative inputs, as part of the significant estimates and assumptions that are inherent in our financial statements. These inputs are based on trends in client behavior and the economic environment throughout the first half of 2020 as COVID-19 has moved throughout the geographies in which we operate. These estimates and assumptions include the collectability of billed and unbilled receivables, the estimation of revenue, and the fair value of our reporting units, tangible and intangible assets and contingent consideration. With regard to collectability, the Company believes it may face atypical delays in client payments going forward. In addition, we believe that the demand for certain discretionary lines of business has decreased, and that such decrease will impact our financial results in succeeding periods. Non-discretionary lines of business may also be adversely affected, for example because reduced economic activity or disruption in insurance markets reduces demand for or the extent of insurance coverage. We believe that these trends and uncertainties are comparable to those faced by other registrants as a result of the pandemic.

CARES Act

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (‘CARES’) Act was enacted in the U.S. to provide relief to companies in the midst of the COVID-19 pandemic and to stimulate the economy. The assistance includes temporary tax relief and government loans, grants and investments for entities in affected industries.

With regard to the income tax provisions of the CARES Act, the Company has reviewed its eligibility requirements, including if and how they apply and how they will affect the Company, particularly provisions that (i) eliminate the taxable income limit for certain net operating losses (‘NOLs’) and allow businesses to carry back NOLs arising in 2018, 2019 and 2020 to the five prior tax years; (ii) generally relaxed the business interest limitation under section 163(j) from 30 percent to 50 percent; and (iii) fix the ‘retail glitch’ for qualified improvement property.

During the three months ended June 30, 2020, the Company elected to use the section 163(j) 50 percent business interest limitation for tax years 2019 and 2020. Utilizing this temporary provision, the Company accelerated a cash tax benefit in 2020 of approximately $40 million for tax years 2019 and 2020. Moreover, the Company will recognize tax expense of approximately $25 million and $22 million for the 2019 and 2020 tax years, respectively, primarily related to an incremental Base Erosion and Anti-Abuse Tax (‘BEAT’). During the quarter, the Company recorded tax expense of $35 million relating to the 2019 and 2020 tax years, and expects to recognize the remaining $12 million BEAT expense during the remainder of 2020.

Additionally, the CARES Act offers an employee retention credit to encourage employers to maintain headcounts even if employees cannot report to work because of issues related to COVID-19 as well as a temporary provision allowing companies to defer remitting the employer share of some payroll taxes to the government. The payroll tax provisions of the CARES Act were not material for the six months ended June 30, 2020 and are currently not expected to be material for calendar year 2020.

Recent Accounting Pronouncements

Not Yet Adopted

In December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes, which clarifies and amends existing guidance, including removing certain exceptions to the general principles of accounting for income taxes. This ASU becomes effective for the Company on January 1, 2021. Some of the changes must be applied on a retrospective or modified retrospective basis while others must be applied on a prospective basis. Early adoption is permitted. The Company does not plan to adopt this ASU early and is assessing the expected impact on our condensed consolidated financial statements.

Adopted

In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses: Measurement of Credit Losses on Financial Instruments, which amended the guidance on the impairment of financial instruments. The ASU added an impairment model (known as the current expected credit loss (‘CECL’) model) that is based on expected losses rather than incurred losses. Under the new guidance, an entity recognizes as an allowance its estimate of lifetime expected credit losses on assets measured at amortized cost, which is intended to result in more timely recognition of such losses. The ASU was also intended to reduce the complexity of U.S. GAAP by decreasing the number of credit impairment models that entities use to account for debt instruments. Further, the ASU made targeted changes to the impairment model for available-for-sale debt securities. Additional ASUs were subsequently issued which provided amended and additional guidance for the implementation of ASU No. 2016-13. All related guidance has been codified into, and is now known as, ASC 326, Financial Instruments—Credit Losses (‘ASC 326’). ASC 326 became effective for the Company on January 1, 2020, at which time we adopted it. This ASU did not have a material impact on our condensed consolidated financial statements.

In January 2017, the FASB issued ASU No. 2017-04, Simplifying the Test for Goodwill Impairment, which simplifies the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. In computing the implied fair value of goodwill under Step 2, previous U.S. GAAP required the performance of procedures to determine the fair value at the impairment testing date of assets and liabilities (including unrecognized assets and liabilities) following the procedure that is required in determining the fair value of assets acquired and liabilities assumed in a business combination. Instead, the amendments under this ASU require the goodwill impairment test to be performed by comparing the fair value of a reporting unit with its carrying amount. An impairment charge would be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The ASU became effective for the Company on January 1, 2020, at which time we adopted it. The amendments in this ASU are applied on a prospective basis. There is no immediate impact to our condensed consolidated financial statements upon adopting this ASU, until such time as the next goodwill impairment test is performed (October 1, 2020, or sooner should circumstances warrant it). The most recent Step 1 goodwill impairment test resulted in fair values in excess of carrying values for all reporting units at October 1, 2019.

In August 2018, the FASB issued ASU 2018-13, Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement as part of its disclosure framework project. The focus of this project is to improve the effectiveness of disclosures in the notes to the financial statements by facilitating clear communication of the information required by U.S. GAAP that is most important to users of an entity’s financial statements. This ASU removes certain disclosure requirements and adds or modifies other requirements. This ASU was effective for the Company on January 1, 2020, at which time we adopted it. Certain provisions of the ASU were required to be adopted retrospectively, while others were required to be adopted prospectively. This ASU did not have a material impact on the notes to our condensed consolidated financial statements.

In March 2020, the SEC issued a final rule that amends the disclosure requirements related to certain registered securities under SEC Regulation S-X, Rules 3-10 and 3-16 which currently require separate financial statements for subsidiary issuers and guarantors of registered debt securities unless certain exceptions are met, and affiliates that collateralize registered securities offerings if the affiliates’ securities are a substantial portion of the collateral. The final rule is generally effective for filings on or after January 4, 2021, however early application is permitted. The most pertinent portions of the final rule that are currently applicable to the Company include: (i) replacing the previous requirement under Rule 3-10 to provide condensed consolidating financial information in the registrant’s financial statements with a requirement to provide alternative financial disclosures (which include summarized financial information of the parent and any issuers and guarantors, as well as other qualitative disclosures) in either the registrant’s Management’s Discussion & Analysis section or its financial statements; and, (ii) reducing the periods for which summarized financial information is required to the most recent annual period and year-to-date interim period. The Company elected to early-adopt the provisions of the final rule during the three months ended March 31, 2020. Further, the new reduced quantitative disclosures and accompanying qualitative disclosures as required by this final rule are in Item II, Management’s Discussion and Analysis of Financial Condition and Results of Operations on this Form 10-Q.

In March 2020, the FASB issued ASU No. 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for accounting for contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts, hedging relationships and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. This ASU

became effective for the Company on March 12, 2020. The Company may apply the changes relating to contracts from January 1, 2020 or from a later date. The Company has made no contract modifications thus far to transition to a different reference rate, however it will consider this guidance as future modifications are made.

Note 3 — Acquisitions and Divestitures

TRANZACT Acquisition

On July 30, 2019, the Company acquired TRANZACT, a U.S.-based provider of comprehensive, direct-to-consumer sales and marketing solutions for leading insurance carriers in the U.S. TRANZACT leverages digital, data and direct marketing solutions to deliver qualified leads, fully-provisioned sales and robust customer management systems to brands seeking to acquire and manage large numbers of consumers. Pursuant to the terms of the acquisition agreement, subject to certain adjustments, the consideration consisted of $1.3 billion paid in cash at closing. Additional contingent consideration in the form of a potential earn-out of up to $17 million is to be paid in cash in 2021 based on the achievement of certain financial targets. The acquisition was initially funded in part with a $1.1 billion one-year term loan, with the remainder being funded from the Company’s existing revolving credit facility. TRANZACT operates as part of our Benefits Delivery and Administration segment and enhances the Company’s existing Medicare broking offering, while also adding significant direct-to-consumer marketing experience.

A summary of the preliminary fair values of the identifiable assets acquired, and liabilities assumed, of TRANZACT at July 30, 2019 are summarized in the following table.

Cash and cash equivalents	$	7
Restricted cash		2
Accounts receivable, net		3
Renewal commissions receivable, current ⁽ⁱ⁾		36
Prepaid and other current assets		22
Renewal commissions receivable, non-current ⁽ⁱ⁾		130
Fixed assets		9
Intangible assets		646
Goodwill		722
Right-of-use assets		19
Other non-current assets		2
Collateralized facility		(91	)
Other current liabilities		(55	)
Deferred tax liabilities, net		(104	)
Lease liabilities		(19	)
Net assets acquired	$	1,329

______________

(i)

Renewal commissions receivables arise from direct-to-consumer Medicare broking sales. Cash collections for these receivables are expected to occur over a period of several years. Due to the provisions of ASC 606, these receivables are not discounted for a significant financing component when initially recognized. However, as a result of recognizing the fair value of these receivables in accordance with ASC 805, Business Combinations, these receivables have now been present-valued at the acquisition date. Prior to this fair value adjustment, the carrying value of these receivables was $231 million. The adjusted values of these acquired renewal commissions receivables will be included in prepaid and other current assets or other non-current assets, as appropriate, on the condensed consolidated balance sheets. The acquired renewal commissions receivables will be accounted for prospectively using the cost-recovery method in which future cash receipts will initially be applied against the acquisition date fair value until the value reaches zero. Any cash received in excess of the fair value determined at acquisition will be recorded to earnings when it is received at a future date.

Intangible assets consist primarily of $612 million of customer relationships, with an expected life of 15.4 years. Additional intangibles acquired consist of domain names.

Goodwill is calculated as the difference between the aggregate consideration and the acquisition date fair value of the net assets acquired, including the intangible assets acquired, and represents the value of TRANZACT’s assembled workforce and the future economic benefits that we expect to achieve as a result of the acquisition. None of the goodwill recognized on the transaction is tax deductible, however there is tax deductible goodwill that will be carried forward from previous acquisitions by TRANZACT.

During the six months ended June 30, 2020, purchase price allocation adjustments were made primarily to adjust the deferred tax liabilities related to the deductibility of goodwill. The purchase price allocation as of the acquisition date related to deferred tax assets and deferred tax liabilities was not yet complete as of June 30, 2020.

Revenue related to TRANZACT was $87 million and $182 million during the three and six months ended June 30, 2020, respectively.

Other Acquisitions

Other acquisitions were completed during the six months ended June 30, 2020 for combined cash payments of $72 million and contingent consideration with an estimated fair value of $2 million.

Max Matthiessen Divestiture

In May 2020, the Company entered into an agreement to sell its Swedish majority-owned subsidiary MM Holding AB (‘Max Matthiessen’) for total consideration of SEK 2.3 billion ($248 million) plus certain other adjustments. Of the total consideration, the Company will be financing a SEK 600 million ($64 million) note repayable by the purchaser. The note has no fixed term but will be repayable subject to certain terms and conditions and will bear an interest rate that could range from 5% to 10%, increasing the longer the note remains outstanding. The divestiture is expected to close during the third quarter of 2020, and the Company has entered into certain foreign currency transactions to hedge the consideration to be received against fluctuations in foreign exchange rates (see Note 8 — Derivative Financial Instruments).

Note 4 — Revenue

Disaggregation of Revenue

The Company reports revenue by segment in Note 5 — Segment Information. The following tables present revenue by service offering and segment, as well as reconciliations to total revenue for the three and six months ended June 30, 2020 and 2019. Along with reimbursable expenses and other, total revenue by service offering represents our revenue from customer contracts.

	Three Months Ended June 30,
	HCB				CRB				IRR				BDA				Corporate ⁽ⁱ⁾				Total
	2020		2019		2020		2019		2020		2019		2020		2019		2020		2019		2020		2019
Broking	$	71	$	64	$	637	$	633	$	258	$	249	$	90	$	9	$	—	$	—	$	1,056	$	955
Consulting		531		571		40		36		95		100		—		—		2		3		668		710
Outsourced administration		122		101		16		13		3		3		119		117		—		—		260		234
Other		41		56		1		1		55		52		—		—		1		1		98		110
Total revenue by service offering		765		792		694		683		411		404		209		126		3		4		2,082		2,009
Reimbursable expenses and other ⁽ⁱ⁾		11		15		1		—		1		2		2		2		4		2		19		21
Total revenue from customer contracts	$	776	$	807	$	695	$	683	$	412	$	406	$	211	$	128	$	7	$	6	$	2,101	$	2,030
Interest and other income ⁽ⁱⁱ⁾		2		5		7		7		2		5		—		—		1		1		12		18
Total revenue	$	778	$	812	$	702	$	690	$	414	$	411	$	211	$	128	$	8	$	7	$	2,113	$	2,048

	Six Months Ended June 30,
	HCB				CRB				IRR				BDA				Corporate ⁽ⁱ⁾				Total
	2020		2019		2020		2019		2020		2019		2020		2019		2020		2019		2020		2019
Broking	$	154	$	137	$	1,285	$	1,293	$	691	$	654	$	188	$	12	$	—	$	—	$	2,318	$	2,096
Consulting		1,113		1,151		87		67		188		214		—		—		4		6		1,392		1,438
Outsourced administration		250		224		41		40		6		5		252		249		—		—		549		518
Other		88		103		2		2		138		110		—		—		2		2		230		217
Total revenue by service offering		1,605		1,615		1,415		1,402		1,023		983		440		261		6		8		4,489		4,269
Reimbursable expenses and other ⁽ⁱ⁾		26		29		1		—		4		4		5		5		10		9		46		47
Total revenue from customer contracts	$	1,631	$	1,644	$	1,416	$	1,402	$	1,027	$	987	$	445	$	266	$	16	$	17	$	4,535	$	4,316
Interest and other income ⁽ⁱⁱ⁾		12		11		25		16		5		15		—		—		2		2		44		44
Total revenue	$	1,643	$	1,655	$	1,441	$	1,418	$	1,032	$	1,002	$	445	$	266	$	18	$	19	$	4,579	$	4,360

______________

(i)	Reimbursable expenses and other, as well as Corporate revenue, are excluded from segment revenue, but included in total revenue on the condensed consolidated statements of comprehensive income.

(ii)	Interest and other income is included in segment revenue and total revenue, however it has been presented separately in the above tables because it does not arise directly from contracts with customers.

Individual revenue streams aggregating to approximately 5% of total revenue from customer contracts for the three and six months ended June 30, 2020 and 2019 have been included within the Other line in the tables above.

The following tables present revenue by the geography where our work is performed for the three and six months ended June 30, 2020 and 2019. Reconciliations to total revenue on our condensed consolidated statements of comprehensive income and to segment revenue are shown in the tables above.

	Three Months Ended June 30,
	HCB				CRB				IRR				BDA				Corporate				Total
	2020		2019		2020		2019		2020		2019		2020		2019		2020		2019		2020		2019
North America	$	462	$	478	$	296	$	274	$	117	$	117	$	207	$	126	$	2	$	4	$	1,084	$	999
Great Britain		117		120		160		172		207		196		—		—		—		—		484		488
Western Europe		119		124		127		128		49		51		—		—		1		—		296		303
International		67		70		111		109		38		40		2		—		—		—		218		219
Total revenue by geography	$	765	$	792	$	694	$	683	$	411	$	404	$	209	$	126	$	3	$	4	$	2,082	$	2,009

	Six Months Ended June 30,
	HCB				CRB				IRR				BDA				Corporate				Total
	2020		2019		2020		2019		2020		2019		2020		2019		2020		2019		2020		2019
North America	$	938	$	949	$	529	$	494	$	287	$	281	$	436	$	261	$	4	$	8	$	2,194	$	1,993
Great Britain		243		238		297		314		528		496		—		—		—		—		1,068		1,048
Western Europe		275		279		371		367		125		120		—		—		2		—		773		766
International		149		149		218		227		83		86		4		—		—		—		454		462
Total revenue by geography	$	1,605	$	1,615	$	1,415	$	1,402	$	1,023	$	983	$	440	$	261	$	6	$	8	$	4,489	$	4,269

Contract Balances

The Company reports accounts receivable, net on the condensed consolidated balance sheet, which includes billed and unbilled receivables and current contract assets. In addition to accounts receivable, net, the Company had the following non-current contract assets and deferred revenue balances at June 30, 2020 and December 31, 2019:

	June 30, 2020		December 31, 2019
Billed receivables, net of allowance for doubtful accounts of $57 million and $37 million	$	1,744	$	1,831
Unbilled receivables		452		434
Current contract assets		234		356
Accounts receivable, net	$	2,430	$	2,621
Non-current accounts receivable, net	$	33	$	30
Non-current contract assets	$	172	$	105
Deferred revenue	$	558	$	538

During the three and six months ended June 30, 2020, revenue of $130 million and $402 million, respectively, was recognized that was reflected as deferred revenue at December 31, 2019. During the three months ended June 30, 2020, revenue of $254 million was recognized that was reflected as deferred revenue at March 31, 2020.

During the three and six months ended June 30, 2020, the Company recognized revenue of $5 million and $14 million, respectively, related to performance obligations satisfied prior to 2020.

Performance Obligations

The Company has contracts for which performance obligations have not been satisfied as of June 30, 2020 or have been partially satisfied as of this date. The following table shows the expected timing for the satisfaction of the remaining performance obligations. This table does not include contract renewals or variable consideration, which was excluded from the transaction prices in accordance with the guidance on constraining estimates of variable consideration.

In addition, in accordance with ASC 606, Revenue From Contracts With Customers (‘ASC 606’), the Company has elected not to disclose the remaining performance obligations when one or both of the following circumstances apply:

•

Performance obligations which are part of a contract that has an original expected duration of less than one year, and

•

Performance obligations satisfied in accordance with ASC 606-10-55-18 (‘right to invoice’).

		Remainder of 2020				2021				2022 onward				Total
Revenue expected to be recognized on contracts as of June 30, 2020		$	283			$	441			$	611			$	1,335

Since most of the Company’s contracts are cancellable with less than one year’s notice, and have no substantive penalty for cancellation, the majority of the Company’s remaining performance obligations as of June 30, 2020 have been excluded from the table above.

Note 5 — Segment Information

Willis Towers Watson has four reportable operating segments or business areas:

•

Human Capital and Benefits (‘HCB’)

•

Corporate Risk and Broking (‘CRB’)

•

Investment, Risk and Reinsurance (‘IRR’)

•

Benefits Delivery and Administration (‘BDA’)

Willis Towers Watson’s chief operating decision maker is its chief executive officer. We determined that the operational data used by the chief operating decision maker is at the segment level. Management bases strategic goals and decisions on these segments and the data presented below is used to assess the adequacy of strategic decisions and the methods of achieving these strategies and related financial results. Management evaluates the performance of its segments and allocates resources to them based on net operating income on a pre-tax basis.

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

The following table presents segment revenue and segment operating income for our reportable segments for the three months ended June 30, 2020 and 2019.

	Three Months Ended June 30,
	HCB				CRB				IRR				BDA						Total
	2020		2019		2020		2019		2020		2019		2020			2019			2020		2019
Segment revenue	$	767	$	797	$	701	$	690	$	413	$	409	$	209		$	126		$	2,090	$	2,022

Segment operating income/(loss)	$	160	$	169	$	135	$	104	$	119	$	109	$	(9	)	$	(25	)	$	405	$	357

The following table presents segment revenue and segment operating income for our reportable segments for the six months ended June 30, 2020 and 2019.

	Six Months Ended June 30,
	HCB				CRB				IRR				BDA						Total
	2020		2019		2020		2019		2020		2019		2020			2019			2020		2019
Segment revenue	$	1,617	$	1,626	$	1,440	$	1,418	$	1,028	$	998	$	440		$	261		$	4,525	$	4,303

Segment operating income/(loss)	$	373	$	373	$	262	$	231	$	396	$	361	$	(20	)	$	(46	)	$	1,011	$	919

The following table presents reconciliations of the information reported by segment to the Company’s condensed consolidated statements of comprehensive income amounts reported for the three and six months ended June 30, 2020 and 2019.

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
Revenue:
Total segment revenue	$	2,090		$	2,022		$	4,525		$	4,303
Reimbursable expenses and other		23			26			54			57
Revenue	$	2,113		$	2,048		$	4,579		$	4,360

Total segment operating income	$	405		$	357		$	1,011		$	919
Amortization		(119	)		(123	)		(240	)		(250	)
Transaction and integration expenses ⁽ⁱ⁾		(14	)		—			(23	)		(6	)
Unallocated, net ⁽ⁱⁱ⁾		(109	)		(58	)		(225	)		(128	)
Income from operations		163			176			523			535
Interest expense		(62	)		(56	)		(123	)		(110	)
Other income, net		76			67			168			122
Income from operations before income taxes	$	177		$	187		$	568		$	547

(i)	Includes transaction costs related to the proposed Aon combination and TRANZACT acquisition in 2019.

(ii)	Includes certain costs, primarily related to corporate functions which are not directly related to the segments, and certain differences between budgeted expenses determined at the beginning of the year and actual expenses that we report for U.S. GAAP purposes.

The Company does not currently provide asset information by reportable segment as it does not routinely evaluate the total asset position by segment.

Note 6 — Income Taxes

Provision for income taxes for the three and six months ended June 30, 2020 was $75 million and $153 million, respectively, compared to $38 million and $105 million for the three and six months ended June 30, 2019, respectively. The effective tax rates were 42.2% and 26.9% for the three and six months ended June 30, 2020, respectively, and 19.7% and 19.1% for the three and six months ended June 30, 2019, respectively. These effective tax rates are calculated using extended values from our condensed consolidated statements of comprehensive income and are therefore more precise tax rates than can be calculated from rounded values. The current year effective tax rate is higher due primarily to a discrete tax expense of $35 million recognized during the three months ended June 30, 2020 in connection with the temporary income tax provisions of the CARES Act. During the three months ended June 30, 2020, the Company elected to utilize the higher section 163(j) 50 percent business interest limitation for tax years 2019 and 2020, which allows the Company to utilize additional interest expense. The utilization of additional interest expense reduces our regular tax liability, reduces our ability to utilize foreign tax credits and creates a base erosion minimum tax expense for these tax years.

On April 7, 2020 the U.S. Department of Treasury finalized regulations on specific aspects of U.S. Tax Reform. During the first quarter ended March 31, 2020, the Company estimated the potential impact of the final regulations and its retroactive application to be between $50 million and $82 million. Subsequently the Company has concluded that the final regulations are not applicable. As a result, our remeasurement of the estimated impact results in no tax expense to be recognized pursuant to this aspect of U.S. Tax Reform during the three months ended June 30, 2020.

The Company recognizes deferred tax balances related to the undistributed earnings of subsidiaries when it expects that it will recover those undistributed earnings in a taxable manner, such as through receipt of dividends or sale of the investments. Historically, we have not provided taxes on cumulative earnings of our subsidiaries that have been reinvested indefinitely. As a result of our plans to restructure or distribute accumulated earnings of certain foreign operations, we have recorded an estimate of foreign withholding and state income taxes. However, we assert that the historical cumulative earnings of our other subsidiaries are reinvested indefinitely, and therefore do not provide deferred tax liabilities on these amounts.

The Company records valuation allowances against net deferred tax assets based on whether it is more likely than not that the deferred tax assets will be realized. We have liabilities for uncertain tax positions under ASC 740 of $51 million, excluding interest and penalties. The Company believes the outcomes that are reasonably possible within the next 12 months may result in a reduction in the liability for uncertain tax positions of approximately $3 million to $8 million, excluding interest and penalties.

Note 7 — Goodwill and Other Intangible Assets

The components of goodwill are outlined below for the six months ended June 30, 2020:

	HCB			CRB			IRR			BDA			Total
Balance at December 31, 2019:
Goodwill, gross	$	4,298		$	2,309		$	1,795		$	3,284		$	11,686
Accumulated impairment losses		(130	)		(362	)		—			—			(492	)
Goodwill, net - December 31, 2019		4,168			1,947			1,795			3,284			11,194
Goodwill acquired		15			28			—			—			43
Goodwill disposals		—			(1	)		—			—			(1	)
Acquisition accounting adjustment		—			—			—			(5	)		(5	)
Foreign exchange		(13	)		(9	)		(13	)		—			(35	)
Balance at June 30, 2020:
Goodwill, gross		4,300			2,327			1,782			3,279			11,688
Accumulated impairment losses		(130	)		(362	)		—			—			(492	)
Goodwill, net - June 30, 2020	$	4,170		$	1,965		$	1,782		$	3,279		$	11,196

Other Intangible Assets

The following table reflects changes in the net carrying amounts of the components of finite-lived intangible assets for the six months ended June 30, 2020:

	Client relationships			Software			Trademark and trade name			Other			Total
Balance at December 31, 2019:
Intangible assets, gross	$	4,029		$	753		$	1,051		$	134		$	5,967
Accumulated amortization		(1,731	)		(551	)		(176	)		(31	)		(2,489	)
Intangible assets, net - December 31, 2019		2,298			202			875			103			3,478
Intangible assets acquired		18			—			—			32			50
Intangible asset disposals		(2	)		—			—			—			(2	)
Amortization		(152	)		(55	)		(22	)		(11	)		(240	)
Foreign exchange		(26	)		(3	)		—			—			(29	)
Balance at June 30, 2020:
Intangible assets, gross		3,992			741			1,051			165			5,949
Accumulated amortization		(1,856	)		(597	)		(198	)		(41	)		(2,692	)
Intangible assets, net - June 30, 2020	$	2,136		$	144		$	853		$	124		$	3,257

The weighted-average remaining life of amortizable intangible assets at June 30, 2020 was 13.5 years.

The table below reflects the future estimated amortization expense for amortizable intangible assets for the remainder of 2020 and for subsequent years:

	Amortization
Remainder of 2020	$	209
2021		376
2022		318
2023		268
2024		237
Thereafter		1,849
Total	$	3,257

Note 8 — Derivative Financial Instruments

We are exposed to certain foreign currency risks. Where possible, we identify exposures in our business that can be offset internally. Where no natural offset is identified, we may choose to enter into various derivative transactions. These instruments have the effect of reducing our exposure to unfavorable changes in foreign currency rates. The Company’s board of directors reviews and approves policies for managing this risk as summarized below. Additional information regarding our derivative financial instruments can be found in Note 10 — Fair Value Measurements and Note 15 — Accumulated Other Comprehensive Loss.

Foreign Currency Risk

Certain non-U.S. subsidiaries receive revenue and incur expenses in currencies other than their functional currency, and as a result, the foreign subsidiary’s functional currency revenue and/or expenses will fluctuate as the currency rates change. Additionally, the forecast Pounds sterling expenses of our London brokerage market operations may exceed their Pounds sterling revenue, and they may also hold significant foreign currency asset or liability positions in the condensed consolidated balance sheet. To reduce such variability, we use foreign exchange contracts to hedge against this currency risk.

These derivatives were designated as hedging instruments and at June 30, 2020 and December 31, 2019 had total notional amounts of $474 million and $499 million, respectively, and had a net fair value liability of $13 million and a net fair value asset of $8 million, respectively.

At June 30, 2020, the Company estimates, based on current exchange rates, there will be $12 million of net derivative losses on forward exchange rates reclassified from accumulated other comprehensive loss into earnings within the next twelve months as the forecast transactions affect earnings. At June 30, 2020, our longest outstanding maturity was 1.7 years.

The effects of the material derivative instruments that are designated as hedging instruments on the condensed consolidated statements of comprehensive income for the three and six months ended June 30, 2020 and 2019 are below. Amounts pertaining to the ineffective portion of hedging instruments and those excluded from effectiveness testing were immaterial for the three and six months ended June 30, 2020 and 2019.

	Loss recognized in OCI (effective element)
	Three months ended June 30,						Six months ended June 30,
	2020			2019			2020			2019
Forward exchange contracts	$	(3	)	$	(10	)	$	(27	)	$	(2	)

Location of loss reclassified from Accumulated OCL into income (effective element)	Loss reclassified from Accumulated OCL into income (effective element)
	Three months ended June 30,						Six months ended June 30,
	2020			2019			2020			2019
Revenue	$	(1	)	$	(3	)	$	(1	)	$	(2	)
Salaries and benefits		(1	)		1			(3	)		(4	)
	$	(2	)	$	(2	)	$	(4	)	$	(6	)

We also enter into foreign currency transactions, primarily to hedge certain intercompany loans and other balance sheet exposures in currencies other than the functional currency of a given entity. These derivatives are not generally designated as hedging instruments and at June 30, 2020 and December 31, 2019, we had notional amounts of $1.1 billion and $931 million, respectively, and had net a fair value liability of $2 million and a net fair value asset of $21 million, respectively.

The effects of derivatives that have not been designated as hedging instruments on the condensed consolidated statements of comprehensive income for the three and six months ended June 30, 2020 and 2019 are as follows:

		Loss/(gain) recognized in income
		Three Months Ended June 30,					Six Months Ended June 30,
Derivatives not designated as hedging instruments:	Location of (loss)/gain recognized in income	2020			2019		2020			2019
Forward exchange contracts	Other income, net	$	(8	)	$	6	$	(20	)	$	(4	)

On June 10, 2020, we entered into certain foreign currency transactions to hedge the consideration to be received from the forthcoming divestiture of our Max Matthiessen business (see Note 3 — Acquisitions and Divestitures) against fluctuations in foreign exchange rates. The notional value of these contracts is approximately $273 million, of which approximately $181 million has been designated as a hedge of net investment, on an after-tax basis, against the carrying value of the net assets of Max Matthiessen. The fair values of both the designated and undesignated hedging instruments at June 30, 2020 were immaterial.

Note 9 — Debt

Current debt consists of the following:

	June 30, 2020		December 31, 2019
5.750% senior notes due 2021	$	500	$	—
Current portion of collateralized facility		25		24
Term loan due 2020		—		292
	$	525	$	316

Long-term debt consists of the following:

	June 30, 2020		December 31, 2019
Revolving $1.25 billion credit facility	$	—	$	—
Collateralized facility ⁽ⁱ⁾		44		60
5.750% senior notes due 2021		—		499
3.500% senior notes due 2021		448		448
2.125% senior notes due 2022⁽ⁱⁱ⁾		605		604
4.625% senior notes due 2023		249		249
3.600% senior notes due 2024		647		646
4.400% senior notes due 2026		546		546
4.500% senior notes due 2028		595		595
2.950% senior notes due 2029		726		446
6.125% senior notes due 2043		271		271
5.050% senior notes due 2048		395		395
3.875% senior notes due 2049		542		542
	$	5,068	$	5,301

(i)	At June 30, 2020 and December 31, 2019, the Company had $112 million and $127 million, respectively, of renewal commissions receivables pledged as collateral for this facility.

(ii)	Notes issued in Euro (€540 million)

Senior Notes

On May 29, 2020, the Company, together with its wholly-owned subsidiary, Willis North America Inc. as issuer, completed an offering of an additional $275 million aggregate principal amount of 2.950% senior notes due 2029 (‘2029 senior notes’), of which Willis North America Inc. previously issued $450 million aggregate principal amount on September 10, 2019 (the ‘Initial Notes’), all of which Initial Notes remain outstanding. The 2029 senior notes will be treated as a single class with, and otherwise identical to, the Initial Notes other than with respect to the date of issuance, the issue price and the amounts paid to holders for each on the first interest payment date. The effective interest rate of the 2029 senior notes is 2.697%, which includes the impact of the premium upon issuance. The 2029 senior notes will mature on September 15, 2029. Interest accrues on the 2029 senior notes from March 15, 2020 and will be paid in cash on March 15 and September 15 of each year, commencing on September 15, 2020. The net proceeds from this offering, after deducting underwriter discounts and commissions and estimated offering expenses, were $280 million (excluding accrued interest on the 2029 senior notes from March 15, 2020 to, but not including, May 29, 2020, of $2 million payable to us on such date), and were used to repay $175 million of the full principal amount and related accrued interest under the term loan facility, which was set to expire in July 2020, as well as repay $105 million of borrowings outstanding under the Company’s $1.25 billion revolving credit facility and related accrued interest.

At June 30, 2020 and December 31, 2019, we were in compliance with all financial covenants.

Note 10 — Fair Value Measurements

The Company has categorized its assets and liabilities that are measured at fair value on a recurring and non-recurring basis into a three-level fair value hierarchy, based on the reliability of the inputs used to determine fair value as follows:

•

Level 1: refers to fair values determined based on quoted market prices in active markets for identical assets;

•

Level 2: refers to fair values estimated using observable market-based inputs or unobservable inputs that are corroborated by market data; and

•

Level 3: includes fair values estimated using unobservable inputs that are not corroborated by market data.

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

•

Available-for-sale securities are classified as Level 1 because we use quoted market prices in determining the fair value of these securities.

•

Market values for our derivative instruments have been used to determine the fair value of forward foreign exchange contracts based on estimated amounts the Company would receive or have to pay to terminate the agreements, taking into account observable information about the current foreign currency forward rates. Such financial instruments are classified as Level 2 in the fair value hierarchy.

•

Contingent consideration payable is classified as Level 3, and we estimate fair value based on the likelihood and timing of achieving the relevant milestones of each arrangement, applying a probability assessment to each of the potential outcomes, which at times includes the use of a Monte Carlo simulation, and discounting the probability-weighted payout. Typically, milestones are based on revenue or earnings growth for the acquired business.

The following tables present our assets and liabilities measured at fair value on a recurring basis at June 30, 2020 and December 31, 2019:

		Fair Value Measurements on a Recurring Basis at June 30, 2020
	Balance Sheet Location	Level 1		Level 2		Level 3		Total
Assets:
Available-for-sale securities:
Mutual funds / exchange traded funds	Prepaid and other current assets and other non-current assets	$	7	$	—	$	—	$	7
Derivatives:
Derivative financial instruments ⁽ⁱ⁾	Prepaid and other current assets and other non-current assets	$	—	$	3	$	—	$	3
Liabilities:
Contingent consideration:
Contingent consideration ⁽ⁱⁱ⁾	Other current liabilities and other non-current liabilities	$	—	$	—	$	22	$	22
Derivatives:
Derivative financial instruments ⁽ⁱ⁾	Other current liabilities and other non-current liabilities	$	—	$	18	$	—	$	18

		Fair Value Measurements on a Recurring Basis at December 31, 2019
	Balance Sheet Location	Level 1		Level 2		Level 3		Total
Assets:
Available-for-sale securities:
Mutual funds / exchange traded funds	Prepaid and other current assets and other non-current assets	$	20	$	—	$	—	$	20
Derivatives:
Derivative financial instruments ⁽ⁱ⁾	Prepaid and other current assets and other non-current assets	$	—	$	32	$	—	$	32
Liabilities:
Contingent consideration:
Contingent consideration ⁽ⁱⁱ⁾	Other current liabilities and other non-current liabilities	$	—	$	—	$	17	$	17
Derivatives:
Derivative financial instruments ⁽ⁱ⁾	Other current liabilities and other non-current liabilities	$	—	$	3	$	—	$	3

(i)	See Note 8 — Derivative Financial Instruments for further information on our derivative investments.

(ii)

Probability weightings are based on our knowledge of the past and planned performance of the acquired entity to which the contingent consideration applies. The fair value weighted-average discount rates used on our material contingent consideration calculations were 9.03% and 10.16% at June 30, 2020 and December 31, 2019, respectively. The range of these discount rates was 3.53% - 13.00% at June 30, 2020. Using different probability weightings and discount rates could result in an increase or decrease of the contingent consideration payable.

The following table summarizes the change in fair value of the Level 3 liabilities:

Fair Value Measurements Using Significant Unobservable Inputs (Level 3)	June 30, 2020
Balance at December 31, 2019	$	17
Obligations assumed		2
Payments		—
Realized and unrealized losses		3
Foreign exchange		—
Balance at June 30, 2020	$	22

There were no significant transfers to or from Level 3 in the six months ended June 30, 2020.

The following tables present our liabilities not measured at fair value on a recurring basis at June 30, 2020 and December 31, 2019:

	June 30, 2020				December 31, 2019
	Carrying Value		Fair Value		Carrying Value		Fair Value
Liabilities:
Current debt	$	525	$	540	$	316	$	319
Long-term debt	$	5,068	$	5,732	$	5,301	$	5,694

The carrying values of our revolving credit facility and collateralized facility approximate their fair values. The fair values above are not necessarily indicative of the amounts that the Company would realize upon disposition nor do they indicate the Company’s intent or ability to dispose of the financial instruments. The fair values of our respective senior notes are considered Level 2 financial instruments as they are corroborated by observable market data.

Note 11 — Retirement Benefits

Defined Benefit Plans and Post-retirement Welfare Plans

Willis Towers Watson sponsors both qualified and non-qualified defined benefit pension plans and other post-retirement welfare (‘PRW’) plans throughout the world. The majority of our plan assets and obligations are in the U.S. and the U.K. We have also included disclosures related to defined benefit plans in certain other countries, including Canada, France, Germany and Ireland. Together, these disclosed funded and unfunded plans represent 99% of Willis Towers Watson’s pension and PRW obligations and are disclosed herein.

Components of Net Periodic Benefit (Income)/Cost for Defined Benefit Pension and Post-retirement Welfare Plans

The following table sets forth the components of net periodic benefit (income)/cost for the Company’s defined benefit pension and PRW plans for the three and six months ended June 30, 2020 and 2019:

	Three Months Ended June 30,
	2020												2019
	U.S.			U.K.			Other			PRW			U.S.			U.K.			Other			PRW
Service cost	$	18		$	3		$	5		$	—		$	16		$	3		$	5		$	—
Interest cost		33			18			3			—			39			23			5			1
Expected return on plan assets		(72	)		(59	)		(9	)		—			(63	)		(62	)		(8	)		—
Settlement		2			1			—			—			—			—			—			—
Amortization of net loss		8			5			2			1			5			5			—			—
Amortization of prior service credit		—			(4	)		—			(1	)		—			(4	)		—			(1	)
Net periodic benefit (income)/cost	$	(11	)	$	(36	)	$	1		$	—		$	(3	)	$	(35	)	$	2		$	—

	Six Months Ended June 30,
	2020												2019
	U.S.			U.K.			Other			PRW			U.S.			U.K.			Other			PRW
Service cost	$	36		$	7		$	10		$	—		$	32		$	7		$	10		$	—
Interest cost		66			36			7			1			79			47			9			2
Expected return on plan assets		(145	)		(121	)		(17	)		—			(127	)		(125	)		(15	)		—
Settlement		2			1			—			—			—			—			—			—
Amortization of net loss		17			11			2			1			10			10			1			—
Amortization of prior service credit		—			(8	)		—			(2	)		—			(8	)		—			(2	)
Net periodic benefit (income)/cost	$	(24	)	$	(74	)	$	2		$	—		$	(6	)	$	(69	)	$	5		$	—

Employer Contributions to Defined Benefit Pension Plans

The Company made no contributions to its U.S. plans for the six months ended June 30, 2020 and anticipates making $18 million in contributions over the remainder of the fiscal year. The Company made contributions of $35 million to its U.K. plans for the six months ended June 30, 2020 and anticipates making additional contributions of $30 million for the remainder of the fiscal year. The Company made contributions of $17 million to its other plans for the six months ended June 30, 2020 and anticipates making additional contributions of $5 million for the remainder of the fiscal year.

Defined Contribution Plans

The Company made contributions to its defined contribution plans of $40 million and $83 million during the three and six months ended June 30, 2020, respectively, and $37 million and $78 million during the three and six months ended June 30, 2019, respectively.

Note 12 — Leases

The following tables present lease costs recorded on our condensed consolidated statements of comprehensive income for the three and six months ended June 30, 2020 and 2019.

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
Finance lease cost:
Amortization of right-of-use assets	$	—		$	—		$	1		$	1
Interest on lease liabilities		1			1			2			2
Operating lease cost		46			46			93			94
Short-term lease cost		—			—			—			—
Variable lease cost		13			17			23			30
Sublease income		(5	)		(4	)		(10	)		(8	)
Total lease cost, net	$	55		$	60		$	109		$	119

The total lease cost is recognized in different locations in our condensed consolidated statements of comprehensive income. Amortization of the finance lease ROU assets is included in depreciation, while the interest cost component of these finance leases is included in interest expense. All other costs are included in other operating expenses.

Note 13 — Commitments and Contingencies

Indemnification Agreements

Willis Towers Watson has various agreements which provide that it may be obligated to indemnify the other party to the agreement with respect to certain matters. Generally, these indemnification provisions are included in contracts arising in the normal course of business and in connection with the purchase and sale of certain businesses. Although it is not possible to predict the maximum potential amount of future payments that may become due under these indemnification agreements because of the conditional nature of the Company’s obligations and the unique facts of each particular agreement, we do not believe that any potential liability that may arise from such indemnity provisions is probable or material.

Legal Proceedings

In the ordinary course of business, the Company is subject to various actual and potential claims, lawsuits and other proceedings. Some of the claims, lawsuits and other proceedings seek damages in amounts which could, if assessed, be significant. We do not expect the impact of claims or demands not described below to be material to the Company’s condensed consolidated financial statements. The Company also receives subpoenas in the ordinary course of business and, from time to time, receives requests for information in connection with governmental investigations.

Errors and omissions claims, lawsuits, and other proceedings arising in the ordinary course of business are covered in part by professional indemnity or other appropriate insurance. The terms of this insurance vary by policy year. Regarding self-insured risks, the Company has established provisions which are believed to be adequate in light of current information and legal advice, or, in certain cases, where a range of loss exists, the Company accrues the minimum amount in the range if no amount within the range is a better estimate than any other amount. The Company adjusts such provisions from time to time according to developments. See Note 14 — Supplementary Information for Certain Balance Sheet Accounts for the amounts accrued at June 30, 2020 and December 31, 2019 in the condensed consolidated balance sheets.

On the basis of current information, the Company does not expect that the actual claims, lawsuits and other proceedings to which it is subject, or potential claims, lawsuits, and other proceedings relating to matters of which it is aware, will ultimately have a material

adverse effect on its financial condition, results of operations or liquidity. Nonetheless, given the large or indeterminate amounts sought in certain of these actions, and the inherent unpredictability of litigation and disputes with insurance companies, it is possible that an adverse outcome or settlement in certain matters could, from time to time, have a material adverse effect on the Company’s results of operations or cash flows in particular quarterly or annual periods. In addition, given the early stages of some litigation or regulatory proceedings described below, it may not be possible to predict their outcomes or resolutions, and it is possible that any one or more of these events may have a material adverse effect on the Company.

The Company provides for contingent liabilities based on ASC 450, Contingencies, when it is determined that a liability, inclusive of defense costs, is probable and reasonably estimable. The contingent liabilities recorded are primarily developed actuarially. Litigation is subject to many factors which are difficult to predict so there can be no assurance that in the event of a material unfavorable result in one or more claims, we will not incur material costs.

Litigation Relating to the Proposed Combination with Aon plc

On May 11, 2020, a purported stockholder of the Company filed a complaint in the United States District Court for the Southern District of New York against the Company and the members of the Company’s board of directors, captioned Stein v. Willis Towers Watson Public Limited Company, et al., Case No. 1:20-cv-03656 (S.D.N.Y.), referred to as the ‘Stein Complaint.’ On May 14, 2020, a purported stockholder of the Company filed a putative class action in the United States District Court for the District of Delaware against the Company, the members of the Company’s board of directors, and Aon plc (‘Aon’), captioned Kent v. Willis Towers Watson Public Limited Company, et al., Case No. 1:20-cv-00641 (D. Del.), referred to as the ‘Kent Complaint.’ On May 19, 2020, a purported stockholder of the Company filed a putative class action in the United States District Court for the Southern District of New York against the Company and the members of the Company’s board of directors, captioned Carter v. Willis Towers Watson Public Limited Company, et al., Case No. 1:20-cv-03865 (S.D.N.Y.), referred to as the ‘Carter Complaint.’ On May 28, 2020, a purported stockholder of the Company filed a complaint in the United States District Court for the Southern District of California against the Company and the members of the Company’s board of directors, captioned Tang v. Willis Towers Watson Public Limited Company, et al., Case No. 3:20-cv-00986 (S.D. Cal.), referred to as the ‘Tang Complaint.’ On June 17, 2020, a purported stockholder of the Company filed a complaint in the United States District Court for the Southern District of California against the Company and the members of the Company’s board of directors, captioned Kuznik v. Willis Towers Watson Public Limited Company, et al., Case No. 3:20-cv-01097 (S.D. Cal.), referred to as the ‘Kuznik Complaint,’ and together with the Stein Complaint, the Kent Complaint, the Carter Complaint, and the Tang Complaint, referred to as the ‘Complaints.’

The Complaints assert claims against certain defendants under Section 14(a) of the Securities Exchange Act of 1934 (the ‘Exchange Act’) for allegedly false and misleading statements in the proxy statement; and against certain defendants under Section 20(a) of the Exchange Act for alleged “control person” liability with respect to such allegedly false and misleading statements. The Stein Complaint, the Carter Complaint, and the Tang Complaint each seek, among other relief, an order enjoining the proposed combination with Aon unless and until corrective disclosures are made. The Kuznik Complaint and the Kent Complaint each seek, among other relief, an order enjoining the proposed combination with Aon and an order directing certain defendants to issue corrective disclosures. The Stein Complaint and the Carter Complaint also seek damages in an unspecified amount. The Company believes the allegations in the Complaints are without merit.

Willis Towers Watson Merger-Related Securities Litigation

On November 21, 2017, a purported former stockholder of Legacy Towers Watson filed a putative class action complaint on behalf of a putative class consisting of all Legacy Towers Watson stockholders as of October 2, 2015 against the Company, Legacy Towers Watson, Legacy Willis, ValueAct Capital Management (‘ValueAct’), and certain current and former directors and officers of Legacy Towers Watson and Legacy Willis (John Haley, Dominic Casserley, and Jeffrey Ubben), in the United States District Court for the Eastern District of Virginia. The complaint asserted claims against certain defendants under Section 14(a) of the Securities Exchange Act of 1934 (the ‘Exchange Act’) for allegedly false and misleading statements in the proxy statement for the Merger; and against other defendants under Section 20(a) of the Exchange Act for alleged ‘control person’ liability with respect to such allegedly false and misleading statements. The complaint further contended that the allegedly false and misleading statements caused stockholders of Legacy Towers Watson to accept inadequate Merger consideration. The complaint sought damages in an unspecified amount. On February 20, 2018, the court appointed the Regents of the University of California (‘Regents’) as Lead Plaintiff and Bernstein Litowitz Berger & Grossman LLP (‘Bernstein’) as Lead Counsel for the putative class, consolidated all subsequently filed, removed, or transferred actions, and captioned the consolidated action ‘In re Willis Towers Watson plc Proxy Litigation,’ Master File No. 1:17-cv-1338-AJT-JFA. On March 9, 2018, Lead Plaintiff filed an Amended Complaint. On April 13, 2018, the defendants filed motions to dismiss the Amended Complaint, and, on July 11, 2018, following briefing and argument, the court granted the motions and dismissed the Amended Complaint in its entirety. On July 30, 2018, Lead Plaintiff filed a notice of appeal from the court’s July 11, 2018 dismissal order to the United States Court of Appeals for the Fourth Circuit, and, on December 6, 2018, the parties completed briefing on the appeal. On May 8, 2019, the parties argued the appeal, and on August 30, 2019, the Fourth Circuit vacated the dismissal order and remanded the case to the Eastern District of Virginia for further proceedings consistent with its decision. On September 13, 2019, the defendants filed a petition for rehearing by the Fourth Circuit en banc, which the Fourth Circuit denied on September 27, 2019. On November 8, 2019, the defendants filed renewed motions to dismiss in the Eastern District of Virginia based upon certain arguments that were advanced in their original motions to dismiss, but undecided by both the district court and the Fourth Circuit. On December

18, 2019, the parties completed briefing on the defendants’ renewed motions, and, on December 20, 2019, the court heard argument on the motions. On January 31, 2020, the court denied the motions. On June 12, 2020, Lead Plaintiff filed a motion for class certification, in connection with which it indicated that it is seeking class-wide damages of approximately $456 million.

On February 27, 2018 and March 8, 2018, two additional purported former stockholders of Legacy Towers Watson, City of Fort Myers General Employees’ Pension Fund (‘Fort Myers’) and Alaska Laborers-Employers Retirement Trust (‘Alaska’), filed putative class action complaints on behalf of a putative class of Legacy Towers Watson stockholders against the former members of the Legacy Towers Watson board of directors, Legacy Towers Watson, Legacy Willis and ValueAct, in the Delaware Court of Chancery, captioned City of Fort Myers General Employees’ Pension Fund v. Towers Watson & Co., et al., C.A. No. 2018-0132, and Alaska Laborers-Employers Retirement Trust v. Victor F. Ganzi, et al., C.A. No. 2018-0155, respectively. Based on similar allegations as the Eastern District of Virginia action described above, the complaints assert claims against the former directors of Legacy Towers Watson for breach of fiduciary duty and against Legacy Willis and ValueAct for aiding and abetting breach of fiduciary duty.

On March 9, 2018, Regents filed a putative class action complaint on behalf of a putative class of Legacy Towers Watson stockholders against the Company, Legacy Willis, ValueAct, and Messrs. Haley, Casserley, and Ubben, in the Delaware Court of Chancery, captioned The Regents of the University of California v. John J. Haley, et al., C.A. No. 2018-0166. Based on similar allegations as the Eastern District of Virginia action described above, the complaint asserts claims against Mr. Haley for breach of fiduciary duty and against all other defendants for aiding and abetting breach of fiduciary duty. Also on March 9, 2018, Regents filed a motion for consolidation of all pending and subsequently filed Delaware Court of Chancery actions, and for appointment as Lead Plaintiff and for the appointment of Bernstein as Lead Counsel for the putative class. On March 29, 2018, Fort Myers and Alaska responded to Regents’ motion and cross-moved for appointment as Co-Lead Plaintiffs and for the appointment of their counsel, Grant & Eisenhofer P.A. and Kessler Topaz Meltzer & Check, LLP as Co-Lead Counsel. On April 2, 2018, the court consolidated the Delaware Court of Chancery actions and all related actions subsequently filed in or transferred to the Delaware Court of Chancery. On June 5, 2018, the court denied Regents’ motion for appointment of Lead Plaintiff and Lead Counsel and granted Fort Myers’ and Alaska’s cross-motion. On June 20, 2018, Fort Myers and Alaska designated the complaint previously filed by Alaska (the ‘Alaska Complaint’) as the operative complaint in the consolidated action. On September 14, 2018, the defendants filed motions to dismiss the Alaska Complaint. On October 31, 2018, Fort Myers and Alaska filed an amended complaint, which, based on similar allegations, asserts claims against the former directors of legacy Towers Watson for breach of fiduciary duty and against ValueAct and Mr. Ubben for aiding and abetting breach of fiduciary duty. On January 11, 2019, the defendants filed motions to dismiss the amended complaint, and on March 29, 2019, the parties completed briefing on the motions. The court heard argument on the motions on April 11, 2019 and, on July 25, 2019, dismissed the amended complaint in its entirety. On August 22, 2019, Fort Myers and Alaska filed a notice of appeal (only with respect to Messrs. Haley and Ubben and ValueAct) from the court’s July 25, 2019 dismissal order to the Supreme Court of the State of Delaware. On November 22, 2019, the parties completed briefing on the appeal, which was submitted on April 22, 2020 for decision in lieu of argument. On June 30, 2020, the Supreme Court of the State of Delaware reversed and remanded the case to the Court of Chancery for further proceedings consistent with its decision.

On October 18, 2018, three additional purported former stockholders of Legacy Towers Watson, Naya Master Fund LP, Naya 174 Fund Limited and Naya Lincoln Park Master Fund Limited (collectively, ‘Naya’), filed a complaint against the Company, Legacy Towers Watson, Legacy Willis and John Haley, in the Supreme Court of the State of New York, County of New York, captioned Naya Master Fund LP, et al. v. John J. Haley, et al., Index No. 654968/2018. Based on similar allegations as the Eastern District of Virginia and Delaware actions described above, the complaint asserts claims for common law fraud and negligent misrepresentation. On December 18, 2018, the defendants filed a motion to dismiss the complaint, and on March 21, 2019, the parties completed briefing on the motion. On April 23, 2019, the parties filed a Stipulation and Proposed Order Voluntarily Discontinuing Action providing for the dismissal of the action with prejudice, which the court entered on April 29, 2019.

The defendants dispute the allegations in these actions and intend to defend the lawsuits vigorously. Given the stage of the proceedings, the Company is unable to provide an estimate of the reasonably possible loss or range of loss in respect of the complaints.

Stanford Financial Group

The Company has been named as a defendant in 15 similar lawsuits 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 complaints in these actions generally allege 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 complaints further allege 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 15 actions are as follows:

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Troice, et al. v. Willis of Colorado, Inc., et al., C.A. No. 3:9-CV-1274-N, was filed on July 2, 2009 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. On April 1, 2011, plaintiffs filed the operative Third Amended Class Action Complaint individually and on behalf of a putative, worldwide class of Stanford investors, adding Willis Limited as a defendant and alleging claims under Texas

statutory and common law and seeking damages in excess of $1 billion, punitive damages and costs. On May 2, 2011, the defendants filed motions to dismiss the Third Amended Class Action Complaint, arguing, inter alia, that the plaintiffs’ claims are precluded by the Securities Litigation Uniform Standards Act of 1998 (‘SLUSA’).

On May 10, 2011, the court presiding over the Stanford-related actions in the Northern District of Texas entered an order providing that it would consider the applicability of SLUSA to the Stanford-related actions based on the decision in a separate Stanford action not involving a Willis entity, Roland v. Green, Civil Action No. 3:10-CV-0224-N (‘Roland’). On August 31, 2011, the court issued its decision in Roland, dismissing that action with prejudice under SLUSA.

On October 27, 2011, the court in Troice entered an order (i) dismissing with prejudice those claims asserted in the Third Amended Class Action Complaint on a class basis on the grounds set forth in the Roland decision discussed above and (ii) dismissing without prejudice those claims asserted in the Third Amended Class Action Complaint on an individual basis. Also on October 27, 2011, the court entered a final judgment in the action.

On October 28, 2011, the plaintiffs in Troice filed a notice of appeal to the U.S. Court of Appeals for the Fifth Circuit. Subsequently, Troice, Roland and a third action captioned Troice, et al. v. Proskauer Rose LLP, Civil Action No. 3:09-CV-01600-N, which also was dismissed on the grounds set forth in the Roland decision discussed above and on appeal to the U.S. Court of Appeals for the Fifth Circuit, were consolidated for purposes of briefing and oral argument. Following the completion of briefing and oral argument, on March 19, 2012, the Fifth Circuit reversed and remanded the actions. On April 2, 2012, the defendants-appellees filed petitions for rehearing en banc. On April 19, 2012, the petitions for rehearing en banc were denied. On July 18, 2012, defendants-appellees filed a petition for writ of certiorari with the United States Supreme Court regarding the Fifth Circuit’s reversal in Troice. On January 18, 2013, the Supreme Court granted our petition. Opening briefs were filed on May 3, 2013 and the Supreme Court heard oral argument on October 7, 2013. On February 26, 2014, the Supreme Court affirmed the Fifth Circuit’s decision.

On March 19, 2014, the plaintiffs in Troice filed a Motion to Defer Resolution of Motions to Dismiss, to Compel Rule 26(f) Conference and For Entry of Scheduling Order.

On March 25, 2014, the parties in Troice and the Janvey, et al. v. Willis of Colorado, Inc., et al. action discussed below stipulated to the consolidation of the two actions for pre-trial purposes under Rule 42(a) of the Federal Rules of Civil Procedure. On March 28, 2014, the Court ‘so ordered’ that stipulation and, thus, consolidated Troice and Janvey for pre-trial purposes under Rule 42(a).

On September 16, 2014, the court (a) denied the plaintiffs’ request to defer resolution of the defendants’ motions to dismiss, but granted the plaintiffs’ request to enter a scheduling order; (b) requested the submission of supplemental briefing by all parties on the defendants’ motions to dismiss, which the parties submitted on September 30, 2014; and (c) entered an order setting a schedule for briefing and discovery regarding plaintiffs’ motion for class certification, which schedule, among other things, provided for the submission of the plaintiffs’ motion for class certification (following the completion of briefing and discovery) on April 20, 2015.

On December 15, 2014, the court granted in part and denied in part the defendants’ motions to dismiss. On January 30, 2015, the defendants except Willis Group Holdings plc answered the Third Amended Class Action Complaint.

On April 20, 2015, the plaintiffs filed their motion for class certification, the defendants filed their opposition to plaintiffs’ motion, and the plaintiffs filed their reply in further support of the motion. Pursuant to an agreed stipulation also filed with the court on April 20, 2015, the defendants on June 4, 2015 filed sur-replies in further opposition to the motion. The Court has not yet scheduled a hearing on the motion.

On June 19, 2015, Willis Group Holdings plc filed a motion to dismiss the complaint for lack of personal jurisdiction. On November 17, 2015, Willis Group Holdings plc withdrew the motion.

On March 31, 2016, the parties in the Troice and Janvey actions entered into a settlement in principle that is described in more detail below.

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Ranni v. Willis of Colorado, Inc., et al., C.A. No. 9-22085, was filed on July 17, 2009 against Willis Group Holdings plc and Willis of Colorado, Inc. in the U.S. District Court for the Southern District of Florida. The complaint was filed on behalf of a putative class of Venezuelan and other South American Stanford investors and alleges claims under Section 10(b) of the Securities Exchange Act of 1934 (and Rule 10b-5 thereunder) and Florida statutory and common law and seeks damages in an amount to be determined at trial. On October 6, 2009, Ranni was transferred, for consolidation or coordination with other Stanford-related actions (including Troice), to the Northern District of Texas by the U.S. Judicial Panel on Multidistrict Litigation (the ‘JPML’). The defendants have not yet responded to the complaint in Ranni. On August 26, 2014, the plaintiff filed a notice of voluntary dismissal of the action without prejudice.

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Canabal, et al. v. Willis of Colorado, Inc., et al., C.A. No. 3:9-CV-1474-D, was filed on August 6, 2009 against Willis Group Holdings plc, Willis of Colorado, Inc. and the same Willis associate named as a defendant in Troice, among others, also in the Northern District of Texas. The complaint was filed individually and on behalf of a putative class of Venezuelan Stanford investors, alleged claims under Texas statutory and common law and sought damages in excess of $1 billion, punitive damages, attorneys’ fees and costs. On December 18, 2009, the parties in Troice and Canabal stipulated to the consolidation

of those actions (under the Troice civil action number), and, on December 31, 2009, the plaintiffs in Canabal filed a notice of dismissal, dismissing the action without prejudice.

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Rupert, et al. v. Winter, et al., Case No. 2009C115137, was filed on September 14, 2009 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). The complaint alleges claims under the Securities Act of 1933, Texas and Colorado statutory law and Texas common law and seeks special, consequential and treble damages of more than $300 million, attorneys’ fees and costs. On October 20, 2009, certain defendants, including Willis of Colorado, Inc., (i) removed Rupert to the U.S. District Court for the Western District of Texas, (ii) notified the JPML of the pendency of this related 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. On April 1, 2010, the JPML issued a final transfer order for the transfer of Rupert to the Northern District of Texas. On January 24, 2012, the court remanded Rupert to Texas state court (Bexar County), but stayed the action until further order of the court. On August 13, 2012, the plaintiffs filed a motion to lift the stay, which motion was denied by the court on September 16, 2014. On October 10, 2014, the plaintiffs appealed the court’s denial of their motion to lift the stay to the U.S. Court of Appeals for the Fifth Circuit. On January 5, 2015, the Fifth Circuit consolidated the appeal with the appeal in the Rishmague, et ano. v. Winter, et al. action discussed below, and the consolidated appeal, was fully briefed as of March 24, 2015. Oral argument on the consolidated appeal was held on September 2, 2015. On September 16, 2015, the Fifth Circuit affirmed. The defendants have not yet responded to the complaint in Rupert.

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Casanova, et al. v. Willis of Colorado, Inc., et al., C.A. No. 3:10-CV-1862-O, was filed on September 16, 2010 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. The complaint alleges claims under Texas statutory and common law and seeks actual damages in excess of $5 million, punitive damages, attorneys’ fees and costs. On February 13, 2015, the parties filed an Agreed Motion for Partial Dismissal pursuant to which they agreed to the dismissal of certain claims pursuant to the motion to dismiss decisions in the Troice action discussed above and the Janvey action discussed below. Also on February 13, 2015, the defendants except Willis Group Holdings plc answered the complaint in the Casanova action. On June 19, 2015, Willis Group Holdings plc filed a motion to dismiss the complaint for lack of personal jurisdiction. Plaintiffs have not opposed the motion.

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Rishmague, et ano. v. Winter, et al., Case No. 2011CI2585, was filed on March 11, 2011 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 complaint alleges claims under Texas and Colorado statutory law and Texas common law and seeks special, consequential and treble damages of more than $37 million and attorneys’ fees and costs. On April 11, 2011, certain defendants, including Willis of Colorado, Inc., (i) removed Rishmague to the Western District of Texas, (ii) notified the JPML of the pendency of this related 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. On August 8, 2011, the JPML issued a final transfer order for the transfer of Rishmague to the Northern District of Texas, where it is currently pending. On August 13, 2012, the plaintiffs joined with the plaintiffs in the Rupert action in their motion to lift the court’s stay of the Rupert action. On September 9, 2014, the court remanded Rishmague to Texas state court (Bexar County), but stayed the action until further order of the court and denied the plaintiffs’ motion to lift the stay. On October 10, 2014, the plaintiffs appealed the court’s denial of their motion to lift the stay to the Fifth Circuit. On January 5, 2015, the Fifth Circuit consolidated the appeal with the appeal in the Rupert action, and the consolidated appeal was fully briefed as of March 24, 2015. Oral argument on the consolidated appeal was held on September 2, 2015. On September 16, 2015, the Fifth Circuit affirmed. The defendants have not yet responded to the complaint in Rishmague.

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MacArthur v. Winter, et al., Case No. 2013-07840, was filed on February 8, 2013 on behalf of two Stanford investors against Willis Group Holdings plc, Willis of Colorado, Inc., Willis of Texas, Inc. and the same Willis associate, among others, in Texas state court (Harris County). The complaint alleges claims under Texas and Colorado statutory law and Texas common law and seeks actual, special, consequential and treble damages of approximately $4 million and attorneys’ fees and costs. On March 29, 2013, Willis of Colorado, Inc. and Willis of Texas, Inc. (i) removed MacArthur to the U.S. District Court for the Southern District of Texas and (ii) notified the JPML of the pendency of this related action. On April 2, 2013, Willis of Colorado, Inc. and Willis of Texas, Inc. filed a motion in the Southern District of Texas 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. Also on April 2, 2013, the court presiding over MacArthur in the Southern District of Texas transferred the action to the Northern District of Texas for consolidation or coordination with the other Stanford-related actions. On September 29, 2014, the parties stipulated to the remand (to Texas state court (Harris County)) and stay of MacArthur until further order of the court (in accordance with the court’s September 9, 2014 decision in Rishmague (discussed above)), which stipulation was ‘so ordered’ by the court on October 14, 2014. The defendants have not yet responded to the complaint in MacArthur.

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Florida suits: On February 14, 2013, five lawsuits were filed against Willis Group Holdings plc, Willis Limited and Willis of Colorado, Inc. in Florida state court (Miami-Dade County), alleging violations of Florida common law. The five suits are: (1)

Barbar, et al. v. Willis Group Holdings Public Limited Company, et al., Case No. 13-05666CA27, filed on behalf of 35 Stanford investors seeking compensatory damages in excess of $30 million; (2) de Gadala-Maria, et al. v. Willis Group Holdings Public Limited Company, et al., Case No. 13-05669CA30, filed on behalf of 64 Stanford investors seeking compensatory damages in excess of $83.5 million; (3) Ranni, et ano. v. Willis Group Holdings Public Limited Company, et al., Case No. 13-05673CA06, filed on behalf of two Stanford investors seeking compensatory damages in excess of $3 million; (4) Tisminesky, et al. v. Willis Group Holdings Public Limited Company, et al., Case No. 13-05676CA09, filed on behalf of 11 Stanford investors seeking compensatory damages in excess of $6.5 million; and (5) Zacarias, et al. v. Willis Group Holdings Public Limited Company, et al., Case No. 13-05678CA11, filed on behalf of 10 Stanford investors seeking compensatory damages in excess of $12.5 million. On June 3, 2013, Willis of Colorado, Inc. removed all five cases to the Southern District of Florida and, on June 4, 2013, notified the JPML of the pendency of these related actions. On June 10, 2013, the court in Tisminesky issued an order sua sponte staying and administratively closing that action pending a determination by the JPML as to whether it should be transferred to the Northern District of Texas for consolidation and coordination with the other Stanford-related actions. On June 11, 2013, Willis of Colorado, Inc. moved to stay the other four actions pending the JPML’s transfer decision. On June 20, 2013, the JPML issued a conditional transfer order for the transfer of the five actions to the Northern District of Texas, the transmittal of which was stayed for seven days to allow for any opposition to be filed. On June 28, 2013, with no opposition having been filed, the JPML lifted the stay, enabling the transfer to go forward.

On September 30, 2014, the court denied the plaintiffs’ motion to remand in Zacarias, and, on October 3, 2014, the court denied the plaintiffs’ motions to remand in Tisminesky and de Gadala Maria. On December 3, 2014 and March 3, 2015, the court granted the plaintiffs’ motions to remand in Barbar and Ranni, respectively, remanded both actions to Florida state court (Miami-Dade County) and stayed both actions until further order of the court. On January 2, 2015 and April 1, 2015, the plaintiffs in Barbar and Ranni, respectively, appealed the court’s December 3, 2014 and March 3, 2015 decisions to the Fifth Circuit. On April 22, 2015 and July 22, 2015, respectively, the Fifth Circuit dismissed the Barbar and Ranni appeals sua sponte for lack of jurisdiction. The defendants have not yet responded to the complaints in Ranni or Barbar.

On April 1, 2015, the defendants except Willis Group Holdings plc filed motions to dismiss the complaints in Zacarias, Tisminesky and de Gadala-Maria. On June 19, 2015, Willis Group Holdings plc filed motions to dismiss the complaints in Zacarias, Tisminesky and de Gadala-Maria for lack of personal jurisdiction. On July 15, 2015, the court dismissed the complaint in Zacarias in its entirety with leave to replead within 21 days. On July 21, 2015, the court dismissed the complaints in Tisminesky and de Gadala-Maria in their entirety with leave to replead within 21 days. On August 6, 2015, the plaintiffs in Zacarias, Tisminesky and de Gadala-Maria filed amended complaints (in which, among other things, Willis Group Holdings plc was no longer named as a defendant). On September 11, 2015, the defendants filed motions to dismiss the amended complaints. The motions await disposition by the court.

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Janvey, et al. v. Willis of Colorado, Inc., et al., Case No. 3:13-CV-03980-D, was filed on October 1, 2013 also in the Northern District of Texas against Willis Group Holdings plc, Willis Limited, Willis North America Inc., Willis of Colorado, Inc. and the same Willis associate. The complaint was filed (i) by Ralph S. Janvey, in his capacity as Court-Appointed Receiver for the Stanford Receivership Estate, and the Official Stanford Investors Committee (the ‘OSIC’) against all defendants and (ii) on behalf of a putative, worldwide class of Stanford investors against Willis North America Inc. Plaintiffs Janvey and the OSIC allege claims under Texas common law and the court’s Amended Order Appointing Receiver, and the putative class plaintiffs allege claims under Texas statutory and common law. Plaintiffs seek actual damages in excess of $1 billion, punitive damages and costs. As alleged by the Stanford Receiver, the total amount of collective losses allegedly sustained by all investors in Stanford certificates of deposit is approximately $4.6 billion.

On November 15, 2013, plaintiffs in Janvey filed the operative First Amended Complaint, which added certain defendants unaffiliated with Willis. On February 28, 2014, the defendants filed motions to dismiss the First Amended Complaint, which motions, other than with respect to Willis Group Holding plc’s motion to dismiss for lack of personal jurisdiction, were granted in part and denied in part by the court on December 5, 2014. On December 22, 2014, Willis filed a motion to amend the court’s December 5 order to certify an interlocutory appeal to the Fifth Circuit, and, on December 23, 2014, Willis filed a motion to amend and, to the extent necessary, reconsider the court’s December 5 order. On January 16, 2015, the defendants answered the First Amended Complaint. On January 28, 2015, the court denied Willis’s motion to amend the court’s December 5 order to certify an interlocutory appeal to the Fifth Circuit. On February 4, 2015, the court granted Willis’s motion to amend and, to the extent necessary, reconsider the December 5 order.

As discussed above, on March 25, 2014, the parties in Troice and Janvey stipulated to the consolidation of the two actions for pre-trial purposes under Rule 42(a) of the Federal Rules of Civil Procedure. On March 28, 2014, the Court ‘so ordered’ that stipulation and, thus, consolidated Troice and Janvey for pre-trial purposes under Rule 42(a).

On January 26, 2015, the court entered an order setting a schedule for briefing and discovery regarding the plaintiffs’ motion for class certification, which schedule, among other things, provided for the submission of the plaintiffs’ motion for class certification (following the completion of briefing and discovery) on July 20, 2015. By letter dated March 4, 2015, the parties requested that the court consolidate the scheduling orders entered in Troice and Janvey to provide for a class certification submission date of April 20, 2015 in both cases. On March 6, 2015, the court entered an order consolidating the scheduling

orders in Troice and Janvey, providing for a class certification submission date of April 20, 2015 in both cases, and vacating the July 20, 2015 class certification submission date in the original Janvey scheduling order.

On November 17, 2015, Willis Group Holdings plc withdrew its motion to dismiss for lack of personal jurisdiction.

On March 31, 2016, the parties in the Troice and Janvey actions entered into a settlement in principle that is described in more detail below.

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Martin v. Willis of Colorado, Inc., et al., Case No. 201652115, was filed on August 5, 2016, on behalf of one Stanford investor against Willis Group Holdings plc, Willis Limited, Willis of Colorado, Inc. and the same Willis associate in Texas state court (Harris County). The complaint alleges claims under Texas statutory and common law and seeks actual damages of less than $100,000, exemplary damages, attorneys’ fees and costs. On September 12, 2016, the plaintiff filed an amended complaint, which added five more Stanford investors as plaintiffs and seeks damages in excess of $1 million. The defendants have not yet responded to the amended complaint in Martin.

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Abel, et al. v. Willis of Colorado, Inc., et al., C.A. No. 3:16-cv-2601, was filed on September 12, 2016, on behalf of more than 300 Stanford investors against Willis Group Holdings plc, Willis Limited, Willis of Colorado, Inc. and the same Willis associate, also in the Northern District of Texas. The complaint alleges claims under Texas statutory and common law and seeks actual damages in excess of $135 million, exemplary damages, attorneys’ fees and costs. On November 10, 2016, the plaintiffs filed an amended complaint, which, among other things, added several more Stanford investors as plaintiffs. The defendants have not yet responded to the complaint in Abel.

The plaintiffs in Janvey and Troice and the other actions above seek overlapping damages, representing either the entirety or a portion of the total alleged collective losses incurred by investors in Stanford certificates of deposit, notwithstanding the fact that Legacy Willis acted as broker of record for only a portion of time that Stanford issued certificates of deposit. In the fourth quarter of 2015, the Company recognized a $70 million litigation provision for loss contingencies relating to the Stanford matters based on its ongoing review of a variety of factors as required by accounting standards.

On March 31, 2016, the Company entered into a settlement in principle for $120 million relating to this litigation, and increased its provisions by $50 million during that quarter. Further details on this settlement in principle are given below.

The settlement is contingent on a number of conditions, including court approval of the settlement and a bar order prohibiting any continued or future litigation against Willis related to Stanford, which may not be given. Therefore, the ultimate resolution of these matters may differ from the amount provided for. The Company continues to dispute the allegations and, to the extent litigation proceeds, to defend the lawsuits vigorously.

Settlement. On March 31, 2016, the Company entered into a settlement in principle, as reflected in a Settlement Term Sheet, relating to the Stanford litigation matter. The Company agreed to the Settlement Term Sheet to eliminate the distraction, burden, expense and uncertainty of further litigation. In particular, the settlement and the related bar orders described below, if upheld through any appeals, would enable the Company (a newly-combined firm) to conduct itself with the bar orders’ protection from the continued overhang of matters alleged to have occurred approximately a decade ago. Further, the Settlement Term Sheet provided that the parties understood and agreed that there is no admission of liability or wrongdoing by the Company. The Company expressly denies any liability or wrongdoing with respect to the matters alleged in the Stanford litigation.

On or about August 31, 2016, the parties to the settlement signed a formal Settlement Agreement memorializing the terms of the settlement as originally set forth in the Settlement Term Sheet. The parties to the Settlement Agreement are Ralph S. Janvey (in his capacity as the Court-appointed receiver (the ‘Receiver’) for The Stanford Financial Group and its affiliated entities in receivership (collectively, ‘Stanford’)), the Official Stanford Investors Committee, Samuel Troice, Martha Diaz, Paula Gilly-Flores, Punga Punga Financial, Ltd., Manuel Canabal, Daniel Gomez Ferreiro and Promotora Villa Marina, C.A. (collectively, ‘Plaintiffs’), on the one hand, and Willis Towers Watson Public Limited Company (formerly Willis Group Holdings Public Limited Company), Willis Limited, Willis North America Inc., Willis of Colorado, Inc. and the Willis associate referenced above (collectively, ‘Defendants’), on the other hand. Under the terms of the Settlement Agreement, the parties agreed to settle and dismiss the Janvey and Troice actions (collectively, the ‘Actions’) and all current or future claims arising from or related to Stanford in exchange for a one-time cash payment to the Receiver by the Company of $120 million to be distributed to all Stanford investors who have claims recognized by the Receiver pursuant to the distribution plan in place at the time the payment is made.

The Settlement Agreement also provides the parties’ agreement to seek the Court’s entry of bar orders prohibiting any continued or future litigation against the Defendants and their related parties of claims relating to Stanford, whether asserted to date or not. The terms of the bar orders therefore would prohibit all Stanford-related litigation described above, and not just the Actions, but including any pending matters and any actions that may be brought in the future. Final Court approval of these bar orders is a condition of the settlement.

On September 7, 2016, Plaintiffs filed with the Court a motion to approve the settlement. On October 19, 2016, the Court preliminarily approved the settlement. Several of the plaintiffs in the other actions above objected to the settlement, and a hearing to consider final approval of the settlement was held on January 20, 2017, after which the Court reserved decision. On August 23, 2017, the Court approved the settlement, including the bar orders. Several of the objectors appealed the settlement approval and bar orders to

the Fifth Circuit. Oral argument on the appeals was heard on December 3, 2018, and, on July 22, 2019, the Fifth Circuit affirmed the approval of the settlement, including the bar orders. On August 5, 2019, certain of the plaintiff-appellants filed a petition for rehearing by the Fifth Circuit en banc (the ‘Petition’). On August 19, 2019, the Fifth Circuit requested a response to the Petition. On August 29, 2019, the Receiver filed a response to the Petition. On December 19, 2019, the Fifth Circuit granted the Petition (treating it as a petition for panel rehearing), withdrew its July 22, 2019 opinion, and substituted a new opinion that also affirmed the approval of the settlement, including the bar orders. On January 2, 2020, certain of the plaintiff-appellants filed another petition for rehearing by the Fifth Circuit en banc (the ‘Second Petition’), in which the other plaintiff-appellants joined. On January 21, 2020, the Fifth Circuit denied the Second Petition. On June 19, 2020, the plaintiff-appellants filed petitions for writ of certiorari with the United States Supreme Court, which are currently pending.

The Company will not make the $120 million settlement payment until the settlement is not subject to any further appeal.

Aviation Broking Competition Investigations

In October 2017, the European Commission (‘Commission’) disclosed to us that it has initiated civil investigation proceedings in respect of a suspected infringement of E.U. competition rules involving several broking firms, including our principal U.K. broking subsidiary and one of its parent entities. In particular, the Commission has stated that the civil proceedings concern the exchange of commercially sensitive information between competitors in relation to aviation and aerospace insurance and reinsurance broking products and services in the European Economic Area, as well as possible coordination between competitors. The initiation of proceedings does not mean there has been a finding of infringement, merely that the Commission will investigate the case. We are providing information to the Commission as requested.

Since 2017, we have become aware that other countries are conducting their own investigations of the same or similar alleged conduct, including, without limitation, Brazil. In January 2019, the Brazil Conselho Administrativo de Defesa Economica (‘CADE’) launched an administrative proceeding to investigate alleged sharing of competitive and commercially sensitive information in the insurance and reinsurance brokerage industry for aviation and aerospace and related ancillary services. The CADE identified 11 entities under investigation, including Willis Group Limited, one of our U.K. subsidiaries.

Given the status of the above-noted investigations, the Company is currently unable to assess the terms on which they will be resolved, or any other regulatory matter or civil claims emanating from the conduct being investigated, will be resolved, and thus is unable to provide an estimate of the reasonably possible loss or range of loss.

Note 14 — Supplementary Information for Certain Balance Sheet Accounts

Additional details of specific balance sheet accounts are detailed below.

Prepaid and other current assets consist of the following:

	June 30, 2020		December 31, 2019
Prepayments and accrued income	$	132	$	145
Deferred contract costs		75		101
Derivatives and investments		20		49
Deferred compensation plan assets		15		18
Retention incentives		6		11
Corporate income and other taxes		46		56
Restricted cash		7		8
Acquired renewal commissions receivable		15		25
Other current assets		47		112
Total prepaid and other current assets	$	363	$	525

Deferred revenue and accrued expenses consist of the following:

	June 30, 2020		December 31, 2019
Accounts payable, accrued liabilities and deferred income	$	832	$	856
Accrued discretionary and incentive compensation		419		727
Accrued vacation		196		137
Other employee-related liabilities		57		64
Total deferred revenue and accrued expenses	$	1,504	$	1,784

Provision for liabilities consists of the following:

	June 30, 2020		December 31, 2019
Claims, lawsuits and other proceedings	$	452	$	456
Other provisions		82		81
Total provision for liabilities	$	534	$	537

Note 15 — Accumulated Other Comprehensive Loss

Changes in accumulated other comprehensive loss, net of non-controlling interests, and net of tax are provided in the following tables for the three and six months ended June 30, 2020 and 2019. These tables exclude amounts attributable to non-controlling interests, which are not material for further disclosure.

	Foreign currency translation ⁽ⁱ⁾						Derivative instruments⁽ⁱ⁾						Defined pension and post-retirement benefit costs ⁽ⁱⁱ⁾						Total
	2020			2019			2020			2019			2020			2019			2020			2019
Quarter-to-date activity:
Balance at March 31, 2020 and 2019, respectively	$	(746	)	$	(607	)	$	(5	)	$	3		$	(1,695	)	$	(1,370	)	$	(2,446	)	$	(1,974	)
Other comprehensive income/(loss) before reclassifications		48			(19	)		(3	)		(7	)		6			3			51			(23	)
Loss reclassified from accumulated other comprehensive loss (net of income tax benefit of $7 and $3, respectively)		—			—			2			—			3			4			5			4
Net current-period other comprehensive income/(loss)		48			(19	)		(1	)		(7	)		9			7			56			(19	)
Balance at June 30, 2020 and 2019, respectively	$	(698	)	$	(626	)	$	(6	)	$	(4	)	$	(1,686	)	$	(1,363	)	$	(2,390	)	$	(1,993	)

Year-to-date activity:
Balance at December 31, 2019 and 2018, respectively	$	(538	)	$	(616	)	$	13		$	(8	)	$	(1,702	)	$	(1,337	)	$	(2,227	)	$	(1,961	)
Other comprehensive (loss)/income before reclassifications		(160	)		(10	)		(22	)		(1	)		2			4			(180	)		(7	)
Loss reclassified from accumulated other comprehensive loss (net of income tax benefit of $7 in both 2020 and 2019)		—			—			3			5			14			6			17			11
Net current-period other comprehensive (loss)/income		(160	)		(10	)		(19	)		4			16			10			(163	)		4
Reclassification of tax effects per ASU 2018-02 ⁽ⁱⁱⁱ⁾		—			—			—			—			—			(36	)		—			(36	)
Balance at June 30, 2020 and 2019, respectively	$	(698	)	$	(626	)	$	(6	)	$	(4	)	$	(1,686	)	$	(1,363	)	$	(2,390	)	$	(1,993	)

(i)

Reclassification adjustments from accumulated other comprehensive loss related to derivative instruments are included in Revenue and Salaries and benefits in the accompanying condensed consolidated statements of comprehensive income. See Note 8 — Derivative Financial Instruments for additional details regarding the reclassification adjustments for the derivative settlements.

(ii)	Reclassification adjustments from accumulated other comprehensive loss are included in the computation of net periodic pension cost (see Note 11 — Retirement Benefits). These components are included in Other income, net in the accompanying condensed consolidated statements of comprehensive income.

(iii)

On January 1, 2019, in accordance with ASU 2018-02, we reclassified to Retained earnings $36 million of defined pension and postretirement costs, representing the ‘stranded’ tax effect of the change in the U.S. federal corporate tax rate resulting from U.S. Tax Reform.

Note 16 — Earnings Per Share

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

At June 30, 2020 and 2019, there were 0.2 million and 0.4 million time-based share options outstanding, respectively. There were 0.3 million performance-based options outstanding at both June 30, 2020 and 2019, and 0.5 million restricted performance-based stock units outstanding at both June 30, 2020 and 2019. The Company’s restricted time-based stock units were immaterial at June 30, 2020 and 2019.

Basic and diluted earnings per share are as follows:

	Three Months Ended June 30,					Six Months Ended June 30,
	2020			2019		2020			2019
Net income attributable to Willis Towers Watson	$	94		$	138	$	399		$	425

Basic average number of shares outstanding		129			130		130			130
Dilutive effect of potentially issuable shares		1			—		—			—
Diluted average number of shares outstanding		130			130		130			130

Basic earnings per share	$	0.73		$	1.06	$	3.08		$	3.27
Dilutive effect of potentially issuable shares		(0.01	)		—		(0.01	)		(0.01	)
Diluted earnings per share	$	0.72		$	1.06	$	3.07		$	3.26

There were no anti-dilutive options or restricted stock units for the three and six months ended June 30, 2020 and 2019.

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

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

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

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

Executive Overview

Proposed Combination with Aon plc

The transaction is subject to the approval of the shareholders of both WTW and Aon, as well as other customary closing conditions, including required regulatory approvals. Meetings of the respective shareholders will be held on August 26, 2020. We are required to be in substantial compliance with the Request for Additional Information and Documentary Materials, referred to as a Second Request, issued by the Antitrust Division of the U.S. Department of Justice on June 29, 2020. The parties expect the transaction to close in the first half of 2021, subject to satisfaction of these conditions.

Risks and Uncertainties of the COVID-19 Pandemic

registrants as a result of the pandemic. See also Part II, Item 1A., ‘Risk Factors’ for a discussion of actual and potential impacts of COVID-19 on our business, clients and operations.

We continue to closely monitor the spread and impact of COVID-19 while adhering to government health directives. The Company has implemented restrictions on business travel, office access, meetings and events. We have thorough business continuity and incident management processes in place that have been activated, including split team operations and work-from-home protocols for essential workers which continue to be globally effective. We are communicating frequently with clients and critical vendors, while meeting our objectives via remote working capabilities, overseen and coordinated by our incident management response team. While no contingency plan can eliminate all risk of temporary service interruption, we continually assess and update our plans to help mitigate all reasonable risk. As of the date of this filing, we have evaluated and concluded that our work-from-home protocol has not had a significant effect on our internal controls, financial reporting systems or operations.

Market Conditions

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

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

The terms of Brexit and its impact remain uncertain, and the Company is currently in the process of establishing appropriate arrangements for the continued servicing of client business in the countries expected to be most affected. For a further discussion of the risks of Brexit to the Company, see Part I, Item 1A. ‘Risk Factors’ in our Annual Report on Form 10-K, filed with the SEC on February 26, 2020.

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

On an annual basis for 2020, although we expect that approximately 21% of our revenue will be generated in the U.K., we expect that approximately 12% of revenue will be denominated in Pounds sterling, as much of the insurance business is transacted in U.S. dollars. We expect that approximately 19% of our expenses will be denominated in Pounds sterling. We have a Company hedging strategy for this aspect of our business, which is designed to mitigate significant fluctuations in currency.

The markets for our consulting, technology and solutions, and marketplace services are affected by economic, regulatory and legislative changes, technological developments, and increased competition from established and new competitors. We believe that the primary factors in selecting a human resources or risk management consulting firm include reputation, the ability to provide measurable increases to shareholder value and return on investment, global scale, quality of service and the ability to tailor services to clients’ unique needs. In that regard, we are focused on developing and implementing technology, data and analytic solutions for both internal operations and for maintaining industry standards and meeting client preferences. We have made such investments from time to time and may decide, based on perceived business needs, to make investments in the future that may be greater than we currently anticipate. Conversely, particularly given the impact of the COVID-19 pandemic, we may make fewer information technology-based investments than previously anticipated, which could potentially create business operational risk.

With regard to the market for exchanges, we believe that clients base their decisions on a variety of factors that include the ability of the provider to deliver measurable cost savings for clients, a strong reputation for efficient execution and an innovative service delivery model and platform. Part of the employer-sponsored insurance market has matured and become more fragmented while other segments remain in the entry phase. As these market segments continue to evolve, we may experience growth in intervals, with periods of accelerated expansion balanced by periods of modest growth. In recent years, growth in the market for exchanges has slowed, and we expect this trend may continue during the remainder of 2020.

See Part II, Item 1A. ‘Risk Factors’ in this Form 10-Q, and Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K, filed with the SEC on February 26, 2020, for a discussion of risks that may affect our ability to compete.

Financial Statement Overview

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

	Three Months Ended June 30,										Six Months Ended June 30,
	2020					2019					2020					2019
	($ in millions, except per share data)
Revenue	$	2,113		100	%	$	2,048		100	%	$	4,579		100	%	$	4,360		100	%
Costs of providing services
Salaries and benefits		1,363		65	%		1,278		62	%		2,757		60	%		2,626		60	%
Other operating expenses		387		18	%		412		20	%		871		19	%		830		19	%
Depreciation		67		3	%		59		3	%		165		4	%		113		3	%
Amortization		119		6	%		123		6	%		240		5	%		250		6	%
Transaction and integration expenses		14		1	%		—		—	%		23		1	%		6		—	%
Total costs of providing services		1,950					1,872					4,056					3,825
Income from operations		163		8	%		176		9	%		523		11	%		535		12	%
Interest expense		(62	)	(3	)%		(56	)	(3	)%		(123	)	(3	)%		(110	)	(3	)%
Other income, net		76		4	%		67		3	%		168		4	%		122		3	%
Provision for income taxes		(75	)	(4	)%		(38	)	(2	)%		(153	)	(3	)%		(105	)	(2	)%
Income attributable to non-controlling interests		(8	)	—	%		(11	)	(1	)%		(16	)	—	%		(17	)	—	%
NET INCOME ATTRIBUTABLE TO WILLIS TOWERS WATSON	$	94		4	%	$	138		7	%	$	399		9	%	$	425		10	%
Diluted earnings per share	$	0.72				$	1.06				$	3.07				$	3.26

Consolidated Revenue

Revenue was $2.1 billion for the three months ended June 30, 2020, compared to $2.0 billion for the three months ended June 30, 2019, an increase of $65 million, or 3%, on an as-reported basis. Adjusting for the impacts of foreign currency and acquisitions and disposals, our organic revenue growth was flat for the three months ended June 30, 2020. While we experienced organic revenue increases in our CRB and IRR segments, they were offset by declines in our HCB and BDA segments, in part due to the impact in HCB of the COVID-19 reduction in demand for our discretionary services. The revenue from acquisitions related primarily to TRANZACT, which generated revenue of $87 million for the three months ended June 30, 2020.

Revenue for the six months ended June 30, 2020 was $4.6 billion, compared to $4.4 billion for the six months ended June 30, 2019, an increase of $219 million, or 5%, on an as-reported basis. Adjusting for the impacts of foreign currency and acquisitions and disposals, our organic revenue growth was 2% for the six months ended June 30, 2020. All segments had strong performances during the first quarter of the year, however during the second quarter, organic revenue increases in our CRB and IRR segments were offset by declines in our HCB and BDA segments, in part due to the impact in HCB of the COVID-19 reduction in demand for our discretionary services. The revenue from acquisitions related primarily to TRANZACT, which generated revenue of $182 million for the six months ended June 30, 2020.

Our revenue can be materially impacted by changes in currency conversions, which can fluctuate significantly over the course of a calendar year. For the three months ended June 30, 2020, currency translation reduced our consolidated revenue by $35 million. For the six months ended June 30, 2020, currency translation reduced our consolidated revenue by $69 million. The primary currencies driving this change were the Euro and Pound sterling.

The following table details our top five markets based on the percentage of consolidated revenue (in U.S. dollars) from the countries where work was performed for the six months ended June 30, 2020. These figures do not represent the currency of the related revenue, which is presented in the next table.

Geographic Region	% of Revenue
United States		46	%
United Kingdom		23	%
France		5	%
Germany		3	%
Canada		3	%

The table below details the percentage of our revenue and expenses by transactional currency for the six months ended June 30, 2020.

Transactional Currency	Revenue			Expenses ⁽ⁱ⁾
U.S. dollars		55	%		52	%
Pounds sterling		13	%		20	%
Euro		16	%		12	%
Other currencies		16	%		16	%

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

The following tables set forth the total revenue for the three and six months ended June 30, 2020 and 2019 and the components of the change in total revenue for the three and six months ended June 30, 2020, as compared to the prior year period:

						Components of Revenue Change ⁽ⁱ⁾
					As		Constant
	Three Months Ended June 30,				Reported	Currency	Currency	Acquisitions/	Organic
	2020		2019		Change	Impact	Change	Divestitures	Change
	($ in millions)
Revenue	$	2,113	$	2,048	3%	(2)%	5%	5%	—%

						Components of Revenue Change ⁽ⁱ⁾
					As		Constant
	Six Months Ended June 30,				Reported	Currency	Currency	Acquisitions/	Organic
	2020		2019		Change	Impact	Change	Divestitures	Change
	($ in millions)
Revenue	$	4,579	$	4,360	5%	(2)%	7%	4%	2%

(i)	Components of revenue change may not add due to rounding.

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

Segment Revenue

The segment descriptions below should be read in conjunction with the full descriptions of our businesses contained in Part I, Item 1. Business, within our Annual Report on Form 10-K, filed with the SEC on February 26, 2020.

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

Impact of the COVID-19 Pandemic on our Segments

The COVID-19 pandemic has had, and is projected to continue to have, an impact on certain of our service offerings. These impacts have been negative in some instances and positive in others, may be material in either event, and primarily impact our revenue. In addition, the potential negative impacts on our results may lag behind the developments to date related to the COVID-19 pandemic. As we originally predicted, we have thus far seen the impact of COVID-19 primarily on our business offerings that are discretionary in nature, like consultative project work; however, most of the services we provide, including broking for various insurance products, compliance and valuation services, risk mitigation and outsourced administration for both pension and health and welfare plans are considered non-discretionary to our clients and recurring in nature. We have seen that these non-discretionary businesses are the least impacted of our offerings, and expect that trend to continue.

We expect to continue to experience unpredictable volatility in demand around our discretionary services and solutions. Clients may defer or delay decision-making or planned work or seek to terminate existing agreements for these discretionary services and solutions.

We recognize that the broad, global nature of the COVID-19 crisis has impacted the liquidity of our clients generally, and may cause us to not meet our original growth estimates for the year. We continue to monitor the global outbreak of the COVID-19 pandemic and take steps to mitigate the risks to us posed by its spread, including by working with our clients, colleagues, suppliers and other stakeholders. Due to the global breadth of the COVID-19 spread and the range of governmental and community reactions thereto, there is uncertainty around its duration, severity, ultimate impact and the timing of recovery. Therefore, the pandemic could lead to an extended disruption of economic activity and the impact on our consolidated results of operations, financial position and cash flows, could be material. Meanwhile, while we cannot predict how long this situation will last, we continue to focus on maintaining a strong balance sheet, liquidity and financial flexibility.

Human Capital and Benefits (‘HCB’)

The HCB segment provides an array of advice, broking, solutions and software for our clients. HCB is the largest segment of the Company and is focused on addressing our clients’ people and risk needs to help them take on the challenges of operating in a global marketplace. This segment is further strengthened with teams of international consultants who provide support through each of our business units to the global headquarters of multinational clients and their foreign subsidiaries.

The following table sets forth HCB segment revenue for the three months ended June 30, 2020 and 2019, and the components of the change in revenue for the three months ended June 30, 2020 from the three months ended June 30, 2019.

						Components of Revenue Change ⁽ⁱ⁾
					As		Constant
	Three Months Ended June 30,				Reported	Currency	Currency	Acquisitions/	Organic
	2020		2019		Change	Impact	Change	Divestitures	Change
	($ in millions)
Segment revenue	$	767	$	797	(4)%	(2)%	(2)%	—%	(2)%

(i)	Components of revenue change may not add due to rounding.

HCB segment revenue for the three months ended June 30, 2020 and 2019 was $767 million and $797 million, respectively. On an organic basis, the global impact of COVID-19 negatively impacted demand in our Talent and Rewards business, causing the decline to the segment’s revenue. Health and Benefits delivered moderate revenue growth, driven by increased consulting and brokerage services and continued expansion of our client portfolio for both local and global appointments. In our Retirement and Technology and Administration Solutions businesses revenue grew modestly as a result of increased project work primarily in Great Britain and Western Europe.

The following table sets forth HCB segment revenue for the six months ended June 30, 2020 and 2019, and the components of the change in revenue for the six months ended June 30, 2020 from the six months ended June 30, 2019.

						Components of Revenue Change ⁽ⁱ⁾
					As		Constant
	Six Months Ended June 30,				Reported	Currency	Currency	Acquisitions/	Organic
	2020		2019		Change	Impact	Change	Divestitures	Change
	($ in millions)
Segment revenue	$	1,617	$	1,626	(1)%	(1)%	1%	—%	1%

(i)	Components of revenue change may not add due to rounding.

HCB segment revenue for both the six months ended June 30, 2020 and 2019 was $1.6 billion. On an organic basis, the global impact of COVID-19 negatively impacted demand in our Talent and Rewards business. Organically, Health and Benefits delivered moderate revenue growth, driven by increased consulting and brokerage services and continued expansion of our client portfolio for both local and global appointments. In our Retirement and Technology and Administration Solutions businesses revenue grew modestly as a result of increased project work primarily in Great Britain and Western Europe.

Corporate Risk and Broking (‘CRB’)

The CRB segment provides a broad range of risk advice, insurance broking and consulting services to our clients worldwide ranging from small businesses to multinational corporations. The segment delivers integrated global solutions tailored to client needs and underpinned by data and analytics.

The following table sets forth CRB revenue for the three months ended June 30, 2020 and 2019, and the components of the change in revenue for the three months ended June 30, 2020 from the three months ended June 30, 2019.

						Components of Revenue Change ⁽ⁱ⁾
					As		Constant
	Three Months Ended June 30,				Reported	Currency	Currency	Acquisitions/	Organic
	2020		2019		Change	Impact	Change	Divestitures	Change
	($ in millions)
Segment revenue	$	701	$	690	2%	(2)%	4%	—%	4%

(i)	Components of revenue change may not add due to rounding.

CRB segment revenue for the three months ended June 30, 2020 and 2019 was $701 million and $690 million, respectively. On an organic basis, North America continued to lead the segment, followed by International and Western Europe, primarily with new business generation along with strong renewals. The revenue increase was partially offset by a decline in Great Britain, which was primarily due to the impact of COVID-19 on certain insurance lines.

The following table sets forth CRB segment revenue for the six months ended June 30, 2020 and 2019, and the components of the change in revenue for the six months ended June 30, 2020 from the six months ended June 30, 2019.

						Components of Revenue Change ⁽ⁱ⁾
					As		Constant
	Six Months Ended June 30,				Reported	Currency	Currency	Acquisitions/	Organic
	2020		2019		Change	Impact	Change	Divestitures	Change
	($ in millions)
Segment revenue	$	1,440	$	1,418	2%	(2)%	4%	—%	4%

(i)	Components of revenue change may not add due to rounding.

CRB segment revenue for both the six months ended June 30, 2020 and 2019 was $1.4 billion. On an organic basis, North America led the segment, followed by Western Europe and International, primarily with new business generation along with strong renewals. The revenue increase was partially offset by a decline in Great Britain, due to a change in the remuneration model for certain lines of business. This change, which is neutral to operating income, results in lower revenue and an equal reduction to salaries and benefits expense. Absent this change, Great Britain revenue increased, primarily as a result of new business.

Investment, Risk and Reinsurance (‘IRR’)

The IRR segment uses a sophisticated approach to risk, which helps our clients free up capital and manage investment complexity. This segment works closely with investors, reinsurers and insurers to manage the equation between risk and return. Blending advanced analytics with deep institutional knowledge, IRR identifies new opportunities to maximize performance. This segment provides investment consulting and discretionary management services and insurance-specific services and solutions through reserves opinions, software, ratemaking, risk underwriting and reinsurance broking.

The following table sets forth IRR revenue for the three months ended June 30, 2020 and 2019, and the components of the change in revenue for the three months ended June 30, 2020 from the three months ended June 30, 2019.

						Components of Revenue Change ⁽ⁱ⁾
					As		Constant
	Three Months Ended June 30,				Reported	Currency	Currency	Acquisitions/	Organic
	2020		2019		Change	Impact	Change	Divestitures	Change
	($ in millions)
Segment revenue	$	413	$	409	1%	(1)%	2%	—%	2%

(i)	Components of revenue change may not add due to rounding.

IRR segment revenue for the three months ended June 30, 2020 and 2019 was $413 million and $409 million, respectively. On an organic basis, most lines of business contributed to the growth. Reinsurance and Wholesale growth were driven by new business wins and favorable renewal factors while Insurance Consulting and Technology revenue grew from technology sales. Max Matthiessen revenue decreased as a result of the negative impact of COVID-19 on financial markets. The Company entered into an agreement to sell the Max Matthiessen business (see Part I., Note 3 — Acquisitions and Divestitures within this filing on Form 10-Q for further information). Modest revenue growth in the Investment businesses resulted from client wins.

The following table sets forth IRR segment revenue for the six months ended June 30, 2020 and 2019, and the components of the change in revenue for the six months ended June 30, 2020 from the six months ended June 30, 2019.

						Components of Revenue Change ⁽ⁱ⁾
					As		Constant
	Six Months Ended June 30,				Reported	Currency	Currency	Acquisitions/	Organic
	2020		2019		Change	Impact	Change	Divestitures	Change
	($ in millions)
Segment revenue	$	1,028	$	998	3%	(1)%	4%	—%	4%

(i)	Components of revenue change may not add due to rounding.

IRR segment revenue for the six months ended June 30, 2020 and 2019 was $1.0 billion and $998 million, respectively. On an organic basis, all lines of business contributed to the growth. Reinsurance and Wholesale growth was driven by new business wins and favorable renewal factors while Insurance Consulting and Technology revenue grew from strong technology sales. Max Matthiessen revenue increased as a result of overall growth in net commissions. Revenue growth in the Investment businesses resulted from client wins.

Benefits Delivery and Administration (‘BDA’)

The BDA segment provides primary medical and ancillary benefit exchange and outsourcing services to active employees and retirees across both the group and individual markets. A significant portion of the revenue in this segment is recurring in nature, driven by either the commissions from the policies we sell, or from long-term service contracts with our clients that typically range from three to five years. Revenue across this segment may be seasonal, driven by the magnitude and timing of client enrollment activities, which often occur during the fourth quarter, with increased membership levels typically effective January 1, after calendar year-end benefits elections. On July 30, 2019, the Company acquired TRANZACT, which operates as part of the BDA segment. TRANZACT experiences seasonally higher revenue during the fourth quarter due primarily to the timing of the Federal Medicare Open Enrollment window.

The following table sets forth BDA revenue for the three months ended June 30, 2020 and 2019, and the components of the change in revenue for the three months ended June 30, 2020 from the three months ended June 30, 2019.

						Components of Revenue Change ⁽ⁱ⁾
					As		Constant
	Three Months Ended June 30,				Reported	Currency	Currency	Acquisitions/	Organic
	2020		2019		Change	Impact	Change	Divestitures	Change
	($ in millions)
Segment revenue	$	209	$	126	66%	—%	66%	69%	(3)%

(i)	Components of revenue change may not add due to rounding.

BDA segment revenue for the three months ended June 30, 2020 and 2019 was $209 million and $126 million, respectively. BDA’s organic revenue decline was primarily due to seasonality in our Individual Marketplace business. The off-peak seasonality of this business can vary annually due to the timing of placement and other activity. The decline was partially offset by the expanded client base of the Benefits Outsourcing business in our Health practice. On July 30, 2019, the Company acquired TRANZACT, which operates as part of the BDA segment. For the three months ended June 30, 2020, TRANZACT generated revenue of $87 million.

The following table sets forth BDA segment revenue for the six months ended June 30, 2020 and 2019, and the components of the change in revenue for the six months ended June 30, 2020 from the six months ended June 30, 2019.

						Components of Revenue Change ⁽ⁱ⁾
					As		Constant
	Six Months Ended June 30,				Reported	Currency	Currency	Acquisitions/	Organic
	2020		2019		Change	Impact	Change	Divestitures	Change
	($ in millions)
Segment revenue	$	440	$	261	69%	—%	69%	70%	(1)%

(i)	Components of revenue change may not add due to rounding.

BDA segment revenue for the six months ended June 30, 2020 and 2019 was $440 million and $261 million, respectively. BDA’s organic revenue decline was primarily due to seasonality in our Individual Marketplace business. The off-peak seasonality of this business can vary annually due to the timing of placement and other activity. The decline was partially offset by the expanded client base of the Benefits Outsourcing business in our Health practice. For the six months ended June 30, 2020, TRANZACT generated revenue of $182 million.

Costs of Providing Services

Total costs of providing services were $2.0 billion for the three months ended June 30, 2020, compared to $1.9 billion for the three months ended June 30, 2019, an increase of $78 million, or 4%. Total costs of providing services for the six months ended June 30, 2020 were $4.1 billion, compared to $3.8 billion for the six months ended June 30, 2019, an increase of $231 million, or 6%. See the following discussion for further details.

Salaries and benefits

Salaries and benefits for the three months ended June 30, 2020 were $1.4 billion, compared to $1.3 billion for the three months ended June 30, 2019, an increase of $85 million, or 7%. The increase was primarily a result of higher salaries and incentive accruals along with the inclusion of TRANZACT’s compensation costs in the current quarter. These increases were partially offset by lower severance accruals, as well as share-based compensation accruals which are liability-based and adjusted to fair value every quarter, and consequently resulted in a reduction of expense related to a lower stock price from the beginning of the year. Salaries and benefits, as a percentage of revenue, increased to 65% for the three months ended June 30, 2020 from 62% for the three months ended June 30, 2019.

Salaries and benefits for the six months ended June 30, 2020 were $2.8 billion, compared to $2.6 billion for the six months ended June 30, 2019, an increase of $131 million, or 5%. The increase was primarily a result of higher salaries and incentive accruals along with the inclusion of TRANZACT’s compensation costs in the first half of the current year. These increases were partially offset by lower severance accruals, as well as share-based compensation accruals which are liability-based and adjusted to fair value every quarter, and consequently resulted in a reduction of expense related to a lower stock price from the beginning of the year. Salaries and benefits, as a percentage of revenue, was 60% for both the six months ended June 30, 2020 and 2019.

Other operating expenses

Other operating expenses for the three months ended June 30, 2020 were $387 million, compared to $412 million for the three months ended June 30, 2019, a decrease of $25 million, or 6%. The decrease was mostly related to lower travel and entertainment expenses incurred during the period, partially offset by the inclusion of TRANZACT’s operating expenses in the current quarter as well as higher professional liability costs. Other operating expenses for the six months ended June 30, 2020 were $871 million, compared to $830 million for the six months ended June 30, 2019, an increase of $41 million, or 5%. The increase was primarily due to the inclusion of TRANZACT’s operating expenses in the current year as well as higher professional fees, partially offset by lower travel and entertainment and occupancy costs during the period.

Depreciation

Depreciation for the three months ended June 30, 2020 was $67 million, compared to $59 million for the three months ended June 30, 2019, an increase of $8 million, or 14%. The quarter-over-quarter increase was due to a higher depreciable base of assets resulting from additional assets placed in service during 2019. Depreciation for the six months ended June 30, 2020 was $165 million, compared to $113 million for the six months ended June 30, 2019, an increase of $52 million, or 46%. The year-over-year increase was due to a higher depreciable base of assets resulting from additional assets placed in service during 2019. Additionally, in the first quarter of 2020, we recognized an acceleration of depreciation of $35 million related to the abandonment of an internally-developed software asset.

Amortization

Amortization for the three months ended June 30, 2020 was $119 million, compared to $123 million for the three months ended June 30, 2019, a decrease of $4 million, or 3%. Amortization for the six months ended June 30, 2020 was $240 million, compared to $250 million for the six months ended June 30, 2019, a decrease of $10 million, or 4%. Our intangible amortization is more heavily weighted to the initial years of the useful lives of the related intangibles, and therefore amortization related to intangible assets purchased prior to our acquisition of TRANZACT will continue to decrease over time. This decrease was partially offset by the additional amortization resulting from the intangible assets related to the TRANZACT acquisition.

Transaction and integration expenses

Transaction and integration expenses for the three months ended June 30, 2020 are comprised of $14 million of transaction costs related to our proposed combination with Aon and integration expenses related to the acquisition of TRANZACT in 2019. The Company did not incur any transaction and integration expenses for the three months ended June 30, 2019.

Transaction and integration expenses for the six months ended June 30, 2020 are comprised of $23 million of transaction costs related to our proposed combination with Aon and integration expenses related to the acquisition of TRANZACT in 2019, compared to $6 million of transaction costs related to the acquisition of TRANZACT for the six months ended June 30, 2019.

Income from Operations

Income from operations for the three months ended June 30, 2020 was $163 million, compared to $176 million for the three months ended June 30, 2019, a decrease of $13 million. This decrease resulted mostly from higher salaries and benefits expense, partially offset by higher revenue quarter over quarter and the inclusion of TRANZACT’s operating results for the period.

Income from operations for the six months ended June 30, 2020 was $523 million, compared to $535 million for the six months ended June 30, 2019, a decrease of $12 million. This decrease resulted mostly from higher salaries and benefits expense and the additional

depreciation related to the asset abandonment noted above, partially offset by higher revenue year over year and the inclusion of TRANZACT’s operating results for the period.

Interest Expense

Interest expense for the three months ended June 30, 2020 was $62 million, compared to $56 million for the three months ended June 30, 2019, an increase of $6 million, or 11%. Interest expense for the six months ended June 30, 2020 was $123 million, compared to $110 million for the six months ended June 30, 2019, an increase of $13 million, or 12%. These increases resulted from additional levels of indebtedness associated with our additional senior notes offering during the second half of 2019 and in connection with the TRANZACT acquisition.

Other Income, Net

Other income, net for the three months ended June 30, 2020 was $76 million, compared to $67 million for the three months ended June 30, 2019, an increase of $9 million, primarily resulting from favorable foreign exchange activity for the current quarter and increased pension income.

Other income, net for the six months ended June 30, 2020 was $168 million, compared to $122 million for the six months ended June 30, 2019, an increase of $46 million, primarily resulting from favorable foreign exchange activity for the current year and increased pension income.

Provision for Income Taxes

Provision for income taxes for the three months ended June 30, 2020 was $75 million, compared to $38 million for the three months ended June 30, 2019, an increase to income tax expense of $37 million. The effective tax rate was 42.2% for the three months ended June 30, 2020, and 19.7% for the three months ended June 30, 2019. Provision for income taxes for the six months ended June 30, 2020 was $153 million, compared to $105 million for the six months ended June 30, 2019, an increase to income tax expense of $48 million. The effective tax rate was 26.9% for the six months ended June 30, 2020, and 19.1% for the six months ended June 30, 2019. These effective tax rates are calculated using extended values from our condensed consolidated statements of comprehensive income and are therefore more precise tax rates than can be calculated from rounded values. The current year effective tax rate is higher due primarily to a discrete tax expense of $35 million recognized during the three months ended June 30, 2020 in connection with the temporary income tax provisions of the CARES Act. During the three months ended June 30, 2020 the Company elected to utilize the higher section 163(j) 50 percent business interest limitation for tax years 2019 and 2020 which allows the Company to utilize additional interest expense. The utilization of additional interest expense reduces our regular tax liability, reduces our ability to utilize foreign tax credits and creates a base erosion minimum tax expense for these tax years.

Net Income Attributable to Willis Towers Watson

Net income attributable to Willis Towers Watson for the three months ended June 30, 2020 was $94 million, compared to $138 million for the three months ended June 30, 2019, a decrease of $44 million, or 32%. This decrease resulted mostly from higher compensation-related costs and tax expense, partially offset by higher revenue quarter over quarter and the inclusion of TRANZACT’s operating results for the period.

Net income attributable to Willis Towers Watson for the six months ended June 30, 2020 was $399 million, compared to $425 million for the six months ended June 30, 2019, a decrease of $26 million, or 6%. This decrease resulted mostly from higher compensation-related costs and tax expense along with the additional depreciation related to the asset abandonment noted above, partially offset by higher revenue year over year and the inclusion of TRANZACT’s operating results for the period.

Liquidity and Capital Resources

Executive Summary

Our principal sources of liquidity are funds generated by operating activities, available cash and cash equivalents and amounts available under our revolving credit facilities and any new debt offerings, subject to the limitations set forth in the Aon combination agreement.

In the first half of 2020, the COVID-19 pandemic has contributed to significant volatility in financial markets, including occasional declines in equity markets, changes in interest rates and reduced liquidity on a global basis. Specific to Willis Towers Watson, we believe this has had, and will continue to have, a negative impact on discretionary work we perform for our clients. We also believe this may impact future cash collections from clients, particularly those in certain harder-hit industries. We have also reduced our spending on travel and associated expenses and third-party contractors, and have the ability to reduce spending on discretionary projects and certain capital expenditures.

In May 2020, the Company, together with its wholly-owned subsidiary, Willis North America Inc., as issuer, completed an offering of an additional $275 million aggregate principal amount of 2.950% senior notes due 2029, of which Willis North America Inc.

previously issued $450 million aggregate principal amount in September 2019, all of which remain outstanding. Net proceeds of $280 million (excluding accrued interest on this recent offering from March 15, 2020 to, but not including, May 29, 2020, of $2 million payable to us on such date) were used to repay $175 million of the full principal amount and related accrued interest under our term loan facility, which was set to expire in July 2020, as well as repay $105 million of borrowings outstanding under our $1.25 billion revolving credit facility and related accrued interest.

Based on our current balance sheet and cash flows, current market conditions and information available to us at this time, we believe that Willis Towers Watson has access to sufficient liquidity, which includes all of the borrowing capacity available to draw against our $1.25 billion revolving credit facility, to meet our cash needs for the next twelve months, including investing in the business for growth, scheduled debt repayments and dividend payments.

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

Undistributed Earnings of Foreign Subsidiaries

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

Cash and Cash Equivalents

Our cash and cash equivalents at June 30, 2020 totaled $1.1 billion, compared to $887 million at December 31, 2019. The increase in cash from December 31, 2019 to June 30, 2020 was primarily due to positive cash flows from our improved working capital during the six months ended June 30, 2020.

Additionally, we had all of the borrowing capacity available to draw against our $1.25 billion revolving credit facility at both June 30, 2020 and December 31, 2019.

Included within cash and cash equivalents at June 30, 2020 and December 31, 2019 are amounts held for regulatory capital adequacy requirements, including $112 million and $114 million, respectively, held within our regulated U.K. entities.

Summarized Condensed Consolidated Cash Flows

The following table presents the summarized condensed consolidated cash flow information for the six months ended June 30, 2020 and 2019:

	Six Months Ended June 30,
	2020			2019
	(in millions)
Net cash from/(used in):
Operating activities	$	685		$	303
Investing activities		(249	)		(148	)
Financing activities		(215	)		(374	)
INCREASE/(DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH		221			(219	)
Effect of exchange rate changes on cash, cash equivalents and restricted cash		(22	)		(2	)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD ⁽ⁱ⁾		895			1,033
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD ⁽ⁱ⁾	$	1,094		$	812

(i)

Cash Flows From Operating Activities

Cash flows from operating activities were $685 million for the six months ended June 30, 2020, compared to $303 million for the six months ended June 30, 2019. The $685 million of net cash from operating activities for the six months ended June 30, 2020 included net income of $415 million and $474 million of non-cash adjustments, partially offset by changes in operating assets and liabilities of $204 million. This increase in cash flows from operations as compared to the prior year was primarily due to positive cash flows from our improved working capital for the six months ended June 30, 2020 as compared to June 30, 2019.

The $303 million of net cash used in operating activities for the six months ended June 30, 2019 included net income of $442 million and $374 million of non-cash adjustments, partially offset by changes in operating assets and liabilities of $513 million.

Cash Flows Used In Investing Activities

Cash flows used in investing activities for the six months ended June 30, 2020 and 2019 were $249 million and $148 million, respectively, primarily driven by capital expenditures and capitalized software additions, and an acquisition during the first quarter of 2020.

Cash Flows Used In Financing Activities

Cash flows used in financing activities for the six months ended June 30, 2020 were $215 million. The significant financing activities included dividend payments of $171 million and net debt-related payments of $31 million.

Cash flows used in financing activities for the six months ended June 30, 2019 were $374 million. The most significant financing activities included dividend payments of $161 million, net debt-related payments of $109 million and share repurchases of $51 million.

Indebtedness

Total debt, total equity, and the capitalization ratios at June 30, 2020 and December 31, 2019 were as follows:

	June 30, 2020			December 31, 2019
	($ in millions)
Long-term debt	$	5,068		$	5,301
Current debt		525			316
Total debt	$	5,593		$	5,617

Total Willis Towers Watson shareholders’ equity	$	10,335		$	10,249

Capitalization ratio		35.1	%		35.4	%

At June 30, 2020, our mandatory debt repayments over the next twelve months include $500 million outstanding on our 5.750% senior notes due 2021 and $25 million outstanding on our collateralized facility assumed as part of our acquisition of TRANZACT.

At June 30, 2020 and December 31, 2019, we were in compliance with all financial covenants.

Fiduciary Funds

As an intermediary, we hold funds, generally in a fiduciary capacity, for the account of third parties, typically as the result of premiums received from clients that are in transit to insurers and claims due to clients that are in transit from insurers. We report premiums, which are held on account of, or due from, clients as assets with a corresponding liability due to the insurers. Claims held by or due to us, which are due to clients, are also shown as both Fiduciary assets and Fiduciary liabilities on our condensed consolidated balance sheets.

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

At June 30, 2020 and December 31, 2019, we had fiduciary funds of $3.9 billion and $3.4 billion, respectively.

Share Repurchase Program

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

On February 26, 2020, the board of directors approved a $251 million increase to the existing share repurchase program, increasing the total remaining authorization to $500 million.

During the six months ended June 30, 2020, the Company had no share repurchase activity. With regards to certain prohibitions under the transaction agreement in connection with our pending business combination with Aon, the board of directors does not expect to repurchase any shares during the remainder of 2020.

At June 30, 2020, approximately $500 million remained on the current repurchase authority. The maximum number of shares that could be repurchased based on the closing price of our ordinary shares on June 30, 2020 of $196.95 was 2,538,715.

Capital Commitments

Capital expenditures for fixed assets and software for internal use were $135 million during the six months ended June 30, 2020. The Company estimates that there will be additional such expenditures of approximately $105 million during the remainder of 2020. We currently expect cash from operations to adequately provide for these cash needs. There have been no material changes to our capital commitments since December 31, 2019.

Dividends

Total cash dividends of $171 million were paid during the six months ended June 30, 2020. In May 2020, the board of directors approved a quarterly cash dividend of $0.68 per share ($2.72 per share annualized rate), which was paid on July 15, 2020 to shareholders of record as of June 30, 2020.

Off-Balance Sheet Arrangements and Contractual Obligations

Off-Balance Sheet Transactions

See Part II, Item 7. ‘Off-Balance Sheet Arrangements and Contractual Obligations’ in our Annual Report on Form 10-K, filed with the SEC on February 26, 2020, for a discussion pertaining to off-balance sheet transactions.

Contractual Obligations

There have been no material changes to our contractual obligations since we filed our Annual Report on Form 10-K with the SEC on February 26, 2020.

Supplemental Guarantor Financial Information

As of June 30, 2020, Willis Towers Watson has issued the following debt securities (the ‘notes’):

Willis Towers Watson plc (the ‘parent company’) has $500 million senior notes outstanding, which were issued on March 17, 2011;

Willis North America Inc. (‘Willis North America’) has approximately $2.9 billion senior notes outstanding, of which $650 million were issued on May 16, 2017, $1.0 billion were issued on September 10, 2018, $1.0 billion were issued on September 10, 2019, and $275 million were issued on May 29, 2020; and

Trinity Acquisition plc has approximately $2.1 billion senior notes outstanding, of which $525 million were issued on August 15, 2013, $1.0 billion were issued on March 22, 2016 and €540 million ($609 million) were issued on May 26, 2016, and a $1.25 billion revolving credit facility established on March 7, 2017, on which no balance is currently outstanding.

The following table presents a summary of the entities that issue each note and those wholly owned subsidiaries of the Company that guarantee each respective note on a joint and several basis. These subsidiaries are all consolidated by the parent company and together with the parent company comprise the ‘Obligor group’.

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

The notes issued by the parent company, Willis North America and Trinity Acquisition plc:

•

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

•

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

•

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

•

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

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

Each member of the Obligor group has only a stockholder’s claim on the assets of the non-guarantor subsidiaries. This stockholder’s claim is junior to the claims that creditors have against those non-guarantor subsidiaries. Holders of the notes will only be creditors of the Obligor group and not creditors of the non-guarantor subsidiaries. As a result, all of the existing and future liabilities of the non-guarantor subsidiaries, including any claims of trade creditors and preferred stockholders, will be structurally senior to the notes. As of and for the periods ended June 30, 2020 and December 31, 2019, the non-guarantor subsidiaries represented substantially all of the total assets and accounted for substantially all of the total revenue of the Company prior to consolidating adjustments. The non-guarantor subsidiaries have other liabilities, including contingent liabilities that may be significant. Each indenture does not contain any limitations on the amount of additional debt that the Obligor group and the non-guarantor subsidiaries may incur. The amounts of this debt could be substantial, and this debt may be debt of the non-guarantor subsidiaries, in which case this debt would be effectively senior in right of payment to the notes.

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

Intercompany balances and transactions between members of the Obligor group have been eliminated. All intercompany balances and transactions between the Obligor group and the non-guarantor subsidiaries have been presented in the disclosures below on a net presentation basis, rather than a gross basis, as this better reflects the nature of the intercompany positions and presents the funding or funded position that is to be received or owed. The intercompany balances and transactions between the Obligor group and non-guarantor subsidiaries, presented below, relate to a number of items including loan funding for acquisitions and other purposes, transfers of surplus cash between subsidiary companies, funding provided for working capital purposes, settlement of expense accounts, transactions related to share-based payment arrangements and share issuances, intercompany royalty arrangements, intercompany dividends and intercompany interest. At June 30, 2020 and December 31, 2019, the intercompany balances of the Obligor group with non-guarantor subsidiaries were net receivables of $0.7 billion and $4.3 billion, respectively, and net payables of $7.8 billion and $3.5 billion, respectively.

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

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

`	As of June 30, 2020		As of December 31, 2019
	(in millions)
Total current assets	$	171	$	1,210
Total non-current assets		878		3,436
Total current liabilities		4,873		3,993
Total non-current liabilities		8,887		5,387

	Six months ended June 30, 2020
	(in millions)
Revenue	$	131
Income from operations		21
Loss from operations before income taxes ⁽ⁱ⁾		(227	)
Net loss		(185	)
Net loss attributable to Willis Towers Watson		(185	)

(i) Includes intercompany expense, net of the Obligor group from non-guarantor subsidiaries of $20 million for the six months ended June 30, 2020.

Non-GAAP Financial Measures

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

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

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

Within the measures referred to as ‘adjusted’, we adjust for significant items which will not be settled in cash, or which we believe to be items that are not core to our current or future operations. Some of these items may not be applicable for the current quarter, however they may be part of our full-year results. These items include the following:

•

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

•

Gains and losses on disposals of operations - Adjustment to remove the gain or loss resulting from disposed operations.

•

Pension settlement and curtailment gains and losses - Adjustment to remove significant pension settlement and curtailment gains and losses to better present how the Company is performing.

•

Abandonment of long-lived asset - Adjustment to remove the depreciation expense resulting from internally-developed software that was abandoned prior to being placed into service.

•

Provisions for significant litigation - We will include provisions for litigation matters which we believe are not representative of our core business operations.

•

Tax effect of the CARES Act - Relates to the incremental tax expense impact, primarily from the Base Erosion and Anti-Abuse Tax (‘BEAT’), generated from electing certain income tax provisions of the CARES Act.

•

Tax effects of internal reorganization - Relates to the U.S. income tax expense resulting from the completion of internal reorganizations of the ownership of certain businesses that reduced the investments held by our U.S.-controlled subsidiaries.

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

Constant Currency Change and Organic Change

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

•

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

•

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

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

Reconciliations of the reported changes to the constant currency and organic changes for the three and six months ended June 30, 2020 from the three and six months ended June 30, 2019 are as follows:

						Components of Revenue Change ⁽ⁱ⁾
					As		Constant
	Three Months Ended June 30,				Reported	Currency	Currency	Acquisitions/	Organic
	2020		2019		Change	Impact	Change	Divestitures	Change
	($ in millions)
Revenue	$	2,113	$	2,048	3%	(2)%	5%	5%	—%

						Components of Revenue Change⁽ⁱ⁾
					As		Constant
	Six Months Ended June 30,				Reported	Currency	Currency	Acquisitions/	Organic
	2020		2019		Change	Impact	Change	Divestitures	Change
	($ in millions)
Revenue	$	4,579	$	4,360	5%	(2)%	7%	4%	2%

(i)	Components of revenue change may not add due to rounding.

Adjusting for the impacts of foreign currency and acquisitions and disposals in the calculation of our organic activity, our revenue growth was flat for the three months ended June 30, 2020. While we experienced organic revenue increases in our CRB and IRR segments, it was offset by declines in our HCB and BDA segments, in part due to the impact in HCB of the COVID-19 reduction in demand for our discretionary services.

Adjusting for the impacts of foreign currency and acquisitions and disposals in the calculation of our organic activity, our revenue growth was 2% for the six months ended June 30, 2020. All segments had strong performances during the first quarter of the year, however during the second quarter, organic revenue increases in our CRB and IRR segments were offset by declines in our HCB and BDA segments, in part due to the impact in HCB of the COVID-19 reduction in demand for our discretionary services.

Adjusted Operating Income/Margin

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

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

Reconciliations of income from operations to adjusted operating income for the three and six months ended June 30, 2020 and 2019 are as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
	(in millions)
Income from operations	$	163		$	176		$	523		$	535
Adjusted for certain items:
Abandonment of long-lived asset		—			—			35			—
Amortization		119			123			240			250
Transaction and integration expenses		14			—			23			6
Adjusted operating income	$	296		$	299		$	821		$	791

Income from operations margin		7.7	%		8.6	%		11.4	%		12.3	%
Adjusted operating income margin		14.0	%		14.6	%		17.9	%		18.1	%

Adjusted operating income decreased for the three months ended June 30, 2020 to $296 million, from $299 million for the three months ended June 30, 2019. This decrease resulted mostly from higher salaries and benefits expense, partially offset by higher revenue quarter over quarter and the inclusion of TRANZACT’s operating results for the period.

Adjusted operating income increased for the six months ended June 30, 2020 to $821 million, from $791 million for the six months ended June 30, 2019. This increase resulted mostly from higher revenue year over year and the inclusion of TRANZACT’s operating results for the period, partially offset by higher salaries and benefits expense.

Adjusted EBITDA/Margin

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

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

Reconciliations of net income to adjusted EBITDA for the three and six months ended June 30, 2020 and 2019 are as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
	(in millions)
NET INCOME	$	102		$	149		$	415		$	442
Provision for income taxes		75			38			153			105
Interest expense		62			56			123			110
Depreciation ⁽ⁱ⁾		67			59			165			113
Amortization		119			123			240			250
Transaction and integration expenses		14			—			23			6
Loss on disposal of operations		2			—			2			—
Adjusted EBITDA	$	441		$	425		$	1,121		$	1,026

Net income margin		4.8	%		7.3	%		9.1	%		10.1	%
Adjusted EBITDA margin		20.9	%		20.8	%		24.5	%		23.5	%

(i)	Includes abandonment of long-lived asset of $35 million for the six months ended June 30, 2020.

Adjusted EBITDA for the three months ended June 30, 2020 was $441 million, compared to $425 million for the three months ended June 30, 2019. This increase resulted mostly from higher revenue quarter over quarter and the inclusion of TRANZACT’s operating results for the period, partially offset by higher compensation-related costs.

Adjusted EBITDA for the six months ended June 30, 2020 was $1.1 billion, compared to $1.0 billion for the six months ended June 30, 2019. This increase resulted mostly from higher revenue year over year and the inclusion of TRANZACT’s operating results for the period, partially offset by higher compensation-related costs.

Adjusted Net Income and Adjusted Diluted Earnings Per Share

Adjusted net income is defined as net income attributable to Willis Towers Watson adjusted for amortization, transaction and integration expenses, gains and losses on disposals of operations and non-recurring items that, in management’s judgment, significantly affect the period-over-period assessment of operating results and the related tax effect of those adjustments, the tax effect of the CARES Act and the tax effects of internal reorganizations. This measure is used solely for the purpose of calculating adjusted diluted earnings per share.

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

Reconciliations of net income attributable to Willis Towers Watson to adjusted diluted earnings per share for the three months ended June 30, 2020 and 2019 are as follows:

	Three Months Ended June 30,
	2020			2019
	($ in millions)
NET INCOME ATTRIBUTABLE TO WILLIS TOWERS WATSON	$	94		$	138
Adjusted for certain items:
Amortization		119			123
Transaction and integration expenses		14			—
Loss on disposal of operations		2			—
Tax effect on certain items listed above ⁽ⁱ⁾		(30	)		(29	)
Tax effect of the CARES Act		35			—
Adjusted net income	$	234		$	232

Weighted-average shares of common stock — diluted		130			130

Diluted earnings per share	$	0.72		$	1.06
Adjusted for certain items ⁽ⁱⁱ⁾:
Amortization		0.91			0.94
Transaction and integration expenses		0.11			—
Loss on disposal of operations		0.02			—
Tax effect on certain items listed above ⁽ⁱ⁾		(0.23	)		(0.22	)
Tax effect of the CARES Act		0.27			—
Adjusted diluted earnings per share	$	1.80		$	1.78

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

(ii)	Per share values and totals may differ due to rounding.

Reconciliations of net income attributable to Willis Towers Watson to adjusted diluted earnings per share for the six months ended June 30, 2020 and 2019 are as follows:

	Six Months Ended June 30,
	2020			2019
	($ in millions)
NET INCOME ATTRIBUTABLE TO WILLIS TOWERS WATSON	$	399		$	425
Adjusted for certain items:
Abandonment of long-lived asset		35			—
Amortization		240			250
Transaction and integration expenses		23			6
Loss on disposal of operations		2			—
Tax effect on certain items listed above ⁽ⁱ⁾		(65	)		(61	)
Tax effect of the CARES Act		35			—
Adjusted net income	$	669		$	620

Weighted-average shares of common stock — diluted		130			130

Diluted earnings per share	$	3.07		$	3.26
Adjusted for certain items ⁽ⁱⁱ⁾:
Abandonment of long-lived asset		0.27			—
Amortization		1.84			1.92
Transaction and integration expenses		0.18			0.05
Loss on disposal of operations		0.02			—
Tax effect on certain items listed above ⁽ⁱ⁾		(0.50	)		(0.47	)
Tax effect of the CARES Act		0.27			—
Adjusted diluted earnings per share	$	5.14		$	4.76

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

(ii)	Per share values and totals may differ due to rounding.

Our adjusted diluted earnings per share increased for the both the three and six months ended June 30, 2020 as compared to the prior year primarily due to higher revenue in comparison to the respective prior periods and the addition of TRANZACT’s operating results.

Adjusted Income Before Taxes and Adjusted Income Taxes/Tax Rate

Adjusted income before taxes is defined as income from operations before income taxes adjusted for amortization, transaction and integration expenses, gains and losses on disposals of operations and non-recurring items that, in management’s judgment, significantly affect the period-over-period assessment of operating results. Adjusted income before taxes is used solely for the purpose of calculating the adjusted income tax rate.

Adjusted income taxes/tax rate is defined as the provision for income taxes adjusted for taxes on certain items of amortization, transaction and integration expenses, gains and losses on disposals of operations, the tax effect of the CARES Act, the tax effects of internal reorganizations and non-recurring items that, in management’s judgment, significantly affect the period-over-period assessment of operating results, divided by adjusted income before taxes. Adjusted income taxes is used solely for the purpose of calculating the adjusted income tax rate.

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

Reconciliations of income from operations before income taxes to adjusted income before taxes and provision for income taxes to adjusted income taxes for the three and six months ended June 30, 2020 and 2019 are as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
	($ in millions)
INCOME FROM OPERATIONS BEFORE INCOME TAXES	$	177		$	187		$	568		$	547
Adjusted for certain items:
Abandonment of long-lived asset		—			—			35			—
Amortization		119			123			240			250
Transaction and integration expenses		14			—			23			6
Loss on disposal of operations		2			—			2			—
Adjusted income before taxes	$	312		$	310		$	868		$	803

Provision for income taxes	$	75		$	38		$	153		$	105
Tax effect on certain items listed above ⁽ⁱ⁾		30			29			65			61
Tax effect of the CARES Act		(35	)		—			(35	)		—
Adjusted income taxes	$	70		$	67		$	183		$	166

U.S. GAAP tax rate		42.2	%		19.7	%		26.9	%		19.1	%
Adjusted income tax rate		22.2	%		21.4	%		21.1	%		20.6	%

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

Our U.S. GAAP tax rates were 42.2% and 19.7% for the three months ended June 30, 2020 and 2019, respectively, and 26.9% and 19.1% for the six months ended June 30, 2020 and 2019, respectively. The current year effective tax rate is higher due primarily to a discrete tax expense of $35 million recognized during the three months ended June 30, 2020 in connection with the temporary income tax provisions of the CARES Act. During the three months ended June 30, 2020 the Company elected to utilize the section 163(j) 50 percent business interest limitation for tax years 2019 and 2020 which allows the Company to utilize additional interest expense. The utilization of additional interest expense reduces our regular tax liability, reduces our ability to utilize foreign tax credits and creates a base erosion minimum tax expense for these tax years.

Our adjusted income tax rates were 22.2% and 21.4% for the three months ended June 30, 2020 and 2019, respectively, and 21.1% and 20.6% for the six months ended June 30, 2020 and 2019, respectively. The prior year effective tax rate was lower primarily due to discrete valuation allowance releases in certain non-U.S. jurisdictions.

Free Cash Flow

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

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

Reconciliations of cash flows from operating activities to free cash flow for the six months ended June 30, 2020 and 2019 are as follows:

	Six Months Ended June 30,
	2020			2019
	(in millions)
Cash flows from operating activities	$	685		$	303
Less: Additions to fixed assets and software for internal use		(135	)		(120	)
Free cash flow	$	550		$	183

The favorable movement in free cash flows in 2020 was primarily due to positive cash flows from our improved working capital for the six months ended June 30, 2020 as compared to June 30, 2019.

Critical Accounting Policies and Estimates

There were no material changes from the Critical Accounting Policies and Estimates disclosed in our 2019 Annual Report on Form 10-K, filed with the SEC on February 26, 2020.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We have considered changes in our exposure to market risks during the six months ended June 30, 2020 and have determined that there have been no material changes to our exposure to market risks from those described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on February 26, 2020. However, we have provided the following information to supplement or update our disclosures on our Form 10-K.

LIBOR-Related Debt Instruments

In July 2017, the Financial Conduct Authority, the authority that regulates LIBOR, announced its intention to stop compelling banks to submit rates for the calculation of LIBOR after 2021. The Alternative Reference Rates Committee (‘ARRC’), a group of private-market participants convened by the Federal Reserve Board and the Federal Reserve Bank of New York to help ensure a successful transition from U.S. dollar LIBOR (‘USD-LIBOR’) to a more robust reference rate, has proposed that the Secured Overnight Financing Rate (‘SOFR’) represents the best alternative to USD-LIBOR for use in derivatives and other financial contracts that are currently indexed to USD-LIBOR. ARRC has proposed a transition plan with specific steps and timelines designed to encourage the adoption of SOFR and guide the transition to SOFR from USD-LIBOR. Organizations are currently working on industry-wide and company-specific transition plans related to derivatives and cash markets exposed to USD-LIBOR. Similar efforts are underway to identify suitable replacement reference rates for LIBOR in other major currencies.

As of June 30, 2020, the Company’s primary exposure is its $1.25 billion revolving credit facility maturing in 2022 and its collateralized facility assumed as part of its acquisition of TRANZACT, which are both priced using rates tied to LIBOR. We anticipate renegotiating the revolving credit facility prior to the potential LIBOR quotation termination date and will renegotiate, or repay, the collateralized facility prior to the end of 2021. In addition, the Company and its subsidiaries have entered into various intercompany notes indexed to LIBOR. The Company expects to amend or replace the LIBOR-based intercompany notes as necessary to reflect new market benchmarks for the relevant loan currencies prior to the 2021 deadline.

We are currently evaluating the LIBOR-related risks that may be inherent elsewhere in our business and are monitoring for further proposals and guidance from the ARRC and other alternative-rate initiatives, with the expectation that we will be prepared for the termination and replacement of the LIBOR benchmarks.

Interest Income on Fiduciary Funds

As described in our Form 10-K, we are exposed to interest rate risk. Specifically, as a result of our operating activities, we receive cash for premiums and claims which we deposit in short-term investments denominated in U.S. dollars and other currencies. We earn interest on these funds, which is included in our condensed consolidated financial statements as interest 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. At June 30, 2020, we held $2.0 billion of fiduciary funds invested in interest-bearing accounts. If short-term interest rates increased or decreased by 25 basis points, interest earned on these invested fiduciary funds, and therefore our interest income recognized, would increase or decrease by approximately $5 million on an annualized basis.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

As of June 30, 2020, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Chief Executive Officer (‘CEO’) and the Chief Financial Officer (‘CFO’), of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as defined by Exchange Act Rule 13a-15(e). Based upon that evaluation, the CEO and the CFO concluded that the Company’s disclosure controls and procedures are effective in ensuring that the information required to be included in the Company’s periodic SEC filings is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms and that such information is accumulated and communicated to management, including the CEO and the CFO, as appropriate, to allow for timely decisions regarding required disclosure.

Our assessment of, and conclusion on, the effectiveness of internal control over financial reporting did not include the internal control over financial reporting at TRANZACT. SEC guidance permits management to omit an assessment of an acquired business’ internal control over financial reporting from its assessment of internal control over financial reporting for a period not to exceed one year from the date of acquisition. We are in the process of integrating TRANZACT operations within our internal control structure. Accordingly, management has excluded controls relating to TRANZACT in this quarter’s evaluation of disclosure controls and procedures.

Changes in Internal Control over Financial Reporting

There have been no changes in the Company’s internal controls over financial reporting during the quarter ended June 30, 2020 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting. Although most of our employees who are involved in our financial reporting processes and controls are working remotely due to the

COVID-19 pandemic, we have not experienced any specific impact to our internal controls over financial reporting. We are continually monitoring and assessing the COVID-19 situation on our internal controls to minimize the impact on their design and operating effectiveness.

Limitations on the Effectiveness of Controls

Management, including the CEO and CFO, does not expect that our disclosure controls and procedures will necessarily prevent all errors and all fraud. However, management does expect that the control system provides reasonable assurance that its objectives will be met. A control system, no matter how well designed and operated, cannot provide absolute assurance that the control system’s objectives will be met. In addition, the design of such internal controls must take into account the costs of designing and maintaining such a control system. Certain inherent limitations exist in control systems to make absolute assurances difficult, including the realities that judgments in decision-making can be faulty, that breakdowns can occur because of a simple error or mistake, and that individuals can circumvent controls. The design of any control system is based in part upon existing business conditions and risk assessments. There can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in business conditions or deterioration in the degree of compliance with policies or procedures. As a result, they may require change or revision. Because of the inherent limitations in a control system, misstatements due to error or fraud may occur and may not be detected. Nevertheless, the disclosure controls and procedures are designed to provide reasonable assurance of achieving their stated objectives, and the CEO and CFO have concluded that the disclosure controls and procedures are effective at a reasonable assurance level.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, we are a party to various lawsuits, arbitrations or mediations that arise in the ordinary course of business. The disclosure called for by Part II, Item 1 regarding our legal proceedings is incorporated by reference herein from Part I, Item 1 Note 13 — Commitments and Contingencies - Legal Proceedings of the notes to the condensed consolidated financial statements in this Form 10-Q for the quarter ended June 30, 2020.

ITEM 1A. RISK FACTORS

Except as described below, there are no material changes from risk factors as previously disclosed in our Annual Report on Form 10-K, filed with the SEC on February 26, 2020. We urge you to read the risk factors contained therein.

We have been impacted by the COVID-19 pandemic and may be substantially and negatively impacted by it in the future.

Recently, the COVID-19 pandemic has had an adverse impact on global commercial activity, including the global supply chain, and has contributed to strain in financial markets, including, among other effects, significant volatility in equity markets, changes in interest rates and reduced liquidity on a global basis. It has also resulted in increased travel restrictions and extended shutdowns of businesses in various industries including, among others, travel, trade, tourism, health systems and food supply, and significantly reduced overall economic output. As such, there is a risk that COVID-19 could have a substantial negative impact on client demand and cash flow.

COVID-19 risks magnify other risks discussed in this report and any of our SEC filings. For example, the effectiveness of external parties, including governmental and non-governmental organizations, in combating the spread and severity of COVID-19 could have a material impact on demand for our business. In addition, steps taken by market counterparties such as (re)insurance carriers to limit their exposures to COVID-19 and related risks could have an impact on their willingness to provide or renew coverage for our clients on historical terms and pricing, which could again impact demand for our business. Coverage disputes arising out of the pandemic could also increase our professional liability risk by increasing the frequency and severity of allegations by others that, in the course of providing services, we have committed errors or omissions for which we should have liability. Also, travel restrictions have caused the postponement or cancellation of various conferences and meetings around the world and adversely impacted sales activity. The rapid development and fluidity of this situation precludes any prediction as to the ultimate adverse impact of COVID-19 on our business. Nevertheless, COVID-19 presents material uncertainty and risk with respect to demand for our products and services.

In addition, COVID-19 could materially disrupt our own business operations and the services we provide, as well as the business operations of our clients, suppliers and other third parties with whom we interact. As an increasing percentage of our colleagues continue to work remotely, we face resiliency risks, such as the risk that our information technology platform could potentially be inadequate to support increasing demand, as well as the risk that unusual working arrangements could impact the effectiveness of our operations or controls. We may also make fewer information technology-based investments than previously anticipated, which could potentially create business operational risk. In addition, we depend on third-party platforms and other infrastructure to provide certain of our products and services, and such third-party infrastructures face similar resiliency risks. These factors have exposed us to increased phishing and other cybersecurity attacks as cybercriminals try to exploit the uncertainty surrounding the COVID-19 pandemic, as well as an increase in the number of points of potential attack, such as laptops and mobile devices (both of which are now being used in increased numbers as many of our employees work remotely), to be secured. A failure to effectively manage these risks, including to promptly identify and appropriately respond to any cyberattacks, may adversely affect our business.

Also, a potential COVID-19 infection of any of our key colleagues could substantially and negatively impact our operations. Further, it is possible that COVID-19 causes us to close down call centers and other processes on which we rely, or impacts processes of third-party vendors on whom we rely, which could also materially impact our operations. The rapidly evolving changes in financial markets could also have a material impact on our own hedging and other financial transactions, which could impact our liquidity. In addition, it is possible that COVID-19 restrictions could create difficulty for satisfying our legal or regulatory filing or other obligations, including with the SEC and other regulators.

All of the foregoing events or potential outcomes, including in combination with other risk factors included in this Quarterly Report on Form 10-Q or our Annual Report on Form 10-K, could cause a substantial negative effect on our results of operations in any period and, depending on their severity, could also substantially and negatively affect our financial condition. Furthermore, such potential material adverse effect may lag behind the developments related to the COVID-19 pandemic. Such events and outcomes also could potentially impact our reputation with clients and regulators, among others.

Our pending combination with Aon creates incremental business, regulatory and reputational risks.

On March 9, 2020, the Company announced that it had entered into a business combination agreement with Aon. The proposed transaction with Aon entails important risks, including, among others: the risk that we are unable to obtain the requisite shareholder or regulatory approvals or satisfy all of the other conditions required to consummate the proposed transaction on the proposed terms and

schedule, if at all; the risk that we and Aon are unable to successfully integrate our combined operations and employees and realize the proposed transaction’s benefits, including potential synergies, or that we are unable to realize such benefits at the times and to the extent anticipated or that results are different from those contained in forecasts when made; the risk that transaction and/or integration costs or dis-synergies are greater than expected, including as a result of conditions regulators put on any approvals of the transaction; the potential impact of the announcement and/or consummation of the proposed transaction on relationships, including with employees, suppliers, clients and competitors; the risk that we and/or the combined company will not have the ability to hire and retain key personnel; the risk that management’s attention is diverted from other matters; the risks posed by changes in general economic, business and political conditions, including changes in the financial markets and any epidemic, pandemic or disease outbreaks; the risk of potential litigation associated with the proposed transaction and the risk that litigation associated with the proposed combination affects the combination or the business otherwise; the fact that the business combination agreement subjects the Company to various significant restrictions on its operations between signing and closing (including, among others, with respect to share repurchases, the incurrence of debt above thresholds or the acquisition or disposition of assets above specified thresholds, or specified changes to compensation and benefit programs); the risk of disruptions from the proposed transaction that impact our and/or Aon’s business, including current plans and operations; the risk posed by extensive government regulation on our business and/or the business of the combined company; the risk of adverse effects on the market price of Aon’s and the Company’s securities and on Aon’s and the Company’s operating results for any reason; and other risks described in the Company’s SEC filings, including definitive additional materials, the merger proxy statement and other filings generally applicable to significant transactions and related integrations that are or will be filed with the SEC.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

During the six months ended June 30, 2020, no shares were issued by the Company without registration under the Securities Act of 1933, as amended.

On February 26, 2020, the board of directors approved a $251 million increase to the existing share repurchase program, increasing the total remaining authorization to $500 million.

During the six months ended June 30, 2020, there was no share repurchase activity. With regards to certain prohibitions under the transaction agreement in connection with our pending business combination with Aon, the board of directors does not expect to repurchase any shares during the remainder of 2020.

At June 30, 2020 the maximum number of shares that may yet be purchased under the existing stock repurchase plan is 2,538,715, with approximately $500 million remaining on the current open-ended repurchase authority granted by the board. An estimate of the maximum number of shares under the existing authorities was determined using the closing price of our ordinary shares on June 30, 2020 of $196.95.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

EXHIBIT INDEX

Exhibit Number		Description of Exhibit
4.1		Officers’ Certificate of the Issuer and the Guarantors, dated as of May 29, 2020 (incorporated by reference to Exhibit 4.1 to the Form 8-K filed by the Company on May 29, 2020).
4.2		Form of Note (included in Exhibit 4.1).
10.1		Amendment to John Haley Employment Agreement, dated June 12, 2020 (incorporated by reference to Exhibit 10.1 to the Form 8-K filed by the Company on June 15, 2020).†
10.2		Willis Towers Watson Public Limited Company Severance and Change in Control Pay Plan for US Executives, (Adopted March 8, 2020 and as amended June 5, 2020).*†
10.3		Willis Towers Watson Public Limited Company Severance and Change in Control Pay Plan for Non-US Executives, (Adopted March 8, 2020 and as amended June 5, 2020).*†
22.1		List of Issuers and Guarantor Subsidiaries (incorporated by reference to Exhibit 22.1 to the Form 10-Q filed by the Company on April 30, 2020).
31.1		Certification of the Registrant’s Chief Executive Officer, John J. Haley, pursuant to Rule 13a-14 of the Securities Exchange Act of 1934.*
31.2		Certification of the Registrant’s Chief Financial Officer, Michael J. Burwell, pursuant to Rule 13a-14 of the Securities Exchange Act of 1934.*
32.1		Certification of the Registrant’s Chief Executive Officer, John J. Haley, and Chief Financial Officer, Michael J. Burwell, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
101.INS		XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.
101.SCH		XBRL Taxonomy Extension Schema Document*
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document*
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document*
101.LAB		XBRL Taxonomy Extension Label Linkbase Document*
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document*
104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)*

*	Filed or furnished herewith.

†	Management contract or compensatory plan or arrangement.

SIGNATURES

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

Willis Towers Watson Public Limited Company
(Registrant)

/s/ John J. Haley		July 30, 2020
Name:	John J. Haley	Date
Title:	Chief Executive Officer

/s/ Michael J. Burwell		July 30, 2020
Name:	Michael J. Burwell	Date
Title:	Chief Financial Officer

/s/ Susan D. Davies		July 30, 2020
Name:	Susan D. Davies	Date
Title:	Principal Accounting Officer and Controller

wltw-ex102_98.htm

Exhibit 10.2

WILLIS TOWERS WATSON PUBLIC LIMITED COMPANY
SEVERANCE AND CHANGE IN CONTROL PAY PLAN FOR US EXECUTIVES

(Adopted March 8, 2020 and as amended June 5, 2020)

The purpose of the Willis Towers Watson Public Limited Company Severance and Change in Control Pay Plan for US Executives, as amended from time to time (the “Plan”), is to better provide for the retention of key executives through providing them with a higher degree of financial security, on the terms and conditions hereinafter stated. The Plan is intended to be a severance pay plan governed by Title I of ERISA primarily for the purpose of providing benefits for a select group of management or highly compensated employees. All benefits under the Plan will be paid solely from the general assets of the Company.

Article I

Definitions

Section 1.01As used in this Plan, the following terms shall have the respective meanings set forth below:

(a)“409A CIC” shall have the meaning ascribed to such term in Section 4.04 of the Plan.

(b)“Accountants” shall have the meaning ascribed to such term in Section 6.04 of the Plan.

(c)“AFR” shall have the meaning ascribed to such term in Section 6.05 of the Plan.

(d)“Beneficial Owner” shall have the meaning set forth in Rule 13d‑3 under the Exchange Act.

(e)“Board” means the Board of Directors of the Company.

(f)“Bonus” means the annual bonuses payable pursuant to the Company’s Annual Incentive Plan or such other plan that provides for the payment of annual incentive bonuses as may be, from time to time, authorized by the Board or the Compensation Committee.

(g)“Cause” means: the Participant’s (i) gross or chronic neglect or negligence in the performance of the Participant’s employment duties with respect to the Company or its Subsidiaries having been provided reasonable notice of such neglect or negligence and a period of at least ten (10) days after the Participant’s receipt of such notice to cure and/or correct such performance neglect or negligence, (ii) willful misconduct in connection with the Participant’s employment which is injurious to the Company or its Subsidiaries (willful misconduct shall be understood to include, but not be limited to, any breach of the duty of loyalty owed by the Participant to the Company or its Subsidiaries), (iii) conviction of any criminal act (other than minor road traffic violations not involving imprisonment), (iv) breach of any of the Participant’s restrictive covenants and other obligations as provided in the Participant’s employment agreement (if any), or any other non-compete agreement and/or confidentiality agreement entered into

between the Participant and the Company or any of its Subsidiaries (other than an insubstantial, inadvertent and non-recurring breach), or (v) material violation of any written Company policy after reasonable notice and an opportunity to cure such violation within ten (10) days after the Participant’s receipt of such notice.

(h)“Change in Control” means:

(i) the acquisition (whether by purchase, merger, consolidation, combination or other similar transaction) of ownership, directly or indirectly, beneficially or of record, by any Person or group of Persons of the Ordinary Shares representing more than 50% of the aggregate voting power represented by the issued and outstanding Ordinary Shares; or

(ii)occupation of a majority of the Board (other than vacant seats) by Persons who were neither (A) nominated by the Board nor (B) appointed by members of the Board so nominated; or

(iii)the consummation of a sale or other disposition of all or substantially all of the Company’s assets in any single transaction or series of related transactions.

For the avoidance of doubt, a transaction shall not constitute a Change in Control (x) if effected for the purpose of changing the place of incorporation or form of organization of the ultimate parent entity of the Company or its Subsidiaries (including where the Company is succeeded by an issuer incorporated under the laws of another state, country or foreign government for such purpose and whether or not the Company remains in existence following such transaction) and (y) where all or substantially all of the Person(s) who are the beneficial owners of the outstanding voting securities of the Company immediately prior to such transaction will beneficially own, directly or indirectly, all or substantially all of the combined voting power of the outstanding voting securities entitled to vote generally in the election of directors of the ultimate parent entity resulting from such transaction in substantially the same proportions as their ownership, immediately prior to such transaction, of such outstanding securities of the Company.

(i)“CIC Period” means the period of time beginning on the date that is six (6) months prior to a Change in Control and ending on the date that is twenty-four (24) months following such Change in Control.

(j)“COBRA” means the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, and also has the meaning ascribed to it in Section 3.01(c).

(k)“COBRA Payment Period” shall have the meaning ascribed to such term in Section 3.01(c) of the Plan.

(l)“Code” means the Internal Revenue Code of 1986, as amended.

(m)“Company” means Willis Towers Watson Public Limited Company, a corporation organized under the laws of Ireland, and any successor corporation thereto.

(n)“Company Change” means any merger, consolidation or corporate reorganization of the Company, including, for the avoidance of any doubt, a Change in Control.

(o)“Compensation Committee” means the Compensation Committee of the Board.

(p)“Date of Termination” means the date on which a Participant’s employment by the Company and its Subsidiaries terminates.

(q)“Dodd – Frank Act” means the Dodd-Frank Wall Street Reform and Consumer Protection Act.

(r)“Eligible Executive” means an employee of the Company or any Subsidiary who is considered a Section 16 officer within the meaning of the Exchange Act.

(s)“EIP” means the Willis Towers Watson Public Limited Company 2012 Equity Incentive Plan, as amended from time to time, or any successor plan thereto.

(t)“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

(u)“Exchange Act” means the Securities Exchange Act of 1934, as amended.

(v)“Excise Tax” means the excise tax imposed by Section 4999 of the Code.

(w)“Good Reason” means that one or more of the following events has occurred without the Participant’s written consent: (i) a material adverse diminution in the Participant’s position, authority or responsibilities or the assignment to Participant of duties or responsibilities which are materially inconsistent with the Participant’s position; provided, that, a material diminution in the foregoing shall not be deemed to have occurred solely as a result of the occurrence of a Change in Control or the Company ceasing to be a public company, so long as the position, authority or responsibilities of the Participant with the Company (or the Subsidiary employing the Participant) (the “Employer”) or any successor is not otherwise materially diminished, (ii) a material reduction in the Participant’s monthly base salary or target annual incentive plan percentage; or (iii) the Participant is required to relocate the Participant’s office outside a radius of fifty (50) miles from the Participant’s current office location. The Participant may not resign or otherwise terminate the Participant’s employment for any reason set forth above as Good Reason unless the Participant first notifies the Employer in writing describing such Good Reason within ninety (90) days of the first occurrence of such circumstances, and, thereafter, such Good Reason is not corrected by the Employer within thirty (30) days of the Participant’s written notice of such Good Reason, and the Participant actually terminates employment within ninety (90) days following the expiration of the Employer’s 30-day cure period described above.

(x)“Involuntary Termination” means a termination of the Participant’s employment by the Company other than for Cause and other than as a result of the Participant’s death or Permanent Disability.

(y)“LTI Award” means an award covering the outstanding shares of the Company granted under the EIP.

(z)“LTI Award Agreement” means the form of award agreement evidencing, and governing the terms of, an LTI Award.

(aa)“Non-CIC Period” means the period prior to or following a CIC Period.

(bb)“Nonqualifying Termination” means a termination of the Participant’s employment other than a Qualifying Termination.

(cc)“Notification Letter” shall have the meaning ascribed to such term in Section 2.01 of the Plan.

(dd)“Ordinary Shares” means the ordinary shares of the Company, with a nominal value of $0.000304635 per Share.

(ee)“Participant” means any Eligible Executive who is selected to be a participant in the Plan by action of the Compensation Committee as specified herein.

(ff)“Permanent Disability” means that the Participant would qualify to receive long-term disability payments under the long-term disability policy, as it may be amended from time to time, of the Company or the Subsidiary to which the Participant provides services covering the Participant or, if no such plan exists or applies, such term will mean a determination that a person is “totally disabled” by the Social Security Administration.

(gg)“Person” shall have the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except that such term shall not include (i) the Company or any of its Subsidiaries, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its Subsidiaries, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities or (iv) a corporation owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of shares of the Company.

(hh)“Plan Administrator” means the Company, acting through the Compensation Committee or another duly constituted committee of members of the Board, or any Person to whom the Plan Administrator has delegated, in writing, any authority or responsibility with respect to the Plan, but only to the extent of such delegation.

(ii)“Qualifying Termination” means (i) an Involuntary Termination, or (ii) a termination of the Participant’s employment as a result of a resignation by the Employee for Good Reason.

(jj)“Recoupment Rules” means the Company’s Compensation Recoupment Policy, as amended from time to time, or the rules or regulations promulgated under the Dodd-Frank Act or by any stock exchange on which the Company’s securities are listed.

(kk)“Release” means the form of waiver and release of claims that is provided by the Plan Administrator.

(ll)“Separation from Service” means a “separation from service” within the meaning of Section 409A of the Code.

(mm)“Subsidiary” means any corporation or other entity in which the Company has a direct or indirect ownership interest of fifty (50) % or more of the total combined voting power of the then outstanding securities of such corporation or other entity.

(nn)“Target Bonus Amount” means, with respect to any Year, the Participant’s target Bonus for such Year based upon the Company’s forecasted operational plan.

(oo)“Year” means the fiscal year of the Company.

Article II

PARTICIPATION

Section 2.01Participation in the Plan. The Compensation Committee may designate any Eligible Executive to be a Participant. Promptly following such designation, each Participant shall be notified of his or her participation in a formal communication from the Compensation Committee or the Company (a “Notification Letter”). Participation in the Plan shall be determined in the Compensation Committee’s sole discretion. Each Eligible Executive shall become a Participant on the date the Eligible Executive signs and properly returns the Notification Letter. Participation in the Plan means that the severance payments and benefits under the Plan supersede and replace any previously offered or agreed payments or benefits (including non-monetary) in the nature of severance, howsoever arising. Once participation in the Plan has commenced, a Participant shall remain a Participant until the first to occur of (i) a Nonqualifying Termination and (ii) the completion of the delivery of all benefits under the Plan following the termination of his or her employment under circumstances giving rise to a right to such benefits.

Section 2.02Benefits Eligibility. A Participant shall become entitled to benefits under the Plan in the event he or she experiences a Qualifying Termination, provided that all of the conditions set forth in Section 2.03 are satisfied in the case of a Qualifying Termination, and provided further that any benefits or severance entitlements provided to a Participant under this Plan shall be offset as contemplated under Section 2.05.

Section 2.03Conditions.

(a)As a condition precedent to entitlement of each Participant to benefits under Sections 3.01(b) and (c) of the Plan, the Participant agrees to each of the following:

(i)The Participant shall have executed, within twenty-one (21) days, or if required for an effective age release, forty-five (45) days, following the Participant’s Date of Termination, a Release, and the applicable revocation period set forth in such release shall have expired;

(ii)The Participant agrees to execute a resignation letter stating that effective as of the Participant’s Date of Termination, or such earlier date as required or requested by the Company, the Participant resigns as any officer or director position with the Company or any of its Subsidiaries of which he or she is a member and/or to which he or she has been appointed;

(iii)The Participant shall return to the Company all property of the Company (or Subsidiary) in the possession of the Participant (or of a person controlled by the Participant); and

(iv)The Participant shall reasonably cooperate with the Company to complete the transition of matters with which the Participant is familiar or responsible to other executives or employees and to make himself or herself reasonably available to answer questions or assist in matters which may require attention after the Participant’s Date of Termination.

(v)The Participant shall have executed, as of the date participation in this Plan by the Participant becomes effective, the consent in the form provided by the Company pursuant to which the Participant shall acknowledge and agree to waive any and all rights to any severance payments or benefits to which the Participant may be entitled to under any other agreement, policy or other arrangements other than as contemplated in this Plan.

(b)As a condition precedent to entitlement of each Participant to benefits under Sections 3.02(b), (c) and (d) of the Plan, the Participant agrees to complete the requirements of Section 2.03(a)(ii)-(v) above.

Section 2.04A Participant shall not be required to mitigate the amount of any payment or benefit provided for in the Plan by seeking other employment or otherwise and, except as provided in Sections 3.01(c) or 3.02(d), no such payment or benefit shall be offset or reduced by the amount of any compensation or benefits provided to the Participant in any subsequent employment.

Section 2.05The severance payments and benefits under the Plan to a Participant are intended to constitute the exclusive payments and benefits in the nature of severance or termination pay that shall be due to a Participant upon termination of his or her employment and to supersede any previously offered or agreed payments or benefits (including non-monetary) in the nature of severance, howsoever arising. Without limiting any of the foregoing, the severance payments and benefits under the Plan shall be in lieu of (or offset by) severance benefits or entitlements, termination indemnities, pay in lieu of notice, or the like provided under any of the Participant’s other agreements, plans, practices or arrangements with the Company or a Subsidiary. Any reductions in payments or benefits shall be made in a manner that complies with Section 409A of the Code. For the avoidance of doubt, there shall be no duplication of benefits under the Plan or otherwise.

Article III

Termination Benefits

Section 3.01Involuntary Termination During Non-CIC Period. If, during a Non-CIC Period, the employment of a Participant terminates as a result of an Involuntary Termination, then, subject to the terms of the Plan, the Participant shall be entitled to the following (which, to the extent payable directly to the Participant, shall be payable in accordance with Article IV):

(a)a lump-sum cash amount equal to the sum of (A) the Participant’s earned and unpaid base salary from the Company and its Subsidiaries through the Date of Termination, (B) any outstanding Bonus for which (i) the performance period has been completed and (ii) the Compensation Committee has determined that the payment for the Bonus is due and owing with respect to the Participant, (C) any paid time off pay that is accrued and unused as of the Date of Termination, and (D) any unreimbursed expenses properly incurred by the Participant in accordance with the Company’s business expense reimbursement policy;

(b)an amount equal to the sum of (A) twelve (12) months of base salary calculated using the Participant’s base salary as of the Date of Termination, and (B) Participant’s Target Bonus Amount for the Year in which the Participant’s Date of Termination occurs, to be paid in twelve (12) equal monthly installments in accordance with Article IV;

(c)provided that the Participant properly and timely elects continuation healthcare coverage under Section 4980B of the Code and the Treasury Regulations thereunder or any similar state medical and dental insurance continuation coverage program (“COBRA”), the cost of the entire amount of the COBRA premiums for the continuation of group healthcare coverage for the Participant and the Participant’s eligible dependents, if applicable, under the Company’s group medical and dental plans from the date immediately following the Date of Termination and continuing until the earlier of (i) the date that is eighteen (18) months following the Date of Termination, (ii) the date that the Participant becomes eligible to receive benefits under another employer’s group health plan and (iii) the date that the Participant ceases to be eligible for COBRA (the “COBRA Payment Period”), with the understanding that following the COBRA Payment Period, any further continuation of coverage under applicable law shall be at the Participant’s sole responsibility and expense. Notwithstanding the foregoing, if the payment of COBRA premiums or the provision of benefits hereunder is likely to result in a penalty to the Participant or at any time the Company determines, in its sole discretion, that the payment of COBRA premiums or the provision of benefits hereunder is likely to result in a penalty to the Company or violation of the nondiscrimination rules of Section 105(h)(2) of the Code or any statute or regulation of similar effect (including, without limitation, the 2010 Patient Protection and Affordable Care Act, as amended by the 2010 Health Care and Education Reconciliation Act), then in lieu of providing the COBRA premiums, the Company will instead pay the Participant, on the Company’s regular payroll dates during the remainder of the COBRA Payment Period, a fully taxable cash payment equal to the amount of the COBRA premiums that the Company has agreed to pay pursuant to this Section 3.01(c) for the corresponding payroll period; and

(d)the Participant shall be entitled to such benefits under his or her outstanding LTI Awards as may be provided under the applicable LTI Award Agreement.

Section 3.02Qualifying Termination During CIC Period. If, during the CIC Period, the employment of the Participant terminates as a result of Qualifying Termination, then, subject to the terms of the Plan, the Participant shall be entitled to the following (which, to the extent payable directly to the Participant, shall be payable in accordance with Article IV):

participants based on the attainment level of Company performance goals, (C) any paid time off pay that is accrued and unused as of the Date of Termination, and (D) any unreimbursed expenses properly incurred by the Participant in accordance with the Company’s business expense reimbursement policy;

(b)a pro-rata portion of the Bonus payable for the Year in which the Date of Termination occurs, calculated by multiplying the amount of the Bonus that is determined to be payable based on the actual attainment level, by a fraction, the numerator of which is the number of months the Participant was employed during the Year in which the Date of Termination occurs and the denominator of which is 12;

(c)a lump-sum cash amount equal to the sum of (A) twenty-four (24) months of base salary calculated using the Participant’s highest monthly rate of base salary during the twelve (12) month period immediately preceding the Date of Termination, or if greater, immediately preceding the Change in Control in the case of a Qualifying Termination occurring on a date that follows a Change in Control, and (B) two (2) times the Participant’s Target Bonus Amount for the Year in which the Date of Termination occurs, or if greater, for the Year in which the Change in Control occurs in the case of a Qualifying Termination occurring on a date that follows a Change in Control, provided that the amount contemplated under this Section 3.02(c) shall be reduced by any amounts payable under Section 3.01(b);

(d)provided that the Participant properly and timely elects continuation healthcare coverage under COBRA, the cost of the entire amount of the COBRA premiums for the continuation of group healthcare coverage for the Participant and the Participant’s eligible dependents, if applicable, under the Company’s group medical and dental plans from the Date of Termination through the last day of the COBRA Payment Period, with the understanding that following the COBRA Payment Period, any further continuation of coverage under applicable law shall be at the Participant’s sole responsibility and expense. Notwithstanding the foregoing, if the payment of COBRA premiums or the provision of benefits hereunder is likely to result in a penalty to the Participant or at any time the Company determines, in its sole discretion, that the payment of COBRA premiums or the provision of benefits hereunder is likely to result in a penalty to the Company or violation of the nondiscrimination rules of Section 105(h)(2) of the Code or any statute or regulation of similar effect (including, without limitation, the 2010 Patient Protection and Affordable Care Act, as amended by the 2010 Health Care and Education Reconciliation Act), then in lieu of providing the COBRA premiums, the Company will instead pay the Participant, on the Company’s regular payroll dates during the remainder of the COBRA Payment Period, a fully taxable cash payment equal to the amount of the COBRA premiums that the Company has agreed to pay pursuant to this Section 3.02(d) for the corresponding payroll period; and

(e)the Participant shall be entitled to such benefits under his or her outstanding LTI Awards as may be provided under the applicable LTI Award Agreement.

Article IV

Form and Time of Payment

Section 4.01The payments and amounts contemplated under Sections 3.01(a) and 3.02(a) shall be made as of the Date of Termination (and, in the event of the amounts contemplated

under Sections 3.01(a)(B) and 3.02(a)(B), at the time that such Bonuses are generally payable to all participants)).

Section 4.02The monthly installments contemplated under Section 3.01(b) shall begin on the sixtieth (60^th) day after the Participant’s Date of Termination, provided that the Participant shall have executed the Release and the revocation period will have expired within such sixty (60) day period.

Section 4.03The payment contemplated under Section 3.02(b) shall be made at the time that such Bonuses are generally payable to all participants and in any event prior to March 15^th of the calendar year following the end of the Year in which the Date of Termination occurs.

Section 4.04The lump sum payment contemplated under Section 3.02(c) shall be made on the sixtieth (60^th) day after the later of the Participant’s Date of Termination and the date of the Change in Control. Notwithstanding the foregoing, if the amount contemplated under Section 3.02(c) constitutes deferred compensation subject to Section 409A of the Code, then if the (i) Change in Control does not constitute a “change in control event” within the meaning of the Treasury Regulations promulgated under Section 409A of the Code (a “409A CIC”), the amount contemplated under Section 3.02(c) shall instead be paid (or continue to be paid, as applicable) in installments in accordance with Section 4.02 (with the amount of installments that continue to be paid upon a Change in Control where installments have already commenced pursuant to Section 3.01(b) increased in equal amounts to reflect the amount payable under Section 3.02(c)); or (ii) Date of Termination occurs prior to a Change in Control and the Change in Control constitutes a 409A CIC, then the amount contemplated under Section 3.02(c) shall be paid in accordance with the first sentence of this Section 4.04, but it shall be reduced by the aggregate amount payable pursuant to Section 3.01(b) and the amounts payable pursuant to Section 3.01(b) will continue be paid in accordance with Section 4.02.

Section 4.05The monthly installments contemplated under Section 3.01(c) and Section 3.02(d), if applicable, shall begin on the sixtieth (60^th) day after the Participant’s Date of Termination, provided that, in the case of Section 3.01(c), the Participant shall have executed the Release and the revocation period will have expired within such sixty (60) day period.

Section 4.06Anything in this Plan to the contrary notwithstanding, no amount payable on a date or within a period that is by reference to a Participant’s termination of employment under Article III hereof that is nonqualified deferred compensation subject to Section 409A of the Code shall be paid unless the Participant experiences a Separation from Service, and if the Participant is a “specified employee” within the meaning of Section 409A of the Code as of the date of the Separation from Service (as determined in accordance with the methodology established by the Company as in effect on the Date of Termination), shall instead be paid with interest on any delayed payment at the applicable federal rate provided for in Section 7872(f)(2)(A) of the Code, to the Participant on the first business day that immediately follows the earlier of (i) the date that is six months following the date of the Participant’s Separation from Service or (ii) the date of the Participant’s death, to the extent such delayed payment is otherwise required in order to avoid a prohibited distribution under Section 409A(a)(2) of the Code, or any successor provision thereto.

Article V

amendment of Plan

Section 5.01This Plan may be amended at the sole discretion of the Board or Compensation Committee provided that the Board, or the Compensation Committee, as applicable, shall provide written notice to the Participant no less than one year prior to any amendment that materially and adversely impacts the right of a Participant under the Plan, and provided further that the Plan shall not be amended once the Company enters into a definite binding agreement, the consummation of which would result in the occurrence of a Change in Control.

Article VI

Federal Excise Tax Under Section 4999 of the Code

Section 6.01In the event that the benefits provided for in this Plan (together with any other benefits or amounts payable or provided to a Participant) otherwise constitute “parachute payments” within the meaning of Section 280G of the Code and would, but for this Article VI be subject to the Excise Tax, then the Participant’s benefits under this Plan (together with any other benefits or amounts payable or provided to such Participant) shall be either: (i) delivered in full, or (ii) delivered as to such lesser extent as would result in no portion of such benefits being subject to the Excise Tax, whichever of the foregoing amounts, taking into account the applicable federal, state and local income taxes and the Excise Tax, results in the receipt by the Participant on an after-tax basis, of the greatest amount of benefits, notwithstanding that all or some portion of such benefits may be taxable under Section 4999 of the Code. In the event of a reduction of benefits hereunder, the Accountants (as defined below) shall determine which benefits shall be reduced, in accordance with Section 6.02 hereof, so as to achieve the principle set forth in the preceding sentence. In no event shall the foregoing be interpreted or administered so as to result in an acceleration of payment or further deferral of payment of any amounts (whether under this Plan or any other arrangement) in violation of Section 409A.

Section 6.02Any reduction in the Participant’s benefits under this Plan and/or otherwise payable or provided to such Participant shall be made as follows:

(a)first, payments that are payable in cash that are valued at full value under Treasury Regulation Section 1.280G-1, Q&A 24(a) will be reduced (if necessary, to zero), with amounts that are payable last reduced first;

(b)second, payments due in respect of any equity valued at full value under Treasury Regulation Section 1.280G-1, Q&A 24(a) will be reduced (if necessary, to zero), with amounts that are payable or deliverable last reduced first;

(c)third, payments that are payable in cash that are valued at less than full value under Treasury Regulation Section 1.280G-1, Q&A 24 will be reduced (if necessary, to zero), with the highest values reduced first (as such values are determined under Treasury Regulation Section 1.280G-1, Q&A 24);

(d)fourth, payments due in respect of any equity valued at less than full value under Treasury Regulation Section 1.280G-1, Q&A 24 will be reduced (if necessary, to zero), with the

highest values reduced first (as such values are determined under Treasury Regulation Section 1.280G-1, Q&A 24); and

(e)fifth, all other non-cash benefits will be reduced pro-rata.

Section 6.03In each case, the amounts of the payments and benefits shall be reduced in the inverse order of their originally scheduled dates of payment or vesting, as applicable, and shall be so reduced only to the extent necessary to achieve the reductions contemplated under Section 6.01.

Section 6.04Unless the Company and the Participant otherwise agree in writing, all determinations required to be made under this Article VI, including the manner and amount of any reduction in the Participant’s benefits under this Plan, and the assumptions to be utilized in arriving at such determinations, shall be promptly determined and reported in writing to the Company and the Participant by the independent public accountants or other independent advisors selected by the Company that are not serving as the accountants or auditors for the individual, entity or group effecting the Change in Control (the “Accountants”), and all such computation and determinations shall be conclusive and binding upon the Participant and the Company. All fees and expenses of the Accountants shall be borne solely by the Company, and the Company shall enter into any agreement requested by the Accountants in connection with the performance of the services hereunder. For purposes of making the calculations required by this Article VI, the Accountants may make reasonable assumptions and approximations concerning the application of Sections 280G and 4999 of the Code. The Company and the Participant shall furnish to the Accountants such information and documents as the Accountants may reasonably request to make a determination under this Article VI.

Section 6.05As expressly permitted by Q/A #32 of the Treasury Regulations under Code Section 280G, with respect to performing any present value calculations that are required in connection with this Article VI, the Participant and the Company each affirmatively elect to utilize the Applicable Federal Rates (“AFR”) that are in effect as of the date this Plan is adopted and the Accountants shall therefore use such AFR in their determinations and calculations.

Article VII

plan administration

Section 7.01The Plan Administrator will administer the Plan and may interpret the Plan, prescribe, amend and rescind rules and regulations under the Plan and make all other determinations necessary or advisable for the administration of the Plan, subject to all of the provisions of the Plan.

Section 7.02The Plan Administrator may delegate any of its duties hereunder to such person or persons from time to time as it may designate.

Section 7.03The Plan Administrator is empowered, on behalf of the Plan, to engage accountants, legal counsel and such other personnel as it deems necessary or advisable to assist it in the performance of its duties under the Plan. The functions of any such persons engaged by the Plan Administrator will be limited to the specified services and duties for which they are engaged, and such persons will have no other duties, obligations or responsibilities under the Plan. Such

persons will exercise no discretionary authority or discretionary control respecting the management of the Plan. All reasonable expenses thereof will be borne by the Company.

Section 7.04Following the occurrence of a Change in Control, the Company may not remove from office the individual or individuals who served as Plan Administrator immediately prior to the Change in Control; provided, however, if any such individual ceases to be affiliated with the Company, the Company may appoint another individual or individuals as Plan Administrator so long as the substitute Plan Administrator consists solely of an individual or individuals who (a) were officers of the Company immediately prior to the Change in Control, (b) were directors of the Company immediately prior to the Change in Control and are not affiliated with the acquiring entity in the Change in Control or (c) were selected or approved in writing by an officer or director described in clause (a) or (b).

Article VIII

MISCELLANEOUS PROVISIONS

Section 8.01Withholding Taxes. The Company may withhold from all payments due to the Participant (or his beneficiary or estate) hereunder all taxes which, by applicable federal, state, local or other law, the Company is required to withhold therefrom.

Section 8.02Scope of Benefits under Plan. Nothing in this Plan shall be deemed to entitle the Participant to continued employment with the Company or its Subsidiaries; provided, however, that notwithstanding anything herein to the contrary, any termination of the Participant’s employment shall be subject to all of the benefit and payment provisions of this Plan.

Section 8.03Successors’ Binding Obligation.

(a)This Plan shall not be terminated by any Company Change or transfer of assets. In the event of any Company Change or transfer of assets, the provisions of this Plan shall be binding upon the surviving or resulting corporation or any person or entity to which the assets of the Company are transferred.

(b)The Company agrees that concurrently with any Company Change or transfer of assets, it will cause any successor or transferee unconditionally to assume by written instrument delivered to the Participant (or his beneficiary or estate) all of the obligations of the Company hereunder. Failure of the Company to obtain such assumption prior to the effectiveness of any such Company Change or transfer of assets that results in a Change in Control shall constitute Good Reason hereunder and shall entitle the Participant to compensation and other benefits from the Company in the same amount and on the same terms as the Participant would be entitled hereunder if the Participant’s employment were terminated in connection with a Change in Control other than by reason of a Nonqualifying Termination. For purposes of implementing the foregoing, the date on which any such Company Change or transfer of assets becomes effective shall be deemed the date Good Reason occurs, and the Participant may terminate employment for Good Reason on or following such date.

to the Participant hereunder had the Participant continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Plan to such person or persons appointed in writing by the Participant to receive such amounts or, if no person is so appointed, to the Participant’s estate.

Section 8.04Compensation Recoupment. Pursuant to the Dodd-Frank Act, the benefits provided for in this Plan shall not be deemed fully earned or vested, even if paid or distributed to the Participant, if the amount payable under Article III or any portion thereof is deemed incentive compensation and subject to recovery, or “clawback” by the Company pursuant to the provisions of the Dodd-Frank Act and any Recoupment Rules. In addition, the Participant hereby acknowledges that this Plan may be amended as necessary and/or shall be subject to any recoupment policies adopted by the Company to comply with the requirements and/or limitations under the Dodd-Frank Act and any Recoupment Rules, or any other federal or stock exchange requirements, including by expressly permitting (or, if applicable, requiring) the Company to revoke, recover and/or clawback the benefits provided herein.

Section 8.05Notice.

(a)For purposes of this Plan, all notices and other communications required or permitted hereunder shall be in writing and shall be deemed to have been duly given when delivered by hand or overnight courier or three (3) days after deposit in the United States mail, registered and return receipt requested, postage prepaid, addressed as follows:

If to the Participant:

To the most recent address of the Participant set forth in the personnel records of the Company

If to the Company:

Willis Towers Watson Public Limited Company

c/o Office of the General Counsel

200 Liberty Street, 7th Floor

New York, NY 10281

Attention: General Counsel

or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt. Alternatively, notice may be deemed to have been delivered when sent by facsimile to a location provided by the other party hereto.

(b)A written notice of the Participant’s Date of Termination by the Company or the Participant, as the case may be, to the other, shall (i) indicate the specific termination provision in this Plan relied upon, (ii) to the extent applicable, set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Participant’s employment under the provision so indicated and (iii) specify the Date of Termination. In the case of a termination by the Company other than a termination for Cause, the Date of Termination shall not be less than (30) days after the notice of termination is given. In the case of a termination by the Participant,

the Date of Termination shall be the date that the cure period contemplated under Section 1.01(w) has expired if the Company has failed to remedy within such period the circumstances constituting Good Reason. The failure by the Participant or the Company to set forth in such notice any fact or circumstance which contributes to a showing of Good Reason or Cause shall not waive any right of the Participant or the Company hereunder or preclude the Participant or the Company from asserting such fact or circumstance in enforcing the Participant’s or the Company’s rights hereunder.

Section 8.06Employment with Subsidiaries. Employment with the Company for purposes of this Plan shall include employment with any Subsidiary.

Section 8.07Governing Law; Validity. The interpretation, construction and performance of the provisions of this Plan shall be governed by and construed and enforced in accordance with the internal laws of the State of New York without regard to the principle of conflicts of laws, to the extent the laws of the State of New York are not preempted by ERISA. The invalidity or unenforceability of any provision of this Plan shall not affect the validity or enforceability of any other provision of this Plan, which other provisions shall remain in full force and effect.

Section 8.08Waiver. No provision of this Plan may be waived unless such waiver is agreed to in writing and signed by the Participant and by a duly authorized officer of the Company. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Plan to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. Failure by the Participant or the Company to insist upon strict compliance with any provision of this Plan or to assert any right the Participant or the Company may have hereunder shall not be deemed to be a waiver of such provision or right or any other provision or right of this Plan.

Section 8.09Limitations on Assignment. Except as otherwise provided herein or by law, no right or interest of any Eligible Executive under the Plan will be assignable or transferable, in whole or in part, either directly or by operation of law or otherwise, including without limitation by execution, levy, garnishment, attachment, pledge or in any manner; no attempted assignment or transfer thereof will be effective; and no third party creditors of an Eligible Executive will have any right or interest in any Eligible Executive’s rights or interests under the Plan. When a payment is due under this Plan to a severed employee who is unable to care for his or her affairs or dies after accruing benefit rights under the Plan, payment may be made directly to his or her legal guardian or personal representative, executor or estate administrator, as the case may be.

undertaking to preclude Section 409A of the Code from applying to this Plan. Nothing in this Plan shall provide a basis for any person to take action against the Company or any affiliate thereof based on matters covered by Section 409A of the Code, including the tax treatment of any amount paid under the Plan, and neither the Company nor any of its affiliates shall under any circumstances have any liability to the Participant or the Participant’s estate or any other party for any taxes, penalties or interest due on amounts paid or payable under this Plan, including taxes, penalties or interest imposed under Section 409A of the Code.

Section 8.11Unfunded Plan. The Plan will not be required to be funded unless such funding is authorized by the Board in its sole discretion. Regardless of whether the Plan is funded, no Eligible Executive will have any right to, or interest in, any assets of the Company which may be applied by the Company to the payment of benefits or other rights under this Plan.

Article IX

CLAIMS, INQUIRIES, APPEALS

Section 9.01Applications for Benefits and Inquiries. Any application for benefits, inquiries about the Plan or inquiries about present or future rights under the Plan must be submitted to the claims administrator in writing by an applicant (or his or her authorized representative), as follows:

Claims Administrator

c/o Office of the Chief Human Resources Officer

Willis Towers Watson Public Limited Company

1450 Brickell Avenue, Suite 1600

Miami, FL 33131

Attention: Chief Human Resources Officer

Section 9.02Denial of Claims. In the event that any application for benefits is denied in whole or in part, the claims administrator must notify the applicant, in writing, of the denial of the application, and of the applicant’s right to review the denial. The written notice of denial will be set forth in a manner designed to be understood by the applicant, and will include specific reasons for the denial, specific references to the Plan provision upon which the denial is based, a description of any information or material that the claims administrator needs to complete the review (and an explanation of why such information or material is necessary), an explanation of the Plan’s review procedures and the time limits applicable to such procedures, including a statement of the applicant’s right to bring civil action under section 502(a) of ERISA, if his or her claim is denied upon review.

This written notice will be given to the applicant within (90) days after the claims administrator receives the application, unless special circumstances require an extension of time, in which case, the claims administrator has up to an additional (90) days for processing the application. If an extension of time for processing is required, written notice of the extension will be furnished to the applicant before the end of the initial (90) day period.

This notice of extension will describe the special circumstances necessitating the additional time and the date by which the claims administrator is to render his or her decision on the application.

If written notice of denial of the application for benefits is not furnished within the specified time, the application will be deemed to be denied. The applicant will then be permitted to appeal the denial in accordance with the review procedure described below.

Section 9.03Request for a Review. Any person (or that person’s authorized representative) for whom an application for benefits is denied (or deemed denied), in whole or in part, may appeal the denial by submitting a request for a review to the Plan Administrator within sixty (60) days after the application is denied (or deemed denied). The Plan Administrator will give the applicant (or his or her representative) an opportunity to review pertinent documents in preparing a request for a review and submit written comments, documents, records and other information relating to the claim. A request for a review will be in writing and will be addressed to:

Plan Administrator

c/o Office of the General Counsel

Willis Towers Watson Public Limited Company

200 Liberty Street, 7th Floor

New York, NY 10281

Attention: General Counsel

A request for review must set forth all of the grounds on which it is based, all facts in support of the request and any other matters that the applicant feels are pertinent. The Plan Administrator may require the applicant to submit additional facts, documents or other material as he or she may find necessary or appropriate in making his or her review.

Section 9.04Decision on Review. The Plan Administrator will act on each request for review within sixty (60) days after receipt of the request, unless special circumstances require an extension of time (not to exceed an additional sixty (60) days), for processing the request for a review. If an extension for review is required, written notice of the extension will be furnished to the applicant within the initial sixty (60) day period. In the event that the Plan Administrator confirms the denial of the application for benefits in whole or in part, the notice will outline, in a manner calculated to be understood by the applicant, the specific reason or reasons for the denial, references to the specific Plan provisions upon which the decision is based, a statement that the applicant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to his or her claim, and a statement of the applicant’s right to bring a civil action under Section 502(a) of ERISA. If written notice of the Plan Administrator’s decision is not given to the applicant within the time prescribed in this Section 9.04 the application will be deemed denied on review.

Section 9.05Rules and Procedures. The Plan Administrator may establish rules and procedures, consistent with the Plan and with ERISA, as necessary and appropriate in carrying out his or her responsibilities in reviewing benefit claims. The Plan Administrator may require an applicant who wishes to submit additional information in connection with an appeal from the denial (or deemed denial) of benefits to do so at the applicant’s own expense.

Section 9.06Exhaustion of Remedies. No claim for benefits under the Plan may be brought in any forum until the claimant (a) has submitted a written application for benefits in accordance with the procedures described by Section 9.01 above, (b) has been notified by the

claims administrator that the application is denied (or the application is deemed denied due to the claims administrator’s failure to act on it within the established time period), (c) has filed a written request for a review of the application in accordance with the appeal procedure described in Section 9.03 above and (d) has been notified in writing that the Plan Administrator has denied the appeal (or the appeal is deemed to be denied due to the Plan Administrator’s failure to take any action on the claim within the time prescribed by Section 9.04 above).

Section 9.07Final Dispute Resolution. Any and all disputes under this Plan (including but not limited to disputes regarding interpretation, scope, or validity of the Plan, any pendant state claims if not otherwise preempted by ERISA) remains unresolved after the exhaustion of the claims procedure outlined in Sections 9.01 through 9.06, above, will be submitted to the exclusive jurisdiction of the United States District Court for the Southern District of New York.

wltw-ex103_99.htm

Exhibit 10.3

WILLIS TOWERS WATSON
SEVERANCE AND CHANGE IN CONTROL PAY PLAN FOR NON-US EXECUTIVES

(Adopted March 8, 2020 and as amended June 5, 2020)

The purpose of the Willis Towers Watson Public Limited Company Severance and Change in Control Pay Plan for Non-US Executives, as amended from time to time (the “Plan”), is to better provide for the retention of key executives through providing them with a higher degree of financial security, on the terms and conditions hereinafter stated.

Article I

Definitions

Section 1.01As used in this Plan, the following terms shall have the respective meanings set forth below:

(a)“409A CIC” shall have the meaning ascribed to such term in Section 4.04 of the Plan.

(b)“Accountants” shall have the meaning ascribed to such term in Section 6.04 of the Plan.

(c)“AFR” shall have the meaning ascribed to such term in Section 6.05 of the Plan.

(d)“Beneficial Owner” shall have the meaning set forth in Rule 13d‑3 under the Exchange Act.

(e)“Board” means the Board of Directors of WTW.

after reasonable notice and an opportunity to cure such violation within ten (10) days after the Participant’s receipt of such notice.

(h)“Change in Control” means:

(ii)occupation of a majority of the Board (other than vacant seats) by Persons who were neither (A) nominated by the Board nor (B) appointed by members of the Board so nominated; or

(iii)the consummation of a sale or other disposition of all or substantially all of WTW’s assets in any single transaction or series of related transactions.

For the avoidance of doubt, a transaction shall not constitute a Change in Control (x) if effected for the purpose of changing the place of incorporation or form of organization of the ultimate parent entity of the WTW or its Subsidiaries (including where WTW is succeeded by an issuer incorporated under the laws of another state, country or foreign government for such purpose and whether or not WTW remains in existence following such transaction) and (y) where all or substantially all of the Person(s) who are the beneficial owners of the outstanding voting securities of WTW immediately prior to such transaction will beneficially own, directly or indirectly, all or substantially all of the combined voting power of the outstanding voting securities entitled to vote generally in the election of directors of the ultimate parent entity resulting from such transaction in substantially the same proportions as their ownership, immediately prior to such transaction, of such outstanding securities of WTW.

(j)“Code” means the Internal Revenue Code of 1986, as amended (references to the Code and provisions that include such Code Section references shall apply only to the extent a Participant is subject to taxation in the United States or a political subdivision thereof.).

(k)“Company” means WTW or, if different, the employing entity.

(l)“Company Change” means any merger, consolidation or corporate reorganization of WTW or the Company, including, for the avoidance of any doubt, a Change in Control.

(m)“Compensation Committee” means the Compensation Committee of the Board.

(n)“Date of Termination” means the date on which a Participant’s employment by the Company and its Subsidiaries terminates.

(o)“Dodd – Frank Act” means the Dodd-Frank Wall Street Reform and Consumer Protection Act.

(p)“Eligible Executive” means an employee of the Company or any Subsidiary who is considered a Section 16 officer within the meaning of the Exchange Act.

(q)“EIP” means the Willis Towers Watson Public Limited Company 2012 Equity Incentive Plan, as amended from time to time, or any successor plan thereto.

(r)“Exchange Act” means the Securities Exchange Act of 1934, as amended.

(s)“Excise Tax” means the excise tax imposed by Section 4999 of the Code .

(t)“Good Reason” means that one or more of the following events has occurred without the Participant’s written consent: (i) a material adverse diminution in the Participant’s position, authority or responsibilities or the assignment to Participant of duties or responsibilities which are materially inconsistent with the Participant’s position; provided, that, a material diminution in the foregoing shall not be deemed to have occurred solely as a result of the occurrence of a Change in Control or WTW ceasing to be a public company, so long as the position, authority or responsibilities of the Participant with WTW (or the Subsidiary employing the Participant) (the “Employer”) or any successor is not otherwise materially diminished, (ii) a material reduction in the Participant’s monthly base salary or target annual incentive plan percentage; or (iii) the Participant is required to relocate the Participant’s office outside a radius of fifty (50) miles from the Participant’s current office location. The Participant may not resign or otherwise terminate the Participant’s employment for any reason set forth above as Good Reason unless the Participant first notifies the Employer in writing describing such Good Reason within ninety (90) days of the first occurrence of such circumstances, and, thereafter, such Good Reason is not corrected by the Employer within thirty (30) days of the Participant’s written notice of such Good Reason, and the Participant actually terminates employment within ninety (90) days following the expiration of the Employer’s 30-day cure period described above.

(u)“Involuntary Termination” means a termination of the Participant’s employment by the Company other than for Cause and other than as a result of the Participant’s death or permanent disability.

(v)“LTI Award” means an award covering the Ordinary Shares granted under the EIP.

(w)“LTI Award Agreement” means the form of award agreement evidencing, and governing the terms of, an LTI Award.

(x)“Non-CIC Period” means the period prior to or following a CIC Period.

(y)“Nonqualifying Termination” means a termination of the Participant’s employment other than a Qualifying Termination.

(z)“Notification Letter” shall have the meaning ascribed to such term in Section 2.01 of the Plan.

(aa)“Ordinary Shares” means the ordinary shares of WTW, with a nominal value of $0.000304635 per Share.

(bb)“Participant” means any Eligible Executive who is selected to be a participant in the Plan by action of the Compensation Committee as specified herein.

(cc)“Person” shall have the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except that such term shall not include (i) WTW, the Company or any of its Subsidiaries, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of WTW or any of its Subsidiaries, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities or (iv) a corporation owned, directly or indirectly, by the shareholders of WTW in substantially the same proportions as their ownership of shares of WTW.

(dd)“Plan Administrator” means the Company, acting through the Compensation Committee or another duly constituted committee of members of the Board, or any Person to whom the Plan Administrator has delegated, in writing, any authority or responsibility with respect to the Plan, but only to the extent of such delegation.

(ee)“Qualifying Termination” means (i) an Involuntary Termination, or (ii) a termination of the Participant’s employment as a result of a resignation by the Employee for Good Reason.

(ff)“Recoupment Rules” means WTW’s Compensation Recoupment Policy, as amended from time to time, or the rules or regulations promulgated under the Dodd-Frank Act or by any stock exchange on which WTW’s securities are listed.

(gg)“Release” means the form of waiver and release of claims that is provided by the Plan Administrator.

(hh)“Separation from Service” means a “separation from service” within the meaning of Section 409A of the Code.

(ii)“Subsidiary” means any corporation or other entity in which WTW, or the Company, as applicable, has a direct or indirect ownership interest of fifty (50)% or more of the total combined voting power of the then outstanding securities of such corporation or other entity.

(jj)“Target Bonus Amount” means, with respect to any Year, the Participant’s target Bonus for such Year based upon the Company’s forecasted operational plan.

(kk)“WTW” the Willis Towers Watson Public Limited Company, a corporation organized under the laws of Ireland, and any successor corporation thereto.

(ll)“Year” means the fiscal year of the Company.

Article II

PARTICIPATION

Section 2.03Conditions.

(a)As a condition precedent to entitlement of each Participant to benefits under Section 3.01(b) of the Plan, the Participant agrees to each of the following:

(i)The Participant shall have executed, within fifteen (15) days following the Participant’s Date of Termination, a Release;

(iii)The Participant shall return to the Company all property of the Company (or Subsidiary) in the possession of the Participant (or of a person controlled by the Participant); and

(v)The Participant shall have executed, as of the date participation in this Plan by the Participant becomes effective, a consent in the form provided by the

Company pursuant to which the Participant shall acknowledge and agree to waive any and all rights to any severance payments or benefits to which the Participant may be entitled to under any other agreement, policy or other arrangements other than as contemplated in this Plan and to offset the severance benefits payable under the Plan by any severance benefits payable under any statute or other law.

(b)As a condition precedent to entitlement of each Participant to benefits under Sections 3.02(b) and (c) of the Plan, the Participant agrees to complete the requirements of Section 2.03(a)(ii)-(iv) above.

Section 2.04A Participant shall not be required to mitigate the amount of any payment or benefit provided for in the Plan by seeking other employment or otherwise and, except as provided in Section 3.01(c), no such payment or benefit shall be offset or reduced by the amount of any compensation or benefits provided to the Participant in any subsequent employment.

Section 2.05The severance payments and benefits under the Plan to a Participant are intended to constitute the exclusive payments and benefits in the nature of severance or termination pay that shall be due to a Participant upon termination of his or her employment and to supersede any previously offered or agreed payments or benefits (including non-monetary) in the nature of severance, howsoever arising. Without limiting any of the foregoing, the severance payments and benefits under the Plan shall be in lieu of (or offset by) severance benefits or entitlements, termination indemnities, pay in lieu of notice, or the like provided under any of the Participant’s other agreements, plans, practices or arrangements with the Company or a Subsidiary. The severance payments and benefits to which a Participant is otherwise entitled shall be further reduced (but not below zero) by any payments or benefits to which the Participant may be entitled under any statute or other law. Any reductions in payments or benefits shall be made in a manner that complies with Section 409A of the Code. For the avoidance of doubt, there shall be no duplication of benefits under the Plan or otherwise.

Article III

Termination Benefits

(a)The payment of (A) the Participant’s earned and unpaid base salary and contractual benefits from the Company and its Subsidiaries through the Date of Termination, (B) any outstanding Bonus for which (i) the performance period applicable to the Bonus has been completed and (ii) the Compensation Committee has determined that the payment for the Bonus is due and owing with respect to the Participant, (C) any paid time off pay that is accrued and unused as of the Date of Termination, and (D) any unreimbursed expenses properly incurred by the Participant in accordance with the Company’s business expense reimbursement policy;

(b)an amount equal to the sum of (A) twelve (12) months of base salary calculated using the Participant’s base salary as of the Date of Termination, and (B) Participant’s Target

Bonus Amount for the Year in which the Participant’s Date of Termination occurs, to be paid in twelve (12) equal monthly installments in accordance with Article IV; and

(c)the Participant shall be entitled to such benefits under his or her outstanding LTI Awards as may be provided under the applicable LTI Award Agreement.

(a)The payment of (A) the Participant’s earned and unpaid base salary and contractual benefits from the Company and its Subsidiaries through the Date of Termination, (B) any outstanding Bonus for which (i) the performance period applicable to the Bonus has been completed and (ii) the Compensation Committee makes a determination that Bonuses are payable generally to participants based on the attainment level of Company performance goals, (C) any paid time off pay that is accrued and unused as of the Date of Termination, and (D) any unreimbursed expenses properly incurred by the Participant in accordance with the Company’s business expense reimbursement policy;

(d)the Participant shall be entitled to such benefits under his or her outstanding LTI Awards as may be provided under the applicable LTI Award Agreement.

Article IV

Form and Time of Payment

Section 4.01The payments and amounts contemplated under Sections 3.01(a) and 3.02(a) shall be made as of the Date of Termination (and, in the event of the amounts contemplated under Section 3.01(a)(B) and 3.02(a)(B), at the time that such Bonuses are generally payable to all participants).

Section 4.05Anything in this Plan to the contrary notwithstanding, no amount payable on a date or within a period that is by reference to a Participant’s termination of employment under Article III hereof that is nonqualified deferred compensation subject to Section 409A of the Code shall be paid unless the Participant experiences a Separation from Service, and if the Participant is a “specified employee” within the meaning of Section 409A of the Code as of the date of the Separation from Service (as determined in accordance with the methodology established by the Company as in effect on the Date of Termination), shall instead be paid with interest on any delayed payment at the applicable federal rate provided for in Section 7872(f)(2)(A) of the Code, to the Participant on the first business day that immediately follows the earlier of (i) the date that is six months following the date of the Participant’s Separation from Service or (ii) the date of the Participant’s death, to the extent such delayed payment is otherwise required in order to avoid a prohibited distribution under Section 409A(a)(2) of the Code, or any successor provision thereto.

Article V

amendment of Plan

Section 5.01This Plan may be amended at the sole discretion of the Board or Compensation Committee, provided that the Board, or Compensation Committee, as applicable, shall provide written notice to the Participant no less than one year prior to any amendment that materially and adversely impacts the right of a Participant under the Plan, and provided further that the Plan shall not be amended once WTW enters into a definite binding agreement, the consummation of which would result in the occurrence of a Change in Control.

Article VI

Federal Excise Tax Under Section 4999 of the Code

Section 6.02Any reduction in the Participant’s benefits under this Plan and/or otherwise payable or provided to such Participant shall be made as follows:

(d)fourth, payments due in respect of any equity valued at less than full value under Treasury Regulation Section 1.280G-1, Q&A 24 will be reduced (if necessary, to zero), with the highest values reduced first (as such values are determined under Treasury Regulation Section 1.280G-1, Q&A 24); and

(e)fifth, all other non-cash benefits will be reduced pro-rata.

Section 6.04Unless WTW and the Participant otherwise agree in writing, all determinations required to be made under this Article VI, including the manner and amount of any reduction in the Participant’s benefits under this Plan, and the assumptions to be utilized in arriving at such determinations, shall be promptly determined and reported in writing to WTW and the Participant by the independent public accountants or other independent advisors selected by WTW that are not serving as the accountants or auditors for the individual, entity or group effecting the Change in Control (the “Accountants”), and all such computation and determinations shall be conclusive and binding upon the Participant and WTW. All fees and expenses of the Accountants shall be borne solely by WTW, and WTW shall enter into any agreement requested by the Accountants in connection with the performance of the services hereunder. For purposes of making the calculations required by this Article VI, the Accountants may make reasonable assumptions and approximations concerning the application of Sections 280G and 4999 of the Code. WTWand the Participant shall furnish to the Accountants such information and documents as the Accountants may reasonably request to make a determination under this Article VI.

Section 6.05As expressly permitted by Q/A #32 of the Treasury Regulations under Code Section 280G, with respect to performing any present value calculations that are required in connection with this Article VI, the Participant and WTW each affirmatively elect to utilize the Applicable Federal Rates (“AFR”) that are in effect as of the date this Plan is adopted and the Accountants shall therefore use such AFR in their determinations and calculations.

Article VII

Plan administration

Section 7.02The Plan Administrator may delegate any of its duties hereunder to such person or persons from time to time as it may designate.

Section 7.04Following the occurrence of a Change in Control, WTW may not remove from office the individual or individuals who served as Plan Administrator immediately prior to the Change in Control; provided, however, if any such individual ceases to be affiliated with WTW, WTW may appoint another individual or individuals as Plan Administrator so long as the substitute Plan Administrator consists solely of an individual or individuals who (a) were officers of WTW immediately prior to the Change in Control, (b) were directors of WTW immediately prior to the Change in Control and are not affiliated with the acquiring entity in the Change in

Control or (c) were selected or approved in writing by an officer or director described in clause (a) or (b).

Article VIII

MISCELLANEOUS PROVISIONS

Section 8.03Successors’ Binding Obligation.

(c)The rights under this Plan shall inure to the benefit of and be enforceable by the Participant’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If the Participant shall die while any amounts would be payable to the Participant hereunder had the Participant continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Plan to such person or persons appointed in writing by the Participant to receive such amounts or, if no person is so appointed, to the Participant’s estate.

that this Plan may be amended as necessary and/or shall be subject to any recoupment policies adopted by WTW to comply with the requirements and/or limitations under the Dodd-Frank Act and any Recoupment Rules, or any other federal or stock exchange requirements, including by expressly permitting (or, if applicable, requiring) WTW to revoke, recover and/or clawback the benefits provided herein.

Section 8.05Notice.

If to the Participant:

To the most recent address of the Participant set forth in the personnel records of the Company

If to the Company:

Willis Towers Watson Public Limited Company

c/o Office of the General Counsel

200 Liberty Street, 7th Floor

New York, NY 10281

Attention: General Counsel

(b)A written notice of the Participant’s Date of Termination by the Company or the Participant, as the case may be, to the other, shall (i) indicate the specific termination provision in this Plan relied upon, (ii) to the extent applicable, set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Participant’s employment under the provision so indicated and (iii) specify the Date of Termination. The failure by the Participant or the Company to set forth in such notice any fact or circumstance which contributes to a showing of Good Reason or Cause shall not waive any right of the Participant or the Company hereunder or preclude the Participant or the Company from asserting such fact or circumstance in enforcing the Participant’s or the Company’s rights hereunder.

Section 8.06Employment with Subsidiaries. Employment with the Company for purposes of this Plan shall include employment with any Subsidiary.

without regard to the principle of conflicts of laws. The invalidity or unenforceability of any provision of this Plan shall not affect the validity or enforceability of any other provision of this Plan, which other provisions shall remain in full force and effect.

Section 8.10Code Section 409A. It is intended that this Plan shall comply with the provisions of Section 409A of the Code, and the Plan shall be interpreted and administered in a manner consistent with this intent. The Company reserves the right, to the extent the Company deems necessary or advisable in its sole discretion, to unilaterally amend or modify the Plan to ensure that all payments are made in a manner that complies with Section 409A of the Code (including, without limitation, the avoidance of penalties thereunder) to the extent permitted under Section 409A of the Code; provided, however, that the Company is under no obligation to make such amendment or modification and makes no representations that the payments hereunder will be exempt from any penalties that may apply under Section 409A of the Code and makes no undertaking to preclude Section 409A of the Code from applying to this Plan. Nothing in this Plan shall provide a basis for any person to take action against the Company or any affiliate thereof based on matters covered by Section 409A of the Code, including the tax treatment of any amount paid under the Plan, and neither the Company nor any of its affiliates shall under any circumstances have any liability to the Participant or the Participant’s estate or any other party for any taxes, penalties or interest due on amounts paid or payable under this Plan, including taxes, penalties or interest imposed under Section 409A of the Code.

Section 8.11Unfunded Plan. The Plan will not be required to be funded unless such funding is authorized by the Board in its sole discretion. Regardless of whether the Plan is funded, no Eligible Executive will have any right to, or interest in, any assets of WTW or the Company which may be applied by WTW or the Company, as applicable, to the payment of benefits or other rights under this Plan.

wltw-ex311_7.htm

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO

SECURITIES EXCHANGE ACT RULES 13a-14 AND 15d-14

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, John J. Haley, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Willis Towers Watson Public Limited Company;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules13a-15(f) and 15d-15(f)) for the registrant and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and to the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date: July 30, 2020

/s/ John J. Haley
John J. Haley
Chief Executive Officer

wltw-ex312_6.htm

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO

SECURITIES EXCHANGE ACT RULES 13a-14 AND 15d-14

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Michael J. Burwell, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Willis Towers Watson Public Limited Company;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

(a)

(b)

(c)

(d)

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and to the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

(a)

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date: July 30, 2020

/s/ Michael J. Burwell
Michael J. Burwell
Chief Financial Officer

wltw-ex321_8.htm

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

AND CHIEF FINANCIAL OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Each of the undersigned hereby certifies, in his capacity as an officer of Willis Towers Watson Public Limited Company (the “Company”), for purposes of 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of his knowledge:

•

The Quarterly Report of the Company on Form 10-Q for the period ended June 30, 2020, fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and

•

The information contained in such report fairly presents, in all material respects, the financial condition and results of operations of the Company.


Date: July 30, 2020

/s/ John J. Haley
John J. Haley
Chief Executive Officer

/s/ Michael J. Burwell
Michael J. Burwell
Chief Financial Officer

A signed original of this written statement required by Section 906 has been provided to Willis Towers Watson Public Limited Company and will be retained by Willis Towers Watson Public Limited Company and furnished to the Securities and Exchange Commission or its staff upon request.