WILLIS TOWERS WATSON PLC (WTW)

CIK: 0001140536. SIC: 6411 Insurance Agents, Brokers & Service. Latest 10-K as of: 2026-02-25.

SIC breadcrumb: Finance, Insurance, And Real Estate > SIC Major Group 64 > SIC 6411 Insurance Agents, Brokers & Service

SEC company page: https://www.sec.gov/edgar/browse/?CIK=1140536. Latest filing source: 0001193125-26-069307.

Selected Fundamentals

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-25. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001140536.json. Derived margins are computed from the extracted annual SEC facts.

Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Missing metrics are omitted rather than fabricated.

Financial Charts

Macro Cross-References

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• UNRATE - Unemployment Rate
• FEDFUNDS - Federal Funds Effective Rate
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• DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
• DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
• T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
• CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
• CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
• CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
• CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
• PCEPI - Personal Consumption Expenditures: Chain-type Price Index
• PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
• PPIACO - Producer Price Index by Commodity: All Commodities
• T10YIE - 10-Year Breakeven Inflation Rate
• U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
• PAYEMS - All Employees, Total Nonfarm
• CIVPART - Labor Force Participation Rate
• EMRATIO - Employment-Population Ratio
• UNEMPLOY - Unemployed
• CE16OV - Employment Level
• ICSA - Initial Claims
• JTSJOL - Job Openings: Total Nonfarm
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• GDPC1 - Real Gross Domestic Product
• A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
• INDPRO - Industrial Production: Total Index
• TCU - Capacity Utilization: Total Index
• HOUST - New Privately-Owned Housing Units Started: Total Units
• PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
• RSAFS - Advance Retail Sales: Retail Trade
• PCE - Personal Consumption Expenditures
• DSPIC96 - Real Disposable Personal Income
• PSAVERT - Personal Saving Rate
• M2SL - M2
• BOPGSTB - U.S. International Trade in Goods and Services: Balance

Latest 10-K MD&A

Extracted between Item 7 and the next Item 7A/8 heading after HTML sanitization. Confidence: high. Filing date: 2026-02-25. Report date: 2025-12-31.

ITEM 7. 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 Part I, Item 1A Risk Factors for 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.

Our methods of calculating these measures may differ from those used by other companies and therefore comparability may be limited. These financial measures should be viewed in addition to, not in lieu of, the consolidated financial statements for the year ended December 31, 2025.

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

Executive Overview

Impact of Market Conditions on Our Business

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

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

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

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

With regard to the market for exchanges, we believe that clients base their decisions on a variety of factors that include the role of health care coverage in recruiting/retaining employees and transitioning employees to retirement, the availability of price competitive individual insurance policies, the array of coverage choices available through the exchange provider and its ability to deliver measurable cost savings for corporate clients, and to both execute efficiently and deliver high quality service. Since the individual insurance market for Medicare policies is well-established and a significant portion of corporate employers have already implemented an exchange for their Medicare retirees, growth in this population segment will be derived from public employers and educational and other not-for-profit institutions. This growth may be more episodic in nature. Growth in other population segments is likely to remain low unless a more competitive individual insurance market emerges for these segments.

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Risks and Uncertainties of the Economic Environment

U.S. and global markets are continuing to experience uncertainty, volatility and disruption as a result of uncertain macroeconomic conditions including tariff actions and uncertainties relating to global trade, fluctuations in currency exchange rates, volatility in debt and equity markets, uncertainty around interest rates, softening consumer confidence and labor markets, changes in U.S. policies across a broad range of subjects and the speed with which such changes are or may be implemented, and the ongoing Russia-Ukraine and other geopolitical conflicts and tensions. Although the length and impact of these situations are highly unpredictable, the ongoing uncertainty and volatility of the global economy and capital markets, which has resulted in persistent inflation and fluctuating interest rates in many of the markets in which we operate, could accelerate recessionary pressures and continue to lead to further market disruptions. Further, in addition to the direct impact of the continuing dynamic tariff environment on our business (which we do not expect to be significant, so long as retaliatory actions do not extend to services), recent U.S. legislation and other U.S. federal government actions continue to create uncertainty for the business as well as accounting and tax matters. Other indirect impacts from changes in tariffs or from legislative or regulatory developments, such as changes in consumer sentiment, trade relations, economic activity, disruption of U.S. federal government operations, willingness to do business with U.S.-listed firms, inflationary pressures and employee distraction, among others, could negatively affect our business, operations and financial condition.

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

If our costs grow significantly in excess of our ability to raise revenue, whether as a result of the foregoing global economic factors or otherwise, our margins and results of operations may be materially and adversely impacted and we may not be able to achieve our strategic and financial objectives.

See Part I, Item 1A Risk Factors in this Annual Report on Form 10-K for a discussion of risks that may affect, among other things, our growth relative to expectation and our ability to achieve our objectives.

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For management’s discussion of our results of operations for the year ended December 31, 2024 in comparison with the year ended December 31, 2023, please see our Annual Report on Form 10-K filed with the SEC on February 25, 2025.

Financial Statement Overview

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

Consolidated Statements of Comprehensive Income

($ in millions, except per share data)

Years ended December 31,

2025

2024

Revenue

$

9,708

100

%

$

9,930

100

%

Costs of providing services

Salaries and benefits

5,625

58

%

5,502

55

%

Other operating expenses

1,408

15

%

1,833

18

%

Impairment (i)

—

—

%

1,042

10

%

Depreciation

226

2

%

230

2

%

Amortization

192

2

%

226

2

%

Restructuring costs

—

—

%

61

1

%

Transaction and transformation

23

—

%

409

4

%

Total costs of providing services

7,474

9,303

Income from operations

2,234

23

%

627

6

%

Interest expense

(260

)

(3

)%

(263

)

(3

)%

Other loss, net (i)

(21

)

—

%

(262

)

(3

)%

INCOME FROM OPERATIONS BEFORE INCOME TAXES AND

   INTEREST IN EARNINGS OF ASSOCIATES

1,953

20

%

102

1

%

Provision for income taxes

(318

)

(3

)%

(192

)

(2

)%

Interest in earnings of associates, net of tax

(22

)

—

%

2

—

%

Income attributable to non-controlling interests

(8

)

—

%

(10

)

—

%

NET INCOME/(LOSS) ATTRIBUTABLE TO WTW

$

1,605

17

%

$

(98

)

(1

)%

Diluted earnings/(loss) per share

$

16.26

$

(0.96

)

(i)
For the year ended December 31, 2024, Impairment and Other loss, net include goodwill-related impairment expense and loss on disposal, respectively, associated with the sale of our TRANZACT business (see Note 3 — Acquisitions and Divestitures within Item 8 of this Annual Report on Form 10-K).

Consolidated Revenue

We derive the majority of our revenue from commissions from our brokerage services and fees for consulting and administration services. No single client represented a significant concentration of our consolidated revenue for any of our three most recent fiscal years.

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

Geographic Region

% of Revenue

United States

46

%

United Kingdom

21

%

France

5

%

Canada

3

%

Germany

3

%

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

Transactional Currency

Revenue

Expenses (i)

U.S. dollars

54

%

47

%

Pounds sterling

13

%

20

%

Euro

16

%

14

%

Other currencies

17

%

19

%

(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 transformation.

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

Components of Revenue Change

As

Less:

Constant

Less:

Years Ended December 31,

Reported

Currency

Currency

Acquisitions/

Organic

2025

2024

Change

Impact

Change

Divestitures

Change (i)

($ in millions)

Revenue

$

9,708

$

9,930

(2)%

1%

(3)%

(8)%

5%

(i)
Interest income did not contribute to organic change for the year ended December 31, 2025.

Revenue for the year ended December 31, 2025 was $9.7 billion, compared to $9.9 billion for the year ended December 31, 2024, a decrease of $222 million, or 2%, on an as-reported basis. Adjusting for the impact of foreign currency and acquisitions and disposals, our organic revenue growth was 5% for the year ended December 31, 2025. The decrease in as-reported revenue was due primarily to the sale of our TRANZACT business on December 31, 2024. The increase in organic revenue was driven by strong performances in both segments. For additional information, please see the section entitled ‘Segment Revenue and Segment Operating Income’ elsewhere within this Item 7 of this Annual Report on Form 10-K.

Our revenue can be materially impacted by changes in currency conversions, which can fluctuate significantly over the course of a calendar year. For the year ended December 31, 2025, currency translation increased our consolidated revenue by $89 million. The primary currencies driving this change were the Euro and Pound Sterling.

Definitions of Constant Currency Change and Organic Change are included in the section entitled ‘Non-GAAP Financial Measures’ elsewhere within this Item 7 of this Annual Report on Form 10-K.

Segment Revenue and Segment Operating Income

Segment revenue excludes amounts that were directly incurred on behalf of our clients and reimbursed by them (reimbursed expenses); however, these amounts are included in consolidated revenue, as required by applicable accounting standards and SEC rules. Segment operating income excludes certain costs, including (i) amortization of intangibles; (ii) restructuring costs; and (iii) certain transaction and transformation expenses, and includes certain expense amounts which may be determined on both a direct and allocated basis. See Note 5 – Segment Information within Item 8 of this Annual Report on Form 10-K for more information about how our segment revenue and segment operating income is calculated and a reconciliation to our GAAP results.

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

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

Health, Wealth & Career

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

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HWC is the larger of the two segments of the Company, generating approximately 55% of our segment revenue for the year ended December 31, 2025. Addressing four key areas, Health, Wealth, Career and Benefits Delivery & Outsourcing (‘BDO’), the segment is focused on addressing our clients’ people and risk needs to help them succeed in a global marketplace.

The following table sets forth HWC segment revenue for the years ended December 31, 2025 and 2024, and the components of the change in revenue for the year ended December 31, 2025 from the year ended December 31, 2024.

Components of Revenue Change

As

Less:

Constant

Less:

Years ended December 31,

Reported

Currency

Currency

Acquisitions/

Organic

2025

2024

Change

Impact

Change

Divestitures

Change

($ in millions)

Segment revenue excluding interest income

$

5,225

$

5,745

(9)%

1%

(10)%

(14)%

4%

Interest income

29

32

Total segment revenue

$

5,254

$

5,777

(9)%

1%

(10)%

(14)%

4%

Segment operating income

$

1,681

$

1,717

HWC segment revenue for the years ended December 31, 2025 and 2024 was $5.3 billion and $5.8 billion, respectively. Health delivered organic revenue growth in all regions, led by double-digit increases across International which benefited from strong new business and geographic expansion. Wealth generated organic revenue growth from higher levels of Retirement work globally, alongside growth in our Investments business. Career reported revenue growth, largely driven by an uptick in advisory work in Europe and increased compensation survey sales globally. BDO increased primarily due to robust project and core administrative work in Europe, alongside higher commission revenue in Individual Marketplace.

HWC segment operating income for both the years ended December 31, 2025 and 2024 was $1.7 billion. HWC segment operating income declined slightly as improvements from operating efficiencies were offset by the operating income lost from sale of TRANZACT.

Risk & Broking (‘R&B’)

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

R&B generated approximately 45% of our segment revenue for the year ended December 31, 2025. The segment comprises two primary businesses - Corporate Risk & Broking and Insurance Consulting and Technology.

The following table sets forth R&B segment revenue for the years ended December 31, 2025 and 2024, and the components of the change in revenue for the year ended December 31, 2025 from the year ended December 31, 2024.

Components of Revenue Change

As

Less:

Constant

Less:

Years ended December 31,

Reported

Currency

Currency

Acquisitions/

Organic

2025

2024

Change

Impact

Change

Divestitures

Change

($ in millions)

Segment revenue excluding interest income

$

4,237

$

3,926

8%

1%

7%

—%

7%

Interest income

97

112

Total segment revenue

$

4,334

$

4,038

7%

1%

6%

—%

6%

Segment operating income

$

1,072

$

958

R&B segment revenue for the years ended December 31, 2025 and 2024 was $4.3 billion and $4.0 billion, respectively. Corporate Risk & Broking had organic revenue growth largely driven by the success of our global specialties model, with higher levels of new

50

business activity along with strong client retention across all regions. Insurance Consulting and Technology had modest organic revenue growth driven primarily by the Technology practice.

R&B segment operating income for the years ended December 31, 2025 and 2024 was $1.1 billion and $958 million, respectively. R&B segment operating income increased due primarily to operating leverage driven by strong organic revenue growth.

Costs of Providing Services

Total costs of providing services for the year ended December 31, 2025 were $7.5 billion, compared to $9.3 billion for the year ended December 31, 2024, a decrease of $1.8 billion, or 20%. See the following discussion for further details.

Salaries and Benefits

Salaries and benefits for the year ended December 31, 2025 were $5.6 billion, compared to $5.5 billion for the year ended December 31, 2024, an increase of $123 million, or 2%. The increase in the current year is primarily due to higher salary expense, driven by increased cost-of-living compensation adjustments, and higher share-based compensation costs.

Salaries and benefits, as a percentage of revenue, represented 58% and 55% for the years ended December 31, 2025 and 2024, respectively.

Other Operating Expenses

Other operating expenses include occupancy, legal, marketing, licenses, royalties, supplies, technology, printing and telephone costs, as well as insurance, including premiums on excess insurance and losses on professional liability claims, travel by colleagues, publications, professional subscriptions and development, recruitment, other professional fees and irrecoverable value-added and sales taxes.

Other operating expenses for the year ended December 31, 2025 were $1.4 billion, compared to $1.8 billion for the year ended December 31, 2024, a decrease of $425 million, or 23%. The decrease was primarily due to lower marketing expenses attributable to the sale of our TRANZACT business on December 31, 2024, decreased office expenses, and lower professional services and occupancy costs, partially offset by higher non-income-related tax expense for the current year as compared to the prior year.

Impairment

Impairment for the year ended December 31, 2024 was $1.0 billion. Impairment was attributable to the goodwill impairment associated with our Benefits Delivery & Outsourcing (‘BDO’) reporting unit related to the sale of our TRANZACT business (see Note 3 — Acquisitions and Divestitures within Item 8 of this Annual Report on Form 10-K).

Depreciation

Depreciation represents the expense incurred over the useful lives of our tangible fixed assets and internally-developed software. Depreciation for the year ended December 31, 2025 was $226 million, compared to $230 million for the year ended December 31, 2024, a decrease of $4 million, or 2%. The decrease was primarily due to a lower depreciable base of assets resulting from disposals associated with the Company’s Transformation program that concluded in the fourth quarter of 2024 and a lower dollar value of assets placed in service during the past few years.

Amortization

Amortization represents the amortization of acquired intangible assets, including customer relationships, trade names and internally-developed software. Amortization for the year ended December 31, 2025 was $192 million, compared to $226 million for the year ended December 31, 2024, a decrease of $34 million, or 15%. Our intangible amortization is generally more heavily weighted to the initial years of the useful lives of the related intangibles, and therefore amortization related to intangible assets has decreased and will continue to decrease over time.

Restructuring Costs

Restructuring costs for the year ended December 31, 2024 was $61 million and primarily related to the real estate rationalization component of our completed Transformation program (see Note 6 — Restructuring Costs within Item 8 of this Annual Report on Form 10-K).

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Transaction and Transformation

Transaction and transformation costs for the year ended December 31, 2025 were $23 million, compared to $409 million for the year ended December 31, 2024, a decrease of $386 million. Transaction and transformation costs in the current year were comprised of transaction-related costs, and costs incurred in the prior year primarily included consulting and compensation costs related to our completed Transformation program.

Income from Operations

Income from operations for the year ended December 31, 2025 was $2.2 billion, compared to $627 million for the year ended December 31, 2024, an increase of $1.6 billion. This increase resulted primarily from the current-year absence of impairment expense associated with the prior-year sale of our TRANZACT business (see Note 3 — Acquisitions and Divestitures within Item 8 of this Annual Report on Form 10-K), lower transformation and transaction costs due to the completion of our Transformation program during the fourth quarter of 2024, lower marketing expenses, decreased office expenses and lower professional services costs in the current year, partially offset by lower revenue due to the prior-year sale of our TRANZACT business.

Interest Expense

Interest expense for the years ended December 31, 2025 and 2024 was $260 million and $263 million, respectively. Interest expense, which is attributable primarily to our senior notes, decreased by $3 million for the year ended December 31, 2025, which was primarily due to a lower average level of indebtedness in the current year.

Other (Loss)/Income, Net

Other (loss)/income, net includes gains and losses on disposals of operations, pension credits or expenses that are not attributable to service expense, interest in earnings of associates, foreign exchange gains and losses and other miscellaneous non-operating income and costs.

Other (loss)/income, net for the year ended December 31, 2025 was a loss of $21 million, compared to a loss of $262 million for the year ended December 31, 2024, a decreased loss of $241 million. The decreased 2025 loss was primarily due to gains on disposals of operations in the current year, as compared to the significant loss on disposal in the prior year, which was attributable to the sale of our TRANZACT business, partially offset by lower pension income, which was a result of a significant pension settlement in the current year, and the recognition of a $750 million earnout related to the 2021 sale of our Willis Re business which was received during the first half of 2025 (see Note 3 — Acquisitions and Divestitures and Note 13 — Retirement Benefits within Item 8 of this Annual Report on Form 10-K).

Provision for Income Taxes

Provision for income taxes for the year ended December 31, 2025 was $318 million, compared to $192 million for the year ended December 31, 2024. The effective tax rates for the years ended December 31, 2025 and 2024 were 16.3% and 188.8%, respectively. These effective tax rates are calculated using extended values from our 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 includes a $79 million tax benefit adjustment related to both the final allocation of the Willis Re earnout received and a change in uncertain tax positions. The prior-year effective tax rate includes a $137 million tax benefit recognized on the sale of our TRANZACT business, partially offset with a $55 million provision for tax expense on the accrual for the Willis Re earnout and a $34 million provision for changes in uncertain tax positions.

In January 2026, the Organisation for Economic Co-operation and Development announced the release of a new package of administrative guidance under the Pillar Two global minimum tax rules (the ‘side-by-side’ (SbS) package). Key components of the package include a simplified effective tax rate safe harbor, an extension of the transitional country-by-country reporting safe harbor, a substance-based tax incentive safe harbor, a side-by-side safe harbor for certain multinational groups located in eligible jurisdictions, an ultimate parent entity safe harbor for eligible countries, and a commitment to focus on additional clarifications and simplifications. However, these new safe harbor rules do not affect the application of a qualified domestic minimum top-up tax. The Pillar Two minimum tax is treated as a period cost beginning in 2024 and does not have a material impact on the Company's financial results of operations for the current period. The Company continues to monitor evolving tax legislation as well as additional guidance to enacted legislation in the jurisdictions in which we operate.

Net Income/(Loss) Attributable to WTW

Net income attributable to WTW for the year ended December 31, 2025 was $1.6 billion, compared to a net loss of $98 million for the year ended December 31, 2024, an increase of $1.7 billion. This increase resulted primarily from the current-year absence of loss on disposal and impairment expense associated with the sale of our TRANZACT business (see Note 3 — Acquisitions and Divestitures

52

within Item 8 of this Annual Report on Form 10-K) in the prior year, lower transformation and transaction costs due to the completion of our Transformation program during the fourth quarter of 2024, and lower marketing expenses for the current year, partially offset by higher tax expense due to prior-year tax benefits attributable to the losses associated with the TRANZACT sale as well as lower revenue due to the sale.

Liquidity and Capital Resources

Executive Summary

Our principal sources of liquidity funding our short-term and long-term obligations at December 31, 2025 are funds generated by operating activities, available cash and cash equivalents and amounts available under our revolving credit facility and any new debt offerings. Our most significant long-term obligations include mandatory debt and related interest, operating leases and pension obligations and contributions to our qualified pension plans.

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

Based on our current balance sheet and cash flows, current market conditions and information available to us at this time, we believe that WTW has access to sufficient liquidity to meet our cash needs, including debt repayment, for the next twelve months. Including our cash generated from operations, our liquidity also includes all of the borrowing capacity available to draw against our recently-amended and restated $1.5 billion revolving credit facility and our recently-acquired $775 million delayed draw term loan. During the year ended December 31, 2025, we completed offerings of $700 million aggregate principal amount of 4.550% senior notes due 2031 and $300 million aggregate principal amount of 5.150% senior notes due 2036. The net proceeds from the 2025 senior notes offering, after deducting underwriter discounts and commissions and estimated offering expenses, were $989 million and were used to pay the consideration for our Newfront acquisition, which was completed on January 27, 2026, and related fees, costs and expenses. Any remaining proceeds, coupled with borrowings against our new delayed draw term loan, will be used to repay in full the $550 million aggregate principal amount of the 4.400% senior notes due 2026 and related accrued interest, and to fund additional acquisitions (see Note 3 — Acquisitions and Divestitures, Note 11 — Debt and Note 22 — Subsequent Events within Item 8 of this Annual Report on Form 10-K).

Additionally, under our minority ownership interest in a joint venture with Bain Capital, in connection with which we re-entered the reinsurance broking space during the fourth quarter of 2024, we have an option to acquire a controlling interest in the joint venture in the future. Given the initial funding needs of a start-up venture, we expect to make certain capital contributions from time to time resulting in a reduction to earnings until such time as the joint venture generates sufficient revenue to be profitable.

During the year ended December 31, 2025, we repurchased $1.6 billion of our outstanding shares and have authorization to repurchase an additional $1.3 billion under our share repurchase program (as further described below under ‘Share Repurchase Program’). We consider many factors, including market and economic conditions, applicable legal requirements and other business considerations, when considering whether to repurchase shares. Our Share Repurchase Program has no termination date and may be suspended or discontinued at any time.

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

Distributable Profits

We are required under Irish law to have available ‘distributable profits’ to make share repurchases or pay dividends to shareholders. Distributable profits are created through the earnings of the Irish parent company and, among other methods, through intercompany dividends or a reduction in share capital approved by the High Court of Ireland. Distributable profits are not linked to a U.S. GAAP reported amount (e.g. retained earnings). We believe that we will have sufficient distributable profits for the foreseeable future.

Tax considerations

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 the receipt of dividends or sale of investments. 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, the Company has not provided for deferred taxes on outside basis differences in our investments, as these outside basis differences can either be repatriated in a nontaxable manner or are considered permanently reinvested. If future events, including material changes in estimates of cash, working capital, long-term investment

53

requirements or additional legislation, necessitate that these earnings be distributed, an additional provision for income and foreign withholding taxes, net of credits, may be necessary. Other potential sources of cash may be through the settlement of intercompany loans or return of capital distributions in a tax-efficient manner.

Cash and Cash Equivalents

Our cash and cash equivalents at December 31, 2025 and 2024 totaled $3.1 billion and $1.9 billion, respectively. The significant changes in cash from December 31, 2024 to December 31, 2025 were due primarily to $1.8 billion of net cash from operations, $1.0 billion issuance of senior notes, receipt of the $750 million earnout related to the 2021 sale of our Willis Re business and $62 million associated with the settlement of a note receivable related to the sale of our Max Matthiessen subsidiary in 2020, partially offset by cash outflows of $1.6 billion of share repurchases, $358 million of dividend payments, $229 million of capital expenditures and capitalized software additions and $194 million of other investing outflows.

Additionally, at December 31, 2025 we had all of the borrowing capacity available to draw against our $1.5 billion revolving credit facility, which was amended and restated on October 17, 2025 (see Note 11 — Debt within Item 8 of this Annual Report on Form 10-K).

Included within cash and cash equivalents at December 31, 2025 and 2024 are amounts held for regulatory capital adequacy requirements, including $105 million and $104 million, respectively, within our regulated U.K. entities.

Summarized Consolidated Cash Flows

The following table presents the summarized consolidated cash flow information for the years ended:

Years ended December 31,

2025

2024

(in millions)

Net cash from/(used in):

Operating activities

$

1,775

$

1,512

Investing activities

447

250

Financing activities

(936

)

(459

)

INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH

1,286

1,303

Effect of exchange rate changes on cash, cash equivalents and restricted cash

203

(97

)

CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF

   YEAR (i)

4,998

3,792

CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF YEAR (i)

$

6,487

$

4,998

(i)
The amounts of the cash, cash equivalents and restricted cash, their respective classification on the consolidated balance sheets, as well as their respective portions of the increase or decrease in cash, cash equivalents and restricted cash for each of the periods presented, have been included in Note 21 — Supplemental Disclosures of Cash Flow Information within Item 8 of this Annual Report on Form 10-K.

Cash Flows From Operating Activities

Cash flows from operating activities were $1.8 billion for 2025, compared to $1.5 billion for 2024. The $1.8 billion net cash from operating activities for 2025 included net income of $1.6 billion and $873 million of favorable non-cash adjustments, partially offset by unfavorable changes in operating assets and liabilities of $711 million. The $873 million of favorable non-cash adjustments primarily includes impairment, depreciation, amortization and non-cash lease expense. This increase in cash flows from operations as compared to the prior year was primarily driven by operating margin expansion and lower Transformation program residual cash outflows.

Cash flows from operating activities of $1.5 billion for 2024 included a net loss of $88 million and $1.9 billion of favorable non-cash adjustments, partially offset by unfavorable changes in operating assets and liabilities of $326 million. The $1.9 billion of favorable non-cash adjustments primarily included impairment, depreciation, amortization and non-cash lease expense.

Cash Flows From Investing Activities

Cash flows from investing activities for the year ended December 31, 2025 were $447 million compared to cash flows from investing activities of $250 million for the year ended December 31, 2024. The cash flows from investing activities in the current year consisted primarily of net proceeds from sales of operations resulting from divestitures that occurred in prior years. These inflows were partially offset by capital expenditures, including software additions, our net purchases of held-to-maturity and available-for-sale securities and cash and fiduciary fund transfers.

54

Cash flows from investing activities of $250 million for the year ended December 31, 2024 consisted of proceeds of $619 million primarily from the sale of TRANZACT, partially offset by capital expenditures and capitalized software additions of $245 million and net cash paid for acquisitions of $104 million.

Cash Flows Used In Financing Activities

Cash flows used in financing activities for the year ended December 31, 2025 were $936 million. The significant financing activities included share repurchases of $1.6 billion and dividend payments of $358 million, partially offset by $984 million of net proceeds from the issuance of debt and net proceeds from fiduciary funds held for clients of $172 million.

Cash flows used in financing activities for the year ended December 31, 2024 were $459 million. The significant financing activities included share repurchases of $901 million and dividend payments of $354 million, partially offset by net proceeds from fiduciary funds held for clients of $785 million and $82 million of net proceeds from the issuance of debt.

Indebtedness

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

December 31,

2025

2024

(in millions)

Long-term debt

$

5,756

$

5,309

Current debt

550

—

Total debt

$

6,306

$

5,309

Total WTW shareholders’ equity

$

7,976

$

7,940

Capitalization ratio

44.2

%

40.1

%

At December 31, 2025, our mandatory debt repayments over the next twelve months include $550 million outstanding on our 4.400% senior notes, which will mature during the first quarter of 2026. In addition, our $1.5 billion revolving credit facility, which was set to expire on October 6, 2026, was replaced on October 17, 2025 by our third amended and restated $1.5 billion revolving credit facility (see Note 11 — Debt within Item 8 of this Annual Report on Form 10-K).

For more information regarding our current and long-term debt, please see ‘Supplemental Guarantor Financial Information’ elsewhere within this Item 7 of this Annual Report on Form 10-K.

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

Fiduciary Funds

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

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

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

55

Share Repurchase Program

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

On September 20, 2023, the board of directors approved a $1.0 billion increase to the existing share repurchase program. Additionally, on November 20, 2024, the board of directors approved a $1.0 billion increase to the existing share repurchase program, and on September 16, 2025, approved a $1.5 billion increase to the existing share repurchase program. These increases brought the total approved authorization, since April 20, 2016, to $11.7 billion. See Part II, Item 5 Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities in this Annual Report on Form 10-K for further information regarding the Company’s share repurchase program.

At December 31, 2025, approximately $1.3 billion remained on the current repurchase authority. The maximum number of shares that could be repurchased based on the closing price of our ordinary shares on December 31, 2025 of $328.60 was 3,931,099.

The following table presents specified information about the Company’s repurchases of ordinary shares for the year ended December 31, 2025:

Year ended

December 31, 2025

Shares repurchased

5,138,535

Average price per share

$321.10

Aggregate repurchase cost (excluding broker costs)

$1.6 billion

Dividends

Total cash dividends of $358 million were paid during the year ended December 31, 2025. In February 2026, the board of directors approved a quarterly cash dividend of $0.96 per share ($3.84 per share annualized rate), which will be paid on or around April 15, 2026 to shareholders of record as of March 31, 2026.

Capital Commitments

The Company’s capital expenditures for fixed assets and software were $229 million for the year ended December 31, 2025. Capital expenditures for fixed assets, capitalized software and software for internal use are expected to be in the range of $225 million to $250 million for the year ended December 31, 2026. We expect cash from operations to adequately provide for these cash needs.

Supplemental Guarantor Financial Information

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

a)
Willis North America Inc. (‘Willis North America’) has approximately $5.5 billion senior notes outstanding, of which $1.0 billion were issued on September 10, 2018, $1.0 billion were issued on September 10, 2019, $275 million were issued on May 29, 2020, $750 million were issued on May 19, 2022, $750 million were issued on May 17, 2023, $750 million were issued on March 5, 2024 and $1.0 billion were issued on December 22, 2025; and

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

56

The following table presents a summary of the entities that issue each note and those wholly-owned subsidiaries of the Company that guarantee each respective note on a joint and several basis as of December 31, 2025. These subsidiaries are all consolidated by Willis Towers Watson plc (the ‘parent company’) and together with the parent company comprise the ‘Obligor group’. On December 16, 2024, TA I Limited, Willis Towers Watson UK Holdings Limited and Willis Netherlands Holdings B.V. ceased to be guarantors of our notes and are no longer part of the Obligor group, following the transfer of their respective properties and assets to other existing guarantors within the Obligor group. Further, Willis Towers Watson UK Holdings Limited was released from its guarantees under our credit agreement. TA I Limited and Willis Netherlands Holdings B.V. are not guarantors under our amended and restated credit agreement (see Note 11 — Debt within Item 8 of this Annual Report on Form 10-K).

Entity

Trinity Acquisition plc Notes

Willis North America Inc. Notes

Willis Towers Watson plc

Guarantor

Guarantor

Trinity Acquisition plc

Issuer

Guarantor

Willis North America Inc.

Guarantor

Issuer

Willis Investment UK Holdings Limited

Guarantor

Guarantor

Willis Group Limited

Guarantor

Guarantor

Willis Towers Watson Sub Holdings Unlimited Company

Guarantor

Guarantor

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

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

•
rank equally with the issuer’s guarantee of all of the existing senior debt of the Company and the other guarantors, including any debt under the third amended and restated $1.5 billion 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 December 31, 2025 and 2024, the non-guarantor subsidiaries represented substantially all of the total assets and accounted for substantially all of the total revenue of the Company prior to consolidating adjustments. The non-guarantor subsidiaries have other liabilities, including contingent liabilities that may be significant. Each indenture does not contain any limitations on the amount of additional debt that the Obligor group and the non-guarantor subsidiaries may incur. The amounts of this debt could be substantial, and this debt may be debt of the non-guarantor subsidiaries, in which case this debt would be effectively senior in right of payment to the notes.

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

Intercompany balances and transactions between members of the Obligor group have been eliminated. All intercompany balances and transactions between the Obligor group and the non-guarantor subsidiaries have been presented in the disclosures below on a net presentation basis, rather than a gross basis, as this better reflects the nature of the intercompany positions and presents the funding or funded position that is to be received or owed. The intercompany balances and transactions between the Obligor group and non-guarantor subsidiaries, presented below, relate to a number of items including loan funding for acquisitions and other purposes, transfers of surplus cash between subsidiary companies, funding provided for working capital purposes, settlement of expense accounts, transactions related to share-based payment arrangements and share issuances, intercompany royalty and related arrangements, intercompany dividends and intercompany interest. At December 31, 2025 and 2024, the intercompany balances of the Obligor group with non-guarantor subsidiaries were net receivables of $1.9 billion and $1.0 billion, respectively, and net payables of $16.3 billion and $15.1 billion, respectively.

57

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

December 31, 2025

As of

December 31, 2024

(in millions)

Total current assets

$

398

$

290

Total non-current assets

1,931

1,050

Total current liabilities

7,733

6,254

Total non-current liabilities

15,068

14,442

Year ended

December 31, 2025

(in millions)

Revenue

$

2,242

Income from operations

2,015

Income from operations before income taxes and interest in earnings of associates (i)

924

Net income

1,164

Net income attributable to Willis Towers Watson

1,164

(i)
Includes intercompany expense, net of the Obligor group from non-guarantor subsidiaries of $552 million for the year ended December 31, 2025.

On January 7, 2026, the Company, together with Trinity Acquisition plc and Willis North America Inc. as borrowers, entered into a $775 million delayed draw term loan (see Note 22 — Subsequent Events within Item 8 of this Annual Report on Form 10-K).

Non-GAAP Financial Measures

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

Most Directly Comparable U.S. GAAP Measure

Non-GAAP Measure

As reported change

Constant currency change

As reported change

Organic change

Income from operations/margin

Adjusted operating income/margin

Net income/(loss)/margin

Adjusted EBITDA/margin

Net income/(loss) attributable to WTW

Adjusted net income

Diluted earnings/(loss) per share

Adjusted diluted earnings per share

Income from operations before income taxes and interest

   in earnings of associates

Adjusted income before taxes

Provision for income taxes/U.S. GAAP tax rate

Adjusted income taxes/tax rate

Net cash from operating activities

Free cash flow/margin

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

Within the measures referred to as ‘adjusted’, we adjust for significant items which will not be settled in cash, or which we believe to be items that are not core to our current or future operations. These items include the following:

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

•
Impairment – Adjustment to remove the non-cash goodwill impairment associated with our BDO reporting unit related to the sale of our TRANZACT business.

58

•
Provisions for specified litigation matters – We will include provisions for litigation matters which we believe are not representative of our core business operations. Among other things, we determine this by reference to the amount of the loss (net of insurance and other recovery receivables) and by reference to whether the matter relates to an unusual and complex scenario that is not expected to be repeated as part of our ongoing, ordinary business. These amounts are presented net of insurance and other recovery receivables. See the footnotes to the reconciliation tables below for more specificity on the litigation matter excluded from adjusted results.

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

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

•
Tax effect of significant adjustments – Relates to the incremental tax expense or benefit resulting from significant or unusual events including significant statutory tax rate changes enacted in material jurisdictions in which we operate, internal reorganizations of ownership of certain businesses that reduced the investment held by our U.S.-controlled subsidiaries and the recovery of certain refunds or payment of taxes related to businesses in which we no longer participate.

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 consolidated financial statements.

Constant Currency Change and Organic Change

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

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

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

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

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

Components of Revenue Change

As

Less:

Constant

Less:

Years ended December 31,

Reported

Currency

Currency

Acquisitions/

Organic

2025

2024

Change

Impact

Change

Divestitures

Change (i)

($ in millions)

Revenue

$

9,708

$

9,930

(2)%

1%

(3)%

(8)%

5%

(i)
Interest income did not contribute to organic change for the year ended December 31, 2025.

For the year ended December 31, 2025, our as-reported revenue decreased by $222 million, or 2%, and our organic revenue increased by 5%. The decrease in as-reported revenue was due primarily to the sale of our TRANZACT business on December 31, 2024. The

59

increases in organic revenue were driven by strong performances in both segments. For additional information, please see the section entitled ‘Segment Revenue and Segment Operating Income’ elsewhere within Item 7 of this Annual Report on Form 10-K.

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

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

Years Ended December 31,

2025

2024

($ in millions)

Income from operations

$

2,234

$

627

Adjusted for certain items:

Impairment

—

1,042

Amortization

192

226

Restructuring costs

—

61

Transaction and transformation

23

409

Provision for specified litigation matter (i)

—

13

Adjusted operating income

$

2,449

$

2,378

Income from operations margin

23.0

%

6.3

%

Adjusted operating income margin

25.2

%

23.9

%

(i)
Represents a provision related to litigation arising out of a structured insurance program originally placed for a client over 15 years ago. The program is of a type and complexity that was highly bespoke to the client and for that reason is unlikely to be exactly replicated elsewhere. Because of this, while we do not believe the potential litigation is material, we believe excluding this matter from adjusted results makes results more comparable from period to period and more representative of our core business operations.

Adjusted operating income for both the years ended December 31, 2025 and 2024 was $2.4 billion, an increase of $71 million. This increase resulted primarily due to lower marketing expenses attributable to the prior-year sale of our TRANZACT business, decreased office expenses and lower professional services costs in the current year, partially offset by lower revenue due to the prior-year sale of TRANZACT and higher salary 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/(loss) adjusted for provision for income taxes, interest expense, impairment, depreciation and amortization, restructuring costs, transaction and transformation, gains and losses on disposals of operations, net periodic pension and postretirement benefits and non-recurring items that, in management’s judgment, significantly affect the period-over-period assessment of operating results. Adjusted EBITDA margin is calculated by dividing adjusted EBITDA by revenue.

60

Reconciliations of net income/(loss) to adjusted EBITDA for the years ended December 31, 2025 and 2024 are as follows:

Years Ended December 31,

2025

2024

($ in millions)

NET INCOME/(LOSS)

$

1,613

$

(88

)

Provision for income taxes

318

192

Interest expense

260

263

Impairment

—

1,042

Depreciation

226

230

Amortization

192

226

Restructuring costs

—

61

Transaction and transformation

23

409

Provision for specified litigation matter (i)

—

13

Net periodic pension and postretirement benefits

46

(64

)

(Gain)/loss on disposal of operations

(40

)

337

Adjusted EBITDA

$

2,638

$

2,621

Net income/(loss) margin

16.6

%

(0.9

)%

Adjusted EBITDA margin

27.2

%

26.4

%

(i)
Represents a provision related to litigation arising out of a structured insurance program originally placed for a client over 15 years ago. The program is of a type and complexity that was highly bespoke to the client and for that reason is unlikely to be exactly replicated elsewhere. Because of this, while we do not believe the potential litigation is material, we believe excluding this matter from adjusted results makes results more comparable from period to period and more representative of our core business operations.

Adjusted EBITDA for both the years ended December 31, 2025 and 2024 was $2.6 billion, an increase of $17 million. This increase resulted primarily due to lower marketing expenses, decreased office expenses and lower professional services costs in the current year, partially offset by lower revenue due to the prior-year sale of our TRANZACT business, and lower pension income and higher salary expense in the current year.

Adjusted Net Income and Adjusted Diluted Earnings Per Share

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

Adjusted diluted earnings per share is defined as adjusted net income divided by the weighted-average number of ordinary shares, diluted. Adjusted diluted earnings per share is used to internally evaluate and assess our core operations and to benchmark our operating results against our competitors. When there is a net loss attributable to WTW for the period, basic and diluted shares and earnings per share are the same values.

61

Reconciliations of net income/(loss) attributable to WTW to adjusted diluted earnings per share for the years ended December 31, 2025 and 2024 are as follows:

Years Ended December 31,

2025

2024

($ and weighted-average shares in millions)

NET INCOME/(LOSS) ATTRIBUTABLE TO WTW

$

1,605

$

(98

)

Adjusted for certain items:

Impairment

—

1,042

Amortization

192

226

Restructuring costs

—

61

Transaction and transformation

23

409

Provision for specified litigation matter (i)

—

13

Net periodic pension and postretirement benefits

46

(64

)

(Gain)/loss on disposal of operations

(40

)

337

Tax effect on certain items listed above (ii)

(61

)

(254

)

Tax effect of significant adjustments

(79

)

(7

)

$

1,686

$

1,665

Weighted-average ordinary shares — diluted

99

102

Diluted earnings/(loss) per share

$

16.26

$

(0.96

)

Adjusted for certain items (iii):

Impairment

—

10.20

Amortization

1.95

2.21

Restructuring costs

—

0.60

Transaction and transformation

0.23

4.00

Provision for specified litigation matter (i)

—

0.13

Net periodic pension and postretirement benefits

0.47

(0.63

)

(Gain)/loss on disposal of operations

(0.41

)

3.30

Tax effect on certain items listed above (ii)

(0.62

)

(2.49

)

Tax effect of significant adjustments

(0.80

)

(0.07

)

Adjusted diluted earnings per share (iii)

$

17.08

$

16.29

(i)
Represents a provision related to litigation arising out of a structured insurance program originally placed for a client over 15 years ago. The program is of a type and complexity that was highly bespoke to the client and for that reason is unlikely to be exactly replicated elsewhere. Because of this, while we do not believe the potential litigation is material, we believe excluding this matter from adjusted results makes results more comparable from period to period and more representative of our core business operations.

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

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

Our adjusted diluted earnings per share increased for the year ended December 31, 2025 as compared to the year ended December 31, 2024 primarily due to lower marketing expenses, decreased office expenses and lower professional services costs in the current year, partially offset by lower revenue due to the prior-year sale of our TRANZACT business, and lower pension income and higher salary expense in the current year.

Adjusted Income Before Taxes and Adjusted Income Taxes/Tax Rate

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

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

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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 years ended December 31, 2025 and 2024 are as follows:

Years Ended December 31,

2025

2024

($ in millions)

INCOME FROM OPERATIONS BEFORE INCOME TAXES

   AND INTEREST IN EARNINGS OF ASSOCIATES

$

1,953

$

102

Adjusted for certain items:

Impairment

—

1,042

Amortization

192

226

Restructuring costs

—

61

Transaction and transformation

23

409

Provision for specified litigation matter (i)

—

13

Net periodic pension and postretirement benefits

46

(64

)

(Gain)/loss on disposal of operations

(40

)

337

Adjusted income before taxes

$

2,174

$

2,126

Provision for income taxes

$

318

$

192

Tax effect on certain items listed above (ii)

61

254

Tax effect of significant adjustments

79

7

Adjusted income taxes

$

458

$

453

U.S. GAAP tax rate

16.3

%

188.8

%

Adjusted income tax rate

21.1

%

21.3

%

(i)
Represents a provision related to litigation arising out of a structured insurance program originally placed for a client over 15 years ago. The program is of a type and complexity that was highly bespoke to the client and for that reason is unlikely to be exactly replicated elsewhere. Because of this, while we do not believe the potential litigation is material, we believe excluding this matter from adjusted results makes results more comparable from period to period and more representative of our core business operations.

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

Our U.S. GAAP tax rates were 16.3% and 188.8% for the years ended December 31, 2025 and 2024, respectively. The current-year U.S. GAAP effective tax rate includes a $79 million tax benefit adjustment related to both the final allocation of the Willis Re earnout received from the sale of our Willis Re business and a change in uncertain tax positions. The prior-year effective tax rate includes a $137 million tax benefit recognized on the sale of our TRANZACT business, partially offset with a $55 million provision for tax expense on the accrual for the Willis Re earnout and a $34 million provision for changes in uncertain tax positions.

Our adjusted income tax rates were 21.1% and 21.3% for the years ended December 31, 2025 and 2024, respectively.

Free Cash Flow/Margin

Free cash flow is defined as cash flows from operating activities less cash used to purchase fixed assets and software. Free cash flow margin, which we include on an annual basis as seasonal fluctuations in our revenue render it not meaningful during interim periods, is calculated by dividing free cash flow by revenue.

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

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

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

Years ended December 31,

2025

2024

(in millions)

Cash flows from operating activities

$

1,775

$

1,512

Less: Additions to fixed assets and software

(229

)

(245

)

Free cash flow

$

1,546

$

1,267

Revenue

$

9,708

$

9,930

Free cash flow margin

15.9

%

12.8

%

The increase in free cash flow during the current year was primarily driven by operating margin expansion and lower Transformation program residual cash outflows.

Critical Accounting Estimates

These consolidated financial statements conform to U.S. GAAP, which requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Our estimates, judgments and assumptions are continually evaluated based on available information and experience. Because of the use of estimates inherent in the financial reporting process, actual results could differ from those estimates. The areas that we believe include critical accounting estimates are revenue recognition, income taxes, commitments, contingencies and accrued liabilities, pension assumptions, and goodwill and intangible assets. The critical accounting estimates discussed below involve making difficult, subjective or complex accounting estimates that could have a material effect on our financial condition and results of operations. These critical accounting estimates require us to make assumptions about matters that are highly uncertain at the time of the estimate or assumption. Different estimates that we could have used, or changes in estimates that are reasonably likely to occur, may have a material effect on our results of operations and financial condition.

Revenue Recognition

We use significant estimates related to revenue recognition most commonly during our estimation of the transaction prices or where we recognize revenue over time on a proportional performance basis. A brief description of these policies and estimates is included below:

Estimation of transaction prices — This process occurs most frequently in certain broking transactions. In situations in which our fees are not fixed but are variable, we must estimate the likely commission per policy, taking into account the likelihood of cancellation before the end of the policy. For Medicare broking and Affinity arrangements, the commissions to which we will be entitled can vary based on the underlying individual insurance policies that are placed. For Medicare broking in particular, we base the estimates of transaction prices on supportable evidence from an analysis of past transactions, and only include amounts that are probable of being received or not refunded (referred to as applying ‘constraint’ under ASC 606, Revenue From Contracts With Customers). Prior to the sale of TRANZACT, we had direct-to-consumer Medicare broking arrangements. The estimate of the total renewal commissions received over the lifetime of the policy required significant judgment, and varied based on product type, estimated commission rates, the expected lives of the respective policies and other factors. The Company applied an actuarial model to account for these uncertainties, which was updated periodically based on actual experience. Each of these processes resulted in us estimating a transaction price that could have been significantly lower than the ultimate amount of commissions we would have collected. The transaction price was then adjusted over time as we received confirmation of our remuneration through receipt of commissions, or as other information became available.

Proportional performance basis over time recognition — Where we recognize revenue on a proportional performance basis, primarily in our consulting and outsourced administration arrangements, the amount we recognize is affected by a number of factors that can change the estimated amount of work required to complete the project, such as the staffing on the engagement and/or the level of client participation. Our periodic engagement evaluations require us to make judgments and estimates regarding the overall profitability and stages of project completion that, in turn, affect how we recognize revenue. We recognize a loss on an engagement when estimated revenue to be received for that engagement is less than the total estimated costs associated with the engagement.

Income Taxes

The Company recognizes deferred tax assets and liabilities for the estimated future tax consequences of events attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating and capital loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates in effect

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for the year in which the differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of changes in tax rates is recognized in the consolidated statement of comprehensive income in the period in which the change is enacted. Deferred tax assets are reduced through the establishment of a valuation allowance at such time as, based on available evidence, it is more likely than not that the deferred tax assets will not be realized. The Company adjusts valuation allowances to measure deferred tax assets at the amounts considered realizable in future periods, which is assessed at each balance sheet date. In making such determinations, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operating results. We place more reliance on evidence that is objectively verifiable.

Commitments, Contingencies and Accrued Liabilities

We have established provisions against various actual and potential claims, lawsuits and other proceedings relating principally to alleged errors and omissions in connection with the placement of insurance and reinsurance and the provision of consulting services in the ordinary course of business. Such provisions cover claims that have been reported but not paid and also claims that have been incurred but not reported. These provisions are established based on actuarial estimates together with individual case reviews and are believed to be adequate in the light of current information and legal advice. In certain cases, where a range of loss exists, we accrue the minimum amount in the range if no amount within the range is a better estimate than any other amount.

See Note 15 — Commitments and Contingencies in Item 8 within this Annual Report on Form 10-K.

Pension Assumptions

We maintain defined benefit pension plans for employees in several countries, with the most significant defined benefit plans offered in the U.S. and U.K. Our disclosures in Note 13 — Retirement Benefits within this Annual Report on Form 10-K contain additional information about our other less significant but material retirement plans. Within our critical accounting policy discussion, we have excluded analysis for plans outside of those noted in the description below, as any variance of recorded information based on management’s estimates would not be material.

Descriptions of our U.S. and U.K. plans, which comprise 87% of our projected benefit obligations and 88% of our plan assets, are below:

United States

Legacy broking business – This plan was frozen in 2009. Approximately 550 WTW employees in the United States have a frozen accrued benefit under this plan. On August 31, 2025, this plan, including all of its assets and participants, merged into the WTW Plan.

WTW Plan – Substantially all U.S. employees are eligible to participate in this plan. Benefits are provided under a stable value pension plan design. The original stable value design came into effect on January 1, 2012. Plan participants prior to July 1, 2017 earn benefits without having to make employee contributions, and all newly-eligible employees after that date were required to contribute 2% of pay on an after-tax basis to participate in the plan. Effective January 1, 2024, stable value benefits are earned under the same contributory formula for all eligible colleagues. To participate, plan participants are required to contribute 2% of eligible earnings (base salary only) on an after-tax basis.

United Kingdom

Legacy broking business – This plan covers approximately 400 WTW employees in the U.K. that were historically part of the broking business. The plan is now closed to new entrants. New employees in the U.K. are offered the opportunity to join a defined contribution plan.

Legacy consulting business – There are two benefit formulas covering different legacy consulting populations. Benefit accruals earned under the first plan formula (predominantly pension benefits) ceased on February 28, 2015, although benefits earned prior to January 1, 2008 retain a link to salary until the employee leaves the Company. Benefit accruals earned under the second plan formula (predominantly lump sum benefits) were frozen on March 31, 2008. All participants now accrue defined contribution benefits.

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The determination of the Company’s obligations and annual expense under the plans is based on a number of assumptions that, given the longevity of the plans, are long-term in focus. A change in one or a combination of these assumptions could have a material impact on our projected benefit obligation. However, certain of these changes, such as changes in the discount rates and other actuarial assumptions, are not recognized immediately in net income, but are instead recorded in other comprehensive income. The accumulated gains and losses not yet recognized in net income are amortized into net income as a component of the net periodic benefit cost/(credit) over the average remaining service period or average remaining life expectancy, as appropriate, of the plan’s participants to the extent that the net gains or losses as of the beginning of the year exceed 10% of the greater of the market-related value of plan assets or the projected benefit obligation.

WTW considers several factors prior to the start of each fiscal year when determining the appropriate annual assumptions, including economic forecasts, relevant benchmarks, historical trends, portfolio composition and peer company comparisons. These assumptions, used to determine our pension liabilities and pension expense, are reviewed annually by senior management and changed when appropriate. A discount rate will be changed annually if underlying rates have moved, whereas an expected long-term return on assets will be changed less frequently as longer-term trends in asset returns emerge or long-term target asset allocations are revised. To calculate the discount rate, we use the granular approach to determining service cost and interest cost. The expected rate of return assumptions for all plans are supported by an analysis of the weighted-average yield expected to be achieved with the anticipated makeup of investments. We have allowed for actual and known inflation in preparing our estimates. Other material assumptions include rates of participant mortality, and the expected long-term rates of compensation and pension increases.

Funding is based on actuarially determined contributions and is limited to amounts that are currently deductible for tax purposes, or as agreed to with the plan trustees for the U.K. plans. Since funding calculations are based on different measurements than those used for accounting purposes, pension contributions are not equal to net periodic benefit cost.

We recorded a combined $109 million net periodic benefit cost for our U.S. and U.K. plans for the year ended December 31, 2025. For the U.S. and U.K. plans, the following table presents our estimated net periodic benefit cost for 2025 and the impact to both plans of a 0.25% increase and decrease to both the expected return on assets (‘EROA’) and the discount rate assumptions; and the projected benefit obligations as of December 31, 2025 and the impact of a 0.25% increase and decrease to the discount rates:

Totals -

current estimates

Impact of 0.25% change to

EROA

Impact of 0.25% change to

discount rate

Increase

Decrease

Increase

Decrease

Estimated 2026 expense:

U.S. Plans

$

21

$

(8

)

$

8

$

(8

)

$

9

U.K. Plans

$

4

$

(7

)

$

7

$

(1

)

$

1

Projected benefit obligation at December 31, 2025:

U.S. Plans

$

3,550

N/A

N/A

$

(87

)

$

91

U.K. Plans

$

2,438

N/A

N/A

$

(69

)

$

72

Economic factors and conditions often affect multiple assumptions simultaneously, and the effects of changes in key assumptions are not necessarily linear.

Goodwill and Intangible Assets — Impairment Review

In applying the acquisition method of accounting for business combinations, amounts assigned to identifiable assets and liabilities acquired were based on estimated fair values as of the date of acquisition, with the remainder recorded as goodwill. Intangible assets are initially valued at fair value using generally accepted valuation methods appropriate for the type of intangible asset. Intangible assets with definite lives are amortized over their estimated useful lives and are reviewed for impairment if indicators of impairment arise. Intangible assets with indefinite lives are tested for impairment annually as of October 1, and whenever indicators of impairment arise. The fair value of the intangible assets is compared with their carrying value and an impairment loss would be recognized for the amount by which the carrying amount exceeds the fair value. Goodwill is tested for impairment annually as of October 1, and whenever indicators of impairment arise.

Goodwill is tested at the reporting unit level and in accordance with the relevant accounting standards, a company has the option to perform the test qualitatively or to proceed directly to a quantitative test. As discussed in Note 3 — Acquisitions and Divestitures within Item 8 of this Annual Report on Form 10-K, in connection with the sale of TRANZACT, completed on December 31, 2024, the Company recorded a $1.0 billion non-cash goodwill impairment charge on the BDO reporting unit during the third quarter of 2024. The BDO reporting unit goodwill after impairment is approximately $1.2 billion. After reflecting the impairment and the sale of TRANZACT, the fair value of the remaining reporting unit was estimated to be significantly in excess of its carrying value, and in 2025, the reporting unit was combined with another reporting unit which reduced the number of reporting units from seven at October 1, 2024 to six at October 1, 2025.

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Due to the substantial excess of the fair value for each reporting unit determined at October 1, 2024 over the respective carrying values of the six reporting units at October 1, 2025, the Company performed a qualitative impairment test for all reporting units and confirmed that it was highly unlikely that a quantitative test of fair value at October 1, 2025 would result in an impairment.

The Company continuously monitors and evaluates relevant events and circumstances that could unfavorably impact the significant assumptions noted above, including changes to the regulatory environment, general industry, market and macro-economic conditions and recent market valuations from transactions of comparable companies. It is possible that future changes in such circumstances, or in the inputs or assumptions used in estimating the fair value of the reporting unit, could require the Company to record a non-cash impairment charge.

To perform the qualitative test, the Company considered numerous factors besides the substantial excess of fair value as determined during 2024, including the financial performance and updated projections for each reporting unit, macroeconomic conditions, industry and market conditions, the impact of any significant acquisitions or dispositions and the performance of the Company's share price.

67