01—Abstract
Summary
Summary of the 10-K/A filed June 6, 2018. Cited figures are marked; the original filing is the authoritative source.
Willis Towers Watson Public Limited Company filed this Amendment No. 1 on Form 10-K/A to amend its Annual Report for the year ended December 31, 2017, originally filed February 28, 2018.
The amendment adds a paragraph to Deloitte & Touche LLP's audit opinion describing procedures on the 2017 segment structure changes and the retrospective adoption of ASU 2016-09. It also includes new principal executive and financial officer certifications, updated XBRL based on the 2017 taxonomy, and new auditor consents. The filing states that no other changes were made to the original filing.
The amended financial statements show total revenues of $8,202 milliona for 2017, up from $7,887 million in 2016, and income from operations of $738 million, up from $551 million. Net income attributable to Willis Towers Watson was $568 million, compared with $420 million in 2016, and diluted earnings per share were $4.18, compared with $3.04. Net cash from operating activities was $862 million, versus $933 million in 2016.
Cash and cash equivalents were $1,030 millionb at year-end, and total assets were $32,458 million. Long-term debt was $4,450 million, and the company repurchased shares for $532 million. The filing also highlights several contingencies and items affecting results.
These include a $120 millionc Stanford-related settlement payment that will not be made until the appeals are resolved, a $40 million Houston pension-advice settlement subject to documentation and city council approval, and ongoing U.K. Competition & Markets Authority, European Commission and FCA investigations for which no loss estimate is provided. U.S. Tax Reform produced a provisional net income tax benefit of $204 million in 2017.
02—Key points
Key Highlights
- Revenue rose to $8,202 million in 2017 from $7,887 million in 2016, and income from operations increased to $738 million from $551 million.
- Net income attributable to Willis Towers Watson was $568 million, and diluted EPS was $4.18, compared with $420 million and $3.04 in 2016.
- Cash from operating activities was $862 million in 2017, down from $933 million in 2016, and cash and equivalents ended the year at $1,030 million.
- Total segment operating income was $1,786 million across the HCB, CRB, IRR and BDA segments, compared with $1,693 million in 2016.
- The company recorded a provisional net income tax benefit of $204 million from U.S. Tax Reform, with a $70 million one-time transition tax expense.
- Long-term debt was $4,450 million at December 31, 2017, and the company returned capital through $532 million of share repurchases and $277 million of dividends paid.
- Pending matters include a $120 million Stanford settlement payable only after appeals are decided and a $40 million Houston settlement subject to finalization, plus U.K. and EU regulatory investigations with no estimated loss range.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-K/AFY2017filed June 6, 2018Financial Statements
FY2017 against FY2016
| Line item | FY2017FY2016 | Change |
|---|---|---|
| Revenue | $8.20B$7.89B | +4.0% |
| Operating Expenses | $7.69B$7.54B | +1.9% |
| Operating Income | $516.00M$348.00M | +48.3% |
| Interest Expense | $188.00M$184.00M | +2.2% |
| Net Income | $568.00M$420.00M | +35.2% |
| EPS (Basic) | $4.21$3.07 | +37.1% |
| EPS (Diluted) | $4.18$3.04 | +37.5% |
| Shares Outstanding (Basic) | 135.00M137.00M | −1.5% |
| Shares Outstanding (Diluted) | 136.00M138.00M | −1.4% |
05—Questions
Frequently Asked Questions
Why was this 10-K/A filed?
The company filed the amendment solely to add a paragraph to its auditor's opinion describing Deloitte & Touche LLP's procedures on the 2017 segment structure adjustments and the retrospective adoption of ASU 2016-09. It also updated the XBRL information to the 2017 taxonomy, included new officer certifications, and added new auditor consents. The filing states that no other changes were made.
How did revenue and profitability change in 2017?
Total revenues increased to $8,202 million from $7,887 million, and income from operations rose to $738 million from $551 million. Net income attributable to Willis Towers Watson was $568 million, compared with $420 million, and diluted EPS was $4.18, compared with $3.04.
What legal and regulatory matters could affect the company?
The Stanford litigation settlement requires a $120 million payment that will not be made until the appeals are decided in the company's favor. A $40 million settlement with the City of Houston is subject to documentation and city council approval. The company also faces a U.K. Competition & Markets Authority investment consulting investigation, a European Commission civil proceeding on aviation and aerospace broking, and an FCA market study, and it cannot estimate a reasonably possible loss for these.
What was the effect of U.S. Tax Reform on 2017 results?
The company recorded a provisional net income tax benefit of $204 million, which includes a $208 million benefit from the lower federal corporate tax rate and a $76 million benefit from releasing a deferred tax liability. These were partly offset by $8 million of provisional expense and a $72 million federal and state transition tax expense on foreign earnings, which the company intends to pay over eight years without interest.
06—Continue