Willis Reports Second Quarter Results

August 2, 2001

Global insurance broker Willis Group Holdings Limited is reporting strong revenue and earnings growth for the quarter and six months ended June 30, 2001. Revenues rose 8 percent to $337 million for the second quarter of 2001. On a constant currency basis, excluding the effects of foreign exchange, acquisitions and disposals, underlying revenues rose 12 percent.

For the quarter ended June 30, 2001, net income was $17 million, or $0.12 per diluted share, compared with a loss of $5 million, or $(0.04), last year. Cash net income, or net income excluding goodwill amortization, grew to $25 million in the quarter compared with $3 million a year ago. Cash net income per diluted share was $0.18 for the second quarter compared with $0.02 last year.

Operating margin in the second quarter doubled to 18 percent. Reported general and administrative expenses were 2 percent lower than the corresponding period last year. On a constant currency basis, adjusting for acquisitions and disposals, expenses rose by 4 percent.

For the six months ended June 30, 2001, revenues were $712 million, up 7 percent from a year ago. Revenues, on a constant currency basis, rose 11 percent in the first half of the year. Net income was $56 million, or $0.42 per diluted share, for the six months ended June 30, 2001 compared to $12 million, or $0.10, last year. Cash net income, or net income excluding goodwill amortization, rose to $73 million for the first half of 2001, from $29 million for the corresponding period of 2000. Cash net income per diluted share was $0.54 compared with $0.24 a year ago.

On June 12, 2001, Willis Group Holdings issued a total of 23 million shares in an initial public offering, priced at $13.50 per share. Proceeds from the offering, net of expenses, of $282 million have been used to repay all the $273 million preference shares outstanding. Further, as of June 30, 2001, Willis repurchased and cancelled approximately $26 million of outstanding 9 percent Senior Subordinated Notes. Willis has subsequently redeemed an additional $28 million of these notes.

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