Willis Reports Record Q4, Full Year Earnings

February 13, 2002

Global insurance broker Willis Group Holdings Limited reported record revenue and operating earnings growth for both the fourth quarter and year ended December 31, 2001.

“Operating cash earnings for the fourth quarter, or net income excluding goodwill amortization, a non-cash charge for performance-based stock options and non-recurring items, rose 172% to $49 million, or $0.30 per diluted share, compared to $18 million, or $0.15 per diluted share, in the corresponding period a year ago. Operating cash earnings for the year rose 172% to $147 million, or $0.99 per diluted share, compared with $54 million, or $0.45 per diluted share, a year ago,” said the company’s announcement.

It noted the following “Operating highlights:”

— Operating cash earnings per diluted share for the quarter doubled to $0.30 from $0.15 last year, and rose 120% to $0.99 per diluted share from $0.45 for 2001
— Operating cash earnings increased 172% to $49 million in the quarter from $18 million a year ago, and also rose 172% to $147 million in 2001 from $54 million last year.
— Organic revenues grew 14% in the quarter, and rose 12% for 2001.
— Operating margin increased to 26% in the quarter from 15% a year ago, and was 21% for 2001 compared to 13% last year.
— EBITDA margin rose to 30% from 20% for the fourth quarter, and full year EBITDA margin was 26%, up from 19% last year.

Controllable expenses were flat in 2001 compared to last year.

Joe Plumeri, Willis Chairman and CEO, was clearly pleased. “Our performance confirms Willis’ status as a premier global broker and client advocate,” Plumeri stated. “Despite challenging market conditions – marked by reduced capacity, tighter underwriting terms and significant premium rate increases – Willis continues to negotiate this environment successfully on behalf of our clients. In turn, we are benefiting from heightened demand for brokerage and other risk management services.”

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