Willis Posts $107 Million Q2 Net Income; $332 Million 1st Half

August 3, 2012

Willis Group Holdings plc reported its results for the quarter and six months ended June 30, 2012.

Selected highlights for the second quarter were listed as follows:
— Earnings per diluted share from continuing operations of $0.61 compared to $0.48 in second quarter of 2011; adjusted earnings per diluted share from continuing operations of $0.59 compared to $0.61 in year ago quarter;
— commissions and fees decreased 2 percent compared with the second quarter of 2011;
— organic growth in commissions and fees of 2 percent; led by 7 percent organic growth in Global Segment;
— operating margin of 21.3 percent compared to 18.1 percent in second quarter of 2011; adjusted operating margin of 20.7 percent compared to 21.5 percent in year ago quarter;
— repurchased 1,040,000 shares for approximately $37 million during the quarter.
— Net income from continuing operations for the quarter ended June 30, 2012 was $107 million, or $0.61 per diluted share, compared with $84 million, or $0.48 per diluted share, in the same period a year ago.
— Net income in the second quarter of 2012 was positively impacted by a $5 million insurance recovery related to previously disclosed fraudulent activity. — Net income in the second quarter of 2011 was reduced by charges amounting to $18 million and $11 million related to the 2011 Operational Review and a regulatory settlement, respectively.
— Adjusted net income from continuing operations, which excludes the after-tax impact of those items discussed above, for the quarter ended June 30, 2012 was $104 million, or $0.59 per diluted share, compared with $107 million, or $0.61 per diluted share, in the same period a year ago

Selected highlights for the first six months of 2012 were listed as follows:
— Net income from continuing operations, for the six months ended June 30, 2012 was $332 million, or $1.89 per diluted share, compared with $119 million, or $0.68 per diluted share, in the same period a year ago. Reported net income for the first six months of 2012 and 2011 was impacted by certain items, as detailed in note 5 of the supplemental financial information.
— Adjusted earnings from continuing operations per diluted share, which excludes the impact of items detailed in note 5 of the supplemental financial information, was $1.91 for the six months ended June 30, 2012 compared with $1.89 in the comparable period of 2011. Foreign currency movements increased earnings by $0.04 per diluted share in the six months ended June 30, 2012 compared to the same period in 2011.
— Total commissions and fees were $1,842 million for the first six months 2012, flat compared to $1,851 million for the first six months of 2011. Organic growth in commissions and fees was 2 percent in the first half of 2012 compared with the comparable period of 2011. Excluding the impact of Loan Protector, organic commissions and fees grew 3 percent compared to the same period in 2011.
— Operating margin was 26.7 percent for the six months ended June 30, 2012 compared with 21.1 percent for the same period last year. Excluding items detailed in note 4 of the supplemental financial information, adjusted operating margin was 27.2 percent for the first half of 2012 compared with 27.7 percent a year ago.

Chairman and CEO Joe Plumeri commented: “The second quarter brought with it modest top-line growth and, more importantly, going forward, we are moving past many of the difficult comparable items that make it harder to see the progress we’ve made in the first half of this year.

“Strong results in our Global segment led the way and, looking forward, robust sales pipelines and increased recruitment of new producers are evident across our businesses and are providing momentum going into the second half of the year. The global economy continues to be challenging, but the reports from our business heads each show positive developments which we will be sharing with our investors on our earnings conference call.”

Source: Willis Group Holdings plc

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