<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the Quarter ended September 30, 2000
----------
WILLIS GROUP LIMITED
(Translation of registrant's name into English)
Ten Trinity Square, London EC3P 3AX
(Address of principal executive offices)
----------
(Indicate by check mark whether the registrant files or will
file annual reports under cover of Form 20-F or Form 40-F.)
Form 20-F __x Form 40-F __
(Indicate by check mark whether the registrant by furnishing the
information contained in this form is also thereby furnishing the
information to the Commission pursuant to Rule 12g3-2(b) under the
Securities Exchange Act of 1934.)
Yes __ No __x
(If `"Yes'" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b): 82-________.)
================================================================================
<PAGE>
WILLIS GROUP LIMITED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(in millions of pounds sterling)
(unaudited)
<TABLE>
<CAPTION>
Three months ended September 30, Nine months ended September 30,
------------------------------- ------------------------------
2000 1999 2000 1999
-------------- -------------- ------------- -------------
<S> <C> <C> <C> <C>
Operating revenues
Commissions and fees ....................................... 186.6 163.4 589.3 525.0
Interest and investment income ............................. 11.9 9.6 31.9 29.3
-------------- -------------- ------------- -------------
198.5 173.0 621.2 554.3
Operating expenses ......................................... (178.9) (178.7) (536.4) (524.0)
Operating expenses -- pensions review (Note 2) ............. --- --- --- (15.0)
-------------- -------------- ------------- -------------
Operating income/(loss) .................................... 19.6 (5.7) 84.8 15.3
Share of (loss)/profit of associates ....................... (0.6) 0.9 8.9 10.2
Interest receivable (Note 3) ............................... 15.1 14.3 43.5 43.2
Interest payable ........................................... (15.2) (13.7) (42.9) (41.3)
Profit on disposal of operations ........................... 0.2 0.5 0.2 1.0
-------------- -------------- ------------- -------------
Income/(loss) before taxation .............................. 19.1 (3.7) 94.5 28.4
Taxation (5.5) 1.2 (29.2) (10.1)
-------------- -------------- ------------- -------------
Income/(loss) after taxation ............................... 13.6 (2.5) 65.3 18.3
Minority interests ......................................... 0.6 0.5 0.7 (0.7)
-------------- -------------- ------------- -------------
Net income/(loss) (i) ...................................... 14.2 (2.0) 66.0 17.6
============== ============== ============= =============
Net income/(loss) per ordinary share (i) ................... 3.0p (0.4)p 13.9p 3.7p
============== ============== ============= =============
Average number of ordinary shares outstanding (in millions) 476.1 469.1 476.1 469.1
============== ============== ============= =============
</TABLE>
---------------
(i) A summary of the significant adjustments to net income that would be
required if United States generally accepted accounting principles were to
be applied instead of those generally accepted in the United Kingdom is
set forth in Note 6 of Notes to Condensed Financial Statements.
CONSOLIDATED STATEMENT OF TOTAL RECOGNIZED GAINS AND LOSSES
(in millions of pounds sterling)
(unaudited)
<TABLE>
<CAPTION>
Nine months ended
Three months ended September 30, September 30,
------------------------------- --------------------
2000 1999 2000 1999
-------------- ------------- -------- -------
<S> <C> <C> <C> <C>
Net income/(loss) ..................................................... 14.2 (2.0) 66.0 17.6
Currency translation differences ...................................... (14.3) 26.4 (46.9) 1.4
-------------- ------------- -------- -------
Total recognized gains and losses (ii) ................................ (0.1) 24.4 19.1 19.0
============== ============= ======== =======
</TABLE>
---------------
(ii) A statement of Comprehensive Income under U.S. GAAP is set forth in Note 6
of Notes to Condensed Financial Statements.
The Notes to Condensed Financial Statements are an integral part of these
Condensed Consolidated Financial Statements.
2
<PAGE>
WILLIS GROUP LIMITED AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(in millions of pounds sterling)
(unaudited)
<TABLE>
<CAPTION>
September 30, December 31,
2000 1999(i)
---------------- ---------------
<S> <C> <C>
ASSETS
Current assets
Cash and short-term deposits ............................................................. 449.8 329.3
Investments .............................................................................. 325.7 294.5
Receivables .............................................................................. 4,620.1 3,878.6
---------------- ---------------
5,395.6 4,502.4
================ ===============
Fixed assets
Intangible assets ........................................................................ 31.6 30.1
Tangible assets .......................................................................... 128.8 135.7
Investments .............................................................................. 49.1 46.6
---------------- ---------------
209.5 212.4
---------------- ---------------
Total assets .............................................................................. 5,605.1 4,714.8
================ ===============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Trade payables ........................................................................... 3,832.9 2,985.6
Corporate tax ............................................................................ 47.2 29.8
Accruals and deferred income ............................................................. 72.3 72.8
Bank loans and overdrafts ................................................................ 0.4 1.6
Other current liabilities ................................................................ 760.4 746.3
---------------- ---------------
4,713.2 3,836.1
---------------- ---------------
Noncurrent liabilities
Bank loans ............................................................................... 287.2 270.1
9% Senior Subordinated Notes due 2009 .................................................... 367.2 334.6
Other noncurrent liabilities ............................................................. 37.3 36.6
---------------- ---------------
691.7 641.3
---------------- ---------------
Provisions for liabilities and charges .................................................... 111.5 124.5
Minority interests ........................................................................ 10.2 11.1
---------------- ---------------
Total liabilities and minority interests .................................................. 5,526.6 4,613.0
Shareholders' equity (ii)
Share capital ............................................................................ 59.5 59.5
Share premium ............................................................................ 118.0 118.0
Revaluation reserve ...................................................................... 14.9 14.9
Retained deficit ......................................................................... (113.9) (90.6)
---------------- ---------------
78.5 101.8
---------------- ---------------
Total liabilities and shareholders' equity ................................................ 5,605.1 4,714.8
================ ===============
</TABLE>
---------------
(i) The balance sheet at December 31, 1999 has been derived from the audited
financial statements at that date but does not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements.
(ii) A summary of the significant adjustments to shareholders' equity that
would be required if United States generally accepted accounting
principles were to be applied instead of those generally accepted in the
United Kingdom is set forth in Note 6 of Notes to Condensed Financial
Statements.
The Notes to Condensed Financial Statements are an integral part of these
Condensed Consolidated Financial Statements.
3
<PAGE>
WILLIS GROUP LIMITED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASHFLOWS
(in millions of pounds sterling)
(unaudited)
<TABLE>
<CAPTION>
Nine months ended
September 30,
----------------------
2000 1999
-------- ---------
<S> <C> <C>
Net cash inflow from operating activities ............................................................... 209.7 116.3
Dividends from associated undertakings .................................................................. 3.0 2.2
Returns on investments and servicing of finance
Interest received ...................................................................................... 52.3 42.4
Interest paid .......................................................................................... (49.2) (39.9)
Minority dividends paid ................................................................................ (0.5) (1.1)
Bank fees on borrowings ................................................................................ (0.4) (4.7)
-------- ---------
2.2 (3.3)
-------- ---------
Taxation ................................................................................................ (8.9) (5.7)
Capital expenditure and financial investment
Purchase of tangible fixed assets ...................................................................... (12.0) (20.4)
Sale of tangible fixed assets .......................................................................... 2.9 5.5
Purchase of fixed asset investments .................................................................... (0.2) (0.5)
Sale of fixed asset investments ........................................................................ --- 0.8
-------- ---------
(9.3) (14.6)
-------- ---------
Acquisitions and disposals
Purchase of subsidiaries ............................................................................... (7.1) (5.2)
Purchase of associates ................................................................................. (0.8) (10.3)
Sale of subsidiaries ................................................................................... 0.3 8.5
Net cash transferred on purchase/sale of subsidiaries .................................................. 2.4 (0.3)
-------- ---------
(5.2) (7.3)
-------- ---------
Equity dividends paid ................................................................................... (6.8) (10.0)
-------- ---------
Cash flow before management of liquid resources and financing ........................................... 184.7 77.6
Management of liquid resources .......................................................................... (88.7) (62.3)
Financing
Amounts due to/from parent company ..................................................................... (58.1) 15.2
Debt due within a year:
Decrease in short-term borrowings..................................................................... --- (348.5)
Debt due beyond a year:
(Decrease)/increase in long-term borrowings........................................................... (8.6) 319.4
-------- ---------
(66.7) (13.9)
-------- ---------
Increase in cash ........................................................................................ 29.3 1.4
======== =========
</TABLE>
---------------
The significant differences between the consolidated statement of cash flows
presented above and that required under U.S. GAAP are described in Note 6 of
Notes to Condensed Financial Statements.
The Notes to Condensed Financial Statements are an integral part of these
Condensed Consolidated Financial Statements
4
<PAGE>
WILLIS GROUP LIMITED AND SUBSIDIARIES
NOTES TO CONDENSED FINANCIAL STATEMENTS
(in millions of pounds sterling)
(unaudited)
Note 1 -- Basis of preparation
These condensed consolidated financial statements, which are unaudited, have
been prepared in accordance with U.K. GAAP and the accounting policies
described in the Company's audited consolidated financial statements for the
year ended December 31, 1999. In the opinion of the Company's management, all
adjustments (consisting of normal recurring accruals) considered necessary for
a fair presentation have been included. Operating results for the nine months
ended September 30, 2000 are not necessarily indicative of the results that
may be expected for the year ending December 31, 2000.
The company prepares its financial statements in pounds sterling. The
following U.S. dollar exchange rates have been used in preparing these
financial statements:
<TABLE>
<CAPTION>
2000 1999
-------- --------
<S> <C> <C>
Average rate : nine months ended September 30 $1.54 $1.61
Closing rate : September 30 $1.48 $1.65
December 31 --- $1.62
</TABLE>
Note 2 -- Operating expenses -- pensions review
An exceptional charge of L15.0 million was recorded in the second quarter of
1999 relating to further provisions made in connection with the review of UK
personal pension plans sold between 1988 and 1994.
Note 3 -- Interest receivable
Substantially all the Group's external borrowings have been advanced to the
Company's parent company, Trinity Acquisition Limited. Interest receivable on
the amounts advanced has been disclosed separately from interest receivable on
other funds, which is included in operating revenues.
Note 4 -- Reconciliation of operating income to net cash inflow from operating
activities
<TABLE>
<CAPTION>
Nine months ended
September 30,
-----------------------
2000 1999
- -------- ---------
<S> <C> <C>
Operating income ....................................................................................... 84.8 15.3
Increase in pensions review provision .................................................................. --- 15.0
Depreciation and amortization .......................................................................... 19.7 21.5
Goodwill on disposal of business ....................................................................... --- 1.3
Increase in receivables ................................................................................ (645.2) (203.6)
Increase in payables ................................................................................... 769.2 271.1
Net movement on provisions ............................................................................. (18.8) (4.3)
--------- ---------
Net cash inflow from operating activities .............................................................. 209.7 116.3
========= =========
</TABLE>
Reconciliation of net cash flow to movement in net funds
<TABLE>
<CAPTION>
Nine months ended
September 30,
---------------------
2000 1999
-------- --------
<S> <C> <C>
Net funds at beginning of period ......................................................................... 583.8 486.5
Net cash flow ............................................................................................ 29.3 1.4
Management of liquid resources ........................................................................... 88.7 62.3
Financing ................................................................................................ 66.7 13.9
Non-cash movements ....................................................................................... (35.8) 92.9
Currency exchange movements .............................................................................. (16.9) (5.1)
-------- --------
Net funds at end of period ............................................................................... 715.8 651.9
======== ========
</TABLE>
5
<PAGE>
Note 5 -- Reconciliation of movements in shareholders' equity
<TABLE>
<CAPTION>
Nine months ended
September 30,
---------------------
2000 1999
-------- --------
<S> <C> <C>
Net income ............................................................................................... 66.0 17.6
Dividends ................................................................................................ (42.6) (61.1)
New ordinary shares issued ............................................................................... --- 92.9
Goodwill on disposals written back ....................................................................... 0.2 4.7
Exchange adjustments ..................................................................................... (46.9) 1.4
-------- --------
Net (decrease)/increase in shareholders' equity .......................................................... (23.3) 55.5
Shareholders' equity at beginning of period .............................................................. 101.8 89.0
-------- --------
Shareholders' equity at end of period .................................................................... 78.5 144.5
======== ========
</TABLE>
Note 6 -- Differences between accounting principles generally accepted in the
United Kingdom and the United States
The unaudited condensed consolidated financial statements are prepared in
accordance with U.K. GAAP which differ in certain respects from U.S. GAAP.
Summaries of the significant differences as they apply to the Company are set
forth in Note 31 of Notes to the Company's Consolidated Financial Statements
for the year ended December 31, 1999.
The effect on net income, comprehensive income and shareholders' equity of
applying the significant differences between U.K. GAAP and U.S. GAAP described
above is summarized as follows:
Net income
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
------------------- ---------------------
2000 1999 2000 1999
------- ------- -------- --------
<S> <C> <C> <C> <C>
Net income/(loss) as reported in the consolidated statement of income ............. 14.2 (2.0) 66.0 17.6
Adjustments
Operating expenses -- restructuring costs ......................................... (5.9) --- (6.8) ---
-- pensions review ............................................. --- --- --- 15.0
Goodwill .......................................................................... (5.6) (3.4) (15.8) (10.5)
Revaluation of forward exchange contracts ........................................ 0.1 2.3 (4.1) 0.3
Pension costs ..................................................................... 4.8 (1.4) 13.0 (16.2)
Deferred taxes -- effect of above adjustments ..................................... 0.5 (0.1) (0.6) 6.0
------- ------- -------- --------
Net income/(loss) as adjusted to accord with U.S. GAAP ............................ 8.1 (4.6) 51.7 12.2
======= ======= ======== ========
</TABLE>
6
<PAGE>
Note 6 -- Differences between accounting principles generally accepted in the
United Kingdom and the United States (continued)
<TABLE>
<CAPTION>
Comprehensive income
Three months ended Nine months ended
September 30, September 30,
-------------------- -------------------
2000 1999 2000 1999
------- -------- ------- -------
<S> <C> <C> <C> <C>
Net income/(loss) as adjusted to accord with U.S. GAAP ............................. 8.1 (4.6) 51.7 12.2
Other comprehensive income:
Foreign currency translation adjustments ........................................... 8.8 (9.6) 26.9 0.9
Unrealized holding gains/(losses) .................................................. 0.3 (0.2) 0.8 (1.5)
------- -------- ------- -------
Comprehensive income/(loss) ........................................................ 17.2 (14.4) 79.4 11.6
======= ======== ======= =======
</TABLE>
Shareholders' equity
<TABLE>
<CAPTION>
September 30, December 31,
2000 1999
---------------- ---------------
<S> <C> <C>
Shareholders' equity as reported in the consolidated balance sheet ........................ 78.5 101.8
Adjustments
Intangible assets:
Goodwill -- cost ......................................................................... 917.8 836.2
-- amortization.................................................................... (46.7) (27.4)
Current assets:
Investments .............................................................................. (0.1) (0.9)
Receivables -- forward exchange contracts ................................................ (3.4) 0.7
Noncurrent liabilities:
Other -- pension costs liability ......................................................... (19.8) (27.5)
Provisions for liabilities and charges:
Surplus properties ....................................................................... --- 6.5
Deferred taxes -- effect of above adjustments ............................................ 9.6 9.7
---------------- ---------------
Shareholders' equity as adjusted to accord with U.S. GAAP ................................. 935.9 899.1
================ ===============
</TABLE>
The categories of cashflow activity under U.S. GAAP can be summarized as
follows:
Consolidated statement of cash flows
<TABLE>
<CAPTION>
Nine months ended
September 30,
---------------------
2000 1999
-------- --------
<S> <C> <C>
Cash inflow from operating activities .................................................................... 206.5 110.6
Cash inflow/(outflow) on investing activities ............................................................ (9.1) 18.8
Cash outflow on financing activities ..................................................................... (75.2) (21.7)
-------- --------
Increase in cash and cash equivalents .................................................................... 122.2 107.7
Effect of foreign exchange rate changes .................................................................. 27.5 (5.2)
Cash and cash equivalents at beginning of period ......................................................... 540.9 499.9
-------- --------
Cash and cash equivalents at end of the period ........................................................... 690.6 602.4
======== ========
</TABLE>
7
<PAGE>
Note 7 -- Willis North America Inc. and Willis Partners
Willis North America Inc. is a wholly-owned subsidiary of Willis Partners,
of which Willis Group Limited is the 99.9% general partner and Willis Faber UK
Group Limited, a wholly-owned subsidiary of Willis Group Limited, is the 0.1%
general partner. Willis Group Limited and Willis Partners have jointly and
severally, fully and unconditionally, guaranteed the $550 million 9% Senior
Subordinated Notes (`"the Notes'"), issued by Willis North America Inc.
Willis North America Inc. prepares its financial information in accordance
with U.K. GAAP. Willis Group has not presented separate financial statements
for Willis North America Inc. because management has determined that such
information is not material to holders of the Notes.
Summarized financial information under U.K. GAAP relating to Willis North
America Inc. is as follows:
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
-------------------- ---------------------
2000 1999 2000 1999
-------- ------- -------- --------
<S> <C> <C> <C> <C>
Total operating revenues ......................................................... 103.9 92.2 290.1 265.5
Operating income ................................................................. 18.1 9.8 32.8 14.4
Net income ....................................................................... 12.7 7.6 24.7 9.6
======== ======= ======== ========
</TABLE>
<TABLE>
<CAPTION>
September 30, December 31,
2000 1999
---------------- ---------------
<S> <C> <C>
Current assets ............................................................................ 2,287.7 1,880.9
Fixed assets .............................................................................. 77.5 70.8
---------------- ---------------
2,365.2 1,951.7
---------------- ---------------
Current liabilities ....................................................................... 2,188.8 1,816.4
Noncurrent liabilities .................................................................... 56.0 48.6
Shareholders' equity ...................................................................... 120.4 86.7
---------------- ---------------
2,365.2 1,951.7
================ ===============
</TABLE>
Willis Partners, formed on November 11, 1998, has no assets other than the
capital stock of Willis North America Inc. and conducts no business other than
the holding of such capital stock. Willis Group has not presented separate
financial statements or summarized financial information for Willis Partners
because management has determined that such information is not material to
holders of the Notes.
8
<PAGE>
WILLIS GROUP LIMITED AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
Summary
Income before taxation for the quarter ended September 30, 2000 grew by
L22.8 million to L19.1 million. In the corresponding quarter of 1999 a loss
before taxation of L3.7 million was recorded. Net income for the quarter
increased by L16.2 million to L14.2 million compared with a net loss of L2.0
million in the same quarter a year ago.
For the nine months ended September 30, 2000, income before taxation rose by
L51.1 million to L94.5 million from L43.4 million a year earlier excluding the
exceptional charge of L15.0 million made in the second quarter of 1999. Net
income increased by L37.9 million to L66.0 million from L28.1 million in 1999,
excluding the after tax effect of the exceptional charge.
These improved results have been achieved through increased operating
revenues coupled with tight control over operating expenses. Operating
revenues grew by 15% in the quarter, and by 12% in the nine months, while
operating expenses grew by only 0.1% in the quarter and 2% in the nine months.
Proforma adjusted constant currency EBITDA increased by 95% to L24.9 million
in the quarter and by 39% to L120.8 million in the nine months compared with
the same periods of 1999.
Operating Revenues
Operating revenues increased by 15% to L198.5 million in the quarter and by
12% to L621.2 million in the nine months compared with L173.0 million and
L554.3 million, respectively, in the corresponding periods of 1999. Excluding
the benefit from movements in foreign currency exchange rates, operating
revenues were up by 6% in constant currency terms for the quarter and 9% for
the nine months. Adjusting for the effect of acquisitions in Mexico and
Venezuela, which occurred towards the end of 1999, adjusted operating revenues
on a comparable basis were 5% higher for the quarter and 7% for the nine
months.
In the quarter, Reinsurance revenues were up by 25% compared with a year
ago, Global Specialities' revenues by 7% and International revenues by 23%.
North American operations increased its revenues by 2% and UK Retail by 1%.
For the first nine months, Reinsurance and Global Specialities' revenues
were ahead of a year ago by 23% and 13%, respectively. North American
operations were up by 4%, UK Retail by 2% and International by 8%.
Operating Expenses
Operating expenses were virtually flat at L178.9 million in the quarter and
increased by 2% to L536.4 million in the nine months compared with the
corresponding periods of 1999 excluding the L15.0 million exceptional charge
made in the second quarter of that year. The exceptional charge in 1999
related to further provisions made in connection with estimated liabilities
arising from the review of U.K. personal pension plans that had been sold
between 1988 and 1994. Allowing for acquisitions, and excluding non-recurring
bank fees incurred in the first quarter of 1999, operating expenses on a
comparable basis were 2% lower for the quarter and increased by 1% for the
nine months.
Liquidity and capital resources
The Group's $150 million revolving credit facility remains undrawn.
Differences between U.K. GAAP and U.S. GAAP
Net income under U.S. GAAP of L8.1 million for the quarter and L51.7million
for the nine months, compares with net income under U.K. GAAP of L14.2 million
and L66.0 million respectively. The principal differences relate to the
amortization of goodwill, pension expense and the revaluation of forward
foreign exchange contracts.
9
<PAGE>
Quantitative and qualitative disclosures about market risk
There have been no material changes in either the third quarter or first
nine months of 2000.
Forward looking information
Forward-looking statements in this quarterly report are made pursuant to the
safe-harbor provisions of the Securities Litigation Reform Act of 1995
including Section 21E(c) of the Securities Exchange Act of 1934. Such
statements should be taken as the informed perspective of senior management of
the Company on possible future performance. Actual results could differ
materially from management's expectations because of many reasons, including
continued deterioration of the rating environment in the insurance markets;
loss of major accounts; regulatory and competitive conditions; unexpected
liabilities; further consolidation among insurance markets or major insurance
brokers; or fluctuation of exchange rates and interest rates.
November 6, 2000
10
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
WILLIS GROUP LIMITED
By: /S/ THOMAS COLRAINE
Name: Thomas Colraine
Title: Group Finance Director
Date: November 6, 2000
11
