Willis Towers Watson has announced financial results for the fourth quarter and full year 2019, which ended December 31, 2019.
“For the year, Willis Towers Watson generated 5 percent organic revenue growth, which was broad-based across all our businesses and 6 percent growth overall. In addition to our continued progress on the operational front, we successfully completed the acquisition of TRANZACT which helped significantly strengthen Willis Towers Watson’s overall growth profile as total revenue increased 13% in the fourth quarter versus prior year”, said John Haley, Willis Towers Watson’s chief executive officer. “As we look ahead to fiscal year 2020, we remain focused on executing our strategy and confident in our ability to continue delivering significant value for our clients, colleagues and shareholders.”
Company Highlights
Revenue was $2.69 billion for the fourth quarter of 2019, an increase of 13% (14% increase constant currency and 6% increase organic) as compared to $2.37 billion for the same period in the prior year.
For the year ended December 31, 2019, revenue was $9.04 billion, an increase of 6% (9% increase constant currency and 5% increase organic) as compared to $8.51 billion for the same period in the prior year.
Net income attributable to Willis Towers Watson for the fourth quarter of 2019 was $544 million, an increase of 44% from $378 million for the prior-year fourth quarter. For the quarter, diluted earnings per share were $4.18 and adjusted diluted earnings per share were $4.90. The U.S. GAAP income tax rate for the quarter was 18.3%, and the adjusted income tax rate for the quarter used in calculating adjusted diluted earnings per share was 19.4%.
For the year ended December 31, 2019, net income attributable to Willis Towers Watson was $1.04 billion, a 50% increase from $695 million for the same period in the prior year. Diluted earnings per share were $8.02, and adjusted diluted earnings per share were $10.96 for the year ended December 31, 2019. Net income attributable to Willis Towers Watson and diluted earnings per share for the year ended December 31, 2019 included pre-tax $13 million of transaction and integration expenses related to the TRANZACT acquisition. For the year ended December 31, 2019, the U.S. GAAP income tax rate was 18.8%, and the adjusted income tax rate used in calculating adjusted diluted earnings per share was 20.3%.
Net income for the fourth quarter of 2019 was $551 million, or 20.5% of revenue, an increase from net income of $383 million, or 16.1% of revenue for the prior-year fourth quarter. Adjusted EBITDA for the fourth quarter of 2019 was $930 million, or 34.6% of revenue, an increase from adjusted EBITDA of $774 million, or 32.6% of revenue for the prior-year fourth quarter.
For the year ended December 31, 2019, net income was $1.07 billion, or 11.9% of revenue, an increase from net income of $715 million, or 8.4% of revenue for the same period in the prior year. Adjusted EBITDA for the year ended December 31, 2019 was $2.3 billion, or 25.4% of revenue, an increase from adjusted EBITDA of $2.0 billion, or 23.9% of revenue for the same period in the prior year.
Operating income margin improved by 570 basis points to 25.5% from 19.8% for the prior-year fourth quarter. Adjusted operating income margin improved by 270 basis points to 30.1% from 27.4% in the prior-year fourth quarter.
For the year ended December 31, 2019, operating income margin improved by 520 basis points to 14.7% from 9.5% for the same period in the prior year. Adjusted operating income margin improved by 220 basis points to 20.3% from 18.1% for the same period in the prior year.
Cash flows from operating activities for the year ended December 31, 2019 were $1.08 billion compared to $1.29 billion for the prior year. Free cash flow for the year ended December 31, 2019 and 2018 was $835 million and $1.02 billion, respectively. The Company repurchased approximately $3 million of Company stock during the fourth quarter of 2019. For the full year, the Company repurchased approximately $150 million of Company stock.
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