v3.24.2
Fair Value Measurements (Tables)
 6 Months Ended
Jun. 30, 2024
Fair Value Disclosures [Abstract]  
Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis

The following tables present our assets and liabilities measured at fair value on a recurring basis at June 30, 2024 and December 31, 2023:

 

 

 

 

 

Fair Value Measurements on a Recurring Basis at
June 30, 2024

 

 

 

Balance Sheet Location

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Available-for-sale securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mutual funds/exchange traded funds (i)

 

Prepaid and other current assets and Other non-current assets

 

$

106

 

 

$

—

 

 

$

—

 

 

$

106

 

 

 

Fiduciary assets

 

 

287

 

 

 

—

 

 

 

—

 

 

 

287

 

Commingled funds (i) (ii)

 

Other non-current assets

 

 

—

 

 

 

—

 

 

 

—

 

 

 

17

 

Hedge funds (i) (iii)

 

Other non-current assets

 

 

—

 

 

 

—

 

 

 

—

 

 

 

16

 

Derivatives:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivative financial instruments (iv)

 

Prepaid and other current assets and Other non-current assets

 

$

—

 

 

$

3

 

 

$

—

 

 

$

3

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contingent consideration:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contingent consideration (v) (vi)

 

Other current liabilities and Other non-current liabilities

 

$

—

 

 

$

—

 

 

$

40

 

 

$

40

 

Derivatives:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivative financial instruments (iv)

 

Other current liabilities and Other non-current liabilities

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

 

 

 

 

 

Fair Value Measurements on a Recurring Basis at
December 31, 2023

 

 

 

Balance Sheet Location

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Available-for-sale securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mutual funds/exchange traded funds (i)

 

Prepaid and other current assets and Other non-current assets

 

$

102

 

 

$

—

 

 

$

—

 

 

$

102

 

 

 

Fiduciary assets

 

 

215

 

 

 

—

 

 

 

—

 

 

 

215

 

Commingled funds (i) (ii)

 

Other non-current assets

 

 

—

 

 

 

—

 

 

 

—

 

 

 

9

 

Hedge funds (i) (iii)

 

Other non-current assets

 

 

—

 

 

 

—

 

 

 

—

 

 

 

8

 

Derivatives:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivative financial instruments (iv)

 

Prepaid and other current assets and Other non-current assets

 

$

—

 

 

$

6

 

 

$

—

 

 

$

6

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contingent consideration:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contingent consideration (v)

 

Other current liabilities and Other non-current liabilities

 

$

—

 

 

$

—

 

 

$

31

 

 

$

31

 

Derivatives:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivative financial instruments (iv)

 

Other current liabilities and Other non-current liabilities

 

$

—

 

 

$

1

 

 

$

—

 

 

$

1

 

 

(i)
With the exception of the funds included in fiduciary assets, the majority of these balances are held as part of deferred compensation plans with related liabilities in other current liabilities and other non-current liabilities on the condensed consolidated balance sheets.
(ii)
Consists of the Towers Watson Global Equity Focus Fund, for which redemptions can occur on any business day, and require a minimum of one business day’s notice.
(iii)
Consists of the Towers Watson Alternative Credit Fund, for which the redemption period is generally quarterly, however requires a 50-day notice.
(iv)
See Note 9 — Derivative Financial Instruments for further information on our derivative investments.
(v)
Probability weightings are based on our knowledge of the past and planned performance of the acquired entity to which the contingent consideration applies. The fair value weighted-average discount rates used in our material contingent consideration calculations were 12.98% and 13.28% at June 30, 2024 and December 31, 2023, respectively. The range of these discount rates was 11.00% - 13.80% at June 30, 2024. Using different probability weightings and discount rates could result in an increase or decrease of the contingent consideration payable.
(vi)
Consideration due to be paid across multiple years until 2029.
Schedule of Change in Fair Value of Level 3 Liabilities

The following table summarizes the change in fair value of the Level 3 liabilities:

 

Fair Value Measurements Using Significant Unobservable Inputs (Level 3)

 

June 30, 2024

 

Balance at December 31, 2023

 

$

31

 

Obligations assumed

 

 

3

 

Payments

 

 

—

 

Realized and unrealized losses (i)

 

 

7

 

Foreign exchange

 

 

(1

)

Balance at June 30, 2024

 

$

40

 

 

(i)
Realized and unrealized losses include accretion and adjustments to contingent consideration liabilities, which are included within Interest expense and Other operating expenses, respectively, on the condensed consolidated statements of comprehensive income.
Schedule of Assets and Liabilities Whose Carrying Values Differ From the Fair Value and are Not Measured on a Recurring Basis

The following tables present our assets and liabilities not measured at fair value on a recurring basis at June 30, 2024 and December 31, 2023:

 

 

 

June 30, 2024

 

 

December 31, 2023

 

 

 

Carrying Value

 

 

Fair Value

 

 

Carrying Value

 

 

Fair Value

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Long-term note receivable

 

$

74

 

 

$

70

 

 

$

74

 

 

$

70

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Current debt

 

$

—

 

 

$

—

 

 

$

650

 

 

$

645

 

Long-term debt

 

$

5,307

 

 

$

4,985

 

 

$

4,567

 

 

$

4,359