Willis Towers Watson Public Limited (WTW) 7 May 182018 Q1 Earnings call transcript

Good day, ladies and gentlemen, and welcome to the First Quarter 2018 Willis Towers Watson Earnings Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session, and instructions will follow at that time. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to introduce your host for the day's the conference Ms. Investor of Director Sukys, Relations. Aida

You may begin.

Good Watson Earnings Catharine. morning everyone. Towers Willis the to Call. Welcome Thanks,

website. standard On the the well provided is Burwell, and call Litigation involve XXXX Today's by Willis today statements forward-looking issued slide recorded statements. Reform may our with XXXXXXX. me today is press the available months risks supplemental Securities new Chief Officer. be refer our financial impact meaning first ASC This release Officer; be the the conference slides. the website which within Financial supplemental our for XXX-XXX-XXXX, for via call Towers The today the XXX are Act information Executive call tomorrow and being through our may on for Chief U.S. to and also Mike as and XXXX, accounting Private show will three uncertainties. our available telephone include will earlier Please of of to as of Watson's John Haley, The replay ID replay next dialing on quarter

forward-looking we as earnings events. the in the date future to Watson to investors discussion Investors materially statements by or and Towers on of forward-looking statements, our and undertake on events and those Factors update and risks factors light most willistowerswatson.com, from may should statements, review well of a other XX-K Risk publicly are cause by place filings Willis law, any reliance as the as the this as this call. of new results morning, of or in under our available obligation speak or annual the to forward-looking forward-looking at that revise website information contemplated actual no For other with only report SEC. which heading undue Form a Except earnings of issued statements section differ press release Forward-Looking is of Statements other Statements our copy of recent cautioned not on which in Forward-looking required the disclosures

we discuss call, the may non-GAAP During financial certain measures.

of the investors as well non-GAAP to call we questions. comparable financial discussion as GAAP most G, financial open a website. reconciliations review the we'll directly under posted conference measures, these the press your Regulation the After measures, For prepared of our should on our for release remarks, measures non-GAAP

Now I'll call turn to John the Haley. over

Thanks Aida. quarter Good outlook. everyone. and XXXX morning the first the we'll XXXX Today review results

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ASC new A impact XXX. of the description XXXX, filing. provided Form in adopted of will ASC XXX we accounting As the XX-Q standard detailed JanuaryX, a of be

be discuss recognized results year the Once More business should consistent should on cash to initiatives XXXX. continue today's the now our in recognized million on XXXX understand this also approximately the To a prior detail and new XXXX calendar have new old critical we which the the explanations flow. fully year how of our past import, issue discuss XXXX XXXX this get have merger this terms comparable detailed earnings been in the revenues, results objectives $XX change the results onetime underlying the that more is new The objectives We our this year, release. in provide accounting XXXX a presentation momentum in accounting the the morning's Mike standards, the and to morning. XXXX. and will down. will for will in merger as look no financial on saw more and call accounting reporting also release guidance impact of year in the provided adoption would that the using results. impact accounting full standard our material We based prior of manner. as later in our a standards call. in of doesn't of both importance our statements the We'll We standards. clear end, merger you impacted earnings free is impact of went anticipate standard

of quarter This compared the million XXX points $XXX an or and the the the regions total This Adjusted for net currency million. accounting as the of the X% was revenues Now, on XX.X% results. ASC results as total to on in increase of reported to our million for to of revenues were XXX, our to We currency quarter of of organic an accounting pleased is first an of and prior up all XX% XX% XXX included first on using the revenues. was I'm constant quarter. or the income to first Based the year was adjusted will of Reported quarter $XXX basis prior year impact up basis. the XX% standard. positive up growth million increase observed report first and the margin. billion, prior $X.X movement. turn as revenues. of compared for a XX% prior I EBITDA compared $XXX standard or income X% $XXX Net segments EBITDA in quarter year basis prior up first without

earnings currency $X.XX our XXX related a diluted calendar positive most quarter quarter their year. of per the Currency of For booked quarter majority and on our adjusted $X.XX impact the diluted adjusted already were operations had $X.XX. XXXX incorporated currency fluctuations earnings EPS. this are to renewals first $X.XX revenues impact to This our was were diluted share per impact share of The guidance for annual in the of as French into original $XX.XX. first

quarter XXX accounting of $XXX $X.X Now, billion. million. of revenues. XX.X% quarter $XXX total million or quarter first results was ASC revenues based for first income EBITDA for turning the to standard. for new Adjusted the Reported were first the on Net was the

earnings were quarter, adjusted diluted the $X.XX For $X.XX. share diluted were per share and earnings per

look of let's at detail. each Now, segments in more the

integration realigned teams and revenues movement in process, and As part our of of which cost between segments. some portfolio we resulted review

allocation We and results. to also implemented process, our were the a asset XXXX charges refined applied restructuring segment allocation

revenue are a guidance Please the segment revenue revenues calculated years revenues detail in We All we in reported performance as on Segment basis a previous margins of fees. of comprehensive discussed reflective specifically and using on is stated commissions reflect results expenses more from overall measure. the include to otherwise. discretionary revenues the currency segment note, and unless company are more our of consider segment constant be regarding amortization accounting prior otherwise. as integration well such intangibles, other results. All results acquisitions as and items segments which on and standard restructuring operating The certain mergers non-core unless cost compensation. corporate unallocated as exclude resulting cost the commentary transaction will and and we stated based feel

first and regions currency grew total the growth all on first for is revenue basis this five for in this quarter year. basis and in constant our very prior quarter, segments X% growth experienced X% strong We revenue regions a consecutive and have of quarters. a Most the an organic So on quarter. experienced against

impact of quarter Britain as X% growth, Human America first with growth first the the of X% growth For region and X% ASC and HCB a the and Western prior Capital growth organic quarter of growth international to quarter. of compared Benefits has of with revenue strong had X%. or led XXX, both Without year Europe Great had ofXXXX and the North X% growth

an prior software a prior quarter quarter, in compared quarters. Talent international. to the Europe grew Western growth revenues first slightly in growth first sales last to growth primarily HCB five strong advisory very year America. offset the due the advisory and demand now was had reminder increase and in for with organic in quarter and first North lower constant product growth. as This year As and Rewards revenue HCB by consecutive businesses currency in X% the has X% had

North Kong. margin in as to change result by Our first reduced $X.XX result demand the Asia or of year orders. Solutions expected their and project risk year was had by points quarter revenue Technology quarter. segment work TAS due increased as HCB Western was by International Britain as to revenues XX%, growth, compared in contraction Europe's quarter, strong business revenues as X% related to clients and an a pension new large also to administration China for X% prior Hong of for and Benefits due revenue first to of first primarily cycle. a growth prior growth Western and part the Administration the was offering result up increased and notably X% of internal in first Health led year our related the our compared global brokerage actuarial the prior to by well North of increased actuarial timing operating revenue sales Europe. and compared and in the Netherlands. growth The partially reorganization. the result to America's and first consulting of in XXX the revenue to results a strong Canada Germany year was basis triennial Britain, benefit as in support in declined growth quarter. tension with a growth as Retirement valuation America's work offset from muted driven was of Great contracting issues the sales prior billion timing quarter as due in revenue Solutions. international Great strong as

of the revenue with revenue an primary business market dates HCB X. recognizing of new than XXXX. twelve that XX%. of had period sale. operating time sold in than effective Now of the Overall impact pro-rates The have turning the margin a care to million the other the at HCB health new standards between over and a results January in is outlook standard, policies segment our the to difference HCB middle care the including for positive accounting policies we are revenues XX% the health $XXX month of rather the the the continue Approximately standard

and basis first and strong to the compared X% year Risk quarter, on Broking Corporate as prior revenues or also currency organic CRB, X.X% constant increased on to which turning a had Now basis a an quarter.

X%. experienced of lines. due Latin a large X%. America growth offset East primarily North business an consecutive offset CRB work. accounting revenues Asia Germany. first aggressive Western XX%, in was revenue and Revenue in now This the improvement project. construction with year with Great of growth a prior revenue of As constant last Britain new corporate by had strong XXXX had percentage a the growth as and to in up three basis year a of currency were of overall restructuring, France's XX%, strengthened growth and both quarter renewal CEEMEA forensic and Great Eastern a Australia. new in business and America's fees five has year growth the strong rate due quarters was strong revenue operating in in America. growth positive of growth X% transpired had America declines led strong North related and increase The and million points have an in better by the to with a Asia's North $XXX revenue at to Europe margin quarter. was growth for allocation revenue post growth renewal International and than of a points to reminder, by compared specialty had impacted XXX region. Britain's financial despite CEEMEA prior expected Middle in noted slight first team. the slight softness every facultative XXXX CRB timing Europe's growth and growth was we retention organic securing consecutive quarters and to three included had in in and Central margin result and up and season CRB higher

including the to standard. new the CRB turning the revenue impact Now, in

the constant of the incurred. margin difference primary momentum the strong were difference expenses Under the million CRB We're into the For becomes performance with will standard business revenues they we're first by as policies sale is the now quarter CRB and X. on XX%. all as the the Revenue pleased as affinity for The the operating and X% total $XXX Both Risk quarter This of And standard recognized X% of increased currency basis an January prior constant expense an IOR. of have growth between Investment currency were revenue that X% is recognized effective. accounting in revenues standards in primary new compared the new globally. in XXXX. Reinsurance are impact to standard. XXXX organic The under and no prorated first quarter. products our or first year effective basis a on was prior annual as the are when on under quarter organic and the and that

a an a by strong under and reinsurance increase facultative business segment. facultative and in Reinsurance results captured reminder, solid Max Matthiessen the of of a the The CRB revenue management of segment especially the assets reinsurance of as revenue of based X% new business led with as X% are North some renewals As represents business. in in with growth new bulk produced result wholesale. treaty reinsurance result line America. business grew

of and the and a a basis. X% While impacted booked project business across consulting flat last in on grew by constant an software consulting and revenue increases of X% essentially basis there ICT second business, was currency and business year. on as sales. quarter by pull technology were on our portfolio. growth result some Wholesale organic multiline new pricing was pockets forward the X% increased rate Insurance global momentum a catastrophe result of grew

constant XXXX. X%. prior result a we a $XXX of year first the experiences prior implementations quarter experienced the to fees. of impacting first of quarter the X% market the segment the primarily XX% IRR margin, IRR client grew sold business growth revenues had Protector in of timing high result of XXXX. from points operating year divestiture Capital performance UCM, As Investment up revenues operating a basis in the The for the reminder and U.S. the Loan a UBI as or and compared quarter first XXX was quarter. driven UCM margin $XXX by million seasonally first of organic a factors of million in revenue and in decline and Underwriting result offset a in new XX% business businesses as as programs slightly XXXX of currency Management reinsurance.

treaty to and within excited part impact turning IRR the important XX%. reflects the our IRR primary in and move to the the solutions of had to The capital advice IRR revenue new Link to under broking an growth. rate. for revenue Willis standards proportional recognized upon Now announced to of and of the $XXX businesses IRR This better for and is Reinsurance. Insurance evolve that the accounting align new segment revenues provide standard, the in the including ongoing from portfolio accounting revenue of standard related that our Overall results million the of Willis us position we our of XXXX. moved was to is the of line sustainable integration operating recognition securities prior and teams our the ILS business arrangements. date the long clients We of continue is ILS we're to the the margin feel difference integrate policy. effective revenue Under standard Securities term to our business portfolio have pro-rata for of ILS efforts business reinsurance momentum about recently the positive we

quarter. by an prior marketplace. Individual year revenues and to primary quarters marketplace had of operating the increased XXXX. from compared the client revenues at negative January new year. million BDA in by had placement to the of of margin, that as The at accounting standards generated as Now revenues of placements outsourcing The the revenue as XX% XXXX retained be pro-rata difference grew January membership The increased of X% revenue enrollment be from the the to of nine now as a result has due new XXXX have These period points recognized marketplace growth. benefits increased X% for the quarter. revenue adjustment XXX standard recognized revenue started revenue typically standard basis individual prior the the season. XX%. by segment first first in fall of related year BDA consecutive segment enrollment effective and balance BDA prior starting revenues segment the as of Group special than rather revenues a fall must reflecting XX% our had of to projects. million the up data and basis revenues XXXX driver result the XX XXX to throughout BDA prorating with the under X, wins recorded margin now is date. This means This opening the on was earnings a would the an operating

the revenue be as generated to enrollment However, of the change seasonality higher the under not change the XXXX standard half the policies XXXX fall second should season revenue immediately, by be new year. in of recognized the the profile in revenues overall the placed calendar this so recognition will in the will

to this optimistic in growth about business. term the we're business like long this and We continue

provide Authority or So, you before Financial with FCA I'd concluding U.K. my remarks regarding an investigation. the to like update Conduct

the taken of competition of Commission we we and had competition retained Competition law. us against insurance the investigation quarter for over at regulatory but from investigation previously point. the jurisdiction will FCA During to that be the taking aspects brokerage that the FCA they The the this matters. The is ongoing brokerage the further brokerage an informed relate last have provide not law us sector. Civil no action regarding regulatory FCA not investigation, had to update European disclosed over aviation the the We European update received previously that disclosed this matters now enforcement do has Commission

accounting detail, general to the of first our I and underlying momentum additional the strength quarter good communicate the feel economy approach. global business, filings hope please been adding refer our with certainly very market the additional overall to the business. the that results. despite new I'm integrated matter. on confusion pleased standards, Again able For SEC the in the of state element our very this of the I about we've of

I'd who the service our to now clients our over And course colleagues continue without like thank Of fail. Mike. to to turn call

I'd to Thanks colleagues John. congratulations our clients and like for And trust like another quarter, but add I'd to support their thank for my to great our us. in continued also

Now, our turn to results. let me financial overall

total quarter first the up The operating management. million This for million income operations million me this from strong first the XXX operations. XXX, prior the XXX quarter revenues. Adjusted XX% Without was expense in Let ASC key This drivers XX.X% year. growth discuss XXX of of was from revenues. adoption for income was XX% or from in income from first or prudent million of was the of and six up increase XX.X% total XXX revenue year. were the prior

to or turn Now adjust the adjusted revenue standard. EPS diluted excluding share let to new me per earnings

share $X.XX quarter up prior of strong per XX% EPS the reminder, share growth XXXX a terms our had we year comparable. revenue For in first And a quarter was the a in prior as first year. versus $X.XX in the of to adjusted per

as release financial revenue the our the in the under and share disclosures per $X.XX for in standard. approach be approach. using recognition in by new was noted revenue our was the quarter. our will statements standard the EPS retrospective This earnings required to new morning standard this adopted footnote adjusted the modified We new XX-Q Our

in due this be we reflected the previously, accounting of And view anticipate The on invested to a prior presentation recognized XX our component with in restated other net. increase is the restated pension expense and performance their mentioned income involve allocated XXXX. from XXXX as new change our in to statement cost the options. the basis due consistent net other for This on to pension assess salaries and XXXX. moving which standard way John on best be using higher payroll increased benefits our is recognized non-service an We would change a income. reminder, revenues presentation. of fully will and net taxes to in that have now to approximately we As increase Brexit as primarily required year-on-year million The income cost income been XXXX on have primarily

Lastly, commission difference quarter this we've fees amounts. the also and reporting the give revenues between started versus immaterial two

insight to our tax provide rates. some U.S. GAAP taxes, you like to Now with I'd into and additional adjusted moving

U.S. guidance Deferred significant first rate our interpretation a from monitor result adjusted we adjustment others benefits and quarter the Treasury from to further GAAP There's rate U.S. estimates that continue merger may or year's will communicate this year more rate in tax as Our U.S. of aligned corporate tax first rules. on X% XX% U.S. to The U.S. the get in impact been last appropriately. new application an previously tax for to through the was related GAAP will on and This tax and rate quarter. of we be tax move XX.X. the increase to the possibility our have closely there had XXXX, the now reduced. XX.X%, Beginning in rate to will adjusted US be over XX%. reduction was and the

Let's move sheet. the on to balance

position. We strong continue a to have financial

payouts. in as from in was payments for quarter, discretionary increase not our improved flow did significantly a variance free bonus of to We As The XXXX. first the repurchase XX for in XXXX flow XX the shares year year-over-year company first resulted was the expected, million cash compensation annual XXXX cash first from prior quarter decrease free an performance million, for was quarter. related

already share million million to of to and XXX expect buyback XXXX. XXX program reinstituted in shares our have back We buy

XXX. based dividend April, As full we XXXX, about merger dividends. retired since XXXX as our financial morning's million in X.X year release reported was we two to effective ensure U.S. investors guidance GAAP increased AS period. to a old the XXXX by results the ASC repurchased into we standard. for XXX our shares clear such the have integration XX% year the standard want ASC to revise progress move XXXX. that The line as on this reminder our and continuing their last of of in three guidance standard are the and sight on a accounting paid of We Thinking both approximate we million based year XXX have

now So let's XXXX Watson. our Willis year full for guidance review Towers

For revenue continue the growth be to approximately company, to expect X%. organic we

For the segments, could we in the full and be year. expect expect to revenues to for for single-digits low around BDA. adjusted ACB, to single be mid the XX% digits for in to the and IRR CRB We be EBITDA

a adjusted the to effective consistent moving to for range accounting XXX% XX% rate standards. XX%. and old This guidance new are is tax the of tax both We from

nor software to is free result operating The X.X accounting is capitalized system in to prior expect difference change free of the cash not standards. a new appliance flow investing capital cash in does between or This cash We flow XXXX. portion X.X a to billion non-material accounting allocation guidance billion a overall of the from of moving activities There activities approximately and of flow strategy. related our implementations impact statement. difference

M&A. former internal buy to the for for use bonus to backs, share ASC continue and investments assess XXX this will calculations, standard accounting We capital year dividends,

turn again, continued I'll Our our and rate of annual with how pleased guidance I the business and results the exchange to currency of an say the momentum pound call and euro. $X.XX the like to am $X.XX assumes back John. to average I'd to

now your and we'll Mike questions. Thanks take

first [Operator And you. comes question Thank from Instructions] with Dave Jefferies. Styblo the

open. is line Your

Hi there, morning good guys.

morning. Good

of of tough were the ago first that guess spike I you from wondering, I change 'XX So, was that in for quarter timing some this of this up or obviously despite back there solid really year that organic points growth. out the a X% obviously that then out think quarters, quarters first quarter is you the to quarter an nice terms if you'd a of growth growth benefited put that much implementations few the How and one been helped management some of organic and comps not called think two it's to orders results anything in them I'm just versus again with company X% through then guess in you've initiatives demand? uptick I quarter perhaps had pushing and you've market that uptick. last 'XXs specifically, specific last and your structures you three

and we've had occur look, share –there's of quarters all XXXX mean of I quarter for first general but first the cetera, movements normal there's a always between we've in is would XXXX this those, little forward a say the and a sort of was first quarter - XXXX exceptional. our that of had so first one et there's is Yeah, was usual that I carry quarter it's HCB, that the that

it's Mike I to to revenue obvious state And just think so very And off. and be great paying and we the and growth we've both throughout company to and hard that refer are satisfying had. such we the delighted, I seems our our needs - working that was colleagues a tough client comparable

strong of from a that to margin how want least was back to stronger guess in were organic expecting point think the the margins follow-up at more taxes the lower was then and as strong you I expected. to street beat I'm narrow seems because and the the And growth with would quarter relative curious step what upside be and margin such had having to did to be guys did accelerate at look I little you would earnings growth have you side you bit upside just results how better thinking, any a would and and the quarter. sort what compared spending, did in the

didn't for line this all benefit through for see we why quarter? bottom reconcile that the to trying just So the way

Mike XXX area let that I'll for to maybe not quick I improvement So just about is got below you a something EBITDA but that a is margin. comment me, point little basis I had our we I think talk a that bit mean adjusted expectations. tell in

So would increase we the basis be delighted a year. point XXX for with

basis EBITDA Yeah, where point to last had is quarter as basis, related our margin it was segments terms it and good all which across on John's had do reduction a a about our overall. terms an we as our first strong last in one four very XX.X% of focused adjusted to we of cost ended where just larger on your comments to us points that quarters, look were of of basis. all for quarter And margin And John and margin ended you at that is a and is improvement. up, see XXX the year in we XXX on obviously feel I we

for step Thanks, others. back Okay. I'll

next Greenspan our question with from Wells comes And Fargo. you. Thank Elyse

line is Your open.

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you currency your months So $X.XX quarterly ago? something expect initial that two a to few offsetting on of guidance in this are do back favorable or compared questions come when our three

we the to No. It's recognized still the year it. that is think there a currency to back. expected we always is the the $X.XX for come impact The for was outlook former year right and we're or seasonality what had $X.XX

on impact Okay and quarter, the correct? margin an didn't have currency in

No, no.

to larger margin Okay. And go conversation. the in to want I just then back

you But or saves like hit expected you I XX the bit margin leverage that a on X% the the saves that a the would in So in think and line get to to coming for lot you a with your John. this of new don't how anything margin maybe one-off you strong quarter maybe I think of short did –cost and standard a margin quarter obviously quarter what second your and the talked in is overall here organic under the in that would old to drive bottom fell quarter? I and posted pretty negatively impacted was at Can well. what some full-year operating expect,

Yes.

into let of Mike of So details maybe I'll again this. some go the

margins the with on incredible a because just was give guess improvement thought prior overall again them. couple XXX that actually thoughts at one question this I'm, least you me in Let on I was of an a I surprised basis point I

of happening tell far from what's viewpoint run Now to of useless looking at I day are trying standard that, recognizes at I a twice. numbers, something some expenses XXX you're I'm the worse a numbers maybe The to not for as mean some and going concerned than I business. guess some all as the as revenue XXX you

of don't thought look focusing results XXX it margin I I on transition I'm find provide when and year spectacular Mike? the to I first any useful the and program at those and this that basis were so. to I try thing in So

which are those. and I feel around And at good our it options. I Yeah them where just we I XXX to on those we on to But continued very, reiterate I invested but we push our we've mean just what would I and continued have on were we at basis did on numbers add to I in mean comments. not and are to in very said, improvement look of there couple know, continue big John's did a John BREXIT driving and a at items payroll about expense mention hard. look and least focus very margins going taxes

might of quantify been expensive the you you what on quarter? can in level And have

organizations. mean to different about across make done have what I will drive and it and without manage offices we are to And sure to operating leverage. our do guess we but appropriately think headcount which driving estate if legacy the estate we that you that think organization continued we two continue week we've consolidate in the continue into costs as between and our going footprint mean ones a real I our detail real of those we've drive I I variety I

headcount our those do So today. bigger at growth, that appropriately with particularly revenue drive I'm the just office we functions so looking we're would as to adding we're of looking not drivers driving footprint to look say manage two the that sorry are lease. and back I have we're our that probably

much. Okay. Thank very you

you. Thank

Kai Pan Morgan Stanley. from comes with question next Our

line open. is Your

and you morning. good Thank

maintain First the guidance question for on your full-year. you guidance, your

would rate you your lower adjusted be If even not why be guidance margin growth would higher? that better at you and the look underneath so guidance organic the maintain EBITDA tax XX%

in was be think in range range. the we a will still guidance the Well

that fronts, wonder than the because X% more achieved then tough it's I quarter And you just comparison the was X%. first and year's alright. Okay, actually organic last

at one do last becoming the easier or it there's and year comp this think actually be quarter The weaker X% a year you second second the was actually quarter for issues? timing of

We second comp is quarter think the easier.

Alright, that's fair. Thank you so much.

from Thank you. And Peters question Raymond Greg our comes James. with next

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around for call not tips wondering if think that cash you that press or in some for sort my establish gave and around they what answer an John, question select and would section could and morning, XXXX improvement, expect answers. two to provided of guideposts guess questions growth, appreciate flow should free a and provided I'm get around first margin key the here EPS annual for et you where basic I and about I trying beyond? I'm community if Mike Good over and question your release, investment but cetera And you was be you in the my XXXX Thanks we revenue front Aida.

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to the anything that don't We moment. either say have about at Yeah.

targets you're you I targets? the been for how performing XXXX give out. us past circle on Last update revenue perhaps on striking area legacy legacy I'm XXXX in those know were Okay. a back an wanted through our synergies you've and moving the as

thanks But we quarter called with. begin would they what and everything partly broadly a to would we script line out. there things hadn't are had results are go during it's mean double I say talk accounting at have going and long with this didn't last if because it that this there through I it's already with had been time, and Yeah. mean well about we that we I

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question Newsome Paul with Sandler Our from O'Neill. comes next

Your line is open.

queue. I I'm margin the questions I get in had on sorry, Mike. and couldn't

Our question comes Stifel. Rosenbaum from next with Shlomo

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taking stock, looks questions. is Why want things do are for buy accelerating. the momentum my good, growth, it you coming. Hey, really make this? to thank they organic she a why well quarter for going they get when if is it's EPS. Hi, first the flow I like just looked cash wait things have to John, the pick margin What mean to expansion, which the back of you quarter this decision ahead business

question. Yeah, fair do just want - that's a that answer you

Yeah improved on conservative and our we're in did but and efforts, and pretty our I we as we closely it's continued watching flow and could DSO just focus. we and focusing managing guess it reality. have cash We not being

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did We we larger So bonuses done year maybe could have before. the have. that we we should than had

the above and to the in that assume the on you you stock you that where a been higher what going range range end of recently? where gave is if has be And the see fair business should it not tracking given momentum, based towards just the tracking

adjusting the about little think I look on we upper have. year. not good worked of the guidance us with fitting the that in feel a or course the Yeah you've for we're don't we that just And guidance while down into occurs very every we and

out even range able the to had So maybe but we feel there better. we pretty good in or come about being

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going more it that will there's a wasn't good think first likely end it's and get I it. quarter upper the into to that

that's. that yeah So

Alright, thank you much. very

KBW. Thank you. Arash next And question our Soleimani comes from with

is open. line Your

but did I the the ask I mean to on a Street unallocated any but but for was like there disconnect the Thanks. in you performance have like anything And seems on year-over-year you that question reason maybe a with was to want more there some expenses maybe definitely in thing were and it the perhaps of John. between one on expected again time there's I something thoughts was there. strong seems like Street kind that it one have and more and? basis looks where just be but Performance we was margin agree disconnect expecting higher on some

been as the and overall, that that associated I activities comments gone transparent try of good as we've standards. be to we moved on our we a easy that back if it I disclosures to in item thinking that not on accounting that's change included have are try schedules another you changes think Yeah, that line what in I I going on. reflect changes enhance application been which to week unallocated compare can net the But was success operations was opening it's margin overall well to then and XXX to would pension and on everyone's try pension it then mean you guess that on to feel what's your margins in our and give website to to our going XXX you there retreat there people had guidance going both it our as restated But supplemental very net as what mean in the with going posted about the comfortable obviously from I What it's, adding them those income that have income in be all is I means. understanding was we've comments are obviously get to that to and and the can model highlight what that from amounts much we and we and that to down included we some present. that going about as a so we've with what accounting was be they were basis, appropriately to in happened year-over-year income was the

provided a if then accounting you put have versus new we we're on looking if new accounting basis. And margin expansion on accounting margin you but would at a been the at number? us new your if obviously Thanks. but What the looking were margin

in managing a in have the that and on have we as margin, we've of But we it. and done in articulated, restate not XXXX about thinking and was not in what on been in at certain a standard, year in think that talked we so contracts million, included come fiscal mean when it will booked did some of of had our basis, $XX range form million so really retained was method and we perspective the you and others focal XXX about get basis which earnings did when back $XX it's terms contrasted literally and to is it in Yeah here revenue amount point. been a back open that so looking adopted business which I accounting terms really equally with gone as that's

I not that how sure really am be. would relevant So

people's our last is for XX% XXX points. XX we But which some about to XXX for that year so and the so basis were the get XX.X% skeptical were we year were got which margin to people if looking to

for measuring that's that's against XXX thinking so why pretty I that And was and good.

question expenses? Yeah. I anymore organic of on you it a the organic And like silly versus the investment segment then reimbursable I income know growth X% know the the the they're don't just difference break out agreed. X% but seem X% might but only for

divestitures, between difference that yes. the No, that's

us didn't difference, of earnings, I XXXXand but I divested I January we in performing there business $X.XX guess our businesses cost the generally $X.XX yeah of lower we XXXX accounting these X% about is and that or were that's think of it yeah. So divested

Okay, and in or thanks. last a change just management And philosophy? capital question buyback

steam no No, full ahead.

for Thanks Perfect. Right. the answers.

William our from Adam Klauber And comes Blair. question you. with Thank next

Your line is open.

good Hi, morning.

get of cash that but mentioned something flow? right that $X.X free did I and does billion change billion impact a mentioned you cash capitalization you $X.X think about free to I in how much

billion $X.X You impact. quarter. as did about of $X.X and That's the roughly get number and it that million there's $XX billion the for right is just now it's to

pretty small. so Okay,

Yes.

of cash. year looks be buybacks and majority will like this free So the dividend

have? the year do activities merger next about think have related we As

I'm sorry beating you're out.

Do mergers deals and likely 'XX 'XX? become and more in

think errors Yes, yes. did mergers it I it coming do M&A three likely, not just after you that was I fronts becomes are on like first mean more merger go a you when the and activity. we out other large also complicate companies couple first complicated but and together, that then relatively it few really a was years so year unlikely further each

Great, thanks a lot.

Goldman Thank from you. our Ron question Sachs. And comes with Kenner next [ph]

Your line is open.

Good morning, everybody.

rates Page Page exchange Just one think I the Elyse's FX, from assumed average follow-up a bit. think do the there little on X% question I I'm gone FX, on look at that have of and targeting still up boost guidance so we're XX,

confirm to coming year? the they is quarter from than the rest that's little by of want more just or I maybe FX that so first all the a driven So

first quarter. in comes So it's all the

maybe that growth you part are year result top Is that for X% the so in And the to the X% the the first slower the Okay. that's there second organic growth, then I That's prior around actually is as the to drivers in second or remaining targeting because guess running were adjusted growth currency in quarter half for months? helpful. nine growth so for my question full-year. of other X% rest in

quarter little I and marketplace overall the very third growth we mean had tough we better obviously second what's comparable into and a quarter think overall. in good very of have at but fourth sort we we're a contracts had go looking obviously happening the

feel what like actually got on quarter. the top obviously in second We're a comp So comp. first it's we we and in another happen reflecting terms we saw of looking reasonable fourth the quarter quarter, third had

kind how be that's number think really of So ourselves will terms the manage in of we let's. what we

so got in the to think least be we growth how and Right. And the for we growing as we the year that be that's less actually will X% fast X% think markets market range there. I or at the somewhere as expect more to

very you Thank Okay. much.

you. Thank

comes question of Bank next from Our with Jay America. Cohen

open. is line Your

us in for Yes. can some you moving It basis be changes you to of looks you. Are of final it affectively that reporting providing addition three with provide, Thank the like XXXX, around. accounting accounting for your quarters made things XXXX? the we to model changes we own so

are our we posted the you recast on on. slides Yes. in Jay have absolutely it's website We were are and so that

Thank Great, you. all the are questions answered.

you. Thank

from Our Mark next comes SunTrust. with question Hughes

open. Your line is

lump morning. in pension and here. interest sum we've Good you you. Any taught going if the dynamics got bulk on Thank just all? rates those bulk in the What backlog seeing accounting some up or it Yes. impact work broader -

ready of but on that act play for big half a this that projections phase we this backlog so a a lower both not lump some it's or the do and right low the right dozen you year lot get sums have liability so any there's we also, cost next measuring a of course bought pickup bulk they to it's up lowered level interest say and they just about Yes, little year, the ways down target factors that to the a projecting going years work in some. looking in I too so, can, early we're in to lump also We sums now. of see were a pick are doing if some has think up say where a last now sort we're relatively don't can higher rates over at

much. Thank you very

Thank you.

with Mike Suisse. [ph] question Our comes Zoranski next Credit from

Your line is open.

in IRS Hey, mentioned you the good potentially. remarks guidance morning, thanks. prepared Mike,

to tax Just there as coming trying to are some or more the conservative a maybe on guys color or you rate trying being this number of that? years and well months change where companies just guidance the materially be mentioned more in could have could color get

tax. guidance get that to provide relates guilty to that to more issue and most continue Yeah, clarification incorporate have guidance the a in they as I all and mean and so –Treasury analysis we continue and and our recently continues to we as additional done calculations

fast that continue got interpreted guidance comes that out. that there's as they So as we bill believe to continued passed

to and plan we more us with more we thoughtful trying understand we're so to continue clear, to that get sure to or And impact forward. what and strategies try to do. to be us what so it making tax below exactly over rates the were statutory planning be and we time to continued could aligned going that's just appropriately But

we're So I that's and then getting we're we the aggressive said think I'd conservative use if are there's same about that saying so why guidance or I it it's and that properly that's sure thinking others getting I'm because why

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you. Thank Okay.

Thank with next Kenner comes question Sachs. [ph] our Ron you. And from Goldman

Your open. line is

on do the one term. in think guidance realize it's growth double-digit in surely XXXX the past I just talked long a have you about good quick follow-up EPS, I but Hey, I the

growth, that think So guidance XXXX? XXXX offer when double-digit XXX that we about is to full-year that for the

we where end-up. Yeah if that's

Okay. Thank much. very you

Morgan And have Pan we you. with from Thank Stanley. another Kai follow-up

Your open. line is

the time to of wondering that business since into give rate years. you well need of thank organic to of two the now improves system. lot that business didn't a just BDA, last given last like is a profile invest how a business? you the is that growth as that probably want scary change that sort don't is margin so on is are slowing Is maturing I Hi, your of take two, much I of for run try to down

as us get of so because slower the retirees a base. it's are growth and so are rate which the with all have that the we get cases said market but the where reason very all much of few you ones the place as is and them one relatively and big Yeah pretty big stock is large we their with you the that individual is all in of all them out clients there there's of

to and is the a big we would growth what ahead could the be market We investment to is cases just I not large So just a doing I that cases. guess of rate competitors technology several say the marketplace think impact investing expense necessarily continue to little that we implement a because of bit prefer in of to both and hiring keep of at the tends keep to if be don't new have XXX,XXX maturing incurring but of I enroll big you group and of the the lower have or that not hire are the that but so course case to any slowing a it the our see there. that we're margin improve or do of call margins large down new We to forefront lot individual we'll very maybe and something don't clients make to people that new having some people getting or little new happens. like life then think or still investment so bit. as we're much margins

side. final pricing Great, on my the is one

down You neutral see going renewals? slowing going? up especially see new the slight you the that and momentum how the like reinsurance to pricing currently Is to do mere

different we I any moment change media than the the But we dynamic being see don't but what is at of the things pricing we year. market see think can don't saw think a these and at I beginning difference.

so you Thank much.

we with from Shlomo Thank And Stifel. have you. Rosenbaum another follow-up

open. line Your is

are talk same they're or the of is was ground that and in maybe squeezing doing better consulting little hearing just compare them quarters areas Hi, it areas and then a resources people Asia back just to can and some the organic on way? the competitively the the I'm the that areas quarter from you of the you're different areas the end. brokerage just trying me out some environment some sensing, side, John, a higher human you thank is business like the bit little in bit at or it and in has your and you're are than par you push it about you of and better Hey for want competitive better markets in on last several growth peers the in the been to seems know of this level

this is at the bit answer Sure. chomping Mike question. to

about international as equally of Also, going I translated on think we've feel seen been very in we strength terms to operations in particular We've what and colleagues, our good international. in and from the Great of a business. terms people, and Britain in risk others management still of see serving our standpoint. clients and our defined there actions working and together at John in winning than in and fair of growing we And retaining through we of we're our our delivering we of as benefits strengthen going that look quality terms where they're to because mentioned in my resources and in and and strength continue what more clients the view more our earlier to win not marketplaces that's a more activities grow share our and continue because

think - in look look happening and look defined activity, been at you benefits business in our is I standpoint, our what's us at what's we you an look Britain, overall So happening brokerage our business Great about, at the been from you look growing. benefits international at defined versus marketplace you

line. what's feel top about the at we And good so happening

them. focus cylinders, on on nothing perfect so focus part we we're overall mention focus we to Germany very on there to and look, ever Now good. all we areas and an - that's we're feel hits continue some of continuing on are is that our But, continuing area to that business. that

like just to this we But like When is to sort as on we I of something indicates you be together. with we merger focused as I add where this of think performing the at is just be. have may of think we've everything company it growth that growth is we is our weaknesses segments to our look brought think the of we'd been - and regions, Shlomo kind have all think growing see we be This quarter we'd too, - one across things we all across what and we everything where of no I well. one and as

Mike think the a always coming minuses as smaller As but make you weaknesses. units, and you no says, to pluses we having get have there, to by can strong down

Okay, great. the for color. Thank you

quarter everybody earnings for call us in is on look we to then? second Okay, August. it that updating you very Thanks much and joining our then forward

gentlemen Ladies in and today's for concludes participating you thank This today's program. conference.

all a disconnect have everyone may great You day. and