Willis Towers Watson Public Limited (WTW) 7 Feb 192018 Q4 Earnings call transcript

Good afternoon, ladies and gentlemen, and welcome to the Willis Towers Watson Fourth Quarter 2018 Earnings Conference 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 turn the conference over to your host, Mr. Investor Willis of Watson. Director Keefe, Relations Towers at Rich Sir, begin. you may

Towers to call. Welcome morning. Watson the Good Willis earnings

On the Burwell, being call for we Willis Officer. Towers issued with refer the me today Chief Please Today's supplemental Officer; are press Executive earlier release and information our today. recorded. Mike to our and Financial Watson's Chief website John that Haley, is call

XXXX. in within Securities differ comments today the Actual today's forward-looking of the Reform statements. no undertakes of in constitute uncertainties. statements the to call, and subject Some forward-looking materially are update Private meaning the Act and discussed to these These statements we Company obligation from risk those may results

should release forward-looking earnings review of the For this issued section the and more a discussion investor of statements press detailed these morning. factors, other risk

other As in and recent other filings. Form Towers most XX-K our Watson SEC well Willis as disclosures

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

as reconciliation regarding measures For questions. materials other please prepared your of and Investor release recent in the the measures, the to other the information open After call Relations conference these of the remarks, our website. earnings for section most non-GAAP well Company's as we'll refer

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

outlook for everyone. XXXX. we'll morning the good for and Rich, Thanks, quarter review the our of full and for Today, brief then on a commentary results year, fourth the and XXXX we'll provide

journey since end The the discussing merger. of like activities. Watson XXXX to Before the Towers integration financial our results, quarter on marked Willis of reflect fourth XXXX the I'd

of faced extremely last for challenges course we the and we've proud the the progress Over made. many years, I'm X

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results. let's to Now turn our

a of million for impacted basis. our Reported dollar organic of which be report prescription basis as accounting detailed our of EBITDA prior $XXX the the X% provided net income the an included ASC currency negative benefit the prior billion, morning. on growth new standard ASC presentation of on as first from the standard I quarter the will constant the XXX $XXX statements million, explanations prior to of for XXX, basis a and earnings our Just January fourth was prior prior an impact was A tax has revenue to as a reform. tax We our our of the XX-K of the was for excluding this reminder, fourth how Adjusted up of points increase across accounting income X% the impact been down one-time without the quarter XXX the Net provided will filings X, X% $XX XX.X% to segments XXXX, reported in standard. an financial ASC for quarter. or of million using Form of revenue, new and XXX. movement. revenue million XX% up in accounting standard as we Based $XXX currency basis or revenue up X% as and organic $X.X accounting quarter on quarter, of year representing of quarter compared year standard adopted XX.X% in fourth the new performance adjusted margin impact basis $XXX an and compared EBITDA results fourth the included year million EBITDA experienced the and release improvement. adjusted was on all fourth the the on detailed compared on

margin a share were $X.XX. and grew We diluted For and were earnings earnings diluted share share per and $X.XX per revenue adjusted the it adjusted earnings was Overall, quarter, good quarter. per EBITDA performance. had

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

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

standard amortization based results reflect commentary revenues our each Now calculated currency certain basis To at on Segment constant acquisitions provide of results the in specifically unallocated which and unless periods, items margins a will segment resulting with other accounting well intangibles, clear are of regarding be the let's prior as compensation. look segments prior costs, stated otherwise. consider detail. results. the revenues transaction as as more and segments comparability all and such of expenses restructuring the non-core and costs mergers for we discretionary include integration operating to The segment and using exclude our on corporate

quarter. The currency the compared growth to Human our a the X% all For on performance and across extended basis. solid grew total growth the constant in segment segment. growth benefits organic had fourth advisory work quarter. specialty our with prior is year and an quarter, X% on our products. strongest as X% a or businesses as the and result the had growth in year health in The revenues Benefits by revenue HCB this solid in Capital increasing We organic quarter both prior to by currency and constant in basis solid business fourth of primarily North fourth growth with America increased compared driven

continued advisory fourth X%, In market North as increases management outside global addition, The compared to rewards experienced was market America, as demand for Western work increased quarter. due and America growth and globally in the Talent fourth revenue and benefit to related net prior in for North Europe and strong International. by to appointments share. compensation surveys year primarily regional quarter momentum we local as well

on Asia. prior fourth projects related projects business in A America of and level consulting retirement to like the expected, experience more nominal pricing growth, bulk compared year quarter. North lower more in the favorable in was from offset by strong to Britain activity lump in As international growth de-risking sums project growth than Great

and margin management margin prior segment TAS implementations. of XX%, quarter. for in Our the HCB revenues Administration year was from prior quarter contributed to an revenue grew Technology growth operating discipline increase Solutions, Germany moderately compared and the with to Revenue or fourth X% the growth. The increased year new client fourth expense from the

the turn XX%. to including the operating of had million HCB and impact segment HCB Now then standard. of margin new the revenue of $XXX The revenues results

the operating operating business by wins a revenue XX% and basis currency Europe Risk the margin business compared to primarily efforts. wins America's new Latin Britain due construction, X% a or fourth which in quarter. cost Western management Now constant management. let's to prior an Corporate in International CRB organic in with America. a by in look growth. X% claims at its several generated continued fourth $XXX and business. prior contributed each with performance the had driven year of Great revenue with revenue across lines as continued Asia top Western million in all and of new XX% momentum, revenues Britain margin in line fourth X% were coupled The as Great North Broking, International on quarter & results increase quarter. and grew of energy both expanded margin CRB, year to compared Europe strong the

the impacted to results CRB turning the revenue standard. Now of including new

For the an CRB margin million revenues quarter $XXX operating had of XX%. of and

about continue to momentum our in optimistic business be We CRB forward. going the

Operating net technology, for or better. new on in strong to basis constant driven and driven growth performance quarter Reinsurance improvement driven Investment technology was increased in unit. new was in client while growth $XXX quarter. Reinsurance the revenue investment margins fourth same insurance to to delivered organic revenue insurance continued North compared or Turning in as a on activity driven increased Wholesale and IRR, also and delegated the consulting through wins fourth growth businesses and Risk by the the basis the business Investment to million X% technology currency X% due project and services. wholesale which by consulting versus specialty period consulting primarily investment negative in X% by sales slight a and were mid-single America, business This last grew growth year reinsurance, year. had prior growth EMEA growth the was mainly and Americas. digit the an

to XXXX revenue due quarter. quarter fourth the margin expanded growth the Over for robust the

including of of revenue the margin Now new the of the standard, revenues turning $XXX had IRR and impact to million operating X%. an IRR results

momentum to X% our very clients while segment projects. quarter in this increase XXXX. and individual driven clients We for the businesses fourth benefits the of X%, Revenues revenue new while remaining marketplace by positive revenues group continue and primarily increased exchange from customized prior new by the drove BDA marketplace business business due membership increased the led outsourcing. to feel continue growth to year IRR in segment enrollments, by the the XX% active and by Increased benefits about the increased grow outsourcing generated

me So to the turn enrollments. let XXXX

our pro seasonality exchange of in million business this added has to The matures. of look continue XXX,XXX difference the The space. been We're in market to XXXX million period. scale their X% year a be continued about increase mentioned we Segment up to effect We must placement $XXX modest year well as throughout individual As recognized margin enrollment large result revenues and The XX,XXX earnings the standard date the individual marketplace the to had primary during and agents. than our to lives accounting XX%. as end, enrollments seeing than to of at mid-market the the in more agents margin the off-cycle growth reflecting due and evenly operating and more in of fourth XX% of revenues to call, we the these date. as XXXX an enrollments due enrollment via revenue revenue enrollment effective as businesses. the rather enrollment with revenue segment was now and previous margin driver had enroll that enrollment expansion of during stronger starting BDA retirees compared the These the shifting $XXX strong during to The expect To the in off-cycle at another spreads revenue BDA quarter. fall new operating marketplace. prior a standard of enrollments rating ability season. XX,XXX The is

throughout new activity to this under recognized started on the revenue be basis a the standard, year. annual now fall immediately, standard have rata XXXX majority is revenue So in under January pro in generated the would the recognized old enrollment the the of by whereas

results at in strong higher share our delivering while continuing of EPS in capital thank the also future meaningful all quarter standard. in dividends growth earnings quarter, of in growth So, year and colleagues for significant have their our summary, our I'm under We to and and a shareholders our growth calendar by fourth the pleased to progress. with like support return year, new this and for produced adjusted to we Watson. outstanding and for In very to continued I'd revenue Willis Towers fourth service revenue invest margin clients unwavering through expansion the repurchases. their commitment all change the full recognition the strong

turn I'll over Mike. to the Now, call

for congratulations all for to our joining Thanks financial contributions all to our and to my overall good like colleagues XXXX, and add and ASC their us. our in of continued XXXX our results our to finish the well morning I'd over as and impact comparability their to clients Thanks, otherwise efforts our strong the results everyone. with John, assist support. performance stated to thank comments unless XXX and will thanks periods. you My of without prior in discuss around year order for

Now, let's financial turn overview. to the

income to million X% the X.X% from billion discuss XXX was the operating year or for operations or a in compared fourth from operating revenue, Income was of for X% from up of of revenue. income which prior same for from year quarter up billion quarter XX.X% the in the XXX% up period XX% or XXX of revenue. X.X and revenue XX.X% year of prior X.X% year or the operations quarter X.X prior the of XXXX adjusted prior of XXXX operations from or income or quarter Income revenue. was first million income fourth Adjusted X.X% of XX.X% XX up was XXX revenue. fourth me revenue for operating in operations. of Let XXX of operating or full from year full adjusted same the Adjusted was the fourth of income from million revenue, the income XXX million million of XX.X% XX.X% or year period as million

turn or share. me let EPS to Now earnings per

$X.XX aforementioned in period, tax benefit incurred decline and comparable U.S. and the the reform. EPS The For and connection our was quarter tax respectively. fourth the of of one-time 'XX, XXXX inclusion EPS diluted diluted due year-over-year to $X.XX was was which in with the

X.XX of the share, quarter. per in as For adjusted compared the fourth per quarter XXXX, EPS was fourth prior year to to our $X.XX up X% share

For the was $X.XX full and year EPS XXXX respectively. diluted and 'XX, $X.XX,

XXXX, Under diluted year the our the revenue same EPS EPS year standard, XX% For XXXX. adjusted share per prior about versus full period the share the for the was and per quarter a new full in was to recognition $X.XX and $X.XX $XX.XX for year. $X.XX

$X.XX for adjusted quarter the Our was $X EPS per full year. the share for and

GAAP prior like compared U.S. insight the rates. I'd negative to XXX, with impact for GAAP Moving rate you of some was fourth tax the fourth quarter. to taxes. for additional tax to U.S. ASC our provide Without the into quarter and year adjusted the as XX.X%, XXX.X%

for prior with As rate, booked at the discrete which had a 'XX significantly quarter in U.S. a reminder, U.S. tax and the benefit we tax to tax in from net XXXX. one-time lower our fourth year year, GAAP QX reform results respect rate both prior full year for

increase quarter. tax fourth a slight adjusted from XX.X%, year Our the rate for fourth was prior rate quarter XX.X% in the the

adjusted guided was XX.X% tax tax U.S. GAAP For adjusted which XX.X%, our for the XX%. tax of lower rate was XXXX was XX% slightly year, than the rate full rate and the

we a strong Moving balance sheet, have to financial continue position. the to

in our For revenue XXXX the strengthen. full free XX% period Including sheet the billion, $X million of the impact flow flow year compared without increase was continues XX% of year standard, free increase an prior new position of of to full was the the same compared to impact year. our the X.X XXX Balance the cash year. billion, the revenue cash to an standard, or prior

year. leverage decreased the X.X capital year-end flexibility. fiscal to the our prior at financial result to as beginning successfully ratio $X senior year, adjusted times X.X provide structure, efficiency end EBITDA we profitability of help year, times notes our at a to of our Moreover XXXX in of of debt from prior increased the issued with During billion additional the the

In or terms approximately we the repurchased approximately have the quarter the XXX million and million during repurchased XX.X merger of shares paid the XXX $XXX in allocation, since capital million for approximately million shares and fourth year full dividends. retired we

both pass a year guidance report adoption summarize standard, the last Having no our all ASC our standard on XXXX, the year's solely based Starting ASC standard. results for we reported the will initial new old standard. moved we for let's on that our Now based XXXX. the accounting to look longer performance, in and financial results financial accounting take ahead XXX we XXX revenue

XXXX the Importantly, today is ASC to on guidance we you will provide the rules. based XXX

we Company the For around X%. growth organic revenue of expect

to on guidance with is We're classified primarily line decline sense changing so is can provided forward. which income line to operating going in to pension in supplemental further think margin get on expected some that due our in in performance assets. how on focus non-cash that investors Our margin about income our returns planned to of adjusted decline better materials. We other core margins other a income guidance our

our income around full Pertaining XX% XX%. operating to tax, expect our be year margin around expect fiscal We for XXXX. rate tax we year to effective XXXX adjusted adjusted to be

to XX.X related any in legislation. Excluding in items the discrete increased from compared reform XXXX. This change potential stance tax effects

continue We by for evaluate impact new tax and tax of assumptions computations taxing the including our effect changes from rate taxes the authorities. reform interpretations effective the associated update with on issued resulting to of

is updated will analysis As and continue be tax to subject becomes a as the result, to effective available. volatility and more rate information

this look to at tax may finding continue will year's lower which guided the We strategies rate. rate beyond

to of cash currency average to the greater view. three measured pound a of year flow XXX in to free from changing term rates $X.XX euro. our free the cash we assumes expectations we We indicate period guidance year And term strong and to next or XX% the our expect way the over grow We're amounts. each $X.XX long our expect flow. flow cash year another longer growth free categorize general In

expect impact of with the level, guidance first XXXX higher will income to diluted tax to and to approximately in share to diluted share the around rates adjusted the includes be Adjusted projected per share line the headwind pension the rate impact the we exchange be and adjusted this $XX.XX $XX.XX. as is quarter. reduction, for headwind $X.XX of reduction around non-cash earnings expected in EPS current item XXXX by with expect majority range $X.XX lower to of in reduction. from adjusted remain Assuming we a FX such this $X.XX the per $X.XX earnings per currency at

these the EPS growth be growth long for we ahead Excluding were execution. on a and which XXXX adjusted remain rate adjusted provided objective. at momentum driving double EPS pleased growth a in our XXXX our lot of opportunity summary, is to XXXX. with and continued digit term we expected will we items, have as There In focused results

look turn to there. to I John, be forward XXnd, hosting before March to Washington seeing So the Day on we'll you call and remind want Analyst we year, an XXXX, this I in DC back you

Okay. Thanks, Mike, questions. your and now we'll take

the first Instructions] Stanley. of question Pan from comes [Operator Our Kai Morgan line with

line is Your open.

question. first My

Just in the forward, want other XXXX, for would as line will reduction the just other $XX that going guys level income income be of one-off to you make sure lower? be

about based that would of line forward. reasonable Kai range Yes, similar that terms we thinking the item, it's in kind but we would that be that's think on think, 'XX number going of amount a

John the this for And X%. guidance organic year did growth then, X%,

headwind in into XXXX? could Just mind wonder, that sort be if your anything of

to that. generally build mean we That's that look well to saying, and XXXX, look, I around whole continue in have we'll think projecting a special we if very XXXX is Well, to nothing expect think, our if I we're in as competitors as the fast built faster. grow X%. as we We not we XXXX, X% and you how did think that into industry on in I growth expect -- we

a last just it's picture more, larger question. One one

Looking you target. back three XX.XX over years, had achieved $XX.XX your last deliver

specific focusing the what through So tied the you one part performance you John are awards, two, and XXXX. stock you've will XXth to past be like years? years two have years, looking in next extended Number unit contracts on your X new X a years? are next they question. is another X for for X Number that, targets There

me first. the the for the grant that that on second did way the awards of we X one-time stock we was awards. return answer -- years metrics focused new special. new just first let of particular part And -- was So, mega more used set the total question The of -- there shareholder will we're the

So we We had over some of lowering of the I tax goals story was We synergy the get goals next in We terms to wanted our think savings get in revenue. had to some the we X wanted X get. to years the some bringing we of wanted efficiency really terms together. had years, costs. last firms overall two

even want what Willis to those I areas. in the of I together bringing think want our across Watson on getting is operations. to three we continue all Towers more press focus and to synergies we of think But all

focuses I as off on I in when able And term, as we that we one basis on. XX% to the the the grow said, build one bit main our to to short XXXX. medium for to faster of perspective, that's free metrics should financial things So new in a look flow are that in little XXXX, as that. from we a year. we And of referenced of flow. by one his just And and the we're as want our we fast cash XXXX be a expect against free of focusing remarks, going growing that key is an have grew competitors Mike cash organic we're

the comes James. question from with Raymond next Peters Greg Our line of

Your is open. line

the the like give growing it's in puzzle DSOs? your us by at give us I cash could a expect guess, embedded on you're per answer and than about faster that term some an pieces sort suggest. would growth and update term share build components flow And longer of because talking John, your when some cash flow. earnings the free drive you to a maybe of cliff last you hoping I'm free near just if could I spend minute was of of you clearly on that, guidance curious to

yes. Well,

I think so.

over all, Mike be of our is, means as And First of percentage that actually one we notice a we from of larger income that, profit the some though more we headwind cash years. that to that of getting significantly is we're have expect profit lower are something growing pension referenced is flow to what getting free the the things there.

going that's helping be So, to us.

We have no that forward. We're capital. we integration years, on be going DSOs are we're our continue coming year, going we lowered to cost and this going focusing to working -- our And successfully on in to Greg. press

And InsurTech that's on improvement? you course are talk investing answer. margin about Can just your in like operations things improved help other the extracting your many an investing of talking seems upfront balance expense? in to efficiency, drive to that build like and initiatives between about and and of It peers

InsurTech. have we on an of on area do mean, we and We're already. couple referenced to are continue of one this to some leaders others, we largest do. be have to a continuing this lot in and -- it's going the investments part of as the company of consider then work push I ourselves We area important Yes. what a we've the but we calls this the in on that actually this last over of years, single in

this get the have nail I could, just you sense know feel organic different but sort guidance last And the of question us some my upcoming is around revenue if was you the specific want if how you for or second could year? wondering and segment, segments by wondering And the might to and don't give to I'm guidance. I perform down a question I in

we more likely break the guidance in overall the little. have Well, is just some We visibility it confident much much I the the think one don't further down, you Company more less that of for feel be. giving into it to as things

of think grow about that's expect all we and Company our would I year note to feel why the trying segments this to segments though all that again stick pretty the level. next at guidance of year. we're to that. we grew good our I And

Next Stifel. of question is from Rosenbaum Shlomo

Your open. line is

I Is maybe a had back just of the just and have But basis. I lower you so into, is because why that's detail just, that more something Mike just jump this stuff. just wanted that. the to the have might and on us couple call, that I jump return to want reason things, correct? give to you hit bit go a little on can expected expect I forth on and we pension missed assets and should forward

in in is XXXX. for returns that evaluation. secret impact of happened some a you performance forward calculating we Well, in in of provide -- obviously had the terms provide that many terms look an of that actual some -- services assets what actuarial in to if have times, and have we direct -- of we that no that that going to actuary. last year terms And the in obviously we no ourselves And extra at of through would be determination us going

that's piece the it. really of direct So

just comments I make Shlomo. Maybe couple make just quickly a maybe on it, that,

less that up, going in enough a interest we during the went but measurement. December, be all, so same might just term So you lot tanked little of when Interestingly do time, have the would bit. thought end December of pension first markets rates assets a in the just at we fact, the they rates the have longer

same liabilities were our increased time So, going that down. our at assets the

company. mark-to-market We are a

smooth don't assets. So we the

fourth if but the some experienced at the increases companies a offsetting the performance little they drop years, asset from that we in that over quarter, bit prior by of you by they're the look So some year. that can maybe hit smooth

So, it's not as year-to-year. big a difference, differences the see companies that bigger mark-to-market

very is small. this And it's the nominal, cash implications,

this turning this a really same could fourth see of we went event that up that it and it's quarter way So, year. The could year impacted as go next year well. that next around year down

January, results. different end at just the we me add a of have assets the we Let if measured would say,

And you okay. on flow cash make coming in that is did then settlement the side, Okay, litigation free XXXX? the XXXX still or in

we That's coming hope XXXX. still in

flow impact out integration Seems by a the really, looking pension be go And ahead of having from cash peel getting at bit you're and with and continuing because to the that back to in expand, is the cash free I'm things margin faster underlying just certainly business and one that capital Without fact less near-term? and to is the lot the know? stuff you step non-cash. the growth in faster to the just if you a little shouldn't work that, be went is growth continuing the margin working integration, cost on

are that you million, one in is in we expecting I XXXX. said thing pay XXX Well, mind we as do have, mean, to keep to the

we're not for not saying the XXX minimum. trying saying so, to We're we'll And we're get XX% adjust million. --

Shlomo. Minimum XX% will Minimum or be plus. the

So, XX% XXX the hit million. including of

Including the million. hit Yes. XXX of

Got over forward? be then there difference And business you last there comfortable the feel expect you able line a growth could then businesses as is organic the of leadership that forward the achieve you that going brokerage with the several go to should a in been said the some of need Do you the changes on trajectory in basis? years Got to some any basically Is and little ahead if talk recently. it. peers of to holistically, in it. you any just reason

on place I committee -- great have we Yes. from I feel about operating down. the in about great leadership the feel the

but us. geographies. I think its have issues all are leaders things segments across think frankly across you hardest in -- every some the deal and terrific that I -- of behind can very there's some optimistic we own about with, our and way to has really have we of year what I'm achieve

Is very business conservative in, could Wyatt just capital Okay, squeeze If debt, on been has I then hit dry and powder just lot allocation, last Company on legacy or wanted we it historically, should the expect great. of share the the might some step one acquisitions. Towers -- think their way a Watson should about it you posture Watson for going we forward repurchase a up a always activity? of

share that, we use We think about $XXX some available million to have I acquisitions, looking so found could be really at we we at repurchase If that Well, do. what looking would didn't great for acquisitions, we'll wanted should is we we or do that repurchase. if shares. we

question Marcon from Baird. next of the comes our And Thank with line you. Mark

Your line is open.

a had if couple basis to wondering I internal was culture, the about or in you the together. way of the that the next things. go-forward just organization viewing like what you're should to how you over a goals of way of if organizational could on you the two the the of operating? you this observable the alignment, talk terms about of the talk terms from are actually years I'm major -- the incentives, would improve a one the that -- of inside that that have just wondering, see outside some that some can goals on of continue mentioned, is change works you certainly be people John, in can the

led think go integrated particularly market certainly So, -- going as I -- some we in to inside, and from of has US the we to see this companies of in large companies a -- not proposition market the our in organizations for. talking is had for. with of market work we'll in the the December some couple We large penetrating, that to we I CRB fourth us timeframe. particular November-December in -- worked in CRB just that traditionally the we quarter won to the mean, the the have our

that it the parts working both that, integrated some the the think I and couldn't of occurred CRB without have approach-and organization of other together.

see but in America growth large to North see visible more that market That think pay think in I inside, start will to we'll be people it in So, our particular. in probably off. you'll continued in outside, I CRB,

seeing I have I them we're we Working them and and in. introducing those from are really CRB to away. to and a so ICT, forefront InsurTech -- to together, available in on that analytics and tools see consulting, response we increasingly took of chances talked earlier And that an about question, together. and bringing what reinsurance and we increasingly ICT is in coming technology there into do some think in right we seeing of expect the we're InsurTech lot our operation insurance, off the together between work

And may. if then two questions more I

revenue strongest to about specific very without Could about with ordering rank being the just overall talk segment X% Just organic to specific from you growth, regards the growth, mentioned the you maybe expectations. last in the also major segments? perhaps are where growth from among most question what four And the your Mike. of expectations revenue and investing terms then most then the you are modest is

more free and the DSOs think the should what you flow terms can the give is about conversion? a and of bit cash there specific goal how in Just EBITDA, little we the Thank you.

Thanks Okay. Mark.

So, a we account think every a course let there earnings so a I about consistent new is to great into the of you BDA say, when segment all But, lose -- customers some to enrollments. have we're in segments, start you're there's having year. actually off and that also reasonably growth the the take segment me retirees rate across element with growth talked mortality from that -- your you I the of segments selling that's of too, the think is

they And too. the number certain for when of years, we last got we only fade some that enrolled premiums people of off first so a

our overall. So, we'll couple at fastest rest brush, the has the BDA the think my growing foot -- like over by think more all about same that Company all I I XX,XXX the segments of of in last the level, with And same broad a them. more point as is been look years; see of pack they far look the

offset we'll but probably think things parts. the and be growing, I volatility, that see segments, then is fast benefits, could that IRRs has think like the I one health which by other will most be within very

to bad a the not segments. thing probably is for X% about the So, think all

excuse of terms what me? we -- In did

one you in invest Which would most? the

yes. So,

incredibly investing -- we're I I we're as Benefits in is said an Health growing. that, fast in, ones think area the investing So, that's &

in is we have year last area then we're that that asset investments the and the largest two around the also. IRR IRR announced or CRB doing. The in. the investing that through ICT are investing for we're and of that AMX CRB also of in -- Invesco in an We are some And in ways some are materials lot management Company the and we the InsurTech investing in of we're exchange InsurTech

of that case our efficiency that still retirement a growth. not to also make our pays it to there areas So, the can for or that invest share those large to great us areas example, to though continue are make are improve market I for so be maintain a for in may sure like are we business we're in. invest would can sure that and growth it's should have to we be investing we where in that that and that -- grow, big some in mention that because

obviously to improvement question, on looking improvement working on remarks five-day prepared at this commented then the drive reduction going to targeted and next number that similar continue mean you that the free year. cash saw flow of we And last DSO Great. in our kind I in we into and we're year

kind that's really really really terms in free capital said, we of is better capital what we're as of part cash big targeting or overall on So, in growth in XX% focused working at of looking a and obviously of terms flow that and management. DSO working --

our the question Mark Hughes of from comes line next And SunTrust. with

Your line open. is

like growth morning. in CRB of North Good seems America a X% strong you. number. Thank Yes. The very

some you or of business revenue came you was benefit much there How would to through You an much of this timing have that come X% integrated that -- approach. quantify had new how alluded quarter? any might there could kind through synergies wins

don't We've actually because for we we even can got a got we've record break that ascribe of data or them this down, different reason. synergies. win them so because we don't have win this No, that

was these quarter some in so was these that. mean, construction, a just big So, quarter there the in quarter impressive in strength the but our a XXXX all in things more would But, evidence fourth in that there. the mention But traditional about we be so America companies, particularly board quarter very this is it say We strong off I fourth about is of which there I'd the had one growth to anecdotal timing. some really, across because wasn't areas name and is year, result. think good I fourth was good anything a North of ours special of happened we -- really -- had strong had this -- like I XXXX this wasn't

total to be should how so we share issued repurchase share activity, XXXX? repurchasing in going the think the share and about you're then, progress to you make count just count? steady or reducing on shares And the going hold Are

did no repurchase to could $XXX it to, I in million, the whole think we about million in expect we to -- some about million. would we more acquisitions, question least that though. half, would as Shlomo's I we spend at would that that, was I eat use count. shares expect a of probably or lower the so repurchase $XXX that share response question If that $XXX think said Mark's we acquisitions that the would into not do If share do if we

Suisse. question next Our from comes Credit Michael with Zaremski

Your line is open.

again, the talk I for XX%. flow, going come cash expectations flow there's think on it a know by lot I been free I'm to to cash closer -- back apologize to free grow of given were but I to

of it's further more from at you the is -- to I keeping alluded cash at If revenues, or a on cash so, the rates this of flow to growing talk expected. kind income and end maybe long-term to that declining So, talk kind you maybe can year making of flow the maybe because fast people the of you free the what's is the investments both? contribution you're as isn't maybe can why gap operating as looking percent goal levels, pension closing as interest of CapEx free think the it between

we increase guidance XX% flow. don't had I think free of cash any in

sorry, want to get Bloomberg. your I consensus on just

a per year We XX% is pretty know. good result. don't think I

So...

excluding years costs free see cash top good number will go a you greater, XX%, be on that we and litigation I integration so minimum at a of be lower think the years some higher, have. target on pretty five to away will see happen lower in if but some and XXXX XX% is likely is and In be some years flow will so growing will obviously the not basic some that XXXX we're of years we and -- be in Stanford view higher, I there have in happening that will it that mean settlement that much outstanding, that, most

of XXXX, that's have last and little sometimes past more fair. and to results I'm tough sometimes digest, when you seasonality we in your just I you organic volatile for curious been or is follow-up any are growth our we be My for was accounting about tweak think should peers, there think XXXX? new Okay, aware the so tough models as comps question quarters, know bit than margins a nuanced

I don't so. think No.

Kinar from with Joseph Goldman is Sachs. next Our question

Your line open. is

question going flow. back to cash free I So guess on

for expect more XXXX, gets five about XXXX said just days I or at the by to growth, DSO so the be would correctly? EBITDA that you thinking guidance think in five that growth, about remainder million, so am $XXX extracting in still the XX% Looking -- of you I think I it

did I get mean, -- that's -- not into we look at of what that specific. combination some

haven't We broken that down specifically. it

of But is coming the think XX% the from DSO million of to Okay. improvement correct $XXX roughly improvement? it

so Last we're Yes. mean, I similar a putting similar year, of out. of of we target a mean, had kind and similar I a days think we and had improvement. where year-on-year year targeted that's five last improvement that's I type kind

it down didn't break that again, specifically. But we

as of five future? about that a out year should improving slowing in start is that by we expect the days DSO years foreseeable to to a down -- number for do you And reasonable or Okay. think the that think

those capital to back of of, that target come management, overall we how profits, combination just would still things -- I all cash and in XX%, manage managing flow. some of Yes. terms working

we're and all those. mean, targeting of So, I XX% a combination

Okay.

continue I get slow as we may eventually mean, coming can several will we in we there goal we closer think improvement least can is look, in each I years. is, one-year They think think at other. -- DSO much not be think what to get we as But the our we the do improvements of to get. do it more we as are but years down of

EBITDA, improvement. a had outlook the have a XXXX, in I other other EBITDA, think we was XX.X% bit that before said kind past I'm of now hand And the potential Okay. the XXXX? clearly drivers thoughts on on had other for in little clarity hand, think EBITDA one on you a the you you've How then guidance change assuming more income on little but should then for of for

EBITDA overall improvement. really we're that's which income, on then operating really it focus and giving focuses on we was to operations the not appropriate Yes, more guidance on really why thought

So out that take that had our volatility pension we touched comments. earlier you on really in

the you for next if and and for that I year. XX% margin saying we're adjusted this think be But, we're in was XX.X% about think, XX.X% operating XXXX to it year to was close going

margins significantly. expecting we're continue So, improve to our to

one last And other that's Okay. quick not the one, million XXXX's right, $XX the income decrease compared $XXX to adjusted in million XXXX, $XXX in million?

sure got So it. just the just make -- back question can to I you repeat

Sure.

income? You're full $XXX of talking wanted not net of the that income $XXX off net to income a other just in off year confirm other million of in adjusted of about other $XX XXXX income decrease million is XXXX. million I that, for $XX decrease

correct. That's

You're correct.

Our from is next with Meyer question Shields KBW.

Your line open. is

Great, thanks.

to one a XXXX of rate next is unallocated expenses, base with a modeling regard good quarter, full run So $XX year? that quick about the should million year question,

and on focused number. any about earlier John mean in improvements Yes. those I number guidance mean, we're really there that not really that is way operating terms really target I the of margin it. mentioned giving income, on on thinking focused the we're further really

overall renewals a us could we're I whether was hoping change among you I'm demand seasons? update on reinsurance give talking seeing in Okay, whether some just for X:X sorry demand, sure enough. certainly reinsurance notable a -- about you're

-- consistent has marketplace, performed for in very are that and so business with and we mean Yes, strong for well. strong been definitely the demand I us what seen reinsurance. seeing we have we've Overall

And are we in see think too, look you'll I I year you stronger at that. -- said think reporting participated it, and -- growth our there's if than it was reinsurance Yes. everybody competitors some as last in is that

you. Thank

from Our comes question Greenspan next with Wells Elyse Fargo.

Your open. line is

that you level free longer-term grow level? mostly guess I or XX% if but, to looking was you of XX% from target to just topics XX% now you've year, to of addressed you annual And to continue growth will an the at to away XX% questions, on some follow-up some target it that that that on EBITDA. are a flow have it's going just adjusted still guys the get XX% related cash I

think reason probably that's Elyse we we on The I think the Yes, the depends say people. XX% it focusing total with income. are the like helpful is your a, that, on problem of pension what things to to much income so is growth more XX% are portion,

income as we also. growth, the fluctuates be pension up more just the meaningful the rather market down, focus that'd target each thought on And thought than participants or adjust for we we'd so, year

we impact, were know to to pointed so you you EBITDA Okay. going of adjust the about those guys And thinking think then, level, in really that that the had income right of is terms margin, kind but December, will I to way we're back, would pension get us of for that really we in be for it have XX.X% talking gone XXXX. all about which then Is and talking other direction not that it impact the XX.X%. pension would and margin operating that of for about if would not -- the we -- the markets the still income

the that today? think trying are an with margin I laid some last about you gave out quarter the EBITDA on reconcile to comments guidance guys basis improvement just folks

that's a a think mean comment. conclusion. I I Yes, fair that's fair

then, well, fourth in your year-over-year basis of And you a assuming you flat the are And XXXX, pretty net kind on comment for Okay. if on the quarter, can that's ticked drove on just that? up as quarter? then unallocated for variable what line, as expense every in unallocated guidance

were in to to we're and that back and line allocated saw going Elyse, happen say, mean all be in on operating as item not line quarter that costs GPD, relates that happening Brexit, unallocated focused aren't improvement. And as activities as I the as forward corporate example of any would really just the what you -- happening income operating giving terms I guidance improvement. business of really going kinds is that fourth an Yes, item forward in see we that such activities it we're that income

might gave, it acquisitions/repurchases. $XXX is seems talk the with would to how buybacks, to use dollars is hit as repurchase take have about million some more you opposed kind deals Can buybacks? on think would Okay, and toward your for so to want I and stock for question tying in you that put against there -- that you toward and bucket of you where your bucket that together just a return like trading, counterbalance M&A it then of still what numbers call you my last to

own time mean, every every the time, I stock priced at it. stock those people look, buyback is is, the we could our think this be look things deal, Sure. money buying and consider for one using of to is that our attractively we we we

so, we deal, now. about. think It's more it's And something we right good know a

So, take return could when acquisition, a potential have we acquisition. probably we an given and our we We go just look that into purchase a it, consider that expected shares. every higher time we somewhat to there, own account at have

Okay, thank for the you colour.

William with Blair. Klauber from Adam And our next is question

open. is line Your

expect actually to would at aggressive more that you more On you you do and acquisitions, will there to areas into? bolt-on look or be have new be cash go more

growing Towers three think, and let Watson answer together looking that way, and it three companies been at this So way. bringing and I the Towers -- we acquisitions And both were active historically in me Willis last would as be years, during Willis we've on energies feel acquisitions. to can not now that potential Watson place historical right much we're at our look a and and integration good had to we and all go really operating on focus Gras back that Savoye, at acquisitions. we've We rightly in our

it and say But, want been out more to aggressive. acquirers aggressive I put I like look to we'll reason aggressive is I the, necessarily. we going years wanted the a we're think we're lot there when than in three pre-XXXX. to careful So, be be it I I have and certainly don't the being in the super think last be will

on sized we that that's We and lots a of looking like our acquisitions areas are deals. to how there's that would looking different open where be should own are we're at, that. number feel things be to of there for for think So, capabilities us we there build that we'd always hard -- be is about but there

what's more as And just in door charges, and out far expectation in one went restructuring cash your follow-up, XXXX how the as much XXXX?

zero. the the cash we're $XXX in went out XXXX so XXXX that was Yes, and expecting door roughly million

Okay.

cash that So, rate? be plus should free a

Yes.

I we touched coming flow. back think, of just on free kind though as cash

going XX% we're to -- at got next grow year. it minimum You over the

likely happen will it. You that you'll back into of the coming -- most got settlement Stanford year, next have

looking the going number, so we're at So, in you flow so... know thinking forward, -- it a XXX and terms free baseline that's of about off cash

Thank you.

Thanks everyone joining us you morning Okay. of to I this all look and for in forward seeing March.

Ladies this the and does gentlemen, conclude program.

Everyone now a may day. have disconnect. You great