Aon plc (AON) Q3 2014 Earnings Report, Transcript and Summary

Good morning, and thank you for holding. Welcome to Aon plc's Third Quarter Earnings Conference Call. [Operator Instructions] I would also like to remind all parties that this call is being recorded and that it is important to note that some of the comments in today's call may constitute certain statements that are forward looking in nature, as defined by the Private Securities Reforms Act of 1995. Such statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or those anticipated. Information concerning risk factors that could cause such differences are described in the press release covering our third quarter results as well as have been posted to our website. Now it is my pleasure to turn the call over to Greg Case, President and CEO of Aon plc. Thank you. You may begin.

Thanks very much, and good morning, everyone, and welcome to our third quarter 2014 conference call. Joining me today is our CFO, Christa Davies. I would note that there are slides available on our website for you to follow along with our commentary today, and consistent with previous quarters, I'd like to cover 3 areas before turning the call over to Christa for further financial review. First is our performance against key metrics we communicate to shareholders. Second is overall organic growth performance, and third, continued areas of strategic investment across Aon. On the first topic, our performance versus key metrics. Each quarter, we measure our performance against the key metrics we focus on achieving over the course of the year: grow organically, expand margins, increase earnings per share, and deliver free cash flow growth. Turning to Slide 3. In the third quarter, organic revenue growth was 3% overall, driven by strong growth in HR Solutions. Operating margin was flat. A strong margin improvement in HR Solutions was offset by unfavorable impact from both revenue timing and foreign currency translation in Risk Solutions. EPS increased 14% to $1.29, reflecting underlying operational improvement, a lower effective tax rate and strong share repurchase. Finally, free cash flow was $704 million on a year-to-date basis, as we head into our strongest cash flow quarter. Overall, in our seasonally weakest quarter, results reflect double-digit earnings growth, driven by underlying operational improvement and effective capital management. In addition, we've returned a record $2 billion of capital to shareholders through the first 9 months of 2014. Turning to Slide 4, on the second topic of growth. I'm going to spend the next few minutes discussing the quarter for both of our segments. In Risk Solutions, organic revenue growth was 1%, reflecting growth across Retail Brokerage, partially offset by an anticipated decline in Reinsurance and a $15 million unfavorable impact from timing. As we discussed previously, we're driving a set of initiatives that are strengthening underlying performance and positioning our Risk Solutions segment for long-term growth and improved operating leverage, with management of a renewal book through Client Promise and retention rates of more than 90% on average, highlighting strong client satisfaction in our retail business; new business generation of $216 [ph] million across our retail business, highlighted by another quarter of strong new business in U.S. retail; and double-digit new business growth in many markets across Asia and the EMEA region; increased operating leverage from our investments in innovative technology and client service capabilities with the growth of GRIP and Aon Broking. And in our core treaty reinsurance business, net new business trends have now been positive for 14 consecutive quarters, an outstanding performance in today's changing marketplace that reflects Aon Benfield's long-term value proposition for clients, focusing on data, analytics and the application of excess capital in the industry to previously uninsured risks. Reflecting on the individual businesses within Risk Solutions. In the Americas, organic revenue growth was 2% against the strong comparable of 5% in the prior year quarter. Exposures continue to be positive across the region, while the impact from pricing was flat, resulting in continued stable market impact. We saw strong growth across Latin America and in our U.S. Affinity business. New business continues to be strong across the region, specifically in U.S. retail. Results in the quarter were partially offset by an $8 million of unfavorable timing across U.S. retail and Canada that we expect to largely reverse itself as a benefit in Q4. In international, organic revenue growth was 2%, similar to the prior year quarter. Exposures were stable, and the impact from pricing was modestly negative on average, driven by fragile conditions in many regions across Europe. Results reflect strong growth across Asia, driven by double-digit new business generation in many countries with solid growth in a number of other markets, New Zealand, Italy and France, to name a few. In Continental Europe, we continue to deliver solid growth against sustained economic and market headwinds, driven by strong management of our renewal book portfolio. Results in the quarter were partially offset by $4 million of unfavorable timing. Macro conditions remain relatively fragile across many core markets in Europe. However, despite uncertainty around economic recovery, we continue to see signs of stabilization throughout this region in Q3. In reinsurance. As we noted on previous calls, we expect macro factors to be a headwind in 2014. Overall, organic revenue growth was minus 4% against a strong comparable of 5% in the prior year quarter. Results reflect a significant unfavorable market impact in treaty, a decline in capital markets transactions and advisory business closing in the quarter and $3 million of unfavorable impact from timing. We saw solid growth in facultative placements, and as I mentioned earlier, positive net new business for the 14th consecutive quarter in treaty placements. In Q4, we expect organic revenue to improve modestly from Q3, driven by growth in our capital markets transactions and advisory business and a modest benefit from timing, while treaty will continue to be pressured by negative market impact. Overall, across total Risk Solutions, we're generating new business across the portfolio, while absorbing market pressure in Reinsurance and unfavorable timing in Q3. We expect stronger organic growth in the fourth quarter, driven by new business growth in the Americas and a modest improvement in Reinsurance. Turning to HR Solutions. Organic revenue growth was 7%, with growth in both consulting and outsourcing. Included in third quarter results was an anticipated favorable impact from timing of revenue and compensation consulting. This timing unfavorably impacts results in the first half of 2014. Excluding this benefit, underlying organic revenue for HR Solutions was 4% compared to flat in the prior year quarter. Underlying performance in the third quarter reflects growth in areas where we're making investments in the business, including pension risk and delegated investment solutions. These investments reflect Aon Hewitt's client leadership, understanding and influence of market trends, and solutions to sustainably address the long-term issues that face our clients, as health care reform, health care costs and the associated financial risks continue to rise at a time when overall health and wellness is not improving. Multinational clients are increasingly looking for global benefit solutions that support their global organizations, delivered at the local level, managing and transferring risk against pension schemes that are increasingly frozen, largely underfunded and facing regulatory changes. Turning to the individual businesses within HR Solutions. In consulting, organic revenue growth was 14%. As previously noted, the quarter includes an anticipated favorable impact from timing of revenue in compensation consulting. Excluding this benefit, underlying organic revenue growth for consulting was 6% compared to 3% in the prior year quarter. Underlying results reflect strong growth in U.S. retirement, primarily for investment consulting. We saw an increase in demand for project work to help clients address lump sum windows and for actuarial services on defined benefit plans to support clients facing regulatory changes, specifically the recently passed Highway Bill. For the full year, we continue to expect mid-single-digit organic growth across Consulting Services. In Outsourcing, organic revenue growth was 3% compared to minus 1% in the prior year quarter. Growth primarily reflects new client wins in benefits administration and project-related revenue, driven by demand for discretionary services. For the full year, we expect stronger organic growth in Outsourcing when taking into consideration the seasonality of revenue recognition and health care exchanges in Q4. Slide 5 highlights the third topic: areas of investment. Aon has a unique and strong track record of developing innovative solutions to help solve problems in response to specific client needs. Solid long-term operating performance, combined with expense discipline and strong free cash flow generation, continues to enable substantial investment in colleagues and capabilities around the globe. A few examples include: in Risk Solutions, we're investing in client leadership with the international rollout of Client Promise to drive greater productivity and efficiency. We're investing in innovative technology such as the Global Risk Insight Platform. GRIP is the world's leading global database of risk and insurance placement information, now capturing 2.2 million trades and $113 billion of bound premium. We continue to have a growing list of more than 35 insurance carriers utilizing the platform for its analytics and services capabilities. Nearly half of the clients have signed multi-year contracts, and an increasing number of clients are also adding strategic consulting services. In addition, we're driving our Aon Broking initiative to better match client needs with insurer appetite for risk and to identify structured portfolio solutions. We continue to align our global health and benefits platform to better capitalize on our global distribution channel and deep brokerage capabilities. And further, we're developing analytics to create globally consistent actuarial valuation and benchmarking models for health and other employer-sponsored benefits. We're also investing in the continued development of data and analytics capability at Aon Benfield to strengthen an already industry-leading value proposition and client-serving capability. A great example of this is Aon Benfield's review [ph], a reinsurer dashboard, implementation support and strategic consulting to help insurers be more effective markets for seeding company clients. Finally, we're expanding our footprint through over $500 million of tuck-in acquisitions so far in 2014 at an [ph] increased scale in emerging markets or expanded capability to better serve clients such as the National Flood Services and Lorica. In HR Solutions, we're invested in innovative solutions to address high-growth areas. We're expanding solutions to derisk pension plans and are seeing tremendous growth in our delegated investment solutions, which fulfill our clients' needs for faster execution of their investment strategies. Aon Hewitt is able to offer differentiated strategy based on our strong 3 pillars of actuarial expertise, investment solutions and pension administration. We're also providing a broader set of advisory and advocacy solutions to our clients' employees to enable greater choice and improve decision making on the retirement options, especially important as recent regulatory changes require more involvement from individuals. Further, we continue to make investments to support future growth and strengthen our industry-leading position in health exchanges for active employees and retirees as part of our comprehensive portfolio of health solutions, covering the full spectrum of benefit strategies. Across Aon's suite of private health exchanges, covered lives will increase by 60% to more than 1.2 million employees, retirees and eligible dependents for more than 100 companies across 19 industries, an outstanding result, as we saw 100% renewal rates, as well as over half of the clients continuing to be new. We continue to expand the number of industries and increase the number of carriers participating. Our model is bending the cost of health care and eliminating volatility for clients, while delivering more choice and strong satisfaction to employees. We feel good about our progress to date, the sustainability of the value proposition and our ability as a market leader to offer the most robust set of exchange solutions to clients. We also continue to invest in our industry-leading benefits administration solutions and technology platforms, including extensive mobile solutions and cloud-based outsourcing solutions. And finally, we're strengthening our international footprint to support a global workforce, with investments in key talent and capabilities across emerging markets. In summary, we delivered strong earnings growth of 14%, despite a number of headwinds impacting results. Looking forward, we expect to deliver strong operating performance across both Risk and HR Solutions in the fourth quarter, benefiting from our investments in client-serving capabilities and resulting in a solid year of operational improvement and record-free cash flow generation. With that said, I'm now pleased to turn the call over to Christa for further financial review. Christa?

Thank you very much, Greg, and good morning, everyone. As Greg noted, our third quarter results reflect strong earnings growth in our seasonally weakest quarter, driven by underlying operational improvement and effective allocation of capital, highlighted by the repurchase of $500 million of ordinary shares in Q3. Now let me turn to the financial results for the quarter on Page 6 of the presentation. Our core EPS performance, excluding noncash intangible asset amortization, increased 14% to $1.29 per share for the third quarter compared to $1.13 in the prior year quarter. Results in the quarter reflect operational improvement, a lower effective tax rate and strong share repurchase. In addition, foreign currency translation had a $0.01 unfavorable impact on EPS in the quarter, due primarily to a weaker dollar versus the British pound and a stronger dollar versus the Argentine peso. If currency were to remain stable at today's rates, we would expect a modestly higher unfavorable impact in the fourth quarter than we experienced in the current quarter. Now let me turn to each of the segments on the next slide. In our Risk Solutions segment, organic revenue growth was 1%. Operating margin decreased minus 80 basis points to 20.3%, and operating income decreased minus 3% versus the prior year quarter. As Greg previously noted, timing impacted revenue unfavorably by approximately $15 million, which we expect will largely reverse as a benefit in Q4. In addition to unfavorable revenue timing, operating results in the third quarter include an $8 million or minus 40 basis point unfavorable impact from FX and $4 million of onetime cost related to closing the NFS acquisition. Together, these headwinds, totaling minus 120 basis points, more than offset underlying operational improvement in the quarter. Let me spend a moment on the Aon Hewitt restructuring program. Approximately $99 million of estimated savings will be achieved in Risk Solutions. Approximately $94 million of accumulative savings have been achieved under the program to date, with the remaining $5 million to be achieved in the fourth quarter. We have incurred 100% of the charges necessary to deliver the remaining savings and expect to complete the Aon Hewitt restructuring program by the end of 2014. Overall, results in the third quarter were challenged by unfavorable impact from revenue timing, foreign currency translation, reinsurance market impact and certain onetime transaction costs, which offset solid underlying operational progress as we generate return on our investments and manage expenses. Year-to-date, Risk Solutions margins are up 10 basis points, including a minus 40 basis point unfavorable impact from foreign currency. We expect to deliver strong operating margin performance in Q4, resulting in solid margin improvement for the full year, placing us firmly on track for continued progress towards our long-term target of 26%. Turning to the HR Solutions segment. Organic revenue growth was 7%. Operating margin increased 110 basis points to 16.5%, and operating income increased 15% versus the prior year quarter. Strong organic revenue growth and anticipated favorable impact from timing of revenue and a $9 million benefit from timing of certain expenses was partially offset by an anticipated increase in expenses related to future growth in health care exchanges. With respect to the Aon Hewitt restructuring program, approximately $301 million of the $303 million in total cumulative savings have been achieved under the program, with the remaining $2 million to be achieved in the fourth quarter. As discussed previously, we provided guidance for Q3 to be relatively flat. This included favorable revenue timing in compensation consulting that negatively impacted the first half of 2012, and increased expense to support future growth in health care exchanges. Our third quarter results were modestly better than previous guidance, primarily reflecting some incremental demand for project work in retirement consulting, and a $9 million benefit from timing of certain expenses. We expect the $9 million to unfavorably impact Q4 compared to our original expectations but have no impact on our full year outlook. Throughout the year, we have provided commentary regarding the full year outlook for HR Solutions segment, and this remains unchanged. For HR Solutions in 2014, we expect to, number one, deliver organic growth; number two, generate greater scale and improved return from investments; number three, deliver remaining savings related to the restructuring program; number four, and lastly, deliver greater than mid-single-digit operating income growth and further margin expansion toward our long-term target of 22%. Overall, the outlook is unchanged, and we are firmly on track for greater than mid-single-digit operating income growth in 2014, with Q3 modestly better than anticipated and Q4 up substantially in our seasonally strongest quarter, including strong organic growth in our health care exchanges. Now let me discuss a few of the line items outside the operating segments on Slide 9. Unallocated expenses decreased $4 million to $39 million, primarily driven by expense discipline in the quarter. Interest income was similar at $3 million. Interest expense increased $12 million due to an increase in total debt outstanding and costs associated with certain derivative hedging programs. Other income of $35 million primarily includes a gain on the sale of our eSolutions business and gains on certain long-term investments. These gains reflect our intent to optimize the portfolio around highest return capital as well as monetize unproductive capital. Going forward, we expect a run rate of approximately $1 million per quarter of interest income, $45 million of unallocated expense and $66 million of interest expense per quarter. Turning to taxes. The effective tax rate on net income from continuing operations was 19.1% compared to 25.1% in the prior year quarter. The effective tax rate in the third quarter of 2014 was favorably impacted by changes in the geographic distribution of income, partially offset by an unfavorable impact from certain discrete tax items. Lastly, average diluted shares outstanding decreased to 296.1 million in the third quarter compared to 312.9 million in the prior year quarter. The company repurchased 5.8 million Class A ordinary shares for approximately $500 million in the third quarter. The company has $1.1 billion of remaining authorization under its share repurchase program. Actual shares outstanding on September 30 were 285 million, and there are approximately 10 million additional dilutive equivalents. Estimated Q4 2014 beginning dilutive share count is approximately 295 million, subject to share price movement, share issuance and share repurchase. Now let me turn to the next slide to highlight our strong balance sheet and cash flow on Page 10. At September 30, 2014, cash and short-term investments were $599 million. Total debt outstanding was approximately $5.5 billion, and overall debt to capital decreased modestly to 43.3% at September 30 compared to 43.6% at June 30, driven by a decrease in total debt outstanding. For the first 9 months of 2014, cash flow from operations decreased 10% to $883 million, driven primarily by significant receivable collections in the prior year period, and higher-than-normal tax payments, partially offset by a decline in pension contributions. Free cash flow, as defined by cash flow from operations less CapEx, was $704 million, reflecting lower cash flow from operations and a $5 million increase in CapEx. Looking forward, the fourth quarter is our seasonally strongest cash flow quarter, and we are on track to deliver cash flow growth for the full year. Turning to the next slide to discuss our significant financial flexibility. We value the firm based on free cash flow and allocate capital to maximize free cash flow returns. There are 3 primary areas that will contribute to our goal of doubling free cash flow to more than $2.3 billion annually by the end of 2017. From the graph in the presentation, based on current assumptions, we expect annual free cash flow to increase by over $600 million based only on a reduction in cash used for pensions and restructuring. Combined with growth in the core business, further margin expansion and a reduction in the overall effective tax rate, we are well on track to achieve our expectations for substantial cash flow generation. Regarding our underfunded pension plans, we have taken significant steps to reduce volatility and liability as we've closed plans to new entrants, frozen plans from accruing additional benefits, and continue to derisk certain plan assets. We currently expect contributions to decline by roughly $138 million to $385 million in 2014 and continue to decline thereafter. Regarding our restructuring program, cash payments were $152 million in 2013. As all charges related to the restructuring program have now been incurred, we would expect cash payments to decline by $65 million to approximately $87 million in 2014, and continue to decline significantly each year thereafter. In summary, we delivered double-digit earnings growth in the third quarter and have returned a record amount of capital to shareholders year-to-date. We expect strong performance in the fourth quarter, placing us firmly on track for growth, margin expansion in both segments and record-free cash flow generation for the full year. With a strong balance sheet and significant financial flexibility, we expect to generate more than $2.3 billion of annual free cash flow by the end of 2017. We have positioned the firm for significant shareholder value creation in 2014 and beyond. With that, I'd like to turn the call back over to the operator for questions.

[Operator Instructions] Our first question comes from Adam Klauber of William Blair. Adam Klauber - William Blair & Company L.L.C., Research Division: Just 1 or 2 questions. In HR Solutions, could you talk about the pension transfer opportunity? You had one big win. How does the pipeline look? And also was this quarter helped by that one good-sized win?

Adam, the pension opportunity, as the laws have sort of shifted and changed a bit, particularly, the Highway Bill, as I mentioned, created a number of different opportunities to support clients with demand. There was some influence on the quarter, but it will happen over time as we help clients sort of react to the situation. But overall, the business has just done very, very well. It's on a very, very good trajectory, but not an undue [ph] influence in the quarter but just will happen over time. Adam Klauber - William Blair & Company L.L.C., Research Division: So do you think that will be a good driver of growth as we look in '15 and '16 for that segment?

Yes, I think it really is an indication of just the change that happens in this segment and just continues to happen. As you think about sort of the whole world around pensions and sort of what's going on, sort of in that context, clients continuing to have to react to different regulatory changes. And whether it's the Highway Bill we described before, in Montreal, there was a change in regulation that also impacted overall, so this is basically U.S., Canada. The U.K. is also seeing regulatory change. These sorts of changes are exactly what our clients have to react to and what we're very well equipped to help them support, and that drives fundamental demand in the business, and that will actually influence and help us and help our clients, not only in '14, but in '15 and '16 and beyond. Adam Klauber - William Blair & Company L.L.C., Research Division: Okay. And then as far as health exchanges, you had a good selling season. You added a fair amount of clients. There -- from what we can see, there was not one large jumbo client. Could you talk about maybe the mindset of some of the large jumbo clients in the pipeline as you think about the larger clients for the next couple of years?

Well, we would say, look, Adam, fundamentally, we are very pleased with the progress we made around -- what is our mission here is a health solutions. That's really what we're trying to bring into the table and an objective and a mission we have on behalf of our clients. Against that, when you think about it, we have a base that's 23 million strong in terms of who we serve sort of in the health category, with $9.5 million in health and benefits alone, and it was really against that backdrop we brought forward was the first of its kind, which is the fully insured multi-carrier exchange. And as we reported, the results have been very, very strong, 1.2 million lives, 100-plus companies, in that context, 60% growth. And the pipeline we've got is exceptionally strong, stronger this year than it was last year as clients have sort of seen this come online. It's resulted in a fundamental bending of the cost curve, which is what we had hoped and anticipated. That includes, by the way, everything thrown in there, taxes, fees everything else, and a real meaningful cost for employee savings around that. We've also seen carriers come on board. So on the active side, 30-plus national and regional carriers. We've expanded coverage, over 10 elected benefits. And on the retiree side, 90-plus health insurance carriers with over 3,700 plans. So the fundamental chassis, the basis, the foundation is exactly what we hoped it would be. Even the industry, frankly, 19 different industries represented, finance, manufacturing, retail, health care technology. And I would say fundamentally, the thing that's driven this more than anything else, from our standpoint, we're excited about, is the impact on the employee. In the end, that's really what the whole focus of the mission is about. I think the numbers, as we've seen them, to date, over 85% of employees, 87%, in fact, love the ability to have choice, transparency and to really have a greater accountability. And a large percentage, 3/4 of them really feel good about -- they're choosing the right health care plan for them, for their families, for their situation. So for us, we really have appreciated the trajectory that our colleagues have been able to build sort of in the category of exchanges. Remember, exchange is a part of our overall strategy, one piece of it, an important piece of it. Fully insured multi-carrier has just gone exceptionally well, and we anticipate that will happen over time. This was never about a quarter or a year for us. This is about, over a period of time, developing a meaningful business that will help serve our clients. And that's exactly where we think we are. Adam Klauber - William Blair & Company L.L.C., Research Division: And just one follow-up on exchanges. I know you have a partnership with eHealth, and they actually talked about it that they have -- it sounds like a fair amount of companies are going to be looking at helping their part-time employees potentially find coverage on the federal exchange or for -- yes, on the federal exchange. If that takes off, will that actually help -- will that revenue hit more in the first quarter and second quarter versus all in the fourth quarter?

It's going to really be over time, as you tend to sort of think about how this evolves. And sort of depending on how it plays out, it's going to have a modest impact. And I just want to emphasize, overall -- again, as we think about the conversation around exchanges, exchanges, overall, when you think about sort of the impact to 2014, have really been an investment for us and will continue to be, as we start to see benefit in '15 and '16. But the category you're describing is important, because it affects individuals, but from a financial standpoint, will have minimal overall impact on us.

Next question, Dan Farrell, Sterne Agee. Dan Farrell - Sterne Agee & Leach Inc., Research Division: So tax rate again came in at a pretty low rate, and you've talked about some of the geographic things going on, but also some negative discrete items. I'm just wondering within the geographic items, is health exchange accounting leading to some seasonality there, where there's some losses booked early in the year, and, then obviously, a lot of gain in the back half?

No. As we think about the effective tax rate, it's really a full year estimate. That's the way effective tax rates always work. And so as we think about our tax rate going forward, the year-to-date rate of 18.5% is really the best indicator of our underlying effective tax rate. And as we think about the tax rate, going forward, for full year '14 or '15, it's really looking at this underlying operating rate of 18.5%, and then that could change in any quarter or year based on discrete tax adjustments, which as we described, were -- negatively impacted it in Q3, positively impacted in Q2, and obviously, can be positive or negative going forward. Dan Farrell - Sterne Agee & Leach Inc., Research Division: Okay, and then there's also just been a lot of talk around the double Irish, and I was wondering if you could just give any thoughts if there's any impact with regard to any businesses that you have there.

There's no impact on us from that. We are a U.K. company with a global business, operating in 120 countries, and we don't comment on changes in local regulations or statutory changes.

Next question is Elyse Greenspan, Wells Fargo.

I was hoping to spend a little bit more time on your private health care exchange. I know you provided your enrollment figures and did speak positively, I guess, going forward about the pipeline. Just in terms of looking at your active exchange, if we look at the incremental number of companies this year, it's about 15, which is the same did join your exchange last year. Have you seen maybe some companies taking longer to make their decision? And if so, why have some companies held off? Were you surprised, I guess, in terms of the 15 that joined this year versus last year? And then, also, if you can just tie in, in terms of your long-term view surrounding the financials of this business? I believe in the past, you've said modest positive earnings in '14. Is that still the same? And then should we think about this as kind of growing from there when we look to 2015?

Let me take those in turn. First, in terms of the ramp-up, no, we weren't surprised. And in fact we're not -- as we said before, we -- the mission we have is truly a mission around health solutions, the best set of integrated health solutions on behalf of clients. The fully insured exchange on the active side was -- it's just been a great platform. The clients who've joined it, I want to remind you, is literally 100% renewal rates. It doesn't mean that a client might come -- might not come off at some point in time, but right now, 100% renewal rates. So everybody who's on it has repeated, has seen tremendous benefits. Employees have really appreciated sort of the overall impact. And when you think about sort of the growth, it's been substantial, 60% growth in participants, as we said before, substantial growth in clients. And our view has always been we want to build this at the right pace and the right time. So we may very likely say to a client, "Defer," if we think actually it will help from a communication or employee standpoint more than anything else. This is about building this in the right way and the right time, and that's exactly what our colleagues have done. So we feel very, very good about the platform, again, from a standing start to go where we are now. And remember, as we did this, we serve more employees than anyone sort of in this space. And we said for the fully insured multi-carrier, we were going to actually start this in the most sophisticated largest market in the world, and that's the large carrier. That's why our smallest is about the size of some of the others' largest sort of in this category. And so we've gone against sort of that backdrop to make sure we're bringing the best capability to bear on behalf of our clients, and that's what we've done. And we expect that's going to grow over time. As I said, the pipeline's exceptionally strong, and we'll see how things play out over the next 24 months, and we feel very good about that.

And then in terms of the economics, Elyse, I think we did originally say that it'd be modestly profitable in 2014. As a result of the significant win we had this year and the scaling up to support that significant client, it is going to be modestly unprofitable this year, and we look -- we don't think it'll have any impact on our greater than mid-single-digit operating income growth, which is exactly where we said we would be for the full year.

[indiscernible] Christa described. We've been able to actually bring this online to develop truly a world-class platform with great capability. We're in the middle of the work, as Christa just alluded to, to the largest active and the largest retiree opportunity in the world by a substantial margin and been able to fully do that in the context of delivering greater than mid-single-digit operating income, and that's exactly where we are for the year.

Okay. And then in terms of just a little bit more time maybe on the Reinsurance side, you did highlight improving trends in terms of organic growth going into the fourth quarter. Just -- is that partially a function of you seeing a change in growth, but then also, where it's a little bit of an easier comp when we look to Q4 last year. How much does that come into play? And then can we talk about the reinsurance markets, I guess, heading towards the January renewals. And we're hearing still competition out there. What would be kind of your initial view when we're looking towards growth in 2015?

Well, if you step back, first, think about sort of where we are in Reinsurance through the first 9 months, we're down 2% on what literally is the, by far, the largest book in the world in terms of what we do on behalf of clients, #1 in treaty, #1 in capital markets, #1 in fac. And our treaty book is the most exposed to the area that's sort of most under pressure from a market standpoint, and that's the property cat world, both in the U.S., substantially greater, Japan and other places around the world. Against that backdrop, through the first 9 months, we're minus 2%. We're not excited about that, but when you think about that, that's pretty -- that's a powerful -- that's a reasonable outcome given where we are. We continue to make substantial investments to build the business in data analytics as I said. We're going to see that benefit coming through. We've had record new business across risk overall, and we've been able to improve margins even in this environment, and we think we're going to be able to continue that trend. Q4, we see the capital markets pipeline and what's going to close. It's stronger in Q4, less closed in Q3, a matter of timing. We'll see that in Q4. So we'll see a marginally stronger benefit in Q4, which will help us deliver the year. But net-net, when you step back and think about Risk Solutions overall, which is how Christa teed this up, we have a 10 basis point improvement margin even against the headwinds with 40 basis points in FX, and we're going to continue to sort of see that improving in the fourth quarter, which is our overall strongest quarter.

Next question is Cliff Gallant of Nomura.

I'm sorry to look at this simplistically, and sort of just, I think, building off of Elyse's last question there. But when we look at Reinsurance from the outside, and Greg, I realize this is simplistic, but earlier this week, 2 of your competitors reported growth in Reinsurance, and we realize that, of course, it's a very difficult market, but it's hard not to think that there might be some share shift happening. Is that not happening or is it something else that's going on?

We would say no. In fact, not at all, Cliff, from our standpoint. Again, net new business won, which is what we track, has been positive for 14 consecutive quarters. In fact, we are almost among our highest ever new business results for the quarter and year-to-date for the first 9 months. So the underlying piece of the business, our colleagues continue to do an exceptional job. Really, just step back. Again, we're the largest book. I mean, there's no excuse. We need to grow. We are -- we anticipate growing over time in this business, but we have the largest book in the world. It is most exposed around the property cat world, and that's in the U.S. and in Japan, and that actually creates pressure. That's what we have to deal with. On the other hand, our clients have tremendous opportunity right now, and we're bringing more and more of that opportunity on behalf of our clients. We're doing it through capital markets. We're doing it through classic treaty and from other avenues as well. And so from our standpoint, we're going to continue to work, build the franchise and feel good about capability in Q4 and what we're going to be able to do in '15 and '16, but we have not seen share shift in any way, shape or form.

If I could have a follow-up. On the -- if I think about buyback, your pace in buyback this year has been very strong, and it's exceeding both what you're making in terms of operating income or what you're reporting for cash flow. And when we think of it, going forward, as a general rule, how should we think about what pace you can sustain in terms of share repurchases?

Yes, it's a great question. So as we think about buyback, we obviously allocate capital based on return on capital, and buyback is our highest return on capital activity. We have returned year-to-date $2 billion to shareholders, of which $1.75 billion was buyback. And included in this amount was $300 million of additional cash on the balance sheet at year end 2013, and $800 million of additional capital from debt that we raised during the year. And so as we think about the amount of buyback going forward, it's unlikely to be as high as it was in 2014 due to those 2 additional activities. We don't give specific guidance, but share repurchase continues to be the highest return on capital activity across the firm. And given the substantial cash flow growth we see over time, we do see opportunities to deploy cash based on the cash flow growth, and there's incremental leverage opportunities over time too.

Next question is Vinay Misquith of Evercore.

Just looking at the organic growth year-to-date in the Risk Solutions segment, perhaps, around the 2%, how would you say that compares to what you would think that the company should do, and where do you think it's going forward? And just also attached to that, do you think that Aon can generate margin expansion in a 2% organic growth environment?

If you step back and think about where we are year-to-date, as you described, we're at 2% for Risk Solutions overall, going into the -- with the headwinds that have been described already on the call, going into our strongest quarter. Through the first 9 months, at 2%, we expanded margin 10 basis points, including 40 basis points of negative FX. So if you just sort of think about can we expand margin against that growth rate, yes, and we're -- we think the fourth quarter is going to be stronger that the sort of overall year-to-date. Remember, a lot of the investments we've made and continue to make are not just around revenue growth by itself. It really is revenue growth and associated operating leverage with that. And I think we've been able to actually demonstrate very clearly our ability to grow margin with low single-digit, and if you step back -- or low single-digit organic growth. And if you think about what we described for the overall year, we've said we'd be low to mid-single-digit organic growth for the year, and we delivered solid margin expansion, both on a reported and underlying basis. And what we're reporting through the first 9 months is that's exactly what we're going to do for the year. And we feel like through the first 9 months, we've got more confidence in that now, having put 9 months in the books than we had even at the beginning of the year, and it was strong then. So to answer your question, we do feel like we can. Obviously, we're always going to go for higher and higher levels of growth, but we want to make sure it sort of meets the criteria I just described.

Sure. Just as a follow-up to this, I mean, this year was helped by the restructuring savings, and next year, I don't think that's going to be there. So do you think you have anything else that can help your earnings next year?

Yes, so as we think about our margin expansion in Risk Solutions, it's really driven by 3 things. The first and primary driver of our margin expansion across Risk Solutions is the investments we've made in data and analytics, both in our retail business in the GRIP platform, which has over $100 billion of premium, and that is driving improved yield on every dollar of premium placed à la incremental operating leverage, and equally the $120 million a year we are investing in Aon Benfield data and analytics. So those investments in GRIP and Aon Benfield data and analytics are really the primary driver of Risk Solutions margin expansion in calendar year 2013 and calendar year 2014. And we'll continue to drive expense discipline and expense opportunities as we look at outsourcing and off-shoring. We look at being more efficient around our IT investments and our real estate footprint. So we feel very good about the continued growth towards 26% Risk Solutions margin.

In many respects, generally [ph] the investments we've made over the last 24 months, 36 months around this idea, as Christa described, of really data and analytics to help clients make better decisions to improve their performance and also to increase yield per dollar of premium placed are literally just coming online. You're starting to see the impact of those. The fullness of those come online in '15 '16 and '17, and that's why, as we said, and continue to say, we're on track to continue to march toward 26% from a margin standpoint in the Risk Solutions business.

Sure, okay, that's helpful. And just on tax rate, Christa, so should we look at it at a 19% tax rate for next year? I mean, is that reasonable, and that seems substantially lower than the 22% rate that you had in 2013, excluding the onetime adjustments.

Yes, we're not -- we're no longer providing specific guidance. The year-to-date rate of 18.5% is the best indicator of our underlying effective tax rate. And as I said previously, as we think about the tax rate going forward, 18.5%, plus or minus discrete tax adjustments, which can be positive, as we saw in Q2 and negative as we saw in Q3, is really how you should think about it.

Next question is Brian Meredith of UBS.

Yes, 2 questions here for you. The first one, just going back to exchanges. Christa, when we think about -- you've signed up a large client this year. That's one of the reasons that, I guess, now you think that the exchanges are going to have a loss for the year. So is every time you sign up a large client, you're going to have this kind of issue of expense pressure? Or are some of the expenses you're putting on as a result of this large client leverage-able as we go into kind of the following years in exchanges?

Yes, it's a great question, Brian, and it's really the second. As we think about the scale we're adding in calendar year 2014, we're really building the infrastructure to run the business going forward. It's a fixed cost base we're building, which will then be leverage-able across new clients going forward.

Great, great. And then the second question, I know as far as the 26% margin target in Risk Solutions, improving yield specifically through GRIP is, I know, is a big part of getting there. I guess my question is when you look at GRIP, where do you expect kind of the revenues and the profits kind of to come from as you get that 26%? Is it signing up new insurance clients? Is it deals? Where is it going to come from?

Yes, Brian, it really is across the board. And again, the goal here is what is the Risk Insight platform? It really is -- it is as sophisticated or not as sophisticated, if you will, of just really getting insight to match capital to client need more effectively. So it really provides insight into our distribution capability for our market partners so that they can apply their balance sheets in a more effective way. Against that goal, that means it actually helps them grow and more opportunity for them is more opportunity for our clients and more opportunity for us. It would give us the ability to bring on some additional insurers, as they see that opportunity, but it also dramatically expands the group we've got. We work with over 4,000 insurers overall, but really, it is -- we said, 30 to 35, we have sort of engaged in this. It really requires the insurers, they're our market partners, to invest time and energy too because we're changing the way we apply capital into our -- into the marketplace on behalf of our clients. So we see really the opportunity all of the above, more of them, more carriers involved, more opportunity with our existing carriers, we think, is quite, quite substantial, and ultimately, even with our clients in terms of sort of what we're doing at this point and helping them make better decisions. So this is really -- GRIP was really just the first step on a journey called using data and analytics to help clients make decisions to improve their operating performance, strengthen their financial position or reduce their volatility. And that's really what the data analytics is all about.

Okay, so it's more getting more penetration within your insurance clients is kind of where the revenue growth comes from [ph]?

But even more than that, more coverage with the existing clients we have. There's so much opportunity that we have, as they think about what they're doing. And we think about our overall portfolio of 60 billion or 70 billion, being able to actually package those risks and deliver them to these carriers in a way they can provide better value propositions for our clients, really, really powerful too. So this is the structured portfolio of solutions, tremendous set of opportunities there. It really benefits everyone, benefits clients tremendously, benefits markets. We benefit in the process too. So it's greater penetration with our existing group and also other opportunities outside that. So that's the second, and the third is opportunities with clients.

The next question, Jay Cohen of Bank of America Merrill Lynch.

On the tax rate, one question, I thought the tax rate, the corporate tax rate in the U.K. was 21%. One, is that right? And then secondly, why is your rate below the corporate tax rate in the U.K.?

Jay, we operate in 120 countries, and so our global effects of tax rate is really a result of profits that we generate in each of the 120 countries as opposed to the U.K. itself.

Okay, so there's obviously other tax jurisdictions that are lower, and that's when you make some money, obviously, brings it overall down, okay. Fourth quarter buybacks tend to be smaller seasonally. Should we expect that again this fourth quarter?

Jay, we don't give specific guidance on share repurchase. I have described why our year-to-date number that we've returned to shareholders of $2 billion is higher than it will be, going forward, because it included additional cash off the balance sheet of $300 million at year-end 2013, and the $800 million of additional capital we raised from debt during the year. And so as we think about our share repurchase going forward, obviously, it's based on our free cash flow growth, which is going to be strong, and it's allocated to the highest use of capital, and that's really our philosophy going forward.

Our next question is Kai Pan of Morgan Stanley.

First, just a little bit on the Reinsurance side. I just want to -- your opinion on -- more on the expense side. If you think about pricing pressure as well as some secular change in the Reinsurance marketplace, how much, like do you think -- what property level of expense, as well as where do you invest your money in that? And basically, we're trying to get is that we see in the near term some margin pressure in the business as you continue to invest. Why the top line probably is lower [ph] in the past?

Well, let's step back. Think about what we're trying to do in the space, again, we're the largest platform in the world, #1 in treaty, #1 in facultative, #1 in capital markets. And what we're trying to do is we're actually helping our clients actually improve their return on invested capital, reduce their volatility, strengthen their balance sheet. And when you think about that opportunity, it is tremendous, and we see that actually increasing over time. The 4,000 issuers out there, many of them, if not, all of them would love to actually have improved operating performance, stronger financial positions, less volatility, et cetera, and that's fundamentally exactly what we do at Aon Benfield. So we see that opportunity is substantial. And by the way, we continue to invest very, very strongly behind that opportunity. Christa highlighted we have -- we're investing over $120 million a year in data and analytics in Aon Benfield alone, which we believe is substantially greater than anyone else in the overall industry, and we're making substantial investments across the overall risk business, not just in the Reinsurance business, and it really is that -- that's really, as we think about the business overall, how we see tremendous opportunity. It is absolutely clear that, currently, there's tremendous price reduction that has happened, and it disproportionately affects books that have property cat, à la ours. But having said that, we think about this across overall Risk Solutions, is it -- Risk Solutions, and as we said before, we improved margins in Risk Solutions in the first 9 months, and we did it against FX headwinds in addition to the market headwinds. So from our standpoint, we like our position a great deal on the Reinsurance side. We're going to continue to invest behind it, and it really is about how we grow that business through helping clients, and that's really what our focus is.

That's great. And then second question on the acquisition front. You have been relatively quiet in the last few years, but now you just acquired the National Flood Services. I just wonder, do you see additional like acquisition opportunities that could augment your organic growth?

We said -- we've done 12 acquisitions plus year-to-date. We've described NFS, and we described Lorica and a number of others as well. We've done in excess of $500 million for the first 9 months, and we see tremendous opportunities around the world and continue to invest in content, capability, geographic expansion, particularly, in the emerging markets. So we see tremendous opportunity on the acquisition front to continue to strengthen global Aon, and as we said, we're going to continue to invest behind that thesis.

Next question, Mike Nannizzi of Goldman Sachs.

A couple of questions here. One is you called out the favorable competition consulting impact on revenues. Did that have an impact on HR margins as well?

No, it didn't because when we gave original guidance at the beginning of the year in terms of greater than mid-single-digit operating income growth, and essentially flat in Q3, we were giving it in the context of knowing about this compensation, consulting revenue timing change, and of course, knowing about the investments we're making in health care exchanges.

Got it. Okay. And then just on the exchanges a bit, I mean, obviously, last year, large case employers saw a lot of movement; this year, maybe a little bit more in the middle market. I was just wondering like, do you think in the near term there are trends out there that may support more adoption in the middle market at a pace that's elevated relative to large -- the larger case employers? And if so, would you consider expanding your offering to kind of reach down to that segment of the market?

Again, come back -- remember our mission and objective. Our mission is to bring the best health solutions to the marketplace, and we serve large market, middle market, small across the board. So and again, if you'd go back to sort of the base line, 23 million strong, 9.5 million in health and benefits alone, that includes a huge amount of the middle market. So we already have a disproportionate amount of business in the middle market and a number of folks are sort of describing pieces of that in different ways as kind of self-insured exchanges. We don't do that. We're trying to bring a range of solutions, including a range of exchange solutions to wherever they have impact. We happen to have tested our first set in the large market arena, and it's done exceptionally well. We think there's great applicability across large and across middle, and for the clients that would benefit from exchanges, we want to bring those solutions to them. And if there are other ways we can serve them and help support their mission, we'll do that too. So we see substantial growth across the board -- substantial potential in the large market and in the middle market.

Got it. And then, I guess, we've talked a lot about you've got growth, and talked -- focused a lot about -- on enrollment and the fact that we expect in the near term that you'll be reinvesting dollars back into the exchanges. You continue to grow in anticipation of more scale down the road. But can you talk about how you think about this business from, like from an operating leverage perspective? I mean, do you expect that at scale, should this business be able to deliver higher margins than your sort of traditional health and benefit business just because there's more technology and there's more -- should be more scalability?

Yes. So what we would say is, obviously, we're investing on behalf of our clients. We've been doing that for several years now,, and we're doing that again in 2014. Long term, we absolutely expect this business to be higher than our target margins of 22%, and therefore, generate a terrific return on capital for shareholders.

Got it, okay. And then just last question, I guess, on this topic is, has the -- how has the relationship with clients changed to the extent that you were a consultant, the largest on the benefit side? Now you are sort of straddling that line between consultant and vendor because you now have your solution that you're bringing to the table? Does that change the relationship at all? And if it does, how, and if not, why not?

It really doesn't. In fact, when we -- when this works well, we were able to provide a platform, which creates transparency, choice, even greater accountability for individual employees. We've actually enabled companies sort of at the center of this to actually create better alignment, more -- better choices for their employees. They then also take risk off their balance sheet. They control volatility and we've created alignment very much with the actual carriers out there. So that's the platform. And again, against that backdrop, 100% renewal, and most important than anything else, 87% employee satisfaction. But if you said yourself, is everything done then? Is all the health issues -- are all they -- are they gone? And the answer is no. This is an ongoing set of challenges for companies. It's an ongoing set of challenges for individual families, and so bringing advice and content and insight around that platform, when it goes well, that's really -- that's the most powerful outcome we can bring to the table, a very clear platform that clients can utilize, as well as advice and perspective that actually helps them take full advantage of it for their company and for the employees. So we think when it works well, there's -- it's highly complementary.

Next question, Joshua Shanker of Deutsche Bank.

I'm not going to be the last person to ask a question about taxes, unfortunately. When I've asked in the past, I've gotten an answer like, well, the data analytics for our health care exchanges are located in Singapore, or the data and analytics for our reinsurance business is located in Singapore. When the client is buying a health care exchange, how much are they paying for the access to the health care, and how much are they paying for your data and analytics services? Or similarly, in reinsurance, how much are they paying for you to buying the business for them, and how are they paying for your data and analytics? It seems like the data analytics is a small part and the access is the big part. And so I'm wondering, how much revenue is really being generated in Singapore that can effectively bring your tax rate significantly down below your domicile where you're located?

Yes, I guess, what I would say, Joshua, is really, as we think about delivering value to clients, we're trying to ensure that we're delivering the best value service to clients, wherever they may be in the world, and a core part of the value we're providing for clients is helping them make better decisions, and the data analytics are a key part of making more informed and better choices in our Reinsurance business, in our retail business, and obviously, in our health care exchange business, as employees make the right health care choice for them, which is why we've got 87% employee satisfaction. As we think about our business around the world, we're absolutely investing in data analytics, because it's a huge part of helping us provide differentiated solutions for clients. I would separate that out from the tax rate. We are a U.K. company. We operate in 120 countries. As we think about our tax rate and our effective tax rate, going forward, the 18.5% is our underlying operating rate, and it's a mix of 120 countries in which we operate.

But the health care exchange, for example, is a U.S. business that happens to record revenues in Singapore because that's where the data analytics is located, yes?

That's not true.

So it doesn't record revenue in Singapore?

No.

Okay, then I'm mistaken in terms of how -- the information I've gotten in the past. And then -- so there are not countries where you're booking revenue in one country, but recognizing the revenue in a tax-free domicile in order to get a better tax rate?

Joshua, what I would say is we have product development and innovation in analytics centers because -- to hub them in analytics centers is the best way to build deep analytic skill sets. So GRIP, GRIP is based in Ireland. We have 110 people based in Ireland. They're PhDs. They're statisticians. They're building that GRIP database. Of course we want them all in one location. That's absolutely right, and so -- but we really think about delivering the value to clients using that data in the best way for the clients.

But if a U.S. client buys GRIP in the United States, is the revenue for the purchase of GRIP recorded as a U.S. revenue or is it reported -- recorded as an Irish revenue?

Yes, look, we have global carriers, and therefore, the revenue is recognized wherever the service is delivered.

Okay. I think that's the same answer, but I'm not sure, but it's a complicated issue. There's a lot of stuff going on in global tax. Obviously, I'm just concerned that you're actually doing a great job with tax, and I want to know if I can forecast that in perpetuity.

And what I said on that is the 18.5% operating rate is our underlying effective tax rate. And as you think about the tax rate going forward, it's 18.5%, plus or minus discrete tax adjustments, which could be positive or negative in future years.

Next question, Meyer Shields of KBW. Meyer Shields - Keefe, Bruyette, & Woods, Inc., Research Division: Greg, one question, just to clarify, when you talk about Reinsurance organically being better in fourth quarter, are you expecting it to be positive or just less bad than it's been for the past couple?

Again, we don't give specific guidance. We said it would be an improvement in the Q4, and it reflect kind of a negative 2% year-to-date. We think Q4 will be a bit better. Meyer Shields - Keefe, Bruyette, & Woods, Inc., Research Division: Okay, that helps. Broadly speaking, when you look at the demand for cyber risk, I guess, I'm wondering, one, is there -- is that something that's going to present a measurable opportunity for Aon? And second, is there any risk that clients that have gotten hacked look to the broker as maybe not pushing as hard on these coverages as they should have?

Well, if you step back and think about it, you're really hitting on -- cyber, you can talk about pandemic. You can talk about sustainability, a whole series of things. Our view always has been, it's one of the reasons why we love this business so much on behalf of our clients, is our clients face a range of traditional risks. And globally, it's true. It's true in every country of the world. As populations urbanize, it becomes even more true around property, casualty, D&O, et cetera, and then you bring in all the nontraditional risk, as you're starting to highlight, cyber being one. But again, you could add pandemic, Ebola, whatever you want to add to that mix. There's just a whole range of those sorts of opportunities and challenges for our clients. We see that as a tremendous obligation to support them in that and opportunity for us to support them in that. And so we've invested and continue to invest very, very heavily. This is back to Christa's point around data and analytics, getting the insight and understanding so that you can just begin to quantify that risk. Therefore, you can then understand -- you can mitigate that risk and then price for it, and where there's opportunities, bring balance sheets into play, à la place insurance. But oftentimes, it doesn't even involve insurance placement. It involves operations, and we're helping clients across the board on all those pieces, and our clients are really looking for us to try to do that. Meyer Shields - Keefe, Bruyette, & Woods, Inc., Research Division: Okay, that's helpful. And then one last question if I can. I think it's for Christa. The various revenue timing issues that you've talked about today, do those reverse in 2015?

In 2015, no. The revenue timing issue, the $15 million, will reverse itself in Q4 2014. So really, in terms of Risk Solutions, what you should really think about is putting $15 million of revenue in Q4 because we've absorbed the expense for it in Q3. Meyer Shields - Keefe, Bruyette, & Woods, Inc., Research Division: Right. No, I understand that. I'm just wondering when we look forward a year, is the seasonal adjustment that we're seeing this year, does that go back to the way it was in 2013 or is this sort of the mentality?

No, this is the new patterning, going forward.

Next question is Paul Newsome of Sandler O'Neill. J. Paul Newsome - Sandler O'Neill + Partners, L.P., Research Division: I was hoping we could talk about, just more broadly, the organic growth year-to-date in the U.S. in international. I think Reinsurance has been beaten dead. So we've seen a modest deceleration, and in hindsight, can you talk about any reflections on whether or not you think that's more economic growth changes or rate changes?

Well, a little bit as we said before. Think about year-to-date in the Americas, the 2%; year-to-date in international, 3%. Basically, as we said, we're about to go into our fourth quarter, which is the strongest quarter we have across the firm. We see exceptionally strong new business trends, particularly in the U.S., have been exceptionally strong. So underlying, again, tremendous opportunity as we continue to build the business. We would say from a pricing standpoint, really, think about it as market impact pricing on one side, and then insured values on the other. Pricing is largely around the retail side, hovering around 0, plus or minus, very slightly, and insured values are holding up, I would say, not decreasing. So we're kind of marginal from that standpoint, which, by the way, might be a bit of an improvement, but marginal overall, and that's really the context. J. Paul Newsome - Sandler O'Neill + Partners, L.P., Research Division: Terrific. My second question, I was hoping you'd talk a little bit more about the other income line. I recognize that there's more than one thing in there, but it seems like we've had a couple of years where, on average, and I'm not asking here for a discussion really on the quarter, but more the year in total, on average, that line has become a positive number. Is that something that we should think about as possible in the future? Or I think, historically, we thought it as being something that in the end ended up being kind of a 0 typically over time?

Yes. So Paul, I think it's obviously a lumpy line. And it, theoretically, should be 0 over time. What you see reflected in there is our continued efforts in managing the portfolio to maximize ROIC for shareholders, and therefore, it includes the gains on the sale of a business, and it also includes gains in certain long-term investments, as we continue to optimize the portfolio around highest return capital. So it is lumpy, and therefore, almost impossible to predict. J. Paul Newsome - Sandler O'Neill + Partners, L.P., Research Division: Well, I'm comfortable with lumpy, but I guess, it actually sounds like if you are -- continue to optimize the portfolio and sell things off and do those like -- and have these investments, that, generally speaking, although, obviously, with a lot of volatility, it should be a positive number. Or am I just completely off-base?

Well, I guess what I would say, Paul, is as we actually model our own business internally, we model it at 0, if that's helpful for you.

Our last question is Charles Sebaski of BMO Capital Markets.

The first question I have is regarding GRIP, and wondering, I think, Greg, you said that some of the 30 or 35 clients currently participating in GRIP are on multi-year contracts. I wonder if we could get some more color on how many of the accounts and how long those multi-year agreements might be lasting?

Yes, we really don't disclose that. What we said before is, again, nearly half or so have signed multi-year contracts, but really, it was more an indication of the value they're seeing and the impact it has. That really is what we're trying to highlight, but we're not going to go into detail in terms of the specific mechanics around it.

Okay. I guess what I'm trying to understand is I believe that the number's been around 30 for a couple of years now. And given, as you said, you work with 4,000 insurers globally, I would have thought that the value proposition you're talking about, we would've seen more expansion in that product line.

No. Actually, we're not going for volume here. We're going for -- by the way, very good question, but this isn't about volume, it's about quality, content. With that balance sheet, our carriers deliver on behalf of our clients. So it's been a reasonable progression, 20, 25, 30, 35, give or take. We don't -- this doesn't need to be thousands or even hundreds, nor do we want it to be, because in the end, we're really talking about using data and analytics to change the way that an underwriter thinks about applying capital to our clients. Fundamentally, that means it's better for our clients, and it means it's better for the underwriters, better for Aon too in that process, but really, it's a function of our clients. That process takes real content, data and analytics. It also takes real leadership from an Aon standpoint and from a carrier standpoint, and this is really what we've been doing. And as those relationships connect in different ways, that's really what's drawn and built the overall GRIP platform effectively, and that's why we see it will expand over time. This goes back to Brian's earlier question. With the 30, 35, we think we see substantial opportunity to expand dramatically, and that's a huge benefit for our clients and for them. And then we'll add a few from time to time if insurers really want to invest their time and energy to make this work, because there's nothing instant about this. This is real hard work with new insights and new data to apply their capital in a different way.

Is that -- is there any sharing between that data analytics platform and what you're doing in Re? So I guess what I'm wondering, as you talk about the $120 million spend in data and analytics for Re, and I guess I'm trying to get an understanding better on what your total investment is across all platforms, be it health care exchange, be it GRIP, be it Re, on where you guys are on that relative to the $120 million you provide.

Yes. Again, we'll be very clear. What we talk about with the $120 million is Aon Benfield only. So the investment on the Risk Insight Platform is not included in that at all. That really is done in the ARS book -- ARS business overall, so it's completely separate. We haven't disclosed what the number is, but if you think about it, $120 million in the Reinsurance business is a tremendous investment, annual investment. We invested substantially more than that on the retail side of the business. So now we haven't even got to Aon Hewitt yet. We're really just talking about on the risk side of the business. So back to what we're doing to sort of build our content and capability, again, we haven't disclosed it, but it's substantially, a multiple greater than $120 million a year when you think about what we do in Risk Solutions overall, and GRIP, our Risk Insight Platform is completely separate from this $120 million.

And can we get some idea at all on the -- I know there was some commentary made about investments this quarter on the new clients for health care exchanges. I'm trying to get an understanding since inception on what kind of investment has been made in the construction of the health care exchange platform. And then going forward, what kind of investment upkeep or run rate investment growth is going to be required in that business?

What we said basically is we've invested -- we explicitly said, as we were bringing this up and online, greater than $100 million investment. What we said, going forward, there will be -- continue to be substantial investments. And by the way, bringing large clients on is a great cause for celebration for us. We -- a phenomenal validation of what we're doing, very reinforcing. What we said is all future investments, we're going to fully fund out of the P&L. And what you need to hear from us is the following, exactly what Christa described, is we are delivering in HR Solutions mid-single-digit organic revenue growth and greater than mid-single-digit operating income growth for 2014. And so while there have been investments greater than $100 million we described before, we are absorbing them all in the P&L, and by the way, delivering greater than mid-single-digit operating income growth for '14. So that's really how you should think about it.

And just a last one. Christa, on the share repurchases for the first quarter, to make sure that I -- I'm understanding something correctly, with the current share count at 296.1 million, and I think in the presentation, you say the expected diluted share count in the -- for full year '14 is 295 million, so am I reading that right that the expectation is really only about 1 million shares of buyback? Is that on par with where cash flow or cash ability is in the quarter?

Yes. So here's what I would say. The actual shares outstanding at 9/30/2014 were 285 million. You then have about 10 million of additional dilutive equivalents, which get you to 295 million, which is your starting point, for Q4, before any share repurchase, et cetera. And so we're not giving guidance about share repurchase in this number.

Thank you. I would now like to turn the call back over to Greg Case for closing remarks.

Just wanted to say thanks to everyone for joining us. We appreciate it very much and look forward to our discussion next quarter. Thanks very much.

Thank you for your participation. That does conclude today's conference. You may disconnect at this time.