Daniel S. Glaser - Chief Executive Officer, President, Director, Member of Executive Committee and Member of Finance Committee J. Michael Bischoff - Chief Financial Officer Peter Zaffino - Chief Executive Officer of Marsh Inc and President of Marsh Inc Julio A. Portalatin - Chief Executive Officer of Mercer and President of Mercer Alexander S. Moczarski - Chairman of Marsh & Mclennan Companies International, Chief Executive Officer of Guy Carpenter and President of Guy Carpenter

Jay Gelb - Barclays Capital, Research Division Ryan Tunis - Crédit Suisse AG, Research Division Kai Pan - Morgan Stanley, Research Division Michael Steven Nannizzi - Goldman Sachs Group Inc., Research Division Elyse Greenspan - Wells Fargo Securities, LLC, Research Division David A. Styblo - Jefferies LLC, Research Division Larry Greenberg - Janney Montgomery Scott LLC, Research Division Joshua D. Shanker - Deutsche Bank AG, Research Division Brian Meredith - UBS Investment Bank, Research Division Thomas Spikes Mitchell - Miller Tabak + Co., LLC, Research Division

Welcome to Marsh & McLennan Companies Conference Call. Today's call is being recorded. First quarter 2015 financial results and supplemental information were issued earlier this morning. They're available on the company's website at www.mmc.com. Before we begin, I would like to remind you that remarks made today may include statements relating to future events or results which are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to inherent risks and uncertainties and a variety of factors may cause the actual results to differ materially from those contemplated by the forward-looking statements. Please refer to the company's most recent SEC filings, which are available on the MMC website for additional information on factors that could cause actual results to differ materially from those expressed or implied in any forward-looking statements made today. I'll now turn this over to Dan Glaser, President and CEO of Marsh & McLennan Companies.

Thank you, Jamie, and good morning, and thank you for joining us to discuss our first quarter results reported earlier today. I'm Dan Glaser, President and CEO of MMC. Joining me on the call today is Mike Bischoff, our CFO; and our operating companies' CEOs: Peter Zaffino of Marsh, Alex Moczarski of Guy Carpenter, Julio Portalatin of Mercer, and Scott McDonald of Oliver Wyman. Also with us is Keith Walsh of Investor Relations. The business world is changing rapidly, and we continue to see examples of disruption and discontinuity. We believe Marsh & McLennan Companies is well positioned in this environment. We are global leaders in the areas of risk, strategy and people, and these areas all have great relevance to our clients. We are defined by deep specialization and united by a common purpose: doing meaningful work that makes a difference for our clients, colleagues and shareholders. We are industry innovators and thought leaders, proud of our heritage of advising clients on complex challenges. Many organizations ranging from multinationals to regionals and small firms, both public and private, are affected by issues such as heightened cybersecurity risk, political and economic uncertainty, increased regulation and slow economic growth. In this increasingly complex and dynamic world, the need for advice and services is rising. Our competitive positioning as a trusted adviser to our clients has never been stronger. Our proposition for shareholders remains unchanged. We are a global growth company with increasing capital flexibility. We continue to invest for future growth, and we have a proven leadership team known for keeping its commitments. I am pleased with our operating performance in the first quarter, especially considering global economic pressures and a softening P&C insurance market. We posted underlying revenue growth across all operating companies, margin improvement in both segments and strong…

Thank you, Dan, and good morning, everyone. In the first quarter, we delivered solid underlying revenue growth across each of our operating companies and double-digit growth in adjusted earnings per share. Revenue growth exceeded the increase in underlying operating expenses for the 18th consecutive quarter. GAAP EPS rose 10% to $0.88, and adjusted EPS increased 12% to $0.91. As we discussed on last quarter's call, results this year are being impacted by 2 macroeconomic headwinds: the decline in global interest rates and the strengthening of the U.S. dollar. Consistent with our comments last quarter, our estimate is that higher retirement planned expenses and foreign exchange should impact earnings per share this year by approximately $0.30. The effects on our quarterly results will vary. In the first quarter, these macro headwinds impacted earnings by approximately $0.12. As anticipated, we made changes to our U.S. post-65 retiree medical program last month. This medical benefit was eliminated for most colleagues more than a decade ago. The net result of the 2 headwinds in this mitigating action was a benefit to operating income of $23 million or $0.03 per share. Looking forward, if foreign exchange rates remain at their present levels, we estimate the impact of the 2 macro headwinds will be $0.08 in the second quarter, $0.06 in the third quarter and $0.04 in the fourth quarter. It also helps to look at the net impact of these items by segment. In the first quarter, the mitigation almost completely offset the macro headwinds in the Consulting segment and had a positive impact on profitability and margins in the Risk and Insurance Services segment. In the second quarter, the headwind should impact Risk and Insurance Services slightly more than Consulting. In the third and fourth quarter, about 1/3 of the headwinds are expected to…

Thanks, Mike. So Jamie, we're ready to begin the Q&A.

[Operator Instructions] And we'll take our first question from Jay Gelb with Barclays.

On the EPS outlook, I just want to confirm that the starting point, that high single-digit EPS growth rate is $2.82 for full year '14, which is the adjusted number.

That's correct, Jay. That's correct.

The other thing that caught my attention in the quarter was the pace of the buybacks, $300 million in the quarter. Can you talk about why that accelerated in 1Q and what the implications are perhaps for the rest of the year in terms of buyback?

Sure. Well, if you go back to last year, we returned between acquisitions, dividends and share repurchase $2.35 billion to shareholders. And we made the comment in our last call that we would expect this year to be at least that amount. So we feel very comfortable with our ability to return value to shareholders through those 3 actions. And when we look at it, our overall feel as we go forward would be that you'll see us over time reducing cash on the balance sheet, increasing our level of leverage over time and putting that leverage -- increased leverage to work for our shareholders. And so our expectation in terms of share repurchases and acquisitions are similar to last year, although acquisitions is one of those things that you can never really quite time. And share repurchase, to us, would be a very good use of our money and certainly superior to growing cash on the balance sheet.

Okay. And then my final question was, with regard to the first quarter, the offsetting benefit of closing the retiree medical plan, my sense is that had a benefit even on the adjusted operating income, especially for RIS. Is it -- can you provide us with sort of a normalized margin for 1Q relative to the 30.3% that was printed?

Yes, sure. When you look at our margins in general, I think what the -- it's smart to not only back out things like foreign exchange but also back out the mitigation aspect, particularly in the first quarter, because that's where it landed so heavily. Even if you back all of that out on an underlying basis, MMC's margin would have been up about 50 bps, and we would have had margin improvement in both segments.

Dan, I think you meant Risk and Insurance Services margins would have been up about 40 or 50 bps. Consulting is fairly straightforward.

And we'll take our next question from Ryan Tunis with Crédit Suisse. Ryan Tunis - Crédit Suisse AG, Research Division: I guess, my first question is just on your organic growth in U.S. and Canada. I know you mentioned -- I think it was driven by MMA. Just curious what was the growth there in MMA and what were some of the other puts and takes maybe against that 3% in U.S. and Canada?

Sure, well, we're not going to start disclosing quarterly individual units within segments and calling them out separately. But Peter, you want to talk broadly about the U.S. and Canada division?

Sure. I'll start, Dan, with why we call that MMA. And we have been communicating on our quarterly calls about the quality of acquisitions that we're making, the ability that we have in terms of being meaningful in the middle market and having a national platform. But in addition to making those acquisitions and bringing something very unique to our clients and to the market, we had strong organic growth. And so we're seeing the components of strength from acquisition as well as from organic growth. In the U.S. and Canada division, again, we have multiple businesses that roll up in the reporting, and MMA was the leader in terms of its organic growth. The one thing that we'll have within overall Marsh as well as the U.S. and Canada division was a weak new business in the first quarter of last year. So therefore, the rollover had some impact in the first quarter growth. But overall, the fundamentals of client retention, strong new business and the 3% in the U.S. and Canada in a mature part of the world we were pleased with. Ryan Tunis - Crédit Suisse AG, Research Division: That's helpful. And I guess, my follow-up would just be the $500 million debt deal you guys did, does that change your outlook, I guess, in terms of what you think you can do for dividend acquisition and share repo for the remainder of the year?

Mike, you want to take that?

Yes, thank you very much. This is basically in line with what we've been doing over the last 3 years in essentially reshaping our debt portfolio, or as some people say, debt maturity ladder. We look at it over a number of years and we started to reposition our 2014 and 2015 maturities. And then looking at that, we wanted to essentially have a smooth ladder going out into the future. We went through about 3 years with keeping our actual debt essentially flat at around $3 billion. And then, what we've been indicating to the investment community as well as the credit rating agencies that as our earnings continue to grow, we will begin to bring up our overall debt levels in a sequential fashion. And so it's very much in keeping with our long-term view, very consistent with what we've been doing. If you look at it on a seasonal basis, where we need the cash, where we -- where heavily utilization of cash, all things being equal, is in the first quarter due to our annual payments for bonuses. And so when we're increasing our debt, most likely on an annual basis, it could occur in the first part of the year. So that's a long answer to something to say, no, it's very consistent with the multiyear strategy.

And we'll go next to Kai Pan with Morgan Stanley.

Just a follow-up on Jay's question on the margin expansion, especially in the RIS segment. Even you're excluding these foreign exchange and the pension impact, pretty healthy year-over-year improvement. Is that sort of -- if you look at organic growth at 3%, is that an indication, when the organic growth is 3% or above, we should see some meaningful margin expansion for these segments going forward?

Yes, well, I'll start by saying, for quite a while, we've sort of used 3% as the baseline and saying, if we can grow organically 3% or better, we believe that we should be able to achieve some margin expansion. I wouldn't say it quite the way you did, Kai, in terms of, at 3%, there will be meaningful margin expansion. I mean, clearly, whatever the delta is between 3% and a higher number creates more of an ability for us to expand margins. And if we're closer to 3%, we wouldn't really be driving at that stage for margin expansion. But Mike, do you have anything to add?

Just more specifics on the first quarter for the clarity. When we looked at the margin improvement in Risk and Insurance Services for the quarter, which was 310 basis points, we knew that, that was affected by the benefit -- the net benefit of the closing of the retiree medical plan post-65 in the United States. And so that's why we wanted to give the investment community much more specificity on the first quarter. So the benefit -- the net benefit that we indicated, the $23 million, was felt almost completely in the RIS segment. And so that's what I was saying earlier. If you just say, based upon the underlying growth in the segment, what would be the organic growth and what would be the margin improvement predicated on that. And thus for the RIS segment, it would be in the neighborhood of 40 to 50 bps. In Consulting, it's a different situation. The net headwinds and the net offsetting items essentially netted out. It was actually a $2 million or $3 million hurt in Consulting. So the margin improvement of 160 basis points was more of a true margin improvement for the segment in this quarter, excluding the impacts of the mitigating items and the macro headwinds.

Then a follow-up on the, sorry, on the Health segment. The organic growth 3% this quarter and -- just trying to see your view on, because last year -- end of last year, you have pretty meaningful increase in terms of your Mercer Marketplace, the private healthcare exchange. Just wondering how those grows, which translate into organic growth, in particular in the Health segment?

Julio, you want to take that?

Thank you, and thanks for the question. It allows us to provide some additional clarity and color around our Health growth, which we are actually very bullish on and I'm very pleased with. You might recall, a couple of years ago, we made an announcement that we will be incorporating our benefit admin business into our line of businesses. In this particular case, the Health and Benefits -- Benefit Administration business or Outsourcing was actually incorporated in our Health segment. And when we did that, of course, the results were -- have been actually pretty good, because we've been able to put profit improvement plans in place to improve our margins in that business. Part of that decisions -- part of those decisions that we make, of course, has to do with client and client retention, our ability to price adequately for the services that we give. So if you were to take the impact of some of the client retention challenges that we had because of anticipated action that we took to improve profitability in ben admin. If you were to take that impact out of the Health number, you would actually see what I think is a much more expected 7% growth. So our core Health, along with MMX, grew 7%. With the actions of ben admin, it impacted it to 3%. So we're very pleased, in fact. We had good performance in our Health business. We expect this to continue. Our client retention x ben admin is actually very strong, our commissions continue to increase. Mercer Marketplace will enhance this segment going forward. And it's important to keep in mind that we'll continue to invest in our exchange health business, because we think it's a robust environment for us to do so and to maintain our leadership position.

And we'll go next to Michael Nannizzi with Goldman Sachs.

I guess, just a couple of questions. One is, so on the buyback -- I mean it's great to see you comment about leverage, Dan, and the buyback there. I guess, one question is, looking now running at the $200 million to $300 million quarterly run rate, 1Q seasonally light because of operating expenses, do you expect -- or should we expect that -- or can we infer that -- I mean, we'll look to maybe increase leverage a bit during the first quarter to sort of supplement the seasonally light cash flows there and to kind of adopt the, or espouse a run rate near this level on buybacks?

Yes, I mean, I think the way you should look at it is more annual than quarterly. I mean, clearly, every year, we pay bonuses in the first quarter, and so it tends to be where we're cash light. And we have lots of items that -- and lots of ability to cover that. So that's not an issue. And as you see, we ended the year with quite a bit of cash on our balance sheet, including $260 million in the United States. And I would think, more over time, what you should consider is that we will be increasing our leverage over time and that by doing that will give us more capital flexibility, not only for share repurchase, but also for dividends and acquisitions. And we remain a very balanced player in those 3 areas. What I can be -- what you can infer from that is, is that our level of acquisitions will not necessarily impact our level of share repurchase that we're looking at really our ability to do more of each over time.

Great. Great, that's helpful. And then just on kind of to square the margin and FX and high-single-digit earnings comment. So if we think about the organic growth kind of sticking at this level on RIS, maybe we'll continue to see that sort of 50 basis point margin expansion through the year. So to get to that mid-single-digit EPS growth, does that mean that Consulting margins should -- we should expect to see this level of margin expansion? Or just -- I'm just trying to mathematically think about how we square kind of those points?

So the way I would look at it is first look at last year, right, because that flip is not switched. Switch is not flipped and everything is different in the new year. And so if you look at last year, we grew overall as a company about 70 bps in margin, and RIS grew 30 bps and Consulting grew 160. When we think about this year in terms of 2015, I think what you'll see is RIS will probably be pretty similar to last year and Consulting will come off a bit from 160 bps. We're not expecting that for the full year, but we'll have some corporate benefit, because our corporate initiatives that we had in the back half of last year are unlikely to recur. So we'll have some benefit there. So overall, we feel like we'll end up with pretty good margin expansion for the company in -- during the year of 2015.

Got it, great. And then just the last quick one maybe, Julio, on the private exchange. Any update on enrollment from the last time we spoke? And one question I'd love to ask too is, thinking about like the employer size spectrum, I mean, can you talk about your initiatives or kind of hit rate in the sub-thousand or maybe mid-size or large on that front?

Julio?

Thanks for the question. As we've discussed in the past, it's our intention to give full updates of our Mercer Marketplace progress on a annual basis, it'll be towards the end of the year when we do that again. But I would like to remind of you a couple of things and maybe add some color to the size piece, because we did make some disclosures on that in the past. So as mentioned in the past, our total lives of eligible lives is over 1 million for both active and Medicare. And when you put those together, it's over 1 million. And when you add voluntary benefits and individual access mediums, we can add another 1.5 million or so. So we're up over 2 million when we talk about eligible lives. Mercer's U.S. Health and Benefits business touches millions of lives and gives us an opportunity to grow our exchange business over time as well as new prospects. We continue to have good interest from and dialogue with clients, both our current clients and new clients, both in the mid- and large-market companies, although we continue to see a little bit more momentum still in the mid-market versus the large market. And Mercer Marketplace has a key part of our future -- is a key part of our future, as you know. So if you look at some of the early adopters versus what our current numbers are, you'll see that in '14, we had about 67 clients. Now we have closer to 250 in '15. Talked about the number of lives already. If you break it down by client size, you'll see that nearly half of the clients that we have in our 2015 number is about, let's say, 5,000 or less on number of employees. So you still see a pretty good number of people going into the exchange that obviously are in the market space that is considered to be mid-market and below. And about 40% of our clients, by the way, would be somewhere in the area of over 5,000. But then again, when you look at jumbos over 20, it really drops considerably. So that goes to your comments earlier in terms of wanting more color as it relates to the size of the employees that we're currently having as part of our Mercer Marketplace initiative.

And we'll go next to Elyse Greenspan with Wells Fargo.

I was hoping to spend a little bit more time, I guess, on the acquisitions in light of your capital outlook for the year, a little bit lower in the first quarter. And I know if you guys can kind of just talk about what you're seeing in the acquisition pipeline, especially in terms of M&A, in terms of the MMA platform and if higher prices of deals have kind of caused you to walk away on that front, or just kind of what you're seeing there as we look for the balance of 2015?

Sure. So I'll talk a little bit about acquisitions, and then I'll hand over to Peter to talk a little bit more about the pipeline within Marsh and in particular MMA. I think it's important to reiterate that our philosophy around acquisitions is that we have no budget or timetable associated with acquisitions. We work a pipeline and we develop relationships, and sometimes, it takes years to actually cultivate a relationship to where we then can have a discussion around whether they want to join with us or not. Our primary focus is on quality. We prefer companies that are growing faster than we are, that are trading at multiples below our multiples and where we can see that we can improve the business by working together. And from that standpoint, I might also say that we rarely participate in auctions. Auction environments -- they don't meet our philosophy, because actually, they're generally geared to optimizing the price for the seller as opposed to any kind of joining together of 2 different companies. So just to reaffirm, we develop relationships with really talented people over a long stretch of time. Now in terms of the multiples, I mean, it's clear over a number of years, there's been some expansion in multiples, generally fueled by low interest rates and the entry of many PE firms into the space. And multiples are important to look at, but it may be even more important to look at, well, what is the EBITDA, because these are private companies and you have to make assumptions around EBITDA. And sometimes, I would say that buyers can be far more optimistic about what those assumptions are than what we would be as a disciplined buyer. And so we also have to look at the projected growth rate. And from that standpoint, we're well practiced. As an overall company, last year was a fairly active year, and it added up to almost $1 billion worth of acquisitions. The pipeline overall for the entire company looks about the same. I'm not going to say it's fuller than what it was at this point last year. It's about the same. And we're working on some things that are consistent with our approach of a string-of-pearls strategy, where the average acquisition for us over the last 5 or 6 years has been around $40 million. And we're also working on some things that we would call more nuggets that might be a little bit more size, but those tend to take more time. And so Peter, you want to add in some on specifically about MMA?

Sure. I think you summarized everything, Dan, for the organization, and it fits very well within MMA. We're working very hard to cultivate relationships. We don't have a budget, so it can be very lumpy from quarter-to-quarter or from year-to-year. And as Dan had mentioned, we very much focus on companies that can strategically position us differently, whether it's in a space like the SME or provide capabilities that we may not have. We made an acquisition of Torrent at the end of last year, which was a best-in-class flood servicing company with great technology. So we're very focused on making sure that we're cultivating those relationships. We tend not to be in a bid process. So in that cultivation of relationships, they tend to be just 2 parties involved. And if I can speak specifically about MMA and International, which is where we focus a lot of our acquisitions, we feel the pipeline is very strong for 2015. And we're optimistic that throughout the next several quarters, we should be able to move forward.

Thanks. Elyse, would it be helpful if Julio talked a little bit about the investments that they've made where they haven't purchased 100% of a firm, but they've invested in Benefitfocus and Alexander Forbes?

Sure, that would be great.

Julio?

Okay, thank you. Yes, it's great to be able to give some additional color on this, because as we've talked about in the past, we have some very pointed strategies on how we want to continue to expand our business. In the case of Alexander Forbes, as mentioned earlier, it was very important for us to be able to get much more of a foothold and much more of a footprint in the Africa continent. And, of course, Alexander Forbes provides that in a very meaningful way. It's part of our focus to expand our new capabilities in growth markets, and of course, in the Investments and the Retirement space as well. So our investment in Alexander Forbes really helps us do that and continues to help us move forward. Benefitfocus, we're very excited about. I mean, obviously, we have a big investment going on in our exchange business. And we bought $75 million of newly issued shares of Benefitfocus, representing 9.9% of outstanding shares. And quite frankly, we're really pleased with the partnership that we've developed with Benefitfocus. We're developing proprietary approaches to the exchange base, and we want to make sure that, that was preserved over a long period of time, sustainable for us to count on for a long period of time. And we made the investment there, and we're very excited about our partnership in developing new things. As we continue to also invest in our Investments expansion, SEM came available to us. And through a lot of discussions over a period of time, we were able to secure that acquisition. Of course, that supports our Investments business, especially in the alternative investment space. So it really expands us in that area, because our clients have been asking us to actually provide great solutions in that space, and that helps us in that area. So as you can see, all of these acquisitions are really very strategic and very much aligned with our strategic purpose. And we'll continue to look for opportunities just like those.

Any other questions, Elyse?

Yes, if we can also spend some time talking on Guy Carpenter. 2% growth in the quarter, just how you kind of think about the growth you can potentially see there on an underlying basis for the balance of 2015, especially in light of some of the price declines you've been seeing in the reinsurance market?

Sure. Alex?

Sure, thanks. So the first quarter was actually a little stronger than we had expected, and the second quarter may be a bit tougher. We can expect -- it is a moderate or slight to moderate underlying growth environment for us. We expect to grow over the year slightly, maybe even moderately. But the next quarter may be a little bit tough. And we may have clumpy quarters, because when you're in that sort of environment where the percentages are small, one quarter will be stronger than the other. But we do believe that we've got a good pipeline. We continue to innovate. We continue to be relevant. As there are more options around capital, we are agnostic to where that capital comes from, and our clients are looking for -- there's interest in unbiased but informed alternatives. We have been specializing, as you know. We've been segmenting. We opened up a Mutual Company Practice in 2013, the Excess and Surplus Line practice, the Cyber Solutions Specialty in 2014, Healthcare in 2014 and just announced the Public Sector Specialty Practice. So we continue to seek relevance. We continue to seek innovation. We've got strategic advisory teams around the world, helping companies grow, helping companies face increased regulation. So we're optimistic about our growth -- about continued growth this year, though, at a, as I said, slight to moderate pace.

To sum that up, GC is doing a terrific job in specialization and segmentation, and all that hard effort enables them to eke out some level of growth in a low growth environment. And that's our expectations for the year.

And we'll go next to Dave Styblo with Jefferies.

I think I'll flip the other side of the business on Marsh for the organic growth there. Another solid quarter of 3%. I guess, as I was looking at things, it's a little bit lower than any of the quarters last year. And obviously, the environment, as you mentioned, is a little bit more challenging. But I'm curious what you're seeing more specifically in the end market. Is there any sort of more material slowdown in activity or increased competition? Or on the other side, I'm just wondering if there's perhaps any sort of timing of revenue that might have been going on in the quarter?

Okay. So I'll just take that broadly and then hand over to Peter. I think when you look at the segment overall, one thing to consider is that we -- for the last 17 out of 18 quarters, we have grown organically 3% or better. And so as you stated, we've had some periods of higher than that, but we've really done a good job creating that as essentially our floor in the segment. But Peter?

Yes. I had commented on the United States earlier. So perhaps I'll just give a little bit of insight on International and its growth. First of all, we have a terrific International business. It's really balanced with strength across the entire geographical platform. But in the first quarter, it is heavily weighted towards EMEA. We had 2% growth in EMEA, 5% in Asia-Pac really led by Asia and 6% in Latin America. So there are couple of factors impacting the growth -- again, nothing to be concerned about. But we had modest renewal growth in the quarter, and that was primarily based on 2 factors. One is we had slow new business growth in the first quarter of 2014, so that had a slight impact on the rollover for 2015. And then pricing coming off a little bit more thinking mid-single digits led by Property in the International business had some impact. The real positives for us is that we had a terrific new business in the quarter. So we were up 7% in International. And in Continental Europe, we had 10% new business growth. And then in the U.K., we had 8%. Other strong performances we had, Africa at 15% and Latin America in double-digit. So we are winning in the marketplace. We are in a very positive way and a balanced way growing our portfolio through adding clients. And so we had a little bit of an impact from last year. Again, it's heavily weighted towards Europe and the U.K. So when you think about the macroeconomic factors and the slight impact, again, we had from rollover, new business and the rating environment, we were pleased with the performance.

Sure, okay. Is it more appropriate to think more like a 3-ish percent organic growth for the year as opposed to kind of 4% to 5% clip you were at last year then?

No, I don't think that would be appropriate. I think the way you should look at it is the overall company, including RIS and including Marsh, has been operating in a 3% to 5% organic growth area. And we're just as likely to pop out of that as we are to go underneath it. But 3% to 5% seems the more accurate way to look at it over a longer period of time.

Okay, great. And then a little bit more coming back to Benefitfocus. I know you started to highlight that. I'm just curious to get a better sense of the rationale for the investment. Obviously, you guys have been working with them for a while. What was the reason for needing to actually help make the investment in there? I guess, at one point, the company was burning through a little bit of cash. Was it just to the help the company out, make sure the business was [indiscernible] so that they could focus on operations? Or was there something new in terms of the expansion of the contract terms and things and services that they were doing for you that is part of this new relationship?

I'll say broadly, and then I'll hand over to Julio, that we saw a tremendous opportunity to develop a closer relationship where we could collaborate more deeply. And we certainly weren't needed as a cash source for them. They had all kinds of different choices. And we are very pleased that we were able to make an equity investment in return for some cash. But Julio?

Yes, thanks for the question. As you know, the importance of Mercer Marketplace is high on our list of priorities. It's -- Mercer Marketplace is our proprietary benefit exchange solution. It's powered by Benefitfocus. And our relationship has flourished. We now serve a lot of lives together, including active and retirees, as well as their dependents in our Mercer Marketplace as part of exchange. This equity investment enhances that relationship. It strengthens our proprietary solution. And it allows us to more closely collaborate and align on employer and consumer development needs. And those were the primary reasons why we actually went in and did the equity investment. It solidifies the partnership, and in essence, allows us to look at things more strategically together, as the exchange business continues to evolve and grow.

And we'll take our next question from Larry Greenberg with Janney Capital.

I guess, this is for Mike, and it relates to FX and other good stuff like that. So is it fair to say that the pension impacts, both the costs and mitigation efforts, are still expected to completely offset one another for the year and that the FX impact is now up to $0.30 a share from what you had indicated, $0.15 coming out of the fourth quarter?

Mike, you want to take that?

Okay, thank you. Larry, and I'm glad you asked for clarity. When we look at the total headwinds, pension, the lower interest rates essentially impacting our pension expenses on a year-over-year basis and foreign exchange, it comes to roughly $240 million to $250 million pretax dollars or roughly $0.30 a share. And it basically is roughly equal between the 2 macro headwinds. So about $0.15 of foreign exchange, about $0.15 of, call it, the impact of lower interest rates. That's very consistent with what we had said on the fourth quarter earnings call. The numbers just changed a bit, meaning a few million. But the total aggregate amount was still in that $240 million, $250 million category. So to be very clear, the foreign exchange impact is $125 million for the year, and we felt almost about $50 million of that in the first quarter.

Just on Guy Carpenter, I saw that there was a negative 2 point impact from M&A. I'm just curious what that was?

Larry, that's just the category -- this is Mike. That's just the category, where we say transfers the businesses between different of our operating units and others. So that's really what it was. We wanted to be very clear when we showed just the underlying growth. It's true business growth to the investment community, and so that was really in the other category.

And we'll go next to Josh Shanker with Deutsche Bank.

I want to talk a little about FX. And obviously 1/1 is a big day for you guys. You -- and currency is currency is much stronger on 1/1. When you think about the new year 2016, is there much of an FX impact expected, I mean, I guess, particularly from Guy Carpenter or whatnot?

Well, why didn't you tell us, Josh?

Where interest rates are right now?

Well, I think FX moves in a lot of different factors other than interest rates, and there's many variables. And it tends to move in cycles. I mean, we've looked at the movement of the dollar all the way since Bretton Woods. And the reality over that length of time, where it's sort of close to the median level of where the dollar has been, it feels a lot stronger, just because it was weaker over the last period of time. But actually, over a longer period of time, it's about at the median. And it's really the volatility rather than the -- rather than whether the dollar is strengthening. And we were -- I think the whole world was taken by surprise in the period from, say, late October, early November all the way through to, say, the end of January. And so we're not anticipating that, but ultimately, we're working on a series of mitigating actions to try to make sure that both a -- that we're as prepared as we can be in a situation of either a strengthening dollar or interest rates to where that could create an impact on 2016.

Well, yes. I'm just talking about as through January 1 though. Given -- when you guys -- or on the last conference call, you had, I would imagine, a good sense of where your FX would be by the end of year, because a disproportionate amount of the revenue for the quarter was already earned through by the time you held the conference call.

Yes, I mean, if you -- well, if you look at our quarters in general, Guy Carpenter is a little bit more weighted toward January than the other operating companies. Europe is a little bit more weighted toward January within Marsh. But Marsh actually, as the biggest opco, is pretty well balanced between the first, second and fourth quarter, and the third quarter is the shortest quarter. So I don't think you can read too much into the results as to whether we anticipate headwind January 1st or not from FX, because I think it's too early to say. I think the important thing to remember with FX is over a longer period of time for long-term shareholders, it has been a wash for Marsh & McLennan Companies, and that's over 10 years or 20 years. And so from that standpoint, this is a an issue that has arisen for this year. The last few years, we have worn $0.04 or $0.05 a year of headwind on it. This was just a spike year, in our view, but it's hard to tell where the macro world goes, and there's an awful lot of variables beyond interest rates that impacts the U.S. dollar.

That's perfectly reasonable. And then, I can probably do the math myself and get it wrong. If I take all the puts and takes from FX, interest rates, pensions, the mitigation efforts, in terms of your long-term target of 13% EPS growth, where did the quarter shake out on a normalized basis?

Well, I would say, I'd go back to what we said last quarter, which was when we were looking at 2015, we were saying, if we looked at the year of 2015 on a constant-currency basis, we thought that we would deliver a result which was akin to our 13% long-term growth target. And that's just the impact of FX. And so from that standpoint, we expect to be high-single-digit EPS growth this year taking into consideration all of those factors, and we're working on a series of initiatives now that could potentially be utilized for next year in the event that there's headwinds that we have to deal with.

And we'll go next to Brian Meredith with UBS.

2 quick questions just for you. First one, Mike, just a question on the pension. Any changes to the expected cash into the pension plan this year with the changes that you've made?

Mike?

Good question. No, I think we're anticipating $190 million.

Okay. So it doesn't change at all. Okay, great. And then secondly, I'm just curious, I noticed you hired somebody, a pretty senior person, for tax in the first quarter. Any kind of updated thoughts? I know you chatted about it on last conference call, but any kind of updated thoughts on what you can do to get your tax rate down?

Well, actually we've hired 2 senior people within the finance department recently. Both the head of tax and also a treasurer. But Mike, you want to talk a little bit about tax more broadly?

Yes, I would say with regard to the new head of tax, it's really just long-term planning -- succession planning, and we're very fortunate to get a very, very capable individual to add to our team. When you look at tax, obviously, we were looking at a lot of issues across the entire globe. The thing that would help us the most, but we can't wish for, is a reduction in the U.S. corporate tax rate. It's among the highest, if not the highest, in the developed world. The other issue with regard to the U.S. tax regulations is that it makes it very difficult to bring international cash back to the United States in a tax efficient manner. And so a lot of our efforts are predicated to that. When we look at what we've done over the last 4 or 5 years, the tax rate, either on an adjusted basis or on a GAAP basis, has averaged in a range of 29.5% and about 30%. And I think that's probably a good range to use for modeling purposes going forward.

Great. And then just quickly, from an on operations perspective, I wonder if you could talk a little bit about opportunities. With cybersecurity, what you've done to beef up, is there anything that you still need to do from an investment perspective to get yourself in a position to really take advantage of what looks like it's going to be a big opportunity for you all?

Yes, I'm glad you mentioned that, Brian, because it is a tremendous opportunity for the insurance community at large. And it's probably one of those things that -- it's a journey without end. I mean, in terms of what kind of innovations we can do to help better prepare our clients to not only beef up and be aware about risks associated with cyber, but also gain some level of risk transfer protection. So the insurance industry has done a great job in other areas over a long period of time of helping spread best practice and actually help clients avoid and mitigate risks before they even think about transferring it. And we think that Marsh & McLennan Companies has a tremendous role to play, in not only risk transfer, but also risk identification, risk avoidance, risk mitigation. But Peter, do you have something to add to that?

We just -- yes, Dan, with RIMS being this week, we just launched some additional cyber capabilities. So we do agree that the high-profile breaches, the awareness at the board level, risk appetite in new industries like financial institutions, retail and healthcare, there is definitely an increased demand. And I think insurance companies are being very thoughtful in trying to offer capacity. We have continued to expand our modeling capabilities and just launched Marsh Cyber Monitor and Marsh Cyber View. I won't go into great detail, but it's a fresh look at cyber by continuously updating different threat indicators, and the analytics side is looking outside in, provides a very interesting lens into companies in risk scoring. And so we're able to do that in a real-time basis and have partnered with a company called Cyence. We announced it on Monday and believe that we will be arranging capacity for clients and have already rated 40,000-plus companies in the U.S. So I think it's an emerging and evolving part of our business, well, one that we think will have high growth over time.

So operator, I think we have time for one more question.

And we'll take our final question from Thomas Mitchell with Miller Tabak. Thomas Spikes Mitchell - Miller Tabak + Co., LLC, Research Division: A couple of semi-philosophical questions here. First of all, when you think about the "mitigation opportunities" that you have, and you mentioned having more mitigation opportunities going forward, how does that tally with your general view of the value proposition you offer to employees who might expect to work until they retire?

Okay. So I'll take that broadly, and I enjoy your semi-philosophical question, Thomas. But I think you're on to something, because ultimately, all mitigation in a company has to be finding ways of reducing organic expense as a way to mitigate some headwinds that can be anticipated. And then you look at, well, what organic expenses do you have to try to mitigate. And there is a whole serious of things, but compensation and benefits is the largest expense category of all professional services firms. And then you have areas like technology, real estate, travel and entertainment, et cetera. And so you have to look at those things really broadly. When -- I think, as a good example of the way we approach our work with colleagues, I mean, we really do believe very sincerely that our colleague base is the heart and soul of the entire company. And actually, when we're making decision as an executive committee, we always have the thought of is this good for colleagues on a mid- and long-term basis in our minds when we're making those decisions. So I really don't think it has anything to do with people as they're getting closer to retirement and that sort of thing. I mean we're an industry that actually builds knowledge, and historical knowledge is incredibly important. And so from that perspective, I think that we have a lot of people who have had significant experiences in our businesses over long periods of time, who are still working for us, and we're happy they are. Thomas Spikes Mitchell - Miller Tabak + Co., LLC, Research Division: And you're basically at a standard that's the same as the rest of the industry. So you're not likely to get producers taken away from you for any reason for that.

I wouldn't have as a standard view us as being similar to any of the companies that you think our traditional competitors are. The fact of the matter is Marsh & McLennan Companies is a unique company and we do not have a single competitor in the world that competes with us globally across our operating companies. We have some competitors that come close to that. But in our view, we don't have the issue that you're citing about production or producers. We're not a producer culture. We are a content [indiscernible] and we employ people who enjoy working in a creative environment for smart people who are dedicated to working on clients, and it's self-selecting. So we attract those sorts of people, and we have not seen any abnormal blips in our voluntary turnover over the last several years. Thomas Spikes Mitchell - Miller Tabak + Co., LLC, Research Division: Okay. No, that's very helpful. I appreciate that. Now I have a sort of different kind of question for Mike, which is, if I -- just -- if we just sort of close our eyes and we're sitting a year from now, now our sort of base is essentially $0.76 a share, that is we're now looking at foreign exchange neutral as if there were no change from March 31, '15, to March 31, '16. So in that case, it's perfectly reasonable for you to make the comparisons to do against first quarter '14. I'm not talking about that. But now that we're looking at that, my basic question is, are the things that come in either on an annual basis or even a quarterly basis from this termination of this plan that would essentially benefit either quarterly or annual earnings going forward, perhaps not by as much as the one-time adjustment, but would be an ongoing or recurring savings for the company.

Okay. So thanks, Thomas. Thank you, Thomas. And Mike?

The answer is that we've been dealing with these 2 macro headwinds, depending on how you count, for 4 or 7 years. In aggregate, the interest rates -- lower interest rates have cost us probably $0.55 on our earnings, and the foreign exchange over the last 4 years has cost us $0.30, enormous amounts. Yet every year, we continue to have growth despite the headwinds. And I think that's what we're looking at in '16 and beyond.

Okay. Thanks, Mike, and thanks, Thomas. And I'd like to thank everybody for joining us on the call this morning. Specifically, and having Peter and I just returning from RIMS, I'd like to thank our clients for their support and our colleagues for their hard work and dedication in serving them. Have a good day, everybody. Thank you.

And again, that does conclude today's conference. We do thank you for your participation, and have a great day.