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J. Patrick Gallagher, Jr.Thank you, Rob, good morning everyone. Thank you for joining us this morning. We appreciate you being on the call. Today I am joined by Doug Howell, our CFO as well as the leaders of our divisional operations. As it is our custom, I am going to add some color to our press release and quarterly results, Doug will make some comments and we will get pretty quickly to questions and answers. Our core operating businesses delivered solid growth in the quarter, 18% revenue growth 4.6% of that was organic and 23% growth in adjusted EBITDA. A solid, solid quarter I am very pleased with the quarter. This is seasonably our smallest revenue quarter, and you will remember we had a terrific fourth quarters, so keeping the momentum going in the first is really, really good to see. I think this just continuous show that our team’s execution across all of our strategies is working extremely well. We are really focused on four things, day in and day out. The first is organic growth. Our Brokerage segment and Risk Management segment combined for 4.6% organic growth. I can’t tell you how good that makes me feel. I would say often that Gallagher has a sales and service culture that is strong and I think this shows that. Everyone of us understands that our [top] priority is taking care of our clients and adding new clients to our list. The first quarter proved that once again our talented teammates are very, very good at ringing the cash register. Number two is mergers and acquisitions. Our good work continues. I am proud of the dozens of colleagues who are actively engaged in helping us continue to buy the best brokers in the marketplace. Thirdly, we’re focused on productivity and quality. We had margin expansion in the quarter and we continue to focus on getting better every quarter every year. Fourth, we continue to foster and build on our very unique culture, which is very important to us and I will make some more comments about that later.
Let me address a few other items about the company in the quarter. First, the property/casualty rate environment continues to firm. However, we are not in a classic hard market. We can typically fill out our client’s insurance needs, but the careers are expecting to increase their rates to levels that give them a chance to improve their ROEs.In particular, we’re seeing property, especially cat-exposed property and work comp firming at a pace of high-single to low-double digits. Other lines are tending to be flat to up 1% to 3%. However, the market is still competitive for new business. In other words, one career’s firm [renewal] is another career’s opportunity, but by and large we are not seeing decreases. Secondly, I continue to believe our client’s businesses are improving. Not seeing a lot of hiring of new employees, but the clients I have spoken with over the last few months do think the worse is behind them. We are seeing additional premium audits and increasing exposure units. Our temporary health customers businesses appear to be very robust, so I hope that hiring can’t be too far off. So those two key headwinds that we faced for five years, rate decreases and economic decreases are starting to feel little bit like tailwinds. I don’t feel like I’m running off the down escalator right now. We just came back from the RIMS Conference in Philadelphia. This is a conference where we had a chance to interact with our larger Risk Management accounts both on the Brokerage side and on the Risk Management side, the Gallagher Bassett side. And Gallagher continues to build significant brand awareness under both banners and we came away with a number of great opportunities. So the Risk Management space is opening up more to us. Thirdly, our Risk Management segment, Gallagher Bassett that business had a great quarter, 8% revenue gains, 7% of that is organic, 16% EBITDA growth, virtually all that are organic. Gallagher Bassett used the conference in Philadelphia to announce some significant upgrades to our information systems, which we call RISX-FACS, which were extremely well received. Read the rest of this transcript for free on seekingalpha.com