10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

___________________________________________________

FORM 10-Q

___________________________________________________

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2014

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-34594

___________________________________________________

TOWERS WATSON & CO.

(Exact name of registrant as specified in its charter)

___________________________________________________

Delaware	27-0676603
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
875 Third Avenue New York, NY	10022
(Address of principal executive offices)	(zip code)

(212) 725-7550

(Registrant’s telephone number, including area code)

___________________________________________________

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	x	Accelerated filer	¨
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

As of April 30, 2014, there were 70,299,510 outstanding shares of Class A Common Stock at a par value of $0.01 per share.

TOWERS WATSON & CO.

INDEX TO FORM 10-Q

For the Three and Nine Months Ended March 31, 2014

	Page
PART I. FINANCIAL INFORMATION	1
Item 1. Financial Statements (Unaudited)	1
Condensed Consolidated Statements of Operations — Three and Nine Months Ended March 31, 2014 and 2013	1
Condensed Consolidated Statements of Comprehensive Income — Three and Nine Months Ended March 31, 2014 and 2013	2
Condensed Consolidated Balance Sheets — March 31, 2014 and June 30, 2013	3
Condensed Consolidated Statements of Cash Flows — Nine Months Ended March 31, 2014 and 2013	4
Condensed Consolidated Statements of Changes in Stockholders’ Equity — Nine Months Ended March 31, 2013 and 2014	6
Notes to the Condensed Consolidated Financial Statements	7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	28
Item 3. Quantitative and Qualitative Disclosures About Market Risk	45
Item 4. Controls and Procedures	46
PART II. OTHER INFORMATION	47
Item 1. Legal Proceedings	47
Item 1A. Risk Factors	47
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	47
Item 3. Defaults Upon Senior Securities	48
Item 4. Mine Safety Disclosures	48
Item 5. Other Information	48
Item 6. Exhibits	49
Signatures	50
Certifications

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

TOWERS WATSON & CO.

Condensed Consolidated Statements of Operations

(In thousands of U.S. dollars, except per share data)

(Unaudited)

	Three Months Ended March 31,						Nine Months Ended March 31,
	2014			2013			2014			2013
Revenue	$	904,833		$	892,977		$	2,602,927		$	2,597,233
Costs of providing services:
Salaries and employee benefits	547,385			542,271			1,574,535			1,590,530
Professional and subcontracted services	57,729			62,908			188,203			189,751
Occupancy	33,961			34,666			102,288			107,116
General and administrative expenses	82,844			76,381			236,651			233,163
Depreciation and amortization	44,250			43,166			130,931			130,970
Transaction and integration expenses	241			12,328			1,049			30,753
	766,410			771,720			2,233,657			2,282,283
Income from operations	138,423			121,257			369,270			314,950
Loss from affiliates	—			—			—			(56		)
Interest income	758			613			1,847			2,118
Interest expense	(2,090		)	(3,483		)	(6,553		)	(10,043		)
Other non-operating income	4,053			12			9,743			5,060
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES	141,144			118,399			374,307			312,029
Provision for income taxes	39,231			35,254			96,322			99,649
INCOME FROM CONTINUING OPERATIONS	101,913			83,145			277,985			212,380
Income from discontinued operations, net of tax of $175, $6,621, $41,012, and $11,158, respectively	3,939			11,700			5,980			20,858
NET INCOME BEFORE NON-CONTROLLING INTERESTS	105,852			94,845			283,965			233,238
Less: Income (loss) attributable to non-controlling interests	3,346			(71		)	7,057			(2,695		)
NET INCOME (attributable to common stockholders)	$	102,506		$	94,916		$	276,908		$	235,933
Basic earnings per share (attributable to common stockholders):
Income from continuing operations	$	1.40		$	1.18		$	3.83		$	3.03
Income from discontinued operations	0.06			0.17			0.09			0.29
Net income	$	1.46		$	1.35		$	3.92		$	3.32
Diluted earnings per share (attributable to common stockholders):
Income from continuing operations	$	1.39		$	1.17		$	3.81		$	3.00
Income from discontinued operations	0.06			0.17			0.09			0.29
Net income	$	1.45		$	1.34		$	3.90		$	3.29
Weighted average shares of common stock, basic (000)	70,447			70,530			70,685			71,094
Weighted average shares of common stock, diluted (000)	70,884			71,076			71,047			71,639

See accompanying notes to the condensed consolidated financial statements

1

TOWERS WATSON & CO.

Condensed Consolidated Statements of Comprehensive Income

(In thousands of U.S. dollars)

(Unaudited)

	Three Months Ended March 31,						Nine Months Ended March 31,
	2014			2013			2014			2013
Net income before non-controlling interests	$	105,852		$	94,845		$	283,965		$	233,238
Other comprehensive income/(loss), net of tax:
Foreign currency translation	(797		)	(96,135		)	87,938			(47,412		)
Defined pension and post-retirement benefit costs	2,806			(4,137		)	9,337			(21,260		)
Hedge effectiveness	292			546			(738		)	(250		)
Available-for-sale securities	(483		)	93			(261		)	149
Other comprehensive income/(loss) before non-controlling interests	1,818			(99,633		)	96,276			(68,773		)
Comprehensive income before non-controlling interests	107,670			(4,788		)	380,241			164,465
Comprehensive income/(loss) attributable to non-controlling interest	3,325			(1,316		)	6,422			(3,072		)
Comprehensive income/(loss) (attributable to common stockholders)	$	104,345		$	(3,472	)	$	373,819		$	167,537

See accompanying notes to the condensed consolidated financial statements

2

TOWERS WATSON & CO.

Condensed Consolidated Balance Sheets

(In thousands of U.S. dollars, except share data)

(Unaudited)

	March 31, 2014			June 30, 2013
Assets
Cash and cash equivalents	$	636,960		$	532,805
Fiduciary assets	10,651			148,414
Short-term investments	28,455			56,645
Receivables from clients:
Billed, net of allowances of $10,528 and $12,768	492,353			519,580
Unbilled, at estimated net realizable value	322,714			306,258
	815,067			825,838
Other current assets	131,700			148,519
Total current assets	1,622,833			1,712,221
Fixed assets, net	362,317			346,915
Deferred income taxes	77,537			86,313
Goodwill	2,284,097			2,218,935
Intangible assets, net	671,178			687,758
Other assets	324,707			279,935
Total Assets	$	5,342,669		$	5,332,077
Liabilities
Accounts payable, accrued liabilities and deferred income	$	349,602		$	351,648
Employee-related liabilities	448,548			560,831
Fiduciary liabilities	10,651			148,414
Term loan - current	25,000			25,000
Other current liabilities	65,891			26,980
Total current liabilities	899,692			1,112,873
Revolving credit facility	—			—
Term loan	206,250			225,000
Accrued retirement benefits and other employee-related liabilities	667,985			771,429
Professional liability claims reserve	261,126			251,191
Other noncurrent liabilities	270,528			226,750
Total Liabilities	2,305,581			2,587,243
Commitments and contingencies
Stockholders’ Equity
Class A Common Stock — $0.01 par value: 300,000,000 shares authorized; 74,552,661 and 69,178,097 issued and 70,371,311 and 65,341,759 outstanding	746			692
Class B Common Stock — $0.01 par value: 93,500,000 shares authorized; 0 and 5,374,070 issued and outstanding	—			54
Additional paid-in capital	1,854,733			1,850,448
Treasury stock, at cost — 4,181,350 and 3,836,338 shares	(280,416		)	(221,643		)
Retained earnings	1,650,410			1,394,407
Accumulated other comprehensive loss	(202,553		)	(299,464		)
Total Stockholders’ Equity	3,022,920			2,724,494
Non-controlling interest	14,168			20,340
Total Equity	3,037,088			2,744,834
Total Liabilities and Total Equity	$	5,342,669		$	5,332,077

See accompanying notes to the condensed consolidated financial statements

3

TOWERS WATSON & CO.

Condensed Consolidated Statements of Cash Flows

(In thousands of U.S. dollars)

(Unaudited)

	Nine Months Ended March 31,
	2014			2013
Cash flows from operating activities:
Net income before non-controlling interests	$	283,965		$	233,238
Adjustments to reconcile net income to net cash from operating activities:
Provision for doubtful receivables from clients	4,241			8,204
Depreciation	73,967			73,762
Amortization of intangible assets	57,402			59,287
Gain on sale of discontinued operations, pretax	(23,631		)	—
Provision for deferred income taxes	64,052			39,120
Stock-based compensation	16,045			24,203
Other, net	(3,743		)	(2,333		)
Changes in operating assets and liabilities
Receivables from clients	16,846			112
Fiduciary assets	113,017			(6,796		)
Other current assets	1,016			(10,053		)
Other noncurrent assets	(6,432		)	1,260
Accounts payable, accrued liabilities and deferred income	(34,948		)	(8,706		)
Employee-related liabilities	(128,510		)	(40,326		)
Fiduciary liabilities	(113,017		)	6,796
Accrued retirement benefits and other employee-related liabilities	(113,690		)	(118,029		)
Professional liability claims reserves	9,418			(4,997		)
Other current liabilities	(607		)	(223		)
Other noncurrent liabilities	(14,141		)	1,508
Income tax related accounts	21,501			30,484
Cash flows from operating activities	$	222,751		$	286,511
Cash flows used in investing activities:
Cash paid for business acquisitions	$	(210,814	)	$	(5,678	)
Cash transferred with discontinued operations	(25,066		)	—
Proceeds from discontinued operations	256,953			4,285
Cash acquired from business acquisitions	3,949			636
Fixed assets and software for internal use	(50,825		)	(66,626		)
Purchases of investments of consolidated variable interest entity	(109,510		)	—
Capitalized software costs	(36,596		)	(41,768		)
Purchases of held-to-maturity securities	(14,994		)	—
Purchases of available-for-sale securities	(44,891		)	(18,188		)
Sales and redemptions of available-for-sale securities	74,246			36,258
Cash flows used in investing activities	$	(157,548	)	$	(91,081	)
Cash flows from/(used in) financing activities:
Borrowings under credit facility	$	220,600		$	391,600
Repayments under credit facility	(220,600		)	(464,600		)
Repayments of notes payable	(18,750		)	—
Cash received from consolidated variable interest entity	109,510			—
Contingent retention liability	21,746			—
Cash paid on retention liabilities	(1,939		)	—
Dividends paid	(11,165		)	(48,147		)
Repurchases of common stock	(74,506		)	(41,596		)
Payroll tax payments on vested shares	(7,457		)	(24,879		)
Excess tax benefit	9,800			—
Cash flows from/(used in) financing activities	$	27,239		$	(187,622	)
Effect of exchange rates on cash	$	11,713		$	(13,296	)
Increase/(decrease) in cash and cash equivalents	104,155			(5,488		)
Cash and cash equivalents at beginning of period	532,805			478,179
Cash and cash equivalents at end of period	$	636,960		$	472,691

4

Supplemental disclosures:
Cash paid for interest	$	2,831	$	6,278
Cash paid for income taxes, net of refunds	$	45,414	$	43,398
Transfers into consolidated investment funds	$	223,212	$	—
Deconsolidation of investment funds (see Note 9)	$	339,019	$	—

See accompanying notes to the condensed consolidated financial statements

5

TOWERS WATSON & CO.

Condensed Consolidated Statements of Changes in Stockholders’ Equity

(In thousands of U.S. Dollars and numbers of shares in thousands)

(Unaudited)

	Class A Common Stock Outstanding		Class A Common Stock			Class B Common Stock Outstanding		Class B Common Stock			Additional Paid-in Capital			Treasury Stock, at Cost			Retained Earnings			Accumulated Other Comprehensive (Loss)/Income			Non- Controlling Interest			Total
Balance as of June 30, 2012	63,522		$	635		11,036		$	110		$	1,833,799		$	(168,901	)	$	1,117,622		$	(350,745	)	$	24,797		$	2,457,317
Net income/(loss)	—		—			—		—			—			—			235,933			—			(2,695		)	233,238
Other comprehensive income	—		—			—		—			—			—			—			(68,396		)	(377		)	(68,773		)
Repurchases of common stock	—		—			—		—			—			(46,618		)	—			—			—			(46,618		)
Shares received for employee taxes upon vesting of restricted stock units	(429	)	(4		)	—		—			—			(24,875		)	—			—			—			(24,879		)
Exercises of stock options	—		—			—		—			(5,560		)	6,378			—			—			—			818
Vesting of restricted stock units	(89	)	—			—		—			(30,570		)	31,492			—			—			—			922
Class A Common Stock:
Cash dividends declared	—		—			—		—			—			—			(42,023		)	—			—			(42,023		)
Stock-based compensation	—		—			—		—			24,203			—			—			—			—			24,203
Acceleration of Class B shares to Class A shares	5,661		56			(5,662	)	(56		)	—			—			—			—			—			—
Balance as of March 31, 2013	68,665		$	687		5,374		$	54		$	1,821,872		$	(202,524	)	$	1,311,532		$	(419,141	)	$	21,725		$	2,534,205
Balance as of June 30, 2013	69,178		$	692		5,374		$	54		$	1,850,448		$	(221,643	)	$	1,394,407		$	(299,464	)	$	20,340		$	2,744,834
Net income	—		—			—		—			—			—			276,908			—			7,057			283,965
Other comprehensive income/(loss)	—		—			—		—			—			—			—			96,911			(635		)	96,276
Repurchases of common stock	—		—			—		—			—			(74,506		)	—						—			(74,506		)
Shares received for employee taxes upon vesting of restricted stock units	—		—			—		—			—			(7,457		)	—			—			—			(7,457		)
Exercises of stock options	—		—			—		—			(4,380		)	5,064			—			—			—			684
Vesting of restricted stock units	—		—			—		—			(24,934		)	18,126			—			—			—			(6,808		)
Acquisitions	—		—			—		—			6,717			—			—			—			(6,297		)	420
Redeemable non-controlling interest from consolidated variable interest entity	—		—			—		—			—			—			—			—			332,722			332,722
Deconsolidation of redeemable non-controlling interest from variable interest entity	—		—			—		—			—			—			—			—			(339,019		)	(339,019		)
Class A Common Stock:
Cash dividends declared	—		—			—		—			—			—			(20,905		)	—			—			(20,905		)
Excess tax benefits	—		—			—		—			9,800			—			—			—			—			9,800
Stock-based compensation	—		—			—		—			17,082			—			—			—			—			17,082
Conversion of Class B shares to Class A shares	5,374		54			(5,374	)	(54		)	—			—			—			—			—			—
Balance as of March 31, 2014	74,552		$	746		—		$	—		$	1,854,733		$	(280,416	)	$	1,650,410		$	(202,553	)	$	14,168		$	3,037,088

See accompanying notes to the condensed consolidated financial statements

6

TOWERS WATSON & CO.

Notes to the Condensed Consolidated Financial Statements

(Tabular amounts are in thousands, except per share data)

(Unaudited)

Note 1 — Organization and Basis of Presentation.

The accompanying unaudited quarterly condensed consolidated financial statements of Towers Watson & Co. (“Towers Watson”, the “Company” or “we”) and our subsidiaries are presented in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) for quarterly reports on Form 10-Q and therefore do not include all of the information and footnotes required by U.S. generally accepted accounting principles (“GAAP”). In the opinion of management, these condensed consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, which are necessary for a fair presentation of the condensed consolidated financial statements and results for the interim periods. All intercompany accounts and transactions have been eliminated in consolidation. The condensed consolidated financial statements should be read together with the Towers Watson audited condensed consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2013, which was filed with the SEC on August 15, 2013, and may be accessed via EDGAR on the SEC’s web site at www.sec.gov. Balance sheet data as of June 30, 2013 was derived from Towers Watson’s audited financial statements.

Towers Watson was formed on January 1, 2010, upon the merger (the “Merger”) of Watson Wyatt Worldwide, Inc. (“Watson Wyatt”) and Towers, Perrin, Forster & Crosby, Inc. (“Towers Perrin”).

Our fiscal year 2014 began July 1, 2013 and ends June 30, 2014.

The results of operations for the three and nine months ended March 31, 2014 are not necessarily indicative of the results that can be expected for the entire fiscal year ending June 30, 2014. The results reflect certain estimates and assumptions made by management including those estimates used in calculating acquisition consideration and fair value of tangible and intangible assets and liabilities, professional liability claims, estimated bonuses, valuation of billed and unbilled receivables, and anticipated tax liabilities that affect the amounts reported in the condensed consolidated financial statements and related notes.

As discussed further in Note 2 – Acquisitions and Divestitures, we have classified the operating results of our reinsurance and property and casualty insurance brokerage business as discontinued operations for all periods presented in our condensed consolidated statements of operations. This business was sold in November 2013.

Note 2 — Acquisitions and Divestitures.

Acquisition

There was one acquisition in the nine months ended March 31, 2014, which was not material for the purposes of financial statement disclosures as required by Accounting Standards Codification (“ASC”) 805. Our acquisition information is included to provide our investors with a better understanding of our strategic acquisitions.

Liazon Corporation Acquisition

On November 22, 2013, Towers Watson purchased Liazon Corporation (“Liazon”), a leader in developing and delivering private benefit exchanges for active employees, for $203.2 million in cash and assumed equity awards valued at $8.0 million. See Note 12 for further information on the assumed stock options. The Liazon business became a new line of business, which complements our existing OneExchange offerings under the Exchange Solutions segment. Together these solutions help organizations, both large and small, deliver self- and fully-insured benefits to both employees as well as pre- and post-65 retirees. We included the results of Liazon's operations since the acquisition date in the Exchange Solutions segment and in our condensed consolidated financial statements.

During the second and third quarters of fiscal 2014, we recorded the tangible assets received, liabilities assumed, and the preliminary fair value of intangibles. The intangibles included developed technology, valued at $34.3 million, and other intangibles that were collectively immaterial. Our estimate of fair value for the technology intangible was developed using the multi-period excess earnings method valuation model. Significant assumptions used in the valuation were estimated revenues and expenses, contributory asset charges, required rates of return, and discount rates. Based on the fair value of these intangibles, we also recorded a net deferred tax liability of $0.7 million. It was determined that total consideration was $211.2 million, and we recorded $174.0 million of goodwill related to the acquisition of Liazon.

7

Divestitures

Sale of our Brokerage business.

On September 19, 2013, we entered into a definitive agreement to sell our Reinsurance and Property and Casualty Insurance Brokerage (“Brokerage”) business to Jardine Lloyd Thompson Group plc (“JLT”) for cash consideration of $250 million. The Brokerage business was a component of our Risk and Financial Services segment. The sale closed during our second quarter of fiscal year 2014. We divested this business as part of our strategy to focus on the businesses where we are market leaders. We continue to focus on risk consulting, software and other services for the insurance industry. The business will be branded for a transitional period of 15 months from the closing date as JLT Towers Re.

As part of the transaction, we entered into an Alliance Agreement with JLT that will ensure clients have continued access to our risk consulting and software services. This agreement will also provide JLT Towers Re with continued use of Towers Watson’s proprietary actuarial models and software.

The Company assessed the guidance under ASC 205 to determine if the Alliance Agreement or any other terms of the sale agreement constituted significant continuing direct cash flows or significant continuing involvement with the Brokerage business after the sale. The Company compared the cash flows expected to be recognized from the Brokerage business as a result of the continuation or migration of activities after the disposal transaction to the projected generation of cash flows by the Brokerage business that we could have expected absent the disposal transaction. Based on this analysis, the expected annual cash inflows or outflows related to the portion of revenues shared or commissions received or paid and software sales under the Alliance Agreement are each expected to represent approximately 1% or less of the annual revenues generated by our Brokerage business operations prior to the disposal. This was deemed not significant.

The Company also calculated the expected cash flows associated with the placement of its insurance and reinsurance arrangements. The Company agreed to use JLT as its broker-of-record for all insurance and reinsurance transactions to which the Company’s wholly-owned captive insurance company, Stone Mountain Insurance Company, is a party for the next five years. These amounts were previously eliminated as intercompany transactions, and are $2.8 million for fiscal year 2014. Additionally, the Company agreed to a Transitional Services Agreement with JLT for a two-year period ending November 5, 2015. The Company expects to incur approximately $6.3 million each year in occupancy or other infrastructure costs, which were prepaid as part of deal consideration or will be repaid by JLT over the next two years. The cash flows associated with these arrangements represent approximately 7.4% of the annual expenses generated by our Brokerage operations prior to the disposal, which was deemed not significant.

The Company noted that none of the aforementioned agreements or arrangements constituted significant continuing involvement because they do not afford the Company the ability to influence the financial or operating decisions of JLT. Accordingly, we concluded that the continuing cash flows expected after the sale of our Brokerage business do not preclude discontinued operations presentation, and the Company has therefore reclassified the results of our Brokerage business’s operations as discontinued operations for all periods presented in our condensed consolidated statements of operations. The following selected financial information relates to the Brokerage business’s operations for the three and nine months ended March 31, 2014 and 2013, respectively:

	Three Months Ended   March 31,					Nine Months Ended   March 31,
	2014			2013		2014			2013
Revenue from discontinued operations	$	—		$	47,990	$	63,762		$	124,227
(Loss)/income from discontinued operations before taxes	(1,037		)	18,321		23,361			32,016
Tax expense on discontinued operations	188			6,621		8,989			11,158
Net (loss)/income from discontinued operations	(1,225		)	11,700		14,372			20,858
Gain from sale of discontinued operations	5,151			—		23,631			—
Tax (credit)/expense on gain from sale of discontinued operations	(13		)	—		32,023			—
Net income/(loss) from sale of discontinued operations	5,164			—		(8,392		)	—
Total net income from discontinued operations	$	3,939		$	11,700	$	5,980		$	20,858

8

Only the fiduciary assets and liabilities associated with the European businesses were sold. North American fiduciary assets and liabilities have not been disposed of due to certain legal restrictions which do not permit the transfer of these assets and liabilities.

In addition to the stated $250 million cash consideration stipulated in the sale agreement, a preliminary purchase price adjustment of $28.7 million was paid to the Company by JLT representing the preliminary value of net assets transferred in the sale. The completion accounts and this purchase price adjustment were finalized during the Company’s third fiscal quarter and an additional $2.7 million is expected to be received during the fourth fiscal quarter.

As part of the sale, the Company agreed to repay JLT for retention payments made to certain employees of Brokerage if they remain with the business on the 30-day anniversary of the sale and the first and second anniversary of the sale. The value ascribed to this portion of the obligation is $21.7 million at the time of the sale. The remaining liability at March 31, 2014 is carried at fair value on the accompanying consolidated balance sheets (see Note 5 – Fair Value Measurements). The total amount has been classified as current or non-current liabilities based on the expected payment dates.

The obligation for retention payments and certain other negotiated terms reduced total consideration received at close to $215.1 million. Total transaction and integration costs were approximately $6.4 million. We finalized the completion accounts and the purchase price adjustments during the third quarter of fiscal 2014. Our final pre-tax gain on the sale is $23.6 million. The sale of our Brokerage business resulted in a significant taxable gain since the disposal of the goodwill and intangible assets associated with the business is not deductible for tax.

Note 3 — Investments.

We hold available-for-sale investments comprised of fixed income securities, equity securities and mutual funds / exchange-traded funds. We also hold held-to-maturity investments comprised of fixed income securities. See Note 5 – Fair Value Measurements for the investments by type of security. The fixed income securities all mature within twelve months of the balance sheet date and are classified as short-term investments on the condensed consolidated balance sheet. We held no material trading securities as of March 31, 2014 and June 30, 2013.

Additional information on available-for-sale security balances is provided in the following table as of March 31, 2014 and June 30, 2013:

	As of March 31, 2014									As of June 30, 2013
	Amortized Cost		Unrealized Gains		Unrealized Losses			Estimated Fair Value		Amortized Cost		Unrealized Gains		Unrealized Losses			Estimated Fair Value
Fixed income securities (a)	$	14,992	$	2	$	—		$	14,994	$	56,602	$	15	$	(2	)	$	56,615
Equity securities (a)	114		16		(3		)	127		853		476		(1		)	1,328
Mutual funds and exchange-traded funds (b)	47,912		1,641		—			49,553		26,666		14		(97		)	26,583

(a) As of March 31, 2014, all fixed income securities are classified as held-to-maturity and are reflected as short-term investments on the condensed consolidated balance sheet. As of June 30, 2013, all fixed income securities are classified as available-for-sale and are reflected as short-term investments on the condensed consolidated balance sheet. Certain liquid short-term investments, such as term deposits and certificates of deposits, are classified as short-term investments on the balance sheet but are not available-for-sale or held-to-maturity investments and therefore, are not included in the table above.

(b) Reflected as short-term investments or other assets on the condensed consolidated balance sheet as of March 31, 2014 and June 30, 2013.

For all investments, other than fixed income securities, amortized cost represents the cost basis of the investment as of the purchase or Merger date. Proceeds from sales and maturities of investments of available-for-sale securities during the nine months ended March 31, 2014 were $59.3 million, resulting in realized gains of $0.8 million that is reflected as income from discontinued operations on the condensed consolidated statement of operations. For the nine months ended March 31, 2014, $1.6 million of these proceeds related to the sale of investments as part of the divestiture of our Brokerage business. Proceeds from sales and maturities of investments of available-for-sale securities during the nine months ended March 31, 2013 were $34.7 million, resulting in no realized gains/losses. There were no proceeds from sales and maturities of held-to-maturity securities during the nine months ended March 31, 2014 and March 31, 2013.

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There were no material investments that have been in a continuous loss position for more than six months, and there have been no other-than-temporary impairments recognized. There were no material investments with unrealized losses as of March 31, 2014. The aggregate fair value of investments with unrealized losses as of June 30, 2013 was $36.3 million.

Note 4 — Goodwill and Intangible Assets.

The components of goodwill and intangible assets are outlined below for the nine months ended March 31, 2014:

	Benefits		Risk and Financial Services			Talent and Rewards		Exchange Solutions		All Other		Total
Balance as of June 30, 2013	$	1,233,272	$	534,150		$	108,850	$	341,449	$	1,214	$	2,218,935
Goodwill related to acquisitions	—		—			—		173,968		—		173,968
Goodwill related to disposals	—		(167,822		)	—		—		—		(167,822		)
Translation adjustment	38,260		17,647			3,109		—		—		59,016
Balance as of March 31, 2014	$	1,271,532	$	383,975		$	111,959	$	515,417	$	1,214	$	2,284,097

Included in the Risk and Financial Services activity is a $167.8 million reduction in goodwill related to the disposal of our Brokerage business, which was completed on November 6, 2013. See Note 2 for additional information regarding the sale of this business.

Included in the Exchange Solutions goodwill acquired is $174.0 million of goodwill related to the acquisition of Liazon, which closed on November 22, 2013. We recorded the consideration less the tangible assets and liabilities as goodwill as of March 31, 2014. See Note 2 for additional information regarding this acquisition.

The following table reflects changes in the net carrying amount of the components of finite-lived intangible assets for the nine months ended March 31, 2014:

	Customer related intangible			Core/ developed technology			Favorable lease agreements			Trademarks & trade names			Total
Balance as of June 30, 2013	$	246,247		$	69,515		$	3,565		$	—		$	319,327
Intangibles acquired	600			34,300			—			150			35,050
Intangibles related to disposal	(8,254		)	—			—			—			(8,254		)
Amortization	(35,106		)	(22,146		)	(710		)	(150		)	(58,112		)
Translation adjustment	5,187			715			(16		)	—			5,886
Balance as of March 31, 2014	$	208,674		$	82,384		$	2,839		$	—		$	293,897

For the three and nine months ended March 31, 2014, we recorded $19.4 million and $57.4 million, respectively, of amortization related to our intangible assets, exclusive of favorable lease agreements. For the three and nine months ended March 31, 2013, we recorded $19.4 million and $59.3 million, respectively, of amortization related to our intangible assets. These amounts include amortization that has been classified within income from discontinued operations on the accompanying condensed consolidated statements of operations.

Included in the change in customer related intangible assets is the reduction of $8.3 million associated with the sale of our Brokerage business, which closed on November 6, 2013.

As part of the integration of our Retirement business, during the second quarter of fiscal 2012, management decided to discontinue the use of an application that was acquired in the Merger with an expected useful life of ten years. We calculated no impairment associated with this application and we shortened the life of the intangible asset and accelerated the amortization in the same pattern in which our clients are transitioned to the surviving application, which is expected to occur predominantly over the next two to three years. To develop our estimated useful remaining life of the application, we are using client engagement revenue and the planned transition developed by our business management. For the three and nine months ended March 31, 2014, we recorded $0.4 million and $1.7 million, respectively, of additional amortization expense and $3.8 million and $6.3 million of additional amortization expense for the three and nine months ended March 31, 2013, respectively.

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Our indefinite-lived non-amortizable intangible assets consist of acquired trade names. The carrying value of these assets were $377.3 million and $368.4 million as of March 31, 2014 and June 30, 2013, respectively. The change during the period was due to foreign currency translation.

Our acquired unfavorable lease liabilities were $11.0 million and $13.5 million as of March 31, 2014 and June 30, 2013, respectively, and are recorded in the other noncurrent liabilities in the condensed consolidated balance sheet. The change for the nine months ended March 31, 2014 was comprised of a reduction to rent expense of $2.5 million.

The following table reflects the carrying value of finite-lived intangible assets and liabilities as of March 31, 2014 and June 30, 2013:

	As of March 31, 2014				As of June 30, 2013
	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Finite-lived intangible assets and liabilities:
Trade name	$	520	$	520	$	370	$	370
Customer related intangibles	387,223		178,549		390,027		143,780
Core/developed technology	175,566		93,182		164,762		95,247
Favorable lease agreements	6,453		3,614		6,496		2,931
Total finite-lived intangible assets	$	569,762	$	275,865	$	561,655	$	242,328
Unfavorable lease agreements	25,982		14,947		25,591		12,122
Total finite-lived intangible liabilities	$	25,982	$	14,947	$	25,591	$	12,122

Certain trademark and trade-name intangible assets have indefinite useful lives and are not amortized. The weighted average remaining life of amortizable intangible assets and liabilities at March 31, 2014 was 5.3 years.

The following table reflects:

1) future estimated amortization expense for amortizable intangible assets consisting of customer related intangibles and core/developed technology, and

2) the rent offset resulting from the amortization of the net lease intangible assets and liabilities for the remainder of fiscal 2014 and for subsequent fiscal years:

Fiscal year ending June 30,	Amortization		Rent (Offset) Expense
2014	$	17,937	$	(575	)
2015	67,783		(2,027		)
2016	57,714		(1,567		)
2017	53,379		(1,864		)
2018	42,967		(1,981		)
Thereafter	51,278		(182		)
Total	$	291,058	$	(8,196	)

Note 5 — Fair Value Measurements.

We have categorized our financial instruments into a three-level fair value hierarchy. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets and liabilities (Level 1) and lowest priority to unobservable inputs (Level 3). In some cases, the inputs used to measure fair value might fall into different levels of the fair value hierarchy. In such

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cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement in its entirety falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

Financial assets and liabilities recorded in the accompanying condensed consolidated balance sheets are categorized based on the inputs in the valuation techniques as follows:

Level 1 — Financial assets and liabilities whose values are based on quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date.

Level 2 — Financial assets and liabilities whose values are based on inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3 — Financial assets and liabilities whose values are based on unobservable inputs for the asset or liability.

The following presents our assets and liabilities measured at fair value on a recurring basis as of March 31, 2014 and June 30, 2013:

	Fair Value Measurements on a Recurring Basis at March 31, 2014
	Level 1		Level 2		Level 3		Total
Assets:
Available-for-sale securities:
Corporate bonds (a)	$	—	$	14,994	$	—	$	14,994
Equity securities (a)	127		—		—		127
Mutual funds / exchange traded funds (b)	49,553		—		—		49,553
Derivatives:
Foreign exchange forwards (c)	—		417		—		417
Liabilities:
Derivatives:
Foreign exchange forwards (c)	$	—	$	1,183	$	—	$	1,183
Contingent Liabilities:
Retention bonus liability (d)	—		—		19,807		19,807

	Fair Value Measurements on a Recurring Basis at June 30, 2013
	Level 1		Level 2		Level 3		Total
Assets:
Available-for-sale securities:
U.S. treasury securities and obligations of the U.S government, government agencies and authorities (a)	$	2,014	$	—	$	—	$	2,014
U.S. Corporate bonds (a)	—		53,100		—		53,100
Foreign corporate bonds (a)	—		1,501		—		1,501
Equity securities (a)	1,328		—		—		1,328
Mutual funds / exchange-traded funds (b)	26,583		—		—		26,583
Derivatives:
Foreign exchange forwards (c)	—		546		—		546
Liabilities:
Derivatives:
Foreign exchange forwards (c)	$	—	$	353	$	—	$	353

_________________________

(a) These assets are included in short-term investments on the condensed consolidated balance sheet.

(b) These assets are included in short-term investments or other assets on the condensed consolidated balance sheet.

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(c) These derivative investments are included in other current assets or accounts payable, accrued liabilities and deferred income on the condensed consolidated balance sheet. See Note 6 for further information on our derivative investments.

(d) These liabilities are included in other current liabilities and other noncurrent liabilities on the condensed consolidated balance sheet. The fair value was determined using a discounted cash flow model. There have been no material changes in the fair value of this liability subsequent to initial recognition.

We record gains or losses related to the changes in the fair value of our financial instruments for foreign exchange forward contracts accounted for as foreign currency hedges in general and administrative expenses in the condensed consolidated statements of operations. For the three and nine months ended March 31, 2014, we recorded gains of $0.1 million and $0.1 million, respectively, for instruments still held at March 31, 2014. For the three and nine months ended March 31, 2013, we recorded losses of $1.5 million and $1.5 million for instruments still held at March 31, 2013, respectively. There were no material gains or losses recorded in the condensed consolidated statements of operations for available-for-sale securities still held at March 31, 2014 or 2013.

To determine the fair value of our derivative positions, we use valuations from the counterparty of each hedge. This is a Level 2 valuation based on observable rates in the market. Counterparties use proprietary models to calculate values and are not actual quotes that could be used to terminate the contracts, but we believe the valuations are very close to the value of each contract if terminated since we review the valuations and compare these valuations against our own calculated fair value. We monitor the counterparty default risk both before the hedge is placed and prospectively throughout the life of the contract and would adjust fair values if asset impairment was deemed significant.

The U.S. Treasury securities, equity securities, exchange traded funds and mutual funds are valued using quoted market prices as of the end of the trading day. Corporate bonds and certain obligations of government agencies or states, municipalities and political subdivisions are valued based on yields currently available on comparable securities of issuers with similar credit ratings. We monitor the value of the investments for other-than-temporary impairment on a quarterly basis.

The availability of observable market data is monitored to assess the appropriate classification of financial instruments within the fair value hierarchy. Changes in economic conditions or model-based valuation techniques may require the transfer of financial instruments from one fair value level to another. In such instances, the transfer is reported at the beginning of the reporting period. There were no transfers between Levels 1, 2 or 3 during the three and nine months ended March 31, 2014.

Note 6 — Derivative Financial Instruments.

We are exposed to market risk from changes in foreign currency exchange rates. Where possible, we identify exposures in our business that can be offset internally. Where no natural offset is identified, we may choose to enter into various derivative

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transactions. These instruments have the effect of reducing our exposure to unfavorable changes in foreign currency rates. We do not enter into derivative transactions for trading purposes.

A number of our foreign subsidiaries receive revenues (through either internal or external billing) in currencies other than their functional currency. As a result, the foreign subsidiary’s functional currency revenue will fluctuate as the currency exchange rates change. To reduce this variability, we use foreign exchange forward contracts to hedge the foreign exchange risk of the forecasted collections. We have designated these derivatives as cash flow hedges of its forecasted foreign currency denominated collections. We also use derivative financial contracts, principally foreign exchange forward contracts, to hedge other non-functional currency obligations. These exposures primarily arise from intercompany lending and other liabilities denominated in foreign currencies. At March 31, 2014, the longest outstanding maturity was 15 months. As of March 31, 2014, a net $0.9 million pretax loss was deferred in accumulated other comprehensive income and is expected to be recognized in general and administrative expenses during the next 12 months when the hedged revenue is recognized.

As of March 31, 2014 and June 30, 2013, we had cash flow and economic hedges with a notional value of $63.3 million and $107.2 million, respectively, to hedge cash flow and balance sheet exposures. We determine the fair value of our foreign currency derivatives based on quoted prices received from the counterparty for each contract, which we evaluate using pricing models whose inputs are observable. The net fair value of all derivatives held as of March 31, 2014 and June 30, 2013 was a liability of $0.8 million and an asset of $0.2 million, respectively. See Note 5, Fair Value Measurements, for further information regarding the determination of fair value.

The fair value of our derivative instruments held as of March 31, 2014 and June 30, 2013 and their location in the condensed consolidated balance sheet are as follows:

	Derivative assets					Derivative liabilities
	Balance sheet location	Fair value				Balance sheet location	Fair value
		March 31, 2014		June 30, 2013			March 31, 2014			June 30, 2013
Derivatives designated as hedging instruments:
Foreign exchange forwards	Other current assets	$	295	$	395	Accounts payable, accrued liabilities and deferred income	$	(1,181	)	$	(159	)
Derivatives not designated as hedging instruments:
Foreign exchange forwards	Other current assets	122		151		Accounts payable, accrued liabilities and deferred income	(2		)	(194		)
Total derivative assets (liabilities)		$	417	$	546		$	(1,183	)	$	(353	)

The effects of derivative instruments that are designated as hedging instruments on the consolidated statements of operations and the consolidated statements of changes in stockholders’ equity for the three months ended March 31, 2014 and 2013 and for the nine months ended March 31, 2014 and 2013 are as follows:

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Derivatives designated as hedging instruments for the three months ended March 31, 2014 and 2013:	Gain recognized in OCI (effective portion)				Location of loss reclassified from OCI into income (effective portion)	Loss reclassified from OCI into income (effective portion)						Location of loss recognized in income (ineffective portion and amount excluded from effectiveness testing)	Loss recognized in income (ineffective portion and amount excluded from effectiveness testing)
	2014		2013			2014			2013				2014			2013
Foreign exchange Forwards	$	85	$	556	General and administrative expenses	$	(520	)	$	(386	)	General and administrative expenses	$	(4	)	$	(1	)
Total	$	85	$	556		$	(520	)	$	(386	)		$	(4	)	$	(1	)

Derivatives designated as hedging instruments for the nine months ended March 31, 2014 and 2013:	Loss recognized in OCI (effective portion)						Location of loss reclassified from OCI into income (effective portion)	Loss reclassified from OCI into income (effective portion)					Location of loss recognized in income (ineffective portion and amount excluded from effectiveness testing)	Loss recognized in income (ineffective portion and amount excluded from effectiveness testing)
	2014			2013				2014		2013				2014			2013
Foreign exchange forwards	$	(1,978	)	$	(503	)	General and administrative expenses	$	852	$	(121	)	General and administrative expenses	$	(1	)	$	(1	)
Total	$	(1,978	)	$	(503	)		$	852	$	(121	)		$	(1	)	$	(1	)

Included in the notional values above are $25.8 million and $33.6 million as of March 31, 2014 and June 30, 2013, respectively, of derivatives held as economic hedges primarily to hedge intercompany loans denominated in currencies other than the functional currency. The effects of derivatives that have not been designated as hedging instruments on the condensed consolidated statements of operations for the three and nine months ended March 31, 2014 and 2013 are as follows:

		(Loss) gain recognized in income
		Three Months Ended   March 31,						Nine Months Ended   March 31,
Derivatives not designated as hedging instruments:	Location of (loss) gain recognized in income	2014			2013			2014		2013
Foreign exchange forwards	General and administrative expenses	$	(365	)	$	(146	)	$	697	$	1,928
Total		$	(365	)	$	(146	)	$	697	$	1,928

Note 7 — Retirement Benefits.

Defined Benefit Plans

Towers Watson sponsors both qualified and non-qualified defined benefit pension plans and other post-retirement benefit plans in North America and Europe. As of June 30, 2013, these funded and unfunded plans represented 98 percent of Towers Watson’s pension and other post-retirement benefit obligations and are disclosed herein. Towers Watson also sponsors funded and unfunded defined benefit pension plans in certain other countries as well, representing the remaining two percent of the liability.

All expenses and contributions presented in this note are inclusive of amounts classified as discontinued operations in the accompanying condensed consolidated statements of operations.

Components of Net Periodic Benefit Cost for Defined Benefit Pension Plans

The following tables set forth the components of net periodic benefit cost for the Company’s defined benefit pension plan for North America and Europe for the three and nine months ended March 31, 2014 and 2013:

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	Three Months Ended March 31,
	2014						2013
	North America			Europe			North America			Europe
Service cost	$	17,493		$	3,054		$	17,731		$	3,074
Interest cost	35,062			10,182			33,854			9,182
Expected return on plan assets	(46,968		)	(11,457		)	(46,586		)	(10,168		)
Amortization of net loss	5,473			2,235			11,440			1,441
Amortization of prior service (credit)/cost	(2,095		)	10			(2,094		)	10
Net periodic benefit cost	$	8,965		$	4,024		$	14,345		$	3,539

	Nine Months Ended March 31,
	2014						2013
	North America			Europe			North America			Europe
Service cost	$	52,819		$	9,162		$	53,189		$	9,221
Interest cost	105,628			30,545			101,566			27,545
Expected return on plan assets	(141,375		)	(34,370		)	(139,540		)	(30,505		)
Amortization of net loss	16,597			6,706			34,325			4,324
Amortization of prior service (credit)/cost	(6,284		)	31			(6,283		)	29
Net periodic benefit cost	$	27,385		$	12,074		$	43,257		$	10,614

The decrease in our North American pension expense was due to a decrease in the amortization of actuarial losses. This decrease was driven primarily by an increase in the discount rate from fiscal year 2013 to fiscal year 2014. Additionally, favorable investment returns during fiscal year 2013 combined with the recognition of the majority of our previously deferred actuarial losses during fiscal year 2013 have resulted in reduced actuarial losses being recognized in fiscal year 2014.

Components of Net Periodic Benefit Cost for Other Postretirement Plans

The following table sets forth the components of net periodic benefit cost for the Company’s post-retirement plans for the three and nine months ended March 31, 2014 and 2013:

	Three Months Ended   March 31,						Nine Months Ended   March 31,
	2014			2013			2014			2013
Service cost	$	365		$	441		$	1,097		$	1,323
Interest cost	2,216			2,197			6,647			6,590
Expected return on plan assets	(28		)	(33		)	(84		)	(98		)
Amortization of net (gain) loss	(436		)	83			(1,309		)	250
Amortization of prior service credit	(1,751		)	(2,051		)	(5,253		)	(6,152		)
Net periodic benefit cost	$	366		$	637		$	1,098		$	1,913

Employer Contributions to Defined Benefit Pension Plans

The Company made $67.0 million in contributions to the North American plans during the first nine months of fiscal year 2014 and anticipates making $5.9 million in contributions over the remainder of the fiscal year. The Company made $24.6 million in contributions to European plans during the first nine months of fiscal year 2014 and anticipates making $13.8 million in contributions over the remainder of the fiscal year. Of the amount contributed for the European plans, $10.1 million was a contribution to the German pension plan which was previously unfunded. The Company expects to fund the German plan obligation over the next 10 years.

Defined Contribution Plans

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The cost of the Company’s contributions to the various U.S. defined contribution plans for the three months ended March 31, 2014 and 2013 amounted to $9.9 million and $9.3 million, respectively. The cost of the Company’s contributions to the plans for the nine months ended March 31, 2014 and 2013 amounted to $22.3 million and $22.3 million, respectively.

The cost of the Company’s contributions to the various U.K. defined contribution plans for the three months ended March 31, 2014 and 2013 amounted to $5.2 million and $5.6 million, respectively. The cost of the Company’s contributions to the plans for the nine months ended March 31, 2014 and 2013 amounted to $15.1 million and $16.8 million, respectively.

Note 8 — Debt, Commitments and Contingent Liabilities.

The debt, commitments and contingencies described below are currently in effect and would require Towers Watson, or domestic subsidiaries, to make payments to third parties under certain circumstances. In addition to commitments and contingencies specifically described below, Towers Watson has historically provided guarantees on an infrequent basis to third parties in the ordinary course of business.

Towers Watson Senior Credit Facility

On November 7, 2011, Towers Watson and certain subsidiaries entered into a five-year, $500 million revolving credit facility, which amount may be increased by an aggregate amount of $250 million, subject to the satisfaction of customary terms and conditions, with a syndicate of banks (the “Senior Credit Facility”). Borrowings under the Senior Credit Facility bear interest at a spread to either LIBOR or the Prime Rate. During the nine months ended March 31, 2014 and 2013, the weighted-average interest rate on borrowings under the Senior Credit Facility was 1.93% and 1.49%, respectively. We are charged a quarterly commitment fee, currently 0.175% of the Senior Credit Facility, which varies with our financial leverage and is paid on the unused portion of the Senior Credit Facility. Obligations under the Senior Credit Facility are guaranteed by Towers Watson and all of its domestic subsidiaries (other than Professional Consultants Insurance Company (“PCIC”), a majority-owned captive insurance company, and Stone Mountain Insurance Company (“SMIC”), a wholly-owned captive insurance company).

The Senior Credit Facility contains customary representations and warranties and affirmative and negative covenants. The Senior Credit Facility requires Towers Watson to maintain certain financial covenants that include a minimum Consolidated Interest Coverage Ratio and a maximum Consolidated Leverage Ratio (which terms in each case are defined in the Senior Credit Facility). In addition, the Senior Credit Facility contains restrictions on the ability of Towers Watson to, among other things, incur additional indebtedness; pay dividends; make distributions; create liens on assets; make acquisitions; dispose of property; engage in sale-leaseback transactions; engage in mergers or consolidations, liquidations and dissolutions; engage in certain transactions with affiliates; and make changes in lines of businesses. As of March 31, 2014, we were in compliance with our covenants.

As of March 31, 2014, Towers Watson had no borrowings outstanding under the Senior Credit Facility.

Letters of Credit under the Senior Credit Facility

As of March 31, 2014, Towers Watson had standby letters of credit totaling $21.4 million associated with our captive insurance companies in the event that we fail to meet our financial obligations. Additionally, Towers Watson had $1.4 million of standby letters of credit covering various other existing or potential business obligations. The aforementioned letters of credit are issued under the Senior Credit Facility, and therefore reduce the amount that can be borrowed under the Senior Credit Facility by the outstanding amount of these standby letters of credit.

Term Loan Agreement Due June 2017

On June 1, 2012, the Company entered into a five-year $250 million amortizing term loan facility (“the Term Loan”) with a consortium of banks. The interest rate on the term loan is based on the Company’s choice of one, three or six month LIBOR plus a spread of 1.25% to 1.75%, or alternatively the bank base rate plus 0.25% to 0.75%. The spread to each index is dependent on the Company’s consolidated leverage ratio. The weighted-average interest rate on the Term Loan during the nine months ended March 31, 2014 and 2013 was 1.42% and 1.47%, respectively. The Term Loan amortizes at a rate of $6.25 million per quarter, beginning in September 2013, with a final maturity date of June 1, 2017 . The Company has the right to prepay a portion or all of the outstanding Term Loan balance on any interest payment date without penalty. At March 31, 2014, the balance on the Term Loan was $231.3 million.

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This agreement contains substantially the same terms and conditions as our Senior Credit Facility, including guarantees from all of the domestic subsidiaries of Towers Watson (other than PCIC and SMIC). The Company entered into the Term Loan as part of the financing of our acquisition of Extend Health on May 29, 2012.

Indemnification Agreements

Towers Watson has various agreements which provide that it may be obligated to indemnify the other party to the agreement with respect to certain matters. Generally, these indemnification provisions are included in contracts arising in the normal course of business and in connection with the purchase and sale of certain businesses. Although it is not possible to predict the maximum potential amount of future payments that may become due under these indemnification agreements because of the conditional nature of Towers Watson’s obligations and the unique facts of each particular agreement, Towers Watson does not believe any potential liability that might arise from such indemnity provisions is probable or material. There are no provisions for recourse to third parties, nor are any assets held by any third parties that any guarantor can liquidate to recover amounts paid under such indemnities.

Legal Proceedings

From time to time, Towers Watson and its subsidiaries, including Watson Wyatt and Towers Perrin, are parties to various lawsuits, arbitrations or mediations that arise in the ordinary course of business. The matters reported on below are the material pending claims against Towers Watson and its subsidiaries. We do not expect the impact of claims not described below to be material to Towers Watson’s financial statements. We also receive subpoenas in the ordinary course of business and, from time-to-time, receive requests for information in connection with governmental investigations.

Towers Watson carries substantial professional liability insurance which, effective July 1, 2010, has been provided by SMIC. For the policy period beginning July 1, 2011 certain changes were made to our professional liability insurance program. These changes remain in-force for the policy periods beginning July 1, 2011 and ending July 1, 2014. Our professional liability insurance includes a $10 million aggregate self-insured retention above the $1 million self-insured retention per claim, including the cost of defending such claims. SMIC provides us with $40 million of coverage per claim and in the aggregate, above the retentions, including the cost of defending such claims. SMIC secured $25 million of reinsurance from unaffiliated reinsurance companies in excess of the $15 million SMIC retained layer. Excess insurance attaching above the SMIC coverage is provided by various unaffiliated commercial insurance companies.

This structure effectively results in Towers Watson and SMIC bearing the first $25 million of loss per occurrence or in the aggregate above the $1 million per claim self-insured retention. As a wholly-owned captive insurance company, SMIC is consolidated into our financial statements.

Before the Merger, Watson Wyatt and Towers Perrin each obtained substantial professional liability insurance from PCIC. A limit of $50 million per claim and in the aggregate was provided by PCIC subject to a $1 million per claim self-insured retention. PCIC secured reinsurance of $25 million attaching above the $25 million PCIC retained layer from unaffiliated reinsurance companies. Our ownership interest in PCIC is 72.86%. As a consequence, PCIC’s results are consolidated in Towers Watson’s operating results. PCIC ceased issuing insurance policies effective July 1, 2010 and at that time entered into a run-off mode of operation. Our shareholder agreements with PCIC could require additional payments to PCIC if development of claims significantly exceeds prior expectations.

We provide for the self-insured retention where specific estimated losses and loss expenses for known claims are considered probable and reasonably estimable. Although we maintain professional liability insurance coverage, this insurance does not cover claims made after expiration of our current policies of insurance. Generally accepted accounting principles require that we record a liability for incurred but not reported (“IBNR”) professional liability claims if they are probable and reasonably estimable, and for which we have not yet contracted for insurance coverage. We use actuarial assumptions to estimate and record our IBNR liability. As of March 31, 2014, we had a $182.3 million IBNR liability balance, net of recoverable receivables of our captive insurance companies. This net liability was $184.1 million as of June 30, 2013. To the extent our captive insurance companies, PCIC and SMIC, expect losses to be covered by a third party, they record a receivable for the amount expected to be recovered. This receivable is classified in other current or other noncurrent assets in our condensed consolidated balance sheet.

We reserve for contingent liabilities based on ASC 450, Contingencies, when it is determined that a liability, inclusive of defense costs, is probable and reasonably estimable. The contingent liabilities recorded are primarily developed actuarially. Litigation is subject to many factors which are difficult to predict so there can be no assurance that in the event of a material unfavorable result in one or more claims, we will not incur material costs.

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Former Towers Perrin shareholder litigation

A putative class action lawsuit filed by certain former shareholders of Towers Perrin (the "Dugan Action") previously was reported in Amendment No. 3 to the Registration Statement on Form S-4/A (File No. 333-161705) filed on November 9, 2009 by the Jupiter Saturn Holding Company (the “Registration Statement”). As reported in the Registration Statement, the complaint was filed on November 5, 2009 against Towers Perrin, members of its board of directors, and certain members of senior management in the United States District Court for the Eastern District of Pennsylvania.

The named Plaintiffs in this action were former members of Towers Perrin’s senior management, who left Towers Perrin at various times between 1995 and 2000. The Dugan plaintiffs sought to represent a class of former Towers Perrin shareholders who separated from service on or after January 1, 1971, but prior to certain changes in Towers Perrin's capital structure that occurred in January 2005, and who also meet certain other specified criteria. The complaint does not contain a quantification of the damages sought.

On December 9, 2009, Watson Wyatt was informed by Towers Perrin of a settlement demand from the plaintiffs in the Dugan Action. Although the complaint in the Dugan Action did not contain a quantification of the damages sought, plaintiffs’ settlement demand, which was orally communicated to Towers Perrin on December 8, 2009 and in writing on December 9, 2009, sought a payment of $800 million to settle the action on behalf of the proposed class. Plaintiffs requested that Towers Perrin communicate the settlement demand to Watson Wyatt.

On December 17, 2009 , four other former Towers Perrin shareholders, all of whom voluntarily left Towers Perrin in May or June 2005 and all of whom were excluded from the proposed class in the Dugan Action, commenced a separate legal proceeding (the "Allen Action") in the United States District Court for the Eastern District of Pennsylvania alleging the same claims in substantially the same form as those alleged in the Dugan Action. A fifth plaintiff joined this action on August 29, 2011. These plaintiffs were proceeding in their individual capacities and did not seek to represent a proposed class.

On January 15, 2010 , another former Towers Perrin shareholder who separated from service with Towers Perrin in March 2005 when Towers Perrin and EDS launched a joint venture that led to the creation of a corporate entity known as ExcellerateHRO (“eHRO”), commenced a separate legal proceeding (the "Pao Action") in the United States District Court of the Eastern District of Pennsylvania alleging the same claims in substantially the same form as those alleged in the Dugan Action. Towers Perrin contributed its Towers Perrin Administrative Solutions (“TPAS”) business to eHRO and formerly was a minority shareholder (15)% of eHRO. Pao sought to represent a class of former Towers Perrin shareholders who separated from service in connection with Towers Perrin’s contribution to eHRO of its TPAS business and who were excluded from the proposed class in the Dugan Action. Towers Watson was also named as a defendant in the Pao Action. On January 20, 2010, the court consolidated the three actions for all purposes under the Dugan Action file number.

Pursuant to the Towers Perrin Bylaws in effect at the time of their separations, the Towers Perrin shares held by all plaintiffs were redeemed by Towers Perrin at book value when these individuals separated from employment. The complaints alleged variously that there was a promise that Towers Perrin would remain privately owned in perpetuity and an implied or actual promise that in the event of a change to public ownership plaintiffs would receive compensation. Plaintiffs alleged that by agreeing to sell their shares back to Towers Perrin at book value upon separation, they and other members of the putative classes relied upon these alleged promises, which they claim were breached as a result of the consummation of the Merger between Watson Wyatt and Towers Perrin. The complaints all asserted claims for breach of contract, breach of express trust, breach of fiduciary duty, promissory estoppel, quasi-contract/unjust enrichment, and constructive trust, and seek equitable relief including an accounting, disgorgement, rescission and/or restitution, and the imposition of a constructive trust.

On February 22, 2010, defendants filed a motion to dismiss the complaints in their entireties. By order dated September 30, 2010, the court granted the motion to dismiss plaintiffs’ claim for a constructive trust and denied the motion with respect to all other claims alleged. Pursuant to the court’s September 30, 2010 order, defendants also filed answers to plaintiffs’ complaints on October 22, 2010. Discovery in the case was bifurcated, with fact discovery to proceed before expert witness and damages discovery. Neither the plaintiffs in the Dugan Action nor the plaintiff in Pao Action moved for class certification. Defendants filed a motion for summary judgment on all claims in all actions on December 23, 2011. The court heard argument on June 19, 2012, and on December 11, 2012 granted defendants’ motion, and entered judgment in favor of defendants on all claims. On January 10, 2013, plaintiffs filed a joint notice of their intent to appeal the court’s judgment to the U.S. Court of Appeals for the Third Circuit. On February 13, 2013, the parties were notified that the appeal had been assigned for mediation pursuant to the Third Circuit’s mediation program. During the mediation session held on May 7, 2013, the parties reached agreement on settlement terms that include payment of an aggregate $10 million to an agreed settlement class (including all persons in the classes as defined in the respective complaints in the Dugan Action and the Pao Action, plus additional former Towers Perrin shareholders who separated from Towers Perrin between January 1971 and June 2005) estimated to potentially include more

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than 1,000 former Towers Perrin shareholders, which payment would also cover legal fees of plaintiffs’ attorneys, as determined by the court, and expenses incurred to administer the settlement.

The cases were then returned to the district court for consideration of the proposed settlement. On September 24, 2013, the court preliminarily certified the settlement class and preliminarily approved the parties’ proposed settlement.

At a hearing on February 12, 2014, the court gave its final approval to the settlement. The final order and judgment approving the settlement and dismissing the Dugan, Allen and Pao Actions with prejudice was entered on February 18, 2014. No appeal was taken from that final order and judgment during the applicable appeal period, and the resolution and dismissal of the cases as against all defendants is now final.

Acument Global Technologies, Inc.

In a letter to the Company dated January 26, 2011, Acument Global Technologies, Inc. (“Acument”) and the Acument Global Technologies, Inc. Pension Plan (the “Plan”) claimed that Towers Watson breached its fiduciary duties under the Employee Retirement Income Security Act of 1974 (“ERISA”) in connection with advice provided to Acument relating to investment of certain assets of the Plan in the Westridge Capital Management Enhancements Funds (the “Westridge Funds”). Acument and the Plan demanded that the Company make the Plan whole for losses and damages allegedly sustained as a result of Acument’s decision to invest in the Westridge Funds. Watson Wyatt Investment Consulting, Inc. (“WWIC”), now known as Towers Watson Investment Services, Inc. (“TWIS”), provided investment consulting services to Acument between December 1, 2007 and April 30, 2010. In connection with those services, WWIC recommended an investment in the Westridge Funds. In July 2008, Acument made a $47.0 million investment in the Westridge Funds. During the period December 1, 2008 through January 22, 2009, Acument made additional investments of $9.5 million, bringing the aggregate investment of the Plan’s assets in the Westridge Funds to $56.5 million.

As the result of information obtained during an investigation of Westridge Capital Management, its affiliates WG Trading Investors, L.P. and WG Trading Company, L.P. (collectively referred to as “Westridge”) and their principals, commenced by the National Futures Association on February 5, 2009, the Commodities Future Trading Commission filed suit against Westridge and its principals alleging violations of the Commodity Exchange Act. This resulted in a court-supervised receivership of the assets of Westridge. The Securities and Exchange Commission (“SEC”) filed a separate suit on February 25, 2009 against Westridge and its principals alleging violations of the federal securities laws. In its complaint, the SEC alleges that Westridge had become a fraudulent investment scheme by which its principals purportedly misappropriated approximately $553 million from a number of highly sophisticated institutional investors, including public pension and retirement plans and educational institutions, some of which were investing in Westridge as late as February 6, 2009. We believe that, to date, Acument has recovered approximately $39.7 million of its investment in the Westridge Funds from the receivership. The Company declined Acument’s demand for compensation.

On January 20, 2012, Acument and the Acument Pension Plan (referred to together as “Acument”) filed suit against the Company and TWIS in the United States District Court for the Southern District of New York. The complaint alleges four counts of breach of fiduciary duty under ERISA, claiming principally alleged deficiencies in the Company’s due diligence relating to Westridge and in the disclosures made to Acument concerning Westridge and the nature of the investment. The Company has filed an answer to the complaint denying all claims and asserting affirmative defenses and plans to continue to defend vigorously against these legal proceedings. A mediation took place on September 5, 2012. On January 16, 2014, the Company and TWIS filed an amended answer and counterclaim asserting that Acument Global Technologies, Inc. failed to fulfill its fiduciary duties to the Acument Pension Plan with respect to its investment in the Westridge Funds. On or about February 28, 2014, the Company received Acument’s expert’s damages report, which asserts the range of loss to be between $38.0 million and $86.0 million, which we understand to be comprised primarily of investment losses (including opportunity costs); more specifically, Acument seeks the present-day value of an alternative investment in a “comparable” fund, less what Acument has been returned from the Westridge Receiver. On or about March 27, 2014, the Company submitted a rebuttal expert damages report, which asserts a range of up to $16.6 million. This range assumes a finding of liability and no contribution for the Company’s pending counterclaim. Based on all of the information to date, including the Company’s rebuttal expert damages report, the Company believes there is no reasonably possible material loss in excess of amounts currently accrued. The dispute remains extant.

Note 9 — Variable Interest Entities.

Variable interest entities (“VIEs”) are entities that lack one or more of the characteristics of a voting interest entity and therefore require a different approach in determining which party involved with the VIE should consolidate the entity. With a VIE, either the entity does not have sufficient equity at risk to finance its activities without additional subordinated financial

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support from other parties or the entity has equity investors that do not have the ability to make significant decisions relating to the entity’s operations through voting rights. The entity that has a controlling financial interest in a VIE is referred to as the primary beneficiary and is required to consolidate the VIE.

Through our wholly owned subsidiaries, Towers Watson Investment Management Limited and Towers Watson Investment Management, Ireland, we manage approximately $1.8 billion of assets in investment funds that are considered VIEs and for which our management fee is considered a variable interest. We have determined that these funds qualify for the deferral to certain provisions of ASC Subtopic 810-10, Consolidation – Overall, afforded by ASU 2010-10, Consolidation – Amendments for Certain Investment Funds. In accordance with this deferral, we determine whether we consolidate the fund based on whether we absorb a majority of the fund’s expected losses or receive a majority of the fund’s expected returns.

During our third fiscal quarter we deconsolidated two previously consolidated funds. Previously, the contracts governing these two funds contained language that restricted the investors' ability to exercise their economic interests in the funds, thereby causing the investors to become related parties of the Company and requiring the Company to combine its own interests with the interests of these investors for purposes of performing the primary beneficiary test. This restrictive language was modified during our third fiscal quarter, which resulted in the investors, other than the Company's defined benefit retirement plans, to no longer be considered related parties, and the Company to no longer be considered the primary beneficiary of the funds. The mark-to-market gains on the investments prior to deconsolidation were $3.0 million and $6.3 million, respectively, for the three and nine months ended March 31, 2014, and are reflected on the accompanying condensed consolidated statements of operations in other non-operating income. The fair value of these investments on the date of deconsolidation, inclusive of the cumulative gains, was $339.0 million, and was removed from the condensed consolidated balance sheets by eliminating the investments of consolidated variable interest entity and by reducing non-controlling interests. The non-controlling interest balance was considered temporary equity as the units held by the investors were redeemable. The changes of the redeemable non-controlling interests balance for the nine months ended March 31, 2014 are as follows:

Balance as of June 30, 2013	$	—
Subscriptions of non-controlling interest holders in consolidated VIEs	332,722
Mark-to-market gains on investments held by consolidated VIEs	6,297
Deconsolidation of VIEs	(339,019		)
Balance as of March 31, 2014	$	—

We are not the primary beneficiary and therefore do not consolidate any of the remaining funds as of March 31, 2014. Our maximum exposure to loss of these unconsolidated VIEs is limited to collection of any unpaid management fees (which are not material) and any potential increase to pension funding obligation due to losses incurred by the funds.

Note 10 — Accumulated Other Comprehensive Income/(Loss).

Changes in accumulated other comprehensive income/(loss), net of non-controlling interests, are provided in the following table. The difference between the amounts presented in this table and the amounts presented in the condensed consolidated statements of comprehensive income are the corresponding components attributable to non-controlling interests, which are not material for further disclosure.

	Foreign currency translation (1)			Hedge effectiveness (1)									Available-for-sale securities (2)									Defined pension and post-retirement benefit costs (3)
				Before Tax			Tax			After Tax			Before Tax			Tax			After Tax			Before Tax			Tax			After Tax
As of June 30, 2013	$	(131,096	)	$	237		$	(105	)	$	132		$	547		$	(134	)	$	413		$	(233,817	)	$	64,904		$	(168,913	)
Other comprehensive income/(loss) before reclassifications	88,573			(1,978		)	681			(1,297		)	457			(130		)	327			—			—			—
Amounts reclassified from accumulated other comprehensive income	—			852			(293		)	559			(761		)	173			(588		)	11,942			(2,605		)	9,337
Net current-period other comprehensive income/(loss)	88,573			(1,126		)	388			(738		)	(304		)	43			(261		)	11,942			(2,605		)	9,337
As of March 31, 2014	$	(42,523	)	$	(889	)	$	283		$	(606	)	$	243		$	(91	)	$	152		$	(221,875	)	$	62,299		$	(159,576	)

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(1) Reclassification adjustments from accumulated other comprehensive income are included in general and administrative expenses (see Note 6– Derivative Financial Instruments for additional details regarding the reclassification adjustments for the hedge settlements)

(2) Reclassification adjustments from accumulated other comprehensive income are included in income from discontinued operations

(3) Reclassification adjustments from accumulated other comprehensive income are included in the computation of net periodic pension cost (see Note 7 – Retirement Benefits for additional details)

Note 11 — Restricted Stock.

In conjunction with the Merger, shares of Towers Watson common stock issued to Towers Perrin shareholders were divided among four series of non-transferable Towers Watson common stock, Classes B-1, B-2, B-3 and B-4, each with a par value of $0.01 per share. In addition, on January 31, 2011, we completed the acquisition of EMB and issued 113,858 shares of Class B-3 and 113,858 shares of Class B-4 common stock, par value $0.01 per share, to the sellers as consideration. The shares were reduced through our tender offer, our secondary public offering and by the restriction lapsing and conversion to Class A common stock annually on January 1, 2011, 2012 and 2013. The remaining 5,374,070 outstanding shares of Towers Watson Class B-4 common stock converted on a one-for-one basis into freely transferable shares of Towers Watson Class A common stock on January 1, 2014.

The Towers Perrin restricted stock unit (“RSU”) holders received 10% of the total consideration issued to Towers Perrin shareholders in conjunction with the Merger. The RSUs were converted into 4,248,984 shares of Towers Watson Restricted Class A Common Stock (“Restricted Class A shares”).The service condition was fulfilled from the grant date through each of the three annual periods from January 1, 2010 until December 31, 2012. The restriction lapsed annually on January 1 and the Restricted Class A shares became freely tradable shares of Class A common stock on such dates. The shares were reduced by forfeitures and shares withheld for tax purposes.

For the three months ended March 31, 2013, we reversed $5.3 million of previously recorded compensation expense based on the actual number of shares forfeited upon the final vesting date of January 1, 2013. Our estimated forfeiture rate was 10% and our actual forfeitures were 11%. For the nine months ended March 31, 2013, we recorded $8.0 million of non-cash share-based compensation expense in connection with the issuance of Towers Watson Restricted Class A common stock to Towers Perrin RSU holders in the Merger. In our results of operations, $1.0 million is classified as discontinued operations for the Brokerage employees’ awards relating to non-cash stock based compensation recorded for the nine months ended March 31, 2013. In our results of operations for the three months ended March 31, 2013 and for the three and nine months ended March 31, 2014, no non-cash stock based compensation expense is classified as discontinued operations since the service period of this award was complete at January 1, 2013.

Note 12 — Share-Based Compensation.

Restricted Stock Units

Executives and Employees

The Compensation Committee of our Board of Directors approves performance-vested restricted stock unit awards pursuant to the Towers Watson & Co. 2009 Long Term Incentive Plan. RSUs are designed to provide us an opportunity to offer our long-term incentive program (LTIP) and to provide key executives with a long-term stake in our success. RSUs are notional, non-voting units of measurement based on our common stock. Under the RSU agreement, participants become vested in a number of RSUs based on the achievement of specified levels of financial performance during the performance period set forth in the agreement, provided that the participant remains in continuous service with us through the end of the performance period. Any RSUs that become vested are payable in shares of our Class A Common Stock. Dividend equivalents will accrue on RSUs and vest to the same extent as the underlying shares. The form of performance-vested restricted stock unit award agreement includes a provision whereby the Committee could provide for continuation of vesting of restricted stock units upon an employee’s termination under certain circumstances such as a qualified retirement. This definition of qualified retirement is age 55 and with 15 years of experience at the company and a minimum of one year of service in the performance period.

2014 LTIP. During the first quarter of fiscal year 2014, the Compensation Committee of the Board of Directors approved a grant of 62,651 RSUs to certain of our executive officers. During the third quarter of fiscal year 2014, the Compensation Committee of the Board of Directors approved an additional grant of 2,704 RSUs as a result of new executives being added to the plan. Awards were based on the value of the executive officer’s annual base salary and a multiplier, which is then converted into a target number of RSUs based on our closing stock price as of the date of grant, which was between $105.90 and $110.70. Between 0% and 204% of the target number of RSUs will vest based on the extent to which specified performance metrics are achieved over the three-year performance period from July 1, 2013 to June 30, 2016, subject to the executive officers’

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continued employment with us through the end of the performance period, except in the case of a qualified retirement. The Compensation Committee approved the grants and established adjusted three-year average EPS and revenue growth during the performance period as the performance metrics for the awards. For participants that met the requirement for qualified retirement, we record the expense of their awards over the one year service period as performed. We will adjust the stock-based compensation for their awards during the performance period based upon the level of performance achieved. For the three and nine months ended March 31, 2014, we recorded $1.1 million and $3.8 million, respectively, of stock-based compensation related to these grants.

2013 LTIP. During the first quarter of fiscal year 2013, the Compensation Committee of the Board of Directors approved a grant of 121,075 RSUs to certain of our executive officers. Awards were based on the value of the executive officer’s annual base salary and a multiplier, which is then converted into a target number of RSUs based on our closing stock price as of the date of grant of $54.59. Between 0% and 204% of the target number of RSUs will vest based on the extent to which specified performance metrics are achieved over the three-year performance period from July 1, 2012 to June 30, 2015, subject to the executive officers’ continued employment with us through the end of the performance period, except in the case of a qualified retirement. The Compensation Committee approved the grants and established adjusted three-year average EPS and revenue growth during the performance period as the performance metrics for the awards. For participants that met the requirement for qualified retirement, we record the expense of their awards over the one year service period as performed. We will adjust the stock-based compensation for their awards during the performance period based upon the level of performance achieved. For the three and nine months ended March 31, 2014, we recorded a reduction in expense of $0.4 million and expense of $0.6 million of stock-based compensation related to these grants, respectively. For the three and nine months ended March 31, 2013, we recorded $1.4 million and $4.3 million of stock-based compensation related to these grants, respectively.

2012 LTIP. During the fiscal year ended June 30, 2012, 86,188 RSUs were granted to certain of our executive officers. Awards are based on the value of the executive officer’s annual base salary and a multiplier, which is then converted into a target number of RSUs based on our closing stock price as of the date of grant which was between $63.73 and $63.94. Between 0% and 204% of the target number of RSUs will vest based on the extent to which specified performance metrics are achieved over the three-year performance period from July 1, 2011 to June 30, 2014, subject to the executive officers’ continued employment with us through the end of the performance period, except in the case of a qualified retirement. The Compensation Committee approved the grants and established adjusted EBITDA margin and revenue growth during the performance period as the performance metrics for the awards. For participants that met the requirement for qualified retirement, we record the expense of their awards over the one year service period as performed. We will adjust the stock-based compensation for their awards during the performance period based upon the level of performance achieved. For the three and nine months ended March 31, 2014, we recorded reductions to expense of $0.5 million and $1.0 million, respectively, of stock-based compensation related to these grants as we adjusted the cumulative expense recorded in the third quarter of fiscal year 2014 according to the performance metric. For the three and nine months ended March 31, 2013, we recorded $0.3 million and $1.8 million, respectively, of stock-based compensation related to these grants.

2014 ES LTIP. In August 2013, the Compensation Committee of the Board of Directors awarded 30,192 RSUs under the 2009 Plan to select executives of our Exchange Solutions segment with a grant date fair value of $81.73, based on our closing stock price. Between 0% and 204% of the target number of RSUs will vest based on the extent to which specified performance metrics are achieved over the two-year performance period from July 1, 2013 to June 30, 2015, subject to continued employment with us through the end of the performance period. The Compensation Committee approved the grants and established EBITDA margin and revenue growth during the performance period as the performance metrics for the awards. For the three and nine months ended March 31, 2014, we recorded $0.4 million and $1.1 million, respectively, of non-cash stock based compensation in the Exchange Solutions business segment.

Liazon RSUs. In November 2013, in connection with the acquisition, we assumed the Liazon Corporation 2011 Equity Incentive Plan and converted the outstanding unvested restricted stock units into 70,533 Towers Watson restricted stock units using a conversion ratio stated in the agreement for the exercise price and number of options. The fair value of these restricted stock units was calculated using the fair value share price of Towers Watson’s closing share price on the date of acquisition. We determined the fair value of the portion of the 70,533 outstanding RSUs related to pre-acquisition employee service using Towers Watson graded vesting methodology from the date of grant to the acquisition date to be $5.7 million which was added to the transaction consideration. The fair value of the remaining portion of RSUs related to the post-acquisition employee services was $2.1 million, and will be recorded over the future vesting periods. For the three and nine months ended March 31, 2014, we recorded $0.4 million and $0.7 million, respectively, of non-cash stock based compensation.

2013 SEP. During the quarter ended September 30, 2013, 131,286 RSUs were granted to certain employees under our Select Equity Plan with a grant date fair value of $91.43, based on our closing stock price. The RSUs vest annually over a three-year

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period. We assumed a 5% forfeiture rate with these awards. For the three and nine months ended March 31, 2014, we recorded $1.6 million and $5.0 million, respectively, of non-cash stock based compensation related to these grants.

2012 SEP. During the quarter ended September 30, 2012, 147,503 RSUs were granted to certain employees under our Select Equity Plan with a grant date fair value of $53.93, based on our closing stock price. The RSUs vest annually over a three-year period. We assumed a 5% forfeiture rate with these awards. For the three and nine months ended March 31, 2014, we recorded $0.5 million and $1.5 million, respectively, of non-cash stock based compensation related to these grants. For the three and nine months ended March 31, 2013, we recorded $1.2 million and $3.5 million, respectively, of non-cash stock-based compensation related to these grants.

2011 SEP. During the quarter ended September 30, 2011, 577,191 RSUs were granted to certain employees under our Select Equity Plan, of which 288,595 were vested immediately in conjunction with our annual fiscal year 2011 performance bonus payments. The remaining 288,595 RSUs vest annually over a three-year period. We assumed a 5% forfeiture rate with these awards. For the three and nine months ended March 31, 2014, we recorded $0.4 million and $1.3 million of non-cash stock based compensation related to these grants, respectively. For the three and nine months ended March 31, 2013, we recorded $1.1 million and $3.3 million of non-cash stock based compensation related to these grants, respectively.

We classified $1.2 million for the nine months ended March 31, 2014 to discontinued operations related to non-cash stock based compensation for the Brokerage employees awards under our SEP Plan. There were no amounts classified to discontinued operations related to non-cash stock based compensation for the Brokerage employees awards under our SEP Plan for the three months ended March 31, 2014. We classified $0.1 million and $0.4 million for the three and nine months ended March 31, 2013, respectively, to discontinued operations related to non-cash stock based compensation for the Brokerage employees awards under our SEP Plan.

Outside Directors

The Towers Watson & Co. Compensation Plan for Non-Employee Directors provides for cash and stock compensation for outside directors. During the three months ended September 30, 2013, 10,251 RSUs were granted for the annual award for outside directors for service on the board of directors in equal quarterly installments over fiscal year 2014. During the three months ended September 30, 2012, 16,027 restricted stock units were granted for the annual award for outside directors for service on the board of directors in equal quarterly installments over fiscal year 2013. In fiscal year 2010, 22,149 restricted stock units were granted for the initial award for outside directors for service on the board of directors, which vest in equal annual installments over a three-year period ending January 1, 2013. We recorded non-cash stock based compensation related to these awards for outside directors of $0.1 million and $0.8 million, respectively, for the three and nine months ended March 31, 2014, and $0.1 million and $0.9 million, respectively, for the three and nine months ended March 31, 2013.

Stock Options

Liazon Options. In November 2013, in connection with the Liazon acquisition, we assumed the Liazon Corporation 2011 Equity Incentive Plan and converted the outstanding unvested employee stock options into 37,162 Towers Watson stock options using a conversion ratio stated in the agreement for the exercise price and number of options. The fair value of the vested stock options was calculated using the Black-Scholes model with a volatility and risk-free interest rate over the expected term of each group of options using the fair value share price of Towers Watson’s closing share price on the date of acquisition. The fair value of the new awards was less than the acquisition date fair value of the replaced Liazon options; accordingly, no compensation expense was recorded. We determined the fair value of the portion of the 37,162 outstanding options relating to the pre-acquisition employee service using Towers Watson graded vesting methodology from the date of grant to the acquisition date to be $2.2 million, which was added to the transaction consideration. The fair value of the remaining portion of unvested options related to the post-acquisition employee service was $1.7 million, which will be recorded over the future vesting periods. We recorded non-cash stock based compensation related to these awards of $0.3 million and $0.4 million, respectively, for the three and nine months ended March 31, 2014.

Extend Health Options. In May 2012, we assumed the Extend Health, Inc. 2007 Equity Incentive Plan and converted the outstanding unvested employee stock options into 377,614 Towers Watson stock options using a conversion ratio stated in the agreement for the exercise price and number of options. The fair value of the vested stock options was calculated using the Black-Scholes model with a volatility and risk-free interest rate over the expected term of each group of options using the fair value share price of Towers Watson’s closing share price on the date of acquisition. The fair value of the new awards was less than the acquisition date fair value of the replaced Extend Health options; accordingly, no compensation expense was recorded. We determined the fair value of the portion of the 377,614 outstanding options related to pre-acquisition employee service using Towers Watson graded vesting methodology from the date of grant to the acquisition date was $11.2 million, which was

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added to the transaction consideration. The fair value of the remaining portion of the unvested options, less 10% estimated forfeitures, was $7.9 million, and will be recorded over the future vesting periods. We recorded non-cash stock based compensation related to these awards of $0.3 million and $1.2 million, respectively, for the three and nine months ended March 31, 2014 and $1.1 million and $5.0 million, respectively, for the three and nine months ended March 31, 2013.

Note 13 — Income Taxes.

Provision for income taxes on continuing operations for the three and nine months ended March 31, 2014 was $39.2 million and $96.3 million, respectively, compared to $35.3 million and $99.6 million, respectively, for the three and nine months ended March 31, 2013. The effective tax rate was 25.7% for the nine months ended March 31, 2014 and 31.9% for the nine months ended March 31, 2013. The decrease in the effective tax rate for the nine months is primarily due to current year income tax benefits on the release of uncertain tax positions of 4.6% related to the lapses in statute of limitations in various taxing jurisdictions, primarily the U.S., and an income tax benefit of 1.0% in connection with the enacted statutory tax rate reduction in the U.K. Towers Watson records a tax benefit on net operating loss carryovers and net deferred tax assets only if it is more likely than not that a benefit will be realized.

It is reasonably possible that during the next 12 months the Company’s liability for uncertain tax positions may change by a significant amount. The Company may settle certain U.S. tax examinations or have lapses in statute of limitations for different amounts than the Company has accrued as uncertain tax positions. The Company may need to accrue and ultimately pay additional amounts for tax positions that previously met a more likely than not standard if such positions are not upheld. Conversely, the Company could settle positions with the tax authorities for amounts lower than have been accrued or extinguish a position through payment. The Company believes the outcomes which are reasonably possible within the next 12 months may result in a reduction in the liability for uncertain tax positions in the range of approximately $5.0 million to $11.8 million, excluding interest and penalties.

On September 13, 2013, the Treasury Department and the Internal Revenue Service released final regulations that provide guidance on the deductibility of amounts paid to acquire, produce, or improve tangible property. These regulations also provide rules applicable to materials and supplies. The Company has assessed the impacts of these regulations and confirmed that the impact of these new regulations will not be material to the financial statements.

Note 14 — Segment Information.

Towers Watson has four reportable operating segments or business areas:

• Benefits

• Risk and Financial Services

• Talent and Rewards

• Exchange Solutions

Towers Watson’s chief operating decision maker is its chief executive officer. It was determined that Towers Watson operational data used by the chief operating decision maker is that of the segments. Management bases strategic goals and decisions on these segments and the data presented below is used to assess the adequacy of strategic decisions, the method of achieving these strategies and related financial results.

Management evaluates the performance of its segments and allocates resources to them based on net operating income on a pre-bonus, pre-tax basis. Revenue includes amounts that were directly incurred on behalf of our clients and reimbursed by them (reimbursable expenses).

On January 23, 2014, Towers Watson announced plans to expand the Exchange Solutions segment by combining operations and associates primarily from portions of the TAS North America line of business with the newly acquired Liazon entity within the existing Exchange Solutions segment to better align their respective strategic goals. The restructuring is expected to take place on July 1, 2014. We are still evaluating the impact to our operating segments and the related disclosures.

All periods presented have been recast to exclude the operating results of our Brokerage business, which has been classified as discontinued operations.

The table below presents specified information about the continuing operations of the reported segments for the three months ended March 31, 2014:

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	Benefits		Risk and Financial Services		Talent and Rewards		Exchange Solutions		Total
Revenue (net of reimbursable expenses)	$	527,414	$	174,382	$	127,572	$	47,551	$	876,919
Net operating income	175,129		53,047		11,558		14,353		254,087

The table below presents specified information about the continuing operations of the reported segments for the three months ended March 31, 2013:

	Benefits		Risk and Financial Services		Talent and Rewards		Exchange Solutions		Total
Revenue (net of reimbursable expenses)	$	523,489	$	177,396	$	124,914	$	30,621	$	856,420
Net operating income	184,304		46,426		13,179		14,648		258,557

The table below presents specified information about the continuing operations of the reported segments for the nine months ended March 31, 2014:

	Benefits		Risk and Financial Services		Talent and Rewards		Exchange Solutions		Total
Revenue (net of reimbursable expenses)	$	1,471,780	$	477,343	$	451,464	$	118,677	$	2,519,264
Net operating income	461,016		109,976		108,718		13,586		693,296

The table below presents specified information about the continuing operations of the reported segments for the nine months ended March 31, 2013:

	Benefits		Risk and Financial Services		Talent and Rewards		Exchange Solutions			Total
Revenue (net of reimbursable expenses)	$	1,500,035	$	499,301	$	441,334	$	60,259		$	2,500,929
Net operating income	505,975		110,950		99,048		(1,245		)	714,728

The table below presents a reconciliation of the information reported by segment to the consolidated amounts reported from continuing operations for the three and nine months ended March 31, 2014 and 2013:

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	Three Months Ended   March 31,						Nine Months Ended   March 31,
	2014			2013			2014			2013
Revenue:
Total segment revenue	$	876,919		$	856,420		$	2,519,264		$	2,500,929
Reimbursable expenses and other	27,914			36,557			83,663			96,304
Revenue	$	904,833		$	892,977		$	2,602,927		$	2,597,233
Net Operating Income:
Total segment net operating income	$	254,087		$	258,557		$	693,296		$	714,728
Differences in allocation methods (1)	(6,885		)	(5,010		)	9,970			984
Amortization of intangibles	(19,380		)	(18,955		)	(56,963		)	(57,777		)
Transaction and integration expenses	(241		)	(12,328		)	(1,049		)	(30,753		)
Stock-based compensation (2)	(2,362		)	1,305			(7,707		)	(16,523		)
Discretionary compensation	(75,712		)	(95,459		)	(225,919		)	(266,241		)
Payroll tax on discretionary compensation	(5,335		)	(5,663		)	(13,978		)	(15,347		)
Other, net	(5,749		)	(1,190		)	(28,380		)	(14,121		)
Income from operations	$	138,423		$	121,257		$	369,270		$	314,950

________________________

(1) Depreciation, general and administrative, pension, and medical costs are allocated to our segments based on budgeted expenses determined at the beginning of the fiscal year, as management believes that these costs are largely uncontrollable to the segment. To the extent that the actual expense base upon which allocations are made differs from the forecast/budget amount, a reconciling item will be created between internally allocated expenses and the actual expense that we report for GAAP purposes.

(2) Stock-based compensation excludes RSUs granted in conjunction with our performance bonus, which are included in discretionary compensation.

Note 15 — Earnings Per Share.

We present earnings per share (“EPS”) using the two-class method. This method addresses whether awards granted in share-based transactions are participating securities prior to vesting and therefore need to be included in the earning allocation in computing earnings per share using the two-class method. This method requires non-vested share-based payment awards that have non-forfeitable rights to dividends or dividend equivalents to be treated as a separate class of securities in calculating earnings per share. Our participating securities include non-vested restricted stock. On January 1, 2013, all remaining outstanding shares of this restricted stock vested and were converted to freely tradable shares of Towers Watson Class A common stock. The components of basic and diluted earnings per share are as follows:

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	Three Months Ended March 31,
	2014					2013
	Income		Shares	Per Share Amount		Income			Shares	Per Share Amount
Basic EPS
Income from continuing operations	$	101,913				83,145
Less: Income/(loss) attributable to non-controlling interests	3,346					(71		)
Income from continuing operations attributable to common stockholders	98,567					83,216
Less: Income allocated to participating securities	—					—
Income from continuing operations attributable to common stockholders	$	98,567	70,447	$	1.40	$	83,216		70,530	$	1.18
Diluted EPS
Share-based compensation awards	—		437			—			546
Income available to common shareholders	$	98,567	70,884	$	1.39	$	83,216		71,076	$	1.17

	Nine Months Ended March 31,
	2014					2013
	Income		Shares	Per Share Amount		Income			Shares	Per Share Amount
Basic EPS
Income from continuing operations	$	277,985				$	212,380
Less: Income/(loss) attributable to non-controlling interests	7,057					(2,695		)
Income from continuing operations attributable to common stockholders	270,928					215,075
Less: Income allocated to participating securities	—					3,289
Income from continuing operations attributable to common stockholders	$	270,928	70,685	$	3.83	$	211,786		69,977	$	3.03
Diluted EPS
Share-based compensation awards	—		362			—			545
Income available to common shareholders	$	270,928	71,047	$	3.81	$	211,786		70,522	$	3.00

Note 16 — Recent Accounting Pronouncements.

Not yet adopted

On June 7, 2013, the FASB issued ASU 2013-08, “Financial Services – Investment Companies (Topic 946): Amendments to the Scope, Measurement, and Disclosure Requirements,” which amends the criteria an entity would need to meet to qualify as an investment company under ASC 946. The ASU (1) introduces new disclosure requirements that apply to all investment companies and (2) amends the measurement criteria for certain interests in other investment companies. The ASU also amends the requirements in ASC 810 related to qualifying for the “investment-company deferral” in ASU 2010-10 as well as the requirements in ASC 820 related to qualifying for the “net asset value practical expedient” in ASU 2009-12. We manage certain funds that are considered variable interest entities and for which our management fee is considered a variable interest. These funds qualify for the “investment-company deferral” in ASU 2010-10 and therefore are subject to the consolidation guidance prior to the issuance of ASU 2009-17. The ASU is effective for annual periods that begin after December 15, 2013 and interim periods within those annual periods. Early adoption is prohibited. The Company is currently evaluating whether these funds will continue to qualify for the “investment-company deferral” based on the amended investment company criteria proscribed by ASU 2013-08.

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ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Executive Overview

General

Towers Watson is a leading global professional services company that helps organizations improve performance through effective people, risk and financial management. Towers Watson was formed on January 1, 2010 from the merger (the “Merger”) of Watson Wyatt Worldwide, Inc. and Towers, Perrin, Forster & Crosby, Inc., two leading professional services firms that traced their roots back more than 100 years.

At Towers Watson, we bring together professionals from around the world — experts in their areas of specialty — to deliver the perspectives that give organizations a clear path forward. We do this by working with clients to develop solutions in the areas of benefits, risk and capital management, and talent and rewards.

We help our clients enhance business performance by improving their ability to attract, retain and motivate qualified employees. We focus on delivering consulting services that help organizations anticipate, identify and capitalize on emerging opportunities in human capital management. We also provide independent financial advice regarding all aspects of life insurance and general insurance, as well as investment advice to help our clients develop disciplined and efficient strategies to meet their investment goals. We operate the largest private Medicare exchange in the United States. Through this exchange, we help our clients to move to a more sustainable economic model by capping and controlling the costs associated with retiree healthcare benefits.

As leading economies worldwide become more service-oriented, human resources and financial management have become increasingly important to companies and other organizations. The heightened competition for skilled employees, unprecedented changes in workforce demographics, regulatory changes related to compensation and retiree benefits, and rising employee-related costs have increased the importance of effective human capital management. Insurance and investment decisions have become increasingly complex and important in the face of changing economies and dynamic financial markets. Towers Watson helps its clients address these issues by combining expertise in human capital and financial management with consulting and technology solutions, to improve the design and implementation of various human resources and financial programs, including compensation, retirement, health care, and insurance and investment plans.

The human resources consulting industry, although highly fragmented, is highly competitive. It is composed of major human capital consulting firms, specialty firms, consulting arms of accounting firms and information technology consulting firms.

In the short term, our revenue is driven by many factors, including the general state of the global economy and the resulting level of discretionary spending, the continuing regulatory compliance requirements of our clients, changes in investment markets, the ability of our consultants to attract new clients or provide additional services to existing clients, the impact of new regulations in the legal and accounting fields and the impact of our ongoing cost saving initiatives. In the long term, we expect that our financial results will depend in large part upon how well we succeed in deepening our existing client relationships through thought leadership and a focus on developing cross-business solutions, actively pursuing new clients in our target markets, cross selling and making strategic acquisitions. We believe that the highly fragmented industry in which we operate offers us growth opportunities, because we provide a unique business combination of benefits and human capital consulting, as well as risk and capital management and strategic technology solutions.

Overview of Towers Watson

Towers Watson is a global professional services firm focusing on providing human capital and financial consulting services. Towers Watson provides services in four principal areas: Benefits, Risk and Financial Services, Talent and Rewards and Exchange Solutions, operating from 114 cities in 37 countries throughout North America, Europe, Asia-Pacific and Latin America. Towers Watson employed approximately 14,500 full-time associates as of both March 31, 2014 and June 30, 2013 in the following segments:

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	March 31, 2014	June 30, 2013
Benefits	7,000	6,900
Risk and Financial Services	2,000	2,500
Talent and Rewards	2,500	2,400
Exchange Solutions	700	300
Other	300	300
Business Services (incl. Corporate and field support)	2,000	2,100
Total associates	14,500	14,500

Segments

We provide services in four business segments: Benefits, Risk and Financial Services, Talent and Rewards and Exchange Solutions.

Benefits Segment. The Benefits segment is our largest and most established segment. This segment has grown through business combinations as well as strong organic growth. It helps clients create and manage cost-effective benefits programs that help them attract, retain and motivate a talented workforce.

The Benefits segment provides benefits consulting and administration services through four lines of business:

• Retirement;

• Health and Group Benefits;

• Technology and Administration Solutions; and

• International Consulting.

Retirement supports organizations worldwide in designing, managing, administering and communicating all types of retirement plans. Health and Group Benefits provides advice on the strategy, design, financing, delivery, ongoing plan management and communication of health and group benefit programs. Through our Technology and Administration Solutions line of business, we deliver cost-effective benefit outsourcing solutions. The International Consulting Group provides expertise in dealing with international human capital management and related benefits and compensation advice for corporate headquarters and their subsidiaries. A significant portion of the revenue in this segment is from recurring work, driven in large part by the heavily regulated nature of employee benefits plans and our clients’ annual needs for these services. For the nine months ended March 31, 2014, the Benefits segment contributed 58% of our segment revenue. For the same period, approximately 44% of the Benefits segment’s revenue originated from outside the United States and is thus subject to translation exposure resulting from foreign exchange rate fluctuations.

Risk and Financial Services Segment. Within the Risk and Financial Services segment, our second largest segment, we have two lines of business:

• Risk Consulting and Software (“RCS”); and

• Investment Consulting and Solutions (“Investment”).

The Risk and Financial Services segment, exclusive of our Reinsurance and Property and Casualty Insurance Brokerage business (“Brokerage”), which was sold in November, 2013, accounted for 19% of our segment revenue for the nine months ended March 31, 2014. Approximately 76% of the segment’s revenue for the nine months ended March 31, 2014 originated from outside the United States and is thus subject to translation exposure resulting from foreign exchange rate fluctuations. The segment has a base of recurring revenue, driven by long-term client relationships in retainer investment consulting relationships, consulting services on financial reporting and actuarial opinions on property/casualty loss reserves. Some of these relationships have been in place for more than 20 years. A portion of the revenue is related to project work, which is more heavily dependent on the overall level of discretionary spending by clients which can fluctuate based on demand and market factors. Major revenue growth drivers include changes in regulations, the level of mergers and acquisitions activity in the insurance industry and growth in pension and other asset pools. In the first quarter of fiscal year 2014, we entered into an agreement to sell our Brokerage business to JLT and we closed the transaction in our second quarter. We have reclassified the

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operating results of Brokerage as discontinued operations in our condensed consolidated statements of operations for fiscal years 2014 and 2013.

Talent and Rewards Segment. Our third largest segment, Talent and Rewards, is focused on three lines of business:

• Executive Compensation;

• Rewards, Talent and Communication; and

• Data, Surveys and Technology.

The Talent and Rewards segment accounted for approximately 18% of our segment revenue for the nine months ended March 31, 2014. Few of the segment’s projects have a recurring element. As a result, this segment is most sensitive to changes in discretionary spending due to cyclical economic fluctuations. Approximately 47% of the segment’s revenue for the nine months ended March 31, 2014 originated from outside the United States and is thus subject to translation exposure resulting from foreign exchange rate fluctuations. Revenue for Talent and Rewards consulting has minimal seasonality, with a small degree of heightened activity in the last quarter of the fiscal year during the annual compensation, benefits and survey cycles. Major revenue growth drivers in this group include demand for workforce productivity improvements and labor cost reductions, focus on high performance culture, globalization of the workforce, changes in regulations and benefits programs, mergers and acquisitions activity, and the demand for universal metrics related to workforce engagement.

Exchange Solutions Segment. Our fourth largest segment, Exchange Solutions, has two lines of business:

• Exchange Solutions; and

• Liazon.

The Exchange Solutions segment accounted for 5% of our segment revenue for the nine months ended March 31, 2014. In November 2013, the segment was expanded through the acquisition of Liazon Corporation, a leader in developing and delivering private benefit exchanges for active employees. The Liazon solution complements the existing OneExchange offering by helping organizations of all sizes deliver self- and fully-insured benefits to both employees as well as pre- and post-65 retirees in new and cost-effective ways. Our core solution enables employers to transition their retirees to individual, defined contribution health plans at an annual cost that the employer controls — versus group-based, defined benefit health plans, which have uncertain annual costs. By moving to a defined contribution approach, our clients can provide their retirees with the same or better health care benefits at a lower overall cost. Most Exchange Solutions’ revenues come from the commissions we receive from insurance carriers for enrolling individuals into their health plans. This revenue increases as the number of enrolled members grows. Exchange Solutions experiences seasonality due to timing of the commissions we receive from our carriers and the costs incurred to enroll members. Most of our revenue is recognized over the calendar year term of the policy whereas the costs are incurred during our corporate clients’ open enrollment period typically in our fiscal year first and second quarters. We will hire additional seasonal benefits advisors to supplement our full-time benefit advisors and we expect to incur higher costs during our client’s busiest enrollment periods.

On January 23, 2014, Towers Watson announced plans to expand the Exchange Solutions segment by combining operations and associates primarily from portions of the TAS North America line of business with the newly acquired Liazon entity within the existing Exchange Solutions segment to better align their respective strategic goals. The restructuring is expected to take place on July 1, 2014. We are still evaluating the impact to our operating segments and the related disclosures.

Financial Statement Overview

Towers Watson’s fiscal year ends June 30.

The financial statements contained in this quarterly report reflect Condensed Consolidated Balance Sheets as of the end of the third quarter of fiscal year 2014 (March 31, 2014) and as of the end of fiscal year 2013 (June 30, 2013), Condensed Consolidated Statements of Operations for the three and nine months ended March 31, 2014 and 2013, Condensed Consolidated Statements of Other Comprehensive Income for the three and nine months ended March 31, 2014 and 2013, Condensed Consolidated Statements of Cash Flows for the nine months ended March 31, 2014 and 2013 and a Condensed Consolidated Statements of Changes in Stockholders’ Equity for the nine months ended March 31, 2014 and 2013.

Shown below are Towers Watson’s top five markets based on percentage of consolidated revenue for the nine months ended March 31, 2014 and the fiscal years ended June 30, 2013 and 2012. For the nine months ended March 31, 2014, the information provided excludes the Brokerage business.

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	Nine Months Ended		Fiscal Year
	March 31, 2014		2013		2012
United States	53	%	53	%	48	%
United Kingdom	20		22		23
Canada	6		6		6
Germany	5		4		5
Netherlands	2		2		3

We derive the majority of our revenue from fees for consulting services, which generally are billed at standard hourly rates and expenses, which we refer to as time and expense, or on a fixed-fee basis. Management believes the approximate percentages for time and expense and fixed-fee engagements are 60% and 40%, respectively. Clients are typically invoiced on a monthly basis with revenue generally recognized as services are performed. No single client accounted for more than 1% of our consolidated revenues for any of our three most recent fiscal years.

Our most significant expense is compensation to associates, which typically comprises approximately 70% of total costs of providing services. Salaries and employee benefits are comprised of wages paid to associates, related taxes, severance, benefit expenses such as pension, medical and insurance costs, and fiscal year-end incentive bonuses. We compensate our directors and select executives with incentive stock-based compensation plans. When granted, awards are governed by the Towers Watson & Co. 2009 Long Term Incentive Plan, which provides for the awards to be valued at their grant date fair value which is amortized over the expected term of the awards, generally three years.

Professional and subcontracted services represent fees paid to external service providers for employment, marketing and other services. On average and for all periods presented, 30% to 40% of the professional and subcontracted services were directly incurred on behalf of clients and were reimbursed by them, with such reimbursements being included in revenue.

Occupancy includes expenses for rent and utilities, as well as the net reduction to rent related to the amortization of acquired favorable and unfavorable lease agreements.

General and administrative expenses include legal, marketing, human resources, finance, research, technology support, supplies, telephone and other costs to operate office locations as well as professional fees and insurance, including premiums on excess insurance and losses on professional liability claims, non-client-reimbursed travel by associates, publications and professional development. This line item also includes miscellaneous expenses, including gains and losses on foreign currency transactions.

Depreciation and amortization includes the depreciation of fixed assets and amortization of intangible assets and internally-developed software.

Transaction and integration expenses include fees and charges associated with the Merger and with our other acquisitions. Transaction and integration expenses principally consist of integration consultants, contract termination fees, as well as legal, accounting, marketing, and information technology integration expenses.

Critical Accounting Policies and Estimates

There are no material changes from the Critical Accounting Policies and Estimates as previously disclosed in our 2013 Annual Report on Form 10-K, filed on August 15, 2013.

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Results of Operations

The table below sets forth our condensed consolidated statements of operations and data as a percentage of revenue for the period indicated:

Condensed Consolidated Statements of Operations

(Thousands of U.S. dollars)

(Unaudited)

	Three Months Ended March 31,										Nine Months Ended March 31,
	2014					2013					2014					2013
Revenue	$	904,833		100	%	$	892,977		100	%	$	2,602,927		100	%	$	2,597,233		100	%
Costs of providing services:
Salaries and employee benefits	547,385			60	%	542,271			61	%	1,574,535			60	%	1,590,530			61	%
Professional and subcontracted services	57,729			6	%	62,908			7	%	188,203			7	%	189,751			7	%
Occupancy	33,961			4	%	34,666			4	%	102,288			4	%	107,116			4	%
General and administrative expenses	82,844			9	%	76,381			9	%	236,651			9	%	233,163			9	%
Depreciation and amortization	44,250			5	%	43,166			5	%	130,931			5	%	130,970			5	%
Transaction and integration expenses	241			—		12,328			1	%	1,049			—		30,753			1	%
	766,410			85	%	771,720			86	%	2,233,657			86	%	2,282,283			88	%
Income from operations	138,423			15	%	121,257			14	%	369,270			14	%	314,950			12	%
Loss from affiliates	—			—		—			—		—			—		(56		)	—
Interest income	758			—		613			—		1,847			—		2,118			—
Interest expense	(2,090		)	—		(3,483		)	—		(6,553		)	—		(10,043		)	—
Other non-operating income	4,053			—		12			—		9,743			—		5,060			—
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES	141,144			16	%	118,399			13	%	374,307			14	%	312,029			12	%
Provision for income taxes	39,231			4	%	35,254			4	%	96,322			4	%	99,649			4	%
INCOME FROM CONTINUING OPERATIONS	101,913			11	%	83,145			9	%	277,985			11	%	212,380			8	%
Income from discontinued operations, net of tax of $175, $6,621, $41,012, and $11,158, respectively	3,939			—		11,700			1	%	5,980			—		20,858			1	%
NET INCOME BEFORE NON-CONTROLLING INTERESTS	105,852			12	%	94,845			11	%	283,965			11	%	233,238			9	%
Less: Income (loss) attributable to non-controlling interests	3,346			—		(71		)	—		7,057			—		(2,695		)	—
NET INCOME (attributable to common stockholders)	$	102,506		11	%	$	94,916		11	%	$	276,908		11	%	$	235,933		9	%

Results of Operations for the Three and Nine Months Ended March 31, 2014

Compared to the Three and Nine Months Ended March 31, 2013

Revenue

Revenue for the three months ended March 31, 2014 was $904.8 million compared to $893.0 million for the three months ended March 31, 2013, an increase of $11.9 million, or 1.3%. Revenue for the nine months ended March 31, 2014 and 2013 was $2.6 billion, an increase of $5.7 million, or less than 1%. The growth in revenue for both the three and nine months was primarily driven by our Exchange Solutions segment, which continues to enroll record numbers of new members into health plans on the retiree exchange.

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During our first quarter of fiscal year 2014, we entered into an agreement to sell our Brokerage business. Our historical statement of operations has been recast; the operations of our Brokerage business for the current and prior year are classified as discontinued operations.

The average exchange rate used to translate our revenues earned in British pounds sterling was 1.6589 for the third quarter of fiscal 2014 compared to 1.5516 for the third quarter of fiscal year 2013, and the average exchange rate used to translate our revenues earned in Euros was 1.3646 for the third quarter of fiscal year 2014 compared to 1.3207 for the third quarter of fiscal 2013. Constant currency is calculated by translating prior year revenue at the current year average exchange rate. Segment results are presented both on a reported basis and on a constant currency basis. Line of business results are presented only on a constant currency basis.

A comparison of segment revenue for the three months ended March 31, 2014 as compared to the three months ended March 31, 2013, is as follows:

• Benefits revenue was $527.4 million for the third quarter of fiscal year 2014, compared to $523.5 million for the third quarter of fiscal year 2013, an increase of 1%. Benefits revenue was consistent for both reporting periods on a constant currency basis. Our Retirement business revenue, which makes up the majority of the segment, decreased 1% due to lower consulting activity in the EMEA and Asia Pacific regions. This was offset by 11% revenue growth in our Technology and Administration Solutions business primarily due to new client work in EMEA and the Americas. Revenues from our Health and Group Benefits business and our International business experienced a 2% and 1% decrease in revenue, respectively.

• Risk and Financial Services revenue, excluding our Brokerage business, was $174.4 million for the third quarter of fiscal year 2014, compared to $177.4 million for the third quarter of fiscal year 2013, a decrease of 2%. The operations of our Brokerage business have been classified as discontinued operations for fiscal years 2014 and 2013. On a constant currency basis, our Risk and Financial Services segment revenue decreased 3%, resulting from a 4% decrease in our Risk Consulting and Software business revenue primarily in EMEA. Our Investment business experienced a 2% revenue decline primarily in EMEA. The comparable period results reflect significant revenue from one-time project work that was completed in the third fiscal quarter of 2013 which did not occur in the same quarter of 2014.

• Talent and Rewards revenue was $127.6 million for the third quarter of fiscal year 2014, compared to $124.9 million for the third quarter of fiscal year 2013, a 2%increase. On a constant currency basis, Talent and Rewards revenue increased 3%. Data, Surveys and Technology business revenue increased 11% as demand for our proprietary Talent Management technology, HR software implementation support and compensation benchmarking surveys continued to be strong. Rewards, Talent and Communication revenue, which is primarily project-oriented, decreased 3% as project work in EMEA remained challenging. Our Executive Compensation business experienced a 4% increase in revenue as consulting demand remained solid in the Americas and EMEA.

• Exchange Solutions revenue was $47.6 million for the third quarter of fiscal year 2014, compared to $30.6 million for the third quarter of fiscal year 2013, a $16.9 million increase, or 55%. Exchange Solutions retiree revenue is entirely denominated in U.S. dollars. Exchange Solutions retiree revenue contributed 47% of the increase. We had another very successful enrollment period for January 1 effective policies, during which we enrolled record numbers of new members compared to our previous enrollment seasons. Our acquisition of Liazon was finalized in our second quarter of fiscal year 2014. Liazon's revenue contributed 8% of the segment's total revenue growth.

A comparison of segment revenue for the nine months ended March 31, 2014 compared to the nine months ended March 31, 2013 is as follows:

• Benefits revenue was $1.47 billion for the nine months ended March 31, 2014, compared to $1.50 billion for the nine months ended March 31, 2013, a decrease of 2% on both a reported and constant currency basis. Our Retirement business revenue, which makes up the majority of the segment, decreased 4%. While we continue to perform bulk lump sum projects, we have not had the level of project work and revenue that we attained in the first nine months of fiscal year 2013. Our Technology and Administration Solutions business experienced 7% revenue growth due to new client work. Our Health and Group Benefits business had a 1% revenue decrease. Our International business revenue remained consistent for both reporting periods.

• Risk and Financial Services revenue, on a continuing basis, which excludes our Brokerage business, was $477.3 million for the nine months ended March 31, 2014, compared to $499.3 million for the nine months ended March 31, 2013, a decrease of 4% on both a reported and constant currency basis. The results associated with the operations of our Brokerage business have been classified as discontinued operations in fiscal years 2014 and 2013. On a constant currency basis, our Risk and Financial Services segment revenue decreased 4%, primarily resulting from a 9% decrease in our Risk

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Consulting and Software business revenue across all regions, especially EMEA. There was low client demand for discretionary projects, prompting the restructuring efforts that began in fiscal year 2013. We completed most of the restructuring efforts in the second quarter of fiscal year 2014. While we experienced a decrease in consulting revenue, our property and casualty software revenue continued to be strong. Our Investment business experienced 3% revenue growth, primarily in the Americas, due to increased project work and performance fees.

• Talent and Rewards revenue was $451.5 million for the nine months ended March 31, 2014, compared to $441.3 million for the nine months ended March 31, 2013, a 2%increase. On a constant currency basis, Talent and Rewards revenue increased 3%. Data, Surveys and Technology business revenue increased 10% as demand for human resources software implementations and employee surveys drove revenue growth across all regions. Rewards, Talent and Communication revenue, which is primarily project-oriented, decreased 3%. Our results were impacted as our communications consultants were redeployed to support Exchange Solutions product development and sales. Our Executive Compensation business experienced a 2% increase in revenue, primarily in the Americas where demand remained solid.

• Exchange Solutions revenue was $118.7 million for the nine months ended March 31, 2014, compared to $60.3 million for the nine months ended March 31, 2013 a 97%increase. Exchange Solutions retiree revenue contributed 91% of the increase. We had another very successful annual enrollment period for January 1 effective policies, during which we enrolled record numbers of new members compared to our previous enrollment seasons. Our acquisition of Liazon was finalized in our second quarter of fiscal year 2014 and the operations are included in our Exchange Solutions segment. Liazon's revenue contributed 6% of the segment's total revenue growth.

Salaries and Employee Benefits

Salaries and employee benefits were $547.4 million for the third quarter of fiscal year 2014, an increase of $5.1 million, or 1%, compared to $542.3 million for the third quarter of fiscal year 2013. We experienced a $24.7 million increase in salaries, wage related taxes and fringe benefits for the third quarter of fiscal year 2014. The increase was driven by our adding personnel in high growth areas of our business coupled with our rationalizing in other business areas which resulted in increased severance costs. The increase was partially offset by a reduction in discretionary compensation. Our discretionary compensation is based on profitability and fluctuates based on the operating results of the Company, and as a result, our discretionary compensation for the third quarter of fiscal year 2014 decreased$19.7 million compared to the third quarter of fiscal year 2013. As a percentage of revenue, salaries and employee benefits were 60% for the third quarter of fiscal year 2014 compared to 61% for the third quarter of fiscal year 2013.

Salaries and employee benefits decreased $16.0 million, or 1%, and were $1.6 billion for the nine months ended March 31, 2014 and 2013. Our discretionary compensation is based on profitability and fluctuates based on the operating results of the Company, and as a result, our discretionary compensation for the nine months ended March 31, 2014decreased by $40.3 million compared to the nine months ended March 31, 2013. Our pension expense decreased$14.9 million due to an increase in the discount rate, a decrease in the amortization of actuarial losses recorded this year compared to the prior year and favorable investment returns. These decreases in expense were partially offset by a $41.2 million increase in salaries, wage related taxes and fringe benefits. The increase was driven by our adding personnel in high growth areas of our business coupled with our rationalizing in other business areas which resulted in increased severance costs. As a percentage of revenue, salaries and employee benefits decreased to 60% for the nine months ended March 31, 2014 from 61% for the nine months ended March 31, 2013.

Professional and Subcontracted Services

Professional and subcontracted services for the third quarter of fiscal year 2014 were $57.7 million, compared to $62.9 million for the third quarter of fiscal year 2013, a decrease of $5.2 million, or 8%. Professional and subcontracted services for the nine months ended March 31, 2014 were $188.2 million, compared to $189.8 million for the nine months ended March 31, 2013, a decrease of $1.5 million, or 1%. Our pass-through expenses, which are reimbursable under our contracts, decreased$2.9 million in the third quarter of fiscal 2014, and decreased$1.0 million for the nine months ended March 31, 2014 compared to the prior year. In addition, our external service provider fees, which supplement our day-to-day operations, decreased by $2.3 million in the third quarter of fiscal 2014 and decreased by $0.6 million in the nine months ended March 31, 2014 compared to the prior year. As a percentage of revenue, professional and subcontracted services were 6% for the third quarter of fiscal year 2014 compared to 7% for the third quarter of fiscal year 2013. As a percentage of revenue, professional and subcontracted services were 7% for the nine months ended March 31, 2014 and 2013.

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Occupancy

Occupancy expenses were $34.0 million and $34.7 million for the third quarters of fiscal years 2014 and 2013, respectively. As a percentage of revenue, occupancy expenses were 4% for the third quarters of fiscal years 2014 and 2013. Occupancy expenses were $102.3 million for the nine months ended March 31, 2014 compared to $107.1 million for the nine months ended March 31, 2013, a decrease of $4.8 million, or 5%. The decrease in occupancy expenses relates to cost savings from the combination of duplicative office spaces. As a percentage of revenue, occupancy expenses were 4% for the nine months ended March 31, 2014 and 2013.

General and Administrative

General and administrative expenses for the third quarter of fiscal year 2014 were $82.8 million, compared to $76.4 million for the third quarter of fiscal year 2013, an increase of $6.5 million, or 8%. The increase was primarily from additional travel costs, software maintenance costs and marketing expenses. As a percentage of revenue, general and administrative expenses were 9% for the third quarters of fiscal 2014 and 2013.

General and administrative expenses for the nine months ended March 31, 2014 were $236.7 million, compared to $233.2 million for the nine months ended March 31, 2013, an increase of $3.5 million, or 1%. The increase was primarily from additional travel expenses and software maintenance costs. The increases were partially offset by a reduction in our professional liability expense resulting from reduced IBNR due to favorable claims experience. As a percentage of revenue, general and administrative expenses were 9% for the nine months ended March 31, 2014 and 2013.

Depreciation and Amortization

Depreciation and amortization expenses for the third quarter of fiscal year 2014 were $44.3 million, compared to $43.2 million for the third quarter of fiscal year 2013, an increase of $1.1 million, or 3%. Depreciation and amortization expenses for the nine months ended March 31, 2014 were $130.9 million, compared to $131.0 million for the nine months ended March 31, 2013. As a percentage of revenue, depreciation and amortization expenses were 5% for the third quarters of fiscal years 2014 and 2013, and the nine months ended March 31, 2014 and 2013, respectively.

Transaction and Integration

Transaction and integration expenses for the three and nine months ended March 31, 2014 were $0.2 million and $1.0 million, respectively, compared to $12.3 million and $30.8 million for the three and nine months ended March 31, 2013, respectively. These expenses related to our acquisition activities in fiscal year 2014 and to our information technology integration project in fiscal year 2013.

Provision for Income Taxes

Provision for income taxes on continuing operations for the third quarter of fiscal 2014 was $39.2 million, compared to $35.3 million for the third quarter of fiscal year 2013. The effective tax rate was 27.8% for the third quarter of fiscal 2014 and 29.8% for the third quarter of fiscal 2013. The decrease in the effective tax rate for the third quarter of fiscal 2014 was primarily due to an income tax benefit of 1.9% from a valuation allowance release on U.S. net operating losses, as we determined that it was more likely than not that these net operating losses would be realized within the carryforward period.

Provision for income taxes on continuing operations for the nine months ended March 31, 2014 was $96.3 million with an effective tax rate of 25.7%, compared to $99.6 million with an effective tax rate of 31.9% for the nine months ended March 31, 2013. The decrease in the effective tax rate was primarily due to current year income tax benefits on the release of uncertain tax positions of 4.6% related to the lapses in statute of limitations in various taxing jurisdictions, primarily the U.S., and an income tax benefit of 1.0% in connection with the enacted statutory tax rate reduction in the U.K.

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Towers Watson records a tax benefit on net operating loss carryovers and net deferred tax assets only if it is more likely than not that a benefit will be realized.

Income from Discontinued Operations, net of income tax

Income from discontinued operations for the three months ended March 31, 2014 was $3.9 million, compared to income from discontinued operations for the three months ended March 31, 2013 of $11.7 million. Income from discontinued operations for the nine months ended March 31, 2014 was $6.0 million, compared to $20.9 million for the nine months ended March 31, 2013. The operations of our Brokerage business, formerly part of our Risk and Financial Services segment, have been classified as discontinued operations for all periods presented as a result of our Board of Directors committing to a plan of action to sell the business in our first quarter of fiscal year 2014. During our second quarter, we closed on the sale of the business to JLT. Included in income from discontinued operations for the nine months ended March 31, 2014 is a pre-tax gain on the sale of $23.6 million. This gain results from the adjusted consideration of $215.1 million offset by transaction costs of $6.4 million, accelerated stock-based compensation awards of $1.0 million, and $184.0 million removal of the Brokerage net assets, primarily goodwill and intangible assets, not transferred in the deal. The sale of our Brokerage business resulted in a significant taxable gain since the disposal of the goodwill and intangible assets associated with the business is not deductible for tax purposes. The following selected financial information relates to the Brokerage business’s operations for the three and nine months ended March 31, 2014 and 2013:

	Three Months Ended   March 31,					Nine Months Ended   March 31,
	2014			2013		2014			2013
Revenue from discontinued operations	$	—		$	47,990	$	63,762		$	124,227
(Loss)/income from discontinued operations before taxes	(1,037		)	18,321		23,361			32,016
Tax expense on discontinued operations	188			6,621		8,989			11,158
Net (loss)/income from discontinued operations	(1,225		)	11,700		14,372			20,858
Gain from sale of discontinued operations	5,151			—		23,631			—
Tax (credit)/expense on gain from sale of discontinued operations	(13		)	—		32,023			—
Net income/(loss) from sale of discontinued operations	5,164			—		(8,392		)	—
Total net income from discontinued operations	$	3,939		$	11,700	$	5,980		$	20,858

Net Income (attributable to common stockholders)

Net income for the third quarter of fiscal year 2014 was $102.5 million, compared to $94.9 million for the third quarter of fiscal year 2013. Net income for the nine months ended March 31, 2014 was $276.9 million, compared to $235.9 million for the nine months ended March 31, 2013.

Diluted Earnings Per Share (attributable to common stockholders)

Diluted earnings per share for the third quarter of fiscal year 2014 was $1.45, compared to $1.34 for the third quarter of fiscal year 2013. Diluted earnings per share for the nine months ended March 31, 2014 was $3.90, compared to $3.29 for the nine months ended March 31, 2013.

Liquidity and Capital Resources

Our most significant sources of liquidity are funds generated by operating activities, available cash and cash equivalents, and our credit facility. Consistent with our liquidity position, management considers various alternative strategic uses of cash reserves including acquisitions, dividends and stock buybacks, or any combination of these options.

We believe that we have sufficient resources to fund operations beyond the next 12 months. The key variables that we manage in response to current and projected capital resource needs include credit facilities and short-term borrowing arrangements, working capital and our stock repurchase program.

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Our cash and cash equivalents at March 31, 2014 totaled $637.0 million, compared to $532.8 million at June 30, 2013. The increase in cash from June 30, 2013 to March 31, 2014 was primarily due to net cash flows from operations and proceeds from the sale of our Brokerage business, partially offset by the cash paid for the acquisition of Liazon, repurchases of common stock and purchases of long-lived assets.

Our cash and cash equivalents balance included $44.7 million from the consolidated balance sheets of PCIC and SMIC, which is available for payment of professional liability claims reserves. As a result, we had a net $592.3 million of cash that is available for our general use.

Our fiduciary assets totaled $10.7 million at March 31, 2014, which primarily relates to our health and welfare benefits administration outsourcing business. These amounts are held in a fiduciary capacity on behalf of clients and are not available for general use by the Company.

Our non-U.S. operations are substantially self-sufficient for their working capital needs. As of March 31, 2014, $563.8 million of Towers Watson’s total cash and cash equivalents balance of $637.0 million was held outside of the United States. Should we require more capital in the U.S. than is generated by our U.S. operations, we may decide to make additional borrowings under our Senior Credit Facility, repatriate funds held in foreign jurisdictions or raise capital in the U.S. through debt or equity issuances. These alternatives could result in higher effective tax rates or increased interest expense. We do not expect restrictions or taxes on repatriation of cash held outside the U.S. to have a material effect on the Company’s overall liquidity, financial condition or results of operations.

We continue to assert that the historical cumulative earnings of our foreign subsidiaries are reinvested indefinitely and we do not provide U.S. deferred tax liabilities on these amounts. We believe the Company’s current cash position, and access to capital markets (via a supplemental offering, if needed) will allow it to meet its U.S. cash obligations without repatriating historical cumulative foreign earnings. Further, non-U.S. cash is used for working capital needs of our non-U.S. operations and may be used for foreign restructuring expenses or acquisitions. It is not practicable to estimate the U.S. federal income tax liability that might be payable if such earnings are not reinvested indefinitely. If future events, including material changes in estimates of cash, working capital and long-term investment requirements, necessitate that these earnings be distributed, an additional provision for U.S. income and foreign withholding taxes, net of foreign tax credits, may be necessary.

Assets and liabilities associated with non-U.S. entities have been translated into U.S. dollars as of March 31, 2014 at U.S. dollar rates that fluctuate compared to historical periods. As a result, cash flows derived from changes in the condensed consolidated balance sheets include the impact of the change in foreign exchange translation rates.

Events that could change the historical cash flow dynamics discussed above include significant changes in operating results, potential future acquisitions or divestitures, material changes in geographic sources of cash, unexpected adverse impacts from litigation or future pension funding during periods of severe downturn in the capital markets.

Cash Flows From Operating Activities.

Cash flows from operating activities were $222.8 million for the nine months ended March 31, 2014, compared to cash flows from operating activities of $286.5 million for the nine months ended March 31, 2013. This decrease was primarily the result of the absence of our Brokerage business for a portion of fiscal year 2014 and a larger payout of employee bonus during our first quarter of fiscal year 2014 compared to fiscal year 2013. These decreases are partially offset by increased cash collections from client receivables.

The allowance for doubtful accounts decreased $2.2 million from June 30, 2013 to March 31, 2014. The number of days of sales outstanding decreased to 77 days at March 31, 2014, compared to 83 days at June 30, 2013, which excludes the impact of our Brokerage business.

Cash Flows Used In Investing Activities.

Cash flows used in investing activities for the nine months ended March 31, 2014 were $157.5 million, compared to $91.1 million of cash flows used in investing activities for the nine months ended March 31, 2013. The increase in cash flows used in investing activities was primarily due to discrete events that occurred during fiscal year 2014, specifically the cash outflows from the acquisition of Liazon and the purchase of $109.5 million of investments by funds that we manage which were previously consolidated (this is offset by an equal amount of cash inflows from financing activities). These cash outflows were partially offset by the cash proceeds from the sale of our Brokerage business.

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Cash Flows From/ (Used In) Financing Activities.

Cash flows from financing activities for the nine months ended March 31, 2014 were $27.2 million, compared to cash flows used in financing activities of $187.6 million for the nine months ended March 31, 2013. The increase in cash from financing activities was primarily due to cash subscriptions of $109.5 million into funds that we manage which were previously consolidated (this is offset by an equal amount of cash outflows from investing activities), which does not have a comparable amount in fiscal year 2013, as well as lower net repayments of borrowings during the nine months ended March 31, 2014 as compared to the nine months ended March 31, 2013.

During the nine months ended March 31, 2014, the average outstanding balance on our Senior Credit Facility was $12.3 million and the largest outstanding balance was $57.5 million.

Capital Commitments

Capital expenditures were $50.8 million for the first nine months of fiscal year 2014. Anticipated commitments of capital funds are estimated to be around $35 million to $40 million for the remainder of fiscal year 2014. We expect cash from operations to adequately provide for these cash needs.

Dividends

During the three months ended March 31, 2014, our board of directors approved the payment of a quarterly cash dividend in the amount of $0.14 per share, which was paid in April 2014. Total dividends paid in the nine months ended March 31, 2014 and 2013 were $11.2 million and $48.1 million, respectively. The amount paid for the nine months ended March 31, 2014 includes $1.2 million of dividends paid by our consolidated, majority-owned subsidiary, Fifth Quadrant, to its third-party shareholders.

Off-Balance Sheet Arrangements and Contractual Obligations

Operating Leases. We lease office space, furniture, cars and selected computer equipment under operating lease agreements with terms typically ranging from one to ten years. We have determined that there is not a large concentration of leases that will expire in any one fiscal year. Consequently, management anticipates that any increase in future rent expense on leases will be mainly market driven. Intangible assets and liabilities were recognized for the difference between the contractual cash obligations and the estimated market rates at the time of the acquisitions. The resulting intangibles amortize to rent expense but do not impact our contractual cash obligations.

Pension Contributions. Remaining contributions to our various pension plans for fiscal year 2014 are projected to be approximately $19.7 million.

Uncertain Tax Positions. We have liabilities for uncertain tax positions under ASC 740, Income Taxes. The expected settlement period for the $21.9 million liability, which excludes interest and penalties, cannot be reasonably estimated because it depends on the timing and possible outcomes of tax examinations with various tax authorities.

It is reasonably possible that during the next 12 months the Company’s liability for uncertain tax positions may change by a significant amount. The Company may settle certain tax examinations or have lapses in statute of limitations for different

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amounts than the Company has accrued. The Company may need to accrue and ultimately pay additional amounts for tax positions that previously met a more likely than not standard if such positions are not upheld. Conversely, the Company could settle positions with the tax authorities for amounts lower than have been accrued or extinguish a position through payment. The Company believes the outcomes which are reasonably possible within the next 12 months may result in a reduction in the liability for uncertain tax positions in the range of approximately $5.0 million to $11.8 million, excluding interest and penalties.

Indebtedness

Towers Watson Senior Credit Facility

On November 7, 2011, Towers Watson and certain subsidiaries entered into a five-year, $500 million revolving credit facility, which amount may be increased by an aggregate amount of $250 million, subject to the satisfaction of customary terms and conditions, with a syndicate of banks (the “Senior Credit Facility”). Borrowings under the Senior Credit Facility bear interest at a spread to either LIBOR or the Prime Rate. During the nine months ended March 31, 2014 and 2013, the weighted-average interest rate on borrowings under the Senior Credit Facility was 1.93% and 1.49%, respectively. We are charged a quarterly commitment fee, currently 0.175% of the Senior Credit Facility, which varies with our financial leverage and is paid on the unused portion of the Senior Credit Facility. Obligations under the Senior Credit Facility are guaranteed by Towers Watson and all of its domestic subsidiaries (other than Professional Consultants Insurance Company (“PCIC”), a majority-owned captive insurance company, and Stone Mountain Insurance Company (“SMIC”), a wholly-owned captive insurance company).

The Senior Credit Facility contains customary representations and warranties and affirmative and negative covenants. The Senior Credit Facility requires Towers Watson to maintain certain financial covenants that include a minimum Consolidated Interest Coverage Ratio and a maximum Consolidated Leverage Ratio (which terms in each case are defined in the Senior Credit Facility). In addition, the Senior Credit Facility contains restrictions on the ability of Towers Watson to, among other things, incur additional indebtedness; pay dividends; make distributions; create liens on assets; make acquisitions; dispose of property; engage in sale-leaseback transactions; engage in mergers or consolidations, liquidations and dissolutions; engage in certain transactions with affiliates; and make changes in lines of businesses. As of March 31, 2014, we were in compliance with our covenants.

As of March 31, 2014, Towers Watson had no borrowings outstanding under the Senior Credit Facility.

Letters of Credit under the Senior Credit Facility

As of March 31, 2014, Towers Watson had standby letters of credit totaling $21.4 million associated with our captive insurance companies in the event that we fail to meet our financial obligations. Additionally, Towers Watson had $1.4 million of standby letters of credit covering various other existing or potential business obligations. The aforementioned letters of credit are issued under the Senior Credit Facility, and therefore reduce the amount that can be borrowed under the Senior Credit Facility by the outstanding amount of these standby letters of credit.

Term Loan Agreement Due June 2017

On June 1, 2012, the Company entered into a five-year $250 million amortizing term loan facility (“the Term Loan”) with a consortium of banks. The interest rate on the term loan is based on the Company’s choice of one, three or six month LIBOR plus a spread of 1.25% to 1.75%, or alternatively the bank base rate plus 0.25% to 0.75%. The spread to each index is dependent on the Company’s consolidated leverage ratio. The weighted-average interest rate on the Term Loan during the nine months ended March 31, 2014 and 2013 was 1.42% and 1.47%, respectively. The Term Loan amortizes at a rate of $6.25 million per quarter, beginning in September 2013, with a final maturity date of June 1, 2017. The Company has the right to prepay a portion or all of the outstanding Term Loan balance on any interest payment date without penalty. At March 31, 2014, the balance on the Term Loan was $231.3 million.

This agreement contains substantially the same terms and conditions as our Senior Credit Facility, including guarantees from all of the domestic subsidiaries of Towers Watson (other than PCIC and SMIC). The Company entered into the Term Loan as part of the financing of our acquisition of Extend Health on May 29, 2012.

Non-U.S. GAAP Measures

In order to assist readers of our financial statements in understanding the core operating results that the Company’s management uses to evaluate the business and for financial planning, we present (1) Adjusted EBITDA, (2) Adjusted income

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from continuing operations (attributable to common stockholders), and (3) Adjusted Diluted Earnings Per Share from continuing operations (which are all non-U.S. GAAP measures), to eliminate the effect of acquisition-related expenses from the financial results of our operations. We use Adjusted income from continuing operations (attributable to common stockholders), the numerator, for the purpose of calculating Adjusted Diluted Earnings Per Share from continuing operations. The Company believes that Adjusted EBITDA and Adjusted Diluted Earnings Per Share from continuing operations are relevant and useful information widely used by analysts, investors and other interested parties in our industry to provide a baseline for evaluating and comparing our operating results.

Since the Merger in January 2010, we have incurred significant acquisition-related expenses related to our merger and integration activities necessary to combine Watson Wyatt and Towers Perrin. These acquisition-related expenses include transaction and integration costs, severance costs, non-cash charges for amortization of intangible assets and merger-related stock-based compensation costs from the issuance of merger-related restricted shares. Included in our acquisition-related transaction and integration costs are integration consultant fees and legal, accounting, marketing and information technology integration expenses. We consider Adjusted EBITDA and Adjusted Diluted Earnings Per Share from continuing operations to be important financial measures, which we use to internally evaluate and assess our core operations, and benchmark our operating results against our competitors. We use Adjusted EBITDA to evaluate and measure our performance-based compensation plans. Adjusted EBITDA and Adjusted Diluted Earnings Per Share from continuing operations are important in illustrating what our operating results would have been had we not incurred these acquisition-related expenses.

The Company’s non-U.S. GAAP measures and their accompanying definitions are presented as follows:

• Adjusted EBITDA - net income (attributable to common stockholders) adjusted for discontinued operations, net of tax, provision for income taxes, interest, net, depreciation and amortization, transaction and integration expenses, stock-based compensation, and other non-operating income excluding income from variable interest entity.

• Adjusted income from continuing operations (attributable to common stockholders) - net income (attributable to common stockholders) adjusted for discontinued operations, net of tax, and adjusted for certain tax-effected merger and acquisition related items of transaction and integration expenses, non-cash stock-based compensation, and amortization of intangible assets.

• Adjusted diluted earnings per share from continuing operations - diluted earnings per share from continuing operations adjusted for discontinued operations, net of tax, and adjusted for certain tax-effected merger and acquisition related items of transaction and integration expenses, non-cash stock-based compensation, and amortization of intangible assets.

These non-U.S. GAAP measures are not defined in the same manner by all companies and may not be comparable to other similarly titled measures of other companies. Non-U.S. GAAP measures should be considered in addition to, and not as a substitute for, the information contained within our financial statements.

Reconciliation of Adjusted EBITDA to net income (attributable to common stockholders), Adjusted income from continuing operations to net income (attributable to common stockholders) and Adjusted Diluted Earnings Per Share from continuing operations to diluted earnings per share from continuing operations are included in the tables below.

	Three Months Ended   March 31,
	2014			2013
	(in thousands)
NET INCOME (attributable to common stockholders)	$	102,506		$	94,916
Less: Income from discontinued operations, net of tax	3,939			11,700
Income from continuing operations (attributable to common stockholders)	98,567			83,216
Provision for income taxes	39,231			35,254
Interest, net	1,332			2,870
Depreciation and amortization	44,250			43,166
Other non-operating income (a)	(1,104		)	(12		)
Transaction and integration expenses	241			12,328
Stock-based compensation (b)	—			(4,236		)
Adjusted EBITDA	$	182,517		$	172,586

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	Nine Months Ended   March 31,
	2014			2013
	(in thousands)
NET INCOME (attributable to common stockholders)	$	276,908		$	235,933
Less: Income from discontinued operations, net of tax	5,980			20,858
Income from continuing operations (attributable to common stockholders)	270,928			215,075
Provision for income taxes	96,322			99,649
Interest, net	4,706			7,925
Depreciation and amortization	130,931			130,970
Other non-operating income (a)	(3,446		)	(5,004		)
Transaction and integration expenses	1,049			30,753
Stock-based compensation (b)	—			7,684
Adjusted EBITDA	$	500,490		487,052

_________________________

(a) Other non-operating income includes income from affiliates and other non-operating income excluding income from variable interest entity of $2.9 million for the three months ended March 31, 2014 and $6.3 million for the nine months endedMarch 31, 2014.

(b) Stock-based compensation is included in salary and employee benefits expense and relates to Towers Watson Restricted Class A shares held by our current associates which were awarded to them in connection with the Merger and other acquisitions.

	Three Months Ended   March 31,
	2014		2013
	(In thousands, except share and per share amounts)
NET INCOME (attributable to common stockholders)	$	102,506	$	94,916
Less: Income from discontinued operations, net of tax	3,939		11,700
Income from continuing operations (attributable to common stockholders)	98,567		83,216
Adjusted for certain acquisition related items (c):
Amortization of intangible assets	13,993		13,311
Transaction and integration expenses including severance	174		8,657
Stock-based compensation (d)	—		(2,975		)
Adjusted Income from continuing operations	$	112,734	$	102,209
Weighted average shares of common stock — diluted (000)	70,884		71,076
Diluted earnings per share, as reported from continuing operations	$	1.39	$	1.17
Adjusted for certain acquisition related items:
Amortization of intangible assets	0.20		0.19
Transaction and integration expenses including severance	—		0.12
Stock-based compensation	—		(0.04		)
Adjusted diluted earnings per share from continuing operations	$	1.59	$	1.44

42

	Nine Months Ended   March 31,
	2014		2013
	(In thousands, except share and per share amounts)
NET INCOME (attributable to common stockholders)	$	276,908	$	235,933
Less: Income from discontinued operations, net of tax	5,980		20,858
Income from continuing operations (attributable to common stockholders)	270,928		215,075
Adjusted for certain acquisition related items (c):
Amortization of intangible assets	42,834		39,093
Transaction and integration expenses including severance	724		20,885
Stock-based compensation (d)	—		4,921
Adjusted Income from continuing operations	$	314,486	$	279,974
Weighted average shares of common stock — diluted (000)	71,047		71,639
Diluted earnings per share, as reported from continuing operations	$	3.81	$	3.00
Adjusted for certain acquisition related items:
Amortization of intangible assets	0.60		0.55
Transaction and integration expenses including severance	0.01		0.29
Stock-based compensation	—		0.07
Adjusted diluted earnings per share from continuing operations	$	4.42	$	3.91

________________________

(c) The adjustments to net income (attributable to common stockholders) and diluted earnings per share of certain acquisition related items are net of tax. In calculating the net of tax amounts, all adjustments were tax effected at the applicable effective tax rate (ETR) for the period. The ETR was 27.8% and 29.8% for the three months ended March 31, 2014 and 2013, respectively, and 25.7% and 31.9% for the nine months ended March 31, 2014 and 2013, respectively.

(d) Stock-based compensation relates to Towers Watson Restricted Class A shares held by our current associates which were awarded to them in connection with the Merger and other acquisitions.

Risk Management

As a part of our risk management program, we purchase customary commercial insurance policies, including commercial general liability and claims-made professional liability insurance. Our professional liability insurance currently includes a self-insured retention of $1 million per claim, together with a self-insured retention of $10 million aggregate, above the $1 million self-insured retention, and covers professional liability claims against us, including the cost of defending such claims.

For the policy period beginning July 1, 2011 certain changes were made to our professional liability insurance program. These changes remain in-force for the annual policy periods beginning July 1, 2011 and ending July 1, 2014. Our professional liability insurance includes a self-insured retention of $1 million per claim. Towers Watson also retains a $10 million aggregate self-insured retention above the $1 million self-insured retention per claim, including the cost of defending such claims. Stone Mountain Insurance Company (“SMIC”) provides us with $40 million of coverage per claim and in the aggregate, above these retentions, including the cost of defending such claims. SMIC secured $25 million of reinsurance from unaffiliated reinsurance companies in excess of the $15 million SMIC retained layer. Excess insurance attaching above the SMIC coverage is provided by various unaffiliated commercial insurance companies. Because of the $1 million self-insured retention per claim and the additional $10 million aggregate self-insured retention above, and because Stone Mountain is wholly-owned by us, our primary errors and omissions risk is borne by Towers Watson and the subsidiary SMIC. We reserve for contingent liabilities based on ASC 450, Contingencies, when it is determined that a liability, inclusive of defense costs, is probable and reasonably estimable. The contingent liabilities recorded are primarily developed actuarially.

Before the Merger, Watson Wyatt and Towers Perrin each obtained substantial professional liability insurance from an affiliated captive insurance company, Professional Consultants Insurance Company (“PCIC”). A limit of $50 million per claim and in the aggregate was provided by PCIC subject to a $1 million per claim self-insured retention. PCIC secured reinsurance of $25 million attaching above the $25 million PCIC retained layer. In addition, both legacy companies carried excess insurance from unaffiliated commercial insurance companies above the self-insured retention and the coverage provided by PCIC.

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Our ownership interest in PCIC is 72.86%. As a consequence, PCIC’s results of operations are consolidated into our results of operations. PCIC ceased issuing insurance policies effective July 1, 2010 and at that time entered into a run-off mode of operation. Our shareholder agreements with PCIC could require additional payments to PCIC if development of claims significantly exceeds prior expectations.

We provide for the self-insured retention where specific estimated losses and loss expenses for known claims are considered probable and reasonably estimable. Although we maintain professional liability insurance coverage, this insurance does not cover claims made after expiration of our current policies of insurance. Generally accepted accounting principles require that we record a liability for incurred but not reported (“IBNR”) professional liability claims if they are probable and reasonably estimable, and for which we have not yet contracted for insurance coverage. We use actuarial assumptions to estimate and record our IBNR liability. As of March 31, 2014, we had a $182.3 million IBNR liability balance, net of recoverable receivables of our captive insurance companies. This net liability was $184.1 million as of June 30, 2013. To the extent our captive insurance companies, PCIC and SMIC, expect losses to be covered by a third party, they record a receivable for the amount expected to be recovered. This receivable is classified in other current or other noncurrent assets in our condensed consolidated balance sheet.

Insurance market conditions for us and our industry have varied in recent years, but the long-term trend has been increasing premium cost. Although the market for professional liability insurance is presently reasonably accessible, trends toward higher self-insured retentions, constraints on aggregate excess coverage for this class of professional liability risk and financial difficulties which have, over the past few years, been faced by several longstanding E&O carriers, are anticipated to recur periodically, and to be reflected in our future annual insurance renewals. As a result, we will continue to assess our ability to secure future insurance coverage, and we cannot assure that such coverage will continue to be available in the event of adverse claims experience, adverse loss trends, market capacity constraints or other factors.

In light of increasing litigation worldwide, including litigation against professionals, we have a policy that all client relationships be documented by engagement letters containing specific risk mitigation clauses that were not included in all historical client agreements. Certain contractual provisions designed to mitigate risk may not be legally enforceable in litigation involving breaches of fiduciary duty or certain other alleged errors or omissions, or in certain jurisdictions. We may incur significant legal expenses in defending against litigation.

Disclaimer Regarding Forward-looking Statements

This filing contains a number of “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including, but not limited to the following: following: Note 4 — Goodwill and Intangible Assets; Note 7 — Retirement Benefits; Note 8 — Debt, Commitments and Contingent Liabilities; Note 11 — Restricted Stock; Note 13 — Income Taxes; Management’s Discussion and Analysis of Financial Condition and Results of Operations — Executive Overview; — Critical Accounting Policies and Estimates; the discussion of our capital expenditures; — Off-Balance Sheet Arrangements and Contractual Obligations; — Liquidity and Capital Resources; — Risk Management; and Part II, Item 1 “Legal Proceedings”. You can identify these statements and other forward-looking statements in this filing by words such as “may”, “will”, “expect”, “anticipate”, “believe”, “estimate”, “plan”, “intend”, “continue”, or similar words, expressions or the negative of such terms or other comparable terminology. You should read these statements carefully because they contain projections of our future results of operations or financial condition, or state other “forward-looking” information. A number of risks and uncertainties exist which could cause actual results to differ materially from the results reflected in these forward-looking statements. Such factors include but are not limited to:

• general economic and business conditions, including a significant or prolonged economic downturn, that adversely affect us or our clients;

• our ability to protect client data and our information systems;

• our continued ability to recruit and retain qualified associates;

• the success of our marketing, client development and sales programs after our acquisitions;

• our ability to maintain client relationships and to attract new clients after our acquisitions;

• a significant decrease in the demand for the consulting, actuarial and other services we offer as a result of changing economic conditions or other factors;

• our ability to reduce our effective tax rate through the restructuring of certain foreign operations of Towers Perrin;

• our ability to make suitable acquisitions and divestitures;

44

• our ability to integrate acquired businesses into our own business, processes and systems, and achieve the anticipated results;

• the acquisitions of Extend Health and Liazon Corporation are not profitable or are not otherwise successfully integrated;

• foreign currency exchange and interest rate fluctuations;

• recent SEC rules concerning compensation consultant independence and disclosure of compensation consultant fees, and the potential impact of losses of clients and associates;

• outcomes of pending or future litigation and the availability and capacity of professional liability insurance to fund the outcome of pending cases or future judgments or settlements;

• our ability to obtain professional liability insurance;

• actions by competitors, including public accounting and consulting firms, technology consulting firms, insurance consulting firms and Internet/intranet development firms;

• our ability to achieve cost reductions after acquisitions;

• exposure to liabilities that have not been expressly assumed in our acquisition transactions;

• potential changes in federal and state health care regulations or future interpretation of existing regulations;

• our Exchange Solutions or One Exchange businesses fail to maintain good relationships with insurance carriers, become dependent upon a limited number of insurance carriers or fail to develop new insurance carrier relationships;

• changes and developments in the health insurance system in the United States;

• our ability to respond to rapid technological changes;

• the level of capital resources required for future acquisitions and business opportunities;

• regulatory developments abroad and domestically that impact our business practice;

• legislative and technological developments that may affect the demand for or costs of our services;

and other factors as discussed under “Risk Factors” in our most recent Annual Report on Form 10-K filed with the SEC, as supplemented in our Quarterly Reports on Form 10-Q. These statements are based on assumptions that may not come true. All forward-looking disclosure is speculative by its nature. The Company undertakes no obligation to update any of the forward-looking information included in this report, whether as a result of new information, future events, changed expectations or otherwise.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

We are exposed to market risks in the ordinary course of business. These risks include interest rate risk, foreign currency exchange and translation risk.

Interest Rate Risk

We are primarily exposed to changes in short-term interest rates globally with respect to the return on our cash and short-term investments, and in the United States with respect to our cost of borrowing under our term loan and revolving credit facility.

Because of our desire for flexibility with respect to our investment balances, and our primary objective of preservation of principal, we primarily invest our portfolios in short-term securities that are recorded on the balance sheet at fair value.

We monitor our cost of borrowing under our various facilities, taking into account the seasonal nature of our funding requirements, and our expectation for short-term rates in the future.

We have material pension obligations that are impacted by interest rates. In recent years, the declining interest rate environment has resulted in lower discount rates, one of the main assumptions used in valuing a pension plan. As discount rates are determined by corporate bond yields, significant changes in the bond market can adversely affect our discount rate, which in turn increases our pension liabilities.

45

Foreign Currency Risk

We consolidate our international subsidiaries by converting them into U.S. dollars in accordance with generally accepted accounting principles of foreign currency translation. The results of operations and our financial position will fluctuate when there is a change in foreign currency exchange rates.

For the nine months ended March 31, 2014, 47% of our revenue was denominated in currencies other than the U.S. dollar, typically in the local currency of our foreign operations. These operations also incur most of their expenses in the local currency. Accordingly, our foreign operations use the local currency as their functional currency and our primary international operations use the British pound sterling, Canadian dollar and the Euro. Our international operations are subject to risks typical of international operations, including, but not limited to, differing economic conditions, changes in political climate, differing tax structures, other regulations and restrictions, and foreign exchange rate volatility. Accordingly, our future results could be adversely impacted by changes in these or other factors. As of March 31, 2014, a uniform 10% strengthening in the value of the U.S. dollar relative to the currencies in which our transactions are denominated would have resulted in a decrease in net income (attributable to common stockholders) of $21.2 million, or 8%, for the nine months ended March 31, 2014. This theoretical calculation assumes that each exchange rate would change in the same direction relative to the U.S. dollar. This calculation is not indicative of our actual experience in foreign currency transactions.

Translation Exposure

Foreign exchange rate fluctuations may adversely impact our condensed consolidated financial position as well as our condensed consolidated results of operations and may adversely impact our financial position as the assets and liabilities of our foreign operations are translated into U.S. dollars in preparing our condensed consolidated balance sheet. Additionally, foreign exchange rate fluctuations may adversely impact our condensed consolidated results of operations as exchange rate fluctuations on transactions denominated in currencies other than our functional currencies result in gains and losses that are reflected in our condensed consolidated statements of operations. Certain of Towers Watson’s foreign subsidiaries, primarily in the United Kingdom, receive revenue in currencies that differ from their functional currencies. To reduce this variability, Towers Watson uses foreign exchange forward contracts and has the ability to use over-the-counter options to hedge the foreign exchange risk of the forecasted collections. See Note 6, Derivative Financial Instruments in the notes to the consolidated financial statements contained in this Form 10-Q for a further discussion of our foreign currency forwards and their fair market value.

We consolidate our international subsidiaries by converting them into U.S. dollars in accordance with generally acceptable accounting principles of foreign currency translation. The results of operations and our financial position will fluctuate when there is a change in foreign currency exchange rates.

ITEM 4. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

An evaluation was performed under the supervision and with the participation of our management, including the chief executive officer, or CEO, and chief financial officer, or CFO, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on that evaluation, our management, including the CEO and CFO, concluded that our disclosure controls and procedures were effective as of March 31, 2014.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the fiscal quarter covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Limitations on the Effectiveness of Controls

Management, including the CEO and CFO, does not expect that our disclosure controls and procedures will necessarily prevent all error and all fraud. However, management does expect that the control system provides reasonable assurance that its objectives will be met. A control system, no matter how well designed and operated, cannot provide absolute assurance that the control system’s objectives will be met. In addition, the design of such internal controls must take into account the costs of designing and maintaining such a control system. Certain inherent limitations exist in control systems to make absolute assurances difficult, including the realities that judgments in decision-making can be faulty, that breakdowns can occur because of a simple error or mistake, and that individuals can circumvent controls. The design of any control system is based in part

46

upon existing business conditions and risk assessments. There can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in business conditions or deterioration in the degree of compliance with policies or procedures. As a result, they may require change or revision. Because of the inherent limitations in a control system, misstatements due to error or fraud may occur and may not be detected. Nevertheless, the disclosure controls and procedures are designed to provide reasonable assurance of achieving their stated objectives, and the CEO and CFO have concluded that the disclosure controls and procedures are effective at a reasonable assurance level.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

From time to time, we are a party to various lawsuits, arbitrations or mediations that arise in the ordinary course of business. The disclosure called for by Part II, Item 1, regarding our legal proceedings is incorporated by reference herein from Note 8Debt, Commitments and Contingent Liabilities, of the Notes to the Condensed Consolidated Financial Statements in this Form 10-Q for the quarter ended March 31, 2014.

ITEM 1A. RISK FACTORS.

There are no material changes from risk factors as previously disclosed in our 2013 Annual Report on Form 10-K, filed on August 15, 2013, as supplemented in our Quarterly Report on Form 10-Q filed on February 7, 2014. We urge you to read the risk factors contained in such Reports.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

(c) Issuer Purchases of Equity Securities

The Towers Watson Board has authorized the Company to periodically repurchase shares of common stock under two distinct sets of authority.

The purpose of the first authority is to offset the dilutive effect of issuance of shares under the Company’s equity based compensation plans (“Dilution”). During the third quarter of fiscal year 2010, our Board of Directors approved the repurchase of up to 750,000 shares of our Class A Common Stock to offset Dilution. During the first quarter of fiscal 2012, the Board of Directors approved the repurchase of an additional 1,000,000 shares of Class A Common Stock to offset Dilution. As of March 31, 2014, 427,189 shares remained available for repurchase under this authority.

The purpose of the second authority is to purchase shares of the Company’s Class A Common Stock outside of the anti-dilutive authorization. During the second quarter of fiscal year 2011, the Company’s Board of Directors approved the repurchase of up to $100 million of the Company’s Class A Common Stock. During the third quarter of fiscal 2012, the $100 million general repurchase authorization was exhausted, and the Board of Directors approved the repurchase of an additional $150 million of the Company’s Class A Common Stock. As of March 31, 2014, $88.8 million remained available for repurchase of shares under this authority.

There are no expiration dates for any of these repurchase plans or programs. The table below presents specified information about the Company’s Class A Common Stock repurchases in the third quarter of fiscal year 2014 and the Company’s repurchase plans.

Period	Total Number of Shares Purchased (a)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (b)
January 1, 2014 through January 31, 2014	115,800	$	126.65	115,800	1,377,686
February 1, 2014 through February 28, 2014	81,700	111.61		81,700	1,295,986
March 1, 2014 through March 31, 2014	90,300	112.77		90,300	1,205,686
	287,800	118.02		287,800	1,205,686

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(a) Of the shares of Class A Common Stock repurchased in the third quarter of fiscal year 2014, 18,100 shares were repurchased under the anti-dilution plan approved by the Board of Directors. The remaining 269,700 shares were repurchased under the $150 million authority approved by the Board of Directors.

(b) The maximum number of shares that may yet be purchased under our two stock repurchase plans is 1,205,686. An estimate of the maximum number of shares under the repurchase of up to $150 million was determined using the closing price of our stock on March 31, 2014 of $114.05.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. MINE SAFETY DISCLOSURES.

Not applicable.

ITEM 5. OTHER INFORMATION.

None.

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ITEM 6. EXHIBITS.

EXHIBIT INDEX

Exhibit Number	Description of Exhibit
10.1	Towers Watson Non-Qualified Deferred Savings Plan for U.S. Employees* **
31.1	Certification of the Registrant’s Chief Executive Officer, John J. Haley, pursuant to Rule 13a-14 of the Securities Exchange Act of 1934.*
31.2	Certification of the Registrant’s Chief Financial Officer, Roger F. Millay, pursuant to Rule 13a-14 of the Securities Exchange Act of 1934.*
32.1	Certification of the Registrant’s Chief Executive Officer, John J. Haley, and Chief Financial Officer, Roger F. Millay, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
101	The following materials from Towers Watson & Co.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2014, formatted in XBRL (eXtensible Business Reporting Language); (i) Condensed Consolidated Statements of Operations for the three and nine months ended March 31, 2014 and 2013, (ii) Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended March 31, 2014 and 2013,(iii) Condensed Consolidated Balance Sheets at March 31, 2014 and June 30, 2013, (iv) Condensed Consolidated Statements of Cash Flows for the nine months ended March 31, 2014 and 2013, (v) Condensed Consolidated Statements of Changes in Stockholders’ Equity for the nine months ended March 31, 2013 and 2014, and (vi) Notes to Condensed Consolidated Financial Statements*.

_________________________

*    Filed or furnished herewith.

**    Designates management contracts and compensation plans.

49

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Towers Watson & Co.
(Registrant)
/s/ John J. Haley		May 6, 2014
Name:	John J. Haley	Date
Title:	Chief Executive Officer
/s/ Roger F. Millay		May 6, 2014
Name:	Roger F. Millay	Date
Title:	Chief Financial Officer
/s/ Michael M. Thomson		May 6, 2014
Name:	Michael M. Thomson	Date
Title:	Controller (Chief Accounting Officer)

50

EX-10.1

Exhibit 10.1

Towers Watson Non-Qualified Deferred Savings Plan for U.S. Employees

1.Establishment of Plan. The Company hereby adopts and establishes an unfunded deferred compensation plan for a select group of key management or highly compensated employees of the Company, which shall be known as the Towers Watson Non-Qualified Deferred Savings Plan for U.S. Employees.

2.Purpose of Plan. The purpose of the Plan is to provide a select group of management or highly compensated employees (within the meaning of Sections 201(2), 301(a)(3), and 401(a)(1) of ERISA) of the Company who contribute significantly to the future business success of the Company with “top-hat” supplemental and deferred compensation benefits through the deferral of Eligible Compensation and through additional discretionary Company Matching Contributions.

3.Definitions.

3.1“Acceleration Events” has the meaning set forth in Section 10 hereof.

3.2“Account” means a hypothetical bookkeeping account(s) established in the name of each Participant and maintained by the Company to reflect the Participant’s interests under the Plan.

3.3“Affiliate” means any corporation, trade, or business which is treated as a single employer with the Company under Sections 414(b) or 414(c) of the Code and any other entity designated by the Committee as an “Affiliate” for purposes of the Plan.

3.4“Base Salary” means the annual rate of base pay paid by the Company to or for the benefit of the Participant for services rendered, including, as applicable, commissions, overtime, bonuses paid to a Participant who passes an actuarial exam, and bonuses paid in lieu of a raise, provided that such amounts are paid on substantially the same terms as base pay.

3.5“Beneficiary” means any person or entity, designated in accordance with Section 14.6, entitled to receive benefits that are payable upon or after a Participant’s death pursuant to the terms of the Plan.

3.6“Board” means the Board of Directors of the Company, as constituted from time to time.

3.7“Bonus Compensation” means compensation earned by a Participant for services rendered by a Participant under any bonus or cash incentive plan maintained by the Company relating to a service period of one year or less, which would be included as compensation under the Savings Plan without regard to the limit under Section 401(a)(17) of the Code.

3.8“Claimant” has the meaning set forth in Section 15.1.

Towers Watson Deferred Savings Plan    1     November 2013

3.9“Code” means the U.S. Internal Revenue Code of 1986, as amended, or any successor statute, and the Treasury Regulations and other authoritative guidance issued thereunder.

3.10“Committee” means the committee of members of the Board of Towers Watson & Co. that administers the LTIP, provided that with respect to the participation of any employee who is not an executive officer (as defined under Rule 3b-7 of the Securities Exchange Act of 1934, as amended) of Towers Watson & Co., “Committee” shall in addition mean the Chief Executive Officer of Towers Watson & Co., who shall have such authority with respect to any or all of the shares of Company Stock issuable under the LTIP. With respect to matters not required by either Section 157 of the Delaware General Corporate Law or by the corporate governance standards of the New York Stock Exchange and NASDAQ to be determined by the committee of members of the Board of Towers Watson & Co. that administers the LTIP, the Committee hereby delegates its authority to the Towers Watson U.S. Benefit Plans Administration Committee, which will serve as plan administrator and have all the authority of the Committee with respect to such matters.

3.11“Company” means Towers Watson Pennsylvania Inc., a Pennsylvania corporation, or any successor thereto and any Affiliate designated by the Committee as a sponsor of the Plan.

3.12“Company Stock” means the Class A common stock of Towers Watson & Co., which is traded on the New York Stock Exchange and NASDAQ.

3.13“Deferral Election” means an election by an Eligible Employee to defer Eligible Compensation. Any election shall be irrevocable and, except as otherwise provided by the Committee, shall carry over from Plan Year to Plan Year unless changed or revoked during the applicable Election Period.

3.14“Disability” means that the Participant is determined to be disabled in accordance with the Company’s long-term disability plan.

3.15“Dividend Equivalent Rights,” or “DERs,” shall have the meaning set forth in the LTIP.

3.16“Effective Date” means January 1, 2014

3.17“Election Notice” means the notice or notices established from time to time by the Committee for making Deferral Elections under the Plan. The Election Notice includes the amount or percentage of Eligible Compensation to be deferred (subject to any minimum or maximum amounts established by the Committee). Each Election Notice shall become irrevocable as of the last day of the Election Period.

3.18“Election Period” means the period established by the Committee with respect to each Plan Year during which Deferral Elections for such Plan Year must be made in accordance with the requirements of Section 409A of the Code, as follows: 

Towers Watson Deferred Savings Plan    2     November 2013

(a)General Rule. Except as provided in (b) below, the Election Period shall end no later than the last day of the Plan Year immediately preceding the Plan Year in which the services will be rendered to which the Eligible Compensation subject to the Deferral Election relates.

(b)Performance-based Compensation. If any Bonus Compensation constitutes “performance-based compensation” within the meaning of Treas. Reg. Section 1.409A-1(e), then the Election Period for such amounts shall end no later than six months before the end of the performance period for which the Bonus Compensation is earned (and in no event later than the date on which the amount of the Bonus Compensation becomes readily ascertainable). For the avoidance of doubt, an Employee must be employed by the Company as an Eligible Employee and must have established performance goals in writing, in each case by September 28 of the applicable performance period beginning on July 1, in order to make an election to defer “performance-based compensation” under this subsection (b).

3.19“Elective Deferrals” means deferrals at the election of an Eligible Employee of Eligible Compensation.

3.20“Elective Deferral Account” means a separate account maintained for each Participant to record the Elective Deferrals made to the Plan pursuant to Section 5 and all earnings and losses allocable thereto.

3.21“Eligible Compensation” means the amount of an Eligible Employee’s Base Salary plus Bonus Compensation that exceeds the limit under Section 401(a)(17) of the Code for the applicable Plan Year.

3.22“Eligible Employee” means, unless determined otherwise by the Company in its discretion, an Employee who (a) is an associate at or above Level 50 as determined by the Company and (b) has Eligible Compensation for the applicable Plan Year. Participation in the Plan is limited to a select group of the Company’s key management or highly compensated employees.

3.23“Employee” means a U.S. employee of the Company or any Affiliate who is eligible to participate in the Savings Plan.

3.24“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time.

3.25“FICA Amount” has the meaning set forth in Section 10.2.

3.26“LTIP” means the Towers Watson & Co. 2009 Long Term Incentive Plan, as amended from time-to-time.

3.27“Matching Contribution” means the amount the Company contributes to the Plan on behalf of any Participant pursuant to Section 6.

Towers Watson Deferred Savings Plan    3     November 2013

3.28“Matching Contribution Account” means a separate account maintained for each Participant to record the Matching Contributions made to the Plan pursuant to Section 6, plus all earnings and losses allocable thereto.

3.29“Participant” means an Eligible Employee who elects to participate in the Plan by filing an Election Notice in accordance with Section 5.1 and any former Eligible Employee who continues to be entitled to a benefit under the Plan.

3.30“Payment Date” means the first business day of the month on which the New York Stock Exchange is open for business following a Payment Event.

3.31“Payment Event” has the meaning set forth in Section 9.1.

3.32“Plan” means this Towers Watson Non-Qualified Deferred Savings Plan for U.S. Employees, as amended from time to time.

3.33“Plan Year” means the twelve consecutive month period which begins on January 1 and ends on the following December 31.

3.34“RSUs” means restricted stock units granted pursuant to Section 9 of the LTIP.

3.35“Savings Plan” means the Towers Watson Savings Plan for U.S. Employees.

3.36“Separation from Service” has the meaning set forth in Section 409A(a)(2)(A)(i) of the Code and Treas. Reg. Section 1.409A-1(h).

3.37“State, Local, and Foreign Tax Amount” has the meaning set forth in Section 10.5.

3.38“Valuation Date” means each day of the Plan Year on which the New York Stock Exchange is open for business.

3.39“Year of Service” means each year of service as determined under the Savings Plan.

4.Eligibility; Participation.

4.1Requirements for Participation. Any Eligible Employee may participate in the Plan commencing as of the first day of the Plan Year.

4.2Election to Participate; Benefits of Participation. An Eligible Employee may become a Participant in the Plan by making a Deferral Election in accordance with Section 5. An Eligible Employee who elects to participate in the Plan by making a Deferral Election is eligible to receive Matching Contributions in accordance with Section 6.

Towers Watson Deferred Savings Plan    4     November 2013

4.3Cessation of Participation. If a Participant ceases to be an Eligible Employee during a Plan Year, then the Participant’s Deferral Elections shall no longer be effective as of the end of the Plan Year.

5.Election Procedures.

5.1Deferral Election. An Eligible Employee may elect to defer Eligible Compensation as designated by the Committee by completing an Election Notice and submitting it in accordance with Plan procedures during the Election Period. The Election Notice must specify the amount or percentage of Eligible Compensation to be deferred (subject to any minimum and maximum amounts as set forth in Section 5.2).

5.2Elective Deferrals. Unless otherwise specified by the Committee, a Participant may elect to defer receipt of up to six percent (6%) of Eligible Compensation. Participant deferrals for any Plan Year must be made in accordance with Deferral Election procedures as set forth in this Section 5. Unless otherwise specified by the Committee, Eligible Compensation deferrals shall be credited to a Participant’s Elective Deferral Account at substantially the same time that elective deferrals and Company matching contributions with respect to the same payroll period are contributed to the Savings Plan.

6.Company Matching Contributions. Each Plan Year the Company may, but need not, make a Matching Contribution to the Plan on behalf of any Participant. The Matching Contribution may be expressed as a percentage of the Participant’s Base Salary, Bonus Compensation, or Eligible Compensation deferral as determined by the Committee. Initially, the Matching Contribution for a Plan Year shall be in an amount equal to (a) one hundred percent (100%) of the Participant’s Elective Deferrals for such Plan Year for the first two percent (2%) of the Participant’s Eligible Compensation that the Participant defers, and (b) fifty percent (50%) of the Participant’s Elective Deferrals in excess of two percent (2%) and not more than six percent (6%) of the Participant’s Eligible Compensation that the Participant defers. The amount of Matching Contributions to be made to the Plan on behalf of any Participant for a Plan Year may be determined or modified by the Committee in its sole discretion. Unless otherwise specified by the Committee, any Matching Contribution shall be credited to the Participant’s Matching Contribution Accountas of the business day that the corresponding Elective Deferrals are credited to the Participant’s Account. The Company is under no obligation to make a Matching Contribution for a Plan Year. Matching Contributions need not be uniform among Participants.

7.Accounts and Investments.

7.1Establishment of Accounts. The Company shall establish and maintain an Account for each Participant. The Company may establish more than one Account on behalf of any Participant as deemed necessary by the Committee for administrative purposes.

7.2Investments. Each Account shall be deemed invested in Company Stock. In the event of changes in the outstanding Company Stock or in the capital structure of the Company by reason of any stock or extraordinary cash dividend, stock split, reverse stock split, an extraordinary corporate transaction such as any recapitalization, reorganization, merger,

Towers Watson Deferred Savings Plan    5     November 2013

consolidation, combination, exchange, or other relevant change in capitalization, the Company Stock credited to each Participant’s Account will be equitably adjusted or substituted, as to the number, price, or kind of a share of Company Stock or other consideration.

7.3Investment Earnings. Each Account shall be adjusted based on the performance of the Company Stock. The Account of a Participant who has ceased to be an Eligible Employee shall continue to be credited with earnings and losses until the applicable Payment Date. The distribution to a Participant on the distribution date shall be based on the value of the Participant’s Account as of the applicable Payment Date. Dividends, if any, which are awarded for shares of Company Stock will be credited to Participant Accounts and deemed invested in Company Stock.

7.4Nature of Accounts. Accounts may not actually be invested in Company Stock and Participants do not have any real or beneficial ownership in Company Stock prior to a Payment Event. A Participant’s Account is solely a device for the measurement and determination of the amounts to be paid to the Participant pursuant to the Plan and shall not constitute or be treated as a trust fund of any kind.

7.5Statements. Each Participant shall be provided with statements or access to statements setting out the amounts in his or her Account(s), which shall be delivered or made available at such intervals determined by the Committee, and shall reflect the applicable number of shares and the value of the Company Stock on the applicable Valuation Date.

7.6RSUs. Notwithstanding anything to the contrary in Section 7.2 and 7.3, a Participant’s Account may be credited with RSUs granted pursuant to the LTIP in lieu of notional shares of Common Stock with respect to Elective Deferrals and, if applicable, Matching Contributions, all as determined by the Committee, in which case such RSUs shall include DERs that shall be deemed reinvested in additional RSUs unless provided otherwise by the Committee. Such RSUs (including any RSUs credited pursuant to DERs) shall vest as set forth in Section 8 of this Plan and shall be payable at the times and subject to the terms set forth in Section 9, 10, and 11 of this Plan, and shall be subject to the terms of the LTIP, including without limitation to Sections 3.2 (Committee Authority), 4.3 (Adjustments), 14.6 (Rights as Shareholder), and 14.8 (Securities Law Compliance). This Plan shall constitute the Award Agreement with respect to any such RSUs and in the event that the Company determines there to be a conflict between the terms of this Plan and the LTIP with respect to such RSUs or DERs, the terms of the LTIP shall control.

8.Vesting.

8.1Vesting of Elective Deferrals. Participants shall be fully vested at all times in their Elective Deferrals and any earnings thereon.

8.2Vesting of Matching Contributions. Unless determined otherwise by the Committee, Participants shall be vested in their Matching Contributions on the earlier of (a) two (2) Years of Service, (b) death, or (c) Disability.

Towers Watson Deferred Savings Plan    6     November 2013

9.Distribution of Participant Accounts.

9.1In General. Distribution of a Participant’s vested Account shall be made on the Payment Date following the earliest to occur of the following events (each a “Payment Event”):

(a)the date that is six months after the Participant’s Separation from Service; and

(b)the date that is thirty (30) days after the Participant’s death.

9.2Timing of Valuation. The value of a Participant’s Account on the Payment Date shall be determined as of the applicable Payment Date.

9.3Forfeiture of Unvested Accounts. Unless otherwise determined by the Committee, a Participant’s unvested Account balance shall be forfeited upon the occurrence of a Payment Event.

9.4Timing of Distributions. Except as otherwise provided in this Plan, distribution shall be made on the Payment Date.

9.5Medium of Distribution. The Participant’s vested Account shall be paid in Company Stock. Fractional shares shall be paid in cash.

10.Permissible Acceleration Events. Notwithstanding anything in the Plan to the contrary, the Committee, in its sole discretion, may accelerate the distribution of all or a portion of a Participant’s vested Account upon the occurrence of any of the events (“Acceleration Events”) set forth in this Section 10. The Committee’s determination of whether distribution may be accelerated in accordance with this Section 10 shall be made in accordance with Treas. Reg. Section 1.409A-3(j)(4).

10.1Limited Cashouts. The Committee may accelerate distribution of a Participant’s vested Account to the extent that (a) the aggregate amount in the Participant’s Account does not exceed the applicable dollar amount under Section 402(g)(1)(B) of the Code, (b) the distribution results in the termination of the Participant’s entire interest in the Plan and any plans that are aggregated with the Plan pursuant to Treas. Reg. Section 1.409A-1(c)(2), and (c) the Committee’s decision to cash out the Participant’s Account is evidenced in writing no later than the date of distribution.

10.2Payment of Employment Taxes. The Committee may accelerate distribution of all or a portion of a Participant’s vested Account (a) to pay the Federal Insurance Contributions Act (FICA) tax imposed under Sections 3101, 3121(a), and 3121(v)(2) of the Code (the “FICA Amount”), or (b) to pay the income tax at source on wages imposed under Section 3401 of the Code or the corresponding withholding provisions of applicable state, local, or foreign tax laws as a result of the payment of the FICA Amount and the additional income tax at source on wages attributable to the pyramiding Section 3401 wages and taxes; provided, however, that the total

Towers Watson Deferred Savings Plan    7     November 2013

payment under this Section 10.2 shall not exceed the FICA Amount and the income tax withholding related to the FICA Amount.

10.3Distribution Upon Income Inclusion. The Committee may accelerate distribution of all or a portion of a Participant’s vested Account to the extent that the Plan fails to meet the requirements of Section 409A of the Code, provided that, the amount accelerated shall not exceed the amount required to be included in income as a result of the failure to comply with Section 409A of the Code.

10.4Termination of the Plan. The Committee may accelerate distribution of all or a portion of a Participant’s vested Account upon termination of the Plan in accordance with Treas. Reg. Section 1.409A-3(j)(4)(ix).

10.5Payment of State, Local, or Foreign Taxes. The Committee may accelerate distribution of all or a portion of a Participant’s vested Account for:

(a)the payment of state, local, or foreign tax obligations arising from participation in the Plan that relate to an amount deferred under the Plan before the amount is paid or made available to the Participant (the “State, Local, and Foreign Tax Amount”), provided, however, the accelerated payment amount shall not exceed the taxes due as a result of participation in the Plan, and/or

(b)the payment of income tax at source on wages imposed under Section 3401 of the Code as a result of such payment and the payment of the additional income tax at source on wages imposed under Section 3401 of the Code attributable to the additional Section 3401 wages and taxes; provided however, the accelerated payment amount shall not exceed the aggregate of the State, Local, and Foreign Tax Amount and the income tax withholding related to such amount.

10.6Certain Offsets. The Committee may accelerate distribution of all or a portion of the Participant’s vested Account to satisfy a debt of the Participant to the Company or an Affiliate incurred in the ordinary course of the service relationship between the Company and the Participant, provided, however, the amount accelerated shall not exceed $5,000 and the distribution shall be made at the same time and in the same amount as the debt otherwise would have been due and collected from the Participant.

11.Section 162(m) of the Code. If the Committee reasonably anticipates that if a distribution were made as scheduled under the Plan it would result in a loss of the Company’s tax deduction due to the application of Section 162(m) of the Code, such distribution may be delayed and paid during the Participant’s first taxable year in which the Committee reasonably anticipates that the Company’s tax deduction will not be limited or eliminated by the application of Section 162(m) of the Code. Notwithstanding the foregoing, no distribution under the Plan may be deferred in accordance with this Section 11 unless all scheduled distributions to the Participant and all similarly situated Participants that could be delayed in accordance with Treas. Reg. Section 1.409A-2(b)(7)(i) are also delayed.

Towers Watson Deferred Savings Plan    8     November 2013

12.Plan Administration.

12.1Administration By Committee. The Plan shall be administered by the Committee, which shall have the authority to:

(a)construe and interpret the Plan and apply its provisions;

(b)promulgate, amend, and rescind rules and regulations relating to the administration of the Plan;

(c)authorize any person to execute, on behalf of the Company, any instrument required to carry out the purposes of the Plan;

(d)determine minimum or maximum amounts, and the types of compensation, that Participants may elect to defer under the Plan;

(e)determine whether any Matching Contributions will be made to the Plan with respect to any Plan Year and the amount of any such contributions;

(f)select, subject to the limitations set forth in the Plan, those Employees who shall be Eligible Employees;

(g)calculate deemed earnings and losses on Accounts;

(h)interpret, administer, reconcile any inconsistency in, correct any defect in, and/or supply any omission in the Plan and any instrument, Election Notice, or agreement relating to the Plan; and

(i)exercise discretion to make any and all other determinations which it determines to be necessary or advisable for the administration of the Plan.

12.2Non-Uniform Treatment. The Committee’s determinations under the Plan need not be uniform and any such determinations may be made selectively among Participants. Without limiting the generality of the foregoing, the Committee shall be entitled, among other things, to make non-uniform and selective determinations with regard to: (a) the terms or conditions of any Elective Deferral; or (b) the amount, terms, or conditions of any Matching Contribution.

12.3Committee Decisions Final. Subject to Section 15, all decisions made by the Committee pursuant to the provisions of the Plan shall be final and binding on the Company and the Participants, unless such decisions are determined by a court having jurisdiction to be arbitrary and capricious.

12.4Indemnification. No member of the Committee or any designee shall be liable for any action, failure to act, determination, or interpretation made in good faith with respect to the Plan except for any liability arising from his or her own wilful malfeasance, gross negligence, or reckless disregard of his or her duties.

Towers Watson Deferred Savings Plan    9     November 2013

13.Amendment and Termination. Subject to the applicable requirements of Section 409A of the Code, the Board may, at any time, and in its discretion, alter, amend, modify, suspend, or terminate the Plan or any portion thereof, provided, however, that no such amendment, modification, suspension, or termination shall, without the consent of a Participant, adversely affect such Participant’s rights with respect to amounts credited to or accrued in his or her Account. Notwithstanding the foregoing, a Participant shall have no rights in, to or as a holder of shares of Common Stock with respect to any unissued securities covered by any RSUs until the date the Participant becomes the holder of record of such securities.

14.Miscellaneous.

14.1No Employment or Other Service Rights. Nothing in the Plan or any instrument executed pursuant thereto shall confer upon any Participant any right to continue to serve the Company or an Affiliate or interfere in any way with the right of the Company or any Affiliate to terminate the Participant’s employment or service at any time with or without notice and with or without cause.

14.2Tax Withholding. The Company and its Affiliates shall have the right to deduct from any amounts otherwise payable under the Plan any federal, state, local, or other applicable taxes required to be withheld.

14.3Governing Law. The Plan shall be administered, construed and governed in all respects under and by the laws of the State of Delaware, without reference to the principles of conflicts of law (except and to the extent pre-empted by applicable Federal law).

14.4Section 409A of the Code. The Company intends that the Plan comply with the requirements of Section 409A of the Code and shall be operated and interpreted consistent with that intent. Notwithstanding the foregoing, the Company makes no representation that the Plan complies with Section 409A of the Code and shall have no liability to any Participant for any failure to comply with Section 409A of the Code.

This Plan shall constitute an “account balance plan” as defined in Treas. Reg. Section 31.3121(v)(2)-1(c)(1)(ii)(A). For purposes of Section 409A of the Code, all amounts deferred under this Plan shall be aggregated with amounts deferred under other account balance plans.

14.5No Warranties. Neither the Company nor the Committee warrants or represents that the value of any Participant’s Account will increase. Each Participant assumes the risk in connection with the deemed investment of his or her Account.

14.6Beneficiary Designation. Each Participant under the Plan may from time to time name any beneficiary or beneficiaries to receive the Participant’s interest in the Plan in the event of the Participant’s death. Each designation will revoke all prior designations by the same Participant, shall be in a form reasonably prescribed by the Committee and shall be effective only when filed by the Participant in writing with the Company during the Participant’s lifetime.

Towers Watson Deferred Savings Plan    10     November 2013

If a Participant fails to designate a beneficiary, then the Participant’s designated beneficiary shall be deemed to be the Participant’s estate.

14.7No Assignment. Neither a Participant nor any other person shall have any right to sell, assign, transfer, pledge, anticipate, or otherwise encumber, transfer, hypothecate, or convey any amounts payable hereunder prior to the date that such amounts are paid (except for the designation of beneficiaries pursuant to Section 14.6).

14.8Expenses. The costs of administering the Plan shall be charged to Participant Accounts, unless paid for by the Company, as determined by the Company in its discretion.

14.9Severability. If any provision of the Plan is held to be invalid, illegal, or unenforceable, whether in whole or in part, such provision shall be deemed modified to the extent of such invalidity, illegality, or unenforceability and the remaining provisions shall not be affected.

14.10Headings and Subheadings. Headings and subheadings in the Plan are for convenience only and are not to be considered in the construction of the provisions hereof.

15.Claims Procedures.

15.1Filing a Claim. Any Participant or other person claiming an interest in the Plan (the “Claimant”) may file a claim in writing with the Committee. The Committee shall review the claim itself or appoint an individual or entity to review the claim.

15.2Claim Decision. The Claimant shall be notified within 90 days after the claim is filed whether the claim is approved or denied, unless the Committee determines that special circumstances beyond the control of the Plan require an extension of time, in which case the Committee may have up to an additional 90 days to process the claim. If the Committee determines that an extension of time for processing is required, the Committee shall furnish written or electronic notice of the extension to the Claimant before the end of the initial 90 day period. Any notice of extension shall describe the special circumstances necessitating the additional time and the date by which the Committee expects to render its decision.

15.3Notice of Denial. If the Committee denies the claim, it must provide to the Claimant, in writing or by electronic communication, a notice which includes:

(a)The specific reason(s) for the denial;

(b)Specific reference to the pertinent Plan provisions on which such denial is based;

(c)A description of any additional material or information necessary for the Claimant to perfect his or her claim and an explanation of why such material or information is necessary;

Towers Watson Deferred Savings Plan    11     November 2013

(d)A description of the Plan’s appeal procedures and the time limits applicable to such procedures, including a statement of the Claimant’s right to bring a civil action under Section 502(a) of ERISA following a denial of the claim on appeal; and

(e)If an internal rule was relied on to make the decision, either a copy of the internal rule or a statement that this information is available at no charge upon request.

15.4Appeal Procedures. A request for appeal of a denied claim must be made in writing to the Committee within 60 days after receiving notice of denial. The decision on appeal will be made within 60 days after the Committee’s receipt of a request for appeal, unless special circumstances require an extension of time for processing, in which case a decision will be rendered not later than 120 days after receipt of a request for appeal. A notice of such an extension must be provided to the Claimant within the initial 60 day period and must explain the special circumstances and provide an expected date of decision. The reviewer shall afford the Claimant an opportunity to review and receive, without charge, all relevant documents, information and records and to submit issues and comments in writing to the Committee. The reviewer shall take into account all comments, documents, records, and other information submitted by the Claimant relating to the claim regardless of whether the information was submitted or considered in the initial benefit determination.

15.5Notice of Decision on Appeal. If the Committee denies the appeal, it must provide to the Claimant, in writing or by electronic communication, a notice which includes:

(a)The specific reason(s) for the denial;

(b)Specific references to the pertinent Plan provisions on which such denial is based;

(c)A statement that the Claimant may receive on request all relevant records at no charge;

(d)A description of the Plan’s voluntary procedures and deadlines, if any;

(e)A statement of the Claimant’s right to sue under Section 502(a) of ERISA; and

(f)If an internal rule was relied on to make the decision, either a copy of the internal rule or a statement that this information is available at no charge upon request.

15.6Claims Procedures Mandatory. The internal claims procedures set forth in this Section 15 are mandatory. If a Claimant fails to follow these claims procedures, or to timely file a request for appeal in accordance with this Section 15, the denial of the Claim shall become final and binding on all persons for all purposes.

[SIGNATURE PAGE FOLLOWS]

Towers Watson Deferred Savings Plan    12     November 2013

IN WITNESS WHEREOF, Towers Watson Pennsylvania Inc. has adopted this Plan as of the Effective Date written above.    

TOWERS WATSON PENNSYLVANIA INC.

By

Name: Anthony Mazzeo

Towers Watson Deferred Savings Plan    13     November 2013

EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO

SECURITIES EXCHANGE ACT RULES 13a-14 AND 15d-14

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, John J. Haley, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Towers Watson & Co.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and to the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 6, 2014

/s/ John J. Haley

John J. Haley

Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO

SECURITIES EXCHANGE ACT RULES 13a-14 AND 15d-14

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Roger F. Millay, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Towers Watson & Co.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and to the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 6, 2014

/s/ Roger F. Millay

Roger F. Millay

Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

AND CHIEF FINANCIAL OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Each of the undersigned hereby certifies, in his capacity as an officer of Towers Watson & Co. (the “Company”), for purposes of 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of his knowledge:

• The Quarterly Report of the Company on Form 10-Q for the period ended March 31, 2014, fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and

• The information contained in such report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 6, 2014

/s/ John J. Haley

John J. Haley

Chief Executive Officer

/s/ Roger F. Millay

Roger F. Millay

Chief Financial Officer

A signed original of this written statement required by Section 906 has been provided to Towers Watson & Co. and will be retained by Towers Watson & Co. and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Investments (Details) (USD $)	9 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Jun. 30, 2013
Available-for-sale Securities, Gross Realized Gain (Loss), Excluding Other than Temporary Impairments [Abstract]
Proceeds from sale of available-for-sale securities	$ 59,300,000	$ 34,700,000
Fair value of investments in an unrealized loss position			36,300,000
Sale Brokerage Business [Member]
Available-for-sale Securities, Gross Realized Gain (Loss), Excluding Other than Temporary Impairments [Abstract]
Proceeds from sale of available-for-sale securities	1,600,000
Gain on available-for-sale securities	800,000
Fixed income securities
Schedule of Available-for-sale Securities [Line Items]
Amortized cost	14,992,000		56,602,000
Unrealized gains	2,000		15,000
Unrealized losses	0		(2,000)
Estimated Fair Value	14,994,000		56,615,000
Equity securities
Schedule of Available-for-sale Securities [Line Items]
Amortized cost	114,000		853,000
Unrealized gains	16,000		476,000
Unrealized losses	(3,000)		(1,000)
Estimated Fair Value	127,000		1,328,000
Mutual funds and exchange-traded funds
Schedule of Available-for-sale Securities [Line Items]
Amortized cost	47,912,000		26,666,000
Unrealized gains	1,641,000		14,000
Unrealized losses	0		(97,000)
Estimated Fair Value	$ 49,553,000		$ 26,583,000

XML

Share-Based Compensation (Details) (USD $) In Millions, except Share data, unless otherwise specified	3 Months Ended	9 Months Ended		3 Months Ended		9 Months Ended			3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended		12 Months Ended			1 Months Ended	3 Months Ended	9 Months Ended	3 Months Ended		9 Months Ended	3 Months Ended			9 Months Ended		3 Months Ended			9 Months Ended		3 Months Ended				9 Months Ended		12 Months Ended	1 Months Ended	3 Months Ended	9 Months Ended
	Mar. 31, 2013	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2014 2014 LTIP	Sep. 30, 2013 2014 LTIP	Mar. 31, 2014 2014 LTIP	Mar. 31, 2014 2014 LTIP Maximum [Member]	Mar. 31, 2014 2014 LTIP Minimum [Member]	Mar. 31, 2014 2013 LTIP	Mar. 31, 2013 2013 LTIP	Mar. 31, 2014 2013 LTIP	Mar. 31, 2013 2013 LTIP	Mar. 31, 2014 2012 LTIP	Mar. 31, 2013 2012 LTIP	Mar. 31, 2014 2012 LTIP	Mar. 31, 2013 2012 LTIP	Jun. 30, 2012 2012 LTIP	Jun. 30, 2012 2012 LTIP Maximum [Member]	Jun. 30, 2012 2012 LTIP Minimum [Member]	Aug. 31, 2013 2014 ES LTIP	Mar. 31, 2014 2014 ES LTIP	Mar. 31, 2014 2014 ES LTIP	Mar. 31, 2014 2013 SEP	Sep. 30, 2013 2013 SEP	Mar. 31, 2014 2013 SEP	Mar. 31, 2014 2012 SEP	Mar. 31, 2013 2012 SEP	Sep. 30, 2012 2012 SEP	Mar. 31, 2014 2012 SEP	Mar. 31, 2013 2012 SEP	Mar. 31, 2014 2011 SEP	Mar. 31, 2013 2011 SEP	Sep. 30, 2011 2011 SEP	Mar. 31, 2014 2011 SEP	Mar. 31, 2013 2011 SEP	Mar. 31, 2014 Outside Directors [Member]	Sep. 30, 2013 Outside Directors [Member]	Mar. 31, 2013 Outside Directors [Member]	Sep. 30, 2012 Outside Directors [Member]	Mar. 31, 2014 Outside Directors [Member]	Mar. 31, 2013 Outside Directors [Member]	Jun. 30, 2010 Outside Directors [Member]	Nov. 30, 2013 Liazon RSUs [Member]	Mar. 31, 2014 Liazon RSUs [Member]	Mar. 31, 2014 Liazon RSUs [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Description of Restricted Stock Units		RSUs are designed to provide us an opportunity to offer our long-term incentive program (LTIP) and to provide key executives with a long-term stake in our success. RSUs are notional, non-voting units of measurement based on our common stock.
Restricted Stock Units granted during the period (in shares)				2,704	62,651							121,075					86,188			30,192				131,286				147,503					577,191				10,251		16,027			22,149	70,533
Restricted Stock Units vested in the period (in shares)																																	288,595
Restricted Stock Units, balance not yet vested (in shares)																																	288,595
Closing stock price on date of grant (in dollars per share)							$ 110.70	$ 105.90		$ 54.59		$ 54.59						$ 63.94	$ 63.73	$ 81.73				$ 91.43				$ 53.93
Forfeiture rate																								5.00%				5.00%					5.00%
Vested Stock Based Compensation Awards Acquired Value																																											$ 5.7
Unvested Stock Based Compensation Awards Acquired Value																																												2.1	2.1
Compensation expense				(1.1)		(3.8)			0.4	(1.4)	(0.6)	(4.3)	0.5	(0.3)	1.0	(1.8)					(0.4)	(1.1)	(1.6)		(5.0)	(0.5)	(1.2)		(1.5)	(3.5)	(0.4)	(1.1)		(1.3)	(3.3)	(0.1)		(0.1)		(0.8)	(0.9)			(0.4)	(0.7)
Discontinued operations - compensation expense	$ 0.1	$ 1.2	$ 0.4

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Debt, Commitments and Contingent Liabilities (Summary of Litigation) (Details) (USD $)	0 Months Ended			9 Months Ended	0 Months Ended		3 Months Ended	0 Months Ended		9 Months Ended
	May 07, 2013 Dugan Action [Member]	Dec. 09, 2009 Dugan Action [Member]	Nov. 05, 2009 Dugan Action [Member]	Mar. 31, 2014 Dugan Action [Member]	Dec. 17, 2009 Allen Action [Member]	Jan. 15, 2010 Pao Action [Member]	Mar. 31, 2014 Pao Action [Member]	Jan. 26, 2011 Acument [Member]	Feb. 25, 2009 Acument [Member]	Mar. 31, 2014 Acument [Member]	Feb. 28, 2014 Acument [Member] Plaintiff [Member]	Mar. 27, 2014 Acument [Member] Towers Watson [Member]
Loss Contingencies [Line Items]
Malpractice loss contingency description							Pursuant to the Towers Perrin Bylaws in effect at the time of their separations, the Towers Perrin shares held by all plaintiffs were redeemed by Towers Perrin at book value when these individuals separated from employment. The complaints alleged variously that there was a promise that Towers Perrin would remain privately owned in perpetuity and an implied or actual promise that in the event of a change to public ownership plaintiffs would receive compensation. Plaintiffs alleged that by agreeing to sell their shares back to Towers Perrin at book value upon separation, they and other members of the putative classes relied upon these alleged promises, which they claim were breached as a result of the consummation of the Merger between Watson Wyatt and Towers Perrin. The complaints all asserted claims for breach of contract, breach of express trust, breach of fiduciary duty, promissory estoppel, quasi-contract/unjust enrichment, and constructive trust, and seek equitable relief including an accounting, disgorgement, rescission and/or restitution, and the imposition of a constructive trust.
Period of loss occurrence								December 1, 2007 and April 30, 2010
Malpractice loss contingency description investments lost								In connection with those services, WWIC recommended an investment in the Westridge Funds. In July 2008, Acument made a $47.0 million investment in the Westridge Funds. During the period December 1, 2008 through January 22, 2009, Acument made additional investments of $9.5 million, bringing the aggregate investment of the Plan’s assets in the Westridge Funds to $56.5 million.
Lawsuit filing date			2009-11-05		2009-12-17	2010-01-15		2011-01-26
Name of plaintiff			"Dugan Action"		"Allen Action"	"Pao Action"		Acument Global Technologies, Inc
Damages sought, value		$ 800,000,000
Terms of settlement agreement				During the mediation session held on May 7, 2013, the parties reached agreement on settlement terms that include payment of an aggregate $10 million to an agreed settlement class (including all persons in the classes as defined in the respective complaints in the Dugan Action and the Pao Action, plus additional former Towers Perrin shareholders who separated from Towers Perrin between January 1971 and June 2005) estimated to potentially include more than 1,000 former Towers Perrin shareholders, which payment would also cover legal fees of plaintiffs’ attorneys, as determined by the court, and expenses incurred to administer the settlement.The cases were then returned to the district court for consideration of the proposed settlement. On September 24, 2013, the court preliminarily certified the settlement class and preliminarily approved the parties’ proposed settlement.
Proposed settlement amount	10,000,000
Misappropriation estimate									553,000,000
Recovery to date										39,700,000
Minimum possible loss											38,000,000.0
Maximum possible loss											$ 86,000,000.0	$ 16,600,000

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Share-Based Compensation (Details 1) (USD $) In Millions, except Share data, unless otherwise specified	1 Months Ended		1 Months Ended	3 Months Ended		9 Months Ended		3 Months Ended	9 Months Ended	1 Months Ended
	May 31, 2012	May 31, 2012 Extend Health Vested Options [Member]	May 31, 2012 Extend Health Unvested Options [Member]	Mar. 31, 2014 Extend Health Unvested Options [Member]	Mar. 31, 2013 Extend Health Unvested Options [Member]	Mar. 31, 2014 Extend Health Unvested Options [Member]	Mar. 31, 2013 Extend Health Unvested Options [Member]	Mar. 31, 2014 Liazon Unvested Options [Member]	Mar. 31, 2014 Liazon Unvested Options [Member]	Nov. 30, 2013 Liazon Vested Options [Member]
Stock Options Explanatory Disclosures [Line Items]
Options granted previously and assumed by a business acquirer	377,614									37,162
Fair value of vested stock options acquired		$ 11.2	$ 7.9					$ 1.7	$ 1.7	$ 2.2
Forfeiture rate			10.00%
Compensation expense				$ 0.3	$ 1.1	$ 1.2	$ 5.0	$ 0.3	$ 0.4

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Debt, Commitments and Contingent Liabilities (Summary of Long-Term Debt) (Details) (USD $)	0 Months Ended	9 Months Ended		9 Months Ended					0 Months Ended
	Nov. 07, 2011 Senior Debt Obligations [Member]	Mar. 31, 2014 Senior Debt Obligations [Member]	Mar. 31, 2013 Senior Debt Obligations [Member]	Mar. 31, 2014 Unsecured Debt [Member]	Mar. 31, 2013 Unsecured Debt [Member]	Jun. 01, 2012 Unsecured Debt [Member]	Mar. 31, 2014 Captive Insurance Companies [Member] Financial Standby Letter of Credit [Member]	Mar. 31, 2014 Other Existing Or Potential Business Obligations [Member] Financial Standby Letter of Credit [Member]	Jun. 01, 2012 Libor [Member] Minimum [Member] Unsecured Debt [Member]	Jun. 01, 2012 Libor [Member] Maximum [Member] Unsecured Debt [Member]	Jun. 01, 2012 Bank Base Rate [Member] Minimum [Member] Unsecured Debt [Member]	Jun. 01, 2012 Bank Base Rate [Member] Maximum [Member] Unsecured Debt [Member]
Debt Instrument [Line Items]
Line of credit covenant terms		The Senior Credit Facility contains customary representations and warranties and affirmative and negative covenants. The Senior Credit Facility requires Towers Watson to maintain certain financial covenants that include a minimum Consolidated Interest Coverage Ratio and a maximum Consolidated Leverage Ratio (which terms in each case are defined in the Senior Credit Facility). In addition, the Senior Credit Facility contains restrictions on the ability of Towers Watson to, among other things, incur additional indebtedness; pay dividends; make distributions; create liens on assets; make acquisitions; dispose of property; engage in sale-leaseback transactions; engage in mergers or consolidations, liquidations and dissolutions; engage in certain transactions with affiliates; and make changes in lines of businesses.
Line of credit covenant compliance		As of March 31, 2014, we were in compliance with our covenants.
Line of credit maximum borrowing capacity	$ 500,000,000
Lined of credit additional borrowing capacity	250,000,000
Line of credit, interest rate description	a spread to either LIBOR or the Prime Rate
Weighted average interest rate (percent)		1.93%	1.49%	1.42%	1.47%
Line of credit commitment fee (percent)		0.175%
Line of credit collateral description		Towers Watson and all of its domestic subsidiaries (other than Professional Consultants Insurance Company (“PCIC”), a majority-owned captive insurance company, and Stone Mountain Insurance Company (“SMIC”), a wholly-owned captive insurance company).
Line of credit amount outstanding							21,400,000	1,400,000
Original amount borrowed						250,000,000
Percentage spread to base index rate									1.25%	1.75%	0.25%	0.75%
Debt periodic principal payment				6,250,000
Term loan				$ 231,300,000

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Accumulated Other Comprehensive Income/(Loss) (Tables)

9 Months Ended

Mar. 31, 2014

Disclosure Text Block [Abstract]

Schedule of Accumulated Other Comprehensive Income/(Loss)

Changes in accumulated other comprehensive income/(loss), net of non-controlling interests, are provided in the following table. The difference between the amounts presented in this table and the amounts presented in the condensed consolidated statements of comprehensive income are the corresponding components attributable to non-controlling interests, which are not material for further disclosure.

	Foreign currency translation (1)			Hedge effectiveness (1)									Available-for-sale securities (2)									Defined pension and post-retirement benefit costs (3)
				Before Tax			Tax			After Tax			Before Tax			Tax			After Tax			Before Tax			Tax			After Tax
As of June 30, 2013	$	(131,096	)	$	237		$	(105	)	$	132		$	547		$	(134	)	$	413		$	(233,817	)	$	64,904		$	(168,913	)
Other comprehensive income/(loss) before reclassifications	88,573			(1,978		)	681			(1,297		)	457			(130		)	327			—			—			—
Amounts reclassified from accumulated other comprehensive income	—			852			(293		)	559			(761		)	173			(588		)	11,942			(2,605		)	9,337
Net current-period other comprehensive income/(loss)	88,573			(1,126		)	388			(738		)	(304		)	43			(261		)	11,942			(2,605		)	9,337
As of March 31, 2014	$	(42,523	)	$	(889	)	$	283		$	(606	)	$	243		$	(91	)	$	152		$	(221,875	)	$	62,299		$	(159,576	)

(1) Reclassification adjustments from accumulated other comprehensive income are included in general and administrative expenses (see Note 6– Derivative Financial Instruments for additional details regarding the reclassification adjustments for the hedge settlements)

(2) Reclassification adjustments from accumulated other comprehensive income are included in income from discontinued operations

(3) Reclassification adjustments from accumulated other comprehensive income are included in the computation of net periodic pension cost (see Note 7 – Retirement Benefits for additional details)

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Segment Information (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2014	Mar. 31, 2013
Segment Reporting Information [Line Items]
Revenue (net of reimbursable expenses)	$ 876,919	$ 856,420	$ 2,519,264	$ 2,500,929
Net operating income	254,087	258,557	693,296	714,728
Benefits
Segment Reporting Information [Line Items]
Revenue (net of reimbursable expenses)	527,414	523,489	1,471,780	1,500,035
Net operating income	175,129	184,304	461,016	505,975
Risk and Financial Services
Segment Reporting Information [Line Items]
Revenue (net of reimbursable expenses)	174,382	177,396	477,343	499,301
Net operating income	53,047	46,426	109,976	110,950
Talent and Rewards
Segment Reporting Information [Line Items]
Revenue (net of reimbursable expenses)	127,572	124,914	451,464	441,334
Net operating income	11,558	13,179	108,718	99,048
Exchange Solutions
Segment Reporting Information [Line Items]
Revenue (net of reimbursable expenses)	47,551	30,621	118,677	60,259
Net operating income	$ 14,353	$ 14,648	$ 13,586	$ (1,245)

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Accounting Policies (Policies)

9 Months Ended

Mar. 31, 2014

Accounting Policies [Abstract]

Variable Interest Entities

Variable interest entities (“VIEs”) are entities that lack one or more of the characteristics of a voting interest entity and therefore require a different approach in determining which party involved with the VIE should consolidate the entity. With a VIE, either the entity does not have sufficient equity at risk to finance its activities without additional subordinated financial support from other parties or the entity has equity investors that do not have the ability to make significant decisions relating to the entity’s operations through voting rights. The entity that has a controlling financial interest in a VIE is referred to as the primary beneficiary and is required to consolidate the VIE.

Through our wholly owned subsidiaries, Towers Watson Investment Management Limited and Towers Watson Investment Management, Ireland, we manage approximately $1.8 billion of assets in investment funds that are considered VIEs and for which our management fee is considered a variable interest. We have determined that these funds qualify for the deferral to certain provisions of ASC Subtopic 810-10, Consolidation – Overall, afforded by ASU 2010-10, Consolidation – Amendments for Certain Investment Funds. In accordance with this deferral, we determine whether we consolidate the fund based on whether we absorb a majority of the fund’s expected losses or receive a majority of the fund’s expected returns.

Recent Accounting Prounoucements, Not Yet Adopted

Not yet adopted

On June 7, 2013, the FASB issued ASU 2013-08, “Financial Services – Investment Companies (Topic 946): Amendments to the Scope, Measurement, and Disclosure Requirements,” which amends the criteria an entity would need to meet to qualify as an investment company under ASC 946. The ASU (1) introduces new disclosure requirements that apply to all investment companies and (2) amends the measurement criteria for certain interests in other investment companies. The ASU also amends the requirements in ASC 810 related to qualifying for the “investment-company deferral” in ASU 2010-10 as well as the requirements in ASC 820 related to qualifying for the “net asset value practical expedient” in ASU 2009-12. We manage certain funds that are considered variable interest entities and for which our management fee is considered a variable interest. These funds qualify for the “investment-company deferral” in ASU 2010-10 and therefore are subject to the consolidation guidance prior to the issuance of ASU 2009-17. The ASU is effective for annual periods that begin after December 15, 2013 and interim periods within those annual periods. Early adoption is prohibited. The Company is currently evaluating whether these funds will continue to qualify for the “investment-company deferral” based on the amended investment company criteria proscribed by ASU 2013-08.

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Accumulated Other Comprehensive Income/(Loss) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2014	Mar. 31, 2013
After tax - AOCI
After tax - Accumulated OCI as of			$ (299,464)
Other comprehensive income/(loss) before non-controlling interests	1,818	(99,633)	96,276	(68,773)
After tax - Accumulated OCI as of	(202,553)		(202,553)
Foreign currency translation
After tax - AOCI
After tax - Accumulated OCI as of			(131,096)
After tax - Other comprehensive income/(loss) before reclassifications			88,573
After tax - Amounts reclassified from accumulated other comprehensive income			0
Other comprehensive income/(loss) before non-controlling interests			88,573
After tax - Accumulated OCI as of	(42,523)		(42,523)
Hedge effectiveness
Before tax - AOCI
Before tax - Accumulated OCI as of			237
Before tax - Other comprehensive income/(loss) before reclassifications			(1,978)
Before tax - Amounts reclassified from accumulated other comprehensive income			852
Before tax - Net current-period other comprehensive income			(1,126)
Before tax - Accumulated OCI as of	(889)		(889)
Tax - AOCI
Tax - Accumulated OCI as of			(105)
Tax - Other comprehensive income/(loss) before reclassifications			681
Tax - Amounts reclassified from accumulated other comprehensive income			(293)
Tax - Net current-period other comprehensive income			388
Tax - Accumulated OCI as of	283		283
After tax - AOCI
After tax - Accumulated OCI as of			132
After tax - Other comprehensive income/(loss) before reclassifications			(1,297)
After tax - Amounts reclassified from accumulated other comprehensive income			559
Other comprehensive income/(loss) before non-controlling interests			(738)
After tax - Accumulated OCI as of	(606)		(606)
Available-for-sale securities
Before tax - AOCI
Before tax - Accumulated OCI as of			547
Before tax - Other comprehensive income/(loss) before reclassifications			457
Before tax - Amounts reclassified from accumulated other comprehensive income			(761)
Before tax - Net current-period other comprehensive income			(304)
Before tax - Accumulated OCI as of	243		243
Tax - AOCI
Tax - Accumulated OCI as of			(134)
Tax - Other comprehensive income/(loss) before reclassifications			(130)
Tax - Amounts reclassified from accumulated other comprehensive income			173
Tax - Net current-period other comprehensive income			43
Tax - Accumulated OCI as of	(91)		(91)
After tax - AOCI
After tax - Accumulated OCI as of			413
After tax - Other comprehensive income/(loss) before reclassifications			327
After tax - Amounts reclassified from accumulated other comprehensive income			(588)
Other comprehensive income/(loss) before non-controlling interests			(261)
After tax - Accumulated OCI as of	152		152
Defined pension and post-retirement benefit costs
Before tax - AOCI
Before tax - Accumulated OCI as of			(233,817)
Before tax - Other comprehensive income/(loss) before reclassifications			0
Before tax - Amounts reclassified from accumulated other comprehensive income			11,942
Before tax - Net current-period other comprehensive income			11,942
Before tax - Accumulated OCI as of	(221,875)		(221,875)
Tax - AOCI
Tax - Accumulated OCI as of			64,904
Tax - Other comprehensive income/(loss) before reclassifications			0
Tax - Amounts reclassified from accumulated other comprehensive income			(2,605)
Tax - Net current-period other comprehensive income			(2,605)
Tax - Accumulated OCI as of	62,299		62,299
After tax - AOCI
After tax - Accumulated OCI as of			(168,913)
After tax - Other comprehensive income/(loss) before reclassifications			0
After tax - Amounts reclassified from accumulated other comprehensive income			9,337
Other comprehensive income/(loss) before non-controlling interests			9,337
After tax - Accumulated OCI as of	$ (159,576)		$ (159,576)

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Fair Value Measurements (Details) (USD $)	3 Months Ended		9 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2014 Fair Value, Measurements, Recurring [Member]	Jun. 30, 2013 Fair Value, Measurements, Recurring [Member] US Treasury and Government [Member]	Mar. 31, 2014 Fair Value, Measurements, Recurring [Member] Corporate Bond Securities [Member]	Jun. 30, 2013 Fair Value, Measurements, Recurring [Member] Corporate Bond Securities [Member]	Jun. 30, 2013 Fair Value, Measurements, Recurring [Member] Foreign Corporate Debt Securities [Member]	Mar. 31, 2014 Fair Value, Measurements, Recurring [Member] Equity Securities [Member]	Jun. 30, 2013 Fair Value, Measurements, Recurring [Member] Equity Securities [Member]	Mar. 31, 2014 Fair Value, Measurements, Recurring [Member] Mutual Funds [Member]	Jun. 30, 2013 Fair Value, Measurements, Recurring [Member] Mutual Funds [Member]	Mar. 31, 2014 Fair Value, Measurements, Recurring [Member] Foreign Exchange Forward [Member]	Jun. 30, 2013 Fair Value, Measurements, Recurring [Member] Foreign Exchange Forward [Member]	Mar. 31, 2014 Fair Value, Measurements, Recurring [Member] Fair Value, Inputs, Level 1 [Member]	Jun. 30, 2013 Fair Value, Measurements, Recurring [Member] Fair Value, Inputs, Level 1 [Member] US Treasury and Government [Member]	Mar. 31, 2014 Fair Value, Measurements, Recurring [Member] Fair Value, Inputs, Level 1 [Member] Corporate Bond Securities [Member]	Jun. 30, 2013 Fair Value, Measurements, Recurring [Member] Fair Value, Inputs, Level 1 [Member] Corporate Bond Securities [Member]	Jun. 30, 2013 Fair Value, Measurements, Recurring [Member] Fair Value, Inputs, Level 1 [Member] Foreign Corporate Debt Securities [Member]	Mar. 31, 2014 Fair Value, Measurements, Recurring [Member] Fair Value, Inputs, Level 1 [Member] Equity Securities [Member]	Jun. 30, 2013 Fair Value, Measurements, Recurring [Member] Fair Value, Inputs, Level 1 [Member] Equity Securities [Member]	Mar. 31, 2014 Fair Value, Measurements, Recurring [Member] Fair Value, Inputs, Level 1 [Member] Mutual Funds [Member]	Jun. 30, 2013 Fair Value, Measurements, Recurring [Member] Fair Value, Inputs, Level 1 [Member] Mutual Funds [Member]	Mar. 31, 2014 Fair Value, Measurements, Recurring [Member] Fair Value, Inputs, Level 1 [Member] Foreign Exchange Forward [Member]	Jun. 30, 2013 Fair Value, Measurements, Recurring [Member] Fair Value, Inputs, Level 1 [Member] Foreign Exchange Forward [Member]	Mar. 31, 2014 Fair Value, Measurements, Recurring [Member] Fair Value, Inputs, Level 2 [Member]	Jun. 30, 2013 Fair Value, Measurements, Recurring [Member] Fair Value, Inputs, Level 2 [Member] US Treasury and Government [Member]	Mar. 31, 2014 Fair Value, Measurements, Recurring [Member] Fair Value, Inputs, Level 2 [Member] Corporate Bond Securities [Member]	Jun. 30, 2013 Fair Value, Measurements, Recurring [Member] Fair Value, Inputs, Level 2 [Member] Corporate Bond Securities [Member]	Jun. 30, 2013 Fair Value, Measurements, Recurring [Member] Fair Value, Inputs, Level 2 [Member] Foreign Corporate Debt Securities [Member]	Mar. 31, 2014 Fair Value, Measurements, Recurring [Member] Fair Value, Inputs, Level 2 [Member] Equity Securities [Member]	Jun. 30, 2013 Fair Value, Measurements, Recurring [Member] Fair Value, Inputs, Level 2 [Member] Equity Securities [Member]	Mar. 31, 2014 Fair Value, Measurements, Recurring [Member] Fair Value, Inputs, Level 2 [Member] Mutual Funds [Member]	Jun. 30, 2013 Fair Value, Measurements, Recurring [Member] Fair Value, Inputs, Level 2 [Member] Mutual Funds [Member]	Mar. 31, 2014 Fair Value, Measurements, Recurring [Member] Fair Value, Inputs, Level 2 [Member] Foreign Exchange Forward [Member]	Jun. 30, 2013 Fair Value, Measurements, Recurring [Member] Fair Value, Inputs, Level 2 [Member] Foreign Exchange Forward [Member]	Mar. 31, 2014 Fair Value, Measurements, Recurring [Member] Fair Value, Inputs, Level 3 [Member]	Jun. 30, 2013 Fair Value, Measurements, Recurring [Member] Fair Value, Inputs, Level 3 [Member] US Treasury and Government [Member]	Mar. 31, 2014 Fair Value, Measurements, Recurring [Member] Fair Value, Inputs, Level 3 [Member] Corporate Bond Securities [Member]	Jun. 30, 2013 Fair Value, Measurements, Recurring [Member] Fair Value, Inputs, Level 3 [Member] Corporate Bond Securities [Member]	Jun. 30, 2013 Fair Value, Measurements, Recurring [Member] Fair Value, Inputs, Level 3 [Member] Foreign Corporate Debt Securities [Member]	Mar. 31, 2014 Fair Value, Measurements, Recurring [Member] Fair Value, Inputs, Level 3 [Member] Equity Securities [Member]	Jun. 30, 2013 Fair Value, Measurements, Recurring [Member] Fair Value, Inputs, Level 3 [Member] Equity Securities [Member]	Mar. 31, 2014 Fair Value, Measurements, Recurring [Member] Fair Value, Inputs, Level 3 [Member] Mutual Funds [Member]	Jun. 30, 2013 Fair Value, Measurements, Recurring [Member] Fair Value, Inputs, Level 3 [Member] Mutual Funds [Member]	Mar. 31, 2014 Fair Value, Measurements, Recurring [Member] Fair Value, Inputs, Level 3 [Member] Foreign Exchange Forward [Member]	Jun. 30, 2013 Fair Value, Measurements, Recurring [Member] Fair Value, Inputs, Level 3 [Member] Foreign Exchange Forward [Member]
Assets:
Available-for-sale securities						$ 2,014,000	$ 14,994,000	$ 53,100,000	$ 1,501,000	$ 127,000	$ 1,328,000	$ 49,553,000	$ 26,583,000				$ 2,014,000	$ 0	$ 0	$ 0	$ 127,000	$ 1,328,000	$ 49,553,000	$ 26,583,000				$ 0	$ 14,994,000	$ 53,100,000	$ 1,501,000	$ 0	$ 0	$ 0	$ 0				$ 0	$ 0	$ 0	$ 0	$ 0	$ 0	$ 0	$ 0
Derivatives														417,000	546,000										0	0										417,000	546,000										0	0
Liabilities:
Derivative Financial Instruments, Liabilities, Fair Value Disclosure														1,183,000	353,000										0	0										1,183,000	353,000										0	0
Retention bonus liability					19,807,000											0											0											19,807,000
Unrealized Gain (Loss) on Derivatives recognized in earnings [Abstract]
Unrealized Gain (Loss) on derivatives recognized in earnings	$ 100,000	$ (1,500,000)	$ 100,000	$ (1,500,000)

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Acquisitions and Divestitures (Details) (USD $)	3 Months Ended		9 Months Ended		0 Months Ended	3 Months Ended	9 Months Ended		9 Months Ended	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2014	Mar. 31, 2013	Sep. 19, 2013 Brokerage Business [Member]	Mar. 31, 2014 Brokerage Business [Member]	Mar. 31, 2014 Brokerage Business [Member]	Mar. 31, 2014 Brokerage Business [Member] Alliance Agreement [Member]	Mar. 31, 2014 Brokerage Business [Member] Insurance And Reinsurance Placement [Member]	Mar. 31, 2014 Brokerage Business [Member] Transitional Services Agreement [Member]	Mar. 31, 2014 Brokerage Business [Member] Combined Ongoing Expenses [Member]
Discontinued Operations Disclosures
Description of disposal transaction						On September 19, 2013, we entered into a definitive agreement to sell our Reinsurance and Property and Casualty Insurance Brokerage (“Brokerage”) business to Jardine Lloyd Thompson Group plc (“JLT”) for cash consideration of $250 million. The Brokerage business was a component of our Risk and Financial Services segment. The sale closed during our second quarter of fiscal year 2014. We divested this business as part of our strategy to focus on the businesses where we are market leaders. We continue to focus on risk consulting, software and other services for the insurance industry. The business will be branded for a transitional period of 15 months from the closing date as JLT Towers Re.
Segment disposal group belonged to					Risk and Financial Services segment
Agreement proceeds					$ 250,000,000
Amount of continuing cash flows										6,300,000
Discontinued operation percentage of continuing cash flows after disposal								1.00%			7.40%
Intercompany revenue eliminated									2,800,000
Selected Income Statement Information
Revenue from discontinued operations	0	47,990,000	63,762,000	124,227,000
Income from discontinued operations before taxes	(1,037,000)	18,321,000	23,361,000	32,016,000
Tax expense on discontinued operations	188,000	6,621,000	8,989,000	11,158,000
Net income from discontinued operations	(1,225,000)	11,700,000	14,372,000	20,858,000
Gain from sale of discontinued operations	5,151,000	0	23,631,000	0
Tax expense on gain from sale of discontinued operations	(13,000)	0	32,023,000	0
Net loss from sale of discontinued operations	5,164,000	0	(8,392,000)	0
Total net (loss)/income from discontinued operations	3,939,000	11,700,000	5,980,000	20,858,000
Proceeds from purchase price adjustment					28,700,000
Proceeds from discontinued operations			256,953,000	4,285,000		2,700,000
Description of retention liability							As part of the sale, the Company agreed to repay JLT for retention payments made to certain employees of Brokerage if they remain with the business on the 30-day anniversary of the sale and the first and second anniversary of the sale. The value ascribed to this portion of the obligation is $21.7 million at the time of the sale. The remaining liability at March 31, 2014 is carried at fair value on the accompanying consolidated balance sheets (see Note 5 – Fair Value Measurements). The total amount has been classified as current or non-current liabilities based on the expected payment dates.
Retention liability amount					21,700,000
Agreement consideration						215,100,000	215,100,000
Transaction costs						$ 6,400,000

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Restricted Stock (Details1) (Common Class B-4 [Member])	0 Months Ended	9 Months Ended
	Jan. 02, 2014	Mar. 31, 2014
Common Class B-4 [Member]
Conversion of Stock [Line Items]
Acceleration of Class B shares to Class A shares, number of shares	5,374,070
Conversion date of Class B shares to Class A shares		Jan. 01, 2014

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Debt, Commitments and Contingent Liabilities (Summary of Malpractice Insurance) (Details) (USD $)			9 Months Ended
	Mar. 31, 2014	Jun. 30, 2013	Mar. 31, 2014 Aggregate Claims [Member]	Mar. 31, 2014 Per Claim [Member]	Mar. 31, 2014 S M I C [Member]	Mar. 31, 2014 P C I C [Member]
Malpractice Insurance [Line Items]
Reinsurance coverage description					SMIC secured $25 million of reinsurance from unaffiliated reinsurance companies in excess of the $15 million SMIC retained layer. Excess insurance attaching above the SMIC coverage is provided by various unaffiliated commercial insurance companies.	PCIC secured reinsurance of $25 million attaching above the $25 million PCIC retained layer from unaffiliated reinsurance companies.
Malpractice insurance description						Before the Merger, Watson Wyatt and Towers Perrin each obtained substantial professional liability insurance from PCIC. A limit of $50 million per claim and in the aggregate was provided by PCIC subject to a $1 million per claim self-insured retention.
Malpractice insurance continuing coverage policy description					Towers Watson carries substantial professional liability insurance which, effective July 1, 2010, has been provided by SMIC. For the policy period beginning July 1, 2011 certain changes were made to our professional liability insurance program. These changes remain in-force for the policy periods beginning July 1, 2011 and ending July 1, 2014. Our professional liability insurance includes a $10 million aggregate self-insured retention above the $1 million self-insured retention per claim, including the cost of defending such claims. SMIC provides us with $40 million of coverage per claim and in the aggregate, above the retentions, including the cost of defending such claims.
Captive insurance reinsurance coverage					$ 25,000,000	$ 25,000,000
Malpractice insurance deductible			10,000,000	1,000,000		1,000,000
Malpractice insurance, maximum coverage per incident					40,000,000	50,000,000
Captive insurance coverage amount					15,000,000	25,000,000
Malpractice insurance, coverage floor					25,000,000
Malpractice insurance percentage of ownership in captive insurer						72.86%
Professional liability claims reserve incurred by not reported	$ 182,300,000	$ 184,100,000

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Organization and Basis of Presentation

9 Months Ended

Mar. 31, 2014

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization and Basis of Presentation

Organization and Basis of Presentation.

The accompanying unaudited quarterly condensed consolidated financial statements of Towers Watson & Co. (“Towers Watson”, the “Company” or “we”) and our subsidiaries are presented in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) for quarterly reports on Form 10-Q and therefore do not include all of the information and footnotes required by U.S. generally accepted accounting principles (“GAAP”). In the opinion of management, these condensed consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, which are necessary for a fair presentation of the condensed consolidated financial statements and results for the interim periods. All intercompany accounts and transactions have been eliminated in consolidation. The condensed consolidated financial statements should be read together with the Towers Watson audited condensed consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2013, which was filed with the SEC on August 15, 2013, and may be accessed via EDGAR on the SEC’s web site at www.sec.gov. Balance sheet data as of June 30, 2013 was derived from Towers Watson’s audited financial statements.

Towers Watson was formed on January 1, 2010, upon the merger (the “Merger”) of Watson Wyatt Worldwide, Inc. (“Watson Wyatt”) and Towers, Perrin, Forster & Crosby, Inc. (“Towers Perrin”).

Our fiscal year 2014 began July 1, 2013 and ends June 30, 2014.

The results of operations for the three and nine months ended March 31, 2014 are not necessarily indicative of the results that can be expected for the entire fiscal year ending June 30, 2014. The results reflect certain estimates and assumptions made by management including those estimates used in calculating acquisition consideration and fair value of tangible and intangible assets and liabilities, professional liability claims, estimated bonuses, valuation of billed and unbilled receivables, and anticipated tax liabilities that affect the amounts reported in the condensed consolidated financial statements and related notes.

As discussed further in Note 2 – Acquisitions and Divestitures, we have classified the operating results of our reinsurance and property and casualty insurance brokerage business as discontinued operations for all periods presented in our condensed consolidated statements of operations. This business was sold in November 2013.

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Derivative Financial Instruments (Details) (USD $)	9 Months Ended
	Mar. 31, 2014	Jun. 30, 2013
Derivatives, Fair Value [Line Items]
Longest outstanding maturity for derivative contracts at the most recent balance sheet date	15 months
Derivative other comprehensive income pretax	$ 900,000
Derivative, fair value, net	(800,000)	200,000
Asset derivatives
Derivative assets	417,000	546,000
Liability derivatives
Derivative liabilities	(1,183,000)	(353,000)
Designated as Hedging Instrument [Member]
Derivatives, Fair Value [Line Items]
Derivative, notional amount	63,300,000	107,200,000
Not Designated as Hedging Instrument [Member]
Derivatives, Fair Value [Line Items]
Derivative, notional amount	25,800,000	33,600,000
Foreign Exchange Forward [Member] | Designated as Hedging Instrument [Member] | Other Current Assets [Member]
Asset derivatives
Derivative assets	295,000	395,000
Foreign Exchange Forward [Member] | Designated as Hedging Instrument [Member] | Other Current Liabilities [Member]
Liability derivatives
Derivative liabilities	(1,181,000)	(159,000)
Foreign Exchange Forward [Member] | Not Designated as Hedging Instrument [Member] | Other Current Assets [Member]
Asset derivatives
Derivative assets	122,000	151,000
Foreign Exchange Forward [Member] | Not Designated as Hedging Instrument [Member] | Other Current Liabilities [Member]
Liability derivatives
Derivative liabilities	$ (2,000)	$ (194,000)

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Fair Value Measurements (Tables)

9 Months Ended

Mar. 31, 2014

Fair Value Disclosures [Abstract]

Schedule of fair value, assets and liabilities measured on recurring basis

The following presents our assets and liabilities measured at fair value on a recurring basis as of March 31, 2014 and June 30, 2013:

	Fair Value Measurements on a Recurring Basis at March 31, 2014
	Level 1		Level 2		Level 3		Total
Assets:
Available-for-sale securities:
Corporate bonds (a)	$	—	$	14,994	$	—	$	14,994
Equity securities (a)	127		—		—		127
Mutual funds / exchange traded funds (b)	49,553		—		—		49,553
Derivatives:
Foreign exchange forwards (c)	—		417		—		417
Liabilities:
Derivatives:
Foreign exchange forwards (c)	$	—	$	1,183	$	—	$	1,183
Contingent Liabilities:
Retention bonus liability (d)	—		—		19,807		19,807

	Fair Value Measurements on a Recurring Basis at June 30, 2013
	Level 1		Level 2		Level 3		Total
Assets:
Available-for-sale securities:
U.S. treasury securities and obligations of the U.S government, government agencies and authorities (a)	$	2,014	$	—	$	—	$	2,014
U.S. Corporate bonds (a)	—		53,100		—		53,100
Foreign corporate bonds (a)	—		1,501		—		1,501
Equity securities (a)	1,328		—		—		1,328
Mutual funds / exchange-traded funds (b)	26,583		—		—		26,583
Derivatives:
Foreign exchange forwards (c)	—		546		—		546
Liabilities:
Derivatives:
Foreign exchange forwards (c)	$	—	$	353	$	—	$	353

_________________________

(a) These assets are included in short-term investments on the condensed consolidated balance sheet.

(b) These assets are included in short-term investments or other assets on the condensed consolidated balance sheet.

(c) These derivative investments are included in other current assets or accounts payable, accrued liabilities and deferred income on the condensed consolidated balance sheet. See Note 6 for further information on our derivative investments.

(d) These liabilities are included in other current liabilities and other noncurrent liabilities on the condensed consolidated balance sheet. The fair value was determined using a discounted cash flow model. There have been no material changes in the fair value of this liability subsequent to initial recognition.

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Goodwill and Intangible Assets (Tables)

9 Months Ended

Mar. 31, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of goodwill

The components of goodwill and intangible assets are outlined below for the nine months ended March 31, 2014:

	Benefits		Risk and Financial Services			Talent and Rewards		Exchange Solutions		All Other		Total
Balance as of June 30, 2013	$	1,233,272	$	534,150		$	108,850	$	341,449	$	1,214	$	2,218,935
Goodwill related to acquisitions	—		—			—		173,968		—		173,968
Goodwill related to disposals	—		(167,822		)	—		—		—		(167,822		)
Translation adjustment	38,260		17,647			3,109		—		—		59,016
Balance as of March 31, 2014	$	1,271,532	$	383,975		$	111,959	$	515,417	$	1,214	$	2,284,097

Schedule of changes in finite-lived intangible assets by major class

The following table reflects changes in the net carrying amount of the components of finite-lived intangible assets for the nine months ended March 31, 2014:

	Customer related intangible			Core/ developed technology			Favorable lease agreements			Trademarks & trade names			Total
Balance as of June 30, 2013	$	246,247		$	69,515		$	3,565		$	—		$	319,327
Intangibles acquired	600			34,300			—			150			35,050
Intangibles related to disposal	(8,254		)	—			—			—			(8,254		)
Amortization	(35,106		)	(22,146		)	(710		)	(150		)	(58,112		)
Translation adjustment	5,187			715			(16		)	—			5,886
Balance as of March 31, 2014	$	208,674		$	82,384		$	2,839		$	—		$	293,897

Schedule of finite-lived intangible assets by major class

The following table reflects the carrying value of finite-lived intangible assets and liabilities as of March 31, 2014 and June 30, 2013:

	As of March 31, 2014				As of June 30, 2013
	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Finite-lived intangible assets and liabilities:
Trade name	$	520	$	520	$	370	$	370
Customer related intangibles	387,223		178,549		390,027		143,780
Core/developed technology	175,566		93,182		164,762		95,247
Favorable lease agreements	6,453		3,614		6,496		2,931
Total finite-lived intangible assets	$	569,762	$	275,865	$	561,655	$	242,328
Unfavorable lease agreements	25,982		14,947		25,591		12,122
Total finite-lived intangible liabilities	$	25,982	$	14,947	$	25,591	$	12,122

Schedule of rent offset, future amortization

The following table reflects:

1) future estimated amortization expense for amortizable intangible assets consisting of customer related intangibles and core/developed technology, and

2) the rent offset resulting from the amortization of the net lease intangible assets and liabilities for the remainder of fiscal 2014 and for subsequent fiscal years:

Fiscal year ending June 30,	Amortization		Rent (Offset) Expense
2014	$	17,937	$	(575	)
2015	67,783		(2,027		)
2016	57,714		(1,567		)
2017	53,379		(1,864		)
2018	42,967		(1,981		)
Thereafter	51,278		(182		)
Total	$	291,058	$	(8,196	)

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Income Taxes (Details) (USD $)	3 Months Ended		9 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2014	Mar. 31, 2013
Income Tax Expense (Benefit), Continuing Operations [Abstract]
Income Tax Expense (Benefit)	$ 39,231,000	$ 35,254,000	$ 96,322,000	$ 99,649,000
Effective Income Tax Rate, Continuing Operations, Tax Rate Reconciliation [Abstract]
Effective Income Tax Rate, Continuing Operations			25.70%	31.90%
Uncertain tax positions tax rate impact			(4.60%)
Change in tax rate - tax rate impact			(1.00%)
Income Tax Uncertainties [Abstract]
Significant Change in Unrecognized Tax Benefits is Reasonably Possible, Estimated Range of Change, Lower Bound	5,000,000		5,000,000
Significant Change in Unrecognized Tax Benefits is Reasonably Possible, Estimated Range of Change, Upper Bound	$ 11,800,000		$ 11,800,000

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Derivative Financial Instruments (Details 2) (Foreign Exchange Forward [Member], Cash Flow Hedging [Member], USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2014	Mar. 31, 2013
Summary Of Hedged Derivative Instruments Impact On Results Of Operations [Abstract]
Gain (loss) recognized in OCI (effective portion)	$ 85	$ 556	$ (1,978)	$ (503)
General and Administrative Expense [Member]
Summary Of Hedged Derivative Instruments Impact On Results Of Operations [Abstract]
Gain (loss) reclassified from OCI into income (effective portion)	(520)	(386)	852	(121)
Gain (loss) recognized in income (ineffective portion and amount excluded from effectiveness testing)	(4)	(1)	(1)	(1)
Summary Of Non Hedged Derivative Instruments Impact On Results Of Operations [Abstract]
Gain (Loss) on Foreign Currency Derivative Instruments Not Designated as Hedging Instruments	$ (365)	$ (146)	$ 697	$ 1,928

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Derivative Financial Instruments (Tables)

9 Months Ended

Mar. 31, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of derivative assets and liabilities at fair value

The fair value of our derivative instruments held as of March 31, 2014 and June 30, 2013 and their location in the condensed consolidated balance sheet are as follows:

	Derivative assets					Derivative liabilities
	Balance sheet location	Fair value				Balance sheet location	Fair value
		March 31, 2014		June 30, 2013			March 31, 2014			June 30, 2013
Derivatives designated as hedging instruments:
Foreign exchange forwards	Other current assets	$	295	$	395	Accounts payable, accrued liabilities and deferred income	$	(1,181	)	$	(159	)
Derivatives not designated as hedging instruments:
Foreign exchange forwards	Other current assets	122		151		Accounts payable, accrued liabilities and deferred income	(2		)	(194		)
Total derivative assets (liabilities)		$	417	$	546		$	(1,183	)	$	(353	)

Schedule of the effect of derivative instruments on statement of financial performance

The effects of derivative instruments that are designated as hedging instruments on the consolidated statements of operations and the consolidated statements of changes in stockholders’ equity for the three months ended March 31, 2014 and 2013 and for the nine months ended March 31, 2014 and 2013 are as follows:

Derivatives designated as hedging instruments for the three months ended March 31, 2014 and 2013:	Gain recognized in OCI (effective portion)				Location of loss reclassified from OCI into income (effective portion)	Loss reclassified from OCI into income (effective portion)						Location of loss recognized in income (ineffective portion and amount excluded from effectiveness testing)	Loss recognized in income (ineffective portion and amount excluded from effectiveness testing)
	2014		2013			2014			2013				2014			2013
Foreign exchange Forwards	$	85	$	556	General and administrative expenses	$	(520	)	$	(386	)	General and administrative expenses	$	(4	)	$	(1	)
Total	$	85	$	556		$	(520	)	$	(386	)		$	(4	)	$	(1	)

Derivatives designated as hedging instruments for the nine months ended March 31, 2014 and 2013:	Loss recognized in OCI (effective portion)						Location of loss reclassified from OCI into income (effective portion)	Loss reclassified from OCI into income (effective portion)					Location of loss recognized in income (ineffective portion and amount excluded from effectiveness testing)	Loss recognized in income (ineffective portion and amount excluded from effectiveness testing)
	2014			2013				2014		2013				2014			2013
Foreign exchange forwards	$	(1,978	)	$	(503	)	General and administrative expenses	$	852	$	(121	)	General and administrative expenses	$	(1	)	$	(1	)
Total	$	(1,978	)	$	(503	)		$	852	$	(121	)		$	(1	)	$	(1	)

Schedule of other derivatives not designated as hedging instruments, Statements of financial performance and financial position

The effects of derivatives that have not been designated as hedging instruments on the condensed consolidated statements of operations for the three and nine months ended March 31, 2014 and 2013 are as follows:

		(Loss) gain recognized in income
		Three Months Ended   March 31,						Nine Months Ended   March 31,
Derivatives not designated as hedging instruments:	Location of (loss) gain recognized in income	2014			2013			2014		2013
Foreign exchange forwards	General and administrative expenses	$	(365	)	$	(146	)	$	697	$	1,928
Total		$	(365	)	$	(146	)	$	697	$	1,928

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Retirement Benefits (Tables)

9 Months Ended

Mar. 31, 2014

Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract]

Schedule of net benefit costs Pension

The following tables set forth the components of net periodic benefit cost for the Company’s defined benefit pension plan for North America and Europe for the three and nine months ended March 31, 2014 and 2013:

	Three Months Ended March 31,
	2014						2013
	North America			Europe			North America			Europe
Service cost	$	17,493		$	3,054		$	17,731		$	3,074
Interest cost	35,062			10,182			33,854			9,182
Expected return on plan assets	(46,968		)	(11,457		)	(46,586		)	(10,168		)
Amortization of net loss	5,473			2,235			11,440			1,441
Amortization of prior service (credit)/cost	(2,095		)	10			(2,094		)	10
Net periodic benefit cost	$	8,965		$	4,024		$	14,345		$	3,539

	Nine Months Ended March 31,
	2014						2013
	North America			Europe			North America			Europe
Service cost	$	52,819		$	9,162		$	53,189		$	9,221
Interest cost	105,628			30,545			101,566			27,545
Expected return on plan assets	(141,375		)	(34,370		)	(139,540		)	(30,505		)
Amortization of net loss	16,597			6,706			34,325			4,324
Amortization of prior service (credit)/cost	(6,284		)	31			(6,283		)	29
Net periodic benefit cost	$	27,385		$	12,074		$	43,257		$	10,614

Schedule of net benefit costs OPEB

The following table sets forth the components of net periodic benefit cost for the Company’s post-retirement plans for the three and nine months ended March 31, 2014 and 2013:

	Three Months Ended   March 31,						Nine Months Ended   March 31,
	2014			2013			2014			2013
Service cost	$	365		$	441		$	1,097		$	1,323
Interest cost	2,216			2,197			6,647			6,590
Expected return on plan assets	(28		)	(33		)	(84		)	(98		)
Amortization of net (gain) loss	(436		)	83			(1,309		)	250
Amortization of prior service credit	(1,751		)	(2,051		)	(5,253		)	(6,152		)
Net periodic benefit cost	$	366		$	637		$	1,098		$	1,913

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Condensed Consolidated Statements of Changes in Stockholders' Equity (USD $) In Thousands, except Share data, unless otherwise specified	Total	Common Class A [Member]	Common Class B [Member]	Additional Paid-in Capital [Member]	Treasury Stock, at cost [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive (Loss) Income [Member]	Noncontrolling Interest [Member]
Balance as of at Jun. 30, 2012	$ 2,457,317	$ 635	$ 110	$ 1,833,799	$ (168,901)	$ 1,117,622	$ (350,745)	$ 24,797
Shares outstanding as of at Jun. 30, 2012		63,522,000	11,036,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	233,238					235,933		(2,695)
Other comprehensive income/(loss)	(68,773)						(68,396)	(377)
Repurchases of common stock	(46,618)				(46,618)
Shares received for employee taxes on conversion of restricted shares, shares		(429,000)
Shares received for employee taxes upon vesting of restricted stock units, value	(24,879)	(4)			(24,875)
Exercises of stock options	818			(5,560)	6,378
Vesting of restricted stock units, value	922			(30,570)	31,492
Vesting of restricted stock units, shares		(89,000)
Deconsolidation of redeemable non-controlling interest from variable interest entity	0
Class A Common Stock:
Cash dividends declared	(42,023)					(42,023)
Stock-based compensation	24,203			24,203
Acceleration of Class B shares to Class A shares, number of shares		5,661,000	(5,662,000)
Acceleration of Class B shares to Class A shares, value		56	(56)
Balance as of at Mar. 31, 2013	2,534,205	687	54	1,821,872	(202,524)	1,311,532	(419,141)	21,725
Shares outstanding as of at Mar. 31, 2013		68,665,000	5,374,000
Balance as of at Jun. 30, 2013	2,744,834	692	54	1,850,448	(221,643)	1,394,407	(299,464)	20,340
Shares outstanding as of at Jun. 30, 2013		69,178,000	5,374,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	283,965					276,908		7,057
Other comprehensive income/(loss)	96,276						96,911	(635)
Repurchases of common stock	(74,506)				(74,506)
Shares received for employee taxes upon vesting of restricted stock units, value	(7,457)				(7,457)
Exercises of stock options	684			(4,380)	5,064
Vesting of restricted stock units, value	(6,808)			(24,934)	18,126
Acquisitions	420			6,717				(6,297)
Subscriptions of non-controlling interest holders in consolidated VIEs	332,722							332,722
Deconsolidation of redeemable non-controlling interest from variable interest entity	(339,019)							(339,019)
Class A Common Stock:
Cash dividends declared	(20,905)					(20,905)
Excess tax benefits	9,800			9,800
Stock-based compensation	17,082			17,082
Acceleration of Class B shares to Class A shares, number of shares		5,374,000	(5,374,000)
Acceleration of Class B shares to Class A shares, value		54	(54)
Balance as of at Mar. 31, 2014	$ 3,037,088	$ 746	$ 0	$ 1,854,733	$ (280,416)	$ 1,650,410	$ (202,553)	$ 14,168
Shares outstanding as of at Mar. 31, 2014		74,552,000	0

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Variable Interest Entities (Tables)

9 Months Ended

Mar. 31, 2014

Variable Interest Entities [Abstract]

Redeemable Noncontrolling Interest

The changes of the redeemable non-controlling interests balance for the nine months ended March 31, 2014 are as follows:

Balance as of June 30, 2013	$	—
Subscriptions of non-controlling interest holders in consolidated VIEs	332,722
Mark-to-market gains on investments held by consolidated VIEs	6,297
Deconsolidation of VIEs	(339,019		)
Balance as of March 31, 2014	$	—

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Goodwill and Intangible Assets (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2014	Mar. 31, 2013
Goodwill [Line Items]
Amortization of intangible assets	$ 19,400	$ 19,400	$ 57,402	$ 59,287
Goodwill [Roll Forward]
Balance as of June 30, 2013			2,218,935
Goodwill related to acquisitions			173,968
Goodwill related to disposals			(167,822)
Translation adjustment			59,016
Balance as of March 31, 2014	2,284,097		2,284,097
Benefits
Goodwill [Roll Forward]
Balance as of June 30, 2013			1,233,272
Goodwill related to acquisitions			0
Goodwill related to disposals			0
Translation adjustment			38,260
Balance as of March 31, 2014	1,271,532		1,271,532
Risk and Financial Services
Goodwill [Roll Forward]
Balance as of June 30, 2013			534,150
Goodwill related to acquisitions			0
Goodwill related to disposals			(167,822)
Translation adjustment			17,647
Balance as of March 31, 2014	383,975		383,975
Talent and Rewards
Goodwill [Roll Forward]
Balance as of June 30, 2013			108,850
Goodwill related to acquisitions			0
Goodwill related to disposals			0
Translation adjustment			3,109
Balance as of March 31, 2014	111,959		111,959
Exchange Solutions
Goodwill [Roll Forward]
Balance as of June 30, 2013			341,449
Goodwill related to acquisitions			173,968
Goodwill related to disposals			0
Translation adjustment			0
Balance as of March 31, 2014	515,417		515,417
All Other
Goodwill [Roll Forward]
Balance as of June 30, 2013			1,214
Goodwill related to acquisitions			0
Goodwill related to disposals			0
Translation adjustment			0
Balance as of March 31, 2014	$ 1,214		$ 1,214

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Restricted Stock (Details2) (USD $) In Millions, except Share data, unless otherwise specified	3 Months Ended	9 Months Ended		3 Months Ended		9 Months Ended
	Mar. 31, 2013	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2013 Towers Perrin Merger [Member]	Mar. 31, 2010 Towers Perrin Merger [Member]	Mar. 31, 2013 Towers Perrin Merger [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of Restricted Class A shares transferred in the Merger					10.00%
Restricted Class A shares granted as consideration (in shares)					4,248,984
Compensation expense				$ (5.3)		$ 8.0
Discontinued operations - compensation expense	$ 0.1	$ 1.2	$ 0.4			$ 1.0
Share Based Compensation Arrangement By Share Based Payment Award Equity Instruments Other Than Options Assumed Forfeited Percentage					10.00%
Share Based Compensation Arrangement By Share Based Payment Award Equity Instruments Other Than Options Actual Forfeited Percentage				11.00%

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Condensed Consolidated Statements of Operations (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2014	Mar. 31, 2013
Income Statement [Abstract]
Revenue	$ 904,833	$ 892,977	$ 2,602,927	$ 2,597,233
Costs of providing services:
Salaries and employee benefits	547,385	542,271	1,574,535	1,590,530
Professional and subcontracted services	57,729	62,908	188,203	189,751
Occupancy	33,961	34,666	102,288	107,116
General and administrative expenses	82,844	76,381	236,651	233,163
Depreciation and amortization	44,250	43,166	130,931	130,970
Transaction and integration expenses	241	12,328	1,049	30,753
Cost of Services	766,410	771,720	2,233,657	2,282,283
Income from operations	138,423	121,257	369,270	314,950
Loss from affiliates	0	0	0	(56)
Interest income	758	613	1,847	2,118
Interest expense	(2,090)	(3,483)	(6,553)	(10,043)
Other non-operating income	4,053	12	9,743	5,060
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES	141,144	118,399	374,307	312,029
Provision for income taxes	39,231	35,254	96,322	99,649
INCOME FROM CONTINUING OPERATIONS	101,913	83,145	277,985	212,380
Income from discontinued operations, net of tax of $175, $6,621, $41,012, and $11,158, respectively	3,939	11,700	5,980	20,858
NET INCOME BEFORE NON-CONTROLLING INTERESTS	105,852	94,845	283,965	233,238
Less: Income (loss) attributable to non-controlling interests	3,346	(71)	7,057	(2,695)
NET INCOME (attributable to common stockholders)	$ 102,506	$ 94,916	$ 276,908	$ 235,933
Earnings per share:
Basic earnings per share - Income from continuing operations (in dollars per share)	$ 1.40	$ 1.18	$ 3.83	$ 3.03
Basic earnings per share - Income from discontinued operations (in dollars per share)	$ 0.06	$ 0.17	$ 0.09	$ 0.29
Basic earnings per share - Net income (in dollars per share)	$ 1.46	$ 1.35	$ 3.92	$ 3.32
Diluted earnings per share - Income from continuing operations (in dollars per share)	$ 1.39	$ 1.17	$ 3.81	$ 3.00
Diluted earnings per share - Income from discontinued operations (in dollars per share)	$ 0.06	$ 0.17	$ 0.09	$ 0.29
Diluted earnings per share - Net income (in dollars per share)	$ 1.45	$ 1.34	$ 3.90	$ 3.29
Weighted average shares of common stock, basic (in shares)	70,447	70,530	70,685	71,094
Weighted average shares of common stock, diluted (in shares)	70,884	71,076	71,047	71,639

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Retirement Benefits (Details) (USD $)		3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended
	Jun. 30, 2013	Mar. 31, 2014 Towers Watson Us [Member]	Mar. 31, 2013 Towers Watson Us [Member]	Mar. 31, 2014 Towers Watson Us [Member]	Mar. 31, 2013 Towers Watson Us [Member]	Mar. 31, 2014 Towers Watson Uk [Member]	Mar. 31, 2013 Towers Watson Uk [Member]	Mar. 31, 2014 Towers Watson Uk [Member]	Mar. 31, 2013 Towers Watson Uk [Member]	Mar. 31, 2014 North America Pension Plans [Member]	Mar. 31, 2013 North America Pension Plans [Member]	Mar. 31, 2014 North America Pension Plans [Member]	Mar. 31, 2013 North America Pension Plans [Member]	Mar. 31, 2014 Europe Pension Plans [Member]	Mar. 31, 2013 Europe Pension Plans [Member]	Mar. 31, 2014 Europe Pension Plans [Member]	Mar. 31, 2013 Europe Pension Plans [Member]	Mar. 31, 2014 Other Postretirement Benefit Plans, Defined Benefit [Member]	Mar. 31, 2013 Other Postretirement Benefit Plans, Defined Benefit [Member]	Mar. 31, 2014 Other Postretirement Benefit Plans, Defined Benefit [Member]	Mar. 31, 2013 Other Postretirement Benefit Plans, Defined Benefit [Member]	Mar. 31, 2014 German Plan [Member]
Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract]
Portion Of Pension And Opeb Plans Represented In Disclosure Portion Disclosed	98.00%
Portion Of Pension And Opeb Plans Represented In Disclosure Portion Not Disclosed	2.00%
Defined Benefit Plan, Net Periodic Benefit Cost [Abstract]
Service cost										$ 17,493,000	$ 17,731,000	$ 52,819,000	$ 53,189,000	$ 3,054,000	$ 3,074,000	$ 9,162,000	$ 9,221,000	$ 365,000	$ 441,000	$ 1,097,000	$ 1,323,000
Interest cost										35,062,000	33,854,000	105,628,000	101,566,000	10,182,000	9,182,000	30,545,000	27,545,000	2,216,000	2,197,000	6,647,000	6,590,000
Expected return on plan assets										(46,968,000)	(46,586,000)	(141,375,000)	(139,540,000)	(11,457,000)	(10,168,000)	(34,370,000)	(30,505,000)	(28,000)	(33,000)	(84,000)	(98,000)
Amortization of net loss										5,473,000	11,440,000	16,597,000	34,325,000	2,235,000	1,441,000	6,706,000	4,324,000	(436,000)	83,000	(1,309,000)	250,000
Amortization of prior service credit										(2,095,000)	(2,094,000)	(6,284,000)	(6,283,000)	10,000	10,000	31,000	29,000	(1,751,000)	(2,051,000)	(5,253,000)	(6,152,000)
Net periodic benefit cost										8,965,000	14,345,000	27,385,000	43,257,000	4,024,000	3,539,000	12,074,000	10,614,000	366,000	637,000	1,098,000	1,913,000
Employer Contributions
Company contributions												67,000,000				24,600,000						10,100,000
Estimated future company contributions												5,900,000				13,800,000
Defined Contributions Plans
Company contribution costs recognized		$ 9,900,000	$ 9,300,000	$ 22,300,000	$ 22,300,000	$ 5,200,000	$ 5,600,000	$ 15,100,000	$ 16,800,000

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Condensed Consolidated Balance Sheets (Parentheticals) (USD $) In Thousands, except Share data, unless otherwise specified	Mar. 31, 2014	Jun. 30, 2013
Treasury stock, shares	4,181,350	3,836,338
Allowance for doubtful accounts receivable, current	$ 10,528	$ 12,768
Common Stock, Value, Issued	746	746
Common Class A [Member]
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	300,000,000	300,000,000
Common stock, shares issued	74,552,661	69,178,097
Common stock, shares outstanding	70,371,311	65,341,759
Common Stock, Value, Issued	746	692
Common Class B [Member]
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	93,500,000	93,500,000
Common stock, shares issued	0	5,374,070
Common stock, shares outstanding	0	5,374,070
Common Stock, Value, Issued	$ 0	$ 54

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Earnings Per Share (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2014	Mar. 31, 2013
Basic EPS
Income from continuing operations	$ 101,913	$ 83,145	$ 277,985	$ 212,380
Less: Income (loss) attributable to non-controlling interests	3,346	(71)	7,057	(2,695)
Income from continuing operations attributable to common stockholders	98,567	83,216	270,928	215,075
Less: Income allocated to participating securities	0	0	0	3,289
Income from continuing operations attributable to common stockholders	$ 98,567	$ 83,216	$ 270,928	$ 211,786
Weighted average shares of common stock, basic (in shares)	70,447	70,530	70,685	71,094
Shares				69,977
Per share amount (in dollars per share)	$ 1.40	$ 1.18	$ 3.83	$ 3.03
Diluted EPS
Share-based compensation awards	437	546	362	545
Shares	70,884	71,076	71,047	70,522
Per share amount (in dollars per share)	$ 1.39	$ 1.17	$ 3.81	$ 3.00

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Earnings Per Share (Tables)

9 Months Ended

Mar. 31, 2014

Earnings Per Share [Abstract]

Schedule of earnings per share, basic and diluted

The components of basic and diluted earnings per share are as follows:

	Three Months Ended March 31,
	2014					2013
	Income		Shares	Per Share Amount		Income			Shares	Per Share Amount
Basic EPS
Income from continuing operations	$	101,913				83,145
Less: Income/(loss) attributable to non-controlling interests	3,346					(71		)
Income from continuing operations attributable to common stockholders	98,567					83,216
Less: Income allocated to participating securities	—					—
Income from continuing operations attributable to common stockholders	$	98,567	70,447	$	1.40	$	83,216		70,530	$	1.18
Diluted EPS
Share-based compensation awards	—		437			—			546
Income available to common shareholders	$	98,567	70,884	$	1.39	$	83,216		71,076	$	1.17

	Nine Months Ended March 31,
	2014					2013
	Income		Shares	Per Share Amount		Income			Shares	Per Share Amount
Basic EPS
Income from continuing operations	$	277,985				$	212,380
Less: Income/(loss) attributable to non-controlling interests	7,057					(2,695		)
Income from continuing operations attributable to common stockholders	270,928					215,075
Less: Income allocated to participating securities	—					3,289
Income from continuing operations attributable to common stockholders	$	270,928	70,685	$	3.83	$	211,786		69,977	$	3.03
Diluted EPS
Share-based compensation awards	—		362			—			545
Income available to common shareholders	$	270,928	71,047	$	3.81	$	211,786		70,522	$	3.00

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Segment Information

9 Months Ended

Mar. 31, 2014

Segment Reporting [Abstract]

Segment Information

Segment Information.

Towers Watson has four reportable operating segments or business areas:

• Benefits

• Risk and Financial Services

• Talent and Rewards

• Exchange Solutions

Towers Watson’s chief operating decision maker is its chief executive officer. It was determined that Towers Watson operational data used by the chief operating decision maker is that of the segments. Management bases strategic goals and decisions on these segments and the data presented below is used to assess the adequacy of strategic decisions, the method of achieving these strategies and related financial results.

Management evaluates the performance of its segments and allocates resources to them based on net operating income on a pre-bonus, pre-tax basis. Revenue includes amounts that were directly incurred on behalf of our clients and reimbursed by them (reimbursable expenses).

On January 23, 2014, Towers Watson announced plans to expand the Exchange Solutions segment by combining operations and associates primarily from portions of the TAS North America line of business with the newly acquired Liazon entity within the existing Exchange Solutions segment to better align their respective strategic goals. The restructuring is expected to take place on July 1, 2014. We are still evaluating the impact to our operating segments and the related disclosures.

All periods presented have been recast to exclude the operating results of our Brokerage business, which has been classified as discontinued operations.

The table below presents specified information about the continuing operations of the reported segments for the three months ended March 31, 2014:

	Benefits		Risk and Financial Services		Talent and Rewards		Exchange Solutions		Total
Revenue (net of reimbursable expenses)	$	527,414	$	174,382	$	127,572	$	47,551	$	876,919
Net operating income	175,129		53,047		11,558		14,353		254,087

The table below presents specified information about the continuing operations of the reported segments for the three months ended March 31, 2013:

	Benefits		Risk and Financial Services		Talent and Rewards		Exchange Solutions		Total
Revenue (net of reimbursable expenses)	$	523,489	$	177,396	$	124,914	$	30,621	$	856,420
Net operating income	184,304		46,426		13,179		14,648		258,557

The table below presents specified information about the continuing operations of the reported segments for the nine months ended March 31, 2014:

	Benefits		Risk and Financial Services		Talent and Rewards		Exchange Solutions		Total
Revenue (net of reimbursable expenses)	$	1,471,780	$	477,343	$	451,464	$	118,677	$	2,519,264
Net operating income	461,016		109,976		108,718		13,586		693,296

The table below presents specified information about the continuing operations of the reported segments for the nine months ended March 31, 2013:

	Benefits		Risk and Financial Services		Talent and Rewards		Exchange Solutions			Total
Revenue (net of reimbursable expenses)	$	1,500,035	$	499,301	$	441,334	$	60,259		$	2,500,929
Net operating income	505,975		110,950		99,048		(1,245		)	714,728

The table below presents a reconciliation of the information reported by segment to the consolidated amounts reported from continuing operations for the three and nine months ended March 31, 2014 and 2013:

	Three Months Ended   March 31,						Nine Months Ended   March 31,
	2014			2013			2014			2013
Revenue:
Total segment revenue	$	876,919		$	856,420		$	2,519,264		$	2,500,929
Reimbursable expenses and other	27,914			36,557			83,663			96,304
Revenue	$	904,833		$	892,977		$	2,602,927		$	2,597,233
Net Operating Income:
Total segment net operating income	$	254,087		$	258,557		$	693,296		$	714,728
Differences in allocation methods (1)	(6,885		)	(5,010		)	9,970			984
Amortization of intangibles	(19,380		)	(18,955		)	(56,963		)	(57,777		)
Transaction and integration expenses	(241		)	(12,328		)	(1,049		)	(30,753		)
Stock-based compensation (2)	(2,362		)	1,305			(7,707		)	(16,523		)
Discretionary compensation	(75,712		)	(95,459		)	(225,919		)	(266,241		)
Payroll tax on discretionary compensation	(5,335		)	(5,663		)	(13,978		)	(15,347		)
Other, net	(5,749		)	(1,190		)	(28,380		)	(14,121		)
Income from operations	$	138,423		$	121,257		$	369,270		$	314,950

________________________

(1) Depreciation, general and administrative, pension, and medical costs are allocated to our segments based on budgeted expenses determined at the beginning of the fiscal year, as management believes that these costs are largely uncontrollable to the segment. To the extent that the actual expense base upon which allocations are made differs from the forecast/budget amount, a reconciling item will be created between internally allocated expenses and the actual expense that we report for GAAP purposes.

(2) Stock-based compensation excludes RSUs granted in conjunction with our performance bonus, which are included in discretionary compensation.

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Organization and Basis of Presentation (Details)	9 Months Ended
	Mar. 31, 2014
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Current Fiscal Year End Date	--06-30

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Recent Accounting Pronouncements

9 Months Ended

Mar. 31, 2014

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

Recent Accounting Pronouncements

Recent Accounting Pronouncements.

Not yet adopted

On June 7, 2013, the FASB issued ASU 2013-08, “Financial Services – Investment Companies (Topic 946): Amendments to the Scope, Measurement, and Disclosure Requirements,” which amends the criteria an entity would need to meet to qualify as an investment company under ASC 946. The ASU (1) introduces new disclosure requirements that apply to all investment companies and (2) amends the measurement criteria for certain interests in other investment companies. The ASU also amends the requirements in ASC 810 related to qualifying for the “investment-company deferral” in ASU 2010-10 as well as the requirements in ASC 820 related to qualifying for the “net asset value practical expedient” in ASU 2009-12. We manage certain funds that are considered variable interest entities and for which our management fee is considered a variable interest. These funds qualify for the “investment-company deferral” in ASU 2010-10 and therefore are subject to the consolidation guidance prior to the issuance of ASU 2009-17. The ASU is effective for annual periods that begin after December 15, 2013 and interim periods within those annual periods. Early adoption is prohibited. The Company is currently evaluating whether these funds will continue to qualify for the “investment-company deferral” based on the amended investment company criteria proscribed by ASU 2013-08.

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Condensed Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Cash flows from operating activities:
Net income before non-controlling interests	$ 283,965	$ 233,238
Adjustments to reconcile net income to net cash from operating activities:
Provision for doubtful receivables from clients	4,241	8,204
Depreciation	73,967	73,762
Amortization of intangible assets	57,402	59,287
Gain on sale of discontinued operations, pretax	(23,631)	0
Provision for deferred income taxes	64,052	39,120
Stock-based compensation	16,045	24,203
Other, net	(3,743)	(2,333)
Changes in operating assets and liabilities
Receivables from clients	16,846	112
Fiduciary assets	113,017	(6,796)
Other current assets	1,016	(10,053)
Other noncurrent assets	(6,432)	1,260
Accounts payable, accrued liabilities and deferred income	(34,948)	(8,706)
Employee-related liabilities	(128,510)	(40,326)
Fiduciary liabilities	(113,017)	6,796
Accrued retirement benefits and other employee-related liabilities	(113,690)	(118,029)
Professional liability claims reserves	9,418	(4,997)
Other current liabilities	(607)	(223)
Other noncurrent liabilities	(14,141)	1,508
Income tax related accounts	21,501	30,484
Cash flows from operating activities	222,751	286,511
Cash flows used in investing activities:
Cash paid for business acquisitions	(210,814)	(5,678)
Cash transferred with discontinued operations	(25,066)	0
Proceeds from discontinued operations	256,953	4,285
Cash acquired from business acquisitions	3,949	636
Fixed assets and software for internal use	(50,825)	(66,626)
Purchases of investments of consolidated variable interest entity	(109,510)	0
Capitalized software costs	(36,596)	(41,768)
Purchases of held-to-maturity securities	(14,994)	0
Purchases of available-for-sale securities	(44,891)	(18,188)
Sales and redemptions of available-for-sale securities	74,246	36,258
Cash flows used in investing activities	(157,548)	(91,081)
Cash flows from/(used in) financing activities:
Borrowings under credit facility	220,600	391,600
Repayments under credit facility	(220,600)	(464,600)
Repayments of notes payable	(18,750)	0
Cash received from consolidated variable interest entity	109,510	0
Contingent retention liability	21,746	0
Cash paid on retention liabilities	(1,939)	0
Dividends paid	(11,165)	(48,147)
Repurchases of common stock	(74,506)	(41,596)
Payroll tax payments on vested shares	(7,457)	(24,879)
Excess tax benefit	9,800	0
Cash flows from/(used in) financing activities	27,239	(187,622)
Effect of exchange rates on cash	11,713	(13,296)
Increase/(decrease) in cash and cash equivalents	104,155	(5,488)
Cash and cash equivalents at beginning of period	532,805	478,179
Cash and cash equivalents at end of period	636,960	472,691
Supplemental disclosures:
Cash paid for interest	2,831	6,278
Cash paid for income taxes, net of refunds	45,414	43,398
Transfers into consolidated investment funds	223,212	0
Deconsolidation of investment funds (see Note 9)	$ 339,019	$ 0

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Condensed Consolidated Statements of Operations (Parenthetical) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2014	Mar. 31, 2013
Income Statement [Abstract]
Discontinued operations, tax provision	$ 175	$ 6,621	$ 41,012	$ 11,158

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Variable Interest Entities

9 Months Ended

Mar. 31, 2014

Variable Interest Entities [Abstract]

Variable Interest Entities

Variable Interest Entities.

Variable interest entities (“VIEs”) are entities that lack one or more of the characteristics of a voting interest entity and therefore require a different approach in determining which party involved with the VIE should consolidate the entity. With a VIE, either the entity does not have sufficient equity at risk to finance its activities without additional subordinated financial support from other parties or the entity has equity investors that do not have the ability to make significant decisions relating to the entity’s operations through voting rights. The entity that has a controlling financial interest in a VIE is referred to as the primary beneficiary and is required to consolidate the VIE.

Through our wholly owned subsidiaries, Towers Watson Investment Management Limited and Towers Watson Investment Management, Ireland, we manage approximately $1.8 billion of assets in investment funds that are considered VIEs and for which our management fee is considered a variable interest. We have determined that these funds qualify for the deferral to certain provisions of ASC Subtopic 810-10, Consolidation – Overall, afforded by ASU 2010-10, Consolidation – Amendments for Certain Investment Funds. In accordance with this deferral, we determine whether we consolidate the fund based on whether we absorb a majority of the fund’s expected losses or receive a majority of the fund’s expected returns.

During our third fiscal quarter we deconsolidated two previously consolidated funds. Previously, the contracts governing these two funds contained language that restricted the investors' ability to exercise their economic interests in the funds, thereby causing the investors to become related parties of the Company and requiring the Company to combine its own interests with the interests of these investors for purposes of performing the primary beneficiary test. This restrictive language was modified during our third fiscal quarter, which resulted in the investors, other than the Company's defined benefit retirement plans, to no longer be considered related parties, and the Company to no longer be considered the primary beneficiary of the funds. The mark-to-market gains on the investments prior to deconsolidation were $3.0 million and $6.3 million, respectively, for the three and nine months ended March 31, 2014, and are reflected on the accompanying condensed consolidated statements of operations in other non-operating income. The fair value of these investments on the date of deconsolidation, inclusive of the cumulative gains, was $339.0 million, and was removed from the condensed consolidated balance sheets by eliminating the investments of consolidated variable interest entity and by reducing non-controlling interests. The non-controlling interest balance was considered temporary equity as the units held by the investors were redeemable. The changes of the redeemable non-controlling interests balance for the nine months ended March 31, 2014 are as follows:

Balance as of June 30, 2013	$	—
Subscriptions of non-controlling interest holders in consolidated VIEs	332,722
Mark-to-market gains on investments held by consolidated VIEs	6,297
Deconsolidation of VIEs	(339,019		)
Balance as of March 31, 2014	$	—

We are not the primary beneficiary and therefore do not consolidate any of the remaining funds as of March 31, 2014. Our maximum exposure to loss of these unconsolidated VIEs is limited to collection of any unpaid management fees (which are not material) and any potential increase to pension funding obligation due to losses incurred by the funds.

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Document and Entity Information	9 Months Ended
	Mar. 31, 2014	Apr. 30, 2014
Document Type	10-Q
Document Period End Date	Mar. 31, 2014
Amendment Flag	false
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2014
Current Fiscal Year End Date	--06-30
Entity Central Index Key	0001470215
Entity Filer Category	Large Accelerated Filer
Entity Registrant Name	Towers Watson & Co.
Entity Common Stock, Shares Outstanding		70,299,510

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Accumulated Other Comprehensive Income (Loss)

9 Months Ended

Mar. 31, 2014

Disclosure Text Block [Abstract]

Accumulated Other Comprehensive Income/(Loss)

Accumulated Other Comprehensive Income/(Loss).

Changes in accumulated other comprehensive income/(loss), net of non-controlling interests, are provided in the following table. The difference between the amounts presented in this table and the amounts presented in the condensed consolidated statements of comprehensive income are the corresponding components attributable to non-controlling interests, which are not material for further disclosure.

	Foreign currency translation (1)			Hedge effectiveness (1)									Available-for-sale securities (2)									Defined pension and post-retirement benefit costs (3)
				Before Tax			Tax			After Tax			Before Tax			Tax			After Tax			Before Tax			Tax			After Tax
As of June 30, 2013	$	(131,096	)	$	237		$	(105	)	$	132		$	547		$	(134	)	$	413		$	(233,817	)	$	64,904		$	(168,913	)
Other comprehensive income/(loss) before reclassifications	88,573			(1,978		)	681			(1,297		)	457			(130		)	327			—			—			—
Amounts reclassified from accumulated other comprehensive income	—			852			(293		)	559			(761		)	173			(588		)	11,942			(2,605		)	9,337
Net current-period other comprehensive income/(loss)	88,573			(1,126		)	388			(738		)	(304		)	43			(261		)	11,942			(2,605		)	9,337
As of March 31, 2014	$	(42,523	)	$	(889	)	$	283		$	(606	)	$	243		$	(91	)	$	152		$	(221,875	)	$	62,299		$	(159,576	)

(1) Reclassification adjustments from accumulated other comprehensive income are included in general and administrative expenses (see Note 6– Derivative Financial Instruments for additional details regarding the reclassification adjustments for the hedge settlements)

(2) Reclassification adjustments from accumulated other comprehensive income are included in income from discontinued operations

(3) Reclassification adjustments from accumulated other comprehensive income are included in the computation of net periodic pension cost (see Note 7 – Retirement Benefits for additional details)

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Condensed Consolidated Statements of Comprehensive Income (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2014	Mar. 31, 2013
Statement of Comprehensive Income [Abstract]
Net income before non-controlling interests	$ 105,852	$ 94,845	$ 283,965	$ 233,238
Other comprehensive income/(loss), net of tax:
Foreign currency translation	(797)	(96,135)	87,938	(47,412)
Defined pension and post-retirement benefit costs	2,806	(4,137)	9,337	(21,260)
Hedge effectiveness	292	546	(738)	(250)
Available-for-sale securities	(483)	93	(261)	149
Other comprehensive income/(loss) before non-controlling interests	1,818	(99,633)	96,276	(68,773)
Comprehensive income before non-controlling interests	107,670	(4,788)	380,241	164,465
Comprehensive income/(loss) attributable to non-controlling interest	3,325	(1,316)	6,422	(3,072)
Comprehensive income/(loss) (attributable to common stockholders)	$ 104,345	$ (3,472)	$ 373,819	$ 167,537

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Goodwill and Intangible Assets

9 Months Ended

Mar. 31, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

Goodwill and Intangible Assets.

The components of goodwill and intangible assets are outlined below for the nine months ended March 31, 2014:

	Benefits		Risk and Financial Services			Talent and Rewards		Exchange Solutions		All Other		Total
Balance as of June 30, 2013	$	1,233,272	$	534,150		$	108,850	$	341,449	$	1,214	$	2,218,935
Goodwill related to acquisitions	—		—			—		173,968		—		173,968
Goodwill related to disposals	—		(167,822		)	—		—		—		(167,822		)
Translation adjustment	38,260		17,647			3,109		—		—		59,016
Balance as of March 31, 2014	$	1,271,532	$	383,975		$	111,959	$	515,417	$	1,214	$	2,284,097

Included in the Risk and Financial Services activity is a $167.8 million reduction in goodwill related to the disposal of our Brokerage business, which was completed on November 6, 2013. See Note 2 for additional information regarding the sale of this business.

Included in the Exchange Solutions goodwill acquired is $174.0 million of goodwill related to the acquisition of Liazon, which closed on November 22, 2013. We recorded the consideration less the tangible assets and liabilities as goodwill as of March 31, 2014. See Note 2 for additional information regarding this acquisition.

The following table reflects changes in the net carrying amount of the components of finite-lived intangible assets for the nine months ended March 31, 2014:

	Customer related intangible			Core/ developed technology			Favorable lease agreements			Trademarks & trade names			Total
Balance as of June 30, 2013	$	246,247		$	69,515		$	3,565		$	—		$	319,327
Intangibles acquired	600			34,300			—			150			35,050
Intangibles related to disposal	(8,254		)	—			—			—			(8,254		)
Amortization	(35,106		)	(22,146		)	(710		)	(150		)	(58,112		)
Translation adjustment	5,187			715			(16		)	—			5,886
Balance as of March 31, 2014	$	208,674		$	82,384		$	2,839		$	—		$	293,897

For the three and nine months ended March 31, 2014, we recorded $19.4 million and $57.4 million, respectively, of amortization related to our intangible assets, exclusive of favorable lease agreements. For the three and nine months ended March 31, 2013, we recorded $19.4 million and $59.3 million, respectively, of amortization related to our intangible assets. These amounts include amortization that has been classified within income from discontinued operations on the accompanying condensed consolidated statements of operations.

Included in the change in customer related intangible assets is the reduction of $8.3 million associated with the sale of our Brokerage business, which closed on November 6, 2013.

As part of the integration of our Retirement business, during the second quarter of fiscal 2012, management decided to discontinue the use of an application that was acquired in the Merger with an expected useful life of ten years. We calculated no impairment associated with this application and we shortened the life of the intangible asset and accelerated the amortization in the same pattern in which our clients are transitioned to the surviving application, which is expected to occur predominantly over the next two to three years. To develop our estimated useful remaining life of the application, we are using client engagement revenue and the planned transition developed by our business management. For the three and nine months ended March 31, 2014, we recorded $0.4 million and $1.7 million, respectively, of additional amortization expense and $3.8 million and $6.3 million of additional amortization expense for the three and nine months ended March 31, 2013, respectively.

Our indefinite-lived non-amortizable intangible assets consist of acquired trade names. The carrying value of these assets were $377.3 million and $368.4 million as of March 31, 2014 and June 30, 2013, respectively. The change during the period was due to foreign currency translation.

Our acquired unfavorable lease liabilities were $11.0 million and $13.5 million as of March 31, 2014 and June 30, 2013, respectively, and are recorded in the other noncurrent liabilities in the condensed consolidated balance sheet. The change for the nine months ended March 31, 2014 was comprised of a reduction to rent expense of $2.5 million.

The following table reflects the carrying value of finite-lived intangible assets and liabilities as of March 31, 2014 and June 30, 2013:

	As of March 31, 2014				As of June 30, 2013
	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Finite-lived intangible assets and liabilities:
Trade name	$	520	$	520	$	370	$	370
Customer related intangibles	387,223		178,549		390,027		143,780
Core/developed technology	175,566		93,182		164,762		95,247
Favorable lease agreements	6,453		3,614		6,496		2,931
Total finite-lived intangible assets	$	569,762	$	275,865	$	561,655	$	242,328
Unfavorable lease agreements	25,982		14,947		25,591		12,122
Total finite-lived intangible liabilities	$	25,982	$	14,947	$	25,591	$	12,122

Certain trademark and trade-name intangible assets have indefinite useful lives and are not amortized. The weighted average remaining life of amortizable intangible assets and liabilities at March 31, 2014 was 5.3 years.

The following table reflects:

1) future estimated amortization expense for amortizable intangible assets consisting of customer related intangibles and core/developed technology, and

2) the rent offset resulting from the amortization of the net lease intangible assets and liabilities for the remainder of fiscal 2014 and for subsequent fiscal years:

Fiscal year ending June 30,	Amortization		Rent (Offset) Expense
2014	$	17,937	$	(575	)
2015	67,783		(2,027		)
2016	57,714		(1,567		)
2017	53,379		(1,864		)
2018	42,967		(1,981		)
Thereafter	51,278		(182		)
Total	$	291,058	$	(8,196	)

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Investments

9 Months Ended

Mar. 31, 2014

Investment [Abstract]

Investments

Investments.

We hold available-for-sale investments comprised of fixed income securities, equity securities and mutual funds / exchange-traded funds. We also hold held-to-maturity investments comprised of fixed income securities. See Note 5 – Fair Value Measurements for the investments by type of security. The fixed income securities all mature within twelve months of the balance sheet date and are classified as short-term investments on the condensed consolidated balance sheet. We held no material trading securities as of March 31, 2014 and June 30, 2013.

Additional information on available-for-sale security balances is provided in the following table as of March 31, 2014 and June 30, 2013:

	As of March 31, 2014									As of June 30, 2013
	Amortized Cost		Unrealized Gains		Unrealized Losses			Estimated Fair Value		Amortized Cost		Unrealized Gains		Unrealized Losses			Estimated Fair Value
Fixed income securities (a)	$	14,992	$	2	$	—		$	14,994	$	56,602	$	15	$	(2	)	$	56,615
Equity securities (a)	114		16		(3		)	127		853		476		(1		)	1,328
Mutual funds and exchange-traded funds (b)	47,912		1,641		—			49,553		26,666		14		(97		)	26,583

(a) As of March 31, 2014, all fixed income securities are classified as held-to-maturity and are reflected as short-term investments on the condensed consolidated balance sheet. As of June 30, 2013, all fixed income securities are classified as available-for-sale and are reflected as short-term investments on the condensed consolidated balance sheet. Certain liquid short-term investments, such as term deposits and certificates of deposits, are classified as short-term investments on the balance sheet but are not available-for-sale or held-to-maturity investments and therefore, are not included in the table above.

(b) Reflected as short-term investments or other assets on the condensed consolidated balance sheet as of March 31, 2014 and June 30, 2013.

For all investments, other than fixed income securities, amortized cost represents the cost basis of the investment as of the purchase or Merger date. Proceeds from sales and maturities of investments of available-for-sale securities during the nine months ended March 31, 2014 were $59.3 million, resulting in realized gains of $0.8 million that is reflected as income from discontinued operations on the condensed consolidated statement of operations. For the nine months ended March 31, 2014, $1.6 million of these proceeds related to the sale of investments as part of the divestiture of our Brokerage business. Proceeds from sales and maturities of investments of available-for-sale securities during the nine months ended March 31, 2013 were $34.7 million, resulting in no realized gains/losses. There were no proceeds from sales and maturities of held-to-maturity securities during the nine months ended March 31, 2014 and March 31, 2013.

There were no material investments that have been in a continuous loss position for more than six months, and there have been no other-than-temporary impairments recognized. There were no material investments with unrealized losses as of March 31, 2014. The aggregate fair value of investments with unrealized losses as of June 30, 2013 was $36.3 million.

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Earnings Per Share

9 Months Ended

Mar. 31, 2014

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per Share.

We present earnings per share (“EPS”) using the two-class method. This method addresses whether awards granted in share-based transactions are participating securities prior to vesting and therefore need to be included in the earning allocation in computing earnings per share using the two-class method. This method requires non-vested share-based payment awards that have non-forfeitable rights to dividends or dividend equivalents to be treated as a separate class of securities in calculating earnings per share. Our participating securities include non-vested restricted stock. On January 1, 2013, all remaining outstanding shares of this restricted stock vested and were converted to freely tradable shares of Towers Watson Class A common stock. The components of basic and diluted earnings per share are as follows:

	Three Months Ended March 31,
	2014					2013
	Income		Shares	Per Share Amount		Income			Shares	Per Share Amount
Basic EPS
Income from continuing operations	$	101,913				83,145
Less: Income/(loss) attributable to non-controlling interests	3,346					(71		)
Income from continuing operations attributable to common stockholders	98,567					83,216
Less: Income allocated to participating securities	—					—
Income from continuing operations attributable to common stockholders	$	98,567	70,447	$	1.40	$	83,216		70,530	$	1.18
Diluted EPS
Share-based compensation awards	—		437			—			546
Income available to common shareholders	$	98,567	70,884	$	1.39	$	83,216		71,076	$	1.17

	Nine Months Ended March 31,
	2014					2013
	Income		Shares	Per Share Amount		Income			Shares	Per Share Amount
Basic EPS
Income from continuing operations	$	277,985				$	212,380
Less: Income/(loss) attributable to non-controlling interests	7,057					(2,695		)
Income from continuing operations attributable to common stockholders	270,928					215,075
Less: Income allocated to participating securities	—					3,289
Income from continuing operations attributable to common stockholders	$	270,928	70,685	$	3.83	$	211,786		69,977	$	3.03
Diluted EPS
Share-based compensation awards	—		362			—			545
Income available to common shareholders	$	270,928	71,047	$	3.81	$	211,786		70,522	$	3.00

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Restricted Stock

9 Months Ended

Mar. 31, 2014

Restricted Stock [Abstract]

Restricted Stock

Restricted Stock.

In conjunction with the Merger, shares of Towers Watson common stock issued to Towers Perrin shareholders were divided among four series of non-transferable Towers Watson common stock, Classes B-1, B-2, B-3 and B-4, each with a par value of $0.01 per share. In addition, on January 31, 2011, we completed the acquisition of EMB and issued 113,858 shares of Class B-3 and 113,858 shares of Class B-4 common stock, par value $0.01 per share, to the sellers as consideration. The shares were reduced through our tender offer, our secondary public offering and by the restriction lapsing and conversion to Class A common stock annually on January 1, 2011, 2012 and 2013. The remaining 5,374,070 outstanding shares of Towers Watson Class B-4 common stock converted on a one-for-one basis into freely transferable shares of Towers Watson Class A common stock on January 1, 2014.

The Towers Perrin restricted stock unit (“RSU”) holders received 10% of the total consideration issued to Towers Perrin shareholders in conjunction with the Merger. The RSUs were converted into 4,248,984 shares of Towers Watson Restricted Class A Common Stock (“Restricted Class A shares”).The service condition was fulfilled from the grant date through each of the three annual periods from January 1, 2010 until December 31, 2012. The restriction lapsed annually on January 1 and the Restricted Class A shares became freely tradable shares of Class A common stock on such dates. The shares were reduced by forfeitures and shares withheld for tax purposes.

For the three months ended March 31, 2013, we reversed $5.3 million of previously recorded compensation expense based on the actual number of shares forfeited upon the final vesting date of January 1, 2013. Our estimated forfeiture rate was 10% and our actual forfeitures were 11%. For the nine months ended March 31, 2013, we recorded $8.0 million of non-cash share-based compensation expense in connection with the issuance of Towers Watson Restricted Class A common stock to Towers Perrin RSU holders in the Merger. In our results of operations, $1.0 million is classified as discontinued operations for the Brokerage employees’ awards relating to non-cash stock based compensation recorded for the nine months ended March 31, 2013. In our results of operations for the three months ended March 31, 2013 and for the three and nine months ended March 31, 2014, no non-cash stock based compensation expense is classified as discontinued operations since the service period of this award was complete at January 1, 2013.

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Retirement Benefits

9 Months Ended

Mar. 31, 2014

Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract]

Retirement Benefits

Retirement Benefits.

Defined Benefit Plans

Towers Watson sponsors both qualified and non-qualified defined benefit pension plans and other post-retirement benefit plans in North America and Europe. As of June 30, 2013, these funded and unfunded plans represented 98 percent of Towers Watson’s pension and other post-retirement benefit obligations and are disclosed herein. Towers Watson also sponsors funded and unfunded defined benefit pension plans in certain other countries as well, representing the remaining two percent of the liability.

All expenses and contributions presented in this note are inclusive of amounts classified as discontinued operations in the accompanying condensed consolidated statements of operations.

Components of Net Periodic Benefit Cost for Defined Benefit Pension Plans

The following tables set forth the components of net periodic benefit cost for the Company’s defined benefit pension plan for North America and Europe for the three and nine months ended March 31, 2014 and 2013:

	Three Months Ended March 31,
	2014						2013
	North America			Europe			North America			Europe
Service cost	$	17,493		$	3,054		$	17,731		$	3,074
Interest cost	35,062			10,182			33,854			9,182
Expected return on plan assets	(46,968		)	(11,457		)	(46,586		)	(10,168		)
Amortization of net loss	5,473			2,235			11,440			1,441
Amortization of prior service (credit)/cost	(2,095		)	10			(2,094		)	10
Net periodic benefit cost	$	8,965		$	4,024		$	14,345		$	3,539

	Nine Months Ended March 31,
	2014						2013
	North America			Europe			North America			Europe
Service cost	$	52,819		$	9,162		$	53,189		$	9,221
Interest cost	105,628			30,545			101,566			27,545
Expected return on plan assets	(141,375		)	(34,370		)	(139,540		)	(30,505		)
Amortization of net loss	16,597			6,706			34,325			4,324
Amortization of prior service (credit)/cost	(6,284		)	31			(6,283		)	29
Net periodic benefit cost	$	27,385		$	12,074		$	43,257		$	10,614

The decrease in our North American pension expense was due to a decrease in the amortization of actuarial losses. This decrease was driven primarily by an increase in the discount rate from fiscal year 2013 to fiscal year 2014. Additionally, favorable investment returns during fiscal year 2013 combined with the recognition of the majority of our previously deferred actuarial losses during fiscal year 2013 have resulted in reduced actuarial losses being recognized in fiscal year 2014.

Components of Net Periodic Benefit Cost for Other Postretirement Plans

The following table sets forth the components of net periodic benefit cost for the Company’s post-retirement plans for the three and nine months ended March 31, 2014 and 2013:

	Three Months Ended   March 31,						Nine Months Ended   March 31,
	2014			2013			2014			2013
Service cost	$	365		$	441		$	1,097		$	1,323
Interest cost	2,216			2,197			6,647			6,590
Expected return on plan assets	(28		)	(33		)	(84		)	(98		)
Amortization of net (gain) loss	(436		)	83			(1,309		)	250
Amortization of prior service credit	(1,751		)	(2,051		)	(5,253		)	(6,152		)
Net periodic benefit cost	$	366		$	637		$	1,098		$	1,913

Employer Contributions to Defined Benefit Pension Plans

The Company made $67.0 million in contributions to the North American plans during the first nine months of fiscal year 2014 and anticipates making $5.9 million in contributions over the remainder of the fiscal year. The Company made $24.6 million in contributions to European plans during the first nine months of fiscal year 2014 and anticipates making $13.8 million in contributions over the remainder of the fiscal year. Of the amount contributed for the European plans, $10.1 million was a contribution to the German pension plan which was previously unfunded. The Company expects to fund the German plan obligation over the next 10 years.

Defined Contribution Plans

The cost of the Company’s contributions to the various U.S. defined contribution plans for the three months ended March 31, 2014 and 2013 amounted to $9.9 million and $9.3 million, respectively. The cost of the Company’s contributions to the plans for the nine months ended March 31, 2014 and 2013 amounted to $22.3 million and $22.3 million, respectively.

The cost of the Company’s contributions to the various U.K. defined contribution plans for the three months ended March 31, 2014 and 2013 amounted to $5.2 million and $5.6 million, respectively. The cost of the Company’s contributions to the plans for the nine months ended March 31, 2014 and 2013 amounted to $15.1 million and $16.8 million, respectively.

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Fair Value Measurements

9 Months Ended

Mar. 31, 2014

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements.

We have categorized our financial instruments into a three-level fair value hierarchy. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets and liabilities (Level 1) and lowest priority to unobservable inputs (Level 3). In some cases, the inputs used to measure fair value might fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement in its entirety falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

Financial assets and liabilities recorded in the accompanying condensed consolidated balance sheets are categorized based on the inputs in the valuation techniques as follows:

Level 1 — Financial assets and liabilities whose values are based on quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date.

Level 2 — Financial assets and liabilities whose values are based on inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3 — Financial assets and liabilities whose values are based on unobservable inputs for the asset or liability.

The following presents our assets and liabilities measured at fair value on a recurring basis as of March 31, 2014 and June 30, 2013:

	Fair Value Measurements on a Recurring Basis at March 31, 2014
	Level 1		Level 2		Level 3		Total
Assets:
Available-for-sale securities:
Corporate bonds (a)	$	—	$	14,994	$	—	$	14,994
Equity securities (a)	127		—		—		127
Mutual funds / exchange traded funds (b)	49,553		—		—		49,553
Derivatives:
Foreign exchange forwards (c)	—		417		—		417
Liabilities:
Derivatives:
Foreign exchange forwards (c)	$	—	$	1,183	$	—	$	1,183
Contingent Liabilities:
Retention bonus liability (d)	—		—		19,807		19,807

	Fair Value Measurements on a Recurring Basis at June 30, 2013
	Level 1		Level 2		Level 3		Total
Assets:
Available-for-sale securities:
U.S. treasury securities and obligations of the U.S government, government agencies and authorities (a)	$	2,014	$	—	$	—	$	2,014
U.S. Corporate bonds (a)	—		53,100		—		53,100
Foreign corporate bonds (a)	—		1,501		—		1,501
Equity securities (a)	1,328		—		—		1,328
Mutual funds / exchange-traded funds (b)	26,583		—		—		26,583
Derivatives:
Foreign exchange forwards (c)	—		546		—		546
Liabilities:
Derivatives:
Foreign exchange forwards (c)	$	—	$	353	$	—	$	353

_________________________

(a) These assets are included in short-term investments on the condensed consolidated balance sheet.

(b) These assets are included in short-term investments or other assets on the condensed consolidated balance sheet.

(c) These derivative investments are included in other current assets or accounts payable, accrued liabilities and deferred income on the condensed consolidated balance sheet. See Note 6 for further information on our derivative investments.

(d) These liabilities are included in other current liabilities and other noncurrent liabilities on the condensed consolidated balance sheet. The fair value was determined using a discounted cash flow model. There have been no material changes in the fair value of this liability subsequent to initial recognition.

We record gains or losses related to the changes in the fair value of our financial instruments for foreign exchange forward contracts accounted for as foreign currency hedges in general and administrative expenses in the condensed consolidated statements of operations. For the three and nine months ended March 31, 2014, we recorded gains of $0.1 million and $0.1 million, respectively, for instruments still held at March 31, 2014. For the three and nine months ended March 31, 2013, we recorded losses of $1.5 million and $1.5 million for instruments still held at March 31, 2013, respectively. There were no material gains or losses recorded in the condensed consolidated statements of operations for available-for-sale securities still held at March 31, 2014 or 2013.

To determine the fair value of our derivative positions, we use valuations from the counterparty of each hedge. This is a Level 2 valuation based on observable rates in the market. Counterparties use proprietary models to calculate values and are not actual quotes that could be used to terminate the contracts, but we believe the valuations are very close to the value of each contract if terminated since we review the valuations and compare these valuations against our own calculated fair value. We monitor the counterparty default risk both before the hedge is placed and prospectively throughout the life of the contract and would adjust fair values if asset impairment was deemed significant.

The U.S. Treasury securities, equity securities, exchange traded funds and mutual funds are valued using quoted market prices as of the end of the trading day. Corporate bonds and certain obligations of government agencies or states, municipalities and political subdivisions are valued based on yields currently available on comparable securities of issuers with similar credit ratings. We monitor the value of the investments for other-than-temporary impairment on a quarterly basis.

The availability of observable market data is monitored to assess the appropriate classification of financial instruments within the fair value hierarchy. Changes in economic conditions or model-based valuation techniques may require the transfer of financial instruments from one fair value level to another. In such instances, the transfer is reported at the beginning of the reporting period. There were no transfers between Levels 1, 2 or 3 during the three and nine months ended March 31, 2014.

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Derivative Financial Instruments

9 Months Ended

Mar. 31, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

Derivative Financial Instruments.

We are exposed to market risk from changes in foreign currency exchange rates. Where possible, we identify exposures in our business that can be offset internally. Where no natural offset is identified, we may choose to enter into various derivative transactions. These instruments have the effect of reducing our exposure to unfavorable changes in foreign currency rates. We do not enter into derivative transactions for trading purposes.

A number of our foreign subsidiaries receive revenues (through either internal or external billing) in currencies other than their functional currency. As a result, the foreign subsidiary’s functional currency revenue will fluctuate as the currency exchange rates change. To reduce this variability, we use foreign exchange forward contracts to hedge the foreign exchange risk of the forecasted collections. We have designated these derivatives as cash flow hedges of its forecasted foreign currency denominated collections. We also use derivative financial contracts, principally foreign exchange forward contracts, to hedge other non-functional currency obligations. These exposures primarily arise from intercompany lending and other liabilities denominated in foreign currencies. At March 31, 2014, the longest outstanding maturity was 15 months. As of March 31, 2014, a net $0.9 million pretax loss was deferred in accumulated other comprehensive income and is expected to be recognized in general and administrative expenses during the next 12 months when the hedged revenue is recognized.

As of March 31, 2014 and June 30, 2013, we had cash flow and economic hedges with a notional value of $63.3 million and $107.2 million, respectively, to hedge cash flow and balance sheet exposures. We determine the fair value of our foreign currency derivatives based on quoted prices received from the counterparty for each contract, which we evaluate using pricing models whose inputs are observable. The net fair value of all derivatives held as of March 31, 2014 and June 30, 2013 was a liability of $0.8 million and an asset of $0.2 million, respectively. See Note 5, Fair Value Measurements, for further information regarding the determination of fair value.

The fair value of our derivative instruments held as of March 31, 2014 and June 30, 2013 and their location in the condensed consolidated balance sheet are as follows:

	Derivative assets					Derivative liabilities
	Balance sheet location	Fair value				Balance sheet location	Fair value
		March 31, 2014		June 30, 2013			March 31, 2014			June 30, 2013
Derivatives designated as hedging instruments:
Foreign exchange forwards	Other current assets	$	295	$	395	Accounts payable, accrued liabilities and deferred income	$	(1,181	)	$	(159	)
Derivatives not designated as hedging instruments:
Foreign exchange forwards	Other current assets	122		151		Accounts payable, accrued liabilities and deferred income	(2		)	(194		)
Total derivative assets (liabilities)		$	417	$	546		$	(1,183	)	$	(353	)

The effects of derivative instruments that are designated as hedging instruments on the consolidated statements of operations and the consolidated statements of changes in stockholders’ equity for the three months ended March 31, 2014 and 2013 and for the nine months ended March 31, 2014 and 2013 are as follows:

Derivatives designated as hedging instruments for the three months ended March 31, 2014 and 2013:	Gain recognized in OCI (effective portion)				Location of loss reclassified from OCI into income (effective portion)	Loss reclassified from OCI into income (effective portion)						Location of loss recognized in income (ineffective portion and amount excluded from effectiveness testing)	Loss recognized in income (ineffective portion and amount excluded from effectiveness testing)
	2014		2013			2014			2013				2014			2013
Foreign exchange Forwards	$	85	$	556	General and administrative expenses	$	(520	)	$	(386	)	General and administrative expenses	$	(4	)	$	(1	)
Total	$	85	$	556		$	(520	)	$	(386	)		$	(4	)	$	(1	)

Derivatives designated as hedging instruments for the nine months ended March 31, 2014 and 2013:	Loss recognized in OCI (effective portion)						Location of loss reclassified from OCI into income (effective portion)	Loss reclassified from OCI into income (effective portion)					Location of loss recognized in income (ineffective portion and amount excluded from effectiveness testing)	Loss recognized in income (ineffective portion and amount excluded from effectiveness testing)
	2014			2013				2014		2013				2014			2013
Foreign exchange forwards	$	(1,978	)	$	(503	)	General and administrative expenses	$	852	$	(121	)	General and administrative expenses	$	(1	)	$	(1	)
Total	$	(1,978	)	$	(503	)		$	852	$	(121	)		$	(1	)	$	(1	)

Included in the notional values above are $25.8 million and $33.6 million as of March 31, 2014 and June 30, 2013, respectively, of derivatives held as economic hedges primarily to hedge intercompany loans denominated in currencies other than the functional currency. The effects of derivatives that have not been designated as hedging instruments on the condensed consolidated statements of operations for the three and nine months ended March 31, 2014 and 2013 are as follows:

		(Loss) gain recognized in income
		Three Months Ended   March 31,						Nine Months Ended   March 31,
Derivatives not designated as hedging instruments:	Location of (loss) gain recognized in income	2014			2013			2014		2013
Foreign exchange forwards	General and administrative expenses	$	(365	)	$	(146	)	$	697	$	1,928
Total		$	(365	)	$	(146	)	$	697	$	1,928

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Debt, Commitments and Contingent Liabilities

9 Months Ended

Mar. 31, 2014

Debt Commitments And Contingent Liabilities [Abstract]

Debt, Commitments And Contingent Liabilities

Debt, Commitments and Contingent Liabilities.

The debt, commitments and contingencies described below are currently in effect and would require Towers Watson, or domestic subsidiaries, to make payments to third parties under certain circumstances. In addition to commitments and contingencies specifically described below, Towers Watson has historically provided guarantees on an infrequent basis to third parties in the ordinary course of business.

Towers Watson Senior Credit Facility

On November 7, 2011, Towers Watson and certain subsidiaries entered into a five-year, $500 million revolving credit facility, which amount may be increased by an aggregate amount of $250 million, subject to the satisfaction of customary terms and conditions, with a syndicate of banks (the “Senior Credit Facility”). Borrowings under the Senior Credit Facility bear interest at a spread to either LIBOR or the Prime Rate. During the nine months ended March 31, 2014 and 2013, the weighted-average interest rate on borrowings under the Senior Credit Facility was 1.93% and 1.49%, respectively. We are charged a quarterly commitment fee, currently 0.175% of the Senior Credit Facility, which varies with our financial leverage and is paid on the unused portion of the Senior Credit Facility. Obligations under the Senior Credit Facility are guaranteed by Towers Watson and all of its domestic subsidiaries (other than Professional Consultants Insurance Company (“PCIC”), a majority-owned captive insurance company, and Stone Mountain Insurance Company (“SMIC”), a wholly-owned captive insurance company).

The Senior Credit Facility contains customary representations and warranties and affirmative and negative covenants. The Senior Credit Facility requires Towers Watson to maintain certain financial covenants that include a minimum Consolidated Interest Coverage Ratio and a maximum Consolidated Leverage Ratio (which terms in each case are defined in the Senior Credit Facility). In addition, the Senior Credit Facility contains restrictions on the ability of Towers Watson to, among other things, incur additional indebtedness; pay dividends; make distributions; create liens on assets; make acquisitions; dispose of property; engage in sale-leaseback transactions; engage in mergers or consolidations, liquidations and dissolutions; engage in certain transactions with affiliates; and make changes in lines of businesses. As of March 31, 2014, we were in compliance with our covenants.

As of March 31, 2014, Towers Watson had no borrowings outstanding under the Senior Credit Facility.

Letters of Credit under the Senior Credit Facility

As of March 31, 2014, Towers Watson had standby letters of credit totaling $21.4 million associated with our captive insurance companies in the event that we fail to meet our financial obligations. Additionally, Towers Watson had $1.4 million of standby letters of credit covering various other existing or potential business obligations. The aforementioned letters of credit are issued under the Senior Credit Facility, and therefore reduce the amount that can be borrowed under the Senior Credit Facility by the outstanding amount of these standby letters of credit.

Term Loan Agreement Due June 2017

On June 1, 2012, the Company entered into a five-year $250 million amortizing term loan facility (“the Term Loan”) with a consortium of banks. The interest rate on the term loan is based on the Company’s choice of one, three or six month LIBOR plus a spread of 1.25% to 1.75%, or alternatively the bank base rate plus 0.25% to 0.75%. The spread to each index is dependent on the Company’s consolidated leverage ratio. The weighted-average interest rate on the Term Loan during the nine months ended March 31, 2014 and 2013 was 1.42% and 1.47%, respectively. The Term Loan amortizes at a rate of $6.25 million per quarter, beginning in September 2013, with a final maturity date of June 1, 2017 . The Company has the right to prepay a portion or all of the outstanding Term Loan balance on any interest payment date without penalty. At March 31, 2014, the balance on the Term Loan was $231.3 million.

This agreement contains substantially the same terms and conditions as our Senior Credit Facility, including guarantees from all of the domestic subsidiaries of Towers Watson (other than PCIC and SMIC). The Company entered into the Term Loan as part of the financing of our acquisition of Extend Health on May 29, 2012.

Indemnification Agreements

Towers Watson has various agreements which provide that it may be obligated to indemnify the other party to the agreement with respect to certain matters. Generally, these indemnification provisions are included in contracts arising in the normal course of business and in connection with the purchase and sale of certain businesses. Although it is not possible to predict the maximum potential amount of future payments that may become due under these indemnification agreements because of the conditional nature of Towers Watson’s obligations and the unique facts of each particular agreement, Towers Watson does not believe any potential liability that might arise from such indemnity provisions is probable or material. There are no provisions for recourse to third parties, nor are any assets held by any third parties that any guarantor can liquidate to recover amounts paid under such indemnities.

Legal Proceedings

From time to time, Towers Watson and its subsidiaries, including Watson Wyatt and Towers Perrin, are parties to various lawsuits, arbitrations or mediations that arise in the ordinary course of business. The matters reported on below are the material pending claims against Towers Watson and its subsidiaries. We do not expect the impact of claims not described below to be material to Towers Watson’s financial statements. We also receive subpoenas in the ordinary course of business and, from time-to-time, receive requests for information in connection with governmental investigations.

Towers Watson carries substantial professional liability insurance which, effective July 1, 2010, has been provided by SMIC. For the policy period beginning July 1, 2011 certain changes were made to our professional liability insurance program. These changes remain in-force for the policy periods beginning July 1, 2011 and ending July 1, 2014. Our professional liability insurance includes a $10 million aggregate self-insured retention above the $1 million self-insured retention per claim, including the cost of defending such claims. SMIC provides us with $40 million of coverage per claim and in the aggregate, above the retentions, including the cost of defending such claims. SMIC secured $25 million of reinsurance from unaffiliated reinsurance companies in excess of the $15 million SMIC retained layer. Excess insurance attaching above the SMIC coverage is provided by various unaffiliated commercial insurance companies.

This structure effectively results in Towers Watson and SMIC bearing the first $25 million of loss per occurrence or in the aggregate above the $1 million per claim self-insured retention. As a wholly-owned captive insurance company, SMIC is consolidated into our financial statements.

Before the Merger, Watson Wyatt and Towers Perrin each obtained substantial professional liability insurance from PCIC. A limit of $50 million per claim and in the aggregate was provided by PCIC subject to a $1 million per claim self-insured retention. PCIC secured reinsurance of $25 million attaching above the $25 million PCIC retained layer from unaffiliated reinsurance companies. Our ownership interest in PCIC is 72.86%. As a consequence, PCIC’s results are consolidated in Towers Watson’s operating results. PCIC ceased issuing insurance policies effective July 1, 2010 and at that time entered into a run-off mode of operation. Our shareholder agreements with PCIC could require additional payments to PCIC if development of claims significantly exceeds prior expectations.

We provide for the self-insured retention where specific estimated losses and loss expenses for known claims are considered probable and reasonably estimable. Although we maintain professional liability insurance coverage, this insurance does not cover claims made after expiration of our current policies of insurance. Generally accepted accounting principles require that we record a liability for incurred but not reported (“IBNR”) professional liability claims if they are probable and reasonably estimable, and for which we have not yet contracted for insurance coverage. We use actuarial assumptions to estimate and record our IBNR liability. As of March 31, 2014, we had a $182.3 million IBNR liability balance, net of recoverable receivables of our captive insurance companies. This net liability was $184.1 million as of June 30, 2013. To the extent our captive insurance companies, PCIC and SMIC, expect losses to be covered by a third party, they record a receivable for the amount expected to be recovered. This receivable is classified in other current or other noncurrent assets in our condensed consolidated balance sheet.

We reserve for contingent liabilities based on ASC 450, Contingencies, when it is determined that a liability, inclusive of defense costs, is probable and reasonably estimable. The contingent liabilities recorded are primarily developed actuarially. Litigation is subject to many factors which are difficult to predict so there can be no assurance that in the event of a material unfavorable result in one or more claims, we will not incur material costs.

Former Towers Perrin shareholder litigation

A putative class action lawsuit filed by certain former shareholders of Towers Perrin (the "Dugan Action") previously was reported in Amendment No. 3 to the Registration Statement on Form S-4/A (File No. 333-161705) filed on November 9, 2009 by the Jupiter Saturn Holding Company (the “Registration Statement”). As reported in the Registration Statement, the complaint was filed on November 5, 2009 against Towers Perrin, members of its board of directors, and certain members of senior management in the United States District Court for the Eastern District of Pennsylvania.

The named Plaintiffs in this action were former members of Towers Perrin’s senior management, who left Towers Perrin at various times between 1995 and 2000. The Dugan plaintiffs sought to represent a class of former Towers Perrin shareholders who separated from service on or after January 1, 1971, but prior to certain changes in Towers Perrin's capital structure that occurred in January 2005, and who also meet certain other specified criteria. The complaint does not contain a quantification of the damages sought.

On December 9, 2009, Watson Wyatt was informed by Towers Perrin of a settlement demand from the plaintiffs in the Dugan Action. Although the complaint in the Dugan Action did not contain a quantification of the damages sought, plaintiffs’ settlement demand, which was orally communicated to Towers Perrin on December 8, 2009 and in writing on December 9, 2009, sought a payment of $800 million to settle the action on behalf of the proposed class. Plaintiffs requested that Towers Perrin communicate the settlement demand to Watson Wyatt.

On December 17, 2009 , four other former Towers Perrin shareholders, all of whom voluntarily left Towers Perrin in May or June 2005 and all of whom were excluded from the proposed class in the Dugan Action, commenced a separate legal proceeding (the "Allen Action") in the United States District Court for the Eastern District of Pennsylvania alleging the same claims in substantially the same form as those alleged in the Dugan Action. A fifth plaintiff joined this action on August 29, 2011. These plaintiffs were proceeding in their individual capacities and did not seek to represent a proposed class.

On January 15, 2010 , another former Towers Perrin shareholder who separated from service with Towers Perrin in March 2005 when Towers Perrin and EDS launched a joint venture that led to the creation of a corporate entity known as ExcellerateHRO (“eHRO”), commenced a separate legal proceeding (the "Pao Action") in the United States District Court of the Eastern District of Pennsylvania alleging the same claims in substantially the same form as those alleged in the Dugan Action. Towers Perrin contributed its Towers Perrin Administrative Solutions (“TPAS”) business to eHRO and formerly was a minority shareholder (15)% of eHRO. Pao sought to represent a class of former Towers Perrin shareholders who separated from service in connection with Towers Perrin’s contribution to eHRO of its TPAS business and who were excluded from the proposed class in the Dugan Action. Towers Watson was also named as a defendant in the Pao Action. On January 20, 2010, the court consolidated the three actions for all purposes under the Dugan Action file number.

Pursuant to the Towers Perrin Bylaws in effect at the time of their separations, the Towers Perrin shares held by all plaintiffs were redeemed by Towers Perrin at book value when these individuals separated from employment. The complaints alleged variously that there was a promise that Towers Perrin would remain privately owned in perpetuity and an implied or actual promise that in the event of a change to public ownership plaintiffs would receive compensation. Plaintiffs alleged that by agreeing to sell their shares back to Towers Perrin at book value upon separation, they and other members of the putative classes relied upon these alleged promises, which they claim were breached as a result of the consummation of the Merger between Watson Wyatt and Towers Perrin. The complaints all asserted claims for breach of contract, breach of express trust, breach of fiduciary duty, promissory estoppel, quasi-contract/unjust enrichment, and constructive trust, and seek equitable relief including an accounting, disgorgement, rescission and/or restitution, and the imposition of a constructive trust.

On February 22, 2010, defendants filed a motion to dismiss the complaints in their entireties. By order dated September 30, 2010, the court granted the motion to dismiss plaintiffs’ claim for a constructive trust and denied the motion with respect to all other claims alleged. Pursuant to the court’s September 30, 2010 order, defendants also filed answers to plaintiffs’ complaints on October 22, 2010. Discovery in the case was bifurcated, with fact discovery to proceed before expert witness and damages discovery. Neither the plaintiffs in the Dugan Action nor the plaintiff in Pao Action moved for class certification. Defendants filed a motion for summary judgment on all claims in all actions on December 23, 2011. The court heard argument on June 19, 2012, and on December 11, 2012 granted defendants’ motion, and entered judgment in favor of defendants on all claims. On January 10, 2013, plaintiffs filed a joint notice of their intent to appeal the court’s judgment to the U.S. Court of Appeals for the Third Circuit. On February 13, 2013, the parties were notified that the appeal had been assigned for mediation pursuant to the Third Circuit’s mediation program. During the mediation session held on May 7, 2013, the parties reached agreement on settlement terms that include payment of an aggregate $10 million to an agreed settlement class (including all persons in the classes as defined in the respective complaints in the Dugan Action and the Pao Action, plus additional former Towers Perrin shareholders who separated from Towers Perrin between January 1971 and June 2005) estimated to potentially include more than 1,000 former Towers Perrin shareholders, which payment would also cover legal fees of plaintiffs’ attorneys, as determined by the court, and expenses incurred to administer the settlement.

The cases were then returned to the district court for consideration of the proposed settlement. On September 24, 2013, the court preliminarily certified the settlement class and preliminarily approved the parties’ proposed settlement.

At a hearing on February 12, 2014, the court gave its final approval to the settlement. The final order and judgment approving the settlement and dismissing the Dugan, Allen and Pao Actions with prejudice was entered on February 18, 2014. No appeal was taken from that final order and judgment during the applicable appeal period, and the resolution and dismissal of the cases as against all defendants is now final.

Acument Global Technologies, Inc.

In a letter to the Company dated January 26, 2011, Acument Global Technologies, Inc. (“Acument”) and the Acument Global Technologies, Inc. Pension Plan (the “Plan”) claimed that Towers Watson breached its fiduciary duties under the Employee Retirement Income Security Act of 1974 (“ERISA”) in connection with advice provided to Acument relating to investment of certain assets of the Plan in the Westridge Capital Management Enhancements Funds (the “Westridge Funds”). Acument and the Plan demanded that the Company make the Plan whole for losses and damages allegedly sustained as a result of Acument’s decision to invest in the Westridge Funds. Watson Wyatt Investment Consulting, Inc. (“WWIC”), now known as Towers Watson Investment Services, Inc. (“TWIS”), provided investment consulting services to Acument between December 1, 2007 and April 30, 2010. In connection with those services, WWIC recommended an investment in the Westridge Funds. In July 2008, Acument made a $47.0 million investment in the Westridge Funds. During the period December 1, 2008 through January 22, 2009, Acument made additional investments of $9.5 million, bringing the aggregate investment of the Plan’s assets in the Westridge Funds to $56.5 million.

As the result of information obtained during an investigation of Westridge Capital Management, its affiliates WG Trading Investors, L.P. and WG Trading Company, L.P. (collectively referred to as “Westridge”) and their principals, commenced by the National Futures Association on February 5, 2009, the Commodities Future Trading Commission filed suit against Westridge and its principals alleging violations of the Commodity Exchange Act. This resulted in a court-supervised receivership of the assets of Westridge. The Securities and Exchange Commission (“SEC”) filed a separate suit on February 25, 2009 against Westridge and its principals alleging violations of the federal securities laws. In its complaint, the SEC alleges that Westridge had become a fraudulent investment scheme by which its principals purportedly misappropriated approximately $553 million from a number of highly sophisticated institutional investors, including public pension and retirement plans and educational institutions, some of which were investing in Westridge as late as February 6, 2009. We believe that, to date, Acument has recovered approximately $39.7 million of its investment in the Westridge Funds from the receivership. The Company declined Acument’s demand for compensation.

On January 20, 2012, Acument and the Acument Pension Plan (referred to together as “Acument”) filed suit against the Company and TWIS in the United States District Court for the Southern District of New York. The complaint alleges four counts of breach of fiduciary duty under ERISA, claiming principally alleged deficiencies in the Company’s due diligence relating to Westridge and in the disclosures made to Acument concerning Westridge and the nature of the investment. The Company has filed an answer to the complaint denying all claims and asserting affirmative defenses and plans to continue to defend vigorously against these legal proceedings. A mediation took place on September 5, 2012. On January 16, 2014, the Company and TWIS filed an amended answer and counterclaim asserting that Acument Global Technologies, Inc. failed to fulfill its fiduciary duties to the Acument Pension Plan with respect to its investment in the Westridge Funds. On or about February 28, 2014, the Company received Acument’s expert’s damages report, which asserts the range of loss to be between $38.0 million and $86.0 million, which we understand to be comprised primarily of investment losses (including opportunity costs); more specifically, Acument seeks the present-day value of an alternative investment in a “comparable” fund, less what Acument has been returned from the Westridge Receiver. On or about March 27, 2014, the Company submitted a rebuttal expert damages report, which asserts a range of up to $16.6 million. This range assumes a finding of liability and no contribution for the Company’s pending counterclaim. Based on all of the information to date, including the Company’s rebuttal expert damages report, the Company believes there is no reasonably possible material loss in excess of amounts currently accrued. The dispute remains extant.

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Segment Information (Tables)

9 Months Ended

Mar. 31, 2014

Segment Reporting [Abstract]

Schedule of segment information, by segment

The table below presents specified information about the continuing operations of the reported segments for the three months ended March 31, 2014:

	Benefits		Risk and Financial Services		Talent and Rewards		Exchange Solutions		Total
Revenue (net of reimbursable expenses)	$	527,414	$	174,382	$	127,572	$	47,551	$	876,919
Net operating income	175,129		53,047		11,558		14,353		254,087

The table below presents specified information about the continuing operations of the reported segments for the three months ended March 31, 2013:

	Benefits		Risk and Financial Services		Talent and Rewards		Exchange Solutions		Total
Revenue (net of reimbursable expenses)	$	523,489	$	177,396	$	124,914	$	30,621	$	856,420
Net operating income	184,304		46,426		13,179		14,648		258,557

The table below presents specified information about the continuing operations of the reported segments for the nine months ended March 31, 2014:

	Benefits		Risk and Financial Services		Talent and Rewards		Exchange Solutions		Total
Revenue (net of reimbursable expenses)	$	1,471,780	$	477,343	$	451,464	$	118,677	$	2,519,264
Net operating income	461,016		109,976		108,718		13,586		693,296

The table below presents specified information about the continuing operations of the reported segments for the nine months ended March 31, 2013:

	Benefits		Risk and Financial Services		Talent and Rewards		Exchange Solutions			Total
Revenue (net of reimbursable expenses)	$	1,500,035	$	499,301	$	441,334	$	60,259		$	2,500,929
Net operating income	505,975		110,950		99,048		(1,245		)	714,728

Schedule of reconciliation of segment information to the consolidated amounts

The table below presents a reconciliation of the information reported by segment to the consolidated amounts reported from continuing operations for the three and nine months ended March 31, 2014 and 2013:

	Three Months Ended   March 31,						Nine Months Ended   March 31,
	2014			2013			2014			2013
Revenue:
Total segment revenue	$	876,919		$	856,420		$	2,519,264		$	2,500,929
Reimbursable expenses and other	27,914			36,557			83,663			96,304
Revenue	$	904,833		$	892,977		$	2,602,927		$	2,597,233
Net Operating Income:
Total segment net operating income	$	254,087		$	258,557		$	693,296		$	714,728
Differences in allocation methods (1)	(6,885		)	(5,010		)	9,970			984
Amortization of intangibles	(19,380		)	(18,955		)	(56,963		)	(57,777		)
Transaction and integration expenses	(241		)	(12,328		)	(1,049		)	(30,753		)
Stock-based compensation (2)	(2,362		)	1,305			(7,707		)	(16,523		)
Discretionary compensation	(75,712		)	(95,459		)	(225,919		)	(266,241		)
Payroll tax on discretionary compensation	(5,335		)	(5,663		)	(13,978		)	(15,347		)
Other, net	(5,749		)	(1,190		)	(28,380		)	(14,121		)
Income from operations	$	138,423		$	121,257		$	369,270		$	314,950

________________________

(1) Depreciation, general and administrative, pension, and medical costs are allocated to our segments based on budgeted expenses determined at the beginning of the fiscal year, as management believes that these costs are largely uncontrollable to the segment. To the extent that the actual expense base upon which allocations are made differs from the forecast/budget amount, a reconciling item will be created between internally allocated expenses and the actual expense that we report for GAAP purposes.

(2) Stock-based compensation excludes RSUs granted in conjunction with our performance bonus, which are included in discretionary compensation.

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Restricted Stock (Details) (EMB [Member], USD $)	0 Months Ended
	Jan. 31, 2011
Common Class B-3 [Member]
Business Acquisition [Line Items]
Shares issued as consideration for purchase of EMB (in shares)	113,858
Common stock, par value (in dollars per share)	$ 0.01
Common Class B-4 [Member]
Business Acquisition [Line Items]
Shares issued as consideration for purchase of EMB (in shares)	113,858

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Income Taxes

9 Months Ended

Mar. 31, 2014

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes.

Provision for income taxes on continuing operations for the three and nine months ended March 31, 2014 was $39.2 million and $96.3 million, respectively, compared to $35.3 million and $99.6 million, respectively, for the three and nine months ended March 31, 2013. The effective tax rate was 25.7% for the nine months ended March 31, 2014 and 31.9% for the nine months ended March 31, 2013. The decrease in the effective tax rate for the nine months is primarily due to current year income tax benefits on the release of uncertain tax positions of 4.6% related to the lapses in statute of limitations in various taxing jurisdictions, primarily the U.S., and an income tax benefit of 1.0% in connection with the enacted statutory tax rate reduction in the U.K. Towers Watson records a tax benefit on net operating loss carryovers and net deferred tax assets only if it is more likely than not that a benefit will be realized.

It is reasonably possible that during the next 12 months the Company’s liability for uncertain tax positions may change by a significant amount. The Company may settle certain U.S. tax examinations or have lapses in statute of limitations for different amounts than the Company has accrued as uncertain tax positions. The Company may need to accrue and ultimately pay additional amounts for tax positions that previously met a more likely than not standard if such positions are not upheld. Conversely, the Company could settle positions with the tax authorities for amounts lower than have been accrued or extinguish a position through payment. The Company believes the outcomes which are reasonably possible within the next 12 months may result in a reduction in the liability for uncertain tax positions in the range of approximately $5.0 million to $11.8 million, excluding interest and penalties.

On September 13, 2013, the Treasury Department and the Internal Revenue Service released final regulations that provide guidance on the deductibility of amounts paid to acquire, produce, or improve tangible property. These regulations also provide rules applicable to materials and supplies. The Company has assessed the impacts of these regulations and confirmed that the impact of these new regulations will not be material to the financial statements.

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Acquisitions and Divestitures (Tables)

9 Months Ended

Mar. 31, 2014

Acquisitions and Divestitures [Abstract]

Schedule Of Disposal Groups Including Discontinued Operations Income Statement [Table Text Block]

The following selected financial information relates to the Brokerage business’s operations for the three and nine months ended March 31, 2014 and 2013, respectively:

	Three Months Ended   March 31,					Nine Months Ended   March 31,
	2014			2013		2014			2013
Revenue from discontinued operations	$	—		$	47,990	$	63,762		$	124,227
(Loss)/income from discontinued operations before taxes	(1,037		)	18,321		23,361			32,016
Tax expense on discontinued operations	188			6,621		8,989			11,158
Net (loss)/income from discontinued operations	(1,225		)	11,700		14,372			20,858
Gain from sale of discontinued operations	5,151			—		23,631			—
Tax (credit)/expense on gain from sale of discontinued operations	(13		)	—		32,023			—
Net income/(loss) from sale of discontinued operations	5,164			—		(8,392		)	—
Total net income from discontinued operations	$	3,939		$	11,700	$	5,980		$	20,858

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Variable Interest Entities (Details) (USD $)	3 Months Ended	9 Months Ended
	Mar. 31, 2014	Mar. 31, 2014	Mar. 31, 2013
Variable Interest Entities [Abstract]
Assets under management	$ 1,800,000,000	$ 1,800,000,000
Increase (Decrease) in Temporary Equity [Roll Forward]
Balance as of June 30, 2013		0
Subscriptions of non-controlling interest holders in consolidated VIEs		332,722,000
Mark-to-market gains on investments held by consolidated VIEs	3,000,000	6,297,000
Deconsolidation of investment funds (see Note 9)		(339,019,000)	0
Balance as of March 31, 2014	$ 0	$ 0

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Goodwill and Intangible Assets (Details1) (USD $)	3 Months Ended		9 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2014	Mar. 31, 2013	Jun. 30, 2013
Finite-Lived Intangible Assets [Roll Forward]
Balance as of June 30, 2013			$ 319,327,000
Intangibles acquired	35,050,000		35,050,000
Intangibles related to disposal			(8,254,000)
Amortization	(19,400,000)	(19,400,000)	(57,402,000)	(59,287,000)
Total intangible amortization and rent expense			(58,112,000)
Translation adjustment			5,886,000
Balance as of March 31, 2014	293,897,000		293,897,000
Intangible Assets Other Disclosures [Abstract]
Indefinite-lived intangible assets (excluding goodwill)	377,300,000		377,300,000		368,400,000
Intangible Lease Liability	11,000,000		11,000,000		13,500,000
Reduction to rent expense			2,500,000
Finite-Lived Intangible Assets By Category [Abstract]
Gross carrying amount	569,762,000		569,762,000		561,655,000
Accumulated amortization	275,865,000		275,865,000		242,328,000
Gross carrying amount - intangible liabilities	25,982,000		25,982,000		25,591,000
Accumulated amortization - intangible liabilities	14,947,000		14,947,000		12,122,000
Weighted average remaining life of intangible assets and liabilities			5 years 4 months
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
2014	17,937,000		17,937,000
2015	67,783,000		67,783,000
2016	57,714,000		57,714,000
2017	53,379,000		53,379,000
2018	42,967,000		42,967,000
Thereafter	51,278,000		51,278,000
Total	291,058,000		291,058,000
Future Amortization Rent Offset [Abstract]
2014			(575,000)
2015			(2,027,000)
2016			(1,567,000)
2017			(1,864,000)
2018			(1,981,000)
Thereafter			(182,000)
Total			(8,196,000)
Intangible Assets, Amortization Period [Member]
Change in Accounting Estimate [Abstract]
Description of change in accounting estimate			As part of the integration of our Retirement business, during the second quarter of fiscal 2012, management decided to discontinue the use of an application that was acquired in the Merger with an expected useful life of ten years. We calculated no impairment associated with this application and we shortened the life of the intangible asset and accelerated the amortization in the same pattern in which our clients are transitioned to the surviving application, which is expected to occur predominantly over the next two to three years. To develop our estimated useful remaining life of the application, we are using client engagement revenue and the planned transition developed by our business management.
Change in accounting estimate period charge	400,000	3,800,000	1,700,000	6,300,000
Customer related intangible
Finite-Lived Intangible Assets [Roll Forward]
Intangibles acquired	600,000		600,000
Intangibles related to disposal			(8,254,000)
Amortization			(35,106,000)
Translation adjustment			5,187,000
Finite-Lived Intangible Assets By Category [Abstract]
Gross carrying amount	387,223,000		387,223,000		390,027,000
Accumulated amortization	178,549,000		178,549,000		143,780,000
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
Total	208,674,000		208,674,000		246,247,000
Core/developed technology
Finite-Lived Intangible Assets [Roll Forward]
Intangibles acquired	34,300,000		34,300,000
Intangibles related to disposal			0
Amortization			(22,146,000)
Translation adjustment			715,000
Finite-Lived Intangible Assets By Category [Abstract]
Gross carrying amount	175,566,000		175,566,000		164,762,000
Accumulated amortization	93,182,000		93,182,000		95,247,000
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
Total	82,384,000		82,384,000		69,515,000
Favorable lease agreements
Finite-Lived Intangible Assets [Roll Forward]
Intangibles acquired	0		0
Intangibles related to disposal			0
Rent expense for lease intangible			(710,000)
Translation adjustment			(16,000)
Finite-Lived Intangible Assets By Category [Abstract]
Gross carrying amount	6,453,000		6,453,000		6,496,000
Accumulated amortization	3,614,000		3,614,000		2,931,000
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
Total	2,839,000		2,839,000		3,565,000
Trademarks & trade names
Finite-Lived Intangible Assets [Roll Forward]
Intangibles acquired	150,000		150,000
Amortization			(150,000)
Finite-Lived Intangible Assets By Category [Abstract]
Gross carrying amount	520,000		520,000		370,000
Accumulated amortization	520,000		520,000		370,000
Unfavorable lease agreements
Finite-Lived Intangible Assets By Category [Abstract]
Gross carrying amount - intangible liabilities	25,982,000		25,982,000		25,591,000
Accumulated amortization - intangible liabilities	$ 14,947,000		$ 14,947,000		$ 12,122,000

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Condensed Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Jun. 30, 2013
Assets
Cash and cash equivalents	$ 636,960	$ 532,805
Fiduciary assets	10,651	148,414
Short-term investments	28,455	56,645
Receivables from clients:
Billed, net of allowances of $10,528 and $12,768	492,353	519,580
Unbilled, at estimated net realizable value	322,714	306,258
Current receivables, net	815,067	825,838
Other current assets	131,700	148,519
Total current assets	1,622,833	1,712,221
Fixed assets, net	362,317	346,915
Deferred income taxes	77,537	86,313
Goodwill	2,284,097	2,218,935
Intangible assets, net	671,178	687,758
Other assets	324,707	279,935
Total Assets	5,342,669	5,332,077
Liabilities
Accounts payable, accrued liabilities and deferred income	349,602	351,648
Employee-related liabilities	448,548	560,831
Fiduciary liabilities	10,651	148,414
Term loan - current	25,000	25,000
Other current liabilities	65,891	26,980
Total current liabilities	899,692	1,112,873
Revolving credit facility	0	0
Term loan	206,250	225,000
Accrued retirement benefits and other employee-related liabilities	667,985	771,429
Professional liability claims reserve	261,126	251,191
Other noncurrent liabilities	270,528	226,750
Total Liabilities	2,305,581	2,587,243
Commitments and contingencies
Stockholders’ Equity
Common stock	746	746
Additional paid-in capital	1,854,733	1,850,448
Treasury stock, at cost — 4,181,350 and 3,836,338 shares	(280,416)	(221,643)
Retained earnings	1,650,410	1,394,407
Accumulated other comprehensive loss	(202,553)	(299,464)
Total Stockholders’ Equity	3,022,920	2,724,494
Non-controlling interest	14,168	20,340
Total Equity	3,037,088	2,744,834
Total Liabilities and Total Equity	5,342,669	5,332,077
Class A Common Stock — $0.01 par value: 300,000,000 shares authorized; 74,552,661 and 69,178,097 issued and 70,371,311 and 65,341,759 outstanding
Stockholders’ Equity
Common stock	746	692
Class B Common Stock — $0.01 par value: 93,500,000 shares authorized; 0 and 5,374,070 issued and outstanding
Stockholders’ Equity
Common stock	$ 0	$ 54

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Acquisitions and Divestitures

9 Months Ended

Mar. 31, 2014

Acquisitions and Divestitures [Abstract]

Acquisitions and Divestitures

Acquisitions and Divestitures.

Acquisition

There was one acquisition in the nine months ended March 31, 2014, which was not material for the purposes of financial statement disclosures as required by Accounting Standards Codification (“ASC”) 805. Our acquisition information is included to provide our investors with a better understanding of our strategic acquisitions.

Liazon Corporation Acquisition

On November 22, 2013, Towers Watson purchased Liazon Corporation (“Liazon”), a leader in developing and delivering private benefit exchanges for active employees, for $203.2 million in cash and assumed equity awards valued at $8.0 million. See Note 12 for further information on the assumed stock options. The Liazon business became a new line of business, which complements our existing OneExchange offerings under the Exchange Solutions segment. Together these solutions help organizations, both large and small, deliver self- and fully-insured benefits to both employees as well as pre- and post-65 retirees. We included the results of Liazon's operations since the acquisition date in the Exchange Solutions segment and in our condensed consolidated financial statements.

During the second and third quarters of fiscal 2014, we recorded the tangible assets received, liabilities assumed, and the preliminary fair value of intangibles. The intangibles included developed technology, valued at $34.3 million, and other intangibles that were collectively immaterial. Our estimate of fair value for the technology intangible was developed using the multi-period excess earnings method valuation model. Significant assumptions used in the valuation were estimated revenues and expenses, contributory asset charges, required rates of return, and discount rates. Based on the fair value of these intangibles, we also recorded a net deferred tax liability of $0.7 million. It was determined that total consideration was $211.2 million, and we recorded $174.0 million of goodwill related to the acquisition of Liazon.

Divestitures

Sale of our Brokerage business.

On September 19, 2013, we entered into a definitive agreement to sell our Reinsurance and Property and Casualty Insurance Brokerage (“Brokerage”) business to Jardine Lloyd Thompson Group plc (“JLT”) for cash consideration of $250 million. The Brokerage business was a component of our Risk and Financial Services segment. The sale closed during our second quarter of fiscal year 2014. We divested this business as part of our strategy to focus on the businesses where we are market leaders. We continue to focus on risk consulting, software and other services for the insurance industry. The business will be branded for a transitional period of 15 months from the closing date as JLT Towers Re.

As part of the transaction, we entered into an Alliance Agreement with JLT that will ensure clients have continued access to our risk consulting and software services. This agreement will also provide JLT Towers Re with continued use of Towers Watson’s proprietary actuarial models and software.

The Company assessed the guidance under ASC 205 to determine if the Alliance Agreement or any other terms of the sale agreement constituted significant continuing direct cash flows or significant continuing involvement with the Brokerage business after the sale. The Company compared the cash flows expected to be recognized from the Brokerage business as a result of the continuation or migration of activities after the disposal transaction to the projected generation of cash flows by the Brokerage business that we could have expected absent the disposal transaction. Based on this analysis, the expected annual cash inflows or outflows related to the portion of revenues shared or commissions received or paid and software sales under the Alliance Agreement are each expected to represent approximately 1% or less of the annual revenues generated by our Brokerage business operations prior to the disposal. This was deemed not significant.

The Company also calculated the expected cash flows associated with the placement of its insurance and reinsurance arrangements. The Company agreed to use JLT as its broker-of-record for all insurance and reinsurance transactions to which the Company’s wholly-owned captive insurance company, Stone Mountain Insurance Company, is a party for the next five years. These amounts were previously eliminated as intercompany transactions, and are $2.8 million for fiscal year 2014. Additionally, the Company agreed to a Transitional Services Agreement with JLT for a two-year period ending November 5, 2015. The Company expects to incur approximately $6.3 million each year in occupancy or other infrastructure costs, which were prepaid as part of deal consideration or will be repaid by JLT over the next two years. The cash flows associated with these arrangements represent approximately 7.4% of the annual expenses generated by our Brokerage operations prior to the disposal, which was deemed not significant.

The Company noted that none of the aforementioned agreements or arrangements constituted significant continuing involvement because they do not afford the Company the ability to influence the financial or operating decisions of JLT. Accordingly, we concluded that the continuing cash flows expected after the sale of our Brokerage business do not preclude discontinued operations presentation, and the Company has therefore reclassified the results of our Brokerage business’s operations as discontinued operations for all periods presented in our condensed consolidated statements of operations. The following selected financial information relates to the Brokerage business’s operations for the three and nine months ended March 31, 2014 and 2013, respectively:

	Three Months Ended   March 31,					Nine Months Ended   March 31,
	2014			2013		2014			2013
Revenue from discontinued operations	$	—		$	47,990	$	63,762		$	124,227
(Loss)/income from discontinued operations before taxes	(1,037		)	18,321		23,361			32,016
Tax expense on discontinued operations	188			6,621		8,989			11,158
Net (loss)/income from discontinued operations	(1,225		)	11,700		14,372			20,858
Gain from sale of discontinued operations	5,151			—		23,631			—
Tax (credit)/expense on gain from sale of discontinued operations	(13		)	—		32,023			—
Net income/(loss) from sale of discontinued operations	5,164			—		(8,392		)	—
Total net income from discontinued operations	$	3,939		$	11,700	$	5,980		$	20,858

Only the fiduciary assets and liabilities associated with the European businesses were sold. North American fiduciary assets and liabilities have not been disposed of due to certain legal restrictions which do not permit the transfer of these assets and liabilities.

In addition to the stated $250 million cash consideration stipulated in the sale agreement, a preliminary purchase price adjustment of $28.7 million was paid to the Company by JLT representing the preliminary value of net assets transferred in the sale. The completion accounts and this purchase price adjustment were finalized during the Company’s third fiscal quarter and an additional $2.7 million is expected to be received during the fourth fiscal quarter.

As part of the sale, the Company agreed to repay JLT for retention payments made to certain employees of Brokerage if they remain with the business on the 30-day anniversary of the sale and the first and second anniversary of the sale. The value ascribed to this portion of the obligation is $21.7 million at the time of the sale. The remaining liability at March 31, 2014 is carried at fair value on the accompanying consolidated balance sheets (see Note 5 – Fair Value Measurements). The total amount has been classified as current or non-current liabilities based on the expected payment dates.

The obligation for retention payments and certain other negotiated terms reduced total consideration received at close to $215.1 million. Total transaction and integration costs were approximately $6.4 million. We finalized the completion accounts and the purchase price adjustments during the third quarter of fiscal 2014. Our final pre-tax gain on the sale is $23.6 million. The sale of our Brokerage business resulted in a significant taxable gain since the disposal of the goodwill and intangible assets associated with the business is not deductible for tax.

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Segment Information (Details 1) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2014	Mar. 31, 2013
Revenue:
Total segment revenue	$ 876,919	$ 856,420	$ 2,519,264	$ 2,500,929
Reimbursable expenses and other	27,914	36,557	83,663	96,304
Revenue	904,833	892,977	2,602,927	2,597,233
Net Operating Income:
Total segment net operating income	254,087	258,557	693,296	714,728
Differences in allocation methods	(6,885)	(5,010)	9,970	984
Amortization of intangibles	(19,380)	(18,955)	(56,963)	(57,777)
Transaction and integration expenses	(241)	(12,328)	(1,049)	(30,753)
Stock-based compensation	(2,362)	1,305	(7,707)	(16,523)
Discretionary compensation	(75,712)	(95,459)	(225,919)	(266,241)
Payroll tax on discretionary compensation	(5,335)	(5,663)	(13,978)	(15,347)
Other, net	(5,749)	(1,190)	(28,380)	(14,121)
Income from operations	$ 138,423	$ 121,257	$ 369,270	$ 314,950

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Investments (Tables)

9 Months Ended

Mar. 31, 2014

Investment [Abstract]

Schedule of investments

Additional information on available-for-sale security balances is provided in the following table as of March 31, 2014 and June 30, 2013:

	As of March 31, 2014									As of June 30, 2013
	Amortized Cost		Unrealized Gains		Unrealized Losses			Estimated Fair Value		Amortized Cost		Unrealized Gains		Unrealized Losses			Estimated Fair Value
Fixed income securities (a)	$	14,992	$	2	$	—		$	14,994	$	56,602	$	15	$	(2	)	$	56,615
Equity securities (a)	114		16		(3		)	127		853		476		(1		)	1,328
Mutual funds and exchange-traded funds (b)	47,912		1,641		—			49,553		26,666		14		(97		)	26,583

(a) As of March 31, 2014, all fixed income securities are classified as held-to-maturity and are reflected as short-term investments on the condensed consolidated balance sheet. As of June 30, 2013, all fixed income securities are classified as available-for-sale and are reflected as short-term investments on the condensed consolidated balance sheet. Certain liquid short-term investments, such as term deposits and certificates of deposits, are classified as short-term investments on the balance sheet but are not available-for-sale or held-to-maturity investments and therefore, are not included in the table above.

(b) Reflected as short-term investments or other assets on the condensed consolidated balance sheet as of March 31, 2014 and June 30, 2013.

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Acquisitions and Divestitures (Summary of Acquisitions) (Details) (USD $)	9 Months Ended			0 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Jun. 30, 2013	Nov. 22, 2013 Liazon [Member]	Mar. 31, 2014 Liazon [Member]
Business Acquisition [Line Items]
Acquisition date				Nov. 22, 2013
Name of acquired entity				Liazon
Cash paid	$ 210,814,000	$ 5,678,000		$ 203,200,000
Stock based compensation awards assumed, fair value				8,000,000
Acquired Finite-Lived Intangibles	35,050,000				34,300,000
Acquired deferred tax liabilities, noncurrent					700,000
Consideration transferred				211,200,000
Goodwill acquired	$ 2,284,097,000		$ 2,218,935,000	$ 174,000,000

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Share-Based Compensation

9 Months Ended

Mar. 31, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Share-Based Compensation

Share-Based Compensation.

Restricted Stock Units

Executives and Employees

The Compensation Committee of our Board of Directors approves performance-vested restricted stock unit awards pursuant to the Towers Watson & Co. 2009 Long Term Incentive Plan. RSUs are designed to provide us an opportunity to offer our long-term incentive program (LTIP) and to provide key executives with a long-term stake in our success. RSUs are notional, non-voting units of measurement based on our common stock. Under the RSU agreement, participants become vested in a number of RSUs based on the achievement of specified levels of financial performance during the performance period set forth in the agreement, provided that the participant remains in continuous service with us through the end of the performance period. Any RSUs that become vested are payable in shares of our Class A Common Stock. Dividend equivalents will accrue on RSUs and vest to the same extent as the underlying shares. The form of performance-vested restricted stock unit award agreement includes a provision whereby the Committee could provide for continuation of vesting of restricted stock units upon an employee’s termination under certain circumstances such as a qualified retirement. This definition of qualified retirement is age 55 and with 15 years of experience at the company and a minimum of one year of service in the performance period.

2014 LTIP. During the first quarter of fiscal year 2014, the Compensation Committee of the Board of Directors approved a grant of 62,651 RSUs to certain of our executive officers. During the third quarter of fiscal year 2014, the Compensation Committee of the Board of Directors approved an additional grant of 2,704 RSUs as a result of new executives being added to the plan. Awards were based on the value of the executive officer’s annual base salary and a multiplier, which is then converted into a target number of RSUs based on our closing stock price as of the date of grant, which was between $105.90 and $110.70. Between 0% and 204% of the target number of RSUs will vest based on the extent to which specified performance metrics are achieved over the three-year performance period from July 1, 2013 to June 30, 2016, subject to the executive officers’ continued employment with us through the end of the performance period, except in the case of a qualified retirement. The Compensation Committee approved the grants and established adjusted three-year average EPS and revenue growth during the performance period as the performance metrics for the awards. For participants that met the requirement for qualified retirement, we record the expense of their awards over the one year service period as performed. We will adjust the stock-based compensation for their awards during the performance period based upon the level of performance achieved. For the three and nine months ended March 31, 2014, we recorded $1.1 million and $3.8 million, respectively, of stock-based compensation related to these grants.

2013 LTIP. During the first quarter of fiscal year 2013, the Compensation Committee of the Board of Directors approved a grant of 121,075 RSUs to certain of our executive officers. Awards were based on the value of the executive officer’s annual base salary and a multiplier, which is then converted into a target number of RSUs based on our closing stock price as of the date of grant of $54.59. Between 0% and 204% of the target number of RSUs will vest based on the extent to which specified performance metrics are achieved over the three-year performance period from July 1, 2012 to June 30, 2015, subject to the executive officers’ continued employment with us through the end of the performance period, except in the case of a qualified retirement. The Compensation Committee approved the grants and established adjusted three-year average EPS and revenue growth during the performance period as the performance metrics for the awards. For participants that met the requirement for qualified retirement, we record the expense of their awards over the one year service period as performed. We will adjust the stock-based compensation for their awards during the performance period based upon the level of performance achieved. For the three and nine months ended March 31, 2014, we recorded a reduction in expense of $0.4 million and expense of $0.6 million of stock-based compensation related to these grants, respectively. For the three and nine months ended March 31, 2013, we recorded $1.4 million and $4.3 million of stock-based compensation related to these grants, respectively.

2012 LTIP. During the fiscal year ended June 30, 2012, 86,188 RSUs were granted to certain of our executive officers. Awards are based on the value of the executive officer’s annual base salary and a multiplier, which is then converted into a target number of RSUs based on our closing stock price as of the date of grant which was between $63.73 and $63.94. Between 0% and 204% of the target number of RSUs will vest based on the extent to which specified performance metrics are achieved over the three-year performance period from July 1, 2011 to June 30, 2014, subject to the executive officers’ continued employment with us through the end of the performance period, except in the case of a qualified retirement. The Compensation Committee approved the grants and established adjusted EBITDA margin and revenue growth during the performance period as the performance metrics for the awards. For participants that met the requirement for qualified retirement, we record the expense of their awards over the one year service period as performed. We will adjust the stock-based compensation for their awards during the performance period based upon the level of performance achieved. For the three and nine months ended March 31, 2014, we recorded reductions to expense of $0.5 million and $1.0 million, respectively, of stock-based compensation related to these grants as we adjusted the cumulative expense recorded in the third quarter of fiscal year 2014 according to the performance metric. For the three and nine months ended March 31, 2013, we recorded $0.3 million and $1.8 million, respectively, of stock-based compensation related to these grants.

2014 ES LTIP. In August 2013, the Compensation Committee of the Board of Directors awarded 30,192 RSUs under the 2009 Plan to select executives of our Exchange Solutions segment with a grant date fair value of $81.73, based on our closing stock price. Between 0% and 204% of the target number of RSUs will vest based on the extent to which specified performance metrics are achieved over the two-year performance period from July 1, 2013 to June 30, 2015, subject to continued employment with us through the end of the performance period. The Compensation Committee approved the grants and established EBITDA margin and revenue growth during the performance period as the performance metrics for the awards. For the three and nine months ended March 31, 2014, we recorded $0.4 million and $1.1 million, respectively, of non-cash stock based compensation in the Exchange Solutions business segment.

Liazon RSUs. In November 2013, in connection with the acquisition, we assumed the Liazon Corporation 2011 Equity Incentive Plan and converted the outstanding unvested restricted stock units into 70,533 Towers Watson restricted stock units using a conversion ratio stated in the agreement for the exercise price and number of options. The fair value of these restricted stock units was calculated using the fair value share price of Towers Watson’s closing share price on the date of acquisition. We determined the fair value of the portion of the 70,533 outstanding RSUs related to pre-acquisition employee service using Towers Watson graded vesting methodology from the date of grant to the acquisition date to be $5.7 million which was added to the transaction consideration. The fair value of the remaining portion of RSUs related to the post-acquisition employee services was $2.1 million, and will be recorded over the future vesting periods. For the three and nine months ended March 31, 2014, we recorded $0.4 million and $0.7 million, respectively, of non-cash stock based compensation.

2013 SEP. During the quarter ended September 30, 2013, 131,286 RSUs were granted to certain employees under our Select Equity Plan with a grant date fair value of $91.43, based on our closing stock price. The RSUs vest annually over a three-year period. We assumed a 5% forfeiture rate with these awards. For the three and nine months ended March 31, 2014, we recorded $1.6 million and $5.0 million, respectively, of non-cash stock based compensation related to these grants.

2012 SEP. During the quarter ended September 30, 2012, 147,503 RSUs were granted to certain employees under our Select Equity Plan with a grant date fair value of $53.93, based on our closing stock price. The RSUs vest annually over a three-year period. We assumed a 5% forfeiture rate with these awards. For the three and nine months ended March 31, 2014, we recorded $0.5 million and $1.5 million, respectively, of non-cash stock based compensation related to these grants. For the three and nine months ended March 31, 2013, we recorded $1.2 million and $3.5 million, respectively, of non-cash stock-based compensation related to these grants.

2011 SEP. During the quarter ended September 30, 2011, 577,191 RSUs were granted to certain employees under our Select Equity Plan, of which 288,595 were vested immediately in conjunction with our annual fiscal year 2011 performance bonus payments. The remaining 288,595 RSUs vest annually over a three-year period. We assumed a 5% forfeiture rate with these awards. For the three and nine months ended March 31, 2014, we recorded $0.4 million and $1.3 million of non-cash stock based compensation related to these grants, respectively. For the three and nine months ended March 31, 2013, we recorded $1.1 million and $3.3 million of non-cash stock based compensation related to these grants, respectively.

We classified $1.2 million for the nine months ended March 31, 2014 to discontinued operations related to non-cash stock based compensation for the Brokerage employees awards under our SEP Plan. There were no amounts classified to discontinued operations related to non-cash stock based compensation for the Brokerage employees awards under our SEP Plan for the three months ended March 31, 2014. We classified $0.1 million and $0.4 million for the three and nine months ended March 31, 2013, respectively, to discontinued operations related to non-cash stock based compensation for the Brokerage employees awards under our SEP Plan.

Outside Directors

The Towers Watson & Co. Compensation Plan for Non-Employee Directors provides for cash and stock compensation for outside directors. During the three months ended September 30, 2013, 10,251 RSUs were granted for the annual award for outside directors for service on the board of directors in equal quarterly installments over fiscal year 2014. During the three months ended September 30, 2012, 16,027 restricted stock units were granted for the annual award for outside directors for service on the board of directors in equal quarterly installments over fiscal year 2013. In fiscal year 2010, 22,149 restricted stock units were granted for the initial award for outside directors for service on the board of directors, which vest in equal annual installments over a three-year period ending January 1, 2013. We recorded non-cash stock based compensation related to these awards for outside directors of $0.1 million and $0.8 million, respectively, for the three and nine months ended March 31, 2014, and $0.1 million and $0.9 million, respectively, for the three and nine months ended March 31, 2013.

Stock Options

Liazon Options. In November 2013, in connection with the Liazon acquisition, we assumed the Liazon Corporation 2011 Equity Incentive Plan and converted the outstanding unvested employee stock options into 37,162 Towers Watson stock options using a conversion ratio stated in the agreement for the exercise price and number of options. The fair value of the vested stock options was calculated using the Black-Scholes model with a volatility and risk-free interest rate over the expected term of each group of options using the fair value share price of Towers Watson’s closing share price on the date of acquisition. The fair value of the new awards was less than the acquisition date fair value of the replaced Liazon options; accordingly, no compensation expense was recorded. We determined the fair value of the portion of the 37,162 outstanding options relating to the pre-acquisition employee service using Towers Watson graded vesting methodology from the date of grant to the acquisition date to be $2.2 million, which was added to the transaction consideration. The fair value of the remaining portion of unvested options related to the post-acquisition employee service was $1.7 million, which will be recorded over the future vesting periods. We recorded non-cash stock based compensation related to these awards of $0.3 million and $0.4 million, respectively, for the three and nine months ended March 31, 2014.

Extend Health Options. In May 2012, we assumed the Extend Health, Inc. 2007 Equity Incentive Plan and converted the outstanding unvested employee stock options into 377,614 Towers Watson stock options using a conversion ratio stated in the agreement for the exercise price and number of options. The fair value of the vested stock options was calculated using the Black-Scholes model with a volatility and risk-free interest rate over the expected term of each group of options using the fair value share price of Towers Watson’s closing share price on the date of acquisition. The fair value of the new awards was less than the acquisition date fair value of the replaced Extend Health options; accordingly, no compensation expense was recorded. We determined the fair value of the portion of the 377,614 outstanding options related to pre-acquisition employee service using Towers Watson graded vesting methodology from the date of grant to the acquisition date was $11.2 million, which was added to the transaction consideration. The fair value of the remaining portion of the unvested options, less 10% estimated forfeitures, was $7.9 million, and will be recorded over the future vesting periods. We recorded non-cash stock based compensation related to these awards of $0.3 million and $1.2 million, respectively, for the three and nine months ended March 31, 2014 and $1.1 million and $5.0 million, respectively, for the three and nine months ended March 31, 2013.