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 June 30, 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: 1-09761

ARTHUR J. GALLAGHER & CO.

(Exact name of registrant as specified in its charter)

Delaware	36-2151613
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

Two Pierce Place, Itasca, Illinois 60143-3141

(Address of principal executive offices) (Zip code)

(630) 773-3800

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

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 (§ 232.405 of this chapter) 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 the 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	¨	Smaller reporting company	¨
(Do not check if a 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

The number of outstanding shares of the registrant’s common stock, $1.00 par value, as of June 30, 2014 was approximately 158,993,000.

Arthur J. Gallagher & Co.

Index

			Page No.
Part I.	Financial Information
	Item 1.	Financial Statements (Unaudited):
		Consolidated Statement of Earnings for the Three-month and Six-month Periods Ended June 30, 2014 and 2013		3
		Consolidated Statement of Comprehensive Earnings for the Three-month and Six-month Periods Ended June 30, 2014 and 2013		4
		Consolidated Balance Sheet at June 30, 2014 and December 31, 2013		5
		Consolidated Statement of Cash Flows for the Six-month Periods Ended June 30, 2014 and 2013		6
		Consolidated Statement of Stockholders’ Equity for the Six-month Period Ended June 30, 2014		7
		Notes to June 30, 2014 Consolidated Financial Statements		8-29
		Report of Independent Registered Public Accounting Firm		30
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		31-56
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk		56-57
	Item 4.	Controls and Procedures		57
Part II.	Other Information
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		57-58
	Item 6.	Exhibits		59
	Signature			60
	Exhibit Index			61

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Part I - Financial Information

Item 1. Financial Statements (Unaudited)

Arthur J. Gallagher & Co.

Consolidated Statement of Earnings

(Unaudited - in millions, except per share data)

	Three-month period ended June 30,						Six-month period ended June 30,
	2014			2013			2014			2013
Commissions	$	539.5		$	400.9		$	951.0		$	727.7
Fees		317.4			268.9			574.6			508.6
Supplemental commissions		27.9			18.3			53.3			35.6
Contingent commissions		21.8			14.5			54.0			37.0
Investment income		3.4			1.6			4.7			2.9
Gains on books of business sales		0.7			2.9			1.7			3.3
Revenues from clean coal activities		262.8			72.2			429.2			129.2
Other net revenues		5.8			0.2			25.8			9.3
Total revenues		1,179.3			779.5			2,094.3			1,453.6
Compensation		530.0			415.5			996.3			799.4
Operating		184.0			137.8			341.2			271.6
Cost of revenues from clean coal activities		270.5			76.6			441.5			134.7
Interest		21.2			11.9			37.4			23.1
Depreciation		16.6			13.1			31.4			23.9
Amortization		42.9			29.7			81.0			59.3
Change in estimated acquisition earnout payables		7.0			(2.5	)		12.1			1.9
Total expenses		1,072.2			682.1			1,940.9			1,313.9
Earnings before income taxes		107.1			97.4			153.4			139.7
Provision (benefit) for income taxes		(1.9	)		3.9			(4.9	)		5.7
Net earnings	$	109.0		$	93.5		$	158.3		$	134.0
Basic net earnings per share	$	0.71		$	0.73		$	1.10		$	1.06
Diluted net earnings per share		0.70			0.73			1.09			1.04
Dividends declared per common share		0.36			0.35			0.72			0.70

See notes to consolidated financial statements.

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Arthur J. Gallagher & Co.

Consolidated Statement of Comprehensive Earnings

(Unaudited - in millions)

	Three-month period ended June 30,					Six-month period ended June 30,
	2014		2013			2014		2013
Net earnings	$	109.0	$	93.5		$	158.3	$	134.0
Change in pension liability, net of taxes		0.7		(0.9	)		0.9		0.2
Foreign currency translation		45.7		(15.9	)		54.5		(39.0	)
Change in fair value of derivative investments, net of taxes		0.9		(0.8	)		1.4		(1.0	)
Comprehensive earnings	$	156.3	$	75.9		$	215.1	$	94.2

See notes to consolidated financial statements.

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Arthur J. Gallagher & Co.

Consolidated Balance Sheet

(In millions)

	June 30, 2014		December 31, 2013
	(Unaudited)
Cash and cash equivalents	$	973.5	$	298.1
Restricted cash		1,109.0		1,027.4
Premiums and fees receivable		1,997.6		1,288.8
Other current assets		360.2		261.3
Total current assets		4,440.3		2,875.6
Fixed assets - net		193.7		160.4
Deferred income taxes		328.9		279.8
Other noncurrent assets		397.3		320.7
Goodwill - net		3,027.6		2,145.2
Amortizable intangible assets - net		1,631.5		1,078.8
Total assets	$	10,019.3	$	6,860.5
Premiums payable to insurance and reinsurance companies	$	2,819.4	$	2,154.7
Accrued compensation and other accrued liabilities		491.5		370.6
Unearned fees		94.3		84.5
Other current liabilities		77.8		44.5
Premium financing debt		139.0		—
Corporate related borrowings - current		253.0		630.5
Total current liabilities		3,875.0		3,284.8
Corporate related borrowings - noncurrent		2,125.0		825.0
Other noncurrent liabilities		769.7		665.2
Total liabilities		6,769.7		4,775.0
Stockholders’ equity:
Common stock - issued and outstanding 159.0 shares in 2014 and 133.6 shares in 2013		159.0		133.6
Capital in excess of par value		2,388.0		1,358.1
Retained earnings		648.4		596.4
Accumulated other comprehensive earnings (loss)		54.2		(2.6	)
Total stockholders’ equity		3,249.6		2,085.5
Total liabilities and stockholders’ equity	$	10,019.3	$	6,860.5

See notes to consolidated financial statements.

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Arthur J. Gallagher & Co.

Consolidated Statement of Cash Flows

(Unaudited - in millions)

	Six-month period ended June  30,
	2014			2013
Cash flows from operating activities:
Net earnings	$	158.3		$	134.0
Adjustments to reconcile net earnings to net cash provided by operating activities:
Net gain on investments and other		(24.9	)		(12.5	)
Depreciation and amortization		112.4			83.2
Change in estimated acquisition earnout payables		12.1			1.9
Amortization of deferred compensation and restricted stock		11.2			5.7
Stock-based and other noncash compensation expense		5.1			3.2
Effect of changes in foreign exchange rates		(0.4	)		(0.6	)
Net change in restricted cash		244.5			(70.1	)
Net change in premiums receivable		(150.0	)		(158.4	)
Net change in premiums payable		44.7			171.2
Net change in other current assets		(57.3	)		(24.0	)
Net change in accrued compensation and other accrued liabilities		53.3			(6.4	)
Net change in fees receivable/unearned fees		(20.2	)		(9.8	)
Net change in income taxes payable		0.7			3.1
Net change in deferred income taxes		(46.4	)		(25.8	)
Net change in other noncurrent assets and liabilities		(136.3	)		(20.9	)
Net cash provided by operating activities		206.8			73.8
Cash flows from investing activities:
Net additions to fixed assets		(42.1	)		(35.9	)
Cash paid for acquisitions, net of cash acquired		(1,402.0	)		(113.4	)
Net proceeds from sales of operations/books of business		2.7			2.9
Net funding of investment transactions		(20.0	)		(18.9	)
Net cash used by investing activities		(1,461.4	)		(165.3	)
Cash flows from financing activities:
Proceeds from issuance of common stock		948.0			51.4
Tax impact from issuance of common stock		7.7			4.9
Dividends paid		(106.1	)		(90.1	)
Net borrowings on premium financing debt facility		139.0			—
Borrowings on line of credit facility		870.4			228.0
Repayments on line of credit facility		(1,247.9	)		(357.0	)
Borrowings of corporate related long-term debt		1,300.0			200.0
Net cash provided by financing activities		1,911.1			37.2
Effect of changes in foreign exchange rates on cash and cash equivalents		18.9			(7.8	)
Net increase (decrease) in cash and cash equivalents		675.4			(62.1	)
Cash and cash equivalents at beginning of period		298.1			302.1
Cash and cash equivalents at end of period	$	973.5		$	240.0
Supplemental disclosures of cash flow information:
Interest paid	$	27.8		$	23.3
Income taxes paid		33.7			23.7

See notes to consolidated financial statements.

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Arthur J. Gallagher & Co.

Consolidated Statement of Stockholders’ Equity

(Unaudited - in millions)

	Common Stock				Capital in Excess of			Retained Earnings			Accumulated Other Comprehensive Earnings
	Shares		Amount		Par Value						(Loss)			Total
Balance at December 31, 2013		133.6	$	133.6	$	1,358.1		$	596.4		$	(2.6	)	$	2,085.5
Net earnings		—		—		—			158.3			—			158.3
Change in pension liability, net of taxes of $0.6 million		—		—		—			—			0.9			0.9
Foreign currency translation		—		—		—			—			54.5			54.5
Change in fair value of derivative instruments, net of taxes of $0.9 million		—		—		—			—			1.4			1.4
Compensation expense related to stock option plan grants		—		—		4.0			—			—			4.0
Tax impact from issuance of common stock		—		—		7.7			—			—			7.7
Common stock issued in:
Nineteen purchase transactions		2.1		2.1		95.6			—			—			97.7
Stock option plans		1.2		1.2		30.3			—			—			31.5
Employee stock purchase plan		0.1		0.1		5.0			—			—			5.1
Deferred compensation and restricted stock		0.1		0.1		(3.3	)		—			—			(3.2	)
Stock issuance from public offering		21.9		21.9		889.5			—			—			911.4
Other compensation expense		—		—		1.1			—			—			1.1
Cash dividends declared on common stock		—		—		—			(106.3	)		—			(106.3	)
Balance at June 30, 2014		159.0	$	159.0	$	2,388.0		$	648.4		$	54.2		$	3,249.6

See notes to consolidated financial statements.

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Notes to June 30, 2014 Consolidated Financial Statements (Unaudited)

1. Nature of Operations and Basis of Presentation

Arthur J. Gallagher & Co. and its subsidiaries, collectively referred to herein as we, our, us or the company, provide insurance brokerage and risk management services to a wide variety of commercial, industrial, institutional and governmental organizations through three reportable operating segments. Commission and fee revenue generated by the brokerage segment is primarily related to the negotiation and placement of insurance for our clients. Fee revenue generated by the risk management segment is primarily related to claims management, information management, risk control consulting (loss control) services and appraisals in the property/casualty market. Investment income and other revenue are generated from our investment portfolio, which includes invested cash and restricted funds, as well as clean energy and other investments. We are headquartered in Itasca, Illinois, have operations in 27 countries and offer client-service capabilities in more than 140 countries globally through a network of correspondent insurance brokers and consultants.

We have prepared the accompanying unaudited consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in annual financial statements have been omitted pursuant to such rules and regulations. The unaudited consolidated financial statements included herein are, in the opinion of management, prepared on a basis consistent with our audited consolidated financial statements for the year ended December 31, 2013 and include all normal recurring adjustments necessary for a fair presentation of the information set forth. The quarterly results of operations are not necessarily indicative of the results of operations to be reported for subsequent quarters or the full year. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2013. In the preparation of our unaudited consolidated financial statements as of June 30, 2014, management evaluated all material subsequent events or transactions that occurred after the balance sheet date through the date on which the financial statements were issued, for potential recognition or disclosure therein.

2. Effect of New Accounting Pronouncements

Revenue Recognition

In May 2014, the Financial Accounting Standards Board (which we refer to as the FASB) issued new accounting guidance on revenue from contracts with customers, which will supersede nearly all existing revenue recognition guidance under U.S. GAAP. The core principal of the new guidance is that an entity should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. This new guidance is effective in first quarter 2017 and early adoption is not permitted. The guidance permits two methods of transition upon adoption; full retrospective and modified retrospective. Under the full retrospective method, prior periods would be restated under the new revenue standard, providing a comparable view across all periods presented. Under the modified retrospective method, prior periods would not be restated. Rather, revenues and other disclosures for pre-2017 periods would be provided in the notes to the financial statements as previously reported under the current revenue standard. Management is currently reviewing the guidance, and the impact from its adoption on our consolidated financial statements cannot be determined at this time.

Presentation of Unrecognized Tax Benefits

In July 2013, the FASB issued ASU 2013-11, “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists,” which provides explicit guidance on the presentation of certain unrecognized tax benefits in the financial statements that did not previously exist. The guidance provides that a liability related to an unrecognized tax benefit would be offset against a deferred tax asset for a net operating loss carryforward, a similar tax loss or a tax credit carryforward if such settlement is required or expected in the event the uncertain tax position is disallowed. In that case, the liability associated with the unrecognized tax benefit is presented in the financial statements as a reduction to the related deferred tax asset. In situations in which a net operating loss carryforward, a similar tax loss or a tax credit carryforward is not available at the reporting date under the tax law of the jurisdiction or the tax law of the jurisdiction does not require, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit will be presented in the financial statements as a liability and will not be combined with deferred tax assets. This new guidance was effective in first quarter 2014. Management adopted the new guidance effective January 1, 2014. The impact of the new guidance upon adoption was not material to our 2014 unaudited consolidated financial statements.

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3. Business Combinations

During the six-month period ended June 30, 2014, we acquired substantially all of the net assets of the following firms in exchange for our common stock and/or cash. These acquisitions have been accounted for using the acquisition method for recording business combinations (in millions except share data):

Name and Effective Date of Acquisition	Common Shares Issued		Common Share Value		Cash Paid		Accrued Liability		Escrow Deposited		Recorded Earnout Payable		Total Recorded Purchase Price		Maximum Potential Earnout Payable
	(000s)
Benefit Development Group, Inc. February 1, 2014		46	$	2.0	$	0.7	$	—	$	0.1	$	0.6	$	3.4	$	2.0
Kent, Kent & Tingle (KKT) February 1, 2014		229		9.1		3.5		—		1.4		3.5		17.5		7.8
L&R Benefits, LLC March 1, 2014		115		5.3		1.8		—		0.1		1.0		8.2		6.0
Spataro Insurance Agency, Inc. March 1, 2014		47		2.0		—		—		0.2		0.4		2.6		0.6
Tudor Risk Services, LLC March 1, 2014		—		—		2.1		—		0.2		0.1		2.4		1.3
American Wholesalers Underwriting Ltd April 1, 2014		133		6.0		5.7		—		0.5		—		12.2		—
Mike Henry Insurance Brokers Limited (MHI) April 1, 2014		—		—		9.6		—		1.7		3.0		14.3		6.8
Oval Group of Companies (OGC) April 1, 2014		—		—		338.4		—		11.8		—		350.2		—
Heritage Insurance Management Limited (HIM) May 1, 2014		—		—		33.9		—		3.8		—		37.7		—
MGA Insurance Group (MGA) May 1, 2014		547		25.1		26.8		—		2.5		11.8		66.2		20.0
Shilling Limited (SL) May 1, 2014		198		8.9		1.7		—		1.2		1.0		12.8		8.4
Sunderland Insurance Services, Inc. May 1, 2014		204		9.2		1.8		—		0.6		—		11.6		—
Plus Companies, Inc. (PCI) June 1, 2014		221		9.3		3.4		—		0.8		—		13.5		—
Tri-State General Insurance Agency, Inc. June 1, 2014		47		2.2		0.6		—		0.1		—		2.9		—
Crombie/OAMPS (CO) June 16, 2014		—		—		951.5		—		—		—		951.5		—
Eleven other acquisitions completed in 2014		78		3.3		12.9		—		0.3		2.6		19.1		6.2
		1,865	$	82.4	$	1,394.4	$	—	$	25.3	$	24.0	$	1,526.1	$	59.1

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On April 1, 2014, we signed and closed on an agreement to acquire the Oval Group of Companies (which we refer to as Oval). Under the agreement, we agreed to purchase all of the outstanding equity of Oval for net cash consideration of approximately $338.0 million, which includes approximately $3.5 million held back and placed into escrow for three years as partial security for warranty obligations under the agreement and approximately $8.3 million held back and placed into escrow for approximately three months as partial security for adjustments to the acquired balance sheet. Oval was an independent commercial insurance broker operating out of 24 offices throughout the U.K., with over 1,000 employees.

On April 16, 2014, we closed on a secondary public offering of our common stock whereby 21.85 million shares of our stock were issued for net proceeds, after underwriting discounts and other expenses related to this offering, of $911.4 million. We used the net proceeds of the offering to fund acquisitions.

On June 16, 2014, we closed on an agreement to acquire the Wesfarmers Insurance Brokerage operations (which we refer to as the Crombie/OAMPS transaction). The Crombie/OAMPS transaction, which includes the OAMPS businesses in Australia and the U.K., Crombie in New Zealand and the associated premium funding operations. Under the agreement, we agreed to purchase all of the outstanding shares of these three operating companies for net cash consideration of approximately $952.0 million. The Crombie/OAMPS operations have approximately 1,700 employees operating out of more than 50 offices across Australia, New Zealand and the U.K. We entered into a AU$400.0 million foreign currency derivative investment contract that we executed on April 16, 2014 in connection with the signing of the agreement to acquire the Crombie/OAMPS operations. The derivative investment contract was exercised on June 16, 2014 and we recorded a pretax gain of $1.9 million related to this derivative investment contract.

On July 2, 2014, we acquired Noraxis Capital Corporation (which we refer to as Noraxis), paying cash consideration of approximately $420.0 million for approximately 89% of the equity of Noraxis. The remaining equity is held by various management employees of Noraxis. Noraxis generated nearly CN$125.0 million in revenue for the year ended December 31, 2013, has more than 650 employees and offices across Alberta, Manitoba, New Brunswick, Nova Scotia and Ontario. Common shares issued in connection with acquisitions are valued at closing market prices as of the effective date of the applicable acquisition. We record escrow deposits that are returned to us as a result of adjustments to net assets acquired as reductions of goodwill when the escrows are settled. The maximum potential earnout payables disclosed in the foregoing table represent the maximum amount of additional consideration that could be paid pursuant to the terms of the purchase agreement for the applicable acquisition. The amounts recorded as earnout payables, which are primarily based upon the estimated future operating results of the acquired entities over a two- to three-year period subsequent to the acquisition date, are measured at fair value as of the acquisition date and are included on that basis in the recorded purchase price consideration in the foregoing table. We will record subsequent changes in these estimated earnout obligations, including the accretion of discount, in our consolidated statement of earnings when incurred.

The fair value of these earnout obligations is based on the present value of the expected future payments to be made to the sellers of the acquired entities in accordance with the provisions outlined in the respective purchase agreements, which is a Level 3 fair value measurement. In determining fair value, we estimated the acquired entity’s future performance using financial projections developed by management for the acquired entity and market participant assumptions that were derived for revenue growth and/or profitability. Revenue growth rates generally ranged from 5.0% to 10.0% for our 2014 acquisitions. We estimated future payments using the earnout formula and performance targets specified in each purchase agreement and these financial projections. We then discounted these payments to present value using a risk-adjusted rate that takes into consideration market-based rates of return that reflect the ability of the acquired entity to achieve the targets. These discount rates generally ranged from 8.5% to 9.5% for all of our 2014 acquisitions. Changes in financial projections, market participant assumptions for revenue growth and/or profitability, or the risk-adjusted discount rate, would result in a change in the fair value of recorded earnout obligations.

During each of the three-month periods ended June 30, 2014 and 2013, we recognized $3.4 million and $2.9 million, respectively, of expense in our consolidated statement of earnings related to the accretion of the discount recorded for earnout obligations in connection with our acquisitions. During each of the six-month periods ended June 30, 2014 and 2013, we recognized $6.7 million and $5.8 million, respectively, of expense in our consolidated statement of earnings related to the accretion of the discount recorded for earnout obligations in connection with our acquisitions. In addition, during the three-month periods ended June 30, 2014 and 2013, we recognized $3.6 million of expense and $5.4 million of income, respectively, related to net adjustments in the estimated fair value of earnout obligations in connection with revised projections of future performance for 18 and 23 acquisitions, respectively. During the six-month periods ended June 30, 2014 and 2013, we recognized $5.4 million of expense and $3.9 million of income,

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respectively, related to net adjustments in the estimated fair value of earnout obligations in connection with revised projections of future performance for 35 and 39 acquisitions, respectively. The aggregate amount of maximum earnout obligations related to acquisitions made in 2009 and subsequent years was $473.8 million as of June 30, 2014, of which $157.4 million was recorded in our consolidated balance sheet as of June 30, 2014, based on the estimated fair value of the expected future payments to be made.

The following is a summary of the estimated fair values of the net assets acquired at the date of each acquisition made in the six-month period ended June 30, 2014 (in millions):

	KKT		MHI		OGC		HIM		MGA		SL		PCI		CO		Eighteen Other Acquisitions		Total
Cash	$	0.2	$	—	$	23.1	$	2.9	$	0.2	$	0.4	$	—	$	26.6	$	0.2	$	53.6
Other current assets		0.1		6.3		129.6		4.9		8.9		1.0		5.8		695.5		7.5		859.6
Fixed assets		—		0.2		2.1		0.3		0.3		0.3		—		17.1		0.3		20.6
Noncurrent assets		—		—		—		—		—		—		—		7.0		4.1		11.1
Goodwill		10.2		9.7		238.3		21.8		24.3		6.4		5.4		535.9		26.4		878.4
Expiration lists		7.0		5.8		140.7		14.6		36.3		6.8		7.8		325.3		30.8		575.1
Non-compete agreements		0.1		—		—		—		0.3		—		—		4.2		0.7		5.3
Trade names		—		0.1		—		—		—		0.1		0.3		4.2		0.4		5.1
Total assets acquired		17.6		22.1		533.8		44.5		70.3		15.0		19.3		1,615.8		70.4		2,408.8
Current liabilities		0.1		6.0		129.5		6.8		4.1		0.8		5.8		490.0		6.9		650.0
Noncurrent liabilities		—		1.8		54.1		—		—		1.4		—		174.3		1.1		232.7
Total liabilities assumed		0.1		7.8		183.6		6.8		4.1		2.2		5.8		664.3		8.0		882.7
Total net assets acquired	$	17.5	$	14.3	$	350.2	$	37.7	$	66.2	$	12.8	$	13.5	$	951.5	$	62.4	$	1,526.1

Among other benefits, these acquisitions allow us to expand into desirable geographic locations, further extend our presence in the retail and wholesale insurance brokerage services and risk management industries and increase the volume of general services currently provided. The excess of the purchase price over the estimated fair value of the tangible net assets acquired at the acquisition date was allocated to goodwill, expiration lists, non-compete agreements and trade names in the amounts of $878.4 million, $575.1 million, $5.3 million and $5.1 million, respectively, within the brokerage segment.

Provisional estimates of fair value are established at the time of each acquisition and are subsequently reviewed within the first year of operations subsequent to the acquisition date to determine the necessity for adjustments. The fair value of the tangible assets and liabilities for each applicable acquisition at the acquisition date approximated their carrying values. The fair value of expiration lists was established using the excess earnings method, which is an income approach based on estimated financial projections developed by management for each acquired entity using market participant assumptions. Revenue growth and attrition rates generally ranged from 2.0% to 3.0% and 5.0% to 10.0%, respectively, for our 2014 and 2013 acquisitions, for which a valuation was performed in the six-month period ended June 30, 2014. We estimate the fair value as the present value of the benefits anticipated from ownership of the subject customer list in excess of returns required on the investment in contributory assets necessary to realize those benefits. The rate used to discount the net benefits was based on a risk-adjusted rate that takes into consideration market-based rates of return and reflects the risk of the asset relative to the acquired business. These discount rates generally ranged from 12.5% to 14.5% for our 2014 and 2013 acquisitions, for which a valuation was performed in the six-month period ended June 30, 2014. The fair value of non-compete agreements was established using the profit differential method, which is an income approach based on estimated financial projections developed by management for the acquired company using market participant assumptions and various non-compete scenarios.

Expiration lists, non-compete agreements and trade names related to our acquisitions are amortized using the straight-line method over their estimated useful lives (three to fifteen years for expiration lists, one to five years for non-compete agreements and three to fifteen years for trade names), while goodwill is not subject to amortization. We use the straight-line method to amortize these intangible assets because the pattern of their economic benefits

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cannot be reasonably determined with any certainty. We review all of our intangible assets for impairment periodically (at least annually) and whenever events or changes in business circumstances indicate that the carrying value of the assets may not be recoverable. In reviewing intangible assets, if the fair value is less than the carrying amount of the respective (or underlying) asset, an indicator of impairment would exist and further analysis would be required to determine whether or not a loss would need to be charged against current period earnings. Based on the results of impairment reviews during the six-month period ended June 30, 2014, we wrote off $0.6 million of amortizable intangible assets related to the brokerage segment. Based on the results of impairment reviews during the three- month and six-month periods ended June 30, 2013, we wrote off $0.4 million and $2.2 million, respectively, of amortizable intangible assets related to the brokerage segment.

Of the $575.1 million of expiration lists, $5.3 million of non-compete agreements and $5.1 million of trade names related to our acquisitions made during the six-month period ended June 30, 2014, $461.7 million, $4.2 million and $4.3 million, respectively, is not expected to be deductible for income tax purposes. Accordingly, we recorded a deferred tax liability of $68.9 million, and a corresponding amount of goodwill, in the six-month period ended June 30, 2014 related to nondeductible amortizable intangible assets.

Our consolidated financial statements for the six-month period ended June 30, 2014 include the operations of the acquired entities from their respective acquisition dates. The following is a summary of the unaudited pro forma historical results, as if these entities had been acquired at January 1, 2013 (in millions, except per share data):

	Three-month period ended June 30,				Six-month period ended June 30,
	2014		2013		2014		2013
Total revenues	$	1,251.1	$	933.4	$	2,295.2	$	1,735.1
Net earnings		112.2		111.6		171.7		161.1
Basic net earnings per share		0.71		0.74		1.09		1.07
Diluted net earnings per share		0.70		0.73		1.07		1.06

The unaudited pro forma results above have been prepared for comparative purposes only and do not purport to be indicative of the results of operations which actually would have resulted had these acquisitions occurred at January 1, 2013, nor are they necessarily indicative of future operating results. Annualized revenues of the businesses acquired during the six-month period ended June 30, 2014 totaled approximately $514.9 million. For the six-month period ended June 30, 2014, total revenues and net earnings recorded in our unaudited consolidated statement of earnings related to our acquisitions made during the six-month period ended June 30, 2014 in the aggregate, were $84.6 million and $10.8 million, respectively.

4. Intangible Assets

The carrying amount of goodwill at June 30, 2014 and December 31, 2013 allocated by domestic and foreign operations is as follows (in millions):

	Brokerage		Risk Management		Corporate		Total
At June 30, 2014
United States	$	1,531.2	$	20.2	$	—	$	1,551.4
United Kingdom		880.1		2.2		—		882.3
Other foreign, principally Australia and Canada		593.9		—		—		593.9
Total goodwill - net	$	3,005.2	$	22.4	$	—	$	3,027.6
At December 31, 2013
United States	$	1,449.6	$	20.2	$	—	$	1,469.8
United Kingdom		595.1		2.1		—		597.2
Other foreign, principally Australia and Canada		78.2		—		—		78.2
Total goodwill - net	$	2,122.9	$	22.3	$	—	$	2,145.2

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The changes in the carrying amount of goodwill for the six-month period ended June 30, 2014 are as follows (in millions):

	Brokerage			Risk Management		Corporate		Total
Balance as of December 31, 2013	$	2,122.9		$	22.3	$	—	$	2,145.2
Goodwill acquired during the period		878.4			—		—		878.4
Goodwill adjustments due to appraisals and other acquisition adjustments		(25.5	)		—		—		(25.5	)
Goodwill written-off related to sales of business		(0.6	)		—		—		(0.6	)
Foreign currency translation adjustments during the period		30.0			0.1		—		30.1
Balance as of June 30, 2014	$	3,005.2		$	22.4	$	—	$	3,027.6

Major classes of amortizable intangible assets at June 30, 2014 and December 31, 2013 consist of the following (in millions):

	June 30, 2014			December 31, 2013
Expiration lists	$	2,232.3		$	1,563.5
Accumulated amortization - expiration lists		(631.0	)		(511.3	)
		1,601.3			1,052.2
Non-compete agreements		37.5			37.3
Accumulated amortization - non-compete agreements		(27.1	)		(25.9	)
		10.4			11.4
Trade names		28.1			22.1
Accumulated amortization - trade names		(8.3	)		(6.9	)
		19.8			15.2
Net amortizable assets	$	1,631.5		$	1,078.8

Estimated aggregate amortization expense for each of the next five years is as follows:

2014 (remaining six months)	$	96.0
2015		188.0
2016		182.4
2017		174.2
2018		162.9
Total	$	803.5

5. Credit and Other Debt Agreements

Note Purchase Agreements - We are a party to an amended and restated note purchase agreement dated December 19, 2007, with certain accredited institutional investors, pursuant to which we issued and sold $100.0 million in aggregate principal amount of our 6.26% Senior Notes, Series A, due August 3, 2014 and $300.0 million in aggregate principal amount of our 6.44% Senior Notes, Series B, due August 3, 2017, in a private placement. These notes require semi-annual payments of interest that are due in February and August of each year.

We are a party to a note purchase agreement dated November 30, 2009, with certain accredited institutional investors, pursuant to which we issued and sold $150.0 million in aggregate principal amount of our 5.85% Senior Notes, Series C, due in three equal installments on November 30, 2016, November 30, 2018 and November 30, 2019, in a private placement. These notes require semi-annual payments of interest that are due in May and November of each year.

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We are a party to a note purchase agreement dated February 10, 2011, with certain accredited institutional investors, pursuant to which we issued and sold $75.0 million in aggregate principal amount of our 5.18% Senior Notes, Series D, due February 10, 2021 and $50.0 million in aggregate principal amount of our 5.49% Senior Notes, Series E, due February 10, 2023, in a private placement. These notes require semi-annual payments of interest that are due in February and August of each year.

We are a party to a note purchase agreement dated July 10, 2012, with certain accredited institutional investors, pursuant to which we issued and sold $50.0 million in aggregate principal amount of our 3.99% Senior Notes, Series F, due July 10, 2020, in a private placement. These notes require semi-annual payments of interest that are due in January and July of each year.

We are a party to a note purchase agreement dated June 14, 2013, with certain accredited institutional investors, pursuant to which we issued and sold $200.0 million in aggregate principal amount of our 3.69% Senior Notes, Series G, due June 14, 2022, in a private placement. These notes require semi-annual payments of interest that are due in June and December of each year.

We are a party to a note purchase agreement dated December 20, 2013, with certain accredited institutional investors, pursuant to which we issued and sold $325.0 million in aggregate principal amount of our 4.58% Senior Notes, Series H, due February 27, 2024, $175.0 million in aggregate principal amount of our 4.73% Senior Notes, Series I, due February 27, 2026 and $100.0 million in aggregate principal amount of our 4.98% Senior Notes, Series J, due February 27, 2029. These notes require semi-annual payments of interest that are due in February and August of each year. The funding of this note purchase agreement occurred on February 27, 2014. We incurred approximately $1.4 million of debt acquisition costs that was capitalized and will be amortized on a pro rata basis over the life of the debt.

We are a party to a note purchase agreement dated June 24, 2014, with certain accredited institutional investors, pursuant to which we issued and sold $50.0 million in aggregate principal amount of our 2.80% Senior Notes, Series K, due 2018, $50.0 million in aggregate principal amount of our 3.20% Senior Notes, Series L, due 2019, $50.0 million in aggregate principal amount of our 3.48% Senior Notes, Series M, due 2020, $200.0 million in aggregate principal amount of our 4.13% Senior Notes, Series N, due 2023, $200.0 million in aggregate principal amount of our 4.31% Senior Notes, Series O, due 2025 and $150.0 million in aggregate principal amount of our 4.36% Senior Notes, Series P, due 2026. These notes require semi-annual payments of interest that are due in June and December of each year. We incurred approximately $2.6 million of debt acquisition costs that was capitalized and will be amortized on a pro rata basis over the life of the debt.

Under the terms of the note purchase agreements, we may redeem the notes at any time, in whole or in part, at 100% of the principal amount of such notes being redeemed, together with accrued and unpaid interest and a “make-whole amount.” The “make-whole amount” is derived from a net present value computation of the remaining scheduled payments of principal and interest using a discount rate based on U.S. Treasury yields plus 0.5% and is designed to compensate the purchasers of the notes for their investment risk in the event prevailing interest rates at the time of prepayment are less favorable than the interest rates under the notes. We do not currently intend to prepay any of the notes.

The note purchase agreements described above contain customary provisions for transactions of this type, including representations and warranties regarding us and our subsidiaries and various financial covenants, including covenants that require us to maintain specified financial ratios. We were in compliance with these covenants as of June 30, 2014. The note purchase agreements also provide customary events of default, generally with corresponding grace periods, including, without limitation, payment defaults with respect to the notes, covenant defaults, cross-defaults to other agreements evidencing our or our subsidiaries’ indebtedness, certain judgments against us or our subsidiaries and events of bankruptcy involving us or our material subsidiaries.

The notes issued under the note purchase agreements are senior unsecured obligations of ours and rank equal in right of payment with our Credit Agreement discussed below.

Credit Agreement - On September 19, 2013, we entered into a $600.0 million unsecured multicurrency credit agreement (which we refer to as the Credit Agreement), which expires on September 19, 2018, with a group of fifteen financial institutions. The Credit Agreement provides for a revolving credit commitment of up to $600.0 million, of which up to $75.0 million may be used for issuances of standby or commercial letters of credit and up to $50.0 million may be used for the making of swing loans, as defined in the Credit Agreement. We may from time to time request, subject to certain conditions, an increase in the revolving credit commitment up to a maximum aggregate revolving credit commitment of $850.0 million.

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The Credit Agreement provides that we may elect that each borrowing in U.S. dollars be either base rate loans or Eurocurrency loans, as defined in the Credit Agreement. All loans denominated in currencies other than U.S. dollars will be Eurocurrency loans. Interest rates on base rate loans and outstanding drawings on letters of credit in U.S. dollars under the Credit Agreement are based on the base rate, as defined in the Credit Agreement. Interest rates on Eurocurrency loans or outstanding drawings on letters of credit in currencies other than U.S. dollars are based on an adjusted London Interbank Offered Rate (which we refer to as LIBOR), as defined in the Credit Agreement, plus a margin of 0.85%, 0.95%, 1.05%, 1.25% or 1.45%, depending on the financial leverage ratio we maintain. Interest rates on swing loans are based, at our election, on either the base rate, as defined in the Credit Agreement, or such alternate rate as may be quoted by the lead lender. The annual facility fee related to the Credit Agreement is 0.15%, 0.175%, 0.20%, 0.25% or 0.30% of the used and unused portions of the revolving credit commitment, depending on the financial leverage ratio we maintain. In connection with entering into the Credit Agreement, we incurred approximately $2.1 million of debt acquisition costs that were capitalized and will be amortized on a pro rata basis over the term of the Credit Agreement.

The terms of the Credit Agreement include various financial covenants, including covenants that require us to maintain specified financial ratios. We were in compliance with these covenants as of June 30, 2014. The Credit Agreement also includes customary events of default, with corresponding grace periods, including, without limitation, payment defaults, cross-defaults to other agreements evidencing indebtedness and bankruptcy-related defaults.

At June 30, 2014, $21.1 million of letters of credit (for which we had $8.9 million of liabilities recorded at June 30, 2014) were outstanding under the Credit Agreement. There were $153.0 million of borrowings outstanding under the Credit Agreement at June 30, 2014. Accordingly, as of June 30, 2014, $425.9 million remained available for potential borrowings under the Credit Agreement, of which $53.9 million was available for additional letters of credit.

Premium Financing Debt Facility - On June 16, 2014 we entered into a Syndicated Facility Agreement, revolving loan facility, which we refer to as the Premium Financing Debt Facility, that provides funding for the three acquired Australian (AU) and New Zealand (NZ) premium finance subsidiaries. See Note 3 “Business Combinations.” The Premium Financing Debt Facility is comprised of: (i) Facility B is separate AU$150.0 million and NZ$35.0 million tranches, (ii) Facility C is an AU$25.0 million equivalent multi-currency overdraft tranche and (iii) Facility D is a NZ$15.0 million equivalent multi-currency overdraft tranche. The Premium Financing Debt Facility expires June 15, 2016.

The interest rates on Facility B are Interbank rates, which vary by tranche, duration and currency, plus a margin of 1.65%. The interest rates on Facilities C and D are 30 day Interbank rates, plus a margin of 0.85%. The annual fee for Facility B is 0.7425% of the undrawn commitments for the two tranches of the facility. The annual fee for Facilities C and D is 0.80% of the total commitments of the facilities. In connection with entering into the Premium Financing Debt Facility, we incurred an upfront fee of 0.30% of the principal amount of the committed facilities.

The terms of our Premium Financing Debt Facility include various financial covenants, including covenants that require us to maintain specified financial ratios. We were in compliance with these covenants as of June 30, 2014. The Premium Financing Debt Facility also includes customary events of default, with corresponding grace periods, including, without limitation, payment defaults, cross-defaults and breach of other obligations. Facilities B, C and D are secured by the premium finance receivables of the Australian and New Zealand premium finance subsidiaries.

At June 30, 2014, AU$119.8 million and NZ$21.3 million of borrowings were outstanding under Facility B, and NZ$8.8 million of borrowings were outstanding under Facility D. Accordingly, as of June 30, 2014, AU$30.2 million and NZ$13.7 million remained available for potential borrowing under Facility B, and AU$25.0 million and NZ$6.2 million under Facilities C and D.

See Note 12 to these unaudited consolidated financial statements for additional discussion on our contractual obligations and commitments as of June 30, 2014.

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The following is a summary of our corporate and other debt (in millions):

	June 30,		December 31,
	2014		2013
Note Purchase Agreements:
Semi-annual payments of interest, fixed rate of 6.26%, balloon due 2014	$	100.0	$	100.0
Semi-annual payments of interest, fixed rate of 6.44%, balloon due 2017		300.0		300.0
Semi-annual payments of interest, fixed rate of 2.80%, balloon due 2018		50.0		—
Semi-annual payments of interest, fixed rate of 3.20%, balloon due 2019		50.0		—
Semi-annual payments of interest, fixed rate of 5.85%, $50 million due in 2016, 2018 and 2019		150.0		150.0
Semi-annual payments of interest, fixed rate of 3.99%, balloon due 2020		50.0		50.0
Semi-annual payments of interest, fixed rate of 3.48%, balloon due 2020		50.0		—
Semi-annual payments of interest, fixed rate of 5.18%, balloon due 2021		75.0		75.0
Semi-annual payments of interest, fixed rate of 5.49%, balloon due 2023		50.0		50.0
Semi-annual payments of interest, fixed rate of 4.13%, balloon due 2023		200.0		—
Semi-annual payments of interest, fixed rate of 3.69%, balloon due 2022		200.0		200.0
Semi-annual payments of interest, fixed rate of 4.58%, balloon due 2024		325.0		—
Semi-annual payments of interest, fixed rate of 4.31%, balloon due 2025		200.0		—
Semi-annual payments of interest, fixed rate of 4.73%, balloon due 2026		175.0		—
Semi-annual payments of interest, fixed rate of 4.36%, balloon due 2026		150.0		—
Semi-annual payments of interest, fixed rate of 4.98%, balloon due 2029		100.0		—
Total Note Purchase Agreements		2,225.0		925.0
Credit Agreement:
Periodic payments of interest and principal, prime or LIBOR plus up to 1.45%, expires September 19, 2018		153.0		530.5
Premium Financing Debt Facility - expires June 15, 2016:
Periodic payments of interest and principal, Interbank rates plus 1.65% for Facility B; plus 0.85% for Facilities C and D
Facility B
AUD denominated tranche		112.8		—
NZD denominated tranche		18.6		—
Facility C and D
NZD denominated tranche		7.6		—
Total Premium Financing Debt Facility		139.0		—
Total corporate and other debt	$	2,517.0	$	1,455.5

The fair value of the $2,225.0 million in debt under the note purchase agreements at June 30, 2014 was $2,321.9 million due to the long-term duration and fixed interest rates associated with these debt obligations. No active or observable market exists for our private placement long-term debt. Therefore, the estimated fair value of this debt is based on discounted future cash flows, which is a Level 3 fair value measurement, using current interest rates available for debt with similar terms and remaining maturities. To estimate an all-in interest rate for discounting, we obtain market quotes for notes with the same terms as ours, which we have deemed to be the closest approximation of current market rates. We have not adjusted this rate for risk profile changes, covenant issues or credit ratings changes. The estimated fair value of the $153.0 million of borrowings outstanding under our Credit Agreement approximates their carrying value due to their short-term duration and variable interest rates. The estimated fair value of the $139.0 million of borrowings outstanding under our Premium Financing Debt Facility approximates their carrying value due to their short-term duration and variable interest rates.

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6. Earnings Per Share

The following table sets forth the computation of basic and diluted net earnings per share (in millions, except per share data):

	Three-month period ended June  30,				Six-month period ended June  30,
	2014		2013		2014		2013
Net earnings	$	109.0	$	93.5	$	158.3	$	134.0
Weighted average number of common shares outstanding		154.3		127.3		144.2		126.7
Dilutive effect of stock options using the treasury stock method		1.4		1.6		1.6		1.5
Weighted average number of common and common equivalent shares outstanding		155.7		128.9		145.8		128.2
Basic net earnings per share	$	0.71	$	0.73	$	1.10	$	1.06
Diluted net earnings per share	$	0.70	$	0.73	$	1.09	$	1.04

Options to purchase 1.9 million and 1.7 million shares of common stock were outstanding at June 30, 2014 and 2013, respectively, but were not included in the computation of the dilutive effect of stock options for the three-month periods then ended. Options to purchase 1.2 million and 1.0 million shares of common stock were outstanding at June 30, 2014 and 2013, respectively, but were not included in the computation of the dilutive effect of stock options for the six-month periods then ended. These stock options were excluded from the computation because the options’ exercise prices were greater than the average market price of our common shares during the respective period, and therefore would be anti-dilutive to earnings per share under the treasury stock method.

7. Stock Option Plans

Long-Term Incentive Plan

On May 13, 2014, our stockholders approved the Arthur J. Gallagher 2014 Long-Term Incentive Plan (which we refer to as the LTIP), which replaced our previous stockholder-approved Arthur J. Gallagher & Co. 2011 Long-Term Incentive Plan (which we refer to as the 2011 LTIP). The LTIP term began May 13, 2014 and terminates on the date of the annual meeting of stockholders in 2021, unless terminated earlier by our board of directors. All of our officers, employees and non-employee directors are eligible to receive awards under the LTIP. The compensation committee of our board of directors determines the participants under the LTIP. The LTIP provides for non-qualified and incentive stock options, stock appreciation rights, restricted stock, restricted stock units and performance units, any or all of which may be made contingent upon the achievement of performance criteria. A stock appreciation right entitles the holder to receive, upon exercise and subject to withholding taxes, cash or shares of our common stock (which may be restricted stock) with a value equal to the difference between the fair market value of our common stock on the exercise date and the base price of the stock appreciation right. Subject to the LTIP limits, the compensation committee has the discretionary authority to determine the size of an award.

Shares of our common stock available for issuance under the LTIP include authorized and unissued shares of common stock or authorized and issued shares of common stock reacquired and held as treasury shares or otherwise, or a combination thereof. The number of available shares is reduced by the aggregate number of shares that become subject to outstanding awards granted under the LTIP. To the extent that shares subject to an outstanding award granted under either the LTIP or the 2011 LTIP are not issued or delivered by reason of the expiration, termination, cancellation or forfeiture of such award or by reason of the settlement of such award in cash, then such shares will again be available for grant under the LTIP. Shares withheld to satisfy tax withholding requirements upon the vesting of awards other than stock options and stock appreciation rights will also be available for grant under the LTIP. Shares that are subject to a stock appreciation right and were not issued upon the net settlement or net exercise of such stock appreciation right, shares that are used to pay the exercise price of an option, shares delivered to or withheld by us to pay withholding taxes related to stock options or stock appreciation rights, and shares that are purchased on the open market with the proceeds of an option exercise, may not again be made available for issuance.

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The maximum number of shares available under the LTIP for restricted stock, restricted stock unit awards and performance unit awards settled with stock (i.e., all awards other than stock options and stock appreciation rights) is 2.0 million at June 30, 2014. To the extent necessary to be qualified performance-based compensation under Section 162(m) of the Internal Revenue Code (which we refer to as the IRC): (i) the maximum number of shares with respect to which options or stock appreciation rights or a combination thereof that may be granted during any fiscal year to any person is 200,000; (ii) the maximum number of shares with respect to which performance-based restricted stock or restricted stock units that may be granted during any fiscal year to any person is 100,000; (iii) the maximum amount that may be payable with respect to cash-settled performance units granted during any fiscal year to any person is $5.0 million; and (iv) the maximum number of shares with respect to which stock-settled performance units may be granted during any fiscal year to any person is 100,000.

The LTIP provides for the grant of stock options, which may be either tax-qualified incentive stock options or non-qualified options and stock appreciation rights. The compensation committee determines the period for the exercise of a non-qualified stock option, tax-qualified incentive stock option or stock appreciation right, provided that no option can be exercised later than seven years after its date of grant. The exercise price of a non-qualified stock option or tax-qualified incentive stock option and the base price of a stock appreciation right cannot be less than 100% of the fair market value of a share of our common stock on the date of grant, provided that the base price of a stock appreciation right granted in tandem with an option will be the exercise price of the related option.

Upon exercise, the option exercise price may be paid in cash, by the delivery of previously owned shares of our common stock, through a net-exercise arrangement, or through a broker-assisted cashless exercise arrangement. The compensation committee determines all of the terms relating to the exercise, cancellation or other disposition of an option or stock appreciation right upon a termination of employment, whether by reason of disability, retirement, death or any other reason. Stock option and stock appreciation right awards under the LTIP are non-transferable.

On March 12, 2014, the compensation committee granted 1,923,000 options under the 2011 LTIP to our officers and key employees that become exercisable at the rate of 34%, 33% and 33% on the anniversary date of the grant in 2017, 2018 and 2019, respectively. On March 13, 2013, the compensation committee granted 1,665,000 options under the 2011 LTIP to our officers and key employees that become exercisable at the rate of 34%, 33% and 33% on the anniversary date of the grant in 2016, 2017 and 2018, respectively. The 2014 and 2013 options expire seven years from the date of grant, or earlier in the event of certain terminations of employment. For certain of our executive officers age 55 or older, stock options awarded in 2014 and 2013 are no longer subject to forfeiture upon such officers’ departure from the company after two years from the date of grant.

Other Information

All of our stock option plans provide for the immediate vesting of all outstanding stock option grants in the event of a change in control of our company, as defined in the applicable plan documents.

During the three-month periods ended June 30, 2014 and 2013, we recognized $2.7 million and $2.3 million, respectively, of compensation expense related to our stock option grants. During the six-month periods ended June 30, 2014 and 2013, we recognized $4.0 million and $3.2 million, respectively, of compensation expense related to our stock option grants.

For purposes of expense recognition, the estimated fair values of the stock option grants are amortized to expense over the options’ vesting period. We estimated the fair value of stock options at the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions:

	2014			2013
Expected dividend yield		3.0	%		3.5	%
Expected risk-free interest rate		1.8	%		1.2	%
Volatility		28.9	%		29.6	%
Expected life (in years)		5.5			6.0

Option valuation models require the input of highly subjective assumptions including the expected stock price volatility. The Black-Scholes option pricing model was developed for use in estimating the fair value of traded options which have no vesting restrictions and are fully transferable. Because our employee and director stock options have characteristics significantly different from those of traded options, and because changes in the selective input assumptions can materially affect the fair value estimate, in management’s opinion, the existing models do not necessarily provide a reliable single measure of the fair value of our employee and non-employee director stock options. The weighted average fair value per option for all options granted during the six-month periods ended June 30, 2014 and 2013, as determined on the grant date using the Black-Scholes option pricing model, was $9.66 and $7.51, respectively.

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The following is a summary of our stock option activity and related information for 2014 (in millions, except exercise price and year data):

	Six-month period ended June 30, 2014
						Weighted
						Average
				Weighted		Remaining
	Shares			Average		Contractual		Aggregate
	Under			Exercise		Term		Intrinsic
	Option			Price		(in years)		Value
Beginning balance		8.3		$	31.35
Granted		1.9			46.87
Exercised		(1.2	)		29.03
Forfeited or canceled		—			27.64
Ending balance		9.0		$	35.00		4.23	$	105.0
Exercisable at end of period		3.2		$	27.19		2.12	$	62.8
Ending vested and expected to vest		8.8		$	34.86		4.19	$	104.3

Options with respect to 9.2 million shares (less any shares of restricted stock issued under the LTIP - see Note 9 to these unaudited consolidated financial statements) were available for grant under the LTIP at June 30, 2014.

The total intrinsic value of options exercised during the six-month periods ended June 30, 2014 and 2013 was $19.7 million and $23.3 million, respectively. As of June 30, 2014, we had approximately $34.4 million of total unrecognized compensation expense related to nonvested options. We expect to recognize that expense over a weighted average period of approximately four years.

Other information regarding stock options outstanding and exercisable at June 30, 2014 is summarized as follows (in millions, except exercise price and year data):

	Options Outstanding						Options Exercisable
Range of Exercise Prices	Number Outstanding		Weighted Average Remaining Contractual Term (in years)		Weighted Average Exercise Price		Number Exercisable		Weighted Average Exercise Price
$    21.28   -  $   27.25		2.5		2.08	$	25.81		2.1	$	25.79
27.35   -        35.71		2.9		3.59		32.65		1.1		29.71
35.95   -        39.17		1.7		5.70		39.15		—		—
46.16   -        46.16		—		6.92		46.16		—		—
46.87   -        46.87		1.9		6.70		46.87		—		—
$    21.28   -  $   46.87		9.0		4.23	$	35.00		3.2	$	27.19

8. Deferred Compensation

We have a Deferred Equity Participation Plan (which we refer to as the Age 62 Plan), which is a non-qualified plan that generally provides for distributions to certain of our key executives when they reach age 62 (or the one-year anniversary of the date of the grant for participants over the age of 61 as of the grant date) or upon or after their actual retirement. Under the provisions of the Age 62 Plan, we typically contribute cash in an amount approved by compensation committee to the rabbi trust on behalf of the executives participating in the Age 62 Plan, and instruct the trustee to acquire a specified number of shares of our common stock on the open market or in privately negotiated transactions based on participant elections. Distributions under the Age 62 Plan may not normally be made until the participant reaches age 62 (or the one-year anniversary of the date of the grant for participants over the age of 61 as of the grant date) and are subject to forfeiture in the event of voluntary termination of employment prior to then. All contributions to the plan deemed to be invested in shares of our common stock are distributed in the form of our common stock and all other distributions are paid in cash.

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Our common stock that is issued to or purchased by the rabbi trust as a contribution under the Age 62 Plan is valued at historical cost, which equals its fair market value at the date of grant or date of purchase. When common stock is issued or purchased, we record an unearned deferred compensation obligation as a reduction of capital in excess of par value in the accompanying consolidated balance sheet, which is amortized to compensation expense ratably over the vesting period of the participants. Future changes in the fair market value of our common stock owed to the participants do not have any impact on the amounts recorded in our consolidated financial statements.

In the first quarter of each of 2014 and 2013, the compensation committee approved $9.2 million and $8.0 million, respectively, of awards in the aggregate to certain key executives under the Age 62 Plan that were contributed to the rabbi trust in first quarter 2014 and second quarter 2013, respectively. We contributed cash to the rabbi trust and instructed the trustee to acquire a specified number of shares of our common stock on the open market to fund these 2014 and 2013 awards. During the three-month periods ended June 30, 2014 and 2013, we charged $1.8 million and $1.8 million, respectively, to compensation expense related to these awards. During the six-month periods ended June 30, 2014 and 2013, we charged $3.2 million and $3.3 million, respectively, to compensation expense related to these awards.

At June 30, 2014 and December 31, 2013, we recorded $33.7 million (related to 2.3 million shares) and $26.3 million (related to 2.1 million shares), respectively, of unearned deferred compensation as a reduction of capital in excess of par value in the accompanying consolidated balance sheet. The total intrinsic value of our unvested equity based awards under the plan at June 30, 2014 and December 31, 2013 was $105.7 million and $96.4 million, respectively. During the six-month period ended June 30, 2013, cash and equity awards with an aggregate fair value of $0.7 million were vested and distributed to executives under the Age 62 Plan. There were no distributions from the Age 62 Plan during the six-month period ended June 30, 2014.

We have a Deferred Cash Participation Plan (which we refer to as the DCPP), which is a non-qualified deferred compensation plan for certain key employees, other than executive officers, that generally provides for distributions no sooner than five years from the date of awards, with full vesting after thirteen months from the date of awards. Under the provisions of the DCPP, we typically contribute cash in an amount approved by compensation committee to the rabbi trust on behalf of the executives participating in the DCPP, and instruct the trustee to acquire a specified number of shares of our common stock on the open market or in privately negotiated transactions based on participant elections. In the first quarter of each of 2014 and 2013, the compensation committee approved $2.9 million and $2.7 million, respectively, of awards in the aggregate to certain key executives under the DCPP that were contributed to the rabbi trust in first quarter 2014 and second quarter 2013, respectively. During the three-month periods ended June 30, 2014 and 2013, we charged $0.7 million and $0.6 million, respectively, to compensation expense related to these awards. During the six-month periods ended June 30, 2014 and 2013, we charged $1.5 million and $0.8 million, respectively, to compensation expense related to these awards.

9. Restricted Stock, Performance Share and Cash Awards

Restricted Stock Awards

As discussed in Note 7 to these unaudited consolidated financial statements, on May 13, 2014, our stockholders approved the LTIP, which replaced our previous stockholder-approved 2011 LTIP. The LTIP provides for the grant of a stock award either as restricted stock or as restricted stock units. In either case, the compensation committee may determine that the award will be subject to the attainment of performance measures over an established performance period. Stock awards and the related dividend equivalents are non-transferable and subject to forfeiture if the holder does not remain continuously employed with us during the applicable restriction period or, in the case of a performance-based award, if applicable performance measures are not attained. The compensation committee will determine all of the terms relating to the satisfaction of performance measures and the termination of a restriction period, or the forfeiture and cancellation of a restricted stock award upon a termination of employment, whether by reason of disability, retirement, death or any other reason. The compensation committee may grant unrestricted shares of common stock or units representing the right to receive shares of common stock to employees who have attained age 62.

The agreements awarding restricted stock units under the LTIP will specify whether such awards may be settled in shares of our common stock, cash or a combination of shares and cash and whether the holder will be entitled to receive dividend equivalents, on a current or deferred basis, with respect to such award. Prior to the settlement of a restricted stock unit, the holder of a restricted stock unit will have no rights as a stockholder of the company. The maximum number of shares available under the LTIP for restricted stock, restricted stock units and performance unit awards settled with stock (i.e., all awards other than stock options and stock appreciation rights) is 2.0 million. At June 30, 2014, 2.0 million shares were available for grant under the LTIP for such awards.

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In the first quarter of each of 2014 and 2013, we granted 323,600 and 345,000 restricted stock units, respectively, to employees under the LTIP, with an aggregate fair value of $15.2 million and $13.5 million, respectively, at the date of grant. These 2014 and 2013 awards of restricted stock units vest as follows: 323,600 units granted in first quarter 2014 and 345,000 units granted in first quarter 2013, vest in full based on continued employment through March 12, 2018 and March 13, 2017, respectively. In the second quarter of each of 2014 and 2013, we granted 19,250 and 17,000 restricted stock units, respectively, to employees under the LTIP, with an aggregate fair value of $0.9 million and $0.8 million, respectively, at the date of grant. These grants vest in full one year from the date of grant. For certain of our executive officers age 55 or older, restricted stock units awarded in 2014 and 2013 are no longer subject to forfeiture upon such officers’ departure from the company after two years from the date of grant.

We account for restricted stock awards at historical cost, which equals its fair market value at the date of grant, which is amortized to compensation expense ratably over the vesting period of the participants. Future changes in the fair value of our common stock that is owed to the participants do not have any impact on the amounts recorded in our consolidated financial statements. During the three-month periods ended June 30, 2014 and 2013, we charged $3.9 million and $3.2 million, respectively, to compensation expense related to restricted stock unit awards granted in 2006 through 2014. During the six-month periods ended June 30, 2014 and 2013, we charged $6.5 million and $5.1 million, respectively, to compensation expense related to restricted stock unit awards granted in 2006 through 2014. The total intrinsic value of unvested restricted stock units at June 30, 2014 and 2013 was $58.2 million and $46.7 million, respectively. During the six-month periods ended June 30, 2014 and 2013, equity awards (including accrued dividends) with an aggregate fair value of $9.5 million and $8.4 million were vested and distributed to employees under this plan.

Performance Share Awards

On March 12, 2014, pursuant to the LTIP, the compensation committee approved 48,800 provisional performance unit awards, with an aggregate fair value of $2.3 million, for future grants to our officers. Each performance unit award was equivalent to the value of one share of our common stock on the date such provisional award was approved. These awards are subject to a one-year performance period based on our financial performance and a two-year vesting period. At the discretion of the compensation committee and determined based on our performance, the eligible officer will be granted a percentage of the provisional performance unit award that equates to the EBITAC growth achieved (as specified in the applicable grant agreement). At the end of the performance period, eligible participants will be granted a number of units based on achievement of the performance goal and subject to approval by the compensation committee. Granted units for the 2014 provisional award will fully vest based on continuous employment through January 1, 2017, and will be settled in shares of our common stock on a one-for-one basis as soon as practicable in 2017. For certain of our executive officers age 55 or older, awards granted in 2014 are no longer subject to forfeiture upon such officers’ departure from the company after two years from the date of grant. If an eligible employee leaves us prior to the vesting date, the entire award will be forfeited.

Cash Awards

On March 12, 2014, pursuant to our Performance Unit Program (which we refer to as the Program), the compensation committee approved provisional cash awards of $10.8 million in the aggregate for future grants to our officers and key employees that are denominated in units (229,000 units in the aggregate), each of which was equivalent to the value of one share of our common stock on the date the provisional award was approved. The Program consists of a one-year performance period based on our financial performance and a two-year vesting period. At the discretion of the compensation committee and determined based on our performance, the eligible officer or key employee will be granted a percentage of the provisional cash award units that equates to the EBITAC growth achieved (as defined in the Program). At the end of the performance period, eligible participants will be granted a number of units based on achievement of the performance goal and subject to approval by the compensation committee. Granted units for the 2014 provisional award will fully vest based on continuous employment through January 1, 2017. For certain of our executive officers age 55 or older, awards granted under the Program in 2014 are no longer subject to forfeiture upon such officers’ departure from the company after two years from the date of the provisional award. The ultimate award value will be equal to the trailing twelve-month price of our common stock on December 31, 2016, multiplied by the number of units subject to the award, but limited to between 0.5 and 1.5 times the original value of the units determined as of the grant date. The fair value of the awarded units will be paid out in cash as soon as practicable in 2017. If an eligible employee leaves us prior to the vesting date, the entire award will be forfeited. We did not recognize any compensation expense during the six-month period ended June 30, 2014 related to the 2014 provisional award under the Program.

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On March 13, 2013, pursuant to the Program, the compensation committee approved provisional cash awards of $10.5 million in the aggregate for future grant to our officers and key employees that are denominated in units (269,000 units in the aggregate), each of which was equivalent to the value of one share of our common stock on the date the provisional awards were approved. Terms of the 2013 provisional awards were similar to the terms of the 2014 provisional awards. Based on our performance for 2013, we granted 263,000 units under the Program in first quarter 2014 that will fully vest on January 1, 2016. During the three-month period ended June 30, 2014, we charged $1.5 million to compensation expense related to these awards. During the six-month period ended June 30, 2014, we charged $3.0 million to compensation expense related to these awards. We did not recognize any compensation expense during 2013 related to the 2013 awards.

On March 16, 2012, pursuant to the Program, the compensation committee approved provisional cash awards of $13.1 million in the aggregate for future grant to our officers and key employees that are denominated in units (368,000 units in the aggregate), each of which was equivalent to the value of one share of our common stock on the date the provisional awards were approved. Terms of the 2012 provisional awards were similar to the terms of the 2014 provisional awards. Based on our performance for 2012, we granted 365,000 units under the Program in first quarter 2013 that will fully vest on January 1, 2015. During the three-month periods ended June 30, 2014 and 2013, we charged $1.8 million and $1.7 million, respectively, to compensation expense related to the 2012 awards. During the six-month periods ended June 30, 2014 and 2013, we charged $4.5 million and $3.4 million, respectively, to compensation expense related to the 2012 awards.

On March 8, 2011, pursuant to the Program, the compensation committee approved provisional cash awards of $14.4 million in the aggregate for future grant to our officers and key employees that are denominated in units (464,000 units in the aggregate), each of which was equivalent to the value of one share of our common stock on the date the provisional awards were approved. Terms of the 2011 provisional awards were similar to the terms of the 2014 provisional awards. Based on our performance for 2011, we granted 432,000 units under the Program in first quarter 2012 that fully vested on January 1, 2014. During the three-month period ended June 30, 2013, we charged $2.3 million to compensation expense related to these awards. During the six-month period ended June 30, 2013, we charged $4.3 million to compensation expense related to these awards. We did not recognize any compensation expense during 2014 related to the 2011 awards.

During the six-month period ended June 30, 2014, cash awards related to the 2011 provisional award with an aggregate fair value of $17.6 million (0.4 million units in the aggregate) were vested and distributed to employees under the Program.

10. Retirement Plans

We have a noncontributory defined benefit pension plan that, prior to July 1, 2005, covered substantially all of our domestic employees who had attained a specified age and one year of employment. Benefits under the plan were based on years of service and salary history. In 2005, we amended our defined benefit pension plan to freeze the accrual of future benefits for all U.S. employees, effective on July 1, 2005. In the table below, the service cost component represents plan administration costs that are incurred directly by the plan.

The components of the net periodic pension benefit cost for the plan consists of the following (in millions):

	Three-month period ended June 30,						Six-month period ended June 30,
	2014			2013			2014			2013
Service cost	$	0.1		$	0.1		$	0.2		$	0.2
Interest cost on benefit obligation		3.2			3.0			6.4			5.9
Expected return on plan assets		(4.7	)		(4.3	)		(9.4	)		(8.6	)
Amortization of net actuarial loss		0.6			1.9			1.2			3.9
Net periodic benefit (earnings) cost	$	(0.8	)	$	0.7		$	(1.6	)	$	1.4

We are not required under the IRC to make any minimum contributions to the plan for the 2014 plan year or the 2013 plan year. This level of required funding is based on the plan being frozen and the aggregate amount of our historical funding. During the six-month period ended June 30, 2013, we made discretionary contributions of $4.2 million to the plan. We did not make any discretionary contributions to the plan during the six-month period ended June 30, 2014.

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11. Investments

The following is a summary of our investments and the related funding commitments (in millions):

	June 30, 2014				December 31,
			Funding		2013
	Assets		Commitments		Assets
Chem-Mod LLC	$	4.0	$	—	$	4.0
Chem-Mod International LLC		2.0		—		2.0
C-Quest Technologies LLC and C-Quest Technologies International LLC		—		—		2.0
Clean-coal investments
Controlling interest in five limited liability companies that own fourteen 2009 Era Clean Coal Plants		24.2		0.2		18.3
Non-controlling interest in one limited liability company that owns one 2011 Era Clean Coal Plant		1.1		—		1.1
Controlling interest in thirteen limited liability companies that own nineteen 2011 Era Clean Coal Plants		61.5		—		59.3
Other investments		3.2		2.9		3.7
Total investments	$	96.0	$	3.1	$	90.4

Chem-Mod LLC - At June 30, 2014, we held a 46.54% controlling interest in Chem-Mod. Chem-Mod possesses the exclusive marketing rights, in the U.S. and Canada, for technologies used to reduce emissions created during the combustion of coal. The refined coal production plants discussed below, as well as those owned by other unrelated parties, license and use Chem-Mod’s proprietary technologies, The Chem-Mod™ Solution, in the production of refined coal. The Chem-Mod™ Solution uses a dual injection sorbent system to reduce mercury, sulfur dioxide and other emissions at coal-fired power plants.

We believe that the application of The Chem-Mod™ Solution qualifies for refined coal tax credits under IRC Section 45 when used with refined coal production plants placed in service by December 31, 2011 or 2009. Chem-Mod has been marketing its technologies principally to coal-fired power plants owned by utility companies, including those utilities that are operating with the IRC Section 45 refined coal production plants in which we hold an investment.

Chem-Mod is determined to be a variable interest entity (which we refer to as a VIE). We are the controlling manager of Chem-Mod and therefore consolidate its operations into our consolidated financial statements. At June 30, 2014, total assets and total liabilities of this VIE included in our consolidated balance sheet were $9.3 million and $0.7 million, respectively. For the six-month period ended June 30, 2014, total revenues and expenses were $32.3 million and $17.8 million (including non-controlling interest of $16.7 million), respectively. We are under no obligation to fund Chem-Mod’s operations in the future.

Chem-Mod International LLC - At June 30, 2014, we held a 31.52% non-controlling ownership interest in Chem-Mod International. Chem-Mod International has the rights to market The Chem-Mod™ Solution in countries other than the U.S. and Canada. Such marketing activity has been limited to date.

C-Quest Technologies LLC and C-Quest Technologies International LLC (together, C-Quest) - At June 30, 2014, we held a non-controlling 12% interest in C-Quest’s global entities, which is an increase of 4% resulting from the transaction described below. C-Quest possesses rights, information and technology for the reduction of carbon dioxide emissions created by burning fossil fuels. Thus far, C-Quest’s operations have been limited to laboratory testing. C-Quest is determined to be a VIE, but due to our lack of control over the operation of C-Quest, we do not consolidate this investment into our consolidated financial statements. Prior to August 1, 2013, we had options to acquire an additional 19% interest in C-Quest’s global entities for $9.5 million at any time on or prior to August 1, 2016. On August 1, 2013, we loaned the majority owner $2.0 million at a 2% interest rate, which was to mature on May 15, 2014. Also on August 1, 2013, the option to acquire the 19% interests was extended to August 15, 2016. The loan was to be repaid in cash or by delivery of an additional 4% ownership interest in C-Quest’s global entities. On March 31, 2014, we accepted payment of the loan by delivery of the additional 4% ownership interest, therefore our remaining option is reduced to 15% and the remaining purchase price was reduced to $7.5 million.

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Clean Coal Investments -

• We have investments in limited liability companies that own 34 refined coal production plants which produce refined coal using propriety technologies owned by Chem-Mod. We believe the production and sale of refined coal at these plants is qualified to receive refined coal tax credits under IRC Section 45. The fourteen plants placed in service prior to December 31, 2009 (which we refer to as the 2009 Era Plants) are eligible to receive tax credits through 2019 and the twenty plants placed in service prior to December 31, 2011 (which we refer to as the 2011 Era Plants) are eligible to receive tax credits through 2021.

• On March 1, 2013, we purchased an additional ownership interest in twelve of the 2009 Era Plants from a co-investor. For nine of the plants, our ownership increased from 24.5% to 49.5%. For the other three of the plants, our ownership increased from 25.0% to 60.0%. Our investment in these plants had been accounted for under the equity method of accounting. As of March 1, 2013, we consolidated the operations of the limited liability company that owns these three plants. Total revenues and expenses recorded in our unaudited consolidated statement of earnings for the six-month period ended June 30, 2014 related to this acquisition, were $109.0 million and $113.1 million, respectively.

• Our purchase price for the additional ownership interests in these twelve plants was the assumption of the promissory note that we received as consideration for the co-investor’s purchase of ownership interests in three of the 2009 Era Plants on March 1, 2010, which had a carrying value, including accrued interest, of $8.0 million at March 1, 2013, plus the payment of cash and other consideration of $5.0 million. We recognized a gain of $11.4 million as a component of other net revenues in the accompanying unaudited consolidated statement of earnings, which included the increase in fair value of our prior 25% equity interest in the limited liability company upon the acquisition of the additional 35% equity interest, and recorded $26.3 million of fixed and other amortizable intangible assets and $6.8 million of other assets in connection with this transaction. The carrying value of our prior non-controlling interest in the limited liability company was $4.8 million as of the acquisition date. The fair value of our prior non-controlling interest in the limited liability company was determined by allocating, on a pro rata basis, the fair value of the limited liability company as adjusted for our lack of control in our prior ownership position. We determined the fair value of the limited liability company using similar valuation techniques to those discussed in Note 3 to these unaudited consolidated financial statements.

• On September 1, 2013, we purchased a 99% interest in a limited liability company that has ownership interests in four limited liability companies that own five 2011 Era Plants. The purchase price was $4.0 million in cash plus a $10.0 million note with 3% interest due in installments through December 19, 2021. Total revenues and expenses recorded in our unaudited consolidated statement of earnings for the six-month period ended June 30, 2014 related to this acquisition, were $35.9 million and $40.0 million, respectively.

• On March 1, 2014, we purchased an additional ownership interest in seven of the 2009 Era Plants and five of the 2011 Era Plants from a co-investor. For all seven of the 2009 Era plants, our ownership increased from 49.5% to 100.0%. For the 2011 Era plants, our ownership increased from 48.8% to 90.0% for one of the plants, from 49.0% to 100.0% for three of the plants and from 98.0% to 100.0% for one of the plants. Our investments in the plants where our ownership was less than 50% had been accounted for under the equity method of accounting. As of March 1, 2014 we consolidated the operations of the limited liability companies that own these plants. Total revenues and expenses recorded in our unaudited consolidated statement of earnings for the six-month period ended June 30, 2014 related to this acquisition were $156.5 million and $167.4 million, respectively.

• We received $0.5 million from our co-investor as part of the 2014 acquisition transaction in addition to receiving the additional ownership interests. We recognized a gain of $25.6 million as a component of other net revenues in the accompanying unaudited consolidated statement of earnings, which resulted from the increase in fair value of our prior equity interests in the limited liability companies upon the acquisition of the additional equity interests, and recorded $26.3 million of fixed and other amortizable intangible assets, $3.3 million of other assets and other liabilities of $4.5 million in connection with this transaction. The carrying value of our prior non-controlling interest in the limited liability companies was $15.5 million as of the acquisition date. The fair value of our prior non-controlling interest in the limited liability company was determined by allocating, on a pro rata basis, the fair value of the limited liability company as adjusted for our lack of control in our prior ownership position. We determined the fair value of the limited liability company using similar valuation techniques to those discussed in Note 3 to these consolidated financial statements.

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• As of June 30, 2014:

• Twenty-seven of the plants have long-term production contracts.

• The remaining seven plants are in various stages of seeking and negotiating long-term production contracts.

• We have a non-controlling interest in one plant, which is owned by a limited liability company (which we refer to as a LLC). We have determined that this LLC is a VIE, for which we are not the primary beneficiary. At June 30, 2014, total assets and total liabilities of this VIE were $9.5 million and $6.3 million, respectively. For the six-month period ended June 30, 2014, total revenues and expenses of this VIE were $21.9 million and $26.8 million, respectively.

• We may sell ownership interests in some or all of the plants to co-investors and relinquish control of the plants, thereby becoming a non-controlling, minority investor. In any limited liability company where we are a non-controlling, minority investor, the membership agreement for the operations contains provisions that preclude an individual member from being able to make major decisions that would denote control. As of any date we become a non-controlling, minority investor, we deconsolidate the entity and subsequently account for the investment using equity method accounting.

• For all plants that are not under long-term production contracts, we estimate that we will invest, on average, an additional $5.0 million per plant to connect and house each of them. For those plants that will have majority ownership co-investors, the average additional investment will be $2.5 million. We are currently committed to fund an additional $0.2 million under engineering and construction contracts related to moving, connecting and housing the refined coal plants that we plan to redeploy during 2014. We further estimate that we will invest an additional $30.0 million to $40.0 million to redeploy the remainder of the refined coal plants in 2015, before any co-investor contributions.

• We and our co-investors each fund our portion of the on-going operations of the limited liability companies in proportion to our investment ownership percentages. Other than our portion of the on-going operational funding, there are no additional amounts that we are committed to related to funding these investments.

• We are aware that some of the coal-fired power plants that purchase the refined coal are considering changing to burning natural gas or shutting down completely for economic reasons. The entities that own such plants are prepared to move the refined coal productions plants to other, generally higher volume, coal-fired power plants. If these potential developments were to occur, we estimate those plants will not operate for 12 to 18 months during their movement and redeployment, which could have a material impact on the amount of tax credits that are generated by these plants.

Other Investments - At June 30, 2014, we owned a non-controlling, minority interest in four venture capital funds totaling $2.7 million, a 20% non-controlling interest in an investment management company totaling $0.5 million, twelve certified low-income housing developments with zero carrying value and two real estate entities with zero carrying value. The low-income housing developments and real estate entities have been determined to be VIEs, but are not required to be consolidated due to our lack of control over their respective operations. At June 30, 2014, total assets and total debt of these VIEs were approximately $60.0 million and $20.0 million, respectively.

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12. Commitments, Contingencies and Off-Balance Sheet Arrangements

In connection with our investing and operating activities, we have entered into certain contractual obligations and commitments. See Notes 5 and 11 to these unaudited consolidated financial statements for additional discussion of these obligations and commitments. Our future minimum cash payments, including interest, associated with our contractual obligations pursuant to the note purchase agreements, Credit Agreement, Premium Financing Debt Facility, operating leases and purchase commitments at June 30, 2014 were as follows (in millions):

	Payments Due by Period
Contractual Obligations	2014			2015			2016			2017			2018			Thereafter		Total
Note purchase agreements	$	100.0		$	—		$	50.0		$	300.0		$	100.0		$	1,675.0	$	2,225.0
Credit Agreement		153.0			—			—			—			—			—		153.0
Premium Financing Debt Facility		139.0			—			—			—			—			—		139.0
Interest on debt		54.0			100.4			100.4			97.5			77.5			397.1		826.9
Total debt obligations		446.0			100.4			150.4			397.5			177.5			2,072.1		3,343.9
Operating lease obligations		45.0			83.5			69.9			57.1			40.4			126.2		422.1
Less sublease arrangements		(2.2	)		(1.0	)		(0.3	)		(0.3	)		(0.1	)		—		(3.9	)
Outstanding purchase obligations		15.7			16.7			9.4			0.9			0.3			—		43.0
Total contractual obligations	$	504.5		$	199.6		$	229.4		$	455.2		$	218.1		$	2,198.3	$	3,805.1

The amounts presented in the table above may not necessarily reflect our actual future cash funding requirements, because the actual timing of future payments may vary from the stated contractual obligation.

Note Purchase Agreements, Credit Agreement and Premium Financing Debt Facility - See Note 5 to these unaudited consolidated financial statements for a discussion of the terms of the note purchase agreements, the Credit Agreement and Premium Financing Debt Facility.

Operating Lease Obligations - Our corporate segment’s executive offices and certain subsidiary and branch facilities of our brokerage and risk management segments are located at Two Pierce Place, Itasca, Illinois, where we lease approximately 306,000 square feet of space, or approximately 60% of the building. The lease commitment on this property expires February 28, 2018.

We generally operate in leased premises at our other locations. Certain of these leases have options permitting renewals for additional periods. In addition to minimum fixed rentals, a number of leases contain annual escalation clauses which are generally related to increases in an inflation index.

We have leased certain office space to several non-affiliated tenants under operating sublease arrangements. In the normal course of business, we expect that certain of these leases will not be renewed or replaced. We adjust charges for real estate taxes and common area maintenance annually based on actual expenses, and we recognize the related revenues in the year in which the expenses are incurred. These amounts are not included in the minimum future rentals to be received in the contractual obligations table above.

Outstanding Purchase Obligations - We typically do not have a material amount of outstanding purchase obligations at any point in time. The amount disclosed in the contractual obligations table above represents the aggregate amount of unrecorded purchase obligations that we had outstanding at June 30, 2014. These obligations represent agreements to purchase goods or services that were executed in the normal course of business.

Off-Balance Sheet Commitments - Our total unrecorded commitments associated with outstanding letters of credit, financial guarantees and funding commitments as of June 30, 2014 were as follows (in millions):

													Total
	Amount of Commitment Expiration by Period												Amounts
Off-Balance Sheet Commitments	2014		2015		2016		2017		2018		Thereafter		Committed
Letters of credit	$	—	$	—	$	—	$	—	$	—	$	21.1	$	21.1
Financial guarantees		—		—		—		—		—		9.1		9.1
Funding commitments		0.2		—		—		—		—		2.9		3.1
Acquistion of Noraxis (see Note 3)		420.0		—		—		—		—		—		420.0
Total commitments	$	420.2	$	—	$	—	$	—	$	—	$	33.1	$	453.3

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Since commitments may expire unused, the amounts presented in the table above do not necessarily reflect our actual future cash funding requirements. See Note 11 to these unaudited consolidated financial statements for a discussion of our funding commitments related to our corporate segment and the Off-Balance Sheet Debt section below for a discussion of our letters of credit. All of the letters of credit represent multiple year commitments that have annual, automatic renewing provisions and are classified by the latest commitment date.

Since January 1, 2002, we have acquired 314 companies, all of which were accounted for using the acquisition method for recording business combinations. Substantially all of the purchase agreements related to these acquisitions contain provisions for potential earnout obligations. For all of our acquisitions made in the period from 2011 to 2014 that contain potential earnout obligations, such obligations are measured at fair value as of the acquisition date and are included on that basis in the recorded purchase price consideration for the respective acquisition. The amounts recorded as earnout payables are primarily based upon estimated future operating results of the acquired entities over a two- to three-year period subsequent to the acquisition date. The aggregate amount of the maximum earnout obligations related to these acquisitions was $473.8 million, of which $157.4 million was recorded in our consolidated balance sheet as of June 30, 2014 based on the estimated fair value of the expected future payments to be made. See Note 3 to these unaudited consolidated financial statements for a discussion of our funding commitments related to a large acquisition we signed in April 2014 and completed in July 2014.

Off-Balance Sheet Debt - Our unconsolidated investment portfolio includes investments in enterprises where our ownership interest is between 1% and 50%, in which management has determined that our level of influence and economic interest is not sufficient to require consolidation. As a result, these investments are accounted for under the equity method. None of these unconsolidated investments had any outstanding debt at June 30, 2014 or December 31, 2013 that was recourse to us.

At June 30, 2014, we had posted two letters of credit totaling $9.8 million, in the aggregate, related to our self-insurance deductibles, for which we had a recorded liability of $8.9 million. We have an equity investment in a rent-a-captive facility, which we use as a placement facility for certain of our insurance brokerage operations. At June 30, 2014, we had posted seven letters of credit totaling $6.3 million to allow certain of our captive operations to meet minimum statutory surplus requirements and for additional collateral related to premium and claim funds held in a fiduciary capacity. At June 30, 2014, we had posted one letter of credit totaling $5.0 million to support our potential obligation under a client’s insurance program. These letters of credit have never been drawn upon.

Litigation, Regulatory and Taxation Matters - We are a defendant in various legal actions incidental to the nature of our business including but not limited to matters related to employment practices, alleged breaches of non-compete or other restrictive covenants, theft of trade secrets, breaches of fiduciary duties and related causes of action. We are also periodically the subject of inquiries and investigations by regulatory and taxing authorities into various matters related to our business. Neither the outcomes of these matters nor their effect upon our business, financial condition or results of operations can be determined at this time.

Our micro-captive advisory services are the subject of an investigation by the Internal Revenue Service (IRS). Additionally, we understand that the IRS has initiated audits for the 2012 tax year of a number of the micro-captive insurance companies organized and/or managed by us. Among other matters, we believe that the IRS is investigating whether we have been acting as a tax shelter promoter in connection with these operations. While the IRS has not made any specific allegations relating to our operations, if the IRS were to successfully assert that the micro-captives organized and/or managed by us do not meet the requirements of IRC Section 831(b), we could be subject to monetary claims by the IRS and/or our micro-captive clients, and our future earnings from our micro-captive operations could be materially adversely affected, any of which could negatively impact the overall captive business and adversely affect our consolidated results of operations and financial condition. Due to the early stage of the investigation and the fact that the IRS has not made any allegation against us at this time, we are not able to reasonably estimate the amount of any potential loss in connection with this investigation.

In July 2014, Gallagher was named in a lawsuit that asserts Gallagher, its subsidiary, Gallagher Clean Energy, LLC, and Chem-Mod LLC are liable for infringement of a patent held by Nalco Company. The complaint seeks a judgment of infringement, damages, costs and attorneys’ fees, and injunctive relief. Gallagher and the other defendants dispute the allegations contained in the complaint and intend to defend this matter vigorously. We believe that the probability of a material loss is remote. However, litigation is inherently uncertain and it is not possible to predict the ultimate disposition of this proceeding.

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Contingent Liabilities - We purchase insurance to provide protection from errors and omissions (which we refer to as E&O) claims that may arise during the ordinary course of business. We currently retain the first $5.0 million of each and every E&O claim. Our E&O insurance provides aggregate coverage for E&O losses up to $175.0 million in excess of our retained amounts. We have historically maintained self-insurance reserves for the portion of our E&O exposure that is not insured. We periodically determine a range of possible reserve levels using actuarial techniques that rely heavily on projecting historical claim data into the future. Our E&O reserve in the June 30, 2014 unaudited consolidated balance sheet is above the lower end of the most recently determined actuarial range by $1.4 million and below the upper end of the actuarial range by $5.4 million. We can make no assurances that the historical claim data used to project the current reserve levels will be indicative of future claim activity. Thus, the E&O reserve level and corresponding actuarial range could change in the future as more information becomes known, which could materially impact the amounts reported and disclosed herein.

Tax-advantaged Investments No Longer Held - Between 1996 and 2007, we developed and then sold portions of our ownership in various energy related investments, many of which qualified for tax credits under IRC Section 29. In connection with the sales to other investors, we provided various indemnities. At June 30, 2014, the maximum potential amount of future payments that we could be required to make under these indemnification provisions totaled approximately $45.0 million, net of the applicable income tax benefit. In addition, we recorded tax benefits in connection with our ownership in these investments. At June 30, 2014, we had exposure on $130.0 million of previously earned tax credits. In 2004, 2007 and 2009, the IRS examined several of these investments and all examinations were closed without any changes being proposed by the IRS. However, any future adverse tax audits, administrative rulings or judicial decisions could disallow previously claimed tax credits or cause us to be subject to liability under our indemnification obligations. Because of the contingent nature of these exposures, no liabilities have been recorded in our June 30, 2014 consolidated balance sheet related to these indemnification obligations.

13. Accumulated Other Comprehensive Earnings (Loss)

The after-tax components of our accumulated other comprehensive earnings (loss) consist of the following:

	Pension Liability			Foreign Currency Translation		Fair Value of Derivative Investments		Accumulated Comprehensive Earnings (Loss)
Balance as of December 31, 2013	$	(25.6	)	$	22.1	$	0.9	$	(2.6	)
Net change in period		0.9			54.5		1.4		56.8
Balance as of June 30, 2014	$	(24.7	)	$	76.6	$	2.3	$	54.2

The foreign currency translation during the six-month period ended June 30, 2014 primarily relates to the net impact of changes in the value of the local currencies relative to the U.S. dollar for our operations in Australia, Canada, the Caribbean, India, New Zealand, Singapore and the U.K.

During the six-month periods ended June 30, 2014 and 2013, $1.2 million and $3.9 million, respectively, of expense related to the pension liability was reclassified from accumulated other comprehensive earnings (loss) to compensation expense in the statement of earnings. During the six-month periods ended June 30, 2014 and 2013, $0.3 million and $0.1 million, respectively, of expense related to the fair value of derivative investments was reclassified from accumulated other comprehensive earnings (loss) to the statement of earnings. During the six-month periods ended June 30, 2014 and 2013, no amounts related to foreign currency translation were reclassified from accumulated other comprehensive earnings (loss) to the statement of earnings.

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14. Segment Information

We have three reportable segments: brokerage, risk management and corporate.

The brokerage segment is primarily comprised of our retail and wholesale insurance brokerage operations. The brokerage segment generates revenues through commissions paid by insurance underwriters and through fees charged to our clients. Our brokers, agents and administrators act as intermediaries between insurers and their customers and we do not assume underwriting risks.

The risk management segment provides contract claim settlement and administration services for enterprises that choose to self-insure some or all of their property/casualty coverages and for insurance companies that choose to outsource some or all of their property/casualty claims departments. These operations also provide claims management, loss control consulting and insurance property appraisal services. Revenues are principally generated on a negotiated per-claim or per-service fee basis.

The corporate segment manages our clean energy and other investments. This segment also holds all of our corporate debt.

Allocations of investment income and certain expenses are based on reasonable assumptions and estimates primarily using revenue, headcount and other information. We allocate the provision for income taxes to the brokerage and risk management segments using the local country statutory rates. Reported operating results by segment would change if different methods were applied.

Financial information relating to our segments for the three-month and six-month periods ended June 30, 2014 and 2013 is as follows (in millions):

	Three-month period ended June 30,						Six-month period ended June 30,
	2014			2013			2014			2013
Brokerage
Total revenues	$	742.6		$	550.9		$	1,311.2		$	1,005.3
Earnings before income taxes	$	136.5		$	112.6		$	186.9		$	153.2
Identifiable assets at June 30, 2014 and 2013							$	8,047.4		$	4,325.2
Risk Management
Total revenues	$	168.1		$	156.2		$	328.1		$	309.8
Earnings before income taxes	$	20.6		$	20.2		$	39.6		$	41.7
Identifiable assets at June 30, 2014 and 2013							$	581.2		$	530.8
Corporate
Total revenues	$	268.6		$	72.4		$	455.0		$	138.5
Loss before income taxes	$	(50.0	)	$	(35.4	)	$	(73.1	)	$	(55.2	)
Identifiable assets at June 30, 2014 and 2013							$	1,390.7		$	706.1

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Review by Independent Registered Public Accounting Firm

The interim consolidated financial statements at June 30, 2014 and for the three-month and six-month periods ended June 30, 2014 and 2013 have been reviewed by Ernst & Young LLP, our independent registered public accounting firm, and their report is included herein.

Review Report of Independent Registered Public Accounting Firm

Board of Directors and Stockholders

Arthur J. Gallagher & Co.

We have reviewed the consolidated balance sheet of Arthur J. Gallagher & Co. as of June 30, 2014, and the related consolidated statements of earnings and comprehensive earnings for the three-month and six-month periods ended June 30, 2014 and 2013, the consolidated statement of cash flows for the six-month periods ended June 30, 2014 and 2013, and the consolidated statement of stockholders’ equity for the six-month period ended June 30, 2014. These financial statements are the responsibility of the Company’s management.

We conducted our review in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States), the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should be made to the consolidated financial statements referred to above for them to be in conformity with U.S. generally accepted accounting principles.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet of Arthur J. Gallagher & Co. as of December 31, 2013, and the related consolidated statements of earnings, comprehensive earnings, stockholders’ equity, and cash flows for the year then ended, not presented herein, and we expressed an unqualified audit opinion on those consolidated financial statements in our report dated February 7, 2014. In our opinion, the accompanying consolidated balance sheet of Arthur J. Gallagher & Co. as of December 31, 2013, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

/s/ Ernst & Young LLP

Ernst & Young LLP

Chicago, Illinois

July 31, 2014

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The discussion and analysis that follows relates to our financial condition and results of operations for the quarter and six-month period ended June 30, 2014. Readers should review this information in conjunction with the unaudited consolidated financial statements and notes included in Item 1 of Part I of this quarterly report on Form 10-Q and the audited consolidated financial statements and notes, and Management’s Discussion and Analysis of Financial Condition and Results of Operations, contained in our annual report on Form 10-K for the year ending December 31, 2013.

Information Concerning Forward-Looking Statements

This report contains certain statements related to future results, or states our intentions, beliefs and expectations or predictions for the future, which are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements relate to expectations or forecasts of future events. Such statements use words such as “anticipate,” “believe,” “estimate,” “expect,” “contemplate,” “forecast,” “project,” “intend,” “plan,” “potential,” and other similar terms, and future or conditional tense verbs like “could,” “may,” “might,” “see,” “should,” “will” and “would.” You can also identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. For example, we may use forward-looking statements when addressing topics such as: market and industry conditions, including competitive and pricing trends; acquisition strategy; the expected impact of acquisitions and dispositions; the development and performance of our services and products; changes in the composition or level of our revenues or earnings; our cost structure and the outcome of cost-saving or restructuring initiatives; future debt to earnings ratios; the outcome of contingencies; dividend policy; pension obligations; cash flow and liquidity; capital structure and financial losses; future actions by regulators; the outcome of existing regulatory actions or investigations; the impact of changes in accounting rules; financial markets; interest rates; foreign exchange rates; matters relating to our operations; income taxes; expectations regarding our investments, including our clean energy investments; and integrating the Crombie/OAMPS acquisition. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from either historical or anticipated results depending on a variety of factors.

Many factors could affect our actual results, and variances from our current expectations regarding such factors could cause actual results to differ materially from those expressed in our forward-looking statements. Potential factors that could impact results include:

• Volatility or declines in premiums or other adverse trends in the insurance industry;

• An economic downturn;

• Competitive pressures in each of our businesses;

• Risks that could negatively affect the success of our acquisition strategy, including continuing consolidation in our industry and growing interest in acquiring insurance brokers on the part of private equity firms, which could make it more difficult to identify targets and could make them more expensive, execution risks, integration risks, the risk of post-acquisition deterioration leading to intangible asset impairment charges, and the risk we could incur or assume unanticipated regulatory liabilities such as those relating to violations of anti-corruption and sanctions laws;

• Our failure to attract and retain experienced and qualified personnel;

• Risks arising from our growing international operations, including the risks posed by political and economic uncertainty in certain countries, risks related to maintaining regulatory and legal compliance across multiple jurisdictions (such as those relating to violations of anti-corruption, sanctions and privacy laws), and risks arising from the complexity of managing businesses across different time zones, geographies, cultures and legal regimes;

• Risks particular to our risk management segment;

• The lower level of predictability inherent in contingent and supplemental commissions versus standard commissions;

• Sustained increases in the cost of employee benefits;

• Our failure to apply technology effectively in driving value for our clients through technology-based solutions, or failure to gain internal efficiencies and effective internal controls through the application of technology and related tools;

• Our inability to recover successfully should we experience a disaster, material cybersecurity attack or other significant disruption to business continuity;

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• Our failure to comply with regulatory requirements, including those related to international sanctions, or a change in regulations or enforcement policies that adversely affects our operations;

• Violations or alleged violations of the U.S. Foreign Corrupt Practices Act (FCPA), the U.K. Bribery Act 2010 (U.K. Bribery Act) or other anti-corruption laws;

• The outcome of any existing or future investigation or regulatory action;

• Our failure to adapt our services to changes resulting from the Patient Protection and Affordable Care Act and the Health Care and Education Affordability Reconciliation Act (2010 Health Care Reform Legislation);

• Unfavorable determinations related to contingencies and legal proceedings;

• Damage to our reputation if clients are not satisfied with our services;

• Improper disclosure of personal data;

• Significant changes in foreign exchange rates;

• Changes in our accounting estimates and assumptions;

• Risks related to our clean energy investments, including the risk of intellectual property claims, environmental and product liability claims and environmental compliance costs;

• Disallowance of Internal Revenue Code of 1986, as amended, (which we refer to as IRC) Section 29 or IRC Section 45 tax credits;

• Risks related to losses on other investments held by our corporate segment;

• Restrictions and limitations in the agreements and instruments governing our debt;

• The risk of share ownership dilution when we issue common stock as consideration for acquisitions;

• Volatility of the price of our common stock; and

• Failure to successfully integrate recently acquired businesses and their operations or fully realize synergies from such acquisitions in the expected time frame.

Accordingly, you should not place undue reliance on forward-looking statements, which speak only as of, and are based on information available to us on, the date of the applicable document. All subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. We do not undertake any obligation to update any such statements or release publicly any revisions to these forward-looking statements to reflect events or circumstances after the date of this report or to reflect the occurrence of unanticipated events.

Forward-looking statements are not guarantees of future performance. They involve risks, uncertainties and assumptions, including the risk factors referred to above. Our future performance and actual results may differ materially from those expressed in forward-looking statements. Many of the factors that will determine these results are beyond our ability to control or predict. Forward-looking statements speak only as of the date that they are made, and we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

A detailed discussion of the factors that could cause actual results to differ materially from our published expectations is contained under the heading “Risk Factors” in our filings with the Securities and Exchange Commission, or the SEC, including our Annual Report on Form 10-K for the fiscal year ended December 31, 2013, our Quarterly Report on Form 10-Q for the quarter ended March 31, 2014, the prospectus supplement filed on April 11, 2014 and any other reports we file with the SEC in the future.

Information Regarding Non-GAAP Measures and Other

In the discussion and analysis of our results of operations that follows, in addition to reporting financial results in accordance with GAAP, we provide information regarding EBITDAC, EBITDAC margin, adjusted EBITDAC, adjusted EBITDAC margin, diluted net earnings per share (as adjusted) for the brokerage and risk management segments, adjusted revenues, adjusted compensation and operating expenses, adjusted compensation expense ratio, adjusted operating expense ratio and organic revenue measures for each operating segment. These measures are not in accordance with, or an alternative to, the GAAP information provided in this quarterly report on Form 10-Q. We believe that these presentations provide useful information to management, analysts and investors regarding financial and business trends relating to our results of operations and financial condition. Our industry peers may provide similar supplemental non-GAAP information related to organic revenues and EBITDAC, although they may not use

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the same or comparable terminology and may not make identical adjustments. The non-GAAP information we provide should be used in addition to, but not as a substitute for, the GAAP information provided. Certain reclassifications have been made to the prior-year amounts reported in this quarterly report on Form 10-Q in order to conform them to the current-year presentation.

Adjusted presentation - We believe that the adjusted presentations of the current and prior year information presented on the following pages provides stockholders and other interested persons with useful information regarding certain of our financial metrics that will assist such persons in analyzing our operating results as they develop a future earnings outlook for us. The after-tax amounts related to the adjustments were computed using the normalized effective tax rate for each respective period.

• Adjusted revenues and expenses - We define these measures as revenues, compensation expense and operating expense, respectively, each adjusted to exclude gains realized from sales of books of business, acquisition integration costs, New Zealand earthquake claims administration, claim portfolio transfer and South Australia ramp up fees/costs, workforce related charges, lease termination related charges, acquisition related adjustments and the impact of foreign currency translation, as applicable. Integration costs include costs related to transactions not expected to occur on an ongoing basis in the future once we fully assimilate the applicable acquisition. These costs are typically associated with redundant workforce, extra lease space, duplicate services and external costs incurred to assimilate the acquisition with our IT related systems.

• Adjusted ratios - Adjusted compensation expense ratio and operating expense ratio are defined as adjusted compensation expense and adjusted operating expense, respectively, each divided by adjusted revenues.

Earnings Measures - We believe that the presentation of EBITDAC, EBITDAC margin, adjusted EBITDAC, adjusted EBITDAC margin and diluted net earnings per share (as adjusted) for the brokerage and risk management segments, each as defined below, provides a meaningful representation of our operating performance. We consider EBITDAC and EBITDAC margin as a way to measure financial performance on an ongoing basis. Adjusted EBITDAC, adjusted EBITDAC margin and diluted net earnings per share (as adjusted) for the brokerage and risk management segments are presented to improve the comparability of our results between periods by eliminating the impact of the items that have a high degree of variability.

• EBITDAC - We define this measure as net earnings before interest, income taxes, depreciation, amortization and the change in estimated acquisition earnout payables.

• EBITDAC margin - We define this measure as EBITDAC divided by total revenues.

• Adjusted EBITDAC - We define this measure as EBITDAC adjusted to exclude gains realized from sales of books of business, acquisition integration costs, workforce related charges, lease termination related charges, New Zealand earthquake claims administration, claim portfolio transfer and South Australia ramp up fees/costs, acquisition related adjustments, and the period-over-period impact of foreign currency translation, as applicable.

• Adjusted EBITDAC margin - We define this measure as adjusted EBITDAC divided by total adjusted revenues (defined above).

• Diluted net earnings per share (as adjusted) - We define this measure as net earnings adjusted to exclude the after-tax impact of gains realized from sales of books of business, acquisition integration costs, New Zealand earthquake claims administration, claim portfolio transfer and South Australia ramp up fees/costs, workforce related charges, lease termination related charges and acquisition related adjustments, the period-over-period impact of foreign currency translation, as applicable, divided by diluted weighted average shares outstanding.

Organic Revenues - For the brokerage segment, organic change in base commission and fee revenues excludes the first twelve months of net commission and fee revenues generated from acquisitions accounted for as purchases and the net commission and fee revenues related to operations disposed of in each year presented. These commissions and fees are excluded from organic revenues in order to help interested persons analyze the revenue growth associated with the operations that were a part of our business in both the current and prior year. In addition, change in organic growth excludes the impact of supplemental and contingent commission revenues and the period-over-period impact of foreign currency translation. The amounts excluded with respect to foreign currency translation are calculated by applying current year foreign exchange rates to the same prior year periods. For the risk management segment, organic change in fee revenues excludes the first twelve months of fee revenues generated from acquisitions accounted for as purchases and the fee revenues related to operations disposed of in each year presented. In addition, change in organic growth excludes the impact of South Australia ramp up fees, New Zealand

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earthquake claims administration and the period-over-period impact of foreign currency translation to improve the comparability of our results between periods by eliminating the impact of the items that have a high degree of variability or are due to the limited-time nature of these revenue sources.

These revenue items are excluded from organic revenues in order to determine a comparable measurement of revenue growth that is associated with the revenue sources that are expected to continue in the current year and beyond. We have historically viewed organic revenue growth as an important indicator when assessing and evaluating the performance of our brokerage and risk management segments. We also believe that using this measure allows readers of our financial statements to measure, analyze and compare the growth from our brokerage and risk management segments in a meaningful and consistent manner.

Reconciliation of Non-GAAP Information Presented to GAAP Measures - This quarterly report on Form 10-Q includes tabular reconciliations to the most comparable GAAP measures for adjusted revenues, adjusted compensation expense and adjusted operating expense, EBITDAC, EBITDAC margin, adjusted EBITDAC, adjusted EBITDAC margin, diluted net earnings per share (as adjusted) and organic revenue measures.

Other Information - Allocations of investment income and certain expenses are based on reasonable assumptions and estimates primarily using revenue, headcount and other information. We allocate the provision for income taxes to the brokerage and risk management segments using local country statutory rates. As a result, the provision for income taxes for the corporate segment reflects the entire benefit to us of the IRC Section 45 credits generated, because that is the segment which produced the credits. The law that provides for IRC Section 45 credits substantially expires in December 2019 for our fourteen 2009 Era Plants and in December 2021 for our twenty 2011 Era Plants. We anticipate reporting an effective tax rate of approximately 35.0% to 37.0% in both our brokerage and risk management segments for the foreseeable future. Reported operating results by segment would change if different allocation methods were applied.

In the discussion that follows regarding our results of operations, we also provide the following ratios with respect to our operating results: pretax profit margin, compensation expense ratio and operating expense ratio. Pretax profit margin represents pretax earnings divided by total revenues. The compensation expense ratio is compensation expense divided by total revenues. The operating expense ratio is operating expense divided by total revenues.

Overview and Second Quarter 2014 Highlights

We are engaged in providing insurance brokerage and third-party property/casualty claims settlement and administration services to entities in the U.S. and abroad. Throughout 2013 and into 2014, we have expanded, and expect to continue to expand, our international operations through both acquisitions and organic growth. We generated approximately 70% of our revenues for the combined brokerage and risk management segments domestically, with the remaining 30% derived internationally, primarily in Australia, Bermuda, Canada, the Caribbean, New Zealand, Singapore and the U.K. (based on second quarter 2014 revenues). We expect that our international revenue will continue to grow as a percentage of our total revenues in 2014 compared to 2013, given the number and size of the non-U.S. acquisitions that we completed in the latter part of 2013 and to date in 2014. We have three reportable segments: brokerage, risk management and corporate, which contributed approximately 63%, 15% and 22%, respectively, to revenues during the six-month period ended June 30, 2014. Our major sources of operating revenues are commissions, fees and supplemental and contingent commissions from brokerage operations and fees from risk management operations. Investment income is generated from our investment portfolio, which includes invested cash and fiduciary funds, as well as clean energy and other investments.

We have generated positive organic growth in each of the last fourteen quarterly periods in both the brokerage and risk management segments. Based on our experience, we are generally seeing continued evidence of moderate rate increases and believe that in general our customers are increasingly optimistic about their business prospects. The second quarter 2014 Council of Insurance Agents and Brokers (which we refer to as CIAB) survey had not been published as of the filing date of this report, but we anticipate that the trends evident in the first quarter 2014 survey continued into the second quarter 2014. The first quarter 2014 CIAB survey indicated that rates were up, on average 1.5% across all sized accounts, which were down from the 2.1% reported for the fourth quarter 2013 survey. The first quarter 2014 survey indicated a slowdown of commercial property/casualty pricing increases, which we believe could continue through 2014. The CIAB represents the leading domestic and international insurance brokers, who write approximately 80% of the commercial property/casualty premiums in the U.S. Insurance carriers appear to be making rational pricing decisions. In lines and accounts where rate increases or decreases are warranted, the underwriters are pricing accordingly. Based on our recent internal survey, for property/casualty accounts renewed in the second quarter, 35% of our customers renewed at higher rates, 30% renewed about flat and 35% received decreases. Given this quarter’s mix of renewals, decreases in commissions from lower property rates were partially offset by increases in commissions from higher casualty rates.

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Our operating results improved in second quarter 2014 compared to the same period in 2013 in both our brokerage and risk management segments:

• In our brokerage segment, total revenues and adjusted total revenues were both up 35% and 34%, respectively, base organic commission and fee revenues were up 3.1%, net earnings were up 29%, adjusted EBITDAC was up 43% and adjusted EBITDAC margins were up 190 basis points.

• In our risk management segment, total revenues and adjusted total revenues were both up 8%, organic fees were up 7.6%, net earnings were up 6%, adjusted EBITDAC was up 9% and adjusted EBITDAC margins were up 20 basis points.

• In our combined brokerage and risk management segments, total revenues and adjusted total revenues were up 29% and 28%, respectively, organic commissions and fee revenues were up 4.1%, net earnings were up 26%, adjusted EBITDAC was up 38% and adjusted EBITDAC margins were up by 191 basis points.

• Our acquisition program and our integration efforts are meeting our expectations. During the second quarter of 2014, the brokerage segment completed seventeen acquisitions with annualized revenues totaling $497.1 million.

• In our corporate segment, earnings from our clean energy investments contributed $35.0 million to net earnings in the second quarter of 2014. On March 1, 2014, we acquired additional ownership interests in seven of the 2009 Era Plants and five of the 2011 Era Plants from a co-investor. These transactions resulted in a non-cash after-tax gain of $15.9 million, which resulted from the fair value as of the transaction date. All but one of our investments in these plants had been accounted for under the equity method of accounting. For all plants where our ownership is over 50%, as of March 1, 2014 we consolidated the operations of the limited liability companies that own these plants. We anticipate our clean energy investments to generate between $99.0 million and $110.0 million in net earnings in 2014. We expect to use these additional earnings to continue our mergers and acquisition strategy in our core brokerage and risk management operations.

On April 1, 2014, we acquired the Oval Group of Companies (which we refer to as Oval). Under the acquisition agreement, we agreed to purchase all of the outstanding equity of Oval for net cash consideration of approximately $338.0 million, which includes approximately $3.5 million held back and placed into escrow for three years as partial security for warranty obligations under the agreement and approximately $8.3 million held back and placed into escrow for approximately three months as partial security for adjustments to the balance sheet. Oval is a commercial insurance broker operating out of 24 offices throughout the U.K., with over 1,000 employees. Oval is expected to annually generate over $135.0 million in revenues.

On June 16, 2014, we acquired the Crombie/OAMPS operations (which we refer to as the Crombie/OAMPS transaction). The Crombie/OAMPS transaction includes the OAMPS businesses in Australia and the U.K., Crombie in New Zealand and the associated premium funding operations. Under the acquisition agreement, we purchased all of the outstanding shares of three operating companies for net cash consideration of approximately $952.0 million. The Crombie/OAMPS operations generated $306.0 million in revenue for the year ended June 30, 2013 and have approximately 1,700 employees operating out of more than 50 offices across Australia, New Zealand and the U.K. We financed the Crombie/OAMPS transaction primarily from a secondary offering of 21.85 million shares of our common stock for net proceeds of $911.4 million, as described in greater detail in Note 3 to our consolidated financial statements included elsewhere in this report. The net impact to diluted net earnings per share in second quarter 2014 compared to second quarter 2013 of issuing the shares on April 16, 2014 yet not using most of those proceeds until June 16, 2014 to purchase Crombie/OAMPS, was a reduction of $0.08 per share ($0.07 in the Brokerage Segment and $0.01 in the Risk Management Segment). For the period June 16, 2014 to June 30, 2014, Gallagher recorded revenues of $29.0 million, adjusted EBITDAC of $16.6 million, adjusted pretax earnings of $15.0 million and adjusted net earnings of $10.1 million related to its ownership of Crombie/OAMPS during that period. Due to seasonality of those businesses, the net earnings realized in this period represented approximately 60% of those operations’ second quarter 2014 net earnings.

We also entered into a AU$400.0 million foreign currency derivative investment contract that we executed on April 16, 2014 in connection with the signing of the agreement to acquire the Crombie/OAMPS operations. The derivative investment contract was exercised on June 16, 2014, the date that the Crombie/OAMPS transaction closed. In second quarter 2014, we recorded a pretax gain of $1.9 million related to this derivative investment contract.

On July 2, 2014, we acquired Noraxis Capital Corporation (which we refer to has Noraxis), paying cash consideration of approximately $420.0 million for approximately 89% of the equity of Noraxis. The remaining equity is held by various management employees of Noraxis. Noraxis generated nearly CN$125.0 million in revenue for the year ended December 31, 2013, has more than 650 employees and offices across Alberta, Manitoba, New Brunswick, Nova Scotia and Ontario. We financed the acquisition using mostly additional long-term borrowings and borrowings on our line of credit.

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The following provides non-GAAP information that management believes is helpful when comparing revenues, EBITDAC and diluted net earnings per share for the three-month and six-month periods ended June 30, 2014 with the same periods in 2013:

For the Three-Month Periods Ended June 30,																		Diluted Net Earnings
	Revenues								EBITDAC									Per Share
Segment	2014		2013			Chg			2014			2013			Chg			2014			2013			Chg
	(in millions)								(in millions)
Brokerage, as adjusted	$	741.9	$	555.6			34	%	$	213.3		$	149.3			43	%	$	0.66		$	0.52
Net gains on book sales		0.7		2.9						0.7			2.9						—			0.01
Acquisition integration		—		—						(16.0	)		(5.0	)					(0.07	)		(0.02	)
Workforce & lease termination		—		—						(1.7	)		(0.3	)					(0.01	)		—
Acquisition related adjustments		—		—						—			—						(0.01	)		0.02
Levelized foreign currency translation		—		(7.6	)					—			(0.2	)					—			—
Brokerage, as reported		742.6		550.9						196.3			146.7						0.57			0.53
Risk Management, as adjusted		168.1		155.9			8	%		28.0			25.8			9	%		0.09			0.10
Workforce & lease termination		—		—						(0.2	)		—						—			—
Claim portfolio transfer ramp up		—		—						(1.5	)		—						(0.01	)		—
Levelized foreign currency translation		—		0.3						—			(0.3	)					—			—
Risk Management, as reported		168.1		156.2						26.3			25.5						0.08			0.10
Total Brokerage & Risk Management, as reported		910.7		707.1						222.6			172.2						0.66			0.63
Corporate, as reported		268.6		72.4						(27.8	)		(22.6	)					0.05			0.10
Total Company, as reported	$	1,179.3	$	779.5					$	194.8		$	149.6					$	0.70		$	0.73
Total Brokerage & Risk Management, as adjusted	$	910.0	$	711.5			28	%	$	241.3		$	175.1			38	%	$	0.75		$	0.62			21	%

For the Six-Month Periods Ended June 30,																		Diluted Net Earnings
	Revenues								EBITDAC									Per Share
Segment	2014		2013			Chg			2014			2013			Chg			2014			2013			Chg
	(in millions)								(in millions)
Brokerage, as adjusted	$	1,309.5	$	1,012.6			29	%	$	324.0		$	231.7			40	%	$	0.97		$	0.74
Net gains on book sales		1.7		3.3						1.7			3.3						—			0.02
Acquisition integration		—		—						(22.5	)		(8.0	)					(0.10	)		(0.04	)
Workforce & lease termination		—		—						(3.9	)		(0.3	)					(0.02	)		—
Acquisition related adjustments		—		—						(1.1	)		—						(0.02	)		0.01
Levelized foreign currency translation		—		(10.6	)					—			0.3						—			—
Brokerage, as reported		1,311.2		1,005.3						298.2			227.0						0.83			0.73
Risk Management, as adjusted		328.1		304.8			8	%		54.0			49.9			8	%		0.19			0.20
Workforce & lease termination		—		—						(0.4	)		—						—			—
Claim portfolio transfer ramp up		—		1.4						(2.7	)		1.3						(0.01	)		—
Levelized foreign currency translation		—		3.6						—			0.8						—			—
Risk Management, as reported		328.1		309.8						50.9			52.0						0.18			0.20
Total Brokerage & Risk Management, as reported		1,639.3		1,315.1						349.1			279.0						1.01			0.93
Corporate, as reported		455.0		138.5						(33.8	)		(31.1	)					0.08			0.11
Total Company, as reported	$	2,094.3	$	1,453.6					$	315.3		$	247.9					$	1.09		$	1.04
Total Brokerage & Risk Management, as adjusted	$	1,637.6	$	1,317.4			24	%	$	378.0		$	281.6			34	%	$	1.16		$	0.94			23	%

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Results of Operations

Brokerage

The brokerage segment accounted for 63% of our revenues during the six-month period ended June 30, 2014. Our brokerage segment is primarily comprised of retail and wholesale brokerage operations. Our retail brokerage operations negotiate and place property/casualty, employer-provided health and welfare insurance and retirement solutions, principally for middle-market commercial, industrial, public entity, religious and not-for-profit entities. Many of our retail brokerage customers choose to place their insurance with insurance underwriters, while others choose to use alternative vehicles such as self-insurance pools, risk retention groups or captive insurance companies. Our wholesale brokerage operations assist our brokers and other unaffiliated brokers and agents in the placement of specialized, unique and hard-to-place insurance programs.

Our primary sources of compensation for our retail brokerage services are commissions paid by insurance companies, which are usually based upon a percentage of the premium paid by insureds, and brokerage and advisory fees paid directly by our clients. For wholesale brokerage services, we generally receive a share of the commission paid to the retail broker from the insurer. Commission rates are dependent on a number of factors, including the type of insurance, the particular insurance company underwriting the policy and whether we act as a retail or wholesale broker. Advisory fees are dependent on the extent and value of services we provide. In addition, under certain circumstances, both retail brokerage and wholesale brokerage services receive supplemental and contingent commissions. A supplemental commission is a commission paid by an insurance carrier that is above the base commissions paid, is determined by the insurance carrier and is established annually in advance of the contractual period based on historical performance criteria. A contingent commission is a commission paid by an insurance carrier based on the overall profit and/or volume of the business placed with that insurance carrier during a particular calendar year and is determined after the contractual period.

Within our retail brokerage operations, one area of growth in recent years has been organizing and managing “captives” and other vehicles for self-insurance. A “captive” is an insurance company that insures the risks of its owner, affiliates or a group of companies. A portion of our captive business includes the development and management of “micro-captives,” through operations we acquired in 2010 in our acquisition of the assets of Tribeca Strategic Advisors (Tribeca). Micro-captives are captive insurance companies that are subject to taxation only on net investment income under IRC Section 831(b). Our micro-captive advisory services are the subject of an investigation by the Internal Revenue Service (IRS). Additionally, we understand that the IRS has initiated audits for the 2012 tax year of a number of the micro-captive insurance companies organized and/or managed by us. Among other matters, we believe that the IRS is investigating whether we have been acting as a tax shelter promoter in connection with these operations. While the IRS has not made any specific allegations relating to our operations or the pre-acquisition activities of Tribeca, if the IRS were to successfully assert that the micro-captives organized and/or managed by us do not meet the requirements of IRC Section 831(b), we could be subject to monetary claims by the IRS and/or our micro-captive clients, and our future earnings from our micro-captive operations could be materially adversely affected, any of which could negatively impact the overall captive business and adversely affect our consolidated results of operations and financial condition. Even if the IRS were to conclude that the micro-captives have been operated in accordance with applicable law, we may still experience lost earnings due to the negative effect of an extended IRS investigation on our clients’ and potential clients’ businesses. Annual renewals for micro-captive clients generally occur during the fourth quarter, so any negative impact from this investigation would likely have a disproportionate impact on fourth-quarter results. In 2013, our micro-captive operations contributed approximately $6.3 million in EBITDAC and $5.5 million in net earnings to our consolidated results. Due to the early stage of the investigation and the fact that the IRS has not made any allegation against us at this time, we are not able to reasonably estimate the amount of any potential loss in connection with this investigation.

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Financial information relating to our brokerage segment results for the three-month and six-month periods ended June 30, 2014 as compared to the same periods in 2013, is as follows (in millions, except per share, percentages and workforce data):

	Three-month period									Six-month period
	ended June 30,									ended June 30,
Statement of Earnings	2014			2013			Change			2014			2013			Change
Commissions	$	539.5		$	400.9		$	138.6		$	951.0		$	727.7		$	223.3
Fees		149.5			113.3			36.2			247.1			200.0			47.1
Supplemental commissions		27.9			18.3			9.6			53.3			35.6			17.7
Contingent commissions		21.8			14.5			7.3			54.0			37.0			17.0
Investment income		3.2			1.0			2.2			4.1			1.7			2.4
Gains realized on books of business sales		0.7			2.9			(2.2	)		1.7			3.3			(1.6	)
Total revenues		742.6			550.9			191.7			1,311.2			1,005.3			305.9
Compensation		423.8			314.0			109.8			779.9			601.7			178.2
Operating		122.5			90.2			32.3			233.1			176.6			56.5
Depreciation		10.6			7.5			3.1			19.6			13.8			5.8
Amortization		42.2			29.1			13.1			79.6			58.1			21.5
Change in estimated acquisition earnout payables		7.0			(2.5	)		9.5			12.1			1.9			10.2
Total expenses		606.1			438.3			167.8			1,124.3			852.1			272.2
Earnings before income taxes		136.5			112.6			23.9			186.9			153.2			33.7
Provision for income taxes		48.0			44.1			3.9			65.8			60.1			5.7
Net earnings	$	88.5		$	68.5		$	20.0		$	121.1		$	93.1		$	28.0
Diluted net earnings per share	$	0.57		$	0.53		$	0.04		$	0.83		$	0.73		$	0.10
Other Information
Change in diluted net earnings per share		8	%		13	%					14	%		18	%
Growth in revenues		35	%		16	%					30	%		17	%
Organic change in commissions and fees		3	%		6	%					3	%		5	%
Compensation expense ratio		57	%		57	%					59	%		60	%
Operating expense ratio		17	%		16	%					18	%		18	%
Effective income tax rate		35	%		39	%					35	%		39	%
Workforce at end of period (includes acquisitions)											13,995			9,327
Identifiable assets at June 30										$	8,047.4		$	4,325.2
EBITDAC
Net earnings	$	88.5		$	68.5		$	20.0		$	121.1		$	93.1		$	28.0
Provision for income taxes		48.0			44.1			3.9			65.8			60.1			5.7
Depreciation		10.6			7.5			3.1			19.6			13.8			5.8
Amortization		42.2			29.1			13.1			79.6			58.1			21.5
Change in estimated acquisition earnout payables		7.0			(2.5	)		9.5			12.1			1.9			10.2
EBITDAC	$	196.3		$	146.7		$	49.6		$	298.2		$	227.0		$	71.2
EBITDAC margin		26	%		27	%					23	%		23	%
EBITDAC growth		34	%		24	%					31	%		28	%

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The following provides non-GAAP information that management believes is helpful when comparing EBITDAC and adjusted EBITDAC for the three-month and six-month periods ended June 30, 2014 to the same periods in 2013 (in millions):

	Three-month period						Six-month period
	ended June 30,						ended June 30,
	2014			2013			2014			2013
Total EBITDAC - see computation above	$	196.3		$	146.7		$	298.2		$	227.0
Gains from books of business sales		(0.7	)		(2.9	)		(1.7	)		(3.3	)
Acquisition integration		16.0			5.0			22.5			8.0
Acquisition related adjustments		—			—			1.1			—
Workforce and lease termination related charges		1.7			0.3			3.9			0.3
Levelized foreign currency translation		—			0.2			—			(0.3	)
Adjusted EBITDAC	$	213.3		$	149.3		$	324.0		$	231.7
Adjusted EBITDAC change		42.9	%		20.3	%		39.8	%		22.9	%
Adjusted EBITDAC margin - see page 36		28.8	%		26.9	%		24.7	%		22.9	%

Acquisition integration costs include costs related to our June 16, 2014 acquisition of Crombie/OAMPS, our April 1, 2014 acquisition of Oval, our November 14, 2013 acquisition of the Giles Group of Companies (which we refer to as Giles), our August 12, 2013 acquisition of Bollinger, Inc., (which we refer to as Bollinger) and our May 12, 2011 acquisition of HLG Holdings, Ltd. (which we refer to as Heath Lambert) that are not expected to occur on an ongoing basis in the future once we fully assimilate these acquisitions. These costs relate to the on-boarding of employees, communication system conversion costs, related performance compensation, redundant workforce, extra lease space, duplicate services and external costs incurred to assimilate the acquired businesses with our IT related systems. The Heath Lambert integration costs in the three-month and six-month periods ended June 30, 2013 totaled $5.0 million and $8.0 million, respectively, and were primarily related to the consolidation of offices in London. The prior period integration costs relate to the Heath Lambert acquisition only. The full integration of the Heath Lambert operations into our existing operations was completed in the third quarter of 2013. Integration costs related to the 2013 and 2014 acquisitions are expected to range between $10.0 million to $17.0 million per quarter in 2014. Integration costs related to the 2014 acquisitions are expected to range between $5.0 million to $8.0 million per quarter in 2015 and approximately $2.0 million per quarter in 2016.

Commissions and fees - The aggregate increase in commissions and fees for the three-month period ended June 30, 2014 compared to the same period in 2013, was principally due to revenues associated with acquisitions that were made in the twelve-month period ended June 30, 2014 ($153.7 million). Commissions and fees in the three-month period ended June 30, 2014 included new business production and renewal rate increases of $72.0 million, which was partially offset by lost business of $50.9 million. Commissions increased 35% and fees increased 32% in the three-month period ended June 30, 2014 compared to the same period in 2013. Organic growth in commissions and fee revenues for the three-month period ended June 30, 2014 was 3.1% compared to 5.9% for the same period in 2013, principally due to net new business production and premium rate increases.

The aggregate increase in commissions and fees for the six-month period ended June 30, 2014 compared to the same period in 2013, was principally due to revenues associated with acquisitions that were made in the twelve-month period ended June 30, 2014 ($235.9 million). Commissions and fees in the six-month period ended June 30, 2014 included new business production and renewal rate increases of $139.5 million, which was partially offset by lost business of $105.0 million. Commissions increased 31% and fees increased 24% in the six-month period ended June 30, 2014 compared to the same period in 2013. Organic growth in commissions and fee revenues for the six-month period ended June 30, 2014 was 3.2% compared to 5.4% for the same period in 2013, principally due to net new business production and premium rate increases.

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Items excluded from organic revenue computations yet impacting revenue comparisons for the three-month and six-month periods ended June 30, 2014 and 2013 include the following (in millions):

	2014 Organic Revenue						2013 Organic Revenue
For the Three-Month Periods Ended June 30,	2014			2013			2013			2012
Base Commissions and Fees
Commission revenues as reported	$	539.5		$	400.9		$	400.9		$	344.7
Fee revenues as reported		149.5			113.3			113.3			99.5
Less commission and fee revenues from acquisitions		(153.7	)		—			(46.4	)		—
Less disposed of operations		—			(1.8	)		—			(0.2	)
Levelized foreign currency translation		—			7.0			—			(2.3	)
Organic base commission and fee revenues	$	535.3		$	519.4		$	467.8		$	441.7
Organic change in base commission and fee revenues		3.1	%					5.9	%
Supplemental Commissions
Supplemental commissions as reported	$	27.9		$	18.3		$	18.3		$	16.6
Less supplemental commissions from acquisitions		(7.9	)		—			(0.4	)		—
Organic supplemental commissions	$	20.0		$	18.3		$	17.9		$	16.6
Organic change in supplemental commissions		9.3	%					7.8	%
Contingent Commissions
Contingent commissions as reported	$	21.8		$	14.5		$	14.5		$	10.3
Less contingent commissions from acquisitions		(5.9	)		—			(3.3	)		—
Organic contingent commissions	$	15.9		$	14.5		$	11.2		$	10.3
Organic change in contingent commissions		9.7	%					8.7	%
Organic change in commissions and fees, supplemental commissions and contingent commissions		3.4	%					6.0	%

	2014 Organic Revenue						2013 Organic Revenue
For the Six-Month Periods Ended June 30,	2014			2013			2013			2012
Base Commissions and Fees
Commission revenues as reported	$	951.0		$	727.7		$	727.7		$	616.7
Fee revenues as reported		247.1			200.0			200.0			174.6
Less commission and fee revenues from acquisitions		(235.9	)		—			(97.9	)		—
Less Heath Lambert adjustment		—			—			—			—
Less disposed of operations		—			(4.6	)		—			(0.5	)
Levelized foreign currency translation		—			9.4			—			(3.7	)
Organic base commission and fee revenues	$	962.2		$	932.5		$	829.8		$	787.1
Organic change in base commission and fee revenues		3.2	%					5.4	%
Supplemental Commissions
Supplemental commissions as reported	$	53.3		$	35.6		$	35.6		$	33.7
Less supplemental commissions from acquisitions		(15.2	)		—			(2.0	)		—
Less disposed of operations		—			—			—			—
Organic supplemental commissions	$	38.1		$	35.6		$	33.6		$	33.7
Organic change in supplemental commissions		7.0	%					(0.3	%)
Contingent Commissions
Contingent commissions as reported	$	54.0		$	37.0		$	37.0		$	29.3
Less contingent commissions from acquisitions		(10.8	)		—			(6.8	)		—
Organic contingent commissions	$	43.2		$	37.0		$	30.2		$	29.3
Organic change in contingent commissions		16.8	%					3.1	%
Organic change in commissions and fees, supplemental commissions and contingent commissions		3.8	%					5.1	%

- 40 -

Supplemental and contingent commissions - Reported supplemental and contingent commission revenues recognized in 2014, 2013 and 2012 by quarter are as follows (in millions):

	First Quarter		Second Quarter		Third Quarter		Fourth Quarter		YTD
2014
Reported supplemental commissions	$	25.4	$	27.9					$	53.3
Reported contingent commissions		32.2		21.8						54.0
Reported supplemental and contingent commissions	$	57.6	$	49.7					$	107.3
2013
Reported supplemental commissions	$	17.3	$	18.3	$	17.8	$	23.9	$	77.3
Reported contingent commissions		22.5		14.5		6.5		8.6		52.1
Reported supplemental and contingent commissions	$	39.8	$	32.8	$	24.3	$	32.5	$	129.4
2012
Reported supplemental commissions	$	17.1	$	16.6	$	16.6	$	17.6	$	67.9
Reported contingent commissions		19.0		10.3		7.7		5.9		42.9
Reported supplemental and contingent commissions	$	36.1	$	26.9	$	24.3	$	23.5	$	110.8

Investment income and gains realized on books of business sales - This primarily represents interest income earned on cash, cash equivalents and restricted funds and one-time gains related to sales of books of business, which were $0.7 million and $2.9 million, respectively, for the three-month periods ended June 30, 2014 and 2013 and $1.7 million and $3.3 million, respectively, for the six-month periods ended June 30, 2014 and 2013. Investment income in the three-month and six-month periods ended June 30, 2014 increased slightly compared to the same periods in 2013.

Compensation expense - The following provides non-GAAP information that management believes is helpful when comparing compensation expense for the three-month and six-month periods ended June 30, 2014 with the same periods in 2013 (in millions):

	Three-month period						Six-month period
	ended June 30,						ended June 30,
	2014			2013			2014			2013
Reported amounts	$	423.8		$	314.0		$	779.9		$	601.7
Acquisition integration		(12.2	)		(2.2	)		(15.8	)		(3.5	)
Workforce related charges		(1.7	)		(0.3	)		(3.4	)		(0.3	)
Acquisition related adjustments		—			—			(1.1	)		—
Levelized foreign currency translation		—			5.3			—			7.9
Adjusted amounts	$	409.9		$	316.8		$	759.6		$	605.8
Adjusted revenues - see page 36	$	741.9		$	555.6		$	1,309.5		$	1,012.6
Adjusted ratios		55.3	%		57.0	%		58.0	%		59.8	%

The increase in compensation expense for the three-month period ended June 30, 2014 compared to the same period in 2013 was primarily due to increased headcount, salary increases, one-time compensation payments and increases in incentive compensation linked to our overall operating results ($93.9 million in the aggregate), increases in employee benefits ($12.7 million), severance related costs ($1.4 million), stock compensation expense ($0.8 million), deferred compensation ($0.6 million) and temporary staffing ($0.4 million). The increase in employee headcount primarily relates to employees associated with the acquisitions completed in the twelve-month period ended June 30, 2014.

- 41 -

The increase in compensation expense for the six-month period ended June 30, 2014 compared to the same period in 2013 was primarily due to increased headcount, salary increases, one-time compensation payments and increases in incentive compensation linked to our overall operating results ($150.8 million in the aggregate), increases in employee benefits ($18.9 million), severance related costs ($3.1 million), stock compensation expense ($2.6 million), deferred compensation ($2.1 million) and temporary staffing ($0.7 million). The increase in employee headcount primarily relates to employees associated with the acquisitions completed in the twelve-month period ended June 30, 2014.

Operating expenses - The following provides non-GAAP information that management believes is helpful when comparing operating expense for the three-month and six-month periods ended June 30, 2014 with the same periods in 2013 (in millions):

	Three-month period						Six-month period
	ended June 30,						ended June 30,
	2014			2013			2014			2013
Reported amounts	$	122.5		$	90.2		$	233.1		$	176.6
Acquisition integration		(3.8	)		(2.8	)		(6.7	)		(4.5	)
Workforce and lease termination related charges		—			—			(0.5	)		—
Levelized foreign currency translation		—			2.1			—			3.0
Adjusted amounts	$	118.7		$	89.5		$	225.9		$	175.1
Adjusted revenues - see page 36	$	741.9		$	555.6		$	1,309.5		$	1,012.6
Adjusted ratios		16.0	%		16.1	%		17.3	%		17.3	%

The increase in operating expense for the three-month period ended June 30, 2014 compared to the same period in 2013 was primarily due to unfavorable foreign currency translation ($0.4 million) and increases in real estate expenses ($7.5 million), meeting and client entertainment expense ($5.1 million), professional and banking fees ($4.6 million), technology expenses ($3.8 million), office supplies ($3.3 million), outside consulting fees ($3.1 million), employee expense ($1.7 million), licenses and fees ($1.4 million), business insurance ($1.2 million), outside services expense ($0.8 million) and bad debt expense ($0.6 million), offset by a decrease in other expense ($1.1 million). Also contributing to the increase in operating expenses in the three-month period ended June 30, 2014 were increased expenses associated with the acquisitions completed in the twelve-month period ended June 30, 2014.

The increase in operating expense for the six-month period ended June 30, 2014 compared to the same period in 2013 was primarily due to unfavorable foreign currency translation ($0.3 million) and increases in real estate expenses ($11.6 million), technology expenses ($7.9 million), meeting and client entertainment expense ($7.9 million), professional and banking fees ($5.4 million), outside consulting fees ($4.6 million), office supplies ($4.5 million), employee expense ($3.5 million), business insurance ($3.5 million), licenses and fees ($2.2 million), outside services expense ($1.8 million), bad debt expense ($1.5 million), and termination charges ($0.5 million). Also contributing to the increase in operating expenses in the six-month period ended June 30, 2014 were increased expenses associated with the acquisitions completed in the twelve-month period ended June 30, 2014.

Depreciation - Depreciation expense in the three-month and six-month periods ended June 30, 2014 increased slightly compared to the same periods in 2013 due to expenses associated with acquisitions completed in the twelve-month period ended June 30, 2014.

Amortization - The increase in amortization expense in the three-month and six-month periods ended June 30, 2014 compared to the same periods in 2013 was due primarily to amortization expense of intangible assets associated with acquisitions completed in the twelve-month period ended June 30, 2014. Expiration lists, non-compete agreements and trade names are amortized using the straight-line method over their estimated useful lives (three to fifteen years for expiration lists, three to five years for non-compete agreements and five to ten years for trade names). Based on the results of impairment reviews during the six-month period ended June 30, 2014, we wrote off $0.6 million of amortizable intangible assets related to the brokerage segment. Based on the results of impairment reviews during the three-month and six-month periods ended June 30, 2013, we wrote off $0.4 million and $2.2 million, respectively, of amortizable intangible assets related to the brokerage segment.

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Change in estimated acquisition earnout payables - The change in expense from the change in estimated acquisition earnout payables in the three-month period ended June 30, 2014 compared to the same period in 2013, was due primarily to adjustments made to the estimated fair value of earnout obligations related to revised projections of future performance. During the three-month periods ended June 30, 2014 and 2013, we recognized $3.4 million and $2.9 million, respectively, of expense related to the accretion of the discount recorded for earnout obligations related to our acquisitions made in the period from 2011 to 2014. During the six-month periods ended June 30, 2014 and 2013, we recognized $6.7 million and $5.8 million, respectively, of expense related to the accretion of the discount recorded for earnout obligations related to our acquisitions made in the period from 2011 to 2014. In addition, during the three-month periods ended June 30, 2014 and 2013, we recognized $3.6 million of expense and $5.4 million of income, respectively, related to net adjustments in the estimated fair value of earnout obligations related to revised projections of future performance for 18 and 23 acquisitions, respectively. During the six-month periods ended June 30, 2014 and 2013, we recognized $5.4 million of expense and $3.9 million of income, respectively, related to net adjustments in the estimated fair value of earnout obligations related to revised projections of future performance for 35 and 39 acquisitions, respectively

The amounts initially recorded as earnout payables for our 2011 to 2014 acquisitions were measured at fair value as of the acquisition date and are primarily based upon the estimated future operating results of the acquired entities over a two- to three-year period subsequent to the acquisition date. The fair value of these earnout obligations is based on the present value of the expected future payments to be made to the sellers of the acquired entities in accordance with the provisions outlined in the respective purchase agreements. In determining fair value, we estimated the acquired entity’s future performance using financial projections developed by management for the acquired entity and market participant assumptions that were derived for revenue growth and/or profitability. We estimated future earnout payments using the earnout formula and performance targets specified in each purchase agreement and these financial projections. Subsequent changes in the underlying financial projections or assumptions will cause the estimated earnout obligations to change and such adjustments are recorded in our consolidated statement of earnings when incurred. Increases in the earnout payable obligations will result in the recognition of expense and decreases in the earnout payable obligations will result in the recognition of income.

Provision for income taxes - The brokerage segment’s effective income tax rates for the three-month periods ended June 30, 2014 and 2013 were 35.2% and 39.2%, respectively. The brokerage segment’s effective income tax rates for the six-month periods ended June 30, 2014 and 2013 were 35.2% and 39.2%, respectively. We anticipate reporting an effective tax rate of approximately 35.0% to 37.0% in our brokerage segment for the foreseeable future.

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Risk Management

The risk management segment accounted for 15% of our revenue during the six-month period ended June 30, 2014. The risk management segment provides contract claim settlement and administration services for enterprises that choose to self-insure some or all of their property/casualty coverages and for insurance companies that choose to outsource some or all of their property/casualty claims departments. In addition, this segment generates revenues from integrated disability management programs, information services, risk control consulting (loss control) services and appraisal services, either individually or in combination with arising claims. Revenues for risk management services are substantially in the form of fees that are generally negotiated in advance on a per-claim or per-service basis, depending upon the type and estimated volume of the services to be performed.

Financial information relating to our risk management segment results for the three-month and six-month periods ended June 30, 2014 as compared to the same periods in 2013, is as follows (in millions, except per share, percentages and workforce data):

	Three-month period									Six-month period
	ended June 30,									ended June 30,
Statement of Earnings	2014			2013			Change			2014			2013			Change
Fees	$	167.9		$	155.6		$	12.3		$	327.5		$	308.6		$	18.9
Investment income		0.2			0.6			(0.4	)		0.6			1.2			(0.6	)
Total revenues		168.1			156.2			11.9			328.1			309.8			18.3
Compensation		100.4			91.3			9.1			200.3			182.9			17.4
Operating		41.4			39.4			2.0			76.9			74.9			2.0
Depreciation		5.0			4.7			0.3			9.9			9.1			0.8
Amortization		0.7			0.6			0.1			1.4			1.2			0.2
Total expenses		147.5			136.0			11.5			288.5			268.1			20.4
Earnings before income taxes		20.6			20.2			0.4			39.6			41.7			(2.1	)
Provision for income taxes		7.4			7.7			(0.3	)		14.3			15.3			(1.0	)
Net earnings	$	13.2		$	12.5		$	0.7		$	25.3		$	26.4		$	(1.1	)
Diluted net earnings per share	$	0.08		$	0.10		$	(0.02	)	$	0.18		$	0.20		$	(0.02	)
Other information
Change in diluted net earnings per share		(20	%)		11	%					(13	%)		5	%
Growth in revenues		8	%		9	%					6	%		9	%
Organic change in fees		8	%		10	%					7	%		11	%
Compensation expense ratio		60	%		58	%					61	%		59	%
Operating expense ratio		25	%		25	%					23	%		24	%
Effective income tax rate		36	%		38	%					36	%		37	%
Workforce at end of period (includes acquisitions)											4,876			4,614
Identifiable assets at June 30										$	581.2		$	530.8
EBITDAC
Net earnings	$	13.2		$	12.5		$	0.7		$	25.3		$	26.4		$	(1.1	)
Provision for income taxes		7.4			7.7			(0.3	)		14.3			15.3			(1.0	)
Depreciation		5.0			4.7			0.3			9.9			9.1			0.8
Amortization		0.7			0.6			0.1			1.4			1.2			0.2
EBITDAC	$	26.3		$	25.5		$	0.8		$	50.9		$	52.0		$	(1.1	)
EBITDAC margin		16	%		16	%					16	%		17	%
EBITDAC growth		3	%		14	%					(2	%)		13	%

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The following provides non-GAAP information that management believes is helpful when comparing EBITDAC and adjusted EBITDAC for the three-month and six-month periods ended June 30, 2014 to the same periods in 2013 (in millions):

	Three-month period						Six-month period
	ended June 30,						ended June 30,
	2014			2013			2014			2013
Total EBITDAC - see computation above	$	26.3		$	25.5		$	50.9		$	52.0
Workforce and lease termination related charges		0.2			—			0.4			—
Claim portfolio transfer ramp up		1.5			—			2.7			(1.3	)
Levelized foreign currency translation		—			0.3			—			(0.8	)
Adjusted EBITDAC	$	28.0		$	25.8		$	54.0		$	49.9
Adjusted EBITDAC change		8.5	%		14.4	%		8.2	%		13.4	%
Adjusted EBITDAC margin - see page 36		16.7	%		16.5	%		16.5	%		16.4	%

Fees - The increase in fees for the three-month period ended June 30, 2014 compared to the same period in 2013 was due primarily to revenues associated with new business and the impact of increased claim counts (total of $15.1 million), which were partially offset by lost business of $3.7 million. Organic growth in fee revenues for the three-month period ended June 30, 2014 was 7.6% compared to 10.4% for the same period in 2013.

The increase in fees for the six-month period ended June 30, 2014 compared to the same period in 2013 was due primarily to revenues associated with new business and the impact of increased claim counts (total of $27.4 million), which were partially offset by lost business of $11.6 million. Organic growth in fee revenues for the six-month period ended June 30, 2014 was 6.8% compared to 10.6% for the same period in 2013.

Items excluded from organic fee computations yet impacting revenue comparisons for the three-month and six-month periods ended June 30, 2014 and 2013 include the following (in millions):

	2014 Organic Revenue						2013 Organic Revenue
For the Three-Month Periods Ended June 30	2014			2013			2013			2012
Fees	$	163.4		$	148.1		$	148.1		$	137.5
International performance bonus fees		4.5			7.5			7.5			5.2
Fees as reported		167.9			155.6			155.6			142.7
Less fees from acquisitions		(0.9	)		—			(1.1	)		—
Less New Zealand earthquake claims administration		—			—			—			(1.9	)
Levelized foreign currency translation		—			(0.4	)		—			(0.9	)
Organic fees	$	167.0		$	155.2		$	154.5		$	139.9
Organic change in fees		7.6	%					10.4	%

	2014 Organic Revenue						2013 Organic Revenue
For the Six-Month Periods Ended June 30	2014			2013			2013			2012
Fees	$	318.9		$	295.4		$	295.4		$	273.7
International performance bonus fees		8.6			13.2			13.2			9.5
Fees as reported		327.5			308.6			308.6			283.2
Less fees from acquisitions		(3.1	)		—			(1.9	)		—
Less South Australia ramp up fees		—			(1.4	)		(1.4	)		—
Less New Zealand earthquake claims administration		—			(0.1	)		(0.1	)		(5.7	)
Levelized foreign currency translation		—			(3.4	)		—			(1.6	)
Organic fees	$	324.4		$	303.7		$	305.2		$	275.9
Organic change in fees		6.8	%					10.6	%

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Investment income - Investment income primarily represents interest income earned on our cash and cash equivalents. Investment income in the three-month and six-month periods ended June 30, 2014 remained relatively unchanged compared to the same periods in 2013.

Compensation expense - The following provides non-GAAP information that management believes is helpful when comparing compensation expense for the three-month and six-month periods ended June 30, 2014 with the same periods in 2013 (in millions):

	Three-month period						Six-month period
	ended June 30,						ended June 30,
	2014			2013			2014			2013
Reported amounts	$	100.4		$	91.3		$	200.3		$	182.9
Claim portfolio transfer ramp up costs		(0.8	)		—			(1.6	)		—
Workforce related charges		(0.2	)		—			(0.4	)		—
Levelized foreign currency translation		—			(0.4	)		—			(2.3	)
Adjusted amounts	$	99.4		$	90.9		$	198.3		$	180.6
Adjusted revenues - see page 36	$	168.1		$	155.9		$	328.1		$	304.8
Adjusted ratios		59.1	%		58.3	%		60.4	%		59.3	%

The increase in compensation expense for the three-month period ended June 30, 2014 compared to the same period in 2013 was primarily due to increased headcount, increases in salaries ($6.3 million), employee benefits expense ($1.2 million), claim portfolio transfer cost ($0.8 million), temporary-staffing expense ($0.7 million), severance related costs ($0.2 million) and deferred compensation ($0.2 million), offset by a favorable foreign currency translation ($0.3 million).

The increase in compensation expense for the six-month period ended June 30, 2014 compared to the same period in 2013 was primarily due to increased headcount, increases in salaries ($14.1 million), employee benefits expense ($1.8 million), claim portfolio transfer cost ($1.6 million), temporary-staffing expense ($1.1 million), deferred compensation ($0.4 million), severance related costs ($0.4 million) and stock compensation expense ($0.2 million), offset by a favorable foreign currency translation ($2.2 million).

Operating expenses - The following provides non-GAAP information that management believes is helpful when comparing operating expense for the three-month and six-month periods ended June 30, 2014 with the same periods in 2013 (in millions):

	Three-month period						Six-month period
	ended June 30,						ended June 30,
	2014			2013			2014			2013
Reported amounts	$	41.4		$	39.4		$	76.9		$	74.9
Claim portfolio transfer and South Australia ramp up costs		(0.7	)		—			(1.1	)		(0.1	)
Levelized foreign currency translation		—			(0.2	)		—			(0.5	)
Adjusted amounts	$	40.7		$	39.2		$	75.8		$	74.3
Adjusted revenues - see page 36	$	168.1		$	155.9		$	328.1		$	304.8
Adjusted ratios		24.2	%		25.1	%		23.1	%		24.4	%

The operating expense for the three-month period ended June 30, 2014 increased compared to the same period in 2013 primarily due to increases in other expense ($2.1 million), business insurance ($0.7 million), claim portfolio transfer cost ($0.7 million), employee expense ($0.4 million), outside consulting fees ($0.1 million) and meeting and client entertainment expense ($0.1 million), offset by decreases in professional and banking fees ($1.1 million), technology expenses ($0.4 million), licenses and fees ($0.2 million), office supplies ($0.1 million) and real estate expenses ($0.1 million).

The operating expense for the six-month period ended June 30, 2014 increased compared to the same period in 2013 primarily due to increases in other expense ($2.4 million), claim portfolio transfer cost ($1.0 million), outside

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consulting fees ($0.9 million), technology expenses ($0.2 million), business insurance ($0.2 million), meeting and client entertainment expense ($0.2 million), employee expense ($0.1 million), outside service expense ($0.1 million) and bad debt expense ($0.1 million), offset by favorable foreign currency translation ($0.2 million) and decreases in real estate expenses ($0.6 million), professional and banking fees ($2.0 million), licenses and fees ($0.1 million) and office supplies ($0.1 million).

Depreciation - Depreciation expense increased slightly in the three-month and six-month periods ended June 30, 2014 compared to the same periods in 2013 and reflects the impact of purchases of furniture, equipment and leasehold improvements related to office expansions and relocations, and expenditures related to upgrading computer systems.

Amortization - Amortization expense increased slightly in the three-month and six-month periods ended June 30, 2014 compared to the same periods in 2013. Historically, the risk management segment has made few acquisitions. We made no acquisitions in this segment during the six-month periods ended June 30, 2014 and 2013.

Provision for income taxes - The risk management segment’s effective income tax rates for the three-month periods ended June 30, 2014 and 2013 were 35.9% and 38.1%, respectively. The risk management segment’s effective income tax rates for the six-month periods ended June 30, 2014 and 2013 were 36.1% and 36.7%, respectively. We anticipate reporting an effective tax rate of approximately 35.0% to 37.0% in our risk management segment for the foreseeable future.

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Corporate

The corporate segment reports the financial information related to our clean energy and other investments, our debt, and certain corporate and acquisition-related activities. For a detailed discussion of the nature of these investments, see our consolidated financial statements included herein for a summary of our investments as of June 30, 2014 (unaudited) (Note 11) and in our most recent Annual Report on Form 10-K as of December 31, 2013 (Note 12). For a detailed discussion of the nature of our debt, see our consolidated financial statements included herein as of June 30, 2014 (unaudited) (Note 5) and in our most recent Annual Report on Form 10-K as of December 31, 2013 (Note 6).

Financial information relating to our corporate segment results for the three-month and six-month periods ended June 30, 2014 as compared to the same periods in 2013 is as follows (in millions, except per share and percentages):

	Three-month period									Six-month period
	ended June 30,									ended June 30,
Statement of Earnings	2014			2013			Change			2014			2013			Change
Revenues from consolidated clean coal production plants	$	250.2		$	66.2		$	184.0		$	404.5		$	115.5		$	289.0
Royalty income from clean coal licenses		12.8			6.9			5.9			27.4			16.9			10.5
Loss from unconsolidated clean coal production plants		(0.2	)		(0.9	)		0.7			(2.7	)		(3.2	)		0.5
Other net revenues		5.8			0.2			5.6			25.8			9.3			16.5
Total revenues		268.6			72.4			196.2			455.0			138.5			316.5
Cost of revenues from consolidated clean coal production plants		270.5			76.6			193.9			441.5			134.7			306.8
Compensation		5.8			10.2			(4.4	)		16.1			14.8			1.3
Operating		20.1			8.2			11.9			31.2			20.1			11.1
Interest		21.2			11.9			9.3			37.4			23.1			14.3
Depreciation		1.0			0.9			0.1			1.9			1.0			0.9
Total expenses		318.6			107.8			210.8			528.1			193.7			334.4
Loss before income taxes		(50.0	)		(35.4	)		(14.6	)		(73.1	)		(55.2	)		(17.9	)
Benefit for income taxes		(57.3	)		(47.9	)		(9.4	)		(85.0	)		(69.7	)		(15.3	)
Net earnings	$	7.3		$	12.5		$	(5.2	)	$	11.9		$	14.5		$	(2.6	)
Diluted net earnings per share	$	0.05		$	0.10		$	(0.05	)	$	0.08		$	0.11		$	(0.03	)
Identifiable assets at June 30										$	1,390.7		$	706.1
EBITDAC
Net earnings	$	7.3		$	12.5		$	(5.2	)	$	11.9		$	14.5		$	(2.6	)
Benefit for income taxes		(57.3	)		(47.9	)		(9.4	)		(85.0	)		(69.7	)		(15.3	)
Interest		21.2			11.9			9.3			37.4			23.1			14.3
Depreciation		1.0			0.9			0.1			1.9			1.0			0.9
EBITDAC	$	(27.8	)	$	(22.6	)	$	(5.2	)	$	(33.8	)	$	(31.1	)	$	(2.7	)

Revenues - Revenues in the corporate segment consist of the following:

• Revenues from consolidated clean coal production plants represents revenues from the consolidated IRC Section 45 facilities that we operate and control under lease arrangements, and the investments in which we have a majority ownership position and maintain control over the operations of the related plants, including those that are currently not operating. When we relinquish control in connection with the sale of majority ownership interests in our investments, we deconsolidate these operations.

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The increase in the three-month and six-month periods ended June 30, 2014, compared to the same periods in 2013, was due primarily to increased production and from the increased interests in the twelve plants we acquired on March 1, 2014.

• Royalty income from clean coal licenses represents revenues related to Chem-Mod LLC. As of June 30, 2014, we held a 46.54% controlling interest in Chem-Mod. As Chem-Mod’s manager, we are required to consolidate its operations.

The increase in royalty income in the three-month and six-month periods ended June 30, 2014, compared to the same periods in 2013, was due to increased production of refined coal by Chem-Mod’s licensees.

Expenses related to royalty income of Chem-Mod in the three-month periods ended June 30, 2014 and 2013, were $8.6 million and $4.6 million, respectively, which include non-controlling interest of $7.9 million and $4.0 million in each of the respective periods. Expenses related to royalty income of Chem-Mod in the six-month periods ended June 30, 2014 and 2013, were $17.8 million and $10.5 million, respectively, which include non-controlling interest of $16.7 million and $9.6 million in each of the respective periods.

• Loss from unconsolidated clean coal production plants represents our equity portion of the pretax operating results from the unconsolidated clean coal production plants, partially offset by the production based income from majority investors. The production of refined coal generates pretax operating losses.

The losses in the three-month and six-month periods ended June 30, 2014, compared to the same periods in 2013, were lower due to the net production activity at our unconsolidated operations being very limited as the vast majority of our operations are now consolidated.

• Other net revenues include our equity portion of the operations of our venture capital fund investments. In addition, in first quarter 2013, we recognized a gain of $9.6 million in connection with the acquisition of an additional ownership interest in twelve of the 2009 Era Plants from a co-investor. In first quarter 2014, we recognized a gain of $22.6 million in connection with the acquisition of an additional ownership interest in seven 2009 Era Plants and five 2011 Era Plants from a co-investor. See Note 11 to the unaudited consolidated financial statements for additional discussion of these acquisition transactions. We have consolidated the operations of the limited liability companies that own these plants effective March 1, 2013 and March 1, 2014, respectively. In addition, in first quarter 2014, we recognized a $2.0 million impairment loss, under equity method accounting, of an additional 4% investment in the global operations of C-Quest Technologies LLC and C-Quest Technologies International LLC. In addition, in second quarter 2014, we recognized a $3.5 million impairment loss related to one of our clean coal production plants which permanently stopped operations, we recognized gain adjustments of $1.8 million and $3.0 million, respectively, for the first quarter 2013 acquisition of the additional ownership interest in twelve of the 2009 Era Plants and the first quarter 2014 acquisition of the additional ownership interests in seven of the 2009 Era Plants and five of the 2011 Era Plants, we realized a $1.9 million hedge gain related to the funding of the Crombie/OAMPS acquisition and earned $2.5 million of interest on cash deposited in Australia to fund the Crombie/OAMPS acquisition.

Cost of revenues - Cost of revenues from consolidated clean coal production plants for the three-month and six-month periods ended June 30, 2014 and 2013, consists of the expenses incurred by the clean coal production plants to generate the consolidated revenues discussed above, including the costs to run the leased facilities. The increase in the three-month and six-month periods ended June 30, 2014, compared to the same periods in 2013, was due to increased production including production at operations that were not producing refined coal in 2013 and production from the increased interests in the twelve plants we acquired on March 1, 2014.

Compensation expense - Compensation expense in the three-month periods ended June 30, 2014 and 2013, respectively, includes salary and benefit expenses of $2.5 million and $3.6 million and incentive compensation of $3.3 million and $6.6 million, respectively. The decrease in salary and benefits expense for the three-month period ended June 30, 2014 compared to the same period in 2013, was due primarily to a reduction in pension expense. The decrease in incentive compensation for the three-month period ended June 30, 2014 compared to the same period in 2013 is due to the efforts in 2013 related to the transaction for the additional interests in the twelve clean coal plants plus efforts related to acquisitions.

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Compensation expense in the six-month periods ended June 30, 2014 and 2013, respectively, includes salary and benefit expenses of $4.4 million and $5.5 million and incentive compensation of $11.7 million and $9.3 million, respectively. The decrease in salary and benefits expense for the six-month period ended June 30, 2014 compared to the same period in 2013, was due primarily to a reduction in pension expense. The increase in incentive compensation for the six-month period ended June 30, 2014 compared to the same period in 2013 is due to the efforts in 2014 related to the transaction for the additional interests in the twelve clean coal plants plus efforts related to acquisitions.

Operating expenses - Operating expense in the three-month period ended June 30, 2014 includes banking and related fees of $0.7 million, external professional fees and other due diligence costs related to second quarter 2014 acquisitions of $12.5 million, operating expenses, professional fees and non-controlling interest related to royalty income of $5.9 million, and other corporate and clean energy related expenses of $1.4 million.

Operating expense in the three-month period ended June 30, 2013 includes banking and related fees of $0.8 million, external professional fees and other due diligence costs related to second quarter 2013 acquisitions of $2.1 million, operating expenses, professional fees and non-controlling interest related to royalty income of $3.5 million, and other corporate operating and clean energy related expenses of $1.8 million.

Operating expense in the six-month period ended June 30, 2014 includes banking and related fees of $1.2 million, external professional fees and other due diligence costs related to second quarter 2014 acquisitions of $13.3 million, operating expenses, professional fees and non-controlling interest related to royalty income of $12.9 million, and other corporate and clean energy related expenses of $4.2 million.

Operating expense in the six-month period ended June 30, 2013 includes banking and related fees of $1.5 million, external professional fees and other due diligence costs related to second quarter 2013 acquisitions of $2.6 million, operating expenses, professional fees and non-controlling interest related to royalty income of $8.5 million, other corporate operating and clean energy related expenses of $3.7 million and a biannual company-wide meeting ($3.8 million).

Interest expense - The increase in interest expense for the three-month and six-month periods ended June 30, 2014, compared to the same periods in 2013, was due to interest on the note purchase agreement funded on June 14, 2013 $1.5 million and $3.4 million, respectively, interest on the note purchase agreement funded on February 27, 2014 $7.0 million and $9.4 million, respectively, interest on the note purchase agreement funded on June 24, 2014 $0.5 million and $0.5 million, respectively, and an increase of $0.1 million and $0.8 million, respectively, in interest on borrowings from our Credit Agreement.

Depreciation - Depreciation expense in the six-month period ended June 30, 2014 increased significantly compared to the same period in 2013, and primarily relates to the assets of the additional ownership interests in the 24 plants that we acquired from a co-investor in the first quarters of 2013 and 2014.

Benefit for income taxes - Our consolidated effective tax rate for the three-month period ended June 30, 2014 was (1.8)% compared to 4.0% for the same period in 2013. Our consolidated effective tax rate for the six-month period ended June 30, 2014 was (3.2)% compared to 4.1% for the same period in 2013. The effective tax rates for the three-month and six-month periods ended June 30, 2014 and 2013 were lower than the statutory rate primarily due to the amount of IRC Section 45 tax credits recognized during the respective periods. U.S. GAAP accounting requires us to estimate at each quarter end, an expected annual effective tax rate based on, among other factors, the estimated annual amount of tax credits we will generate in the current year, and recognize these estimated tax credits each quarter based on estimated company-wide quarterly earnings before income taxes. This accounting will cause a difference in the amount of tax credits recognized in the financial statements compared to the amount of tax credits actually generated. There were $64.6 million and $48.3 million of tax credits recognized in the six-month periods ended June 30, 2014 and 2013, respectively. There were $65.5 million and $33.6 million of tax credits generated in the six-month periods ended June 30, 2014 and 2013, respectively.

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The following provides non-GAAP information that we believe is helpful when comparing our operating results for the three-month and six-month periods ended June 30, 2014 and 2013 for the corporate segment (in millions):

	2014									2013
Three-Month Periods Ended June 30,	Pretax Earnings (Loss)			Income Tax Benefit			Net Earnings (Loss)			Pretax Earnings (Loss)			Income Tax Benefit		Net Earnings (Loss)
Interest and banking costs	$	(21.7	)	$	8.7		$	(13.0	)	$	(12.8	)	$	5.1	$	(7.7	)
Clean energy investments		(15.9	)		50.9			35.0			(16.7	)		40.8		24.1
Acquisition costs		(9.1	)		0.5			(8.6	)		(1.9	)		0.2		(1.7	)
Corporate		(3.3	)		(2.8	)		(6.1	)		(4.0	)		1.8		(2.2	)
Total	$	(50.0	)	$	57.3		$	7.3		$	(35.4	)	$	47.9	$	12.5

	2014									2013
Six-Month Periods Ended June 30,	Pretax Earnings (Loss)			Income Tax Benefit			Net Earnings (Loss)			Pretax Earnings (Loss)			Income Tax Benefit		Net Earnings (Loss)
Interest and banking costs	$	(38.3	)	$	15.3		$	(23.0	)	$	(24.7	)	$	9.9	$	(14.8	)
Clean energy investments		(14.5	)		70.4			55.9			(17.6	)		54.9		37.3
Acquisition costs		(12.0	)		0.9			(11.1	)		(2.9	)		0.4		(2.5	)
Corporate		(8.3	)		(1.6	)		(9.9	)		(10.0	)		4.5		(5.5	)
Total	$	(73.1	)	$	85.0		$	11.9		$	(55.2	)	$	69.7	$	14.5

Interest and banking includes expenses related to our debt. Clean energy investments include the operating results related to our investments in clean coal production plants and Chem-Mod. Acquisition costs include professional fees, due diligence and other costs incurred related to our acquisitions. Corporate consists of overhead allocations mostly related to corporate staff compensation and, in the first quarter of 2013, costs related to a biannual company-wide award, cross-selling and motivational meeting for our production staff and field management.

Clean energy investments - We have investments in limited liability companies that own 29 clean coal production plants developed by us and five clean coal production plants we purchased from a third party on September 1, 2013. All 34 plants produce refined coal using propriety technologies owned by Chem-Mod. We believe that the production and sale of refined coal at these plants are qualified to receive refined coal tax credits under IRC Section 45. The fourteen plants which were placed in service prior to December 31, 2009 (which we refer to as the 2009 Era Plants) can receive tax credits through 2019 and the twenty plants which were placed in service prior to December 31, 2011 (which we refer to as the 2011 Era Plants) can receive tax credits through 2021. We may sell ownership interests in some or all of the plants to co-investors and relinquish control of the plants, thereby becoming a non-controlling, minority investor.

The following table provides a summary of our clean coal plant investments as of June 30, 2014 (in millions):

			Our Portion of Estimated
Investments that own 2009 Era Plants	Our Tax-Effected Book Value At June 30, 2014		Additional Required Tax-Effected Capital Investment		Ultimate Annual After-tax Earnings
12 Under long-term production contracts	$	13.8	$	0.1	$	35.0
2 In negotiations for long-term production contracts		0.7		Not Estimable		Not Estimable
Investments that own 2011 Era Plants
15 Under long-term production contracts		34.3		—		60.0
5 In negotiations for long-term production contracts		3.2		Not Estimable		Not Estimable

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The information in the table above under the caption Our Portion of Estimated Ultimate Annual After-Tax Earnings reflects management’s current best estimate of the ultimate future annual after-tax earnings based on production estimates from the host utilities. However, host utilities do not consistently utilize the refined coal plants at ultimate production levels due to seasonal electricity demand, as well as many operational, regulatory and environmental compliance reasons. Please refer to our filings with the SEC, including Item 1A, “Risk Factors,” on pages 14, 15 and 16 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2013, for a more detailed discussion of these and other factors could impact the information above.

Our investment in Chem-Mod generates royalty income from refined coal plants owned by those limited liability companies in which we invest as well as refined coal plants owned by other unrelated parties. Based on current production estimates provided by licensees, Chem-Mod could generate for us an average of approximately $4.0 million of net after-tax earnings per quarter.

Financial Condition and Liquidity

Liquidity describes the ability of a company to generate sufficient cash flows to meet the cash requirements of its business operations. The insurance brokerage industry is not capital intensive. Historically, our capital requirements have primarily included dividend payments on our common stock, repurchases of our common stock, funding of our investments, acquisitions of brokerage and risk management operations and capital expenditures.

Cash Flows From Operating Activities

Historically, we have depended on our ability to generate positive cash flows from operations to meet our cash requirements. We believe that our cash flows from operations and borrowings under our Credit Agreement will provide us with adequate resources to meet our liquidity needs in the foreseeable future. To fund acquisitions made during 2013 and for the six-month period ended June 30, 2014, we relied to a large extent on proceeds from borrowings under our Credit Agreement and the $200.0 million, $600.0 million and $700.0 million note purchase agreements we entered into in June 2013, December 2013 and June 2014, respectively, plus a secondary public offering of our common stock in April 2014, whereby 21.85 million shares of our stock were issued for net proceeds, after underwriting discounts and other expenses related to this offering, of $911.4 million.

Cash provided by operating activities was $206.8 million and $73.8 million for the six-month periods ended June 30, 2014 and 2013, respectively. The increase in cash provided by operating activities during the six-month period ended June 30, 2014 compared to the same period in 2013 was primarily due to favorable timing differences in the payment of accrued liabilities and favorable timing differences in the receipts and disbursements of fiduciary funds in 2014 compared to 2013. Our cash flows from operating activities are primarily derived from our earnings from operations, as adjusted for realized gains and losses, and our non-cash expenses, which include depreciation, amortization, change in estimated acquisition earnout payables, deferred compensation, restricted stock and stock-based and other non-cash compensation expenses. Cash provided by operating activities can be unfavorably impacted by the amount of IRC Section 45 tax credits recognized compared to the amount of tax credits actually used during the respective periods. Excess tax credits generated during the period result in an increase to our deferred tax assets, which is a net use of cash related to operating activities. Please see “Clean energy investments” below for more information on their potential future impact on cash provided by operating activities.

When assessing our overall liquidity, we believe that the focus should be on net earnings as reported in our consolidated statement of earnings, adjusted for non-cash items (i.e., EBITDAC), and cash provided by operating activities in our consolidated statement of cash flows. Consolidated EBITDAC was $315.3 million and $247.9 million for the six-month periods ended June 30, 2014 and 2013, respectively. Consolidated net earnings were $158.3 million and $134.0 million for the six-month periods ended June 30, 2014 and 2013, respectively. We believe that the EBITDAC items are indicators of trends in liquidity. From a balance sheet perspective, we believe the focus should not be on premiums and fees receivable, premiums payable or restricted cash for trends in liquidity. Net cash flows provided by operations will vary substantially from quarter to quarter and year to year because of the variability in the timing of premiums and fees receivable and premiums payable. We believe that in order to consider these items in assessing our trends in liquidity, they should be looked at in a combined manner, because changes in these balances are interrelated and are based on the timing of premium payments, both to and from us. In addition, funds legally restricted as to our use relating to premiums and clients’ claim funds held by us in a fiduciary capacity are presented in our consolidated balance sheet as “Restricted Cash” and have not been included in determining our overall liquidity.

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Our policy for funding our defined benefit pension plan is to contribute amounts at least sufficient to meet the minimum funding requirements under the IRC. The Employee Retirement Security Act of 1974, as amended (which we refer to as ERISA), could impose a minimum funding requirement for our plan. We are not required to make any minimum contributions to the plan for the 2014 plan year or the 2013 plan year. Funding requirements are based on the plan being frozen and the aggregate amount of our historical funding. The plan’s actuaries determine contribution rates based on our funding practices and requirements. Funding amounts may be influenced by future asset performance, the level of discount rates and other variables impacting the assets and/or liabilities of the plan. In addition, amounts funded in the future, to the extent not due under regulatory requirements, may be affected by alternative uses of our cash flows, including dividends, acquisitions and common stock repurchases. During the six-month period ended June 30, 2013, we made discretionary contributions of $4.2 million to the plan. We did not make any discretionary contributions to the plan during the six month period ended June 30, 2014. We are considering making discretionary contributions to the plan in 2014 and may be required to make significantly larger minimum contributions to the plan in future periods.

Cash Flows From Investing Activities

Capital Expenditures - Net capital expenditures were $42.1 million and $35.9 million for the six-month periods ended June 30, 2014 and 2013, respectively. In 2014, we expect total expenditures for capital improvements to be approximately $90.0 million, primarily related to office moves and expansions and updating computer systems and equipment.

Acquisitions - Cash paid for acquisitions, net of cash acquired, were $1,402.0 million and $113.4 million in the six-month periods ended June 30, 2014 and 2013, respectively. In addition, during the six-month period ended June 30, 2014, we issued 1.9 million shares ($82.4 million) of our common stock as payment for a portion of the total consideration paid for 2014 acquisitions and earnout payments made in 2014. During the six-month period ended June 30, 2013, we did not issue any shares of our common stock as payment for consideration paid for 2013 acquisitions or earnout payments. We completed 26 acquisitions and nine acquisitions in the six-month periods ended June 30, 2014 and 2013, respectively. Annualized revenues of businesses acquired in the six-month periods ended June 30, 2014 and 2013 totaled approximately $514.9 million and $40.9 million, respectively. In the six-month period ended June 30, 2014, we funded substantially all of our acquisitions activity using a mix of our common stock, debt and cash from operations. We expect to use our common stock to fund all or a portion of acquisitions we complete through the remainder of 2014.

Dispositions - During the six-month periods ended June 30, 2014 and 2013, we sold several books of business and recognized one-time gains of $1.7 million and $3.3 million, respectively. We received cash proceeds of $2.7 million and $2.9 million related to the 2014 and 2013 transactions, respectively.

Clean Energy Investments - During the period 2009 through 2014, we have made significant investments in clean energy operations capable of producing refined coal that we believe qualifies for tax credits under IRC Section 45. Our current estimate of the 2014 annual after-tax earnings, including IRC Section 45 tax credits, which will be generated from all of our clean energy investments in 2014, is $99.0 million to $110.0 million. The IRC Section 45 tax credits generate positive cash flow by reducing the amount of Federal income taxes we pay, which is offset by capital expenditures related to the redeployment, and in some cases the relocation of refined coal plants. We anticipate positive net cash flow related to IRC Section 45 activity in 2014. With the expected increased earnings from the IRC Section 45 investments in 2015 through 2021, and the anticipated minimal capital expenditures during that same period, we anticipate that the annual positive net cash flow during such years will continue to increase. We anticipate that this favorable impact on the amount we will pay in taxes during 2014 and in future years from IRC Section 45 investments will allow us to use these positive cash flows to fund acquisitions. Please see “Clean energy investments” on page 51 for a more detailed description of these investments and their risks and uncertainties.

Cash Flows From Financing Activities

We have an unsecured multicurrency credit agreement (which we refer to as the Credit Agreement), which expires on September 19, 2018, with a group of fifteen financial institutions. Our Credit Agreement provides for a revolving credit commitment of up to $600.0 million, of which up to $75.0 million may be used for issuances of standby or commercial letters of credit and up to $50.0 million may be used for the making of swing loans, as defined in the Credit Agreement. We may from time to time request, subject to certain conditions, an increase in the revolving credit commitment up to a maximum aggregate revolving credit commitment of $850.0 million. At June 30, 2014, $153.0 million of borrowings were outstanding under the Credit Agreement. Due to borrowings and outstanding letters of credit, $425.9 million remained available under the Credit Agreement at June 30, 2014.

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We use the Credit Agreement to post letters of credit and to borrow funds to supplement our operating cash flows from time to time. In the six-month period ended June 30, 2014, we borrowed $870.4 million and repaid $1,247.9 million under our Credit Agreement. In the six-month period ended June 30, 2013, we borrowed $228.0 million and repaid $357.0 million under our prior credit facility. Principal uses of the 2014 and 2013 borrowings were to fund acquisitions, make earnout payments related to acquisitions and for general corporate purposes.

We have a secured revolving loan facility (which we refer to as the Premium Financing Debt Facility), that provides funding for the three Australian (AU) and New Zealand (NZ) premium finance subsidiaries that we acquired on June 16, 2014. The Premium Financing Debt Facility is comprised of: (i) Facility B with separate AU$150.0 million and NZ$35.0 million tranches, (ii) Facility C is an AU$25.0 million equivalent multi-currency overdraft tranche and (iii) Facility D is a NZ$15.0 million equivalent multi-currency overdraft tranche. The Premium Financing Debt Facility expires June 15, 2016. At June 30, 2014, $139.0 million of borrowings were outstanding under the Premium Financing Debt Facility.

We use the Premium Financing Debt Facility to borrow funds from time to time to fund the premium financing activities of three of our Australian (AU) and New Zealand (NZ) subsidiaries. In the six-month period ended June 30, 2014, we had net borrowings of $139.0 million.

On June 24, 2014, we borrowed $700.0 million of private placement debt which was used to fund acquisitions and for general corporate purposes. On December 20, 2013, we entered into a note purchase agreement for private placement debt of $600.0 million that funded on February 27, 2014. We used the proceeds primarily to pay down our line of credit facility. On June 14, 2013, we borrowed $200.0 million of private placement debt which was used to fund acquisitions and for general corporate purposes. At June 30, 2014, we had $2,225.0 million of corporate-related borrowings outstanding under separate note purchase agreements entered into in the period from 2007 to 2014 and a cash and cash equivalent balance of $973.5 million. On August 3, 2014, $100.0 million of our private placement debt will mature and become due. See Note 5 to our unaudited consolidated financial statements for a discussion of the terms of the note purchase agreements, the Credit Agreement and the Premium Financing Debt Facility.

The note purchase agreements, the Credit Agreement and the Premium Financing Debt Facility contain various financial covenants that require us to maintain specified financial ratios. We were in compliance with these covenants at June 30, 2014.

Dividends - Our board of directors determines our dividend policy. Our board of directors determines dividends on our common stock on a quarterly basis after considering our available cash from earnings, our anticipated cash needs and current conditions in the economy and financial markets.

In the six-month period ended June 30, 2014, we declared $106.3 million in cash dividends on our common stock, or $0.36 per common share, a 3% increase over the six-month period ended June 30, 2013. On July 24, 2014, we announced a quarterly dividend for third quarter 2014 of $0.36 per common share. If the dividend is maintained at $0.36 per common share throughout 2014, the dividend level will result in annualized net cash used by financing activities in 2014 of approximately $220.2 million (based on the number of outstanding shares as of June 30, 2014) or an anticipated increase in cash used of approximately $37.6 million compared to 2013. We make no assurances regarding the amount of any future dividend payments.

Shelf Registration Statement - On November 20, 2013, we filed a shelf registration statement on Form S-3 with the SEC, registering the offer and sale from time to time, of an indeterminate amount of our common stock. We have used this registration statement to register shares sold under our at-the-market equity program and the secondary public offering referred to below. The availability of the potential liquidity under this shelf registration statement depends on investor demand, market conditions and other factors. We make no assurances regarding when, or if, we will issue any additional shares under this registration statement.

Secondary Public Offering - On April 7, 2014, we entered into an Underwriting Agreement with Morgan Stanley & Co. LLC to issue 19.0 million shares of our common stock in a public offering. On April 10, 2014, we agreed to price the offering of 19.0 million shares of our common stock at $43.25 and granted the underwriters in the offering a 30-day option to purchase up to an additional 2.85 million shares of our common stock at the same price. On April 11, 2014, the underwriters exercised the option to purchase an additional 2.85 million shares. The offering closed on April 16, 2014 and 21.85 million shares of our stock were issued for net proceeds, after underwriting discounts and other expenses related to this offering, of $911.4 million. We used the net proceeds of the offering to fund acquisitions.

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At-the-Market Equity Program - On November 20, 2013, we entered into an Equity Distribution Agreement with Morgan Stanley & Co. LLC, pursuant to which we may offer and sell, from time to time, up to $200 million (of which $196.0 million is remaining) of our common stock through Morgan Stanley as sales agent. Pursuant to the agreement, shares may be sold by means of ordinary brokers’ transactions, including on the New York Stock Exchange, at market prices prevailing at the time of sale, at prices related to the prevailing market prices, or at negotiated prices, in block transactions, or as otherwise agreed upon by us and Morgan Stanley. During the quarter ended June 30, 2014, we did not sell shares of our common stock under the program.

Other Common Stock Issuances - Another source of liquidity to us is the issuance of our common stock pursuant to our stock option and employee stock purchase plans. Proceeds from the issuance of common stock under the two plans described for the six-month periods ended June 30, 2014 and 2013 were $36.6 million and $51.4 million, respectively. Prior to 2009, we issued stock options under four stock option-based employee compensation plans. The options were primarily granted at the fair value of the underlying shares at the date of grant and generally became exercisable at the rate of 10% per year beginning the calendar year after the date of grant. In May 2008, all of these plans expired. On May 10, 2011, our stockholders approved the 2011 Long-Term Incentive Plan (which we refer to as the LTIP), which replaced our previous stockholder-approved 2009 Long-Term Incentive Plan. All of our officers, employees and non-employee directors are eligible to receive awards under the LTIP. Awards which may be granted under the LTIP include non-qualified and incentive stock options, stock appreciation rights, restricted stock units and performance units, any or all of which may be made contingent upon the achievement of performance criteria. Stock options with respect to 9.2 million shares (less any shares of restricted stock issued under the LTIP - 2.0 million shares of our common stock were available for this purpose as of June 30, 2014) were available for grant under the LTIP at June 30, 2014. In addition, we have an employee stock purchase plan which allows our employees to purchase our common stock at 95% of its fair market value. Proceeds from the issuance of our common stock related to these plans have contributed favorably to net cash provided by financing activities in the six-month periods ended June 30, 2014 and 2013 and we believe this favorable trend will continue in the foreseeable future.

Outlook - We believe that we have sufficient capital to meet our short- and long-term cash flow needs. Except for 2008 and 2005, our earnings before income taxes, adjusted for non-cash items, have increased year over year since 1991. In 2008, earnings before income taxes were adversely impacted by charges related to real estate lease terminations, severance, litigation, impairments of intangible assets and the adverse impact of foreign currency translation. In 2005, earnings before income taxes were adversely impacted by charges incurred for litigation and retail contingent commission related matters and claims handling obligations. We expect the historically favorable trend in earnings before income taxes, adjusted for non-cash items, to continue in the foreseeable future because we intend to continue to expand our business through organic growth from existing operations and through acquisitions. Additionally, we anticipate a favorable impact on the amount we will pay the IRS in 2014 and in future years based on anticipated tax credits from IRC Section 45 investments. We also anticipate that we will continue to use cash flows from operations and, if needed, borrowings under the Credit Agreement and private placement debt (described above under “Cash Flows From Financing Activities”) and our common stock to fund acquisitions. In addition, we may from time to time consider other alternatives for longer-term funding sources. Such alternatives could include raising additional capital through public or private debt offerings, equity markets, or restructuring our operations. Our micro-captive advisory services are the subject of an investigation by the IRS. See “Results of Operations - Brokerage” above for more information regarding this investigation. Due to the early stage of this investigation and the fact that the IRS has not made any allegations against us at this time, we are not able to reasonably estimate the amount of any potential loss or impact on our liquidity in connection with this investigation.

Contractual Obligations and Commitments

In connection with our investing and operating activities, we have entered into certain contractual obligations and commitments. See Note 12 to our unaudited consolidated financial statements for a discussion of these obligations and commitments. In addition, see Note 13 to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2013 for additional discussion of these obligations and commitments.

Off-Balance Sheet Arrangements

See Notes 5, 11 and 12 to the unaudited consolidated financial statements for a discussion of our off-balance sheet arrangements. In addition, see Notes 6, 12 and 13 to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2013 for additional discussion of these off-balance sheet arrangements.

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Critical Accounting Policies

There have been no changes in our critical accounting policies, which include revenue recognition, income taxes and intangible assets/earnout obligations, as discussed in our Annual Report on Form 10-K for the year ended December 31, 2013.

Business Combinations and Dispositions

See Note 3 to the unaudited consolidated financial statements for a discussion of our business combinations during the six-month period ended June 30, 2014. We did not have any material dispositions during the six-month periods ended June 30, 2014 and 2013.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are exposed to various market risks in our day to day operations. Market risk is the potential loss arising from adverse changes in market rates and prices, such as interest and foreign currency exchange rates and equity prices. The following analyses present the hypothetical loss in fair value of the financial instruments held by us at June 30, 2014 that are sensitive to changes in interest rates. The range of changes in interest rates used in the analyses reflects our view of changes that are reasonably possible over a one-year period. This discussion of market risks related to our consolidated balance sheet includes estimates of future economic environments caused by changes in market risks. The effect of actual changes in these market risk factors may differ materially from our estimates. In the ordinary course of business, we also face risks that are either nonfinancial or unquantifiable, including credit risk and legal risk. These risks are not included in the following analyses.

Our invested assets are primarily held as cash and cash equivalents, which are subject to various market risk exposures such as interest rate risk. The fair value of our portfolio of cash and cash equivalents at June 30, 2014 approximated its carrying value due to its short-term duration. We estimated market risk as the potential decrease in fair value resulting from a hypothetical one-percentage point increase in interest rates for the instruments contained in the cash and cash equivalents investment portfolio. The resulting fair values were not materially different from the carrying values at June 30, 2014.

At June 30, 2014, we had $2,225.0 million of borrowings outstanding under our various note purchase agreements. The aggregate estimated fair value of these borrowings at June 30, 2014 was $2,321.9 million due to their long-term duration and fixed interest rates associated with these debt obligations. No active or observable market exists for our private placement long-term debt. Therefore, the estimated fair value of this debt is based on discounted future cash flows using current interest rates available for debt with similar terms and remaining maturities. To estimate an all-in interest rate for discounting, we obtained market quotes for notes with the same terms as ours, which we have deemed to be the closest approximation of current market rates. We have not adjusted this rate for risk profile changes, covenant issues or credit rating changes. We estimated market risk as the potential impact on the value of the debt recorded in our consolidated balance sheet resulting from a hypothetical one-percentage point decrease in our weighted average borrowing rate at June 30, 2014 and the resulting fair values would have been $148.1 million higher than their carrying value (or $2,373.1 million).

As of June 30, 2014, we had $153.0 million of borrowings outstanding under our Credit Agreement. The fair value of these borrowings approximate their carrying value due to their short-term duration and variable interest rates associated with these debt obligations. Market risk is estimated as the potential increase in fair value resulting from a hypothetical one-percentage point decrease in our weighted average short-term borrowing rate at June 30, 2014, and the resulting fair value is not materially different from their carrying value.

At June 30, 2014, we had $139.0 million of borrowings outstanding under our Premium Financing Debt Facility. The fair value of these borrowings approximate their carrying value due to their short-term duration and variable interest rates associated with these debt obligations. Market risk is estimated as the potential increase in fair value resulting from a hypothetical one-percentage point decrease in our weighted average short-term borrowing rate at June 30, 2014, and the resulting fair value is not materially different from their carrying value.

We are subject to foreign currency exchange rate risk primarily from one of our larger U.K. based brokerage subsidiaries that incurs expenses denominated primarily in British pounds while receiving a substantial portion of its revenues in U.S. dollars. In addition, we are subject to foreign currency exchange rate risk from our Australian, Canadian, Indian, Jamaican, New Zealand, Singaporean and various Caribbean operations because we transact business in their local denominated currencies. Foreign currency gains (losses) related to this market risk are recorded in earnings before income taxes as transactions occur. Assuming a hypothetical adverse change of 10% in the average foreign currency exchange rate for the six-month period ended June 30, 2014 (a weakening of the U.S.

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dollar), earnings before income taxes would have decreased by approximately $2.6 million. Assuming a hypothetical favorable change of 10% in the average foreign currency exchange rate for the six-month period ended June 30, 2014 (a strengthening of the U.S. dollar), earnings before income taxes would have increased by approximately $1.5 million. We are also subject to foreign currency exchange rate risk associated with the translation of local currencies of our foreign subsidiaries into U.S. dollars. However, it is management’s opinion that this foreign currency exchange risk is not material to our consolidated operating results or financial position. We manage the balance sheets of our foreign subsidiaries, where practical, such that foreign liabilities are matched with equal foreign assets, maintaining a “balanced book” which minimizes the effects of currency fluctuations. Historically, we have not entered into derivatives or other similar financial instruments for trading or speculative purposes. However, with respect to managing foreign currency exchange rate risk in India and the U.K., we have periodically purchased financial instruments when market opportunities arose to minimize our exposure to this risk. During the six-month periods ended June 30, 2014 and 2013, we had several monthly put/call options in place with an external financial institution that are designed to hedge a significant portion of our future U.K. currency revenues (in 2014) and disbursements (in 2013) through various future payment dates. In addition, during the six-month period ended June 30, 2014, we had several monthly put/call options in place with an external financial institution that are designed to hedge a significant portion of our Indian currency disbursements through various future payment dates. Although these hedging strategies were designed to protect us against significant U.K. and India currency exchange rate movements, we are still exposed to some foreign currency exchange rate risk for the portion of the payments and currency exchange rate that are unhedged. The impact of these hedging strategies was not material to our unaudited consolidated financial statements for the six-month periods ended June 30, 2014 and 2013. We entered into a AU$400.0 million foreign currency derivative investment contract that we executed on April 16, 2014 in connection with the signing of the agreement to acquire the Crombie/OAMPS operations. This contract was designed to hedge a portion of the AU$ denominated purchase price consideration of this acquisition. The derivative investment contract was exercised on June 16, 2014, the date that the Crombie/OAMPS transaction closed. In second quarter 2014, we recorded a pretax gain of $1.9 million related to this derivative investment contract. See Note 13 to our unaudited consolidated financial statements for the changes in fair value of the derivative instruments reflected in comprehensive earnings at June 30, 2014.

Item 4. Controls and Procedures

As of June 30, 2014, our management, including our chief executive officer and chief financial officer, have conducted an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act, as amended). Based on that evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were effective as of June 30, 2014.

There has been no change in our internal control over financial reporting during the six-month period ended June 30, 2014, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Part II - Other Information

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

(b) Secondary Public Offering

On April 7, 2014, we entered into an Underwriting Agreement with Morgan Stanley & Co. LLC to issue 19.0 million shares of our common stock in a public offering. On April 10, 2014, we agreed to price the offering of 19.0 million shares of our common stock at $43.25 and granted the underwriters in the offering a 30-day option to purchase up to an additional 2.85 million shares of our common stock at the same price. On April 11, 2014, the underwriters exercised the option to purchase an additional 2.85 million shares. The offering closed on April 16, 2014 and 21.85 million shares of our stock were issued for net proceeds, after underwriting discounts and other expenses related to this offering, of $911.4 million. We used the net proceeds of the offering to fund acquisitions.

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(c) Issuer Purchases of Equity Securities

The following table shows the purchases of our common stock made by or on behalf of Gallagher or any “affiliated purchaser” (as such term is defined in Rule 10b-18(a)(3) under the Securities Exchange Act of 1934, as amended) of Gallagher for each fiscal month in the three-month period ended June 30, 2014:

					Total Number of		Maximum Number
	Total				Shares Purchased		of Shares that May
	Number of		Average		as Part of Publicly		Yet be Purchased
	Shares		Price Paid		Announced Plans		Under the Plans
Period	Purchased (1)		per Share (2)		or Programs (3)		or Programs (3)
April 1 through April 30, 2014		8,500	$	45.23		—		10,000,000
May 1 through May 31, 2014		696		45.33		—		10,000,000
June 1 through June 30, 2014		19,438		46.47		—		10,000,000
Total		28,634	$	46.07		—

(1) Amounts in this column represent shares of our common stock purchased by the trustees of rabbi trusts established under our Deferred Equity Participation Plan (which we refer to as the Age 62 Plan), our Deferred Cash Participation Plan (which we refer to as the DCPP) and our Supplemental Savings and Thrift Plan (which we refer to as the Supplemental Plan), respectively. The Age 62 Plan is an unfunded, non-qualified deferred compensation plan that generally provides for distributions to certain of our key executives when they reach age 62 or upon or after their actual retirement. See Note 8 to the unaudited consolidated financial statements in this report for more information regarding the Age 62 Plan. The DCPP is an unfunded, non-qualified deferred compensation plan for certain key employees, other than executive officers, that generally provides for distributions no sooner than five years from the date of awards. Under the terms of the Age 62 Plan and the DCPP, we may contribute cash to the rabbi trust and instruct the trustee to acquire a specified number of shares of our common stock on the open market or in privately negotiated transactions. In the second quarter of 2014, we instructed the rabbi trustee for the Age 62 Plan and the DCPP to reinvest dividends paid into the plans in our common stock and to purchase our common stock using the cash that was funded into these plans related to the 2014 awards. The Supplemental Plan is an unfunded, non-qualified deferred compensation plan that allows certain highly compensated employees to defer amounts, including company match amounts, on a before-tax basis. Under the terms of the Supplemental Plan, all cash deferrals and company match amounts may be deemed invested, at the employee’s election, in a number of investment options that include various mutual funds, an annuity product and a fund representing our common stock. When an employee elects to deem his or her amounts under the Supplemental Plan invested in the fund representing our common stock, the trustee of the rabbi trust purchases the number of shares of our common stock equivalent to the amount deemed invested in the fund representing our common stock. We established the rabbi trusts for the Age 62 Plan, the DCPP and the Supplemental Plan to assist us in discharging our deferred compensation obligations under these plans. All assets of the rabbi trusts, including any shares of our common stock purchased by the trustees, remain, at all times, assets of the Company, subject to the claims of our creditors. The terms of the Age 62 Plan, the DCPP and the Supplemental Plan do not provide for a specified limit on the number of shares of common stock that may be purchased by the respective trustees of the rabbi trusts.

(2) The average price paid per share is calculated on a settlement basis and does not include commissions.

(3) We have a common stock repurchase plan that the board of directors adopted on May 10, 1988 and has periodically amended since that date to authorize additional shares for repurchase (the last amendment was on January 24, 2008). We did not repurchase any shares of our common stock under the repurchase plan during the second quarter of 2014. The repurchase plan has no expiration date and we are under no commitment or obligation to repurchase any particular amount of our common stock under the plan. At our discretion, we may suspend the repurchase plan at any time.

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Item 6. Exhibits

Filed with this Form 10-Q

*10.46	Arthur J. Gallagher & Co. 2014 Long Term Incentive Plan.
15.1	Letter of acknowledgement from Ernst & Young LLP concerning unaudited interim financial information.
31.1	Rule 13a-14(a) Certification of Chief Executive Officer.
31.2	Rule 13a-14(a) Certification of Chief Financial Officer.
32.1	Section 1350 Certification of Chief Executive Officer.
32.2	Section 1350 Certification of Chief Financial Officer.
101.INS	XBRL Instance Document.
101.SCH	XBRL Taxonomy Extension Schema Document.
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.
101.LAB	XBRL Taxonomy Extension Label Linkbase Document.
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.
Incorporated by reference into this Form 10-Q
1.1	Underwriting Agreement, dated April 10, 2014, by and between Arthur J. Gallagher & Co. and Morgan Stanley & Co. LLC, as representative of the several underwriters listed on Schedule 1 thereto (incorporated by reference to the same exhibit number to our Form 8-K Current Report dated April 16, 2014, File No. 1-09761).
2.1	Share Purchase Agreement, dated April 1, 2014, between Arthur J. Gallagher & Co., Oval Limited, Oval EBT Trustees Limited and certain institutional sellers, individual sellers and option holders (incorporated by reference to the same exhibit number to our Form 10-Q Quarterly Report for the quarter ended March 31, 2014, File No. 1-09761).
2.2	Share Sale Agreement, amended and restated as of June 15, 2014, by and among Arthur J. Gallagher & Co., Wesfarmers Insurance Investments Pty Ltd, OAMPS Ltd, Wesfarmers Limited and Pastel Purchaser Party Limited (incorporated by reference to Exhibit 2.1 to our Form 8-K Current Report dated June 16, 2014, File No. 1-09761).
2.3	Share Purchase Agreement, dated as of May 19, 2014, by and among Arthur J. Gallagher & Co., Roins Financial Services Limited and Noraxis Capital Corporation (incorporated by reference to Exhibit 2.1 to our Form 8-K Current Report dated May 19, 2014, File No. 1-09761).
The registrant agrees to furnish to the Securities and Exchange Commission upon request a copy of any long-term debt instruments that have been omitted pursuant to Item 601(h)(4)(iii)(A) of Regulation S-K.
*   Such exhibit is a management contract or compensatory plan or arrangement required to be filed as an exhibit to this form pursuant to Item 601 of Regulation S-K.

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Signature

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

	Arthur J. Gallagher & Co.
Date: July 31, 2014	By: /s/ Douglas K. Howell
	Douglas K. Howell Vice President and Chief Financial Officer (principal financial officer and duly authorized officer)

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Arthur J. Gallagher & Co.

Quarterly Report on Form 10-Q

For The Quarterly Period Ended June 30, 2014

Exhibit Index

*10.46	Arthur J. Gallagher & Co. 2014 Long Term Incentive Plan.
15.1	Letter of acknowledgement from Ernst & Young LLP concerning unaudited interim financial information.
31.1	Rule 13a-14(a) Certification of Chief Executive Officer.
31.2	Rule 13a-14(a) Certification of Chief Financial Officer.
32.1	Section 1350 Certification of Chief Executive Officer.
32.2	Section 1350 Certification of Chief Financial Officer.
101.INS	XBRL Instance Document.
101.SCH	XBRL Taxonomy Extension Schema Document.
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.
101.LAB	XBRL Taxonomy Extension Label Linkbase Document.
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.

* Such exhibit is a management contract or compensatory plan or arrangement required to be filed as an exhibit to this form pursuant to Item 601 of Regulation S-K.

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EX-10.46

Exhibit 10.46

ARTHUR J. GALLAGHER & CO.

2014 LONG-TERM INCENTIVE PLAN

I. INTRODUCTION

1.1 Purposes. The purposes of the Arthur J. Gallagher & Co. 2014 Long-Term Incentive Plan (this “Plan”) are (i) to align the interests of the Company’s stockholders and the recipients of Awards under this Plan by increasing the proprietary interest of such recipients in the Company’s growth and success, (ii) to advance the interests of the Company by attracting and retaining directors, officers and other employees, and (iii) to motivate such persons to act in the long-term best interests of the Company and its stockholders. As of the effective date of the Plan, no further awards shall be granted under the Prior Plans, as defined in Section 1.2.

1.2 Certain Definitions.

“Agreement” shall mean the written agreement evidencing an Award hereunder between the Company and the recipient of such Award.

“Automatic Exercise Date” shall mean the last business day of the term of an Option or SAR.

“Award” shall mean an Option, Restricted Stock Award, Restricted Stock Unit Award, a Performance Unit Award, or a SAR, which may be awarded or granted under the Plan (collectively, “Awards”).

“Board” shall mean the Board of Directors of the Company.

“Change in Control” shall have the meaning set forth in Section 6.8(b).

“Code” shall mean the Internal Revenue Code of 1986, as amended.

“Committee” shall mean the Committee designated by the Board, consisting of two or more members of the Board, each of whom shall be (i) a “non-employee director” within the meaning of Rule 16b-3 under the Exchange Act, (ii) an “outside director” within the meaning of Section 162(m) of the Code and (iii) “independent” within the meaning of the rules of the New York Stock Exchange or, if the Common Stock is not listed on the New York Stock Exchange, within the meaning of the rules of the principal national stock exchange on which the Common Stock is then traded. Any reference herein to the Committee shall be deemed to include any person to whom any duty of the Committee has been delegated pursuant to Section 1.3.

“Common Stock” shall mean the common stock, par value $1.00 per share, of the Company.

“Company” shall mean Arthur J. Gallagher & Co., a Delaware corporation, or any successor thereto.

“Directors Option” shall have the meaning set forth in Section 5.2.

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

“Fair Market Value” shall mean the closing transaction price (or, at the discretion of the Committee, the real time price) of a share of Common Stock as reported on the New York Stock Exchange on the date as of which such value is being determined or, if the Common Stock is not listed on the New York Stock Exchange, the closing transaction price of a share of Common Stock on the principal national stock exchange on which the Common Stock is traded on the date as of which such value is being determined or, if there shall be no reported transactions for such date, on the next preceding date for which transactions were reported; provided, however, that if the Common Stock is not listed on a national stock exchange or if Fair Market Value for any date cannot be so determined, Fair Market Value shall be determined by the Committee by whatever means or method as the Committee, in the good faith exercise of its discretion and in accordance with the applicable provisions of Section 409A of the Code, shall at such time deem appropriate. For purposes of Section 2.1(c)(i)(B), Section 2.1(c)(i)(C) and Section 6.5, the Fair Market Value of any shares of Common Stock shall be the market value determined by such methods or procedures as shall be established from time to time by the Committee.

“Free-Standing SAR” shall mean a SAR which is not granted in tandem with, or by reference to, an Option, which entitles the holder thereof to receive, upon exercise, shares of Common Stock (which may be Restricted Stock) or cash with an aggregate value equal to the excess of the Fair Market Value of one share of Common Stock on the date of exercise over the base price of such SAR, multiplied by the number of such SARs which are exercised.

“Full Value Award” shall mean any Award settled in shares of Common Stock other than (i) an Option or (ii) a SAR.

“Incentive Stock Option” shall mean an Option that meets the requirements of Section 422 of the Code, or any successor provision, which is intended by the Committee to constitute an Incentive Stock Option and is specified to be an Incentive Stock Option in the applicable Award Agreement.

“Non-Employee Director” shall mean any director of the Company who is not an officer or employee of the Company or any Subsidiary.

“Nonqualified Stock Option” shall mean an Option which is not an Incentive Stock Option.

“Option” shall mean a right to purchase shares of Common Stock at a specified exercise price, and includes both Incentive Stock Options and Nonqualified Stock Options.

“Participant” shall mean a person who has been granted an Award.

“Performance Measures” shall mean the criteria and objectives, established by the Committee, which shall be satisfied or met (i) as a condition to the grant or exercisability of all or a portion of an Option or SAR or (ii) during the applicable Restriction Period or Performance Period as a condition to the vesting of the holder’s interest, in the case of a Restricted Stock Award, of the shares of Common Stock subject to such Award, or, in the case of a Restricted Stock Unit Award, to the holder’s receipt of the shares of Common Stock subject to such Award or of payment with respect to such Award.

To the extent necessary for an Award to be qualified performance-based compensation under Section 162(m) of the Code and the regulations thereunder, such criteria and objectives shall include one or more of the following objective corporate-wide or subsidiary, division, operating unit or individual measures, stated in either absolute terms or relative terms, such as rates of growth or improvement: (i) the attainment by a share of Common Stock of a specified Fair Market Value for a specified period of time, (ii) earnings per share, (iii) return to stockholders, (iv) return on assets, (v) return on equity, (vi) revenue, (vii) cash flow, (viii) operating expense reduction, (ix) return on investment, (x) return on capital, (xi) operating margin, (xii) net income, (xiii) earnings before interest, taxes, depreciation, amortization and/or change in estimated earnout payables or net earnings (either before or after interest, taxes, depreciation, amortization and/or change in estimated earnout payables), (xiv) operating earnings, (xv) net cash provided by operations, and (xvi) strategic business criteria, consisting of one or more objectives such as (A) geographic business expansion goals, (B) cost targets, (C) customer satisfaction ratings, (D) reductions in errors and omissions, (E) reductions in lost business, (F) management of employment practices and employee benefits, (G) supervision of litigation, (H) satisfactory audit scores, (I) productivity, (J) efficiency, and (K) goals relating to acquisitions or divestitures, or any combination of the foregoing. With respect to participants who are not “covered employees” within the meaning of Section 162(m) of the Code and who, in the Committee’s judgment, are not likely to be a covered employees at any time during the applicable Performance Period, the performance goals established for the Performance Period may consist of any objective corporate-wide or subsidiary, division, operating unit or individual measures, whether or not listed herein. Performance Measures shall be subject to such other special rules and conditions as the Committee may establish at any time within the time prescribed by Section 162(m) of the Code.

In the sole discretion of the Committee, but subject to Section 162(m) of the Code, the Committee may provide that one or more objectively determinable adjustments shall be made to one or more of the Performance Measures. Such adjustments may include one or more of the following: (i) items related to a change in accounting principles or applicable law; (ii) items relating to financing activities; (iii) expenses for restructuring or productivity initiatives; (iv) other non-operating items; (v) items related to acquisitions; (vi) items attributable to the business operations of any entity acquired by the Company during the Performance Period; (vii) items related to the disposal of a business or segment of a business; (viii) items related to discontinued operations that do not qualify as a segment of a business under GAAP; (ix) items attributable to any stock dividend, stock split, combination or exchange of shares occurring during the Performance Period; (x) any other items of significant income or expense which are determined to be appropriate adjustments; (xi) items relating to unusual or extraordinary corporate transactions, events or developments, (xii) items related to amortization of acquired intangible assets; (xiii) items that are outside the scope of the Company’s core, on-going business activities; or (xiv) items relating to any other unusual or nonrecurring events or changes in applicable laws, accounting principles or business conditions. For all Awards intended to qualify as qualified performance-based compensation under Section 162(m) of the Code, such determinations shall be made within the time prescribed by, and otherwise in compliance with, Section 162(m) of the Code.

“Performance Option” shall mean an Incentive Stock Option or Nonqualified Stock Option, the grant of which or the exercisability of all or a portion of which is contingent upon the attainment of specified Performance Measures within a specified Performance Period.

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“Performance Period” shall mean any period designated by the Committee during which (i) the Performance Measures applicable to an Award shall be measured and (ii) the conditions to vesting applicable to an Award shall remain in effect.

“Performance Unit” shall mean a right to receive, contingent upon the attainment of specified Performance Measures within a specified Performance Period, a specified cash amount or, in lieu thereof, shares of Common Stock having a Fair Market Value equal to such cash amount.

“Performance Unit Award” shall mean an Award of Performance Units under this Plan.

“Prior Plans” shall mean the Company’s 2009 Long-Term Incentive Plan and the Company’s 2011 Long-Term Incentive Plan.

“Restricted Stock” shall mean shares of Common Stock which are subject to a Restriction Period and which may, in addition thereto, be subject to the attainment of specified Performance Measures within a specified Performance Period.

“Restricted Stock Award” shall mean an Award of Restricted Stock under this Plan.

“Restricted Stock Unit” shall mean a right to receive one share of Common Stock or, in lieu thereof, the Fair Market Value of such share of Common Stock in cash, which shall be contingent upon the expiration of a specified Restriction Period and which may, in addition thereto, be contingent upon the attainment of specified Performance Measures within a specified Performance Period.

“Restricted Stock Unit Award” shall mean an Award of Restricted Stock Units under this Plan.

“Restriction Period” shall mean any period designated by the Committee during which (i) the Common Stock subject to a Restricted Stock Award may not be sold, transferred, assigned, pledged, hypothecated or otherwise encumbered or disposed of, except as provided in this Plan or the Agreement relating to such Award, and (ii) the conditions to vesting applicable to a Restricted Stock Unit Award shall remain in effect. With the exception of Awards to Non-Employee Directors, Substitute Awards, performance-based Awards under Section 3.2(b) or 3.3(b) and in the event of a Participant’s death, disability, retirement or other termination of employment, the minimum Restriction Period before any portion of a Restricted Stock Award or Restricted Stock Unit Award shall vest shall be three years.

“SAR” shall mean a stock appreciation right which may be a Free-Standing SAR or a Tandem SAR.

“Stock Award” shall mean a Restricted Stock Award or a Restricted Stock Unit Award.

“Subsidiary” shall mean any corporation, limited liability company, partnership, joint venture or similar entity in which the Company owns, directly or indirectly, an equity interest possessing more than 50% of the combined voting power of the total outstanding equity interests of such entity.

“Substitute Award” shall mean an Award granted under the Plan upon the assumption of, or in substitution for, outstanding equity awards previously granted by a company or other entity in connection with a corporate transaction, such as a merger, combination, consolidation or acquisition of property or stock; provided, however, that in no event shall the term “Substitute Award” be construed to refer to an award made in connection with the cancellation and repricing of an Option or SAR.

“Tandem SAR” shall mean a SAR which is granted in tandem with, or by reference to, an Option (including a Nonqualified Stock Option granted prior to the date of grant of the SAR), which entitles the holder thereof to receive, upon exercise of such SAR and surrender for cancellation of all or a portion of such Option, shares of Common Stock (which may be Restricted Stock) or cash with an aggregate value equal to the excess of the Fair Market Value of one share of Common Stock on the date of exercise over the base price of such SAR, multiplied by the number of shares of Common Stock subject to such Option, or portion thereof, which is surrendered.

“Ten Percent Holder” shall have the meaning set forth in Section 2.1(a).

1.3 Administration. This Plan shall be administered by the Committee. Any one or a combination of the following Awards may be made under this Plan to eligible persons: (i) Options to purchase shares of Common Stock in the form of Incentive Stock Options or Nonqualified Stock Options (which may include Performance Options), (ii) SARs in the form of Tandem SARs or Free-Standing SARs, (iii) Stock Awards in the form of Restricted Stock Awards or Restricted Stock Unit Awards and (iv) Performance Unit Awards. The Committee shall, subject to the terms of this Plan, select eligible persons for participation in this Plan and determine the form, amount and timing of each Award to such persons and, if applicable, the number of shares of Common Stock, the number of SARs,

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the number of Restricted Stock Units and the number of Performance Units subject to such an Award, the exercise price or base price associated with the Award, the time and conditions of exercise or settlement of the Award and all other terms and conditions of the Award, including, without limitation, the form of the Agreement evidencing the Award. The Committee may, in its sole discretion and for any reason at any time, subject to the requirements of Section 162(m) of the Code and regulations thereunder in the case of an Award intended to be qualified performance-based compensation, take action such that (i) any or all outstanding Options and SARs shall become exercisable in part or in full, (ii) all or a portion of the Restriction Period applicable to any outstanding Restricted Stock or Restricted Stock Units shall lapse, (iii) all or a portion of the Performance Period applicable to any outstanding Restricted Stock, Restricted Stock Units, Performance Options or Performance Units shall lapse and (iv) the Performance Measures (if any) applicable to any outstanding Award shall be deemed to be satisfied at the maximum or any other level. The Committee shall have the authority, subject to the terms of this Plan: (x) to interpret this Plan and the application thereof, establish rules and regulations it deems necessary or desirable for the administration of this Plan; (y) to impose, incidental to the grant of an Award, conditions with respect to the Award, such as limiting competitive employment or other activities or applying the Company’s compensation recovery policy, as amended from time to time; and (z) to amend any outstanding Awards; provided, however, that if any such amendment impairs in any material way a Participant’s rights with respect to such Award, such amendment shall also be subject to the Participant’s consent. All such interpretations, rules, regulations and conditions shall be conclusive and binding on all parties.

Subject to applicable law and applicable rules and regulations of the New York Stock Exchange, the Committee may delegate some or all of its power and authority hereunder to the Board or to the President and Chief Executive Officer or other executive officer of the Company as the Committee deems appropriate; provided, however, that (i) the Committee may not delegate its power and authority to the Board or the President and Chief Executive Officer or other executive officer of the Company with regard to the grant of an Award to any person who is a “covered employee” within the meaning of Section 162(m) of the Code or who, in the Committee’s judgment, is likely to be a covered employee at any time during the period an Award hereunder to such employee would be outstanding and (ii) the Committee may not delegate its power and authority to the President and Chief Executive Officer or other executive officer of the Company with regard to the selection for participation in this Plan of an officer, Non-Employee Director or other person subject to Section 16 of the Exchange Act or decisions concerning the timing, pricing or amount of an Award to such an officer, Non-Employee Director or other person.

No member of the Board or Committee, and neither the President and Chief Executive Officer nor any other executive officer to whom the Committee delegates any of its power and authority hereunder, shall be liable for any act, omission, interpretation, construction or determination made in connection with this Plan in good faith, and the members of the Board and the Committee and the President and Chief Executive Officer or other executive officer shall be entitled to indemnification and reimbursement by the Company in respect of any claim, loss, damage or expense (including attorneys’ fees) arising therefrom to the full extent permitted by law (except as otherwise may be provided in the Company’s Certificate of Incorporation and/or By-laws) and under any directors’ and officers’ liability insurance that may be in effect from time to time.

Each member of the Committee is entitled to, in good faith, rely or act upon any report or other information furnished to that member by any officer or other employee of the Company or any Subsidiary, the Company’s independent certified public accountants, or any executive compensation consultant or other professional retained by the Company or the Committee to assist in the administration of the Plan.

1.4 Eligibility. Participants in this Plan shall consist of such officers, other employees and Non-Employee Directors of the Company and its Subsidiaries as the Committee in its sole discretion may select from time to time. The Committee’s selection of a person to participate in this Plan at any time shall not require the Committee to select such person to participate in this Plan at any other time. For purposes of this Plan, references to employment by the Company shall also mean employment by a Subsidiary.

1.5 Shares Available.

(a) Share Reserve and Full Value Award Limit. Subject to adjustment as provided in Section 6.7 and to all other limits set forth in this Section 1.5, the maximum aggregate number of shares of Common Stock that shall be available for all Awards under this Plan is equal to the sum of: (i) 9,000,000; plus (ii) the number of shares of Common Stock under the Prior Plans that are not subject to outstanding awards as of the effective date of this Plan; plus (iii) the number of shares of Common Stock subject to any awards granted under the Prior Plans as of the effective date of this Plan that are settled for cash, forfeited, expired, or for any reason are cancelled or terminated, without resulting in the issuance of shares of Common Stock.

Of the total number of shares of Common Stock authorized for grant under the Plan, no more than 2,000,000 Shares may be used for Full Value Awards. Subject to adjustment as provided in Section 6.7, the number of shares of Common Stock authorized for grant as Incentive Stock Options shall be no more than the total number of shares of Common Stock authorized for grant under the Plan under Section 1.5(a)(i).

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(b) Counting Shares Against the Share Reserve. Any shares of Common Stock that are subject to Awards shall be counted against the share reserve limit in Section 1.5 as one (1) share of Common Stock for every one (1) share of Common Stock granted.

(c) Substitute Awards. Substitute Awards shall not reduce the shares of Common Stock authorized for grant under the Plan. Additionally, to the extent permitted by NYSE Listed Company Manual Section 303A.08 or other applicable stock exchange rules, in the event that a company acquired by the Company or any Subsidiary or with which the Company or any Subsidiary combines has shares available under a pre-existing plan approved by stockholders and not adopted in contemplation of such acquisition or combination, the shares available for grant pursuant to the terms of such pre-existing plan (as adjusted, to the extent appropriate, using the exchange ratio or other adjustment or valuation ratio of formula used in such acquisition or combination to determine the consideration payable to the holders of common stock of the entities party to such acquisition or combination) may be used for Awards under the Plan and shall not reduce the shares of Common Stock authorized for grant under the Plan; provided, that Awards using such available shares shall not be made after the date awards could have been made under the terms of the pre-existing plan, absent the acquisition or combination, and shall only be made to individuals who were not employed by or providing services to the Company or its Subsidiaries immediately prior to such acquisition or combination.

(d) Shares Available for Subsequent Issuance. If any shares of Common Stock subject to an Award are forfeited, canceled, terminated or expire, or an Award is settled for cash (in whole or in part), the shares of Common Stock subject to such Award shall, to the extent of such forfeiture, cancelation, termination, expiration or cash settlement, again be available for Awards under the Plan. Shares of Common Stock tendered to or withheld by the Company to satisfy tax withholding requirements upon the vesting of Awards other than Options and SARs shall also become available for issuance under the Plan.

(e) Shares Not Available for Subsequent Issuance. Notwithstanding anything in this Section 1.5 to the contrary, shares of Common Stock subject to an Award under this Plan (or the Prior Plans) may not be made available for issuance under this Plan if such shares are: (i) shares that were subject to a stock-settled SAR and were not issued upon the net settlement or net exercise of such SAR; (ii) shares used to pay the exercise price of an Option; (iii) shares delivered to or withheld by the Company to pay withholding taxes related to an Option or a SAR; or (iv) shares repurchased on the open market with the proceeds of an Option exercise.

(f) Source of Shares. Shares of Common Stock to be delivered under this Plan shall be made available from authorized and unissued shares of Common Stock, or authorized and issued shares of Common Stock reacquired and held as treasury shares or otherwise or a combination thereof.

(g) Award Limitations. To the extent necessary for an Award to be qualified performance-based compensation under Section 162(m) of the Code and the regulations thereunder: (i) the maximum number of shares of Common Stock with respect to which Options or SARs or a combination thereof may be granted during any fiscal year of the Company to any person shall be 200,000, subject to adjustment as provided in Section 6.7; (ii) the maximum number of shares of Common Stock with respect to which Stock Awards subject to Performance Measures may be granted during any fiscal year of the Company to any person shall be 100,000, subject to adjustment as provided in Section 6.7; (iii) the maximum amount that may be payable with respect to cash-settled Performance Units granted during any fiscal year of the Company to any person shall be $5,000,000; and (iv) the maximum number of shares of Common Stock with respect to which stock-settled Performance Units granted during any fiscal year of the Company to any person shall be 100,000.

II. STOCK OPTIONS AND STOCK APPRECIATION RIGHTS

2.1 Stock Options. The Committee may, in its discretion, grant Options to purchase shares of Common Stock to such eligible persons as may be selected by the Committee. Each Option, or portion thereof, that is not an Incentive Stock Option shall be a Nonqualified Stock Option. To the extent that the aggregate Fair Market Value (determined as of the date of grant) of shares of Common Stock with respect to which Options designated as Incentive Stock Options are exercisable for the first time by a participant during any calendar year (under this Plan or any other plan of the Company, or any parent or Subsidiary) exceeds the amount (currently $100,000) established by the Code, such Options shall constitute Nonqualified Stock Options.

Options may be granted in addition to, or in lieu of, any other compensation payable to officers, other employees and Non-Employee Directors, and in all cases shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent with the terms of this Plan, as the Committee shall deem advisable:

(a) Number of Shares and Purchase Price. The number of shares of Common Stock subject to an Option and the purchase price per share of Common Stock purchasable upon exercise of the Option shall be determined by the Committee; provided, however, that the purchase price per share of Common Stock purchasable upon exercise of a Nonqualified Stock Option or an Incentive Stock Option shall not be less than 100% of the Fair Market Value of a share of Common Stock on the date of grant of such Option; provided

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further, that if an Incentive Stock Option shall be granted to any person who, at the time such Option is granted, owns capital stock possessing more than 10 percent of the total combined voting power of all classes of capital stock of the Company (or of any parent or Subsidiary) (a “Ten Percent Holder”), the purchase price per share of Common Stock shall not be less than the price (currently 110% of Fair Market Value) required by the Code in order to constitute an Incentive Stock Option. Notwithstanding the foregoing, the purchase price per share of Common Stock purchasable upon exercise of an Option granted pursuant to a Substitute Award may be less than 100% of the Fair Market Value of a share of Common Stock on the date of grant, provided, that such purchase price complies with the requirements of Sections 409A and 422 of the Code, as applicable.

(b) Option Period and Exercisability. The period during which an Option may be exercised shall be determined by the Committee; provided, however, that no Incentive Stock Option or Nonqualified Stock Option shall be exercised later than 7 years after its date of grant; provided further, that if an Incentive Stock Option shall be granted to a Ten Percent Holder, such Option shall not be exercised later than five years after its date of grant. The Committee may, in its discretion, determine that an Option is to be granted as a Performance Option and may establish an applicable Performance Period and Performance Measures which shall be satisfied or met as a condition to the grant of such Option or to the exercisability of all or a portion of such Option. The Committee shall determine whether an Option shall become exercisable in cumulative or non-cumulative installments and in part or in full at any time. Each Option granted under the Plan shall become vested and exercisable, in whole or in part, at such time or times during its term as set forth in the Agreement; provided, however, no shares underlying an Option shall vest prior to the date that is three years from the date of grant (with the exception of Options granted to Non-Employee Directors, Substitute Awards and in the event of a Participant’s death, disability, retirement or other termination of employment). An exercisable Option, or portion thereof, may be exercised only with respect to whole shares of Common Stock.

(c) Method of Exercise. An Option may be exercised, to the extent then exercisable, (i) by delivering a written or electronic notice to the Company’s stock plan administrator in a form satisfactory to the Committee specifying the number of whole shares of Common Stock to be purchased and accompanying such notice with payment therefor in full (or arrangement made for such payment to the Company’s satisfaction) either (A) in cash or check, (B) by delivery (either actual delivery or by attestation procedures established by the Company) of shares of Common Stock having a Fair Market Value equal to the aggregate purchase price payable by reason of such exercise, (C) authorizing the Company or stock plan administrator to withhold whole shares of Common Stock which would otherwise be delivered having an aggregate Fair Market Value equal to the amount necessary to satisfy such obligation, (D) except as may be prohibited by applicable law, in cash by a broker-dealer acceptable to the Company to whom the optionee has submitted an irrevocable notice of exercise or (E) a combination of (A), (B) and (C), in each case to the extent set forth in the Agreement relating to the Option, (ii) if applicable, by surrendering to the Company any Tandem SARs which are cancelled by reason of the exercise of the Option and (iii) by executing such documents as the Company may reasonably request. Any fraction of a share of Common Stock which would be required to pay such purchase price shall be disregarded and the remaining amount due shall be paid in cash by the optionee. No shares of Common Stock shall be issued and no certificate representing Common Stock shall be delivered until the full purchase price therefor and any withholding taxes thereon, as described in Section 6.5, have been paid (or arrangement made for such payment to the Company’s satisfaction).

(d) Automatic Exercise of In-the-Money Options. The Committee, in its sole discretion, may provide in an Award Agreement or otherwise that any Option outstanding on the Automatic Exercise Date with an exercise price per share of Common Stock that is less than the Fair Market Value per share of Common Stock as of such date shall automatically and without further action by any Participant (or, in the event of Participant’s death, Participant’s personal representative or estate) or the Company be exercised on the Automatic Exercise Date if the Committee, in its sole discretion, determines that such exercise would provide economic benefit to the Participant after payment of the exercise price, applicable taxes and any expenses to effect the exercise. In the sole discretion of the Committee, payment of the exercise price of any Option may be made pursuant to Section 2.1(c)(i)(C) or (D), and the Company may deduct or withhold an amount sufficient to satisfy all taxes associated with such exercise in accordance with Section 6.5(ii)(C) or (D). Unless otherwise determined by the Committee, this Section 2.1(d) shall not apply to an Option if the Participant of such Option incurs a termination of employment or service on or before the Automatic Exercise Date.

2.2 Stock Appreciation Rights. The Committee may, in its discretion, grant SARs to such eligible persons as may be selected by the Committee. The Agreement relating to a SAR shall specify whether the SAR is a Tandem SAR or a Free-Standing SAR.

SARs shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent with the terms of this Plan, as the Committee shall deem advisable:

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(a) Number of SARs and Base Price. The number of SARs subject to an Award shall be determined by the Committee. Any Tandem SAR related to an Incentive Stock Option shall be granted at the same time that such Incentive Stock Option is granted. The base price of a Tandem SAR shall be the purchase price per share of Common Stock of the related Option. The base price of a Free-Standing SAR shall be determined by the Committee; provided, however, that such base price shall not be less than 100% of the Fair Market Value of a share of Common Stock on the date of grant of such SAR. Notwithstanding the foregoing, the base price of a SAR granted pursuant to a Substitute Award may be less than 100% of the Fair Market Value of a share of Common Stock on the date of grant, provided, that such base price complies with the requirements of Section 409A of the Code.

(b) Exercise Period and Exercisability. The period for the exercise of a SAR shall be determined by the Committee; provided, however, that no Tandem SAR shall be exercised later than the expiration, cancellation, forfeiture or other termination of the related Option and no Free-Standing SAR shall be exercised later than 7 years after its date of grant. The Committee may, in its discretion, establish Performance Measures which shall be satisfied or met as a condition to the grant of a SAR or to the exercisability of all or a portion of a SAR. The Committee shall determine whether a SAR may be exercised in cumulative or non-cumulative installments and in part or in full at any time. Each SAR granted under the Plan shall become vested and exercisable, in whole or in part, at such time or times during its term as set forth in the Agreement; provided, however, no shares underlying a SAR shall vest prior to the date that is three years from the date of grant (with the exception of SARs granted to Non-Employee Directors, Substitute Awards and in the event of a Participant’s death, disability, retirement or other termination of employment). An exercisable SAR, or portion thereof, may be exercised, in the case of a Tandem SAR, only with respect to whole shares of Common Stock and, in the case of a Free-Standing SAR, only with respect to a whole number of SARs. If a SAR is exercised for shares of Restricted Stock, a certificate or certificates representing such Restricted Stock shall be issued in accordance with Section 3.2(c), or such shares shall be transferred to the holder in book entry form with restrictions on the Shares duly noted, and the holder of such Restricted Stock shall have such rights of a stockholder of the Company as determined pursuant to Section 3.2(d). Prior to the exercise of a SAR, the holder of such SAR shall have no rights as a stockholder of the Company with respect to the shares of Common Stock subject to such SAR.

(c) Method of Exercise. A Tandem SAR may be exercised, to the extent then exercisable, (i) by delivering a written or electronic notice to the Company’s stock plan administrator in a form satisfactory to the Committee specifying the number of whole SARs which are being exercised, (ii) by surrendering to the Company any Options which are cancelled by reason of the exercise of the Tandem SAR and (iii) by executing such documents as the Company may reasonably request. A Free-Standing SAR may be exercised, to the extent then exercisable, (A) by delivering a written or electronic notice to the Company’s stock plan administrator in a form satisfactory to the Committee specifying the whole number of SARs which are being exercised and (B) by executing such documents as the Company may reasonably request.

(d) Automatic Exercise of In-the-Money SARs. The Committee, in its sole discretion, may provide in an Award Agreement or otherwise that any SAR outstanding on the Automatic Exercise Date with a base price per share of Common Stock that is less than the Fair Market Value per share of Common Stock as of such date shall automatically and without further action by any Participant (or, in the event of Participant’s death, Participant’s personal representative or estate) or the Company be exercised on the Automatic Exercise Date if the Committee, in its sole discretion, determines that such exercise would provide economic benefit to the Participant after payment of the applicable taxes and any expenses to effect the exercise. In the sole discretion of the Committee, the Company may deduct or withhold an amount sufficient to satisfy all taxes associated with such exercise in accordance with Section 6.5(ii)(C) or (D). Unless otherwise determined by the Committee, this Section 2.2(d) shall not apply to a SAR if the Participant of such SAR incurs a termination of employment or service on or before the Automatic Exercise Date.

2.3 Termination of Employment or Service. All of the terms relating to the exercise, cancellation or other disposition of an Option or SAR upon a termination of employment or service with the Company of the holder of such Option or SAR, as the case may be, whether by reason of disability, retirement, death or any other reason, shall be determined by the Committee.

2.4 Limitations.

(a) No Repricing. Notwithstanding anything in this Plan to the contrary and subject to Section 6.7, without the prior approval of the stockholders of the Company, the Committee will not amend or replace any previously granted Option or SAR in a transaction that constitutes a “repricing,” including but not limited to: (i) the reduction, directly or indirectly, in the per-share price of an outstanding Option or SAR by amendment, cancellation or substitution; (ii) any action that is treated as a repricing under generally accepted accounting principles; (iii) canceling an Option or SAR in exchange for another Option, SAR or other equity security (unless the cancellation and exchange occurs in connection with a merger, acquisition, or similar transaction); and (iv) any other action that is treated as a repricing by the rules or regulations of the New York Stock Exchange.

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(b) Buyout Provisions. The Committee may at any time offer to buy out for a payment in cash an Option or SAR previously granted based on such terms and conditions as the Committee will establish at the time that such offer is made. Notwithstanding anything contained in this Section 2.4(b) to the contrary, the Committee shall not be allowed to authorize the buyout of underwater Options or SARs without the prior approval of the stockholders of the Company.

III. STOCK AWARDS

3.1 Stock Awards. The Committee may, in its discretion, grant Stock Awards to such eligible persons as may be selected by the Committee. The Agreement relating to a Stock Award shall specify whether the Stock Award is a Restricted Stock Award or a Restricted Stock Unit Award.

3.2 Terms of Restricted Stock Awards. Restricted Stock Awards shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent with the terms of this Plan, as the Committee shall deem advisable.

(a) Number of Shares and Other Terms. The number of shares of Common Stock subject to a Restricted Stock Award and the Restriction Period, Performance Period (if any) and Performance Measures (if any) applicable to a Restricted Stock Award shall be determined by the Committee.

(b) Vesting and Forfeiture. The Agreement relating to a Restricted Stock Award shall provide, in the manner determined by the Committee, in its discretion, and subject to the provisions of this Plan, for the vesting of the shares of Common Stock subject to such Award (i) if the holder of such Award remains continuously in the employment or service of the Company during the specified Restriction Period and (ii) if specified Performance Measures (if any) are satisfied or met during a specified Performance Period, and for the forfeiture of the shares of Common Stock subject to such Award (x) if the holder of such Award does not remain continuously in the employment or service of the Company during the specified Restriction Period or (y) if specified Performance Measures (if any) are not satisfied or met during a specified Performance Period. The Committee may grant unrestricted shares of Common Stock to employees who have attained age 62. Any Performance Period shall be for a period of time not less than 12 months for performance-based Awards.

(c) Stock Issuance. During the Restriction Period, the shares of Restricted Stock shall be held by a custodian in book entry form with restrictions on such shares duly noted or, alternatively, a certificate or certificates representing a Restricted Stock Award shall be registered in the holder’s name and may bear a legend, in addition to any legend which may be required pursuant to Section 6.6, indicating that the ownership of the shares of Common Stock represented by such certificate is subject to the restrictions, terms and conditions of this Plan and the Agreement relating to the Restricted Stock Award. All such certificates shall be deposited with the Company, together with stock powers or other instruments of assignment (including a power of attorney), each endorsed in blank with a guarantee of signature if deemed necessary or appropriate, which would permit transfer to the Company of all or a portion of the shares of Common Stock subject to the Restricted Stock Award in the event such Award is forfeited in whole or in part. Upon termination of any applicable Restriction Period (and the satisfaction or attainment of applicable Performance Measures), subject to the Company’s right to require payment of any taxes in accordance with Section 6.5, the restrictions shall be removed from the requisite number of any shares of Common Stock that are held in book entry form, and all certificates evidencing ownership of the requisite number of shares of Common Stock shall be delivered to the holder of such Award.

(d) Rights with Respect to Restricted Stock Awards. Unless otherwise set forth in the Agreement relating to a Restricted Stock Award, and subject to the terms and conditions of a Restricted Stock Award, the holder of such Award shall have all rights as a stockholder of the Company, including, but not limited to, voting rights, the right to receive dividends and the right to participate in any capital adjustment applicable to all holders of Common Stock; provided, however, that a distribution with respect to shares of Common Stock, other than a regular cash dividend, shall be deposited with the Company and shall be subject to the same restrictions as the shares of Common Stock with respect to which such distribution was made. Notwithstanding the foregoing, no dividends will be paid at a time when any performance-based goals that apply to a Restricted Stock Award have not been satisfied; until such goals are satisfied, all dividends paid upon the shares of Common Stock underlying the Restricted Stock Award shall be retained by the Company for the account of the Participant and paid to the Participant (without interest) upon satisfaction of such goals and revert back to the Company if such goals are not satisfied.

3.3 Terms of Restricted Stock Unit Awards. Restricted Stock Unit Awards shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent with the terms of this Plan, as the Committee shall deem advisable.

(a) Number of Shares and Other Terms. The number of shares of Common Stock subject to a Restricted Stock Unit Award and the Restriction Period, Performance Period (if any) and Performance Measures (if any) applicable to a Restricted Stock Unit Award shall be determined by the Committee.

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(b) Vesting and Forfeiture. The Agreement relating to a Restricted Stock Unit Award shall provide, in the manner determined by the Committee, in its discretion, and subject to the provisions of this Plan, for the vesting of such Restricted Stock Unit Award (i) if the holder of such Award remains continuously in the employment or service of the Company during the specified Restriction Period and (ii) if specified Performance Measures (if any) are satisfied or met during a specified Performance Period, and for the forfeiture of the shares of Common Stock subject to such Award (x) if the holder of such Award does not remain continuously in the employment or service of the Company during the specified Restriction Period or (y) if specified Performance Measures (if any) are not satisfied or met during a specified Performance Period. The Committee may grant fully vested units representing the right to receive shares of Common Stock to employees who have attained age 62. Any Performance Period shall be for a period of time not less than 12 months for performance-based Awards.

(c) Settlement of Vested Restricted Stock Unit Awards. The Agreement relating to a Restricted Stock Unit Award shall specify (i) whether such Award may be settled in shares of Common Stock or cash or a combination thereof and (ii) whether the holder thereof shall be entitled to receive, on a current or deferred basis, dividend equivalents, and, if determined by the Committee, interest on, or the deemed reinvestment of, any deferred dividend equivalents, with respect to the number of shares of Common Stock subject to such Award. Prior to the settlement of a Restricted Stock Unit Award, the holder of such Award shall have no rights as a stockholder of the Company with respect to the shares of Common Stock subject to such Award. Notwithstanding anything to the contrary, no dividend equivalents will be paid at a time when any performance-based goals that apply to the Restricted Stock Unit Award upon which the dividend equivalents are paid have not been satisfied and will revert back to the Company if such goals are not satisfied.

3.4 Termination of Employment or Service. All of the terms relating to the satisfaction of Performance Measures and the termination of the Restriction Period or Performance Period relating to a Stock Award, or any forfeiture and cancellation of such Award upon a termination of employment or service with the Company of the holder of such Award, whether by reason of disability, retirement, death or any other reason, shall be determined by the Committee.

IV. PERFORMANCE UNIT AWARDS

4.1 Performance Unit Awards. The Committee may, in its discretion, grant Performance Unit Awards to such eligible persons as may be selected by the Committee.

4.2 Terms of Performance Unit Awards. Performance Unit Awards shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent with the terms of this Plan, as the Committee shall deem advisable.

(a) Number of Performance Units and Performance Measures. The number of Performance Units subject to a Performance Unit Award and the Performance Measures and Performance Period applicable to a Performance Unit Award shall be determined by the Committee.

(b) Vesting and Forfeiture. The Agreement relating to a Performance Unit Award shall provide, in the manner determined by the Committee, in its discretion, and subject to the provisions of this Plan, for the vesting of such Performance Unit Award if the specified Performance Measures are satisfied or met during the specified Performance Period and for the forfeiture of such Award if the specified Performance Measures are not satisfied or met during the specified Performance Period. Any Performance Period shall be for a period of time not less than 12 months for performance-based Awards.

(c) Settlement of Vested Performance Unit Awards. The Agreement relating to a Performance Unit Award shall specify whether such Award may be settled in shares of Common Stock (including shares of Restricted Stock) or cash or a combination thereof. If a Performance Unit Award is settled in shares of Restricted Stock, such shares of Restricted Stock shall be issued to the holder in book entry form or a certificate or certificates representing such Restricted Stock shall be issued in accordance with Section 3.2(c) and the holder of such Restricted Stock shall have such rights as a stockholder of the Company as determined pursuant to Section 3.2(d). Prior to the settlement of a Performance Unit Award in shares of Common Stock, including Restricted Stock, the holder of such Award shall have no rights as a stockholder of the Company.

4.3 Termination of Employment or Service. All of the terms relating to the satisfaction of Performance Measures and the termination of the Performance Period relating to a Performance Unit Award, or any forfeiture and cancellation of such Award upon a termination of employment or service with the Company of the holder of such Award, whether by reason of disability, retirement, death or any other reason, shall be determined by the Committee.

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V. PROVISIONS RELATING TO NON-EMPLOYEE DIRECTORS

5.1 Eligibility. Each Non-Employee Director may be granted Options to purchase shares of Common Stock in accordance with this Article V. All Options granted under this Article V shall constitute Nonqualified Stock Options.

5.2 Elective Participation. Subject to the discretion of the Board or the Nominating/Governance Committee, each Non-Employee Director may elect, prior to December 31st of any year and in accordance with procedures to be specified by the Committee, to receive a stock Option in lieu of all or part of the annual cash retainer that would otherwise be payable to such Non-Employee Director for service on the Board or any committee thereof during the 12-month period following the date of the next annual meeting of stockholders (a “Directors Option”). Each Directors Option shall be granted on, or as soon as administratively practicable after, the date of the annual meeting of stockholders next following the date of such election. The number of shares of Common Stock subject to each Directors Option shall have a Fair Market Value as of the date of grant equal to a multiple of the forgone amount of the retainer otherwise payable to the Non-Employee Director, which multiple shall be determined by the Board from time to time.

5.3 Directors Options. Each Directors Option shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent with the terms of this Plan, as the Committee shall deem advisable:

(a) Exercise Period and Exercisability. Each Directors Option shall become exercisable (i) on the three-month anniversary of the date of grant with respect to 25% of the shares subject to such Option, (ii) on the six-month anniversary of the date of grant with respect to an additional 25% of the shares subject to such Option, (iii) on the nine-month anniversary of the date of grant with respect to an additional 25% of the shares subject to such Option and (iv) on the 12-month anniversary of the date of grant with respect to the remaining shares subject to such Option; provided, however, that such Director’s Option shall become immediately exercisable upon a Non-Employee Director’s termination of service on the Board for any reason other than gross misconduct by the Non-Employee Director, as determined by the Board in its sole discretion. Each Director’s Option shall expire and cease to be exercisable upon the later to occur of (A) the termination of the Non-Employee Director’s service on the Board or (B) 7 years after such date of grant.

(b) Purchase Price. The purchase price for the shares of Common Stock subject to any Directors Option shall be equal to 100% of the Fair Market Value of a share of Common Stock on the date of grant of such Directors Option. A Directors Option, or portion thereof, may be exercised in whole or in part only with respect to whole shares of Common Stock. Directors Options shall be exercisable in accordance with Section 2.1(c).

5.4 Limitation on Awards to Non-Employee Directors. Notwithstanding any other provision of the Plan, the aggregate grant date fair value of all Awards made to any single Non-Employee Director in any calendar year shall not exceed $500,000, excluding the value of Awards made during that year at the election of the Non-Employee Director in lieu of all or a portion of annual Board and committee cash retainers.

VI. GENERAL

6.1 Effective Date and Term of Plan. This Plan shall be submitted to the stockholders of the Company for approval at the Company’s 2014 annual meeting of stockholders and, if approved by the stockholders of the Company shall become effective as of the date of such approval. This Plan shall terminate as of the annual meeting of the Company’s stockholders that occurs during the year of the seventh anniversary of its effective date, unless terminated earlier by the Board, and Awards hereunder may be made at any time prior to the termination of this Plan. Termination of this Plan shall not affect the terms or conditions of any Award granted prior to termination. Upon the effective date of this Plan, no further Awards shall be granted under the Prior Plans.

6.2 Amendment or Termination. The Board may amend or terminate this Plan as it shall deem advisable, subject to any requirement of stockholder approval required by applicable law, rule or regulation, including Section 162(m) of the Code and any rule of the New York Stock Exchange, or, if the Common Stock is not listed on the New York Stock Exchange, any rule of the principal national stock exchange on which the Common Stock is then traded; provided, however, that no amendment or termination may impair in any material way the rights of a holder of an outstanding Award without the consent of such holder.

6.3 Agreement. Each Award under this Plan shall be evidenced by an Agreement setting forth the terms and conditions applicable to such Award. No Award shall be valid until an Agreement is executed by the Company and the recipient of such Award (for clarity, electronic acceptance of an agreement in accordance with the procedures of the Company’s stock plan administrator shall be deemed to be execution) and, upon execution by each party and delivery of the Agreement to the Company within the time period specified by the Company, such Award shall be effective as of the effective date set forth in the Agreement.

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6.4 Non-Transferability. No Award shall be transferable other than by will, the laws of descent and distribution or pursuant to beneficiary designation procedures approved by the Company or, to the extent expressly permitted in the Agreement relating to such Award, to the holder’s family members, a trust or entity established by the holder for estate planning purposes or a charitable organization designated by the holder. Except to the extent permitted by the foregoing sentence or the Agreement relating to an Award, each Award may be exercised or settled during the holder’s lifetime only by the holder or the holder’s legal representative or similar person. Except as permitted by the second preceding sentence, no Award may be sold, transferred, assigned, pledged, hypothecated, encumbered or otherwise disposed of (whether by operation of law or otherwise) or be subject to execution, attachment or similar process. Upon any attempt to so sell, transfer, assign, pledge, hypothecate, encumber or otherwise dispose of any Award, such Award and all rights thereunder shall immediately become null and void.

6.5 Tax Withholding. The Company shall have the right to require, prior to the issuance or delivery of any shares of Common Stock or the payment of any cash pursuant to an Award made hereunder, payment by the holder of such Award of any federal, state, local or other taxes which may be required to be withheld or paid in connection with such Award. An Agreement may provide that (i) the Company shall withhold or direct the withholding of whole shares of Common Stock which would otherwise be delivered to a holder, having an aggregate Fair Market Value equal to the amount necessary to satisfy any such obligation, or withhold or direct the withholding of an amount of cash which would otherwise be payable to a holder, in the amount necessary to satisfy any such obligation or (ii) the holder may satisfy any such obligation by any of the following means: (A) a cash payment to the Company, (B) delivery (either actual delivery or by attestation procedures established by the Company) to the Company of previously owned whole shares of Common Stock having an aggregate Fair Market Value equal to the amount necessary to satisfy any such obligation, (C) authorizing the Company or its stock plan administrator to withhold whole shares of Common Stock which would otherwise be delivered having an aggregate Fair Market Value or withhold an amount of cash which would otherwise be payable to a holder, equal to the amount necessary to satisfy any such obligation, (D) in the case of the exercise of an Option and except as may be prohibited by applicable law, a cash payment by a broker-dealer acceptable to the Company to whom the optionee has submitted an irrevocable notice of exercise or (E) any combination of (A), (B) and (C), in each case to the extent set forth in the Agreement relating to the Award. Shares of Common Stock to be delivered or withheld may not have an aggregate Fair Market Value in excess of the amount determined by applying the minimum statutory withholding rate. Any fraction of a share of Common Stock which would be required to satisfy such an obligation shall be disregarded and the remaining amount due shall be paid in cash by the holder.

6.6 Restrictions on Shares. Each Award made hereunder shall be subject to the requirement that if at any time the Company determines that the listing, registration or qualification of the shares of Common Stock subject to such Award upon any securities exchange or under any law, or the consent or approval of any governmental body, or the taking of any other action is necessary or desirable as a condition of, or in connection with, the delivery of shares thereunder, such shares shall not be delivered unless such listing, registration, qualification, consent, approval or other action shall have been effected or obtained, free of any conditions not acceptable to the Company. The Company may require that certificates evidencing shares of Common Stock delivered pursuant to any Award made hereunder bear a legend indicating that the sale, transfer or other disposition thereof by the holder is prohibited except in compliance with the Securities Act of 1933, as amended, and the rules and regulations thereunder.

6.7 Adjustment. In the event of any stock split, stock dividend, recapitalization, reorganization, merger, consolidation, combination, exchange of shares, liquidation, spin-off or other similar change in capitalization or event, or any distribution to holders of Common Stock other than a regular cash dividend, the number and class of securities available under this Plan, the number and class of securities subject to each outstanding Option and the purchase price per security, the terms of each outstanding SAR, the terms of each outstanding Restricted Stock Award and Restricted Stock Unit Award, including the number and class of securities subject thereto, the terms of each outstanding Performance Unit, the maximum number of securities with respect to which Options or SARs may be granted during any fiscal year of the Company to any one grantee, the maximum number of shares of Common Stock that may be awarded during any fiscal year of the Company to any one grantee pursuant to a Stock Award that is subject to Performance Measures, and the maximum amount that may be payable pursuant to any Performance Unit Award granted during any fiscal year of the Company to any one grantee shall be equitably adjusted by the Committee, such adjustments to be made in the case of outstanding Options and SARs without an increase in the aggregate purchase price or base price. The decision of the Committee regarding any such adjustment shall be final, binding and conclusive. If any such adjustment would result in a fractional security being (a) available under this Plan, such fractional security shall be disregarded, or (b) subject to an Award under this Plan, the Company shall pay the holder of such Award, in connection with the first vesting, exercise or settlement of such Award, in whole or in part, occurring after such adjustment, an amount in cash determined by multiplying (i) the fraction of such security (rounded to the nearest hundredth) by (ii) the excess, if any, of (A) the Fair Market Value on the vesting, exercise or settlement date over (B) the exercise or base price, if any, of such Award.

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6.8 Change in Control.

(a) Notwithstanding any provision in this Plan or any Agreement, in the event of a Change in Control, (i) all outstanding Options and SARs shall immediately become exercisable in full, (ii) the Restriction Period applicable to any outstanding Restricted Stock Award or Restricted Stock Unit Award shall lapse, (iii) the Performance Period applicable to any outstanding Award shall lapse, (iv) the Performance Measures applicable to any outstanding Award shall be deemed to be satisfied at their target levels or, if greater, on a pro rata basis based on actual achievement as of the date of the Change in Control, and (v) the Board (as constituted prior to such Change in Control) may, in its discretion: (1) require that shares of stock of the corporation resulting from such Change in Control, or a parent corporation thereof, be substituted for some or all of the shares of Common Stock subject to an outstanding Award, with an appropriate and equitable adjustment to such Award as shall be determined by the Board in accordance with Section 6.7; and/or (2) require outstanding Awards, in whole or in part, to be surrendered to the Company by the holder, and to be immediately cancelled by the Company, and to provide for the holder to receive (A) a cash payment in an amount equal to (i) in the case of an Option or a SAR, the number of shares of Common Stock then subject to the portion of such Option or SAR surrendered multiplied by the excess, if any, of the highest per share price offered to holders of Common Stock in any transaction whereby the Change in Control takes place, over the purchase price or base price per share of Common Stock subject to such Option or SAR, (ii) in the case of a Stock Award, the number of shares of Common Stock then subject to the portion of such award surrendered multiplied by the highest per share price offered to holders of Common Stock in any transaction whereby the Change in Control takes place, and (iii) in the case of a Performance Unit Award, the number of Performance Units then subject to the portion of such award surrendered multiplied by the value of the Performance Unit under the terms of the related Agreement; (B) shares of capital stock of the corporation resulting from such Change in Control, or a parent corporation thereof, having a fair market value not less than the amount determined under clause (A) above; or (C) a combination of the payment of cash pursuant to clause (A) above and the issuance of shares pursuant to clause (B) above. The Board need not take the same action or actions with respect to all Awards or portions of Awards with respect to all participants.

(b) For purposes of this Plan, a “Change in Control” shall occur if (a) any person or group, as defined in Sections 13(d) and 14(d)(2) of the Exchange Act, as amended, is or becomes the beneficial owner, directly or indirectly of securities of the Company representing 50 percent or more of the combined voting power of the Company’s outstanding securities then entitled to vote for the election of directors; or (b) during any period of two consecutive years, individuals who at the beginning of such period constitute the Board and any new directors whose election by the Board or nomination for election by the Company’s stockholders was approved by at least two-thirds of the directors then still in office who either were directors at the beginning of the period or whose election was previously so approved cease for any reason to constitute at least a majority thereof.

If and to the extent that any Award is determined by the Company to constitute “non-qualified deferred compensation” subject to Section 409A of the Code and such Award is payable to a participant upon a Change in Control, then no payment shall be made pursuant to such Award unless such Change in Control constitutes a “change in the ownership of the corporation,” “a change in effective control of the corporation,” or “a change in the ownership of a substantial portion of the assets of the corporation” within the meaning of Section 409A of the Code; provided that if such Change in Control does not constitute a “change in the ownership of the corporation,” “a change in effective control of the corporation,” or “a change in the ownership of a substantial portion of the assets of the corporation” within the meaning of Section 409A of the Code, then the Award shall still fully vest upon such Change in Control, but shall be payable upon the original schedule contained in the Award.

6.9 Deferrals. The Committee may determine that the delivery of shares of Common Stock or the payment of cash, or a combination thereof, upon the exercise or settlement of all or a portion of any Award (other than Awards of Incentive Stock Options, Nonqualified Stock Options and SARs) made hereunder shall be deferred, or the Committee may, in its sole discretion, approve deferral elections made by holders of Awards. Deferrals shall be for such periods and upon such terms as the Committee may determine in its sole discretion, subject to the requirements of Section 409A of the Code.

6.10 No Right of Participation, Employment or Service. Unless otherwise set forth in an employment agreement, no person shall have any right to participate in this Plan. Neither this Plan nor any Award made hereunder shall confer upon any person any right to continued employment by or service with the Company, any Subsidiary or any affiliate of the Company or affect in any manner the right of the Company, any Subsidiary or any affiliate of the Company to terminate the employment or service of any person at any time without liability hereunder.

6.11 Rights as Stockholder. No person shall have any right as a stockholder of the Company with respect to any shares of Common Stock or other equity security of the Company which is subject to an Award hereunder unless and until such person becomes a stockholder of record with respect to such shares of Common Stock or equity security.

12

6.12 Designation of Beneficiary. To the extent permitted by the Committee, a participant may, by completing and returning the appropriate form provided by the Company or its stock plan administrator, name a beneficiary or beneficiaries to receive any payment to which such participant may become entitled under this Plan in the event of his or her death. To the extent permitted by the Committee, a participant may change his or her beneficiary or beneficiaries from time to time by submitting a new form in accordance with the procedures established by the Company and/or its stock plan administrator. If a participant does not or is not permitted to designate a beneficiary, or if no designated beneficiary is living on the date any amount becomes payable under this Plan, such payment will be made to the legal representatives of his or her estate, which will be deemed to be his or her designated beneficiary under this Agreement.

6.13 Recovery Policy. Notwithstanding any other provisions in the Plan, any Award which is subject to recovery under any law, government regulation or stock exchange listing requirement, will be subject to such deductions and clawback as may be required to be made pursuant to such law, government regulation or stock exchange listing requirement (or any recoupment policy adopted by the Company, including a policy adopted by the Company in response to any such law, government regulation or stock exchange listing requirement).

6.14 Section 409A. (a) The Plan and Awards granted under the Plan are intended to be exempt from the requirements of Section 409A of the Code to the maximum extent possible, whether pursuant to the short-term deferral exception described in Treasury Regulation 1.409A-1(b)(4), the exclusion applicable to stock options, stock appreciation rights and certain other equity-based compensation under Treasury Regulation 1.409A-1(b)(5), or otherwise. To the extent Section 409A of the Code is applicable to the Plan or any Award granted under the Plan, it is intended that the Plan and any Awards granted under the Plan comply with the requirements of Section 409A of the Code. Notwithstanding any other provision of the Plan or any Award granted under the Plan to the contrary, the Plan and any Award granted under the Plan shall be interpreted, operated and administered in a manner consistent with such intentions.

(b) Notwithstanding any other provision of the Plan to the contrary, the Board, to the extent it deems necessary or advisable in its sole discretion, reserves the right, but shall not be required, to unilaterally amend or modify the Plan pursuant to Section 6.2 and any Award granted under the Plan so that the Award qualifies for exemption from or complies with Section 409A of the Code; provided, however, that the Committee makes no representations that Awards granted under the Plan shall be exempt from or comply with Section 409A of the Code and makes no undertaking to preclude Section 409A of the Code from applying to Awards granted under the Plan.

6.15 Governing Law. This Plan, each Award hereunder and the related Agreement, and all determinations made and actions taken pursuant thereto, to the extent not otherwise governed by the Code or the laws of the United States, shall be governed by the laws of the State of Delaware and construed in accordance therewith without giving effect to principles of conflicts of laws.

6.16 Foreign Employees. Without amending this Plan, the Committee may grant Awards to eligible persons who are foreign nationals on such terms and conditions different from those specified in this Plan as may in the judgment of the Committee be necessary or desirable to foster and promote achievement of the purposes of this Plan and, in furtherance of such purposes the Committee may make such modifications, amendments, procedures, subplans and the like as may be necessary or advisable to comply with provisions of laws in other countries or jurisdictions in which the Company or its Subsidiaries operates or has employees.

6.17 Data Protection. By participating in the Plan, a Participant consents to the collection, processing, transmission and storage by the Company in any form whatsoever, of any data of a professional or personal nature which is necessary for the purposes of introducing and administering the Plan. The Company may share such information with any Subsidiary, the trustee of any employee benefit trust, its registrars, trustees, brokers, other third-party administrator or any Person who obtains control of the Company or acquires the Company or a Subsidiary which employs the Participant.

13

EX-15.1

Exhibit 15.1

Board of Directors and Stockholders

Arthur J. Gallagher & Co.

We are aware of the incorporation by reference in the Registration Statements (Form S-8, No. 333-87320 and Form S-8, No. 333-106535) pertaining to the Arthur J. Gallagher & Co. 1988 Nonqualified and Non-Employee Directors’ Stock Option Plans, in the Registration Statement (Form S-8, No. 333-106534) pertaining to the Arthur J. Gallagher & Co. Employee Stock Purchase Plan, in the Registration Statement (Form S-8, No. 333-106539) pertaining to the Arthur J. Gallagher & Co. Restricted Stock Plan, in the Registration Statement (Form S-8, No. 333-159150) pertaining to the Arthur J. Gallagher & Co. 2009 Long-Term Incentive Plan, in the Registration Statement (Form S-8, No. 333-174497) pertaining to the Arthur J. Gallagher & Co. 2011 Long-Term Incentive Plan, in the Registration Statements (Form S-4, No. 333-152710, Form S-3, No. 333-166533, Form S-4, No. 333-188651 and Form S-3, No. 333-192437), and in the related Prospectuses, of our report dated July 31, 2014 relating to the unaudited consolidated interim financial statements of Arthur J. Gallagher & Co. that is included in its Form 10-Q for the quarter ended June 30, 2014.

/s/ Ernst & Young LLP

Ernst & Young LLP

Chicago, Illinois

July 31, 2014

EX-31.1

Exhibit 31.1

Rule 13a-14(a) Certification of Chief Executive Officer

I, J. Patrick Gallagher, Jr., certify that:

1. I have reviewed this quarterly report on Form 10-Q of Arthur J. Gallagher & 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 Rules 13a-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 the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(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: July 31, 2014

/s/ J. Patrick Gallagher, Jr.

J. Patrick Gallagher, Jr.

President and Chief Executive Officer

(principal executive officer)

EX-31.2

Exhibit 31.2

Rule 13a-14(a) Certification of Chief Financial Officer

I, Douglas K. Howell, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Arthur J. Gallagher & 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 Rules 13a-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 the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(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: July 31, 2014

/s/ Douglas K. Howell

Douglas K. Howell

Vice President

Chief Financial Officer

(principal financial officer)

EX-32.1

Exhibit 32.1

Section 1350 Certification of Chief Executive Officer

I, J. Patrick Gallagher, Jr., the chief executive officer of Arthur J. Gallagher & Co., certify that (i) the Quarterly Report on Form 10-Q of Arthur J. Gallagher & Co. for the quarterly period ended June 30, 2014 (the “Form 10-Q”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and (ii) the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Arthur J. Gallagher & Co. and its subsidiaries.

Date: July 31, 2014

/s/ J. Patrick Gallagher, Jr.

J. Patrick Gallagher, Jr.

President and Chief Executive Officer

(principal executive officer)

A signed original of this written statement required by 18 U.S.C. Section 1350 has been provided to Arthur J. Gallagher & Co. and will be retained by Arthur J. Gallagher & Co. and furnished to the Securities Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

Section 1350 Certification of Chief Financial Officer

I, Douglas K. Howell, the chief financial officer of Arthur J. Gallagher & Co., certify that (i) the Quarterly Report on Form 10-Q of Arthur J. Gallagher & Co. for the quarterly period ended June 30, 2014 (the “Form 10-Q”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and (ii) the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Arthur J. Gallagher & Co. and its subsidiaries.

Date: July 31, 2014

/s/ Douglas K. Howell

Douglas K. Howell

Vice President

Chief Financial Officer

(principal financial officer)

A signed original of this written statement required by 18 U.S.C. Section 1350 has been provided to Arthur J. Gallagher & Co. and will be retained by Arthur J. Gallagher & Co. and furnished to the Securities Exchange Commission or its staff upon request.

XML

Business Combinations - Summary of Unaudited Pro Forma Historical Results (Detail) (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Business Combinations [Abstract]
Total revenues	$ 1,251.1	$ 933.4	$ 2,295.4	$ 1,735.1
Net earnings	$ 112.2	$ 111.6	$ 171.7	$ 161.1
Basic net earnings per share	$ 0.71	$ 0.74	$ 1.09	$ 1.07
Diluted net earnings per share	$ 0.70	$ 0.73	$ 1.07	$ 1.06

XML

Deferred Compensation - Additional information (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended				6 Months Ended		12 Months Ended
	Jun. 30, 2014	Mar. 31, 2014	Jun. 30, 2013	Mar. 31, 2013	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013
Investments And Employee Deferred Compensation Plan [Line Items]
Deferred Equity Participation Plan, distributions to key executives, age					Age 62 (or the one-year anniversary of the date of the grant for participants over the age of 61 as of the grant date) or upon or after their actual retirement
Age 62 Plan [Member]
Investments And Employee Deferred Compensation Plan [Line Items]
Compensation approved by committee, value		$ 9.2		$ 8.0
Charge to compensation expenses related to awards	1.8		1.8		3.2	3.3
Unearned deferred compensation, value					33.7		26.3
Unearned deferred compensation, shares					2.3		2.1
Total intrinsic value of unvested equity based awards					105.7		96.4
Cash and equity awards with aggregate fair value vested and distributed to participants					0	0.7
Deferred Cash Participation Plan (DCPP) [Member]
Investments And Employee Deferred Compensation Plan [Line Items]
Compensation approved by committee, value		2.9		2.7
Charge to compensation expenses related to awards	$ 0.7		$ 0.6		$ 1.5	$ 0.8

XML

Earnings Per Share - Computation of Basic and Diluted Net EPS (Detail) (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Earnings Per Share [Abstract]
Net earnings	$ 109.0	$ 93.5	$ 158.3	$ 134.0
Weighted average number of common shares outstanding	154.3	127.3	144.2	126.7
Dilutive effect of stock options using the treasury stock method	1.4	1.6	1.6	1.5
Weighted average number of common and common equivalent shares outstanding	155.7	128.9	145.8	128.2
Basic net earnings per share	$ 0.71	$ 0.73	$ 1.10	$ 1.06
Diluted net earnings per share	$ 0.70	$ 0.73	$ 1.09	$ 1.04

XML

Restricted Stock, Performance Share and Cash Awards - Additional Information (Detail) (USD $) In Millions, except Share data, unless otherwise specified	6 Months Ended		6 Months Ended			6 Months Ended								3 Months Ended	6 Months Ended	12 Months Ended	3 Months Ended	6 Months Ended		3 Months Ended				6 Months Ended		3 Months Ended									6 Months Ended				0 Months Ended	6 Months Ended
	Jun. 30, 2014 Times	Dec. 31, 2013	Jun. 30, 2014 Minimum [Member]	Jun. 30, 2014 Executive Officer [Member]	Mar. 12, 2014 Officer and Key Employees [Member]	Jun. 30, 2014 Cash Awards [Member] Officer and Key Employees [Member]	Mar. 31, 2014 Cash Awards [Member] Officer and Key Employees [Member]	Mar. 12, 2014 Cash Awards [Member] Officer and Key Employees [Member]	Mar. 31, 2013 Cash Awards [Member] Officer and Key Employees [Member]	Mar. 13, 2013 Cash Awards [Member] Officer and Key Employees [Member]	Mar. 31, 2012 Cash Awards [Member] Officer and Key Employees [Member]	Mar. 16, 2012 Cash Awards [Member] Officer and Key Employees [Member]	Mar. 08, 2011 Cash Awards [Member] Officer and Key Employees [Member]	Mar. 31, 2014 2013 Provisional Cash Awards [Member]	Jun. 30, 2014 2013 Provisional Cash Awards [Member]	Dec. 31, 2013 2013 Provisional Cash Awards [Member]	Jun. 30, 2013 2011 Provisional Cash Awards [Member]	Jun. 30, 2014 2011 Provisional Cash Awards [Member]	Jun. 30, 2013 2011 Provisional Cash Awards [Member]	Jun. 30, 2014 Restricted Stock Units (RSUs) [Member]	Mar. 31, 2014 Restricted Stock Units (RSUs) [Member]	Jun. 30, 2013 Restricted Stock Units (RSUs) [Member]	Mar. 31, 2013 Restricted Stock Units (RSUs) [Member]	Jun. 30, 2014 Restricted Stock Units (RSUs) [Member]	Jun. 30, 2013 Restricted Stock Units (RSUs) [Member]	Jun. 30, 2014 Restricted Stock Units (RSUs) [Member] Minimum [Member]	Mar. 31, 2014 Restricted Stock Units (RSUs) [Member] Minimum [Member]	Mar. 31, 2014 Restricted Stock Units (RSUs) [Member] Executive Officer [Member]	Jun. 30, 2014 Restricted Stock Plan [Member]	Mar. 31, 2014 Restricted Stock Plan [Member]	Jun. 30, 2013 Restricted Stock Plan [Member]	Mar. 31, 2013 Restricted Stock Plan [Member]	Jun. 30, 2014 2012 Provisional Cash Awards [Member]	Jun. 30, 2013 2012 Provisional Cash Awards [Member]	Jun. 30, 2014 2012 Provisional Cash Awards [Member]	Jun. 30, 2013 2012 Provisional Cash Awards [Member]	Jun. 30, 2014 Unvested Restricted Stock [Member]	Jun. 30, 2013 Unvested Restricted Stock [Member]	Mar. 12, 2014 Performance Shares [Member]	Jun. 30, 2014 Performance Shares [Member]
Common Stock Options Restricted Stock Warrants And Changes In Capitalization [Line Items]
Share-based compensation, shares outstanding, Value																				$ 2.0				$ 2.0
Share-based compensation, shares outstanding	9,000,000	8,300,000																		2,000,000				2,000,000
Shares granted in the period																													19,250	323,600	17,000	345,000
Fair value of grants in period																													0.9	15.2	0.8	13.5
Share based payment award vesting date																					Mar. 12, 2018		Mar. 13, 2017
Minimum age of employee with not subject to award forfeiture on condition compliance				55 years																								55 years
Period of Service from Grant Date Stock Options Awarded Not Subject to Forfeiture			2 years																							2 years	2 years
Restricted stock or unit expense																				3.9		3.2		6.5	5.1
Total intrinsic value																																					58.2	46.7
Equity awards with an aggregate fair value																																					9.5	8.4
Performance unit awards approved, Shares																																							48,800
Performance unit awards approved, Fair value																																							2.3
Performance unit awards, Terms																																								Granted units for the 2014 provisional award will fully vest based on continuous employment through January 1, 2017, and will be settled in shares of our common stock on a one-for-one basis as soon as practicable in 2017.
Provisional compensation cash awards approved for future grant by compensation committee, value								10.8		10.5		13.1	14.4
Provisional compensation cash award approved for future grant by compensation committee, units					229,000		263,000		365,000	269,000	432,000	368,000	464,000					400,000
Performance period, years						1
Vesting period, years						2 years
Ultimate award value, multiples of original value of the units, minimum	0.5
Ultimate award value, multiples of original value of the units, maximum	1.5
Cash-based compensation awards, expenses														1.5	3.0	0	2.3	0	4.3														1.8	1.7	4.5	3.4
Grants vested in period fair value																		$ 17.6

XML

Credit and Other Debt Agreements - Summary of Corporate and Other Debt (Detail) (USD $) In Millions, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Debt Instrument [Line Items]
Semi-annual payments of interest	$ 2,517.0	$ 1,455.5
Premium Financing Debt Facility [Member]
Debt Instrument [Line Items]
Semi-annual payments of interest	139.0	0
Note Purchase Agreements [Member]
Debt Instrument [Line Items]
Semi-annual payments of interest	2,225.0	925.0
Fixed Rate of 6.26%, Balloon Due 2014 [Member] | Note Purchase Agreements [Member]
Debt Instrument [Line Items]
Semi-annual payments of interest	100.0	100.0
Fixed Rate of 6.44%, Balloon Due 2017 [Member] | Note Purchase Agreements [Member]
Debt Instrument [Line Items]
Semi-annual payments of interest	300.0	300.0
Fixed Rate of 2.80%, Balloon Due 2018 [Member] | Note Purchase Agreements [Member]
Debt Instrument [Line Items]
Semi-annual payments of interest	50.0
Fixed Rate of 3.20%, Balloon Due 2019 [Member] | Note Purchase Agreements [Member]
Debt Instrument [Line Items]
Semi-annual payments of interest	50.0
Fixed Rate of 5.85%, $50.0 Million Due in 2016, 2018 and 2019 [Member] | Note Purchase Agreements [Member]
Debt Instrument [Line Items]
Semi-annual payments of interest	150.0	150.0
Fixed Rate of 3.99%, Balloon Due 2020 [Member] | Note Purchase Agreements [Member]
Debt Instrument [Line Items]
Semi-annual payments of interest	50.0	50.0
Fixed Rate of 3.48%, Balloon Due 2020 [Member] | Note Purchase Agreements [Member]
Debt Instrument [Line Items]
Semi-annual payments of interest	50.0
Fixed Rate of 5.18%, Balloon Due 2021 [Member] | Note Purchase Agreements [Member]
Debt Instrument [Line Items]
Semi-annual payments of interest	75.0	75.0
Fixed Rate of 5.49%, Balloon Due 2023 [Member] | Note Purchase Agreements [Member]
Debt Instrument [Line Items]
Semi-annual payments of interest	50.0	50.0
Fixed Rate of 4.13%, Balloon Due 2023 [Member] | Note Purchase Agreements [Member]
Debt Instrument [Line Items]
Semi-annual payments of interest	200.0
Fixed rate of 3.69%, Balloon Due 2022 [Member] | Note Purchase Agreements [Member]
Debt Instrument [Line Items]
Semi-annual payments of interest	200.0	200.0
Fixed Rate of 4.58% Balloon Due 2024 [Member] | Note Purchase Agreements [Member]
Debt Instrument [Line Items]
Semi-annual payments of interest	325.0
Fixed Rate of 4.31%, Balloon Due 2025 [Member] | Note Purchase Agreements [Member]
Debt Instrument [Line Items]
Semi-annual payments of interest	200.0
Fixed Rate of 4.73% Balloon Due 2026 [Member] | Note Purchase Agreements [Member]
Debt Instrument [Line Items]
Semi-annual payments of interest	175.0
Fixed Rate of 4.36%, Balloon Due 2026 [Member] | Note Purchase Agreements [Member]
Debt Instrument [Line Items]
Semi-annual payments of interest	150.0
Fixed Rate of 4.98% Balloon Due 2029 [Member] | Note Purchase Agreements [Member]
Debt Instrument [Line Items]
Semi-annual payments of interest	100.0	0
Prime or LIBOR plus up to 1.45%, expires September 19, 2018 [Member] | Credit Agreement [Member]
Debt Instrument [Line Items]
Semi-annual payments of interest	153.0	530.5
Interbank rates plus 1.65%, Expires June 15, 2016 [Member] | AUD denominated tranche [Member] | Facility B [Member] | Premium Financing Debt Facility [Member]
Debt Instrument [Line Items]
Semi-annual payments of interest	112.8	0
Interbank rates plus 1.65%, Expires June 15, 2016 [Member] | NZD denominated tranche [Member] | Facility B [Member] | Premium Financing Debt Facility [Member]
Debt Instrument [Line Items]
Semi-annual payments of interest	18.6	0
Interbank rates plus 0.85%, Expires June 15, 2016 [Member] | NZD denominated tranche [Member] | Facility C and D [Member] | Premium Financing Debt Facility [Member]
Debt Instrument [Line Items]
Semi-annual payments of interest	$ 7.6	$ 0

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Segment Information (Tables)

6 Months Ended

Jun. 30, 2014

Segment Reporting [Abstract]

Schedule of Segment Reporting Information by Segment

Financial information relating to our segments for the three-month and six-month periods ended June 30, 2014 and 2013 is as follows (in millions):

	Three-month period ended June 30,						Six-month period ended June 30,
	2014			2013			2014			2013
Brokerage
Total revenues	$	742.6		$	550.9		$	1,311.2		$	1,005.3
Earnings before income taxes	$	136.5		$	112.6		$	186.9		$	153.2
Identifiable assets at June 30, 2014 and 2013							$	8,047.4		$	4,325.2
Risk Management
Total revenues	$	168.1		$	156.2		$	328.1		$	309.8
Earnings before income taxes	$	20.6		$	20.2		$	39.6		$	41.7
Identifiable assets at June 30, 2014 and 2013							$	581.2		$	530.8
Corporate
Total revenues	$	268.6		$	72.4		$	455.0		$	138.5
Loss before income taxes	$	(50.0	)	$	(35.4	)	$	(73.1	)	$	(55.2	)
Identifiable assets at June 30, 2014 and 2013							$	1,390.7		$	706.1

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Retirement Plans - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Compensation And Retirement Disclosure [Abstract]
Minimum contribution by employer	$ 0	$ 0
Discretionary contributions by employer	$ 0	$ 4.2

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Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2014

Goodwill And Intangible Assets Disclosure [Abstract]

Carrying Amount of Goodwill Allocated by Domestic and Foreign Operations

The carrying amount of goodwill at June 30, 2014 and December 31, 2013 allocated by domestic and foreign operations is as follows (in millions):

	Brokerage		Risk Management		Corporate		Total
At June 30, 2014
United States	$	1,531.2	$	20.2	$	—	$	1,551.4
United Kingdom		880.1		2.2		—		882.3
Other foreign, principally Australia and Canada		593.9		—		—		593.9
Total goodwill - net	$	3,005.2	$	22.4	$	—	$	3,027.6
At December 31, 2013
United States	$	1,449.6	$	20.2	$	—	$	1,469.8
United Kingdom		595.1		2.1		—		597.2
Other foreign, principally Australia and Canada		78.2		—		—		78.2
Total goodwill - net	$	2,122.9	$	22.3	$	—	$	2,145.2

Changes in Carrying Amount of Goodwill

The changes in the carrying amount of goodwill for the six-month period ended June 30, 2014 are as follows (in millions):

	Brokerage			Risk Management		Corporate		Total
Balance as of December 31, 2013	$	2,122.9		$	22.3	$	—	$	2,145.2
Goodwill acquired during the period		878.4			—		—		878.4
Goodwill adjustments due to appraisals and other acquisition adjustments		(25.5	)		—		—		(25.5	)
Goodwill written-off related to sales of business		(0.6	)		—		—		(0.6	)
Foreign currency translation adjustments during the period		30.0			0.1		—		30.1
Balance as of June 30, 2014	$	3,005.2		$	22.4	$	—	$	3,027.6

Major Classes of Amortizable Intangible Assets

Major classes of amortizable intangible assets at June 30, 2014 and December 31, 2013 consist of the following (in millions):

	June 30, 2014			December 31, 2013
Expiration lists	$	2,232.3		$	1,563.5
Accumulated amortization - expiration lists		(631.0	)		(511.3	)
		1,601.3			1,052.2
Non-compete agreements		37.5			37.3
Accumulated amortization - non-compete agreements		(27.1	)		(25.9	)
		10.4			11.4
Trade names		28.1			22.1
Accumulated amortization - trade names		(8.3	)		(6.9	)
		19.8			15.2
Net amortizable assets	$	1,631.5		$	1,078.8

Estimated Aggregate Amortization Expense

Estimated aggregate amortization expense for each of the next five years is as follows:

2014 (remaining six months)	$	96.0
2015		188.0
2016		182.4
2017		174.2
2018		162.9
Total	$	803.5

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Stock Option Plans - Additional information (Detail) (USD $)	3 Months Ended		6 Months Ended		12 Months Ended	6 Months Ended	0 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013	Jun. 30, 2014 Minimum [Member]	Mar. 12, 2014 Officer and Key Employees [Member]	Mar. 13, 2013 Officer and Key Employees [Member]	Jun. 30, 2014 Executive Officer [Member]	Jun. 30, 2014 Long Term Incentive Plan [Member]	Jun. 30, 2014 Performance-Based Restricted Stock [Member]	Jun. 30, 2014 Black-Scholes Option Pricing Model [Member]	Jun. 30, 2013 Black-Scholes Option Pricing Model [Member]	Jun. 30, 2014 Cash Settled Performance Shares [Member] Performance-Based Restricted Stock [Member]
Stock Option Plans [Line Items]
Maximum number of shares available										2,000,000
Maximum number of shares granted during any fiscal year to any person			200,000								100,000			100,000
Maximum amount payable for the shares granted during any fiscal year to any person											$ 5,000,000
Maximum period for the exercise of stock options, years			7 years
Minimum exercise price of stock options, percent of fair market value of a share of common stock on the date of grant			100.00%
Shares available for grant							1,923,000	1,665,000		9,200,000
Stock options granted, exercise percentage, year one							34.00%	34.00%
Stock options granted, exercise percentage, year two							33.00%	33.00%
Stock options granted, exercise percentage, year three							33.00%	33.00%
Number of years options expire, maximum			7 years		7 years
Minimum age of employee with not subject to award forfeiture on condition compliance									55 years
Period of Service from Grant Date Stock Options Awarded Not Subject to Forfeiture						2 years
Compensation expense related to stock option grants	2,700,000	2,300,000	4,000,000	3,200,000
Weighted average fair value per option for all options												$ 9.66	$ 7.51
Total intrinsic value of options exercised			19,700,000	23,300,000
Total unrecognized compensation cost related to nonvested options	$ 34,400,000		$ 34,400,000
Weighted average period, years			4 years

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Intangible Assets - Major Classes of Amortizable Intangible Assets (Detail) (USD $) In Millions, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Finite-Lived Intangible Assets [Line Items]
Amortizable intangible assets, net	$ 1,631.5	$ 1,078.8
Expiration Lists [Member]
Finite-Lived Intangible Assets [Line Items]
Amortizable intangible assets, gross	2,232.3	1,563.5
Accumulated amortization	(631.0)	(511.3)
Amortizable intangible assets, net	1,601.3	1,052.2
Non-Compete Agreements [Member]
Finite-Lived Intangible Assets [Line Items]
Amortizable intangible assets, gross	37.5	37.3
Accumulated amortization	(27.1)	(25.9)
Amortizable intangible assets, net	10.4	11.4
Trade Names [Member]
Finite-Lived Intangible Assets [Line Items]
Amortizable intangible assets, gross	28.1	22.1
Accumulated amortization	(8.3)	(6.9)
Amortizable intangible assets, net	$ 19.8	$ 15.2

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Business Combinations - Additional Information (Detail) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended		150 Months Ended	3 Months Ended	6 Months Ended									6 Months Ended			6 Months Ended
	Jun. 30, 2014 USD ($) Entity	Jun. 30, 2013 USD ($) Entity	Jun. 30, 2014 USD ($) Entity	Jun. 30, 2013 USD ($) Entity	Jun. 30, 2014 USD ($) Entity	Jun. 30, 2013 Brokerage [Member] USD ($)	Jun. 30, 2014 Brokerage [Member] USD ($)	Jun. 30, 2013 Brokerage [Member] USD ($)	Jun. 30, 2014 2014 Acquisitions [Member] Market Approach Valuation Technique [Member] Minimum [Member]	Jun. 30, 2014 2014 Acquisitions [Member] Market Approach Valuation Technique [Member] Maximum [Member]	Jun. 30, 2014 Business Acquisition [Member] USD ($)	Jun. 30, 2014 Business Acquisition [Member] Brokerage [Member] USD ($)	Jun. 30, 2014 Business Acquisition [Member] Brokerage [Member] Expiration Lists [Member] USD ($)	Jun. 30, 2014 Business Acquisition [Member] Brokerage [Member] Non-Compete Agreements [Member] USD ($)	Jun. 30, 2014 Business Acquisition [Member] Brokerage [Member] Trade Names [Member] USD ($)	Jun. 30, 2014 Oval Group of Companies (OGC) [Member] USD ($) Office Employee	Jun. 30, 2014 Oval Group of Companies (OGC) [Member] Warranty obligations [Member] USD ($)	Jun. 30, 2014 Oval Group of Companies (OGC) [Member] Adjustment to the balance sheet [Member] USD ($)	Jun. 30, 2014 Crombie/OAMPS (CO) [Member] USD ($) Office Employees	Jun. 30, 2014 Noraxis Capital Corporation [Member] USD ($) Employees	Jun. 30, 2014 Noraxis Capital Corporation [Member] CAD	Jun. 30, 2014 2013 Acquisitions [Member] Income Approach Valuation Technique [Member] Minimum [Member]	Jun. 30, 2014 2013 Acquisitions [Member] Income Approach Valuation Technique [Member] Maximum [Member]
Business Acquisition [Line Items]
Cash paid for acquisition of equity interest			$ 1,394.4													$ 338.4			$ 952.0	$ 420.0
Acquisition agreement date																Apr. 01, 2014			Apr. 16, 2014
Number of employees at offices of acquired entity																1,000			1,700	650	650
Number of offices in which acquiree entity operates																24			50
Escrow Deposited	25.3		25.3		25.3											11.8	3.5	8.3
Foreign currency derivative investment contract amount																			400.0
Unrealized fair value, pretax gain																			1.9
Common stock issued for net proceeds	21.85
Underwriting discount	911.4
Acquisition date																Apr. 01, 2014				Jul. 02, 2014	Jul. 02, 2014
Percentage of equity on which cash consideration paid																				89.00%	89.00%
Revenue generated by Noraxis																					125.0
Revenue growth rate									5.00%	10.00%												2.00%	3.00%
Discount rate									8.50%	9.50%												12.50%	14.50%
Accretion of the discount on acquisition	3.4	2.9	6.7	5.8
Income related to net adjustments	3.6	5.4	5.4	3.9
Number of companies acquired	18	23	35	39	314
Aggregate amount of maximum earnout obligations related to acquisitions			473.8
Aggregate amount of maximum earnout obligations related to acquisitions, recorded in consolidated balance sheet			157.4
Goodwill	878.4		878.4		878.4		878.4									238.3
Expiration lists	575.1		575.1		575.1		575.1					575.1				140.7
Non-compete agreements	5.3		5.3		5.3		5.3					5.3				0
Trade name	5.1		5.1		5.1		5.1					5.1				0
Attrition rate																						5.00%	10.00%
Expiration lists, amortization period, minimum, years							3 years
Expiration lists, amortization period, maximum, years							15 years
Non-compete agreements, amortization period, minimum, years							1 year
Non-compete agreements, amortization period, maximum, years							5 years
Trade names, amortization period, minimum ,years							3 years
Trade names, amortization period, maximum, years							15 years
Amortization of intangible assets related to brokerage segment						0.4	0.6	2.2
Business acquisition not deductible for income tax purposes													461.7	4.2	4.3
Deferred tax liability												68.9
Goodwill related to nondeductible amortizable intangible assets												68.9
Annualized revenue of business acquisitions during 3 month period ended March 31, 2014											514.7
Total revenues related to acquisitions in the aggregate	1,251.1	933.4	2,295.4	1,735.1							84.6
Net earnings	$ 112.2	$ 111.6	$ 171.7	$ 161.1							$ 10.8

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Stock Option Plans - Stock Option Activity and Related Information (Detail) (USD $) In Millions, except Per Share data, unless otherwise specified	6 Months Ended
	Jun. 30, 2014
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Shares Under Option, Beginning balance	8.3
Shares Under Option, Granted	1.9
Shares Under Option, Exercised	(1.2)
Shares Under Option, Forfeited or canceled
Shares Under Option, Ending balance	9.0
Shares Under Option, Exercisable at end of period	3.2
Shares Under Option, Ending vested and expected to vest	8.8
Weighted Average Exercise Price, Beginning balance	$ 31.35
Weighted Average Exercise Price, Granted	$ 46.87
Weighted Average Exercise Price, Exercised	$ 29.03
Weighted Average Exercise Price, Forfeited or canceled	$ 27.64
Weighted Average Exercised Price, Ending balance	$ 35.00
Weighted Average Exercise Price, Exercisable at end of period	$ 27.19
Weighted Average Exercise price, Ending vested and expected to vest	$ 34.86
Weighted Average Remaining Contractual Term (in years), Ending balance	4 years 2 months 23 days
Weighted Average Remaining Contractual Term (in years), Exercisable at end of period	2 years 1 month 13 days
Weighted Average Remaining Contractual Term (in years), Ending vested and expected to vested	4 years 2 months 9 days
Aggregate Intrinsic Value, Ending Balance	$ 105.0
Aggregate Intrinsic Value, Exercisable at end of period	62.8
Aggregate Intrinsic Value, Ending vested and expected to vest	$ 104.3

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Accumulated Other Comprehensive Earnings (Loss) - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Statement Of Income And Comprehensive Income [Abstract]
Expense related to pension liability reclassified from accumulated other comprehensive earnings (loss)	$ 1.2	$ 3.9
Income (expense) related to fair value of derivative investments reclassified from accumulated other comprehensive earnings (loss)	0.3	0.1
Foreign currency translation reclassified from accumulated other comprehensive earnings (loss)	$ 0	$ 0

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Investments - Clean Coal Investments - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended					6 Months Ended			6 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014 Plant	Jun. 30, 2013	Sep. 01, 2013	Jun. 30, 2014 Limited Liability Company [Member]	Sep. 01, 2013 Notes Payable, Other Payables [Member]	Jun. 30, 2014 2009 Era Plants [Member]	Mar. 01, 2014 2009 Era Plants [Member]	Mar. 01, 2013 2009 Era Plants [Member] Plant	Jun. 30, 2014 2011 Era Plants [Member]	Mar. 01, 2014 2011 Era Plants [Member] Plant	Jun. 30, 2014 2011 Era Plants [Member] Notes Payable, Other Payables [Member]	Jun. 30, 2014 Chem-Mod LLC [Member] Plant	Jun. 30, 2014 Chem-Mod LLC [Member] 2009 Era Plants [Member] Plant	Jun. 30, 2014 Chem-Mod LLC [Member] 2011 Era Plants [Member] Plant	Jun. 30, 2014 Long Term Production Contracts [Member] Plant	Jun. 30, 2014 Clean-Coal Investments [Member] Entity	Jun. 30, 2014 Clean-Coal Investments [Member] Minimum [Member]	Jun. 30, 2014 Clean-Coal Investments [Member] Minimum [Member] Scenario, Forecast [Member]	Jun. 30, 2014 Clean-Coal Investments [Member] Maximum [Member]	Jun. 30, 2014 Clean-Coal Investments [Member] Maximum [Member] Scenario, Forecast [Member]	Jun. 30, 2014 Clean-Coal Investments [Member] VIE [Member]
Schedule of Equity Method Investments [Line Items]
Number of clean coal production plants owned														34	14	20	27
Number of additional plants acquired										12		5
Number of additional plants acquired with ownership interest range one										9
Number of additional plants acquired with ownership interest range two										3
Ownership interest before additional nine plants acquired										24.50%
Ownership interest after additional nine plants acquired										49.50%
Ownership interest before additional three plants acquired										25.00%
Ownership interest after additional three plants acquired										60.00%
Total revenues	$ 1,179.3	$ 779.5	$ 2,094.3	$ 1,453.6				$ 109.0			$ 156.5		$ 35.9
Total expenses	1,072.2	682.1	1,940.9	1,313.9				113.1			167.4		40.0
Purchase of consideration received								8.0
Payment of cash and other consideration								5.0
Gain on purchase of additional interest	25.6		25.6					11.4
Prior percentage of equity interest in limited liability company								25.00%
Additional percentage of equity interest in limited liability company upon acquisition								35.00%
Fixed assets and other amortizable intangible assets acquired upon acquisition	26.3		26.3					26.3
Carrying value of prior non-controlling interest in limited liability company on acquisition date	15.5		15.5					6.8
Other assets acquired upon acquisition	3.3		3.3					5.0
Ownership interest acquired in a limited liability company					99.00%	50.00%
Amount of promissory note					10.0
Purchase price paid in cash					4.0
Interest rate on promissory note							3.00%
Ownership interest before additional seven plants acquired									49.50%
Ownership interest after additional seven plants acquired									100.00%
Ownership interest before additional one plant acquired												48.80%
Ownership interest after additional one plant acquired												90.00%
Ownership interest before additional three plants acquired												49.00%
Ownership interest after additional three plants acquired												100.00%
Ownership interest before additional one plant acquired												98.00%
Ownership interest after additional one plant acquired												100.00%
Amount received from co investor as part of the acquisition			0.5
Other liabilities acquired upon acquisition	4.5		4.5
Number of clean coal production plants seeking and negotiating for long term production contract			7
Number of variable interest entities																		1
Total assets of limited liability companies																							9.5
Total liability of limited liability companies																							6.3
Total revenues of limited liability companies																							21.9
Total expenses of limited liability companies																							26.8
Additional investment per plant under new long-term production contract, net of co-investor funds																		5.0		30.0		40.0
Tax effected average additional investment																		2.5
Investment in engineering and construction contracts	$ 0.2		$ 0.2
Idle period during move and redeployment																			12 months		18 months

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Credit and Other Debt Agreements - Summary of Corporate and Other Debt (Parenthetical) (Detail) (USD $) In Millions, unless otherwise specified	6 Months Ended	12 Months Ended
	Jun. 30, 2014	Dec. 31, 2013
Fixed Rate of 6.26%, Balloon Due 2014 [Member]
Debt Instrument [Line Items]
Periodic Payment of Interest	6.26%	6.26%
Principal payments, year due	2014	2014
Fixed Rate of 6.44%, Balloon Due 2017 [Member]
Debt Instrument [Line Items]
Periodic Payment of Interest	6.44%	6.44%
Principal payments, year due	2017	2017
Fixed Rate of 2.80%, Balloon Due 2018 [Member]
Debt Instrument [Line Items]
Periodic Payment of Interest	2.80%	2.80%
Principal payments, year due	2018	2018
Fixed Rate of 3.20%, Balloon Due 2019 [Member]
Debt Instrument [Line Items]
Periodic Payment of Interest	3.20%	3.20%
Principal payments, year due	2019	2019
Fixed Rate of 5.85%, $50.0 Million Due in 2016, 2018 and 2019 [Member]
Debt Instrument [Line Items]
Periodic Payment of Interest	5.85%	5.85%
Long-Term debt maturities repayments in 2016	$ 50	$ 50
Long-Term debt maturities repayments in 2018	50	50
Long-Term debt maturities repayments in 2019	$ 50	$ 50
Fixed Rate of 3.99%, Balloon Due 2020 [Member]
Debt Instrument [Line Items]
Periodic Payment of Interest	3.99%	3.99%
Principal payments, year due	2020	2020
Fixed Rate of 3.48%, Balloon Due 2020 [Member]
Debt Instrument [Line Items]
Periodic Payment of Interest	3.48%	3.48%
Principal payments, year due	2020	2020
Fixed Rate of 5.18%, Balloon Due 2021 [Member]
Debt Instrument [Line Items]
Periodic Payment of Interest	5.18%	5.18%
Principal payments, year due	2021	2021
Fixed Rate of 5.49%, Balloon Due 2023 [Member]
Debt Instrument [Line Items]
Periodic Payment of Interest	5.49%	5.49%
Principal payments, year due	2023	2023
Fixed Rate of 4.13%, Balloon Due 2023 [Member]
Debt Instrument [Line Items]
Periodic Payment of Interest	4.13%	4.13%
Principal payments, year due	2023	2023
Fixed rate of 3.69%, Balloon Due 2022 [Member]
Debt Instrument [Line Items]
Periodic Payment of Interest	3.69%	3.69%
Principal payments, year due	2022	2022
Fixed Rate of 4.58% Balloon Due 2024 [Member]
Debt Instrument [Line Items]
Periodic Payment of Interest	4.58%	4.58%
Principal payments, year due	2024	2024
Fixed Rate of 4.31%, Balloon Due 2025 [Member]
Debt Instrument [Line Items]
Periodic Payment of Interest	4.31%	4.31%
Principal payments, year due	2025	2025
Fixed Rate of 4.73% Balloon Due 2026 [Member]
Debt Instrument [Line Items]
Periodic Payment of Interest	4.73%	4.73%
Principal payments, year due	2026	2026
Fixed Rate of 4.36%, Balloon Due 2026 [Member]
Debt Instrument [Line Items]
Periodic Payment of Interest	4.36%	4.36%
Principal payments, year due	2026	2026
Fixed Rate of 4.98% Balloon Due 2029 [Member]
Debt Instrument [Line Items]
Periodic Payment of Interest	4.98%	4.98%
Principal payments, year due	2029	2029
First Installment [Member] | Fixed Rate of 5.85%, $50.0 Million Due in 2016, 2018 and 2019 [Member]
Debt Instrument [Line Items]
Principal payments, year due	2016	2016
Second Installment [Member] | Fixed Rate of 5.85%, $50.0 Million Due in 2016, 2018 and 2019 [Member]
Debt Instrument [Line Items]
Principal payments, year due	2018	2018
Third Installment [Member] | Fixed Rate of 5.85%, $50.0 Million Due in 2016, 2018 and 2019 [Member]
Debt Instrument [Line Items]
Principal payments, year due	2019	2019
Premium Financing Debt Facility [Member]
Debt Instrument [Line Items]
Periodic payments of interest and principal, expiry date	Jun. 15, 2016	Jun. 15, 2016
Premium Financing Debt Facility [Member] | Facility B [Member] | Interbank rates plus 1.65%, Expires June 15, 2016 [Member]
Debt Instrument [Line Items]
Periodic Payment of Interest	1.65%	1.65%
Premium Financing Debt Facility [Member] | Facility C and D [Member] | Interbank rates plus 0.85%, Expires June 15, 2016 [Member]
Debt Instrument [Line Items]
Periodic Payment of Interest	0.85%	0.85%
Credit Agreement [Member] | Prime or LIBOR plus up to 1.45%, expires September 19, 2018 [Member]
Debt Instrument [Line Items]
Periodic Payment of Interest	1.45%	1.45%
Periodic payments of interest and principal, expiry date	Sep. 19, 2018	Sep. 19, 2018

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Nature of Operations and Basis of Presentation

6 Months Ended

Jun. 30, 2014

Accounting Policies [Abstract]

Nature of Operations and Basis of Presentation

1. Nature of Operations and Basis of Presentation

Arthur J. Gallagher & Co. and its subsidiaries, collectively referred to herein as we, our, us or the company, provide insurance brokerage and risk management services to a wide variety of commercial, industrial, institutional and governmental organizations through three reportable operating segments. Commission and fee revenue generated by the brokerage segment is primarily related to the negotiation and placement of insurance for our clients. Fee revenue generated by the risk management segment is primarily related to claims management, information management, risk control consulting (loss control) services and appraisals in the property/casualty market. Investment income and other revenue are generated from our investment portfolio, which includes invested cash and restricted funds, as well as clean energy and other investments. We are headquartered in Itasca, Illinois, have operations in 27 countries and offer client-service capabilities in more than 140 countries globally through a network of correspondent insurance brokers and consultants.

We have prepared the accompanying unaudited consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in annual financial statements have been omitted pursuant to such rules and regulations. The unaudited consolidated financial statements included herein are, in the opinion of management, prepared on a basis consistent with our audited consolidated financial statements for the year ended December 31, 2013 and include all normal recurring adjustments necessary for a fair presentation of the information set forth. The quarterly results of operations are not necessarily indicative of the results of operations to be reported for subsequent quarters or the full year. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2013. In the preparation of our unaudited consolidated financial statements as of June 30, 2014, management evaluated all material subsequent events or transactions that occurred after the balance sheet date through the date on which the financial statements were issued, for potential recognition or disclosure therein.

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Investments - Other Investments - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	Jun. 30, 2014	Mar. 31, 2014 Venture Investment	Dec. 31, 2013	Sep. 01, 2013
Schedule of Equity Method Investments [Line Items]
Assets	$ 96.0		$ 90.4
Ownership interest held				99.00%
Non controlling interest in venture capital funds number		4
Non controlling interest certified low-income housing developments		12
Non controlling interest in real estate entities		2
Carrying value of investments in real estate entities		0
Other Investments [Member]
Schedule of Equity Method Investments [Line Items]
Assets	3.2		3.7
Other Investments [Member] | Four Venture Capital Funds [Member]
Schedule of Equity Method Investments [Line Items]
Assets		2.7
Other Investments [Member] | Variable Interest Entity, Not Primary Beneficiary [Member]
Schedule of Equity Method Investments [Line Items]
Assets		60.0
Debt		20.0
Other Investments [Member] | Variable Interest Entity, Not Primary Beneficiary [Member] | Twelve Certified Low-Income Housing Developments [Member]
Schedule of Equity Method Investments [Line Items]
Carrying value of investments		0
Investment Management Company [Member]
Schedule of Equity Method Investments [Line Items]
Ownership interest held		20.00%
Cost of acquiring equity interest		$ 0.5

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Intangible Assets - Estimated Aggregate Amortization Expense (Detail) (USD $) In Millions, unless otherwise specified	Jun. 30, 2014
Goodwill And Intangible Assets Disclosure [Abstract]
2014 (remaining six months)	$ 96.0
2015	188.0
2016	182.4
2017	174.2
2018	162.9
Total	$ 803.5

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Retirement Plans (Tables)

6 Months Ended

Jun. 30, 2014

Compensation And Retirement Disclosure [Abstract]

Components of Net Periodic Pension Benefit Cost

The components of the net periodic pension benefit cost for the plan consists of the following (in millions):

	Three-month period ended June 30,						Six-month period ended June 30,
	2014			2013			2014			2013
Service cost	$	0.1		$	0.1		$	0.2		$	0.2
Interest cost on benefit obligation		3.2			3.0			6.4			5.9
Expected return on plan assets		(4.7	)		(4.3	)		(9.4	)		(8.6	)
Amortization of net actuarial loss		0.6			1.9			1.2			3.9
Net periodic benefit (earnings) cost	$	(0.8	)	$	0.7		$	(1.6	)	$	1.4

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Stock Option Plans (Tables)

6 Months Ended

Jun. 30, 2014

Text Block [Abstract]

Black-Scholes Option Pricing Model with Weighted Average

For purposes of expense recognition, the estimated fair values of the stock option grants are amortized to expense over the options’ vesting period. We estimated the fair value of stock options at the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions:

	2014			2013
Expected dividend yield		3.0	%		3.5	%
Expected risk-free interest rate		1.8	%		1.2	%
Volatility		28.9	%		29.6	%
Expected life (in years)		5.5			6.0

Stock Option Activity and Related Information

The following is a summary of our stock option activity and related information for 2014 (in millions, except exercise price and year data):

	Six-month period ended June 30, 2014
						Weighted
						Average
				Weighted		Remaining
	Shares			Average		Contractual		Aggregate
	Under			Exercise		Term		Intrinsic
	Option			Price		(in years)		Value
Beginning balance		8.3		$	31.35
Granted		1.9			46.87
Exercised		(1.2	)		29.03
Forfeited or canceled		—			27.64
Ending balance		9.0		$	35.00		4.23	$	105.0
Exercisable at end of period		3.2		$	27.19		2.12	$	62.8
Ending vested and expected to vest		8.8		$	34.86		4.19	$	104.3

Other Information Regarding Stock Options Outstanding and Exercisable

Other information regarding stock options outstanding and exercisable at June 30, 2014 is summarized as follows (in millions, except exercise price and year data):

	Options Outstanding						Options Exercisable
Range of Exercise Prices	Number Outstanding		Weighted Average Remaining Contractual Term (in years)		Weighted Average Exercise Price		Number Exercisable		Weighted Average Exercise Price
$    21.28   -  $   27.25		2.5		2.08	$	25.81		2.1	$	25.79
27.35   -        35.71		2.9		3.59		32.65		1.1		29.71
35.95   -        39.17		1.7		5.70		39.15		—		—
46.16   -        46.16		—		6.92		46.16		—		—
46.87   -        46.87		1.9		6.70		46.87		—		—
$    21.28   -  $   46.87		9.0		4.23	$	35.00		3.2	$	27.19

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Retirement Plans - Components of Net Periodic Pension Benefit Cost (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Compensation And Retirement Disclosure [Abstract]
Service cost	$ 0.1	$ 0.1	$ 0.2	$ 0.2
Interest cost on benefit obligation	3.2	3.0	6.4	5.9
Expected return on plan assets	(4.7)	(4.3)	(9.4)	(8.6)
Amortization of net actuarial loss	0.6	1.9	1.2	3.9
Net periodic benefit (earnings) cost	$ (0.8)	$ 0.7	$ (1.6)	$ 1.4

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Credit and Other Debt Agreements - Note Purchase Agreements - Additional information (Detail) (Note Purchase Agreements [Member], USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2014
Debt Instrument [Line Items]
Amount payable to redeem the notes, percent of the principal amount	100.00%
Discount rate used to compute the remaining scheduled payments of principal and interest	U.S. Treasury yields plus 0.5%
5.85% Senior Notes, Series C [Member]
Debt Instrument [Line Items]
Notes issued and sold	$ 150.0
Note payable, semi-annual payments of interest, fixed rate	5.85%
5.85% Senior Notes, Series C [Member] | First Installment [Member]
Debt Instrument [Line Items]
Debt instrument, maturity date	Nov. 30, 2016
5.85% Senior Notes, Series C [Member] | Second Installment [Member]
Debt Instrument [Line Items]
Debt instrument, maturity date	Nov. 30, 2018
5.85% Senior Notes, Series C [Member] | Third Installment [Member]
Debt Instrument [Line Items]
Debt instrument, maturity date	Nov. 30, 2019
5.18% Senior Notes, Series D [Member]
Debt Instrument [Line Items]
Notes issued and sold	75.0
Note payable, semi-annual payments of interest, fixed rate	5.18%
Debt instrument, maturity date	Feb. 10, 2021
5.49% Senior Notes, Series E [Member]
Debt Instrument [Line Items]
Notes issued and sold	50.0
Note payable, semi-annual payments of interest, fixed rate	5.49%
Debt instrument, maturity date	Feb. 10, 2023
3.99% Senior Notes, Series F [Member]
Debt Instrument [Line Items]
Notes issued and sold	50.0
Note payable, semi-annual payments of interest, fixed rate	3.99%
Debt instrument, maturity date	Jul. 10, 2020
3.69% Senior Notes Series G [Member] | Private Placement [Member]
Debt Instrument [Line Items]
Debt instrument, maturity date	Jun. 14, 2022
Private placement debt, additional amount committed to borrow	200.0
Interest rate	3.69%
6.26% Senior Notes, Series A [Member]
Debt Instrument [Line Items]
Notes issued and sold	100.0
Note payable, semi-annual payments of interest, fixed rate	6.26%
Debt instrument, maturity date	Aug. 03, 2014
6.44% Senior Notes, Series B [Member]
Debt Instrument [Line Items]
Notes issued and sold	300.0
Note payable, semi-annual payments of interest, fixed rate	6.44%
Debt instrument, maturity date	Aug. 03, 2017
4.58% Senior Notes, Series H [Member]
Debt Instrument [Line Items]
Notes issued and sold	325.0
Note payable, semi-annual payments of interest, fixed rate	4.58%
Debt instrument, maturity date	Feb. 27, 2024
4.73% Senior Notes, Series I [Member]
Debt Instrument [Line Items]
Notes issued and sold	175.0
Note payable, semi-annual payments of interest, fixed rate	4.73%
Debt instrument, maturity date	Feb. 27, 2026
4.98% Senior Notes, Series J [Member]
Debt Instrument [Line Items]
Notes issued and sold	100.0
Note payable, semi-annual payments of interest, fixed rate	4.98%
Debt instrument, maturity date	Feb. 27, 2029
Senior Notes Series H, I & J [Member]
Debt Instrument [Line Items]
Debt acquisition costs	1.4
2.80% Senior Notes, Series K [Member]
Debt Instrument [Line Items]
Notes issued and sold	50.0
Note payable, semi-annual payments of interest, fixed rate	2.80%
Debt instrument, maturity period	2018
3.20% Senior Notes, Series L [Member]
Debt Instrument [Line Items]
Notes issued and sold	50.0
Note payable, semi-annual payments of interest, fixed rate	3.20%
Debt instrument, maturity period	2019
3.48% Senior Notes, Series M [Member]
Debt Instrument [Line Items]
Notes issued and sold	50.0
Note payable, semi-annual payments of interest, fixed rate	3.48%
Debt instrument, maturity period	2020
4.13% Senior Notes, Series N [Member]
Debt Instrument [Line Items]
Notes issued and sold	200.0
Note payable, semi-annual payments of interest, fixed rate	4.13%
Debt instrument, maturity period	2023
4.31% Senior Notes, Series O [Member]
Debt Instrument [Line Items]
Notes issued and sold	200.0
Note payable, semi-annual payments of interest, fixed rate	4.31%
Debt instrument, maturity period	2025
4.36% Senior Notes, Series P [Member]
Debt Instrument [Line Items]
Notes issued and sold	150.0
Note payable, semi-annual payments of interest, fixed rate	4.36%
Debt instrument, maturity period	2026
Senior Notes Series K, L, M, N, O & P [Member]
Debt Instrument [Line Items]
Debt acquisition costs	$ 2.6

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Investments (Tables)

6 Months Ended

Jun. 30, 2014

Equity Method Investments And Joint Ventures [Abstract]

Investments Reported in Other Current and Non-Current Assets

The following is a summary of our investments and the related funding commitments (in millions):

	June 30, 2014				December 31,
			Funding		2013
	Assets		Commitments		Assets
Chem-Mod LLC	$	4.0	$	—	$	4.0
Chem-Mod International LLC		2.0		—		2.0
C-Quest Technologies LLC and C-Quest Technologies International LLC		—		—		2.0
Clean-coal investments
Controlling interest in five limited liability companies that own fourteen 2009 Era Clean Coal Plants		24.2		0.2		18.3
Non-controlling interest in one limited liability company that owns one 2011 Era Clean Coal Plant		1.1		—		1.1
Controlling interest in thirteen limited liability companies that own nineteen 2011 Era Clean Coal Plants		61.5		—		59.3
Other investments		3.2		2.9		3.7
Total investments	$	96.0	$	3.1	$	90.4

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Commitments, Contingencies and Off-Balance Sheet Arrangements (Tables)

6 Months Ended

Jun. 30, 2014

Commitments And Contingencies Disclosure [Abstract]

Contractual Obligations

Our future minimum cash payments, including interest, associated with our contractual obligations pursuant to the note purchase agreements, Credit Agreement, Premium Financing Debt Facility, operating leases and purchase commitments at June 30, 2014 were as follows (in millions):

	Payments Due by Period
Contractual Obligations	2014			2015			2016			2017			2018			Thereafter		Total
Note purchase agreements	$	100.0		$	—		$	50.0		$	300.0		$	100.0		$	1,675.0	$	2,225.0
Credit Agreement		153.0			—			—			—			—			—		153.0
Premium Financing Debt Facility		139.0			—			—			—			—			—		139.0
Interest on debt		54.0			100.4			100.4			97.5			77.5			397.1		826.9
Total debt obligations		446.0			100.4			150.4			397.5			177.5			2,072.1		3,343.9
Operating lease obligations		45.0			83.5			69.9			57.1			40.4			126.2		422.1
Less sublease arrangements		(2.2	)		(1.0	)		(0.3	)		(0.3	)		(0.1	)		—		(3.9	)
Outstanding purchase obligations		15.7			16.7			9.4			0.9			0.3			—		43.0
Total contractual obligations	$	504.5		$	199.6		$	229.4		$	455.2		$	218.1		$	2,198.3	$	3,805.1

Off-Balance Sheet Commitments

Off-Balance Sheet Commitments - Our total unrecorded commitments associated with outstanding letters of credit, financial guarantees and funding commitments as of June 30, 2014 were as follows (in millions):

													Total
	Amount of Commitment Expiration by Period												Amounts
Off-Balance Sheet Commitments	2014		2015		2016		2017		2018		Thereafter		Committed
Letters of credit	$	—	$	—	$	—	$	—	$	—	$	21.1	$	21.1
Financial guarantees		—		—		—		—		—		9.1		9.1
Funding commitments		0.2		—		—		—		—		2.9		3.1
Acquistion of Noraxis (see Note 3)		420.0		—		—		—		—		—		420.0
Total commitments	$	420.2	$	—	$	—	$	—	$	—	$	33.1	$	453.3

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Consolidated Statement of Stockholders' Equity (Unaudited) (Parenthetical) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2014
Statement Of Stockholders Equity [Abstract]
Tax effect on net change in pension liability	$ 0.6
Net change in fair value of derivative instruments, tax	$ 0.9

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Accumulated Other Comprehensive Earnings (Loss) (Tables)

6 Months Ended

Jun. 30, 2014

Equity [Abstract]

Schedule of Accumulated Comprehensive Earnings (loss)

The after-tax components of our accumulated other comprehensive earnings (loss) consist of the following:

	Pension Liability			Foreign Currency Translation		Fair Value of Derivative Investments		Accumulated Comprehensive Earnings (Loss)
Balance as of December 31, 2013	$	(25.6	)	$	22.1	$	0.9	$	(2.6	)
Net change in period		0.9			54.5		1.4		56.8
Balance as of June 30, 2014	$	(24.7	)	$	76.6	$	2.3	$	54.2

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Intangible Assets - Carrying Amount of Goodwill Allocated by Domestic and Foreign Operations (Detail) (USD $) In Millions, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Goodwill [Line Items]
Total goodwill-net	$ 3,027.6	$ 2,145.2
Unites States [Member]
Goodwill [Line Items]
Total goodwill-net	1,551.4	1,469.8
United Kingdom [Member]
Goodwill [Line Items]
Total goodwill-net	882.3	597.2
Other Foreign, Principally Australia and Canada [Member]
Goodwill [Line Items]
Total goodwill-net	593.9	78.2
Brokerage [Member]
Goodwill [Line Items]
Total goodwill-net	3,005.2	2,122.9
Brokerage [Member] | Unites States [Member]
Goodwill [Line Items]
Total goodwill-net	1,531.2	1,449.6
Brokerage [Member] | United Kingdom [Member]
Goodwill [Line Items]
Total goodwill-net	880.1	595.1
Brokerage [Member] | Other Foreign, Principally Australia and Canada [Member]
Goodwill [Line Items]
Total goodwill-net	593.9	78.2
Risk Management [Member]
Goodwill [Line Items]
Total goodwill-net	22.4	22.3
Risk Management [Member] | Unites States [Member]
Goodwill [Line Items]
Total goodwill-net	20.2	20.2
Risk Management [Member] | United Kingdom [Member]
Goodwill [Line Items]
Total goodwill-net	2.2	2.1
Risk Management [Member] | Other Foreign, Principally Australia and Canada [Member]
Goodwill [Line Items]
Total goodwill-net	0	0
Corporate [Member]
Goodwill [Line Items]
Total goodwill-net	0	0
Corporate [Member] | Unites States [Member]
Goodwill [Line Items]
Total goodwill-net	0	0
Corporate [Member] | United Kingdom [Member]
Goodwill [Line Items]
Total goodwill-net	0	0
Corporate [Member] | Other Foreign, Principally Australia and Canada [Member]
Goodwill [Line Items]
Total goodwill-net	$ 0	$ 0

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Stock Option Plans - Stock Options Outstanding and Exercisable (Detail) (USD $) In Millions, except Per Share data, unless otherwise specified	6 Months Ended
	Jun. 30, 2014	Dec. 31, 2013
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of Exercise Prices, minimum	$ 21.28
Range of Exercise Prices, maximum	$ 46.87
Option Outstanding, Number Outstanding	9.0
Option Outstanding, Weighted Average Remaining Contractual Term (in years)	4 years 2 months 23 days
Option Outstanding, Weighted Average Exercise Price	$ 35.00	$ 31.35
Options Exercisable, Number Exercisable	3.2
Option Exercisable, Weighted Average Exercise Price	$ 27.19
Exercise Prices Range $ 21.28 - $ 27.25 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of Exercise Prices, minimum	$ 21.28
Range of Exercise Prices, maximum	$ 27.25
Option Outstanding, Number Outstanding	2.5
Option Outstanding, Weighted Average Remaining Contractual Term (in years)	2 years 29 days
Option Outstanding, Weighted Average Exercise Price	$ 25.81
Options Exercisable, Number Exercisable	2.1
Option Exercisable, Weighted Average Exercise Price	$ 25.79
Exercise Prices Range $ 27.35 - $ 35.71 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of Exercise Prices, minimum	$ 27.35
Range of Exercise Prices, maximum	$ 35.71
Option Outstanding, Number Outstanding	2.9
Option Outstanding, Weighted Average Remaining Contractual Term (in years)	3 years 7 months 2 days
Option Outstanding, Weighted Average Exercise Price	$ 32.65
Options Exercisable, Number Exercisable	1.1
Option Exercisable, Weighted Average Exercise Price	$ 29.71
Exercise Prices Range $ 35.95 - $ 39.17 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of Exercise Prices, minimum	$ 35.95
Range of Exercise Prices, maximum	$ 39.17
Option Outstanding, Number Outstanding	1.7
Option Outstanding, Weighted Average Remaining Contractual Term (in years)	5 years 8 months 12 days
Option Outstanding, Weighted Average Exercise Price	$ 39.15
Options Exercisable, Number Exercisable
Option Exercisable, Weighted Average Exercise Price
Exercise Prices Range $ 46.16 - $ 46.16 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of Exercise Prices, minimum	$ 46.16
Range of Exercise Prices, maximum	$ 46.16
Option Outstanding, Number Outstanding
Option Outstanding, Weighted Average Remaining Contractual Term (in years)	6 years 11 months 1 day
Option Outstanding, Weighted Average Exercise Price	$ 46.16
Options Exercisable, Number Exercisable
Option Exercisable, Weighted Average Exercise Price
Exercise Prices Range $ 46.87 - $ 46.87 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of Exercise Prices, minimum	$ 46.87
Range of Exercise Prices, maximum	$ 46.87
Option Outstanding, Number Outstanding	1.9
Option Outstanding, Weighted Average Remaining Contractual Term (in years)	6 years 8 months 12 days
Option Outstanding, Weighted Average Exercise Price	$ 46.87
Options Exercisable, Number Exercisable
Option Exercisable, Weighted Average Exercise Price

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Consolidated Statement of Earnings (Unaudited) (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Income Statement [Abstract]
Commissions	$ 539.5	$ 400.9	$ 951.0	$ 727.7
Fees	317.4	268.9	574.6	508.6
Supplemental commissions	27.9	18.3	53.3	35.6
Contingent commissions	21.8	14.5	54.0	37.0
Investment income	3.4	1.6	4.7	2.9
Gains on books of business sales	0.7	2.9	1.7	3.3
Revenues from clean coal activities	262.8	72.2	429.2	129.2
Other net revenues	5.8	0.2	25.8	9.3
Total revenues	1,179.3	779.5	2,094.3	1,453.6
Compensation	530.0	415.5	996.3	799.4
Operating	184.0	137.8	341.2	271.6
Cost of revenues from clean coal activities	270.5	76.6	441.5	134.7
Interest	21.2	11.9	37.4	23.1
Depreciation	16.6	13.1	31.4	23.9
Amortization	42.9	29.7	81.0	59.3
Change in estimated acquisition earnout payables	7.0	(2.5)	12.1	1.9
Total expenses	1,072.2	682.1	1,940.9	1,313.9
Earnings before income taxes	107.1	97.4	153.4	139.7
Provision (benefit) for income taxes	(1.9)	3.9	(4.9)	5.7
Net earnings	$ 109.0	$ 93.5	$ 158.3	$ 134.0
Basic net earnings per share	$ 0.71	$ 0.73	$ 1.10	$ 1.06
Diluted net earnings per share	$ 0.70	$ 0.73	$ 1.09	$ 1.04
Dividends declared per common share	$ 0.36	$ 0.35	$ 0.72	$ 0.70

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Credit and Other Debt Agreements - Credit Agreement - Additional information (Detail)	6 Months Ended			6 Months Ended			6 Months Ended		6 Months Ended				6 Months Ended
	Jun. 30, 2014 USD ($)	Jun. 30, 2013 USD ($)	Dec. 31, 2013 USD ($)	Jun. 30, 2014 Revolving Credit Facility [Member] USD ($)	Jun. 30, 2014 Credit Agreement [Member] USD ($) Institution	Jun. 30, 2014 Credit Agreement [Member] Swing Loan [Member] USD ($)	Jun. 30, 2014 Credit Agreement [Member] Standby Letters of Credit [Member] USD ($)	Jun. 30, 2014 Note Purchase Agreements [Member] Level 3 [Member] USD ($)	Jun. 30, 2014 Credit Facility B [Member] Revolving Credit Facility [Member] AUD	Jun. 30, 2014 Credit Facility B [Member] Revolving Credit Facility [Member] NZD	Jun. 30, 2014 Credit Facility C [Member] Revolving Credit Facility [Member] AUD	Jun. 30, 2014 Credit Facility C [Member] Revolving Credit Facility [Member] NZD	Jun. 30, 2014 Credit Facility D [Member] Revolving Credit Facility [Member] NZD	Jun. 30, 2014 Credit Facility D [Member] Revolving Credit Facility [Member] AUD
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity					$ 600,000,000
Number of financial institutions entered in unsecured multicurrency credit agreement					15
Debt instrument, maturity date					Sep. 19, 2018
Long-term debt, gross						50,000,000	75,000,000
Line of credit facility, maximum amount outstanding during period					850,000,000
Fixed rate (alternative one) over LIBOR					0.85%
Fixed rate (alternative two) over LIBOR					0.95%
Fixed rate (alternative three) over LIBOR					1.05%
Fixed rate (alternative four) over LIBOR					1.25%
Fixed rate (alternative five) over LIBOR					1.45%
Annual facility fee of revolving credit facility (alternative one)					0.15%
Annual facility fee of revolving credit facility (alternative two)					0.175%
Annual facility fee of revolving credit facility (alternative three)					0.20%
Annual facility fee of revolving credit facility (alternative four)					0.25%
Annual facility fee of revolving credit facility (alternative five)					0.30%
Debt acquisition costs					2,100,000
Line of credit facility, amount outstanding							21,100,000		119,800,000	21,300,000			8,800,000
Liabilities	6,769,700,000		4,775,000,000				8,900,000
Line of credit facility, fair value of amount outstanding							153,000,000	2,321,900,000
Line of credit facility, remaining borrowing capacity							425,900,000		30,200,000	13,700,000	25,000,000	6,200,000	6,200,000	25,000,000
Line of credit facility, increase in additional borrowings	870,400,000	228,000,000					53,900,000
Net borrowings on premium financing debt facility	139,000,000	0							150,000,000	35,000,000	25,000,000		15,000,000
Date of expire				Jun. 15, 2016
Interest rate for facility				The interest rates on Facility B are Interbank rates, which vary by tranche, duration and currency, plus a margin of 1.65%. The interest rates on Facilities C and D are 30 day Interbank rates, plus a margin of 0.85%. The annual fee for Facility B is 0.7425% of the undrawn commitments for the two tranches of the facility. The annual fee for Facilities C and D is 0.80% of the total commitments of the facilities. In connection with entering into the Premium Financing Debt Facility, we incurred an upfront fee of 0.30% of the principal amount of the committed facilities.
Interest rate on debt percentage									1.65%	1.65%	0.85%		0.85%
Annual fee percentage									0.7425%	0.7425%	0.80%		0.80%
Up front fee Percentage				0.30%
Long-term debt								2,225,000,000
Estimated fair value of outstanding borrowings					153,000,000
Debt instrument fair value amount				$ 139,000,000

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Consolidated Statement of Cash Flows (Unaudited) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Cash flows from operating activities:
Net earnings	$ 158.3	$ 134.0
Adjustments to reconcile net earnings to net cash provided by operating activities:
Net gain on investments and other	(24.9)	(12.5)
Depreciation and amortization	112.4	83.2
Change in estimated acquisition earnout payables	12.1	1.9
Amortization of deferred compensation and restricted stock	11.2	5.7
Stock-based and other noncash compensation expense	5.1	3.2
Effect of changes in foreign exchange rates	(0.4)	(0.6)
Net change in restricted cash	244.5	(70.1)
Net change in premiums receivable	(150.0)	(158.4)
Net change in premiums payable	44.7	171.2
Net change in other current assets	(57.3)	(24.0)
Net change in accrued compensation and other accrued liabilities	53.3	(6.4)
Net change in fees receivable/unearned fees	(20.2)	(9.8)
Net change in income taxes payable	0.7	3.1
Net change in deferred income taxes	(46.4)	(25.8)
Net change in other noncurrent assets and liabilities	(136.3)	(20.9)
Net cash provided by operating activities	206.8	73.8
Cash flows from investing activities:
Net additions to fixed assets	(42.1)	(35.9)
Cash paid for acquisitions, net of cash acquired	(1,402.0)	(113.4)
Net proceeds from sales of operations/books of business	2.7	2.9
Net funding of investment transactions	(20.0)	(18.9)
Net cash used by investing activities	(1,461.4)	(165.3)
Cash flows from financing activities:
Proceeds from issuance of common stock	948.0	51.4
Tax impact from issuance of common stock	7.7	4.9
Dividends paid	(106.1)	(90.1)
Net borrowings on premium financing debt facility	139.0	0
Borrowings on line of credit facility	870.4	228.0
Repayments on line of credit facility	(1,247.9)	(357.0)
Borrowings of corporate related long-term debt	1,300.0	200.0
Net cash provided by financing activities	1,911.1	37.2
Effect of changes in foreign exchange rates on cash and cash equivalents	18.9	(7.8)
Net increase (decrease) in cash and cash equivalents	675.4	(62.1)
Cash and cash equivalents at beginning of period	298.1	302.1
Cash and cash equivalents at end of period	973.5	240.0
Supplemental disclosures of cash flow information:
Interest paid	27.8	23.3
Income taxes paid	$ 33.7	$ 23.7

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Investments - Investments Reported in Other Current and Non-Current Assets (Parenthetical) (Detail) (Clean-Coal Investments [Member])	6 Months Ended	12 Months Ended
	Jun. 30, 2014 Plant Entity	Dec. 31, 2013 Plant Entity
Schedule of Equity Method Investments [Line Items]
Number of variable interest entities	1
Fourteen 2009 Era Clean Coal Plants [Member] | Controlling Interest [Member]
Schedule of Equity Method Investments [Line Items]
Number of coal plants	14	14
Number of variable interest entities	5	5
One 2011 Era Clean Coal Plant [Member] | Non-controlling Interest [Member]
Schedule of Equity Method Investments [Line Items]
Number of coal plants	1	1
Number of variable interest entities	1	1
Nineteen 2011 Era Clean Coal Plants [Member] | Controlling Interest [Member]
Schedule of Equity Method Investments [Line Items]
Number of coal plants	19	19
Number of variable interest entities	13	13

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Business Combinations - Acquisition Method for Recording Business Combinations (Detail) (USD $) In Millions, except Share data in Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2014
Business Acquisition [Line Items]
Common Shares Issued	1,865
Common Share Value	$ 82.4
Cash Paid	1,394.4
Accrued Liability	0
Escrow Deposited	25.3
Recorded Earnout Payable	24.0
Total Recorded Purchase Price	1,526.1
Maximum Potential Earnout Payable	59.1
Benefit Development Group, Inc. [Member]
Business Acquisition [Line Items]
Common Shares Issued	46
Common Share Value	2.0
Cash Paid	0.7
Accrued Liability	0
Escrow Deposited	0.1
Recorded Earnout Payable	0.6
Total Recorded Purchase Price	3.4
Maximum Potential Earnout Payable	2.0
Kent, Kent & Tingle (KKT) [Member]
Business Acquisition [Line Items]
Common Shares Issued	229
Common Share Value	9.1
Cash Paid	3.5
Accrued Liability	0
Escrow Deposited	1.4
Recorded Earnout Payable	3.5
Total Recorded Purchase Price	17.5
Maximum Potential Earnout Payable	7.8
L&R Benefits, LLC [Member]
Business Acquisition [Line Items]
Common Shares Issued	115
Common Share Value	5.3
Cash Paid	1.8
Accrued Liability	0
Escrow Deposited	0.1
Recorded Earnout Payable	1.0
Total Recorded Purchase Price	8.2
Maximum Potential Earnout Payable	6.0
Spataro Insurance Agency, Inc. [Member]
Business Acquisition [Line Items]
Common Shares Issued	47
Common Share Value	2.0
Cash Paid	0
Accrued Liability	0
Escrow Deposited	0.2
Recorded Earnout Payable	0.4
Total Recorded Purchase Price	2.6
Maximum Potential Earnout Payable	0.6
Tudor Risk Services, LLC [Member]
Business Acquisition [Line Items]
Common Shares Issued	0
Common Share Value	0
Cash Paid	2.1
Accrued Liability	0
Escrow Deposited	0.2
Recorded Earnout Payable	0.1
Total Recorded Purchase Price	2.4
Maximum Potential Earnout Payable	1.3
American Wholesalers Underwriting Ltd [Member]
Business Acquisition [Line Items]
Common Shares Issued	133
Common Share Value	6.0
Cash Paid	5.7
Accrued Liability	0
Escrow Deposited	0.5
Recorded Earnout Payable	0
Total Recorded Purchase Price	12.2
Maximum Potential Earnout Payable	0
Mike Henry Insurance Brokers Limited (MHI) [Member]
Business Acquisition [Line Items]
Common Shares Issued	0
Common Share Value	0
Cash Paid	9.6
Accrued Liability	0
Escrow Deposited	1.7
Recorded Earnout Payable	3.0
Total Recorded Purchase Price	14.3
Maximum Potential Earnout Payable	6.8
Oval Group of Companies (OGC) [Member]
Business Acquisition [Line Items]
Common Shares Issued	0
Common Share Value	0
Cash Paid	338.4
Accrued Liability	0
Escrow Deposited	11.8
Recorded Earnout Payable	0
Total Recorded Purchase Price	350.2
Maximum Potential Earnout Payable	0
Heritage Insurance Management Limited (HIM) [Member]
Business Acquisition [Line Items]
Common Shares Issued	0
Common Share Value	0
Cash Paid	33.9
Accrued Liability	0
Escrow Deposited	3.8
Recorded Earnout Payable	0
Total Recorded Purchase Price	37.7
Maximum Potential Earnout Payable	0
MGA Insurance Group (MGA) [Member]
Business Acquisition [Line Items]
Common Shares Issued	547
Common Share Value	25.1
Cash Paid	26.8
Accrued Liability	0
Escrow Deposited	2.5
Recorded Earnout Payable	11.8
Total Recorded Purchase Price	66.2
Maximum Potential Earnout Payable	20.0
Shilling Limited (SL) [Member]
Business Acquisition [Line Items]
Common Shares Issued	198
Common Share Value	8.9
Cash Paid	1.7
Accrued Liability	0
Escrow Deposited	1.2
Recorded Earnout Payable	1.0
Total Recorded Purchase Price	12.8
Maximum Potential Earnout Payable	8.4
Sunderland Insurance Services, Inc. [Member]
Business Acquisition [Line Items]
Common Shares Issued	204
Common Share Value	9.2
Cash Paid	1.8
Accrued Liability	0
Escrow Deposited	0.6
Recorded Earnout Payable	0
Total Recorded Purchase Price	11.6
Maximum Potential Earnout Payable	0
Plus Companies, Inc. (PCI) [Member]
Business Acquisition [Line Items]
Common Shares Issued	221
Common Share Value	9.3
Cash Paid	3.4
Accrued Liability	0
Escrow Deposited	0.8
Recorded Earnout Payable	0
Total Recorded Purchase Price	13.5
Maximum Potential Earnout Payable	0
Tri-State General Insurance Agency, Inc. [Member]
Business Acquisition [Line Items]
Common Shares Issued	47
Common Share Value	2.2
Cash Paid	0.6
Accrued Liability	0
Escrow Deposited	0.1
Recorded Earnout Payable	0
Total Recorded Purchase Price	2.9
Maximum Potential Earnout Payable	0
Crombie OAMPS (CO) [Member]
Business Acquisition [Line Items]
Common Shares Issued	0
Common Share Value	0
Cash Paid	951.5
Accrued Liability	0
Escrow Deposited	0
Recorded Earnout Payable	0
Total Recorded Purchase Price	951.5
Maximum Potential Earnout Payable	0
Eleven Other Acquisitions [Member]
Business Acquisition [Line Items]
Common Shares Issued	78
Common Share Value	3.3
Cash Paid	12.9
Accrued Liability	0
Escrow Deposited	0.3
Recorded Earnout Payable	2.6
Total Recorded Purchase Price	19.1
Maximum Potential Earnout Payable	$ 6.2

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Commitments, Contingencies and Off-Balance Sheet Arrangements - Off-Balance Sheet Commitments (Detail) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2014
Commitments Contingencies And Off Balance Sheet Arrangements [Line Items]
Amount of Commitment Expiration by Period - 2014	$ 420.2
Amount of Commitment Expiration by Period - 2015	0
Amount of Commitment Expiration by Period - 2016	0
Amount of Commitment Expiration by Period - 2017	0
Amount of Commitment Expiration by Period - 2018	0
Amount of Commitment Expiration by Period - Thereafter	33.1
Total Amounts Committed	453.3
Letters of Credit [Member]
Commitments Contingencies And Off Balance Sheet Arrangements [Line Items]
Amount of Commitment Expiration by Period - 2014	0
Amount of Commitment Expiration by Period - 2015	0
Amount of Commitment Expiration by Period - 2016	0
Amount of Commitment Expiration by Period - 2017	0
Amount of Commitment Expiration by Period - 2018	0
Amount of Commitment Expiration by Period - Thereafter	21.1
Total Amounts Committed	21.1
Financial Guarantees [Member]
Commitments Contingencies And Off Balance Sheet Arrangements [Line Items]
Amount of Commitment Expiration by Period - 2014	0
Amount of Commitment Expiration by Period - 2015	0
Amount of Commitment Expiration by Period - 2016	0
Amount of Commitment Expiration by Period - 2017	0
Amount of Commitment Expiration by Period - 2018	0
Amount of Commitment Expiration by Period - Thereafter	9.1
Total Amounts Committed	9.1
Funding Commitments [Member]
Commitments Contingencies And Off Balance Sheet Arrangements [Line Items]
Amount of Commitment Expiration by Period - 2014	0.2
Amount of Commitment Expiration by Period - 2015	0
Amount of Commitment Expiration by Period - 2016	0
Amount of Commitment Expiration by Period - 2017	0
Amount of Commitment Expiration by Period - 2018	0
Amount of Commitment Expiration by Period - Thereafter	2.9
Total Amounts Committed	3.1
Acquisition Of Noraxis [Member]
Commitments Contingencies And Off Balance Sheet Arrangements [Line Items]
Amount of Commitment Expiration by Period - 2014	420.0
Amount of Commitment Expiration by Period - 2015	0
Amount of Commitment Expiration by Period - 2016	0
Amount of Commitment Expiration by Period - 2017	0
Amount of Commitment Expiration by Period - 2018	0
Amount of Commitment Expiration by Period - Thereafter	0
Total Amounts Committed	$ 420.0

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Segment Information

6 Months Ended

Jun. 30, 2014

Segment Reporting [Abstract]

Segment Information

14. Segment Information

We have three reportable segments: brokerage, risk management and corporate.

The brokerage segment is primarily comprised of our retail and wholesale insurance brokerage operations. The brokerage segment generates revenues through commissions paid by insurance underwriters and through fees charged to our clients. Our brokers, agents and administrators act as intermediaries between insurers and their customers and we do not assume underwriting risks.

The risk management segment provides contract claim settlement and administration services for enterprises that choose to self-insure some or all of their property/casualty coverages and for insurance companies that choose to outsource some or all of their property/casualty claims departments. These operations also provide claims management, loss control consulting and insurance property appraisal services. Revenues are principally generated on a negotiated per-claim or per-service fee basis.

The corporate segment manages our clean energy and other investments. This segment also holds all of our corporate debt.

Allocations of investment income and certain expenses are based on reasonable assumptions and estimates primarily using revenue, headcount and other information. We allocate the provision for income taxes to the brokerage and risk management segments using the local country statutory rates. Reported operating results by segment would change if different methods were applied.

Financial information relating to our segments for the three-month and six-month periods ended June 30, 2014 and 2013 is as follows (in millions):

	Three-month period ended June 30,						Six-month period ended June 30,
	2014			2013			2014			2013
Brokerage
Total revenues	$	742.6		$	550.9		$	1,311.2		$	1,005.3
Earnings before income taxes	$	136.5		$	112.6		$	186.9		$	153.2
Identifiable assets at June 30, 2014 and 2013							$	8,047.4		$	4,325.2
Risk Management
Total revenues	$	168.1		$	156.2		$	328.1		$	309.8
Earnings before income taxes	$	20.6		$	20.2		$	39.6		$	41.7
Identifiable assets at June 30, 2014 and 2013							$	581.2		$	530.8
Corporate
Total revenues	$	268.6		$	72.4		$	455.0		$	138.5
Loss before income taxes	$	(50.0	)	$	(35.4	)	$	(73.1	)	$	(55.2	)
Identifiable assets at June 30, 2014 and 2013							$	1,390.7		$	706.1

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Business Combinations - Acquisition Method for Recording Business Combinations (Parenthetical) (Detail)	6 Months Ended
	Jun. 30, 2014
Benefit Development Group, Inc. [Member]
Business Acquisition [Line Items]
Effective Date of Acquisition	Feb. 01, 2014
Kent, Kent & Tingle (KKT) [Member]
Business Acquisition [Line Items]
Effective Date of Acquisition	Feb. 01, 2014
L&R Benefits, LLC [Member]
Business Acquisition [Line Items]
Effective Date of Acquisition	Mar. 01, 2014
Spataro Insurance Agency, Inc. [Member]
Business Acquisition [Line Items]
Effective Date of Acquisition	Mar. 01, 2014
Tudor Risk Services, LLC [Member]
Business Acquisition [Line Items]
Effective Date of Acquisition	Mar. 01, 2014
American Wholesalers Underwriting Ltd [Member]
Business Acquisition [Line Items]
Effective Date of Acquisition	Apr. 01, 2014
Mike Henry Insurance Brokers Limited (MHI) [Member]
Business Acquisition [Line Items]
Effective Date of Acquisition	Apr. 01, 2014
Oval Group of Companies (OGC) [Member]
Business Acquisition [Line Items]
Effective Date of Acquisition	Apr. 01, 2014
Heritage Insurance Management Limited (HIM) [Member]
Business Acquisition [Line Items]
Effective Date of Acquisition	May 01, 2014
MGA Insurance Group (MGA) [Member]
Business Acquisition [Line Items]
Effective Date of Acquisition	May 01, 2014
Shilling Limited (SL) [Member]
Business Acquisition [Line Items]
Effective Date of Acquisition	May 01, 2014
Sunderland Insurance Services, Inc. [Member]
Business Acquisition [Line Items]
Effective Date of Acquisition	May 01, 2014
Plus Companies, Inc. (PCI) [Member]
Business Acquisition [Line Items]
Effective Date of Acquisition	Jun. 01, 2014
Tri-State General Insurance Agency, Inc. [Member]
Business Acquisition [Line Items]
Effective Date of Acquisition	Jun. 01, 2014
Crombie OAMPS (CO) [Member]
Business Acquisition [Line Items]
Effective Date of Acquisition	Jun. 16, 2014

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Business Combinations (Tables)

6 Months Ended

Jun. 30, 2014

Business Combinations [Abstract]

Acquisition Method for Recording Business Combinations

During the six-month period ended June 30, 2014, we acquired substantially all of the net assets of the following firms in exchange for our common stock and/or cash. These acquisitions have been accounted for using the acquisition method for recording business combinations (in millions except share data):

Name and Effective Date of Acquisition	Common Shares Issued		Common Share Value		Cash Paid		Accrued Liability		Escrow Deposited		Recorded Earnout Payable		Total Recorded Purchase Price		Maximum Potential Earnout Payable
	(000s)
Benefit Development Group, Inc. February 1, 2014		46	$	2.0	$	0.7	$	—	$	0.1	$	0.6	$	3.4	$	2.0
Kent, Kent & Tingle (KKT) February 1, 2014		229		9.1		3.5		—		1.4		3.5		17.5		7.8
L&R Benefits, LLC March 1, 2014		115		5.3		1.8		—		0.1		1.0		8.2		6.0
Spataro Insurance Agency, Inc. March 1, 2014		47		2.0		—		—		0.2		0.4		2.6		0.6
Tudor Risk Services, LLC March 1, 2014		—		—		2.1		—		0.2		0.1		2.4		1.3
American Wholesalers Underwriting Ltd April 1, 2014		133		6.0		5.7		—		0.5		—		12.2		—
Mike Henry Insurance Brokers Limited (MHI) April 1, 2014		—		—		9.6		—		1.7		3.0		14.3		6.8
Oval Group of Companies (OGC) April 1, 2014		—		—		338.4		—		11.8		—		350.2		—
Heritage Insurance Management Limited (HIM) May 1, 2014		—		—		33.9		—		3.8		—		37.7		—
MGA Insurance Group (MGA) May 1, 2014		547		25.1		26.8		—		2.5		11.8		66.2		20.0
Shilling Limited (SL) May 1, 2014		198		8.9		1.7		—		1.2		1.0		12.8		8.4
Sunderland Insurance Services, Inc. May 1, 2014		204		9.2		1.8		—		0.6		—		11.6		—
Plus Companies, Inc. (PCI) June 1, 2014		221		9.3		3.4		—		0.8		—		13.5		—
Tri-State General Insurance Agency, Inc. June 1, 2014		47		2.2		0.6		—		0.1		—		2.9		—
Crombie/OAMPS (CO) June 16, 2014		—		—		951.5		—		—		—		951.5		—
Eleven other acquisitions completed in 2014		78		3.3		12.9		—		0.3		2.6		19.1		6.2
		1,865	$	82.4	$	1,394.4	$	—	$	25.3	$	24.0	$	1,526.1	$	59.1

Summary of Estimated Fair Values of Net Assets Acquired

The following is a summary of the estimated fair values of the net assets acquired at the date of each acquisition made in the six-month period ended June 30, 2014 (in millions):

	KKT		MHI		OGC		HIM		MGA		SL		PCI		CO		Eighteen Other Acquisitions		Total
Cash	$	0.2	$	—	$	23.1	$	2.9	$	0.2	$	0.4	$	—	$	26.6	$	0.2	$	53.6
Other current assets		0.1		6.3		129.6		4.9		8.9		1.0		5.8		695.5		7.5		859.6
Fixed assets		—		0.2		2.1		0.3		0.3		0.3		—		17.1		0.3		20.6
Noncurrent assets		—		—		—		—		—		—		—		7.0		4.1		11.1
Goodwill		10.2		9.7		238.3		21.8		24.3		6.4		5.4		535.9		26.4		878.4
Expiration lists		7.0		5.8		140.7		14.6		36.3		6.8		7.8		325.3		30.8		575.1
Non-compete agreements		0.1		—		—		—		0.3		—		—		4.2		0.7		5.3
Trade names		—		0.1		—		—		—		0.1		0.3		4.2		0.4		5.1
Total assets acquired		17.6		22.1		533.8		44.5		70.3		15.0		19.3		1,615.8		70.4		2,408.8
Current liabilities		0.1		6.0		129.5		6.8		4.1		0.8		5.8		490.0		6.9		650.0
Noncurrent liabilities		—		1.8		54.1		—		—		1.4		—		174.3		1.1		232.7
Total liabilities assumed		0.1		7.8		183.6		6.8		4.1		2.2		5.8		664.3		8.0		882.7
Total net assets acquired	$	17.5	$	14.3	$	350.2	$	37.7	$	66.2	$	12.8	$	13.5	$	951.5	$	62.4	$	1,526.1

Summary of Unaudited Pro Forma Historical Results

The following is a summary of the unaudited pro forma historical results, as if these entities had been acquired at January 1, 2013 (in millions, except per share data):

	Three-month period ended June 30,				Six-month period ended June 30,
	2014		2013		2014		2013
Total revenues	$	1,251.1	$	933.4	$	2,295.2	$	1,735.1
Net earnings		112.2		111.6		171.7		161.1
Basic net earnings per share		0.71		0.74		1.09		1.07
Diluted net earnings per share		0.70		0.73		1.07		1.06

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Segment Information - Additional Information (Detail)	6 Months Ended
	Jun. 30, 2014 Segment
Segment Reporting [Abstract]
Number of reportable operating segments	3

XML

Consolidated Statement of Stockholders' Equity (Unaudited) (USD $) In Millions, unless otherwise specified	Total	Common Stock [Member]	Capital in Excess of Par Value [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Earnings (Loss) [Member]
Beginning Balance at Dec. 31, 2013	$ 2,085.5	$ 133.6	$ 1,358.1	$ 596.4	$ (2.6)
Beginning Balance, Shares at Dec. 31, 2013		133.6
Net earnings	158.3			158.3
Change in pension liability, net of taxes of $0.6 million	0.9				0.9
Foreign currency translation	54.5				54.5
Change in fair value of derivative instruments, net of taxes of $0.9 million	1.4				1.4
Compensation expense related to stock option plan grants	4.0		4.0
Tax impact from issuance of common stock	7.7		7.7
Common stock issued in:
Nineteen purchase transactions	97.7	2.1	95.6
Nineteen purchase transactions, shares		2.1
Stock option plans	31.5	1.2	30.3
Stock option plans (in shares)	1.2	1.2
Employee stock purchase plan	5.1	0.1	5.0
Employee stock purchase plan (in shares)		0.1
Deferred compensation and restricted stock	(3.2)	0.1	(3.3)
Deferred compensation and restricted stock (in shares)		0.1
Stock issuance from public offering	911.4	21.9	889.5
Stock issuance from public offering (in shares)		21.85
Other compensation expense	1.1		1.1
Cash dividends declared on common stock	(106.3)			(106.3)
Ending Balance at Jun. 30, 2014	$ 3,249.6	$ 159.0	$ 2,388.0	$ 648.4	$ 54.2
Ending Balance, Shares at Jun. 30, 2014		159.0

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Consolidated Statement of Comprehensive Earnings (Unaudited) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Statement Of Income And Comprehensive Income [Abstract]
Net earnings	$ 109.0	$ 93.5	$ 158.3	$ 134.0
Change in pension liability, net of taxes	0.7	(0.9)	0.9	0.2
Foreign currency translation	45.7	(15.9)	54.5	(39.0)
Change in fair value of derivative investments, net of taxes	0.9	(0.8)	1.4	(1.0)
Comprehensive earnings	$ 156.3	$ 75.9	$ 215.1	$ 94.2

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Restricted Stock, Performance Share and Cash Awards

6 Months Ended

Jun. 30, 2014

Text Block [Abstract]

Restricted Stock, Performance Share and Cash Awards

9. Restricted Stock, Performance Share and Cash Awards

Restricted Stock Awards

As discussed in Note 7 to these unaudited consolidated financial statements, on May 13, 2014, our stockholders approved the LTIP, which replaced our previous stockholder-approved 2011 LTIP. The LTIP provides for the grant of a stock award either as restricted stock or as restricted stock units. In either case, the compensation committee may determine that the award will be subject to the attainment of performance measures over an established performance period. Stock awards and the related dividend equivalents are non-transferable and subject to forfeiture if the holder does not remain continuously employed with us during the applicable restriction period or, in the case of a performance-based award, if applicable performance measures are not attained. The compensation committee will determine all of the terms relating to the satisfaction of performance measures and the termination of a restriction period, or the forfeiture and cancellation of a restricted stock award upon a termination of employment, whether by reason of disability, retirement, death or any other reason. The compensation committee may grant unrestricted shares of common stock or units representing the right to receive shares of common stock to employees who have attained age 62.

The agreements awarding restricted stock units under the LTIP will specify whether such awards may be settled in shares of our common stock, cash or a combination of shares and cash and whether the holder will be entitled to receive dividend equivalents, on a current or deferred basis, with respect to such award. Prior to the settlement of a restricted stock unit, the holder of a restricted stock unit will have no rights as a stockholder of the company. The maximum number of shares available under the LTIP for restricted stock, restricted stock units and performance unit awards settled with stock (i.e., all awards other than stock options and stock appreciation rights) is 2.0 million. At June 30, 2014, 2.0 million shares were available for grant under the LTIP for such awards.

In the first quarter of each of 2014 and 2013, we granted 323,600 and 345,000 restricted stock units, respectively, to employees under the LTIP, with an aggregate fair value of $15.2 million and $13.5 million, respectively, at the date of grant. These 2014 and 2013 awards of restricted stock units vest as follows: 323,600 units granted in first quarter 2014 and 345,000 units granted in first quarter 2013, vest in full based on continued employment through March 12, 2018 and March 13, 2017, respectively. In the second quarter of each of 2014 and 2013, we granted 19,250 and 17,000 restricted stock units, respectively, to employees under the LTIP, with an aggregate fair value of $0.9 million and $0.8 million, respectively, at the date of grant. These grants vest in full one year from the date of grant. For certain of our executive officers age 55 or older, restricted stock units awarded in 2014 and 2013 are no longer subject to forfeiture upon such officers’ departure from the company after two years from the date of grant.

We account for restricted stock awards at historical cost, which equals its fair market value at the date of grant, which is amortized to compensation expense ratably over the vesting period of the participants. Future changes in the fair value of our common stock that is owed to the participants do not have any impact on the amounts recorded in our consolidated financial statements. During the three-month periods ended June 30, 2014 and 2013, we charged $3.9 million and $3.2 million, respectively, to compensation expense related to restricted stock unit awards granted in 2006 through 2014. During the six-month periods ended June 30, 2014 and 2013, we charged $6.5 million and $5.1 million, respectively, to compensation expense related to restricted stock unit awards granted in 2006 through 2014. The total intrinsic value of unvested restricted stock units at June 30, 2014 and 2013 was $58.2 million and $46.7 million, respectively. During the six-month periods ended June 30, 2014 and 2013, equity awards (including accrued dividends) with an aggregate fair value of $9.5 million and $8.4 million were vested and distributed to employees under this plan.

Performance Share Awards

On March 12, 2014, pursuant to the LTIP, the compensation committee approved 48,800 provisional performance unit awards, with an aggregate fair value of $2.3 million, for future grants to our officers. Each performance unit award was equivalent to the value of one share of our common stock on the date such provisional award was approved. These awards are subject to a one-year performance period based on our financial performance and a two-year vesting period. At the discretion of the compensation committee and determined based on our performance, the eligible officer will be granted a percentage of the provisional performance unit award that equates to the EBITAC growth achieved (as specified in the applicable grant agreement). At the end of the performance period, eligible participants will be granted a number of units based on achievement of the performance goal and subject to approval by the compensation committee. Granted units for the 2014 provisional award will fully vest based on continuous employment through January 1, 2017, and will be settled in shares of our common stock on a one-for-one basis as soon as practicable in 2017. For certain of our executive officers age 55 or older, awards granted in 2014 are no longer subject to forfeiture upon such officers’ departure from the company after two years from the date of grant. If an eligible employee leaves us prior to the vesting date, the entire award will be forfeited.

Cash Awards

On March 12, 2014, pursuant to our Performance Unit Program (which we refer to as the Program), the compensation committee approved provisional cash awards of $10.8 million in the aggregate for future grants to our officers and key employees that are denominated in units (229,000 units in the aggregate), each of which was equivalent to the value of one share of our common stock on the date the provisional award was approved. The Program consists of a one-year performance period based on our financial performance and a two-year vesting period. At the discretion of the compensation committee and determined based on our performance, the eligible officer or key employee will be granted a percentage of the provisional cash award units that equates to the EBITAC growth achieved (as defined in the Program). At the end of the performance period, eligible participants will be granted a number of units based on achievement of the performance goal and subject to approval by the compensation committee. Granted units for the 2014 provisional award will fully vest based on continuous employment through January 1, 2017. For certain of our executive officers age 55 or older, awards granted under the Program in 2014 are no longer subject to forfeiture upon such officers’ departure from the company after two years from the date of the provisional award. The ultimate award value will be equal to the trailing twelve-month price of our common stock on December 31, 2016, multiplied by the number of units subject to the award, but limited to between 0.5 and 1.5 times the original value of the units determined as of the grant date. The fair value of the awarded units will be paid out in cash as soon as practicable in 2017. If an eligible employee leaves us prior to the vesting date, the entire award will be forfeited. We did not recognize any compensation expense during the six-month period ended June 30, 2014 related to the 2014 provisional award under the Program.

On March 13, 2013, pursuant to the Program, the compensation committee approved provisional cash awards of $10.5 million in the aggregate for future grant to our officers and key employees that are denominated in units (269,000 units in the aggregate), each of which was equivalent to the value of one share of our common stock on the date the provisional awards were approved. Terms of the 2013 provisional awards were similar to the terms of the 2014 provisional awards. Based on our performance for 2013, we granted 263,000 units under the Program in first quarter 2014 that will fully vest on January 1, 2016. During the three-month period ended June 30, 2014, we charged $1.5 million to compensation expense related to these awards. During the six-month period ended June 30, 2014, we charged $3.0 million to compensation expense related to these awards. We did not recognize any compensation expense during 2013 related to the 2013 awards.

On March 16, 2012, pursuant to the Program, the compensation committee approved provisional cash awards of $13.1 million in the aggregate for future grant to our officers and key employees that are denominated in units (368,000 units in the aggregate), each of which was equivalent to the value of one share of our common stock on the date the provisional awards were approved. Terms of the 2012 provisional awards were similar to the terms of the 2014 provisional awards. Based on our performance for 2012, we granted 365,000 units under the Program in first quarter 2013 that will fully vest on January 1, 2015. During the three-month periods ended June 30, 2014 and 2013, we charged $1.8 million and $1.7 million, respectively, to compensation expense related to the 2012 awards. During the six-month periods ended June 30, 2014 and 2013, we charged $4.5 million and $3.4 million, respectively, to compensation expense related to the 2012 awards.

On March 8, 2011, pursuant to the Program, the compensation committee approved provisional cash awards of $14.4 million in the aggregate for future grant to our officers and key employees that are denominated in units (464,000 units in the aggregate), each of which was equivalent to the value of one share of our common stock on the date the provisional awards were approved. Terms of the 2011 provisional awards were similar to the terms of the 2014 provisional awards. Based on our performance for 2011, we granted 432,000 units under the Program in first quarter 2012 that fully vested on January 1, 2014. During the three-month period ended June 30, 2013, we charged $2.3 million to compensation expense related to these awards. During the six-month period ended June 30, 2013, we charged $4.3 million to compensation expense related to these awards. We did not recognize any compensation expense during 2014 related to the 2011 awards.

During the six-month period ended June 30, 2014, cash awards related to the 2011 provisional award with an aggregate fair value of $17.6 million (0.4 million units in the aggregate) were vested and distributed to employees under the Program.

XML

Document and Entity Information	6 Months Ended
	Jun. 30, 2014
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q2
Trading Symbol	AJG
Entity Registrant Name	GALLAGHER ARTHUR J & CO
Entity Central Index Key	0000354190
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding	158,993,000

XML

Retirement Plans

6 Months Ended

Jun. 30, 2014

Compensation And Retirement Disclosure [Abstract]

Retirement Plans

10. Retirement Plans

We have a noncontributory defined benefit pension plan that, prior to July 1, 2005, covered substantially all of our domestic employees who had attained a specified age and one year of employment. Benefits under the plan were based on years of service and salary history. In 2005, we amended our defined benefit pension plan to freeze the accrual of future benefits for all U.S. employees, effective on July 1, 2005. In the table below, the service cost component represents plan administration costs that are incurred directly by the plan.

The components of the net periodic pension benefit cost for the plan consists of the following (in millions):

	Three-month period ended June 30,						Six-month period ended June 30,
	2014			2013			2014			2013
Service cost	$	0.1		$	0.1		$	0.2		$	0.2
Interest cost on benefit obligation		3.2			3.0			6.4			5.9
Expected return on plan assets		(4.7	)		(4.3	)		(9.4	)		(8.6	)
Amortization of net actuarial loss		0.6			1.9			1.2			3.9
Net periodic benefit (earnings) cost	$	(0.8	)	$	0.7		$	(1.6	)	$	1.4

We are not required under the IRC to make any minimum contributions to the plan for the 2014 plan year or the 2013 plan year. This level of required funding is based on the plan being frozen and the aggregate amount of our historical funding. During the six-month period ended June 30, 2013, we made discretionary contributions of $4.2 million to the plan. We did not make any discretionary contributions to the plan during the six-month period ended June 30, 2014.

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Consolidated Balance Sheet (USD $) In Millions, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Statement Of Financial Position [Abstract]
Cash and cash equivalents	$ 973.5	$ 298.1
Restricted cash	1,109.0	1,027.4
Premiums and fees receivable	1,997.6	1,288.8
Other current assets	360.2	261.3
Total current assets	4,440.3	2,875.6
Fixed assets - net	193.7	160.4
Deferred income taxes	328.9	279.8
Other noncurrent assets	397.3	320.7
Goodwill - net	3,027.6	2,145.2
Amortizable intangible assets - net	1,631.5	1,078.8
Total assets	10,019.3	6,860.5
Premiums payable to insurance and reinsurance companies	2,819.4	2,154.7
Accrued compensation and other accrued liabilities	491.5	370.6
Unearned fees	94.3	84.5
Other current liabilities	77.8	44.5
Premium financing debt	139.0
Corporate related borrowings - current	253.0	630.5
Total current liabilities	3,875.0	3,284.8
Corporate related borrowings - noncurrent	2,125.0	825.0
Other noncurrent liabilities	769.7	665.2
Total liabilities	6,769.7	4,775.0
Stockholders' equity:
Common stock - issued and outstanding 159.0 shares in 2014 and 133.6 shares in 2013	159.0	133.6
Capital in excess of par value	2,388.0	1,358.1
Retained earnings	648.4	596.4
Accumulated other comprehensive earnings (loss)	54.2	(2.6)
Total stockholders' equity	3,249.6	2,085.5
Total liabilities and stockholders' equity	$ 10,019.3	$ 6,860.5

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Intangible Assets

6 Months Ended

Jun. 30, 2014

Goodwill And Intangible Assets Disclosure [Abstract]

Intangible Assets

4. Intangible Assets

The carrying amount of goodwill at June 30, 2014 and December 31, 2013 allocated by domestic and foreign operations is as follows (in millions):

	Brokerage		Risk Management		Corporate		Total
At June 30, 2014
United States	$	1,531.2	$	20.2	$	—	$	1,551.4
United Kingdom		880.1		2.2		—		882.3
Other foreign, principally Australia and Canada		593.9		—		—		593.9
Total goodwill - net	$	3,005.2	$	22.4	$	—	$	3,027.6
At December 31, 2013
United States	$	1,449.6	$	20.2	$	—	$	1,469.8
United Kingdom		595.1		2.1		—		597.2
Other foreign, principally Australia and Canada		78.2		—		—		78.2
Total goodwill - net	$	2,122.9	$	22.3	$	—	$	2,145.2

The changes in the carrying amount of goodwill for the six-month period ended June 30, 2014 are as follows (in millions):

	Brokerage			Risk Management		Corporate		Total
Balance as of December 31, 2013	$	2,122.9		$	22.3	$	—	$	2,145.2
Goodwill acquired during the period		878.4			—		—		878.4
Goodwill adjustments due to appraisals and other acquisition adjustments		(25.5	)		—		—		(25.5	)
Goodwill written-off related to sales of business		(0.6	)		—		—		(0.6	)
Foreign currency translation adjustments during the period		30.0			0.1		—		30.1
Balance as of June 30, 2014	$	3,005.2		$	22.4	$	—	$	3,027.6

Major classes of amortizable intangible assets at June 30, 2014 and December 31, 2013 consist of the following (in millions):

	June 30, 2014			December 31, 2013
Expiration lists	$	2,232.3		$	1,563.5
Accumulated amortization - expiration lists		(631.0	)		(511.3	)
		1,601.3			1,052.2
Non-compete agreements		37.5			37.3
Accumulated amortization - non-compete agreements		(27.1	)		(25.9	)
		10.4			11.4
Trade names		28.1			22.1
Accumulated amortization - trade names		(8.3	)		(6.9	)
		19.8			15.2
Net amortizable assets	$	1,631.5		$	1,078.8

Estimated aggregate amortization expense for each of the next five years is as follows:

2014 (remaining six months)	$	96.0
2015		188.0
2016		182.4
2017		174.2
2018		162.9
Total	$	803.5

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Business Combinations

6 Months Ended

Jun. 30, 2014

Business Combinations [Abstract]

Business Combinations

3. Business Combinations

During the six-month period ended June 30, 2014, we acquired substantially all of the net assets of the following firms in exchange for our common stock and/or cash. These acquisitions have been accounted for using the acquisition method for recording business combinations (in millions except share data):

Name and Effective Date of Acquisition	Common Shares Issued		Common Share Value		Cash Paid		Accrued Liability		Escrow Deposited		Recorded Earnout Payable		Total Recorded Purchase Price		Maximum Potential Earnout Payable
	(000s)
Benefit Development Group, Inc. February 1, 2014		46	$	2.0	$	0.7	$	—	$	0.1	$	0.6	$	3.4	$	2.0
Kent, Kent & Tingle (KKT) February 1, 2014		229		9.1		3.5		—		1.4		3.5		17.5		7.8
L&R Benefits, LLC March 1, 2014		115		5.3		1.8		—		0.1		1.0		8.2		6.0
Spataro Insurance Agency, Inc. March 1, 2014		47		2.0		—		—		0.2		0.4		2.6		0.6
Tudor Risk Services, LLC March 1, 2014		—		—		2.1		—		0.2		0.1		2.4		1.3
American Wholesalers Underwriting Ltd April 1, 2014		133		6.0		5.7		—		0.5		—		12.2		—
Mike Henry Insurance Brokers Limited (MHI) April 1, 2014		—		—		9.6		—		1.7		3.0		14.3		6.8
Oval Group of Companies (OGC) April 1, 2014		—		—		338.4		—		11.8		—		350.2		—
Heritage Insurance Management Limited (HIM) May 1, 2014		—		—		33.9		—		3.8		—		37.7		—
MGA Insurance Group (MGA) May 1, 2014		547		25.1		26.8		—		2.5		11.8		66.2		20.0
Shilling Limited (SL) May 1, 2014		198		8.9		1.7		—		1.2		1.0		12.8		8.4
Sunderland Insurance Services, Inc. May 1, 2014		204		9.2		1.8		—		0.6		—		11.6		—
Plus Companies, Inc. (PCI) June 1, 2014		221		9.3		3.4		—		0.8		—		13.5		—
Tri-State General Insurance Agency, Inc. June 1, 2014		47		2.2		0.6		—		0.1		—		2.9		—
Crombie/OAMPS (CO) June 16, 2014		—		—		951.5		—		—		—		951.5		—
Eleven other acquisitions completed in 2014		78		3.3		12.9		—		0.3		2.6		19.1		6.2
		1,865	$	82.4	$	1,394.4	$	—	$	25.3	$	24.0	$	1,526.1	$	59.1

On April 1, 2014, we signed and closed on an agreement to acquire the Oval Group of Companies (which we refer to as Oval). Under the agreement, we agreed to purchase all of the outstanding equity of Oval for net cash consideration of approximately $338.0 million, which includes approximately $3.5 million held back and placed into escrow for three years as partial security for warranty obligations under the agreement and approximately $8.3 million held back and placed into escrow for approximately three months as partial security for adjustments to the acquired balance sheet. Oval was an independent commercial insurance broker operating out of 24 offices throughout the U.K., with over 1,000 employees.

On April 16, 2014, we closed on a secondary public offering of our common stock whereby 21.85 million shares of our stock were issued for net proceeds, after underwriting discounts and other expenses related to this offering, of $911.4 million. We used the net proceeds of the offering to fund acquisitions.

On June 16, 2014, we closed on an agreement to acquire the Wesfarmers Insurance Brokerage operations (which we refer to as the Crombie/OAMPS transaction). The Crombie/OAMPS transaction, which includes the OAMPS businesses in Australia and the U.K., Crombie in New Zealand and the associated premium funding operations. Under the agreement, we agreed to purchase all of the outstanding shares of these three operating companies for net cash consideration of approximately $952.0 million. The Crombie/OAMPS operations have approximately 1,700 employees operating out of more than 50 offices across Australia, New Zealand and the U.K. We entered into a AU$400.0 million foreign currency derivative investment contract that we executed on April 16, 2014 in connection with the signing of the agreement to acquire the Crombie/OAMPS operations. The derivative investment contract was exercised on June 16, 2014 and we recorded a pretax gain of $1.9 million related to this derivative investment contract.

On July 2, 2014, we acquired Noraxis Capital Corporation (which we refer to as Noraxis), paying cash consideration of approximately $420.0 million for approximately 89% of the equity of Noraxis. The remaining equity is held by various management employees of Noraxis. Noraxis generated nearly CN$125.0 million in revenue for the year ended December 31, 2013, has more than 650 employees and offices across Alberta, Manitoba, New Brunswick, Nova Scotia and Ontario. Common shares issued in connection with acquisitions are valued at closing market prices as of the effective date of the applicable acquisition. We record escrow deposits that are returned to us as a result of adjustments to net assets acquired as reductions of goodwill when the escrows are settled. The maximum potential earnout payables disclosed in the foregoing table represent the maximum amount of additional consideration that could be paid pursuant to the terms of the purchase agreement for the applicable acquisition. The amounts recorded as earnout payables, which are primarily based upon the estimated future operating results of the acquired entities over a two- to three-year period subsequent to the acquisition date, are measured at fair value as of the acquisition date and are included on that basis in the recorded purchase price consideration in the foregoing table. We will record subsequent changes in these estimated earnout obligations, including the accretion of discount, in our consolidated statement of earnings when incurred.

The fair value of these earnout obligations is based on the present value of the expected future payments to be made to the sellers of the acquired entities in accordance with the provisions outlined in the respective purchase agreements, which is a Level 3 fair value measurement. In determining fair value, we estimated the acquired entity’s future performance using financial projections developed by management for the acquired entity and market participant assumptions that were derived for revenue growth and/or profitability. Revenue growth rates generally ranged from 5.0% to 10.0% for our 2014 acquisitions. We estimated future payments using the earnout formula and performance targets specified in each purchase agreement and these financial projections. We then discounted these payments to present value using a risk-adjusted rate that takes into consideration market-based rates of return that reflect the ability of the acquired entity to achieve the targets. These discount rates generally ranged from 8.5% to 9.5% for all of our 2014 acquisitions. Changes in financial projections, market participant assumptions for revenue growth and/or profitability, or the risk-adjusted discount rate, would result in a change in the fair value of recorded earnout obligations.

During each of the three-month periods ended June 30, 2014 and 2013, we recognized $3.4 million and $2.9 million, respectively, of expense in our consolidated statement of earnings related to the accretion of the discount recorded for earnout obligations in connection with our acquisitions. During each of the six-month periods ended June 30, 2014 and 2013, we recognized $6.7 million and $5.8 million, respectively, of expense in our consolidated statement of earnings related to the accretion of the discount recorded for earnout obligations in connection with our acquisitions. In addition, during the three-month periods ended June 30, 2014 and 2013, we recognized $3.6 million of expense and $5.4 million of income, respectively, related to net adjustments in the estimated fair value of earnout obligations in connection with revised projections of future performance for 18 and 23 acquisitions, respectively. During the six-month periods ended June 30, 2014 and 2013, we recognized $5.4 million of expense and $3.9 million of income, respectively, related to net adjustments in the estimated fair value of earnout obligations in connection with revised projections of future performance for 35 and 39 acquisitions, respectively. The aggregate amount of maximum earnout obligations related to acquisitions made in 2009 and subsequent years was $473.8 million as of June 30, 2014, of which $157.4 million was recorded in our consolidated balance sheet as of June 30, 2014, based on the estimated fair value of the expected future payments to be made.

The following is a summary of the estimated fair values of the net assets acquired at the date of each acquisition made in the six-month period ended June 30, 2014 (in millions):

	KKT		MHI		OGC		HIM		MGA		SL		PCI		CO		Eighteen Other Acquisitions		Total
Cash	$	0.2	$	—	$	23.1	$	2.9	$	0.2	$	0.4	$	—	$	26.6	$	0.2	$	53.6
Other current assets		0.1		6.3		129.6		4.9		8.9		1.0		5.8		695.5		7.5		859.6
Fixed assets		—		0.2		2.1		0.3		0.3		0.3		—		17.1		0.3		20.6
Noncurrent assets		—		—		—		—		—		—		—		7.0		4.1		11.1
Goodwill		10.2		9.7		238.3		21.8		24.3		6.4		5.4		535.9		26.4		878.4
Expiration lists		7.0		5.8		140.7		14.6		36.3		6.8		7.8		325.3		30.8		575.1
Non-compete agreements		0.1		—		—		—		0.3		—		—		4.2		0.7		5.3
Trade names		—		0.1		—		—		—		0.1		0.3		4.2		0.4		5.1
Total assets acquired		17.6		22.1		533.8		44.5		70.3		15.0		19.3		1,615.8		70.4		2,408.8
Current liabilities		0.1		6.0		129.5		6.8		4.1		0.8		5.8		490.0		6.9		650.0
Noncurrent liabilities		—		1.8		54.1		—		—		1.4		—		174.3		1.1		232.7
Total liabilities assumed		0.1		7.8		183.6		6.8		4.1		2.2		5.8		664.3		8.0		882.7
Total net assets acquired	$	17.5	$	14.3	$	350.2	$	37.7	$	66.2	$	12.8	$	13.5	$	951.5	$	62.4	$	1,526.1

Among other benefits, these acquisitions allow us to expand into desirable geographic locations, further extend our presence in the retail and wholesale insurance brokerage services and risk management industries and increase the volume of general services currently provided. The excess of the purchase price over the estimated fair value of the tangible net assets acquired at the acquisition date was allocated to goodwill, expiration lists, non-compete agreements and trade names in the amounts of $878.4 million, $575.1 million, $5.3 million and $5.1 million, respectively, within the brokerage segment.

Provisional estimates of fair value are established at the time of each acquisition and are subsequently reviewed within the first year of operations subsequent to the acquisition date to determine the necessity for adjustments. The fair value of the tangible assets and liabilities for each applicable acquisition at the acquisition date approximated their carrying values. The fair value of expiration lists was established using the excess earnings method, which is an income approach based on estimated financial projections developed by management for each acquired entity using market participant assumptions. Revenue growth and attrition rates generally ranged from 2.0% to 3.0% and 5.0% to 10.0%, respectively, for our 2014 and 2013 acquisitions, for which a valuation was performed in the six-month period ended June 30, 2014. We estimate the fair value as the present value of the benefits anticipated from ownership of the subject customer list in excess of returns required on the investment in contributory assets necessary to realize those benefits. The rate used to discount the net benefits was based on a risk-adjusted rate that takes into consideration market-based rates of return and reflects the risk of the asset relative to the acquired business. These discount rates generally ranged from 12.5% to 14.5% for our 2014 and 2013 acquisitions, for which a valuation was performed in the six-month period ended June 30, 2014. The fair value of non-compete agreements was established using the profit differential method, which is an income approach based on estimated financial projections developed by management for the acquired company using market participant assumptions and various non-compete scenarios.

Expiration lists, non-compete agreements and trade names related to our acquisitions are amortized using the straight-line method over their estimated useful lives (three to fifteen years for expiration lists, one to five years for non-compete agreements and three to fifteen years for trade names), while goodwill is not subject to amortization. We use the straight-line method to amortize these intangible assets because the pattern of their economic benefits cannot be reasonably determined with any certainty. We review all of our intangible assets for impairment periodically (at least annually) and whenever events or changes in business circumstances indicate that the carrying value of the assets may not be recoverable. In reviewing intangible assets, if the fair value is less than the carrying amount of the respective (or underlying) asset, an indicator of impairment would exist and further analysis would be required to determine whether or not a loss would need to be charged against current period earnings. Based on the results of impairment reviews during the six-month period ended June 30, 2014, we wrote off $0.6 million of amortizable intangible assets related to the brokerage segment. Based on the results of impairment reviews during the three- month and six-month periods ended June 30, 2013, we wrote off $0.4 million and $2.2 million, respectively, of amortizable intangible assets related to the brokerage segment.

Of the $575.1 million of expiration lists, $5.3 million of non-compete agreements and $5.1 million of trade names related to our acquisitions made during the six-month period ended June 30, 2014, $461.7 million, $4.2 million and $4.3 million, respectively, is not expected to be deductible for income tax purposes. Accordingly, we recorded a deferred tax liability of $68.9 million, and a corresponding amount of goodwill, in the six-month period ended June 30, 2014 related to nondeductible amortizable intangible assets.

Our consolidated financial statements for the six-month period ended June 30, 2014 include the operations of the acquired entities from their respective acquisition dates. The following is a summary of the unaudited pro forma historical results, as if these entities had been acquired at January 1, 2013 (in millions, except per share data):

	Three-month period ended June 30,				Six-month period ended June 30,
	2014		2013		2014		2013
Total revenues	$	1,251.1	$	933.4	$	2,295.2	$	1,735.1
Net earnings		112.2		111.6		171.7		161.1
Basic net earnings per share		0.71		0.74		1.09		1.07
Diluted net earnings per share		0.70		0.73		1.07		1.06

The unaudited pro forma results above have been prepared for comparative purposes only and do not purport to be indicative of the results of operations which actually would have resulted had these acquisitions occurred at January 1, 2013, nor are they necessarily indicative of future operating results. Annualized revenues of the businesses acquired during the six-month period ended June 30, 2014 totaled approximately $514.9 million. For the six-month period ended June 30, 2014, total revenues and net earnings recorded in our unaudited consolidated statement of earnings related to our acquisitions made during the six-month period ended June 30, 2014 in the aggregate, were $84.6 million and $10.8 million, respectively.

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Effect of New Accounting Pronouncements (Policies)

6 Months Ended

Jun. 30, 2014

Accounting Changes And Error Corrections [Abstract]

Revenue Recognition

Revenue Recognition

In May 2014, the Financial Accounting Standards Board (which we refer to as the FASB) issued new accounting guidance on revenue from contracts with customers, which will supersede nearly all existing revenue recognition guidance under U.S. GAAP. The core principal of the new guidance is that an entity should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. This new guidance is effective in first quarter 2017 and early adoption is not permitted. The guidance permits two methods of transition upon adoption; full retrospective and modified retrospective. Under the full retrospective method, prior periods would be restated under the new revenue standard, providing a comparable view across all periods presented. Under the modified retrospective method, prior periods would not be restated. Rather, revenues and other disclosures for pre-2017 periods would be provided in the notes to the financial statements as previously reported under the current revenue standard. Management is currently reviewing the guidance, and the impact from its adoption on our consolidated financial statements cannot be determined at this time.

Presentation of Unrecognized Tax Benefits

Presentation of Unrecognized Tax Benefits

In July 2013, the FASB issued ASU 2013-11, “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists,” which provides explicit guidance on the presentation of certain unrecognized tax benefits in the financial statements that did not previously exist. The guidance provides that a liability related to an unrecognized tax benefit would be offset against a deferred tax asset for a net operating loss carryforward, a similar tax loss or a tax credit carryforward if such settlement is required or expected in the event the uncertain tax position is disallowed. In that case, the liability associated with the unrecognized tax benefit is presented in the financial statements as a reduction to the related deferred tax asset. In situations in which a net operating loss carryforward, a similar tax loss or a tax credit carryforward is not available at the reporting date under the tax law of the jurisdiction or the tax law of the jurisdiction does not require, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit will be presented in the financial statements as a liability and will not be combined with deferred tax assets. This new guidance was effective in first quarter 2014. Management adopted the new guidance effective January 1, 2014. The impact of the new guidance upon adoption was not material to our 2014 unaudited consolidated financial statements.

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Investments

6 Months Ended

Jun. 30, 2014

Equity Method Investments And Joint Ventures [Abstract]

Investments

11. Investments

The following is a summary of our investments and the related funding commitments (in millions):

	June 30, 2014				December 31,
			Funding		2013
	Assets		Commitments		Assets
Chem-Mod LLC	$	4.0	$	—	$	4.0
Chem-Mod International LLC		2.0		—		2.0
C-Quest Technologies LLC and C-Quest Technologies International LLC		—		—		2.0
Clean-coal investments
Controlling interest in five limited liability companies that own fourteen 2009 Era Clean Coal Plants		24.2		0.2		18.3
Non-controlling interest in one limited liability company that owns one 2011 Era Clean Coal Plant		1.1		—		1.1
Controlling interest in thirteen limited liability companies that own nineteen 2011 Era Clean Coal Plants		61.5		—		59.3
Other investments		3.2		2.9		3.7
Total investments	$	96.0	$	3.1	$	90.4

Chem-Mod LLC - At June 30, 2014, we held a 46.54% controlling interest in Chem-Mod. Chem-Mod possesses the exclusive marketing rights, in the U.S. and Canada, for technologies used to reduce emissions created during the combustion of coal. The refined coal production plants discussed below, as well as those owned by other unrelated parties, license and use Chem-Mod’s proprietary technologies, The Chem-Mod™ Solution, in the production of refined coal. The Chem-Mod™ Solution uses a dual injection sorbent system to reduce mercury, sulfur dioxide and other emissions at coal-fired power plants.

We believe that the application of The Chem-Mod™ Solution qualifies for refined coal tax credits under IRC Section 45 when used with refined coal production plants placed in service by December 31, 2011 or 2009. Chem-Mod has been marketing its technologies principally to coal-fired power plants owned by utility companies, including those utilities that are operating with the IRC Section 45 refined coal production plants in which we hold an investment.

Chem-Mod is determined to be a variable interest entity (which we refer to as a VIE). We are the controlling manager of Chem-Mod and therefore consolidate its operations into our consolidated financial statements. At June 30, 2014, total assets and total liabilities of this VIE included in our consolidated balance sheet were $9.3 million and $0.7 million, respectively. For the six-month period ended June 30, 2014, total revenues and expenses were $32.3 million and $17.8 million (including non-controlling interest of $16.7 million), respectively. We are under no obligation to fund Chem-Mod’s operations in the future.

Chem-Mod International LLC - At June 30, 2014, we held a 31.52% non-controlling ownership interest in Chem-Mod International. Chem-Mod International has the rights to market The Chem-Mod™ Solution in countries other than the U.S. and Canada. Such marketing activity has been limited to date.

C-Quest Technologies LLC and C-Quest Technologies International LLC (together, C-Quest) - At June 30, 2014, we held a non-controlling 12% interest in C-Quest’s global entities, which is an increase of 4% resulting from the transaction described below. C-Quest possesses rights, information and technology for the reduction of carbon dioxide emissions created by burning fossil fuels. Thus far, C-Quest’s operations have been limited to laboratory testing. C-Quest is determined to be a VIE, but due to our lack of control over the operation of C-Quest, we do not consolidate this investment into our consolidated financial statements. Prior to August 1, 2013, we had options to acquire an additional 19% interest in C-Quest’s global entities for $9.5 million at any time on or prior to August 1, 2016. On August 1, 2013, we loaned the majority owner $2.0 million at a 2% interest rate, which was to mature on May 15, 2014. Also on August 1, 2013, the option to acquire the 19% interests was extended to August 15, 2016. The loan was to be repaid in cash or by delivery of an additional 4% ownership interest in C-Quest’s global entities. On March 31, 2014, we accepted payment of the loan by delivery of the additional 4% ownership interest, therefore our remaining option is reduced to 15% and the remaining purchase price was reduced to $7.5 million.

Clean Coal Investments -

• We have investments in limited liability companies that own 34 refined coal production plants which produce refined coal using propriety technologies owned by Chem-Mod. We believe the production and sale of refined coal at these plants is qualified to receive refined coal tax credits under IRC Section 45. The fourteen plants placed in service prior to December 31, 2009 (which we refer to as the 2009 Era Plants) are eligible to receive tax credits through 2019 and the twenty plants placed in service prior to December 31, 2011 (which we refer to as the 2011 Era Plants) are eligible to receive tax credits through 2021.

• On March 1, 2013, we purchased an additional ownership interest in twelve of the 2009 Era Plants from a co-investor. For nine of the plants, our ownership increased from 24.5% to 49.5%. For the other three of the plants, our ownership increased from 25.0% to 60.0%. Our investment in these plants had been accounted for under the equity method of accounting. As of March 1, 2013, we consolidated the operations of the limited liability company that owns these three plants. Total revenues and expenses recorded in our unaudited consolidated statement of earnings for the six-month period ended June 30, 2014 related to this acquisition, were $109.0 million and $113.1 million, respectively.

• Our purchase price for the additional ownership interests in these twelve plants was the assumption of the promissory note that we received as consideration for the co-investor’s purchase of ownership interests in three of the 2009 Era Plants on March 1, 2010, which had a carrying value, including accrued interest, of $8.0 million at March 1, 2013, plus the payment of cash and other consideration of $5.0 million. We recognized a gain of $11.4 million as a component of other net revenues in the accompanying unaudited consolidated statement of earnings, which included the increase in fair value of our prior 25% equity interest in the limited liability company upon the acquisition of the additional 35% equity interest, and recorded $26.3 million of fixed and other amortizable intangible assets and $6.8 million of other assets in connection with this transaction. The carrying value of our prior non-controlling interest in the limited liability company was $4.8 million as of the acquisition date. The fair value of our prior non-controlling interest in the limited liability company was determined by allocating, on a pro rata basis, the fair value of the limited liability company as adjusted for our lack of control in our prior ownership position. We determined the fair value of the limited liability company using similar valuation techniques to those discussed in Note 3 to these unaudited consolidated financial statements.

• On September 1, 2013, we purchased a 99% interest in a limited liability company that has ownership interests in four limited liability companies that own five 2011 Era Plants. The purchase price was $4.0 million in cash plus a $10.0 million note with 3% interest due in installments through December 19, 2021. Total revenues and expenses recorded in our unaudited consolidated statement of earnings for the six-month period ended June 30, 2014 related to this acquisition, were $35.9 million and $40.0 million, respectively.

• On March 1, 2014, we purchased an additional ownership interest in seven of the 2009 Era Plants and five of the 2011 Era Plants from a co-investor. For all seven of the 2009 Era plants, our ownership increased from 49.5% to 100.0%. For the 2011 Era plants, our ownership increased from 48.8% to 90.0% for one of the plants, from 49.0% to 100.0% for three of the plants and from 98.0% to 100.0% for one of the plants. Our investments in the plants where our ownership was less than 50% had been accounted for under the equity method of accounting. As of March 1, 2014 we consolidated the operations of the limited liability companies that own these plants. Total revenues and expenses recorded in our unaudited consolidated statement of earnings for the six-month period ended June 30, 2014 related to this acquisition were $156.5 million and $167.4 million, respectively.

• We received $0.5 million from our co-investor as part of the 2014 acquisition transaction in addition to receiving the additional ownership interests. We recognized a gain of $25.6 million as a component of other net revenues in the accompanying unaudited consolidated statement of earnings, which resulted from the increase in fair value of our prior equity interests in the limited liability companies upon the acquisition of the additional equity interests, and recorded $26.3 million of fixed and other amortizable intangible assets, $3.3 million of other assets and other liabilities of $4.5 million in connection with this transaction. The carrying value of our prior non-controlling interest in the limited liability companies was $15.5 million as of the acquisition date. The fair value of our prior non-controlling interest in the limited liability company was determined by allocating, on a pro rata basis, the fair value of the limited liability company as adjusted for our lack of control in our prior ownership position. We determined the fair value of the limited liability company using similar valuation techniques to those discussed in Note 3 to these consolidated financial statements.

• As of June 30, 2014:

• Twenty-seven of the plants have long-term production contracts.

• The remaining seven plants are in various stages of seeking and negotiating long-term production contracts.

• We have a non-controlling interest in one plant, which is owned by a limited liability company (which we refer to as a LLC). We have determined that this LLC is a VIE, for which we are not the primary beneficiary. At June 30, 2014, total assets and total liabilities of this VIE were $9.5 million and $6.3 million, respectively. For the six-month period ended June 30, 2014, total revenues and expenses of this VIE were $21.9 million and $26.8 million, respectively.

• We may sell ownership interests in some or all of the plants to co-investors and relinquish control of the plants, thereby becoming a non-controlling, minority investor. In any limited liability company where we are a non-controlling, minority investor, the membership agreement for the operations contains provisions that preclude an individual member from being able to make major decisions that would denote control. As of any date we become a non-controlling, minority investor, we deconsolidate the entity and subsequently account for the investment using equity method accounting.

• For all plants that are not under long-term production contracts, we estimate that we will invest, on average, an additional $5.0 million per plant to connect and house each of them. For those plants that will have majority ownership co-investors, the average additional investment will be $2.5 million. We are currently committed to fund an additional $0.2 million under engineering and construction contracts related to moving, connecting and housing the refined coal plants that we plan to redeploy during 2014. We further estimate that we will invest an additional $30.0 million to $40.0 million to redeploy the remainder of the refined coal plants in 2015, before any co-investor contributions.

• We and our co-investors each fund our portion of the on-going operations of the limited liability companies in proportion to our investment ownership percentages. Other than our portion of the on-going operational funding, there are no additional amounts that we are committed to related to funding these investments.

• We are aware that some of the coal-fired power plants that purchase the refined coal are considering changing to burning natural gas or shutting down completely for economic reasons. The entities that own such plants are prepared to move the refined coal productions plants to other, generally higher volume, coal-fired power plants. If these potential developments were to occur, we estimate those plants will not operate for 12 to 18 months during their movement and redeployment, which could have a material impact on the amount of tax credits that are generated by these plants.

Other Investments - At June 30, 2014, we owned a non-controlling, minority interest in four venture capital funds totaling $2.7 million, a 20% non-controlling interest in an investment management company totaling $0.5 million, twelve certified low-income housing developments with zero carrying value and two real estate entities with zero carrying value. The low-income housing developments and real estate entities have been determined to be VIEs, but are not required to be consolidated due to our lack of control over their respective operations. At June 30, 2014, total assets and total debt of these VIEs were approximately $60.0 million and $20.0 million, respectively.

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Stock Option Plans

6 Months Ended

Jun. 30, 2014

Text Block [Abstract]

Stock Option Plans

7. Stock Option Plans

Long-Term Incentive Plan

On May 13, 2014, our stockholders approved the Arthur J. Gallagher 2014 Long-Term Incentive Plan (which we refer to as the LTIP), which replaced our previous stockholder-approved Arthur J. Gallagher & Co. 2011 Long-Term Incentive Plan (which we refer to as the 2011 LTIP). The LTIP term began May 13, 2014 and terminates on the date of the annual meeting of stockholders in 2021, unless terminated earlier by our board of directors. All of our officers, employees and non-employee directors are eligible to receive awards under the LTIP. The compensation committee of our board of directors determines the participants under the LTIP. The LTIP provides for non-qualified and incentive stock options, stock appreciation rights, restricted stock, restricted stock units and performance units, any or all of which may be made contingent upon the achievement of performance criteria. A stock appreciation right entitles the holder to receive, upon exercise and subject to withholding taxes, cash or shares of our common stock (which may be restricted stock) with a value equal to the difference between the fair market value of our common stock on the exercise date and the base price of the stock appreciation right. Subject to the LTIP limits, the compensation committee has the discretionary authority to determine the size of an award.

Shares of our common stock available for issuance under the LTIP include authorized and unissued shares of common stock or authorized and issued shares of common stock reacquired and held as treasury shares or otherwise, or a combination thereof. The number of available shares is reduced by the aggregate number of shares that become subject to outstanding awards granted under the LTIP. To the extent that shares subject to an outstanding award granted under either the LTIP or the 2011 LTIP are not issued or delivered by reason of the expiration, termination, cancellation or forfeiture of such award or by reason of the settlement of such award in cash, then such shares will again be available for grant under the LTIP. Shares withheld to satisfy tax withholding requirements upon the vesting of awards other than stock options and stock appreciation rights will also be available for grant under the LTIP. Shares that are subject to a stock appreciation right and were not issued upon the net settlement or net exercise of such stock appreciation right, shares that are used to pay the exercise price of an option, shares delivered to or withheld by us to pay withholding taxes related to stock options or stock appreciation rights, and shares that are purchased on the open market with the proceeds of an option exercise, may not again be made available for issuance.

The maximum number of shares available under the LTIP for restricted stock, restricted stock unit awards and performance unit awards settled with stock (i.e., all awards other than stock options and stock appreciation rights) is 2.0 million at June 30, 2014. To the extent necessary to be qualified performance-based compensation under Section 162(m) of the Internal Revenue Code (which we refer to as the IRC): (i) the maximum number of shares with respect to which options or stock appreciation rights or a combination thereof that may be granted during any fiscal year to any person is 200,000; (ii) the maximum number of shares with respect to which performance-based restricted stock or restricted stock units that may be granted during any fiscal year to any person is 100,000; (iii) the maximum amount that may be payable with respect to cash-settled performance units granted during any fiscal year to any person is $5.0 million; and (iv) the maximum number of shares with respect to which stock-settled performance units may be granted during any fiscal year to any person is 100,000.

The LTIP provides for the grant of stock options, which may be either tax-qualified incentive stock options or non-qualified options and stock appreciation rights. The compensation committee determines the period for the exercise of a non-qualified stock option, tax-qualified incentive stock option or stock appreciation right, provided that no option can be exercised later than seven years after its date of grant. The exercise price of a non-qualified stock option or tax-qualified incentive stock option and the base price of a stock appreciation right cannot be less than 100% of the fair market value of a share of our common stock on the date of grant, provided that the base price of a stock appreciation right granted in tandem with an option will be the exercise price of the related option.

Upon exercise, the option exercise price may be paid in cash, by the delivery of previously owned shares of our common stock, through a net-exercise arrangement, or through a broker-assisted cashless exercise arrangement. The compensation committee determines all of the terms relating to the exercise, cancellation or other disposition of an option or stock appreciation right upon a termination of employment, whether by reason of disability, retirement, death or any other reason. Stock option and stock appreciation right awards under the LTIP are non-transferable.

On March 12, 2014, the compensation committee granted 1,923,000 options under the 2011 LTIP to our officers and key employees that become exercisable at the rate of 34%, 33% and 33% on the anniversary date of the grant in 2017, 2018 and 2019, respectively. On March 13, 2013, the compensation committee granted 1,665,000 options under the 2011 LTIP to our officers and key employees that become exercisable at the rate of 34%, 33% and 33% on the anniversary date of the grant in 2016, 2017 and 2018, respectively. The 2014 and 2013 options expire seven years from the date of grant, or earlier in the event of certain terminations of employment. For certain of our executive officers age 55 or older, stock options awarded in 2014 and 2013 are no longer subject to forfeiture upon such officers’ departure from the company after two years from the date of grant.

Other Information

All of our stock option plans provide for the immediate vesting of all outstanding stock option grants in the event of a change in control of our company, as defined in the applicable plan documents.

During the three-month periods ended June 30, 2014 and 2013, we recognized $2.7 million and $2.3 million, respectively, of compensation expense related to our stock option grants. During the six-month periods ended June 30, 2014 and 2013, we recognized $4.0 million and $3.2 million, respectively, of compensation expense related to our stock option grants.

For purposes of expense recognition, the estimated fair values of the stock option grants are amortized to expense over the options’ vesting period. We estimated the fair value of stock options at the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions:

	2014			2013
Expected dividend yield		3.0	%		3.5	%
Expected risk-free interest rate		1.8	%		1.2	%
Volatility		28.9	%		29.6	%
Expected life (in years)		5.5			6.0

Option valuation models require the input of highly subjective assumptions including the expected stock price volatility. The Black-Scholes option pricing model was developed for use in estimating the fair value of traded options which have no vesting restrictions and are fully transferable. Because our employee and director stock options have characteristics significantly different from those of traded options, and because changes in the selective input assumptions can materially affect the fair value estimate, in management’s opinion, the existing models do not necessarily provide a reliable single measure of the fair value of our employee and non-employee director stock options. The weighted average fair value per option for all options granted during the six-month periods ended June 30, 2014 and 2013, as determined on the grant date using the Black-Scholes option pricing model, was $9.66 and $7.51, respectively.

The following is a summary of our stock option activity and related information for 2014 (in millions, except exercise price and year data):

	Six-month period ended June 30, 2014
						Weighted
						Average
				Weighted		Remaining
	Shares			Average		Contractual		Aggregate
	Under			Exercise		Term		Intrinsic
	Option			Price		(in years)		Value
Beginning balance		8.3		$	31.35
Granted		1.9			46.87
Exercised		(1.2	)		29.03
Forfeited or canceled		—			27.64
Ending balance		9.0		$	35.00		4.23	$	105.0
Exercisable at end of period		3.2		$	27.19		2.12	$	62.8
Ending vested and expected to vest		8.8		$	34.86		4.19	$	104.3

Options with respect to 9.2 million shares (less any shares of restricted stock issued under the LTIP - see Note 9 to these unaudited consolidated financial statements) were available for grant under the LTIP at June 30, 2014.

The total intrinsic value of options exercised during the six-month periods ended June 30, 2014 and 2013 was $19.7 million and $23.3 million, respectively. As of June 30, 2014, we had approximately $34.4 million of total unrecognized compensation expense related to nonvested options. We expect to recognize that expense over a weighted average period of approximately four years.

Other information regarding stock options outstanding and exercisable at June 30, 2014 is summarized as follows (in millions, except exercise price and year data):

	Options Outstanding						Options Exercisable
Range of Exercise Prices	Number Outstanding		Weighted Average Remaining Contractual Term (in years)		Weighted Average Exercise Price		Number Exercisable		Weighted Average Exercise Price
$    21.28   -  $   27.25		2.5		2.08	$	25.81		2.1	$	25.79
27.35   -        35.71		2.9		3.59		32.65		1.1		29.71
35.95   -        39.17		1.7		5.70		39.15		—		—
46.16   -        46.16		—		6.92		46.16		—		—
46.87   -        46.87		1.9		6.70		46.87		—		—
$    21.28   -  $   46.87		9.0		4.23	$	35.00		3.2	$	27.19

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Investments - Additional Information (Detail) (USD $) In Millions, unless otherwise specified		6 Months Ended			6 Months Ended			6 Months Ended
	Sep. 01, 2013	Jun. 30, 2014 Chem-Mod Clean-Coal Venture [Member]	Jun. 30, 2014 Chem-Mod Clean-Coal Venture - U.S. And Canadian Operations [Member]	Jun. 30, 2014 Chem-Mod International LLC [Member]	Jun. 30, 2014 C-Quest Technologies LLC and C-Quest Technologies International LLC [Member]	Mar. 31, 2014 C-Quest Technologies LLC and C-Quest Technologies International LLC [Member]	Aug. 01, 2013 C-Quest Technologies LLC and C-Quest Technologies International LLC [Member]	Jun. 30, 2014 C-Quest Technologies LLC and C-Quest Technologies International LLC [Member] Change In Option On Delivery Of Additional Interest [Member]
Schedule of Equity Method Investments [Line Items]
Ownership interest held	99.00%		46.54%	31.52%	12.00%
Total assets of variable interest entities		$ 9.3
Total liabilities of variable interest entities		0.7
Total revenue of limited liability companies		32.3
Total expenses of limited liability companies		17.8
Non-controlling interest		16.7
Increase in ownership interest					4.00%
Options to acquire additional interest, percent					19.00%			15.00%
Options to acquire additional interest, total price					9.5			7.5
End date for acquiring additional interest					Aug. 01, 2016
Loans to majority owners							$ 2.0
Interest rate of loan							2.00%
Maturity date of of loan					May 15, 2014
Loan description					On August 1, 2013, we loaned the majority owner $2.0 million at a 2% interest rate, which was to mature on May 15, 2014. Also on August 1, 2013, the option to acquire the 19% interests was extended to August 15, 2016. The loan was to be repaid in cash or by delivery of an additional 4% ownership interest in C-Quest's global operations. On March 31, 2014, we accepted payment of the loan by delivery of the additional 4% ownership interest, therefore our option is reduced to 15% and the remaining purchase price is reduced to $7.5 million.
Delivery of additional ownership interest						4.00%

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Credit and Other Debt Agreements

6 Months Ended

Jun. 30, 2014

Debt Disclosure [Abstract]

Credit and Other Debt Agreements

5. Credit and Other Debt Agreements

Note Purchase Agreements - We are a party to an amended and restated note purchase agreement dated December 19, 2007, with certain accredited institutional investors, pursuant to which we issued and sold $100.0 million in aggregate principal amount of our 6.26% Senior Notes, Series A, due August 3, 2014 and $300.0 million in aggregate principal amount of our 6.44% Senior Notes, Series B, due August 3, 2017, in a private placement. These notes require semi-annual payments of interest that are due in February and August of each year.

We are a party to a note purchase agreement dated November 30, 2009, with certain accredited institutional investors, pursuant to which we issued and sold $150.0 million in aggregate principal amount of our 5.85% Senior Notes, Series C, due in three equal installments on November 30, 2016, November 30, 2018 and November 30, 2019, in a private placement. These notes require semi-annual payments of interest that are due in May and November of each year.

We are a party to a note purchase agreement dated February 10, 2011, with certain accredited institutional investors, pursuant to which we issued and sold $75.0 million in aggregate principal amount of our 5.18% Senior Notes, Series D, due February 10, 2021 and $50.0 million in aggregate principal amount of our 5.49% Senior Notes, Series E, due February 10, 2023, in a private placement. These notes require semi-annual payments of interest that are due in February and August of each year.

We are a party to a note purchase agreement dated July 10, 2012, with certain accredited institutional investors, pursuant to which we issued and sold $50.0 million in aggregate principal amount of our 3.99% Senior Notes, Series F, due July 10, 2020, in a private placement. These notes require semi-annual payments of interest that are due in January and July of each year.

We are a party to a note purchase agreement dated June 14, 2013, with certain accredited institutional investors, pursuant to which we issued and sold $200.0 million in aggregate principal amount of our 3.69% Senior Notes, Series G, due June 14, 2022, in a private placement. These notes require semi-annual payments of interest that are due in June and December of each year.

We are a party to a note purchase agreement dated December 20, 2013, with certain accredited institutional investors, pursuant to which we issued and sold $325.0 million in aggregate principal amount of our 4.58% Senior Notes, Series H, due February 27, 2024, $175.0 million in aggregate principal amount of our 4.73% Senior Notes, Series I, due February 27, 2026 and $100.0 million in aggregate principal amount of our 4.98% Senior Notes, Series J, due February 27, 2029. These notes require semi-annual payments of interest that are due in February and August of each year. The funding of this note purchase agreement occurred on February 27, 2014. We incurred approximately $1.4 million of debt acquisition costs that was capitalized and will be amortized on a pro rata basis over the life of the debt.

We are a party to a note purchase agreement dated June 24, 2014, with certain accredited institutional investors, pursuant to which we issued and sold $50.0 million in aggregate principal amount of our 2.80% Senior Notes, Series K, due 2018, $50.0 million in aggregate principal amount of our 3.20% Senior Notes, Series L, due 2019, $50.0 million in aggregate principal amount of our 3.48% Senior Notes, Series M, due 2020, $200.0 million in aggregate principal amount of our 4.13% Senior Notes, Series N, due 2023, $200.0 million in aggregate principal amount of our 4.31% Senior Notes, Series O, due 2025 and $150.0 million in aggregate principal amount of our 4.36% Senior Notes, Series P, due 2026. These notes require semi-annual payments of interest that are due in June and December of each year. We incurred approximately $2.6 million of debt acquisition costs that was capitalized and will be amortized on a pro rata basis over the life of the debt.

Under the terms of the note purchase agreements, we may redeem the notes at any time, in whole or in part, at 100% of the principal amount of such notes being redeemed, together with accrued and unpaid interest and a “make-whole amount.” The “make-whole amount” is derived from a net present value computation of the remaining scheduled payments of principal and interest using a discount rate based on U.S. Treasury yields plus 0.5% and is designed to compensate the purchasers of the notes for their investment risk in the event prevailing interest rates at the time of prepayment are less favorable than the interest rates under the notes. We do not currently intend to prepay any of the notes.

The note purchase agreements described above contain customary provisions for transactions of this type, including representations and warranties regarding us and our subsidiaries and various financial covenants, including covenants that require us to maintain specified financial ratios. We were in compliance with these covenants as of June 30, 2014. The note purchase agreements also provide customary events of default, generally with corresponding grace periods, including, without limitation, payment defaults with respect to the notes, covenant defaults, cross-defaults to other agreements evidencing our or our subsidiaries’ indebtedness, certain judgments against us or our subsidiaries and events of bankruptcy involving us or our material subsidiaries.

The notes issued under the note purchase agreements are senior unsecured obligations of ours and rank equal in right of payment with our Credit Agreement discussed below.

Credit Agreement - On September 19, 2013, we entered into a $600.0 million unsecured multicurrency credit agreement (which we refer to as the Credit Agreement), which expires on September 19, 2018, with a group of fifteen financial institutions. The Credit Agreement provides for a revolving credit commitment of up to $600.0 million, of which up to $75.0 million may be used for issuances of standby or commercial letters of credit and up to $50.0 million may be used for the making of swing loans, as defined in the Credit Agreement. We may from time to time request, subject to certain conditions, an increase in the revolving credit commitment up to a maximum aggregate revolving credit commitment of $850.0 million.

The Credit Agreement provides that we may elect that each borrowing in U.S. dollars be either base rate loans or Eurocurrency loans, as defined in the Credit Agreement. All loans denominated in currencies other than U.S. dollars will be Eurocurrency loans. Interest rates on base rate loans and outstanding drawings on letters of credit in U.S. dollars under the Credit Agreement are based on the base rate, as defined in the Credit Agreement. Interest rates on Eurocurrency loans or outstanding drawings on letters of credit in currencies other than U.S. dollars are based on an adjusted London Interbank Offered Rate (which we refer to as LIBOR), as defined in the Credit Agreement, plus a margin of 0.85%, 0.95%, 1.05%, 1.25% or 1.45%, depending on the financial leverage ratio we maintain. Interest rates on swing loans are based, at our election, on either the base rate, as defined in the Credit Agreement, or such alternate rate as may be quoted by the lead lender. The annual facility fee related to the Credit Agreement is 0.15%, 0.175%, 0.20%, 0.25% or 0.30% of the used and unused portions of the revolving credit commitment, depending on the financial leverage ratio we maintain. In connection with entering into the Credit Agreement, we incurred approximately $2.1 million of debt acquisition costs that were capitalized and will be amortized on a pro rata basis over the term of the Credit Agreement.

The terms of the Credit Agreement include various financial covenants, including covenants that require us to maintain specified financial ratios. We were in compliance with these covenants as of June 30, 2014. The Credit Agreement also includes customary events of default, with corresponding grace periods, including, without limitation, payment defaults, cross-defaults to other agreements evidencing indebtedness and bankruptcy-related defaults.

At June 30, 2014, $21.1 million of letters of credit (for which we had $8.9 million of liabilities recorded at June 30, 2014) were outstanding under the Credit Agreement. There were $153.0 million of borrowings outstanding under the Credit Agreement at June 30, 2014. Accordingly, as of June 30, 2014, $425.9 million remained available for potential borrowings under the Credit Agreement, of which $53.9 million was available for additional letters of credit.

Premium Financing Debt Facility - On June 16, 2014 we entered into a Syndicated Facility Agreement, revolving loan facility, which we refer to as the Premium Financing Debt Facility, that provides funding for the three acquired Australian (AU) and New Zealand (NZ) premium finance subsidiaries. See Note 3 “Business Combinations.” The Premium Financing Debt Facility is comprised of: (i) Facility B is separate AU$150.0 million and NZ$35.0 million tranches, (ii) Facility C is an AU$25.0 million equivalent multi-currency overdraft tranche and (iii) Facility D is a NZ$15.0 million equivalent multi-currency overdraft tranche. The Premium Financing Debt Facility expires June 15, 2016.

The interest rates on Facility B are Interbank rates, which vary by tranche, duration and currency, plus a margin of 1.65%. The interest rates on Facilities C and D are 30 day Interbank rates, plus a margin of 0.85%. The annual fee for Facility B is 0.7425% of the undrawn commitments for the two tranches of the facility. The annual fee for Facilities C and D is 0.80% of the total commitments of the facilities. In connection with entering into the Premium Financing Debt Facility, we incurred an upfront fee of 0.30% of the principal amount of the committed facilities.

The terms of our Premium Financing Debt Facility include various financial covenants, including covenants that require us to maintain specified financial ratios. We were in compliance with these covenants as of June 30, 2014. The Premium Financing Debt Facility also includes customary events of default, with corresponding grace periods, including, without limitation, payment defaults, cross-defaults and breach of other obligations. Facilities B, C and D are secured by the premium finance receivables of the Australian and New Zealand premium finance subsidiaries.

At June 30, 2014, AU$119.8 million and NZ$21.3 million of borrowings were outstanding under Facility B, and NZ$8.8 million of borrowings were outstanding under Facility D. Accordingly, as of June 30, 2014, AU$30.2 million and NZ$13.7 million remained available for potential borrowing under Facility B, and AU$25.0 million and NZ$6.2 million under Facilities C and D.

See Note 12 to these unaudited consolidated financial statements for additional discussion on our contractual obligations and commitments as of June 30, 2014.

The following is a summary of our corporate and other debt (in millions):

	June 30,		December 31,
	2014		2013
Note Purchase Agreements:
Semi-annual payments of interest, fixed rate of 6.26%, balloon due 2014	$	100.0	$	100.0
Semi-annual payments of interest, fixed rate of 6.44%, balloon due 2017		300.0		300.0
Semi-annual payments of interest, fixed rate of 2.80%, balloon due 2018		50.0		—
Semi-annual payments of interest, fixed rate of 3.20%, balloon due 2019		50.0		—
Semi-annual payments of interest, fixed rate of 5.85%, $50 million due in 2016, 2018 and 2019		150.0		150.0
Semi-annual payments of interest, fixed rate of 3.99%, balloon due 2020		50.0		50.0
Semi-annual payments of interest, fixed rate of 3.48%, balloon due 2020		50.0		—
Semi-annual payments of interest, fixed rate of 5.18%, balloon due 2021		75.0		75.0
Semi-annual payments of interest, fixed rate of 5.49%, balloon due 2023		50.0		50.0
Semi-annual payments of interest, fixed rate of 4.13%, balloon due 2023		200.0		—
Semi-annual payments of interest, fixed rate of 3.69%, balloon due 2022		200.0		200.0
Semi-annual payments of interest, fixed rate of 4.58%, balloon due 2024		325.0		—
Semi-annual payments of interest, fixed rate of 4.31%, balloon due 2025		200.0		—
Semi-annual payments of interest, fixed rate of 4.73%, balloon due 2026		175.0		—
Semi-annual payments of interest, fixed rate of 4.36%, balloon due 2026		150.0		—
Semi-annual payments of interest, fixed rate of 4.98%, balloon due 2029		100.0		—
Total Note Purchase Agreements		2,225.0		925.0
Credit Agreement:
Periodic payments of interest and principal, prime or LIBOR plus up to 1.45%, expires September 19, 2018		153.0		530.5
Premium Financing Debt Facility - expires June 15, 2016:
Periodic payments of interest and principal, Interbank rates plus 1.65% for Facility B; plus 0.85% for Facilities C and D
Facility B
AUD denominated tranche		112.8		—
NZD denominated tranche		18.6		—
Facility C and D
NZD denominated tranche		7.6		—
Total Premium Financing Debt Facility		139.0		—
Total corporate and other debt	$	2,517.0	$	1,455.5

The fair value of the $2,225.0 million in debt under the note purchase agreements at June 30, 2014 was $2,321.9 million due to the long-term duration and fixed interest rates associated with these debt obligations. No active or observable market exists for our private placement long-term debt. Therefore, the estimated fair value of this debt is based on discounted future cash flows, which is a Level 3 fair value measurement, using current interest rates available for debt with similar terms and remaining maturities. To estimate an all-in interest rate for discounting, we obtain market quotes for notes with the same terms as ours, which we have deemed to be the closest approximation of current market rates. We have not adjusted this rate for risk profile changes, covenant issues or credit ratings changes. The estimated fair value of the $153.0 million of borrowings outstanding under our Credit Agreement approximates their carrying value due to their short-term duration and variable interest rates. The estimated fair value of the $139.0 million of borrowings outstanding under our Premium Financing Debt Facility approximates their carrying value due to their short-term duration and variable interest rates.

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Earnings Per Share

6 Months Ended

Jun. 30, 2014

Earnings Per Share [Abstract]

Earnings Per Share

6. Earnings Per Share

The following table sets forth the computation of basic and diluted net earnings per share (in millions, except per share data):

	Three-month period ended June  30,				Six-month period ended June  30,
	2014		2013		2014		2013
Net earnings	$	109.0	$	93.5	$	158.3	$	134.0
Weighted average number of common shares outstanding		154.3		127.3		144.2		126.7
Dilutive effect of stock options using the treasury stock method		1.4		1.6		1.6		1.5
Weighted average number of common and common equivalent shares outstanding		155.7		128.9		145.8		128.2
Basic net earnings per share	$	0.71	$	0.73	$	1.10	$	1.06
Diluted net earnings per share	$	0.70	$	0.73	$	1.09	$	1.04

Options to purchase 1.9 million and 1.7 million shares of common stock were outstanding at June 30, 2014 and 2013, respectively, but were not included in the computation of the dilutive effect of stock options for the three-month periods then ended. Options to purchase 1.2 million and 1.0 million shares of common stock were outstanding at June 30, 2014 and 2013, respectively, but were not included in the computation of the dilutive effect of stock options for the six-month periods then ended. These stock options were excluded from the computation because the options’ exercise prices were greater than the average market price of our common shares during the respective period, and therefore would be anti-dilutive to earnings per share under the treasury stock method.

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Deferred Compensation

6 Months Ended

Jun. 30, 2014

Compensation And Retirement Disclosure [Abstract]

Deferred Compensation

8. Deferred Compensation

We have a Deferred Equity Participation Plan (which we refer to as the Age 62 Plan), which is a non-qualified plan that generally provides for distributions to certain of our key executives when they reach age 62 (or the one-year anniversary of the date of the grant for participants over the age of 61 as of the grant date) or upon or after their actual retirement. Under the provisions of the Age 62 Plan, we typically contribute cash in an amount approved by compensation committee to the rabbi trust on behalf of the executives participating in the Age 62 Plan, and instruct the trustee to acquire a specified number of shares of our common stock on the open market or in privately negotiated transactions based on participant elections. Distributions under the Age 62 Plan may not normally be made until the participant reaches age 62 (or the one-year anniversary of the date of the grant for participants over the age of 61 as of the grant date) and are subject to forfeiture in the event of voluntary termination of employment prior to then. All contributions to the plan deemed to be invested in shares of our common stock are distributed in the form of our common stock and all other distributions are paid in cash.

Our common stock that is issued to or purchased by the rabbi trust as a contribution under the Age 62 Plan is valued at historical cost, which equals its fair market value at the date of grant or date of purchase. When common stock is issued or purchased, we record an unearned deferred compensation obligation as a reduction of capital in excess of par value in the accompanying consolidated balance sheet, which is amortized to compensation expense ratably over the vesting period of the participants. Future changes in the fair market value of our common stock owed to the participants do not have any impact on the amounts recorded in our consolidated financial statements.

In the first quarter of each of 2014 and 2013, the compensation committee approved $9.2 million and $8.0 million, respectively, of awards in the aggregate to certain key executives under the Age 62 Plan that were contributed to the rabbi trust in first quarter 2014 and second quarter 2013, respectively. We contributed cash to the rabbi trust and instructed the trustee to acquire a specified number of shares of our common stock on the open market to fund these 2014 and 2013 awards. During the three-month periods ended June 30, 2014 and 2013, we charged $1.8 million and $1.8 million, respectively, to compensation expense related to these awards. During the six-month periods ended June 30, 2014 and 2013, we charged $3.2 million and $3.3 million, respectively, to compensation expense related to these awards.

At June 30, 2014 and December 31, 2013, we recorded $33.7 million (related to 2.3 million shares) and $26.3 million (related to 2.1 million shares), respectively, of unearned deferred compensation as a reduction of capital in excess of par value in the accompanying consolidated balance sheet. The total intrinsic value of our unvested equity based awards under the plan at June 30, 2014 and December 31, 2013 was $105.7 million and $96.4 million, respectively. During the six-month period ended June 30, 2013, cash and equity awards with an aggregate fair value of $0.7 million were vested and distributed to executives under the Age 62 Plan. There were no distributions from the Age 62 Plan during the six-month period ended June 30, 2014.

We have a Deferred Cash Participation Plan (which we refer to as the DCPP), which is a non-qualified deferred compensation plan for certain key employees, other than executive officers, that generally provides for distributions no sooner than five years from the date of awards, with full vesting after thirteen months from the date of awards. Under the provisions of the DCPP, we typically contribute cash in an amount approved by compensation committee to the rabbi trust on behalf of the executives participating in the DCPP, and instruct the trustee to acquire a specified number of shares of our common stock on the open market or in privately negotiated transactions based on participant elections. In the first quarter of each of 2014 and 2013, the compensation committee approved $2.9 million and $2.7 million, respectively, of awards in the aggregate to certain key executives under the DCPP that were contributed to the rabbi trust in first quarter 2014 and second quarter 2013, respectively. During the three-month periods ended June 30, 2014 and 2013, we charged $0.7 million and $0.6 million, respectively, to compensation expense related to these awards. During the six-month periods ended June 30, 2014 and 2013, we charged $1.5 million and $0.8 million, respectively, to compensation expense related to these awards.

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Commitments, Contingencies and Off-Balance Sheet Arrangements - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended		150 Months Ended
	Jun. 30, 2014 Entity	Jun. 30, 2013 Entity	Jun. 30, 2014 Entity sqft	Jun. 30, 2013 Entity	Jun. 30, 2014 Entity
Commitments Contingencies And Off Balance Sheet Arrangements [Line Items]
Acquired property through lease area, sqft			306,000
Acquired property through lease percentage of building			60.00%
Operating lease commitment, expiration date			Feb. 28, 2018
Number of companies acquired	18	23	35	39	314
Aggregate amount of maximum earnout obligations related to acquisitions			$ 473.8
Aggregate amount of maximum earnout obligations related to acquisitions, recorded in consolidated balance sheet			157.4
Income tax credits and adjustments			130.0
Tax-Advantaged Investments No Longer Held [Member]
Commitments Contingencies And Off Balance Sheet Arrangements [Line Items]
Total indemnifications	45.0		45.0		45.0
Letter of Credit [Member]
Commitments Contingencies And Off Balance Sheet Arrangements [Line Items]
Debt	5.0		5.0		5.0
Number of letters of credit issued			1
Self-Insurance Deductibles [Member]
Commitments Contingencies And Off Balance Sheet Arrangements [Line Items]
Number of letters of credit issued			2
Self-Insurance Deductibles [Member] | Letter of Credit [Member]
Commitments Contingencies And Off Balance Sheet Arrangements [Line Items]
Liabilities recorded on self-insurance	8.9		8.9		8.9
Debt	9.8		9.8		9.8
Rent-A-Captive Facility [Member]
Commitments Contingencies And Off Balance Sheet Arrangements [Line Items]
Number of letters of credit issued			7
Rent-A-Captive Facility [Member] | Letter of Credit [Member]
Commitments Contingencies And Off Balance Sheet Arrangements [Line Items]
Debt	6.3		6.3		6.3
Errors and Omissions [Member]
Commitments Contingencies And Off Balance Sheet Arrangements [Line Items]
Insurance claims, amount retained			5.0
Amount of losses in excess of retained amounts	175.0		175.0		175.0
Minimum [Member]
Commitments Contingencies And Off Balance Sheet Arrangements [Line Items]
Ownership interest	1.00%		1.00%		1.00%
Minimum [Member] | Errors and Omissions [Member]
Commitments Contingencies And Off Balance Sheet Arrangements [Line Items]
Actuarial range value	1.4		1.4		1.4
Maximum [Member]
Commitments Contingencies And Off Balance Sheet Arrangements [Line Items]
Ownership interest	50.00%		50.00%		50.00%
Maximum [Member] | Errors and Omissions [Member]
Commitments Contingencies And Off Balance Sheet Arrangements [Line Items]
Actuarial range value	$ 5.4		$ 5.4		$ 5.4

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Accumulated Other Comprehensive Earnings (Loss) - Schedule of Accumulated Comprehensive Earnings (Loss) (Detail) (USD $) In Millions, unless otherwise specified			6 Months Ended
	Jun. 30, 2014	Dec. 31, 2013	Jun. 30, 2014 Pension Liability [Member]	Jun. 30, 2014 Foreign Currency Translation [Member]	Jun. 30, 2014 Fair Value of Derivative Instruments [Member]	Jun. 30, 2014 Accumulated Other Comprehensive Earnings (Loss) [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance	$ 54.2	$ (2.6)	$ (25.6)	$ 22.1	$ 0.9	$ (2.6)
Net change in period			0.9	54.5	1.4	56.8
Ending Balance	$ 54.2	$ (2.6)	$ (24.7)	$ 76.6	$ 2.3	$ 54.2

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Commitments, Contingencies and Off-Balance Sheet Arrangements - Contractual Obligations (Detail) (USD $) In Millions, unless otherwise specified	Jun. 30, 2014
Note Purchase Agreements [Member]
Commitments Contingencies And Off Balance Sheet Arrangements [Line Items]
Contractual Obligations, Payments Due by Period, 2014	$ 100.0
Contractual Obligations, Payments Due by Period, 2015
Contractual Obligations, Payments Due by Period, 2016	50.0
Contractual Obligations, Payments Due by Period, 2017	300.0
Contractual Obligations, Payments Due by Period, 2018	100.0
Contractual Obligations, Payments Due by Period, Thereafter	1,675.0
Total	2,225.0
Credit Agreement [Member]
Commitments Contingencies And Off Balance Sheet Arrangements [Line Items]
Contractual Obligations, Payments Due by Period, 2014	153.0
Contractual Obligations, Payments Due by Period, 2015
Contractual Obligations, Payments Due by Period, 2016
Contractual Obligations, Payments Due by Period, 2017
Contractual Obligations, Payments Due by Period, 2018
Contractual Obligations, Payments Due by Period, Thereafter
Total	153.0
Premium Financing Debt Facility [Member]
Commitments Contingencies And Off Balance Sheet Arrangements [Line Items]
Contractual Obligations, Payments Due by Period, 2014	139.0
Contractual Obligations, Payments Due by Period, 2015
Contractual Obligations, Payments Due by Period, 2016
Contractual Obligations, Payments Due by Period, 2017
Contractual Obligations, Payments Due by Period, 2018
Contractual Obligations, Payments Due by Period, Thereafter
Total	139.0
Total Debt Obligations [Member]
Commitments Contingencies And Off Balance Sheet Arrangements [Line Items]
Contractual Obligations, Payments Due by Period, 2014	446.0
Contractual Obligations, Payments Due by Period, 2015	100.4
Contractual Obligations, Payments Due by Period, 2016	150.4
Contractual Obligations, Payments Due by Period, 2017	397.5
Contractual Obligations, Payments Due by Period, 2018	177.5
Contractual Obligations, Payments Due by Period, Thereafter	2,072.1
Total	3,343.9
Operating Lease Obligations [Member]
Commitments Contingencies And Off Balance Sheet Arrangements [Line Items]
Contractual Obligations, Payments Due by Period, 2014	45.0
Contractual Obligations, Payments Due by Period, 2015	83.5
Contractual Obligations, Payments Due by Period, 2016	69.9
Contractual Obligations, Payments Due by Period, 2017	57.1
Contractual Obligations, Payments Due by Period, 2018	40.4
Contractual Obligations, Payments Due by Period, Thereafter	126.2
Total	422.1
Less Sublease Arrangements [Member]
Commitments Contingencies And Off Balance Sheet Arrangements [Line Items]
Contractual Obligations, Payments Due by Period, 2014	(2.2)
Contractual Obligations, Payments Due by Period, 2015	(1.0)
Contractual Obligations, Payments Due by Period, 2016	(0.3)
Contractual Obligations, Payments Due by Period, 2017	(0.3)
Contractual Obligations, Payments Due by Period, 2018	(0.1)
Contractual Obligations, Payments Due by Period, Thereafter
Total	(3.9)
Outstanding Purchase Obligations [Member]
Commitments Contingencies And Off Balance Sheet Arrangements [Line Items]
Contractual Obligations, Payments Due by Period, 2014	15.7
Contractual Obligations, Payments Due by Period, 2015	16.7
Contractual Obligations, Payments Due by Period, 2016	9.4
Contractual Obligations, Payments Due by Period, 2017	0.9
Contractual Obligations, Payments Due by Period, 2018	0.3
Contractual Obligations, Payments Due by Period, Thereafter
Total	43.0
Total Contractual Obligations [Member]
Commitments Contingencies And Off Balance Sheet Arrangements [Line Items]
Contractual Obligations, Payments Due by Period, 2014	504.5
Contractual Obligations, Payments Due by Period, 2015	199.6
Contractual Obligations, Payments Due by Period, 2016	229.4
Contractual Obligations, Payments Due by Period, 2017	455.2
Contractual Obligations, Payments Due by Period, 2018	218.1
Contractual Obligations, Payments Due by Period, Thereafter	2,198.3
Total	3,805.1
Interest on Debt [Member]
Commitments Contingencies And Off Balance Sheet Arrangements [Line Items]
Contractual Obligations, Payments Due by Period, 2014	54.0
Contractual Obligations, Payments Due by Period, 2015	100.4
Contractual Obligations, Payments Due by Period, 2016	100.4
Contractual Obligations, Payments Due by Period, 2017	97.5
Contractual Obligations, Payments Due by Period, 2018	77.5
Contractual Obligations, Payments Due by Period, Thereafter	397.1
Total	$ 826.9

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Nature of Operations and Basis of Presentation - Additional Information (Detail)	6 Months Ended
	Jun. 30, 2014 Segment Country
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Number of countries in which the company has operations	27
Number of countries in which the company does business through a network of correspondent brokers and consultants	140
Number of reportable segments	3

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Stock Option Plans - Black-Scholes Option Pricing Model with Weighted Average (Detail)	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Expected dividend yield	3.00%	3.50%
Expected risk-free interest rate	1.80%	1.20%
Volatility	28.90%	29.60%
Expected life (in years)	5 years 6 months	6 years

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Accumulated Other Comprehensive Earnings (Loss)

6 Months Ended

Jun. 30, 2014

Equity [Abstract]

Accumulated Other Comprehensive Earnings (Loss)

13. Accumulated Other Comprehensive Earnings (Loss)

The after-tax components of our accumulated other comprehensive earnings (loss) consist of the following:

	Pension Liability			Foreign Currency Translation		Fair Value of Derivative Investments		Accumulated Comprehensive Earnings (Loss)
Balance as of December 31, 2013	$	(25.6	)	$	22.1	$	0.9	$	(2.6	)
Net change in period		0.9			54.5		1.4		56.8
Balance as of June 30, 2014	$	(24.7	)	$	76.6	$	2.3	$	54.2

The foreign currency translation during the six-month period ended June 30, 2014 primarily relates to the net impact of changes in the value of the local currencies relative to the U.S. dollar for our operations in Australia, Canada, the Caribbean, India, New Zealand, Singapore and the U.K.

During the six-month periods ended June 30, 2014 and 2013, $1.2 million and $3.9 million, respectively, of expense related to the pension liability was reclassified from accumulated other comprehensive earnings (loss) to compensation expense in the statement of earnings. During the six-month periods ended June 30, 2014 and 2013, $0.3 million and $0.1 million, respectively, of expense related to the fair value of derivative investments was reclassified from accumulated other comprehensive earnings (loss) to the statement of earnings. During the six-month periods ended June 30, 2014 and 2013, no amounts related to foreign currency translation were reclassified from accumulated other comprehensive earnings (loss) to the statement of earnings.

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Credit and Other Debt Agreements (Tables)

6 Months Ended

Jun. 30, 2014

Debt Disclosure [Abstract]

Summary of Corporate and Other Debt

The following is a summary of our corporate and other debt (in millions):

	June 30,		December 31,
	2014		2013
Note Purchase Agreements:
Semi-annual payments of interest, fixed rate of 6.26%, balloon due 2014	$	100.0	$	100.0
Semi-annual payments of interest, fixed rate of 6.44%, balloon due 2017		300.0		300.0
Semi-annual payments of interest, fixed rate of 2.80%, balloon due 2018		50.0		—
Semi-annual payments of interest, fixed rate of 3.20%, balloon due 2019		50.0		—
Semi-annual payments of interest, fixed rate of 5.85%, $50 million due in 2016, 2018 and 2019		150.0		150.0
Semi-annual payments of interest, fixed rate of 3.99%, balloon due 2020		50.0		50.0
Semi-annual payments of interest, fixed rate of 3.48%, balloon due 2020		50.0		—
Semi-annual payments of interest, fixed rate of 5.18%, balloon due 2021		75.0		75.0
Semi-annual payments of interest, fixed rate of 5.49%, balloon due 2023		50.0		50.0
Semi-annual payments of interest, fixed rate of 4.13%, balloon due 2023		200.0		—
Semi-annual payments of interest, fixed rate of 3.69%, balloon due 2022		200.0		200.0
Semi-annual payments of interest, fixed rate of 4.58%, balloon due 2024		325.0		—
Semi-annual payments of interest, fixed rate of 4.31%, balloon due 2025		200.0		—
Semi-annual payments of interest, fixed rate of 4.73%, balloon due 2026		175.0		—
Semi-annual payments of interest, fixed rate of 4.36%, balloon due 2026		150.0		—
Semi-annual payments of interest, fixed rate of 4.98%, balloon due 2029		100.0		—
Total Note Purchase Agreements		2,225.0		925.0
Credit Agreement:
Periodic payments of interest and principal, prime or LIBOR plus up to 1.45%, expires September 19, 2018		153.0		530.5
Premium Financing Debt Facility - expires June 15, 2016:
Periodic payments of interest and principal, Interbank rates plus 1.65% for Facility B; plus 0.85% for Facilities C and D
Facility B
AUD denominated tranche		112.8		—
NZD denominated tranche		18.6		—
Facility C and D
NZD denominated tranche		7.6		—
Total Premium Financing Debt Facility		139.0		—
Total corporate and other debt	$	2,517.0	$	1,455.5

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Earnings Per Share - Additional information (Detail) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Earnings Per Share [Abstract]
Options to purchase common stock shares outstanding	1.9	1.7	1.2	1.0

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Intangible Assets - Changes in Carrying Amount of Goodwill (Detail) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2014
Goodwill [Line Items]
Beginning Balance	$ 2,145.2
Goodwill acquired during the period	878.4
Goodwill adjustments due to appraisals and other acquisition adjustments	(25.5)
Goodwill written-off related to sales of business	(0.6)
Foreign currency translation adjustments during the period	30.1
Ending Balance	3,027.6
Brokerage [Member]
Goodwill [Line Items]
Beginning Balance	2,122.9
Goodwill acquired during the period	878.4
Goodwill adjustments due to appraisals and other acquisition adjustments	(25.5)
Goodwill written-off related to sales of business	(0.6)
Foreign currency translation adjustments during the period	30.0
Ending Balance	3,005.2
Risk Management [Member]
Goodwill [Line Items]
Beginning Balance	22.3
Goodwill acquired during the period	0
Goodwill adjustments due to appraisals and other acquisition adjustments	0
Goodwill written-off related to sales of business	0
Foreign currency translation adjustments during the period	0.1
Ending Balance	22.4
Corporate [Member]
Goodwill [Line Items]
Beginning Balance	0
Goodwill acquired during the period	0
Goodwill adjustments due to appraisals and other acquisition adjustments	0
Goodwill written-off related to sales of business	0
Foreign currency translation adjustments during the period	0
Ending Balance	$ 0

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Consolidated Balance Sheet (Parenthetical) In Millions, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Statement Of Financial Position [Abstract]
Common stock - issued shares	159.0	133.6
Common stock - outstanding shares	159.0	133.6

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Effect of New Accounting Pronouncements

6 Months Ended

Jun. 30, 2014

Accounting Changes And Error Corrections [Abstract]

Effect of New Accounting Pronouncements

2. Effect of New Accounting Pronouncements

Revenue Recognition

In May 2014, the Financial Accounting Standards Board (which we refer to as the FASB) issued new accounting guidance on revenue from contracts with customers, which will supersede nearly all existing revenue recognition guidance under U.S. GAAP. The core principal of the new guidance is that an entity should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. This new guidance is effective in first quarter 2017 and early adoption is not permitted. The guidance permits two methods of transition upon adoption; full retrospective and modified retrospective. Under the full retrospective method, prior periods would be restated under the new revenue standard, providing a comparable view across all periods presented. Under the modified retrospective method, prior periods would not be restated. Rather, revenues and other disclosures for pre-2017 periods would be provided in the notes to the financial statements as previously reported under the current revenue standard. Management is currently reviewing the guidance, and the impact from its adoption on our consolidated financial statements cannot be determined at this time.

Presentation of Unrecognized Tax Benefits

In July 2013, the FASB issued ASU 2013-11, “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists,” which provides explicit guidance on the presentation of certain unrecognized tax benefits in the financial statements that did not previously exist. The guidance provides that a liability related to an unrecognized tax benefit would be offset against a deferred tax asset for a net operating loss carryforward, a similar tax loss or a tax credit carryforward if such settlement is required or expected in the event the uncertain tax position is disallowed. In that case, the liability associated with the unrecognized tax benefit is presented in the financial statements as a reduction to the related deferred tax asset. In situations in which a net operating loss carryforward, a similar tax loss or a tax credit carryforward is not available at the reporting date under the tax law of the jurisdiction or the tax law of the jurisdiction does not require, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit will be presented in the financial statements as a liability and will not be combined with deferred tax assets. This new guidance was effective in first quarter 2014. Management adopted the new guidance effective January 1, 2014. The impact of the new guidance upon adoption was not material to our 2014 unaudited consolidated financial statements.

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Investments - Investments Reported in Other Current and Non-Current Assets (Detail) (USD $) In Millions, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Schedule of Equity Method Investments [Line Items]
Assets	$ 96.0	$ 90.4
Funding Commitments	3.1
Chem-Mod LLC [Member]
Schedule of Equity Method Investments [Line Items]
Assets	4.0	4.0
Funding Commitments
Chem-Mod International LLC [Member]
Schedule of Equity Method Investments [Line Items]
Assets	2.0	2.0
Funding Commitments
C-Quest Technologies LLC and C-Quest Technologies International LLC [Member]
Schedule of Equity Method Investments [Line Items]
Assets		2.0
Funding Commitments
Clean-Coal Investments [Member] | Controlling Interest [Member] | Fourteen 2009 Era Clean Coal Plants [Member]
Schedule of Equity Method Investments [Line Items]
Assets	24.2	18.3
Funding Commitments	0.2
Clean-Coal Investments [Member] | Controlling Interest [Member] | Nineteen 2011 Era Clean Coal Plants [Member]
Schedule of Equity Method Investments [Line Items]
Assets	61.5	59.3
Funding Commitments
Clean-Coal Investments [Member] | Non-controlling Interest [Member] | One 2011 Era Clean Coal Plant [Member]
Schedule of Equity Method Investments [Line Items]
Assets	1.1	1.1
Funding Commitments
Other Investments [Member]
Schedule of Equity Method Investments [Line Items]
Assets	3.2	3.7
Funding Commitments	$ 2.9

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Segment Information - Schedule of Segment Reporting Information by Segment (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013
Segment Reporting Information [Line Items]
Total revenues	$ 1,179.3	$ 779.5	$ 2,094.3	$ 1,453.6
Earnings before income taxes	107.1	97.4	153.4	139.7
Identifiable assets at June 30, 2014 and 2013	10,019.3		10,019.3		6,860.5
Brokerage [Member]
Segment Reporting Information [Line Items]
Total revenues	742.6	550.9	1,311.2	1,005.3
Earnings before income taxes	136.5	112.6	186.9	153.2
Identifiable assets at June 30, 2014 and 2013	8,047.4	4,325.2	8,047.4	4,325.2
Risk Management [Member]
Segment Reporting Information [Line Items]
Total revenues	168.1	156.2	328.1	309.8
Earnings before income taxes	20.6	20.2	39.6	41.7
Identifiable assets at June 30, 2014 and 2013	581.2	530.8	581.2	530.8
Corporate [Member]
Segment Reporting Information [Line Items]
Total revenues	268.6	72.4	455.0	138.5
Earnings before income taxes	(50.0)	(35.4)	(73.1)	(55.2)
Identifiable assets at June 30, 2014 and 2013	$ 1,390.7	$ 706.1	$ 1,390.7	$ 706.1

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Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2014

Earnings Per Share [Abstract]

Computation of Basic and Diluted Net EPS

The following table sets forth the computation of basic and diluted net earnings per share (in millions, except per share data):

	Three-month period ended June 30,				Six-month period ended June 30,
	2014		2013		2014		2013
Net earnings	$	109.0	$	93.5	$	158.3	$	134.0
Weighted average number of common shares outstanding		154.3		127.3		144.2		126.7
Dilutive effect of stock options using the treasury stock method		1.4		1.6		1.6		1.5
Weighted average number of common and common equivalent shares outstanding		155.7		128.9		145.8		128.2
Basic net earnings per share	$	0.71	$	0.73	$	1.10	$	1.06
Diluted net earnings per share	$	0.70	$	0.73	$	1.09	$	1.04

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Business Combinations - Summary of Estimated Fair Values of Net Assets Acquired (Detail) (USD $) In Millions, unless otherwise specified	Jun. 30, 2014
Business Acquisition Actual Revenue And Pre Tax Income Loss [Line Items]
Cash	$ 53.6
Other current assets	859.6
Fixed assets	20.6
Noncurrent assets	11.1
Goodwill	878.4
Expiration lists	575.1
Non-compete agreements	5.3
Trade names	5.1
Total assets acquired	2,408.8
Current liabilities	650.0
Noncurrent liabilities	232.7
Total liabilities assumed	882.7
Total net assets acquired	1,526.1
Kent, Kent & Tingle (KKT) [Member]
Business Acquisition Actual Revenue And Pre Tax Income Loss [Line Items]
Cash	0.2
Other current assets	0.1
Fixed assets	0
Noncurrent assets	0
Goodwill	10.2
Expiration lists	7.0
Non-compete agreements	0.1
Trade names	0
Total assets acquired	17.6
Current liabilities	0.1
Noncurrent liabilities
Total liabilities assumed	0.1
Total net assets acquired	17.5
Mike Henry Insurance Brokers Limited (MHI) [Member]
Business Acquisition Actual Revenue And Pre Tax Income Loss [Line Items]
Cash	0
Other current assets	6.3
Fixed assets	0.2
Noncurrent assets	0
Goodwill	9.7
Expiration lists	5.8
Non-compete agreements	0
Trade names	0.1
Total assets acquired	22.1
Current liabilities	6.0
Noncurrent liabilities	1.8
Total liabilities assumed	7.8
Total net assets acquired	14.3
Oval Group of Companies (OGC) [Member]
Business Acquisition Actual Revenue And Pre Tax Income Loss [Line Items]
Cash	23.1
Other current assets	129.6
Fixed assets	2.1
Noncurrent assets	0
Goodwill	238.3
Expiration lists	140.7
Non-compete agreements	0
Trade names	0
Total assets acquired	533.8
Current liabilities	129.5
Noncurrent liabilities	54.1
Total liabilities assumed	183.6
Total net assets acquired	350.2
Heritage Insurance Management Limited (HIM) [Member]
Business Acquisition Actual Revenue And Pre Tax Income Loss [Line Items]
Cash	2.9
Other current assets	4.9
Fixed assets	0.3
Noncurrent assets	0
Goodwill	21.8
Expiration lists	14.6
Non-compete agreements	0
Trade names	0
Total assets acquired	44.5
Current liabilities	6.8
Noncurrent liabilities	0
Total liabilities assumed	6.8
Total net assets acquired	37.7
MGA Insurance Group (MGA) [Member]
Business Acquisition Actual Revenue And Pre Tax Income Loss [Line Items]
Cash	0.2
Other current assets	8.9
Fixed assets	0.3
Noncurrent assets	0
Goodwill	24.3
Expiration lists	36.3
Non-compete agreements	0.3
Trade names	0
Total assets acquired	70.3
Current liabilities	4.1
Noncurrent liabilities	0
Total liabilities assumed	4.1
Total net assets acquired	66.2
Shilling Limited (SL) [Member]
Business Acquisition Actual Revenue And Pre Tax Income Loss [Line Items]
Cash	0.4
Other current assets	1.0
Fixed assets	0.3
Noncurrent assets	0
Goodwill	6.4
Expiration lists	6.8
Non-compete agreements	0
Trade names	0.1
Total assets acquired	15.0
Current liabilities	0.8
Noncurrent liabilities	1.4
Total liabilities assumed	2.2
Total net assets acquired	12.8
Plus Companies, Inc. (PCI) [Member]
Business Acquisition Actual Revenue And Pre Tax Income Loss [Line Items]
Cash	0
Other current assets	5.8
Fixed assets	0
Noncurrent assets	0
Goodwill	5.4
Expiration lists	7.8
Non-compete agreements	0
Trade names	0.3
Total assets acquired	19.3
Current liabilities	5.8
Noncurrent liabilities	0
Total liabilities assumed	5.8
Total net assets acquired	13.5
Crombie OAMPS (CO) [Member]
Business Acquisition Actual Revenue And Pre Tax Income Loss [Line Items]
Cash	26.6
Other current assets	695.5
Fixed assets	17.1
Noncurrent assets	7.0
Goodwill	535.9
Expiration lists	325.3
Non-compete agreements	4.2
Trade names	4.2
Total assets acquired	1,615.8
Current liabilities	490.0
Noncurrent liabilities	174.3
Total liabilities assumed	664.3
Total net assets acquired	951.5
Eighteen other acquisitions [Member]
Business Acquisition Actual Revenue And Pre Tax Income Loss [Line Items]
Cash	0.2
Other current assets	7.5
Fixed assets	0.3
Noncurrent assets	4.1
Goodwill	26.4
Expiration lists	30.8
Non-compete agreements	0.7
Trade names	0.4
Total assets acquired	70.4
Current liabilities	6.9
Noncurrent liabilities	1.1
Total liabilities assumed	8.0
Total net assets acquired	$ 62.4

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Commitments, Contingencies and Off-Balance Sheet Arrangements

6 Months Ended

Jun. 30, 2014

Commitments And Contingencies Disclosure [Abstract]

Commitments, Contingencies and Off-Balance Sheet Arrangements

12. Commitments, Contingencies and Off-Balance Sheet Arrangements

In connection with our investing and operating activities, we have entered into certain contractual obligations and commitments. See Notes 5 and 11 to these unaudited consolidated financial statements for additional discussion of these obligations and commitments. Our future minimum cash payments, including interest, associated with our contractual obligations pursuant to the note purchase agreements, Credit Agreement, Premium Financing Debt Facility, operating leases and purchase commitments at June 30, 2014 were as follows (in millions):

	Payments Due by Period
Contractual Obligations	2014			2015			2016			2017			2018			Thereafter		Total
Note purchase agreements	$	100.0		$	—		$	50.0		$	300.0		$	100.0		$	1,675.0	$	2,225.0
Credit Agreement		153.0			—			—			—			—			—		153.0
Premium Financing Debt Facility		139.0			—			—			—			—			—		139.0
Interest on debt		54.0			100.4			100.4			97.5			77.5			397.1		826.9
Total debt obligations		446.0			100.4			150.4			397.5			177.5			2,072.1		3,343.9
Operating lease obligations		45.0			83.5			69.9			57.1			40.4			126.2		422.1
Less sublease arrangements		(2.2	)		(1.0	)		(0.3	)		(0.3	)		(0.1	)		—		(3.9	)
Outstanding purchase obligations		15.7			16.7			9.4			0.9			0.3			—		43.0
Total contractual obligations	$	504.5		$	199.6		$	229.4		$	455.2		$	218.1		$	2,198.3	$	3,805.1

The amounts presented in the table above may not necessarily reflect our actual future cash funding requirements, because the actual timing of future payments may vary from the stated contractual obligation.

Note Purchase Agreements, Credit Agreement and Premium Financing Debt Facility - See Note 5 to these unaudited consolidated financial statements for a discussion of the terms of the note purchase agreements, the Credit Agreement and Premium Financing Debt Facility.

Operating Lease Obligations - Our corporate segment’s executive offices and certain subsidiary and branch facilities of our brokerage and risk management segments are located at Two Pierce Place, Itasca, Illinois, where we lease approximately 306,000 square feet of space, or approximately 60% of the building. The lease commitment on this property expires February 28, 2018.

We generally operate in leased premises at our other locations. Certain of these leases have options permitting renewals for additional periods. In addition to minimum fixed rentals, a number of leases contain annual escalation clauses which are generally related to increases in an inflation index.

We have leased certain office space to several non-affiliated tenants under operating sublease arrangements. In the normal course of business, we expect that certain of these leases will not be renewed or replaced. We adjust charges for real estate taxes and common area maintenance annually based on actual expenses, and we recognize the related revenues in the year in which the expenses are incurred. These amounts are not included in the minimum future rentals to be received in the contractual obligations table above.

Outstanding Purchase Obligations - We typically do not have a material amount of outstanding purchase obligations at any point in time. The amount disclosed in the contractual obligations table above represents the aggregate amount of unrecorded purchase obligations that we had outstanding at June 30, 2014. These obligations represent agreements to purchase goods or services that were executed in the normal course of business.

Off-Balance Sheet Commitments - Our total unrecorded commitments associated with outstanding letters of credit, financial guarantees and funding commitments as of June 30, 2014 were as follows (in millions):

													Total
	Amount of Commitment Expiration by Period												Amounts
Off-Balance Sheet Commitments	2014		2015		2016		2017		2018		Thereafter		Committed
Letters of credit	$	—	$	—	$	—	$	—	$	—	$	21.1	$	21.1
Financial guarantees		—		—		—		—		—		9.1		9.1
Funding commitments		0.2		—		—		—		—		2.9		3.1
Acquistion of Noraxis (see Note 3)		420.0		—		—		—		—		—		420.0
Total commitments	$	420.2	$	—	$	—	$	—	$	—	$	33.1	$	453.3

Since commitments may expire unused, the amounts presented in the table above do not necessarily reflect our actual future cash funding requirements. See Note 11 to these unaudited consolidated financial statements for a discussion of our funding commitments related to our corporate segment and the Off-Balance Sheet Debt section below for a discussion of our letters of credit. All of the letters of credit represent multiple year commitments that have annual, automatic renewing provisions and are classified by the latest commitment date.

Since January 1, 2002, we have acquired 314 companies, all of which were accounted for using the acquisition method for recording business combinations. Substantially all of the purchase agreements related to these acquisitions contain provisions for potential earnout obligations. For all of our acquisitions made in the period from 2011 to 2014 that contain potential earnout obligations, such obligations are measured at fair value as of the acquisition date and are included on that basis in the recorded purchase price consideration for the respective acquisition. The amounts recorded as earnout payables are primarily based upon estimated future operating results of the acquired entities over a two- to three-year period subsequent to the acquisition date. The aggregate amount of the maximum earnout obligations related to these acquisitions was $473.8 million, of which $157.4 million was recorded in our consolidated balance sheet as of June 30, 2014 based on the estimated fair value of the expected future payments to be made. See Note 3 to these unaudited consolidated financial statements for a discussion of our funding commitments related to a large acquisition we signed in April 2014 and completed in July 2014.

Off-Balance Sheet Debt - Our unconsolidated investment portfolio includes investments in enterprises where our ownership interest is between 1% and 50%, in which management has determined that our level of influence and economic interest is not sufficient to require consolidation. As a result, these investments are accounted for under the equity method. None of these unconsolidated investments had any outstanding debt at June 30, 2014 or December 31, 2013 that was recourse to us.

At June 30, 2014, we had posted two letters of credit totaling $9.8 million, in the aggregate, related to our self-insurance deductibles, for which we had a recorded liability of $8.9 million. We have an equity investment in a rent-a-captive facility, which we use as a placement facility for certain of our insurance brokerage operations. At June 30, 2014, we had posted seven letters of credit totaling $6.3 million to allow certain of our captive operations to meet minimum statutory surplus requirements and for additional collateral related to premium and claim funds held in a fiduciary capacity. At June 30, 2014, we had posted one letter of credit totaling $5.0 million to support our potential obligation under a client’s insurance program. These letters of credit have never been drawn upon.

Litigation, Regulatory and Taxation Matters - We are a defendant in various legal actions incidental to the nature of our business including but not limited to matters related to employment practices, alleged breaches of non-compete or other restrictive covenants, theft of trade secrets, breaches of fiduciary duties and related causes of action. We are also periodically the subject of inquiries and investigations by regulatory and taxing authorities into various matters related to our business. Neither the outcomes of these matters nor their effect upon our business, financial condition or results of operations can be determined at this time

Our micro-captive advisory services are the subject of an investigation by the Internal Revenue Service (IRS). Additionally, we understand that the IRS has initiated audits for the 2012 tax year of a number of the micro-captive insurance companies organized and/or managed by us. Among other matters, we believe that the IRS is investigating whether we have been acting as a tax shelter promoter in connection with these operations. While the IRS has not made any specific allegations relating to our operations, if the IRS were to successfully assert that the micro-captives organized and/or managed by us do not meet the requirements of IRC Section 831(b), we could be subject to monetary claims by the IRS and/or our micro-captive clients, and our future earnings from our micro-captive operations could be materially adversely affected, any of which could negatively impact the overall captive business and adversely affect our consolidated results of operations and financial condition. Due to the early stage of the investigation and the fact that the IRS has not made any allegation against us at this time, we are not able to reasonably estimate the amount of any potential loss in connection with this investigation.

In July 2014, Gallagher was named in a lawsuit that asserts Gallagher, its subsidiary, Gallagher Clean Energy, LLC, and Chem-Mod LLC are liable for infringement of a patent held by Nalco Company. The complaint seeks a judgment of infringement, damages, costs and attorneys’ fees, and injunctive relief. Gallagher and the other defendants dispute the allegations contained in the complaint and intend to defend this matter vigorously. We believe that the probability of a material loss is remote. However, litigation is inherently uncertain and it is not possible to predict the ultimate disposition of this proceeding.

Contingent Liabilities - We purchase insurance to provide protection from errors and omissions (which we refer to as E&O) claims that may arise during the ordinary course of business. We currently retain the first $5.0 million of each and every E&O claim. Our E&O insurance provides aggregate coverage for E&O losses up to $175.0 million in excess of our retained amounts. We have historically maintained self-insurance reserves for the portion of our E&O exposure that is not insured. We periodically determine a range of possible reserve levels using actuarial techniques that rely heavily on projecting historical claim data into the future. Our E&O reserve in the June 30, 2014 unaudited consolidated balance sheet is above the lower end of the most recently determined actuarial range by $1.4 million and below the upper end of the actuarial range by $5.4 million. We can make no assurances that the historical claim data used to project the current reserve levels will be indicative of future claim activity. Thus, the E&O reserve level and corresponding actuarial range could change in the future as more information becomes known, which could materially impact the amounts reported and disclosed herein.

Tax-advantaged Investments No Longer Held - Between 1996 and 2007, we developed and then sold portions of our ownership in various energy related investments, many of which qualified for tax credits under IRC Section 29. In connection with the sales to other investors, we provided various indemnities. At June 30, 2014, the maximum potential amount of future payments that we could be required to make under these indemnification provisions totaled approximately $45.0 million, net of the applicable income tax benefit. In addition, we recorded tax benefits in connection with our ownership in these investments. At June 30, 2014, we had exposure on $130.0 million of previously earned tax credits. In 2004, 2007 and 2009, the IRS examined several of these investments and all examinations were closed without any changes being proposed by the IRS. However, any future adverse tax audits, administrative rulings or judicial decisions could disallow previously claimed tax credits or cause us to be subject to liability under our indemnification obligations. Because of the contingent nature of these exposures, no liabilities have been recorded in our June 30, 2014 consolidated balance sheet related to these indemnification obligations.