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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Marsh & Mclennan Cos. Inc | LSE:MHM | London | Ordinary Share | COM US$1 |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 81.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Ins Agents,brokers & Service | 22.74B | 3.76B | 7.6395 | 26.37 | 99.05B |
From Apr 2019 to Apr 2024
TIDMMHM
Marsh & McLennan Companies, Inc. (NYSE:MMC), a global professional services firm offering clients advice and solutions in risk, strategy and people, today reported financial results for the first quarter ended March 31, 2017.
Dan Glaser, President and CEO, said: "We are pleased with our performance in the first quarter. Marsh & McLennan Companies had underlying revenue growth across all of our operating companies, with growth of 5% in Risk & Insurance Services and 3% in Consulting. We delivered strong operating income growth with solid margin expansion."
"With a strong start to the year, we believe the Company is well positioned to deliver underlying revenue growth, margin expansion in both operating segments and strong earnings per share growth in 2017," concluded Mr. Glaser.
Consolidated Results
Earnings per share increased 20% to $1.09. Adjusted EPS rose 17% to $1.08. The tax provision for the first quarter of 2017 includes a benefit from the required change in accounting for share-based awards of approximately $0.08 per share.
Consolidated revenue in the first quarter of 2017 was $3.5 billion, an increase of 5%, or 4% on an underlying basis, compared with the first quarter of 2016. Operating income was $809 million, an increase of 10% from the prior year. Adjusted operating income, which excludes noteworthy items as presented in the attached supplemental schedules, rose 9% to $802 million. Net income attributable to the Company was $569 million.
Risk & Insurance Services
Risk & Insurance Services revenue was $2.0 billion in the first quarter of 2017, an increase of 6%, or 5% on an underlying basis. Operating income was $613 million, an increase of 15%. Adjusted operating income rose 10% to $600 million compared with $543 million in last year's first quarter.
Marsh's revenue in the first quarter was $1.6 billion, an increase of 5% on an underlying basis. International operations produced underlying revenue growth of 5%, reflecting growth of 3% in EMEA, 11% in Asia Pacific and 7% in Latin America. In US/Canada, underlying revenue also rose 5%.
Guy Carpenter's revenue in the first quarter was $385 million, an increase of 4% on an underlying basis.
Consulting
Consulting revenue in the first quarter was $1.5 billion, an increase of 3% on both a reported and underlying basis. Operating income decreased 1% to $241 million. Adjusted operating income increased 3% to $245 million compared with $238 million in last year's first quarter.
Beginning in the first quarter of 2017, Mercer established a Wealth business reflecting a unified client strategy for its former Retirement and Investments businesses. Please see the attached supplemental schedules for further information. Additionally, moving forward we will refer to the Talent business as Career.
Mercer's revenue was $1.1 billion in the first quarter, an increase of 3% on an underlying basis. Wealth, with revenue of $520 million, grew 3% on an underlying basis. Within Wealth, Defined Benefit Consulting & Administration was flat, while Investment Management & Related Services increased 9%. Health revenue of $415 million was up 2% on an underlying basis, and Career revenue of $142 million increased 7%.
Oliver Wyman Group's revenue was $449 million in the first quarter, an increase of 4% on an underlying basis.
Other Items
In January, the Company issued $500 million of 2.75% senior notes due in 2022 and $500 million 4.35% senior notes due in 2047, the net proceeds of which are being used for general corporate purposes, including the repayment of $250 million 2.30% senior notes on April 1, 2017. The Company repurchased approximately 2.7 million shares of its common stock for $200 million in the first quarter.
In the first quarter, Marsh & McLennan Agency (MMA) completed the acquisition of J. Smith Lanier & Co. (JSL), one of the nation's largest privately held insurance brokers. JSL has annual revenue of approximately $130 million.
Conference Call
A conference call to discuss first quarter 2017 results will be held today at 8:30 a.m. Eastern time. To participate in the teleconference, please dial +1 888 882 8941. Callers from outside the United States should dial +1 719 325 2346. The access code for both numbers is 2511104. The live audio webcast may be accessed at http://www.mmc.com. A replay of the webcast will be available approximately two hours after the event.
About Marsh & McLennan Companies
MARSH & McLENNAN COMPANIES (NYSE: MMC) is a global professional services firm offering clients advice and solutions in the areas of risk, strategy and people. Marsh is a leader in insurance broking and risk management; Guy Carpenter is a leader in providing risk and reinsurance intermediary services; Mercer is a leader in health, wealth and career consulting; and Oliver Wyman is a leader in management consulting. With annual revenue of more than $13 billion and more than 60,000 colleagues worldwide, Marsh & McLennan Companies provides analysis, advice and transactional capabilities to clients in more than 130 countries. The Company is committed to being a responsible corporate citizen and making a positive impact in the communities in which it operates. Visit www.mmc.com for more information and follow us on LinkedIn and Twitter @MMC_Global.
INFORMATION CONCERNING FORWARD-LOOKING STATEMENTS
This press release contains "forward-looking statements," as defined in the Private Securities Litigation Reform Act of 1995. These statements, which express management's current views concerning future events or results, use words like "anticipate," "assume," "believe," "continue," "estimate," "expect," "intend," "plan," "project" and similar terms, and future or conditional tense verbs like "could," "may," "might," "should," "will" and "would." Forward-looking statements are subject to inherent risks and uncertainties that could cause actual results to differ materially from those expressed or implied in our forward-looking statements.
Factors that could materially affect our future results include, among other things: our exposure to potential civil damages, criminal penalties or other consequences, such as reputational impact, if we fail to comply with applicable U.S. and non-U.S. laws and regulations, including in connection with the U.K. Financial Conduct Authority's ongoing investigation into the aviation insurance and reinsurance sector; our exposure to potential liabilities, including reputational impact, arising from errors and omissions, breach of fiduciary duty and similar claims against us; our organization's ability to maintain adequate safeguards to protect the security of our information systems and confidential, personal or proprietary information, particularly given the volume of third party vendors we use; our ability to successfully recover if we experience a business continuity problem due to cyberattack, natural disaster or otherwise; our ability to compete effectively and adapt to changes in the competitive environment, including to respond to disintermediation, pricing pressures and technological and other types of innovation; the impact of macroeconomic conditions, political events and market conditions on us, our clients and the industries in which we operate, including the effects of the vote in the U.K. to exit the E.U. and the potential for a move towards protectionist laws and business practices; the financial and operational impact of complying with laws and regulations where we operate, including the E.U.'s General Data Protection Regulation; our ability to incentivize and retain key employees; the effect of our global pension obligations on our financial position, earnings and cash flows and the impact of low interest rates on those obligations; the impact on our competitive position of our tax rate relative to our competitors; the impact of fluctuations in foreign exchange, interest rates and securities markets on our results; and the impact of changes in accounting rules or in our accounting estimates or assumptions.
The factors identified above are not exhaustive. Marsh & McLennan Companies and its subsidiaries operate in a dynamic business environment in which new risks emerge frequently. Accordingly, we caution readers not to place undue reliance on any forward-looking statements, which are based only on information currently available to us and speak only as of the dates on which they are made. The Company undertakes no obligation to update or revise any forward-looking statement to reflect events or circumstances arising after the date on which it is made.
Further information concerning Marsh & McLennan Companies and its businesses, including information about factors that could materially affect our results of operations and financial condition, is contained in the Company's filings with the Securities and Exchange Commission, including the "Risk Factors" section and the "Management's Discussion and Analysis of Financial Condition and Results of Operations" section of our most recently filed Annual Report on Form 10-K.
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Marsh & McLennan Companies, Inc.
Consolidated Statements of Income
(In millions, except per share figures)
(Unaudited)
Three Months Ended
March 31,
2017 2016
Revenue $ 3,503 $ 3,336
Expense:
Compensation and Benefits 1,945 1,854
Other Operating Expenses 749 749
Operating Expenses 2,694 2,603
Operating Income 809 733
Interest Income 2 2
Interest Expense (58 ) (46 )
Investment Income (Loss) - (3 )
Income Before Income Taxes 753 686
Income Tax Expense 175 196
Income from Continuing Operations 578 490
Less: Net Income Attributable 9 9
to Non-Controlling Interests
Net Income Attributable to the Company $ 569 $ 481
Basic Net Income Per Share
- Continuing Operations $ 1.10 $ 0.92
- Net Income Attributable to the Company $ 1.10 $ 0.92
Diluted Net Income Per Share
- Continuing Operations $ 1.09 $ 0.91
- Net Income Attributable to the Company $ 1.09 $ 0.91
Average Number of Shares Outstanding
- Basic 515 521
- Diluted 522 526
Shares Outstanding at 3/31 515 521
Marsh & McLennan
Companies, Inc.
Supplemental Information
- Revenue Analysis
Three Months Ended
March 31, 2017
(Millions) (Unaudited)
Components of Revenue Change*
Three Months Ended % ChangeGAAPRevenue CurrencyImpact Acquisitions/DispositionsImpact UnderlyingRevenue
March 31,
2017 2016
Risk and Insurance Services
Marsh $ 1,596 $ 1,488 7 % (1 )% 4 % 5 %
Guy Carpenter 385 374 3 % (1 )% - 4 %
Subtotal 1,981 1,862 6 % (1 )% 3 % 5 %
Fiduciary Interest Income 8 6
Total Risk and Insurance 1,989 1,868 6 % (1 )% 3 % 5 %
Services
Consulting
Mercer 1,077 1,039 4 % (2 )% 2 % 3 %
Oliver Wyman Group 449 439 2 % (2 )% - 4 %
Total Consulting 1,526 1,478 3 % (2 )% 2 % 3 %
Corporate / Eliminations (12 ) (10 )
Total Revenue $ 3,503 $ 3,336 5 % (1 )% 2 % 4 %
Revenue Details
The following table provides more detailed revenue information for certain of the components presented above:
Components of Revenue Change*
Three Months Ended % ChangeGAAPRevenue Currency Acquisitions/DispositionsImpact UnderlyingRevenue
March 31, Impact
2017 2016
Marsh:
EMEA $ 589 $ 570 3 % (4 )% 5 % 3 %
Asia Pacific 152 146 4 % 1 % (8 )% 11 %
Latin America 80 71 13 % 1 % 5 % 7 %
Total International 821 787 4 % (3 )% 2 % 5 %
U.S. / Canada 775 701 10 % - 5 % 5 %
Total Marsh $ 1,596 $ 1,488 7 % (1 )% 4 % 5 %
Mercer:
Defined Benefit Consulting $ 334 $ 361 (8 )% (4 )% (4 )% -
& Administration
Investment Management 186 147 26 % 1 % 16 % 9 %
& Related Services
Total Wealth 520 508 2 % (2 )% 2 % 3 %
Health 415 400 4 % (1 )% 2 % 2 %
Career 142 131 9 % (1 )% 3 % 7 %
Total Mercer $ 1,077 $ 1,039 4 % (2 )% 2 % 3 %
Notes
Underlying revenue measures the change in revenue using consistent
currency exchange rates, excluding the impact of certain items that
affect comparability such as: acquisitions, dispositions, transfers
among businesses and the deconsolidation of Marsh India.
Effective January 1, 2017, Mercer established a Wealth
business reflecting a unified client strategy
for its former Retirement and Investments businesses.
The 2016 information in the chart
above has been conformed to the current presentation.
Please refer to the "Supplemental Information
- Mercer" schedules herein for additional
information about the Wealth business.
* Components of revenue change may not add due to rounding.
Marsh & McLennan Companies, Inc.Reconciliation of Non-GAAP MeasuresThree Months Ended March 31(Millions) (Unaudited)
Overview
The Company reports its financial results in accordance
with accounting principles generally
accepted in the United States (referred to
in this release as "GAAP" or "reported"
results). The Company also refers to and presents
below certain additional non-GAAP financial
measures, within the meaning of Regulation
G under the Securities Exchange Act
of 1934. These measures are: adjusted operating
income (loss), adjusted operating margin,
adjusted income, net of tax and adjusted earnings
per share (EPS). The Company has
included reconciliations of these non-GAAP financial
measures to the most directly comparable
financial measure calculated in accordance
with GAAP in the following tables.
The Company believes these non-GAAP financial measures
provide useful supplemental information
that enables investors to better compare the Company's
performance across periods. Management
also uses these measures internally to assess the
operating performance of its business, to assess
performance for employee compensation purposes
and to decide how to allocate resources.
However, investors should not consider these non-GAAP
measures in isolation from, or as a substitute
for, the financial information that the Company
reports in accordance with GAAP. The
Company's non-GAAP measures include adjustments that
reflect how management views our businesses,
and may differ from similarly titled non-GAAP
measures presented by other companies.
Adjusted Operating Income (Loss) and Adjusted Operating Margin
Adjusted operating income (loss)is calculated by
excluding the impact of certain noteworthy
items from the Company's GAAP operating income
or loss. The following tables identify
these noteworthy items and reconcileadjusted operating
income (loss)to GAAP operating income
or loss, on a consolidated and segment basis,
for the three months ended March 31,
2017 and 2016. The following tables also presentadjusted
operating margin. For the three
months ended March 31, 2017 and 2016,adjusted
operating marginis calculated by dividing
adjusted operating income by consolidated or segment
GAAP revenue less the proceeds related
to the disposal of Mercer's U.S. defined
contribution recordkeeping business.
Risk &InsuranceServices Consulting Corporate/Eliminations Total
Three Months Ended
March 31, 2017
Operating income $ 613 $ 241 $ (45 ) $ 809
(loss)
Add (Deduct)
impact of
Noteworthy Items:
Restructuring (a) 4 3 2 9
Adjustments to (17 ) 1 - (16 )
acquisition
related accounts
(b)
Operating income (13 ) 4 2 (7 )
adjustments
Adjusted operating $ 600 $ 245 $ (43 ) $ 802
income (loss)
Operating margin 30.8 % 15.8 % N/A 23.1 %
Adjusted operating 30.2 % 16.1 % N/A 22.9 %
margin
Three Months Ended
March 31, 2016
Operating income $ 535 $ 245 $ (47 ) $ 733
(loss)
Add (Deduct)
impact of
Noteworthy Items:
Restructuring (a) 1 - 2 3
Adjustments to 7 (1 ) - 6
acquisition
related accounts
(b)
Disposal/deconsolidation - (6 ) - (6 )
of business (c)
Operating income 8 (7 ) 2 3
adjustments
Adjusted operating $ 543 $ 238 $ (45 ) $ 736
income (loss)
Operating margin 28.6 % 16.6 % N/A 22.0 %
Adjusted operating 29.1 % 16.2 % N/A 22.1 %
margin
(a) Primarily severance for center led initiatives, future rent
under non-cancellable leases, and integration costs related to
recent acquisitions.
(b) Primarily includes the change in fair value as measured each
quarter of contingent consideration related to acquisitions.
(c) Reflects contingent proceeds related to the disposal of Mercer's
U.S. defined contribution recordkeeping business
in 2015. The $6 million is also removed from GAAP revenue
in the calculation of adjusted operating margin.
Marsh & McLennan Companies, Inc.Reconciliation of Non-GAAP MeasuresThree Months Ended March 31(Millions) (Unaudited)
Adjusted Income, Net of Tax and Adjusted Earnings per Share
Adjusted income,net of taxis calculated
as the Company's GAAP income from
continuing operations, adjusted to reflect the after-tax impact of
the operating income adjustments set
forth in the preceding tables.Adjusted
EPSis calculated by dividing the Company'sadjusted income,
net of tax, by MMC's average number of shares outstanding-diluted for
the relevant period. The following tables reconcileadjusted income,
net of taxto GAAP income from continuing operations andadjusted EPSto
GAAP EPS for the three months ended March 31, 2017 and 2016.
Three Months Ended Three Months Ended
March 31, 2017 March 31, 2016
Amount AdjustedEPS Amount AdjustedEPS
Income $ 578 $ 490
from
continuing
operations
Less: 9 9
Non-controlling
interest,
net
of tax
Subtotal $ 569 $ 1.09 $ 481 $ 0.91
Operating $ (7 ) $ 3
income
adjustments
Impact of 1 -
income
taxes
(6 ) (0.01 ) 3 0.01
Adjusted $ 563 $ 1.08 $ 484 $ 0.92
income,
net of tax
Marsh & McLennan Companies, Inc.
Supplemental Information
Three Months Ended March 31
(Millions) (Unaudited)
Three Months Ended
March 31,
2017 2016
Consolidated
Compensation and Benefits $ 1,945 $ 1,854
Other operating expenses 749 749
Total Expenses $ 2,694 $ 2,603
Depreciation and amortization expense $ 80 $ 78
Identified intangible amortization expense 40 33
Total $ 120 $ 111
Stock option expense $ 14 $ 11
Capital expenditures $ 62 $ 51
Risk and Insurance Services
Compensation and Benefits $ 980 $ 921
Other operating expenses 396 412
Total Expenses $ 1,376 $ 1,333
Depreciation and amortization expense $ 35 $ 36
Identified intangible amortization expense 32 28
Total $ 67 $ 64
Consulting
Compensation and Benefits $ 875 $ 847
Other operating expenses 410 386
Total Expenses $ 1,285 $ 1,233
Depreciation and amortization expense $ 27 $ 25
Identified intangible amortization expense 8 5
Total $ 35 $ 30
Marsh & McLennan Companies, Inc.Supplemental Information - MercerRevenue Reclassification Analysis
Effective January 1, 2017, Mercer established a Wealth business reflecting a unified client strategy for its former Retirement and Investments businesses.
Wealth is comprised of two practices, Defined Benefit Consulting & Administration (DBA), and Investment Management & Related Services (IMS). DBA encompasses mature businesses primarily in defined benefit and actuarial consulting, along with defined benefit administration. IMS includes businesses primarily in delegated solutions, defined contribution related investment services, and financial wellness. Among the changes, defined benefit investment consulting, previously reported in the Investments business, will now be included in Defined Benefit Consulting & Administration. Revenue information will be reported for these two practices to provide investors better insight into the underlying growth dynamics within Wealth. This change has no impact on previously reported Mercer total revenue, Consulting segment revenue or operating income, or consolidated revenue or financial results. In addition, moving forward the Company will refer to the Talent business as Career.
For information purposes only, the following schedules show Mercer's line of business revenue reflecting these changes for each of the three years ended December 31, 2014, 2015 and 2016, as well as the revenue change by quarter for the year ended December 31, 2016 and full year 2015.
Marsh
& McLennan
Companies,
Inc.
Supplemental
Information
- Mercer
Quarterly
2016 vs
2015
Revenue
Reclassification
Analysis
(Millions)
(Unaudited)
% ChangeGAAPRevenue UnderlyingRevenue
First 2016 2015
Quarter
Defined $ 361 $ 391 (7 )% -
Benefit
Consulting
&
Administration
Investment 147 145 1 % -
Management
& Related
Services
Total 508 536 (5 )% -
Wealth
Health 400 384 4 % 6 %
Career 131 117 11 % 1 %
Total $ 1,039 $ 1,037 - 3 %
Mercer
Second
Quarter
Defined $ 371 $ 383 (3 )% 3 %
Benefit
Consulting
&
Administration
Investment 153 149 3 % 4 %
Management
& Related
Services
Total 524 532 (2 )% 3 %
Wealth
Health 410 391 5 % 5 %
Career 145 123 18 % 6 %
Total $ 1,079 $ 1,046 3 % 4 %
Mercer
Third
Quarter
Defined $ 351 $ 374 (6 )% 1 %
Benefit
Consulting
&
Administration
Investment 154 145 7 % 7 %
Management
& Related
Services
Total 505 519 (3 )% 2 %
Wealth
Health 397 394 1 % 2 %
Career 207 177 17 % 7 %
Total $ 1,109 $ 1,090 2 % 3 %
Mercer
Fourth
Quarter
Defined $ 364 $ 431 (16 )% (2 )%
Benefit
Consulting
&
Administration
Investment 152 145 5 % 11 %
Management
& Related
Services
Total 516 576 (11 )% 2 %
Wealth
Health 381 389 (2 )% (1 )%
Career 199 175 14 % 3 %
Total $ 1,096 $ 1,140 (4 )% 1 %
Mercer
Full Year
Defined $ 1,447 $ 1,579 (8 )% -
Benefit
Consulting
&
Administration
Investment 606 584 4 % 6 %
Management
& Related
Services
Total 2,053 2,163 (5 )% 2 %
Wealth
Health 1,588 1,558 2 % 3 %
Career 682 592 15 % 5 %
Total $ 4,323 $ 4,313 - 3 %
Mercer
Marsh & McLennan
Companies, Inc.
Supplemental
Information
- Mercer
Full Year
2015 vs
2014 Revenue
Reclassification
Analysis
(Millions)
(Unaudited)
2015 2014 % ChangeGAAPRevenue UnderlyingRevenue
Defined Benefit $ 1,579 $ 1,627 (3 )% -
Consulting
& Administration
Investment 584 584 - 10 %
Management
& Related
Services
Total Wealth 2,163 2,211 (2 )% 3 %
Health 1,558 1,553 - 6 %
Career 592 586 1 % 5 %
Total Mercer $ 4,313 $ 4,350 (1 )% 4 %
Marsh & McLennan Companies, Inc.
Consolidated Balance Sheets
(Millions)
(Unaudited) December 31,2016
March 31,
2017
ASSETS
Current assets:
Cash and cash equivalents $ 930 $ 1,026
Net receivables 3,795 3,643
Other current assets 256 215
Total current assets 4,981 4,884
Goodwill and intangible assets 10,060 9,495
Fixed assets, net 722 725
Pension related assets 872 776
Deferred tax assets 1,009 1,097
Other assets 1,325 1,213
TOTAL ASSETS $ 18,969 $ 18,190
LIABILITIES AND EQUITY
Current liabilities:
Short-term debt $ 412 $ 312
Accounts payable and 2,033 1,969
accrued liabilities
Accrued compensation and 765 1,655
employee benefits
Accrued income taxes 202 146
Dividends payable 176 -
Total current liabilities 3,588 4,082
Fiduciary liabilities 4,601 4,241
Less - cash and investments held (4,601 ) (4,241 )
in a fiduciary capacity
- -
Long-term debt 5,479 4,495
Pension, post-retirement and 2,025 2,076
post-employment benefits
Liabilities for errors and omissions 300 308
Other liabilities 958 957
Total equity 6,619 6,272
TOTAL LIABILITIES AND EQUITY $ 18,969 $ 18,190 Marsh & McLennan Companies Media: Laura Schooler, +1 212 345 0370 laura.schooler@mmc.com or Investor: Keith Walsh, +1 212 345 0057 keith.walsh@mmc.com
View source version on businesswire.com: http://www.businesswire.com/news/home/20170427005809/en/
This information is provided by Business Wire
(END) Dow Jones Newswires
April 27, 2017 07:00 ET (11:00 GMT)
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