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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Marsh and McLennan Companies Inc | NYSE:MMC | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-0.41 | -0.21% | 199.36 | 200.06 | 198.30 | 199.90 | 1,821,484 | 00:12:39 |
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Large Accelerated Filer
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Accelerated Filer
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Non-Accelerated Filer
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(Do not check if a smaller reporting company)
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Smaller Reporting Company
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•
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our ability to maintain adequate safeguards to protect the security of our information systems and confidential, personal or proprietary information;
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•
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our ability to successfully recover if we experience a business continuity problem due to cyberattack, natural disaster or otherwise;
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•
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our exposure to potential losses and liabilities, including reputational impact, arising from errors and omissions, breach of fiduciary duty and similar claims against us;
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•
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our ability to compete effectively and adapt to changes in the competitive environment, including to technological and other types of innovation;
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•
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the impact of potential changes in global economic, political and market conditions on us, our clients and the industries in which we operate, including the impact of the vote in the UK to exit the EU;
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•
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the impact of changes in applicable tax laws and regulations, including of the regulations recently proposed by the U.S. Treasury Department;
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•
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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;
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our exposure to potential civil remedies or criminal penalties if we fail to comply with U.S. and non-U.S. laws and regulations applicable in the jurisdictions in which we operate;
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•
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the financial and operational impact of complying with laws and regulations where we operate;
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•
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the impact of fluctuations in foreign exchange, interest rates and securities markets on our results;
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•
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the impact on our competitive position of our tax rate relative to our competitors;
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•
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our ability to incentivize and retain key employees; and
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•
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the impact of changes in accounting rules or in our accounting estimates or assumptions.
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ITEM 1.
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FINANCIAL STATEMENTS
(UNAUDITED)
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ITEM 2.
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OF OPERATIONS
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ITEM 3.
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ITEM 4.
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ITEM 1.
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ITEM 1A.
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ITEM 2.
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ITEM 3.
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ITEM 4.
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ITEM 5.
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ITEM 6.
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Item 1.
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Financial Statements.
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Three Months Ended
June 30, |
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Six Months Ended
June 30, |
||||||||||||
(In millions, except per share figures)
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2016
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|
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2015
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2016
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2015
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||||
Revenue
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$
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3,376
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$
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3,225
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$
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6,712
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$
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6,440
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Expense:
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||||||||
Compensation and benefits
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1,872
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1,826
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3,726
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3,556
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Other operating expenses
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778
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770
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1,527
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1,520
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Operating expenses
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2,650
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2,596
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5,253
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5,076
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||||
Operating income
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726
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629
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1,459
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1,364
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||||
Interest income
|
2
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3
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4
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6
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||||
Interest expense
|
(48
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)
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|
(40
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)
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(94
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)
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(76
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)
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||||
Investment income (loss)
|
1
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3
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(2
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)
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5
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||||
Income before income taxes
|
681
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595
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1,367
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1,299
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||||
Income tax expense
|
201
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166
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397
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372
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Income from continuing operations
|
480
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429
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970
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927
|
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||||
Discontinued operations, net of tax
|
—
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—
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—
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(3
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)
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Net income before non-controlling interests
|
480
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|
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429
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970
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924
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Less: Net income attributable to non-controlling interests
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8
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10
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17
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23
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Net income attributable to the Company
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$
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472
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$
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419
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$
|
953
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$
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901
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Basic net income per share – Continuing operations
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$
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0.91
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$
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0.78
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$
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1.83
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$
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1.68
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– Net income attributable to
the Company
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$
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0.91
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$
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0.78
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$
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1.83
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$
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1.68
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Diluted net income per share – Continuing operations
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$
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0.90
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$
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0.77
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$
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1.81
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$
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1.66
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– Net income attributable to
the Company |
$
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0.90
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$
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0.77
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$
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1.81
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$
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1.66
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Average number of shares outstanding – Basic
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521
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535
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521
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537
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– Diluted
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525
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541
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526
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543
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Shares outstanding at June 30,
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519
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531
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519
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531
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Three Months Ended
June 30, |
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Six Months Ended
June 30, |
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(In millions)
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2016
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2015
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2016
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2015
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Net income before non-controlling interests
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$
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480
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$
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429
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$
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970
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$
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924
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Other comprehensive (loss) income, before tax:
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Foreign currency translation adjustments
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(334
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)
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246
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(321
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)
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(180
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)
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Gain (loss) related to pension/post-retirement plans
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163
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(83
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)
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301
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153
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Other comprehensive (loss) income, before tax
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(171
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)
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163
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(20
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)
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(27
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)
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Income tax expense (credit) on other comprehensive income
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33
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(4
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)
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61
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49
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Other comprehensive (loss) income, net of tax
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(204
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)
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167
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(81
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)
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(76
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)
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Comprehensive income
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276
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596
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889
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848
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Less: comprehensive income attributable to non-controlling interest
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8
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10
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17
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23
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Comprehensive income attributable to the Company
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$
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268
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$
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586
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$
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872
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$
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825
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(In millions, except share and per share figures)
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June 30,
2016 |
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December 31,
2015 |
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ASSETS
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Current assets:
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Cash and cash equivalents
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$
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974
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$
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1,374
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Receivables
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Commissions and fees
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3,473
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3,198
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Advanced premiums and claims
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47
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51
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Other
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287
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309
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3,807
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3,558
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Less-allowance for doubtful accounts and cancellations
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(86
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)
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(87
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)
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Net receivables
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3,721
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3,471
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Other current assets
|
235
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199
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Total current assets
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4,930
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5,044
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Goodwill
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7,945
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7,889
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Other intangible assets
|
955
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1,036
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Fixed assets
(net of accumulated depreciation and amortization of $1,666 at June 30, 2016 and $1,621 at December 31, 2015)
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736
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773
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Pension related assets
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1,197
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1,159
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Deferred tax assets
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1,093
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1,138
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Other assets
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1,220
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1,177
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$
|
18,076
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$
|
18,216
|
|
(In millions, except share and per share figures)
|
June 30,
2016 |
|
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December 31,
2015 |
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LIABILITIES AND EQUITY
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||||
Current liabilities:
|
|
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|
||||
Short-term debt
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$
|
261
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$
|
12
|
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Accounts payable and accrued liabilities
|
1,868
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|
1,886
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|
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Accrued compensation and employee benefits
|
1,015
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|
1,656
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Accrued income taxes
|
182
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|
154
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|
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Dividends payable
|
178
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|
|
—
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Total current liabilities
|
3,504
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|
|
3,708
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Fiduciary liabilities
|
4,538
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4,146
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Less – cash and investments held in a fiduciary capacity
|
(4,538
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)
|
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(4,146
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)
|
||
|
—
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—
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Long-term debt
|
4,496
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|
|
4,402
|
|
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Pension, post-retirement and post-employment benefits
|
2,004
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|
|
2,058
|
|
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Liabilities for errors and omissions
|
322
|
|
|
318
|
|
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Other liabilities
|
1,045
|
|
|
1,128
|
|
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Commitments and contingencies
|
—
|
|
|
—
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Equity:
|
|
|
|
||||
Preferred stock, $1 par value, authorized 6,000,000 shares, none issued
|
—
|
|
|
—
|
|
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Common stock, $1 par value, authorized
|
|
|
|
||||
1,600,000,000 shares, issued 560,641,640 shares at June 30, 2016
|
|
|
|
||||
and December 31, 2015
|
561
|
|
|
561
|
|
||
Additional paid-in capital
|
789
|
|
|
861
|
|
||
Retained earnings
|
11,751
|
|
|
11,302
|
|
||
Accumulated other comprehensive loss
|
(4,301
|
)
|
|
(4,220
|
)
|
||
Non-controlling interests
|
81
|
|
|
89
|
|
||
|
8,881
|
|
|
8,593
|
|
||
Less – treasury shares, at cost, 41,593,434 shares at June 30, 2016
|
|
|
|
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and 38,743,686 shares at December 31, 2015
|
(2,176
|
)
|
|
(1,991
|
)
|
||
Total equity
|
6,705
|
|
|
6,602
|
|
||
|
$
|
18,076
|
|
|
$
|
18,216
|
|
For the Six Months Ended June 30,
|
|
|
|
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(In millions)
|
2016
|
|
|
2015
|
|
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Operating cash flows:
|
|
|
|
||||
Net income before non-controlling interests
|
$
|
970
|
|
|
$
|
924
|
|
Adjustments to reconcile net income to cash provided by operations:
|
|
|
|
||||
Depreciation and amortization of fixed assets and capitalized software
|
154
|
|
|
156
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|
||
Amortization of intangible assets
|
67
|
|
|
48
|
|
||
Adjustments and payments related to contingent consideration liability
|
(8
|
)
|
|
—
|
|
||
Gain on deconsolidation of subsidiary
|
(12
|
)
|
|
—
|
|
||
Provision for deferred income taxes
|
48
|
|
|
90
|
|
||
Loss (gain) on investments
|
2
|
|
|
(2
|
)
|
||
Loss on disposition of assets
|
3
|
|
|
1
|
|
||
Share-based compensation expense
|
58
|
|
|
46
|
|
||
Changes in assets and liabilities:
|
|
|
|
||||
Net receivables
|
(280
|
)
|
|
(274
|
)
|
||
Other current assets
|
(37
|
)
|
|
(6
|
)
|
||
Other assets
|
(1
|
)
|
|
(15
|
)
|
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Accounts payable and accrued liabilities
|
(24
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)
|
|
(75
|
)
|
||
Accrued compensation and employee benefits
|
(645
|
)
|
|
(659
|
)
|
||
Accrued income taxes
|
35
|
|
|
37
|
|
||
Contributions to pension and other benefit plans in excess of current year expense/credit
|
(139
|
)
|
|
(149
|
)
|
||
Other liabilities
|
(10
|
)
|
|
(59
|
)
|
||
Effect of exchange rate changes
|
48
|
|
|
49
|
|
||
Net cash provided by operations
|
229
|
|
|
112
|
|
||
Financing cash flows:
|
|
|
|
||||
Purchase of treasury shares
|
(410
|
)
|
|
(775
|
)
|
||
Net increase in commercial paper
|
—
|
|
|
50
|
|
||
Proceeds from debt
|
347
|
|
|
494
|
|
||
Repayments of debt
|
(6
|
)
|
|
(5
|
)
|
||
Shares withheld for taxes on vested units – treasury shares
|
(38
|
)
|
|
(48
|
)
|
||
Issuance of common stock from treasury shares
|
131
|
|
|
147
|
|
||
Payments of deferred and contingent consideration for acquisitions
|
(63
|
)
|
|
(40
|
)
|
||
Distributions of non-controlling interests
|
(11
|
)
|
|
(15
|
)
|
||
Dividends paid
|
(326
|
)
|
|
(302
|
)
|
||
Net cash used for financing activities
|
(376
|
)
|
|
(494
|
)
|
||
Investing cash flows:
|
|
|
|
||||
Capital expenditures
|
(114
|
)
|
|
(176
|
)
|
||
Net purchases of long-term investments
|
(4
|
)
|
|
(90
|
)
|
||
Proceeds from sales of fixed assets
|
1
|
|
|
1
|
|
||
Acquisitions
|
(77
|
)
|
|
(260
|
)
|
||
Other, net
|
4
|
|
|
(3
|
)
|
||
Net cash used for investing activities
|
(190
|
)
|
|
(528
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
(63
|
)
|
|
(118
|
)
|
||
Decrease in cash and cash equivalents
|
(400
|
)
|
|
(1,028
|
)
|
||
Cash and cash equivalents at beginning of period
|
1,374
|
|
|
1,958
|
|
||
Cash and cash equivalents at end of period
|
$
|
974
|
|
|
$
|
930
|
|
For the Six Months Ended June 30,
|
|
|
|
||||
(In millions, except per share figures)
|
2016
|
|
|
2015
|
|
||
COMMON STOCK
|
|
|
|
||||
Balance, beginning and end of period
|
$
|
561
|
|
|
$
|
561
|
|
ADDITIONAL PAID-IN CAPITAL
|
|
|
|
||||
Balance, beginning of year
|
$
|
861
|
|
|
$
|
930
|
|
Change in accrued stock compensation costs
|
(10
|
)
|
|
(19
|
)
|
||
Issuance of shares under stock compensation plans and employee stock purchase plans and related tax impact
|
(62
|
)
|
|
(69
|
)
|
||
Balance, end of period
|
$
|
789
|
|
|
$
|
842
|
|
RETAINED EARNINGS
|
|
|
|
||||
Balance, beginning of year
|
$
|
11,302
|
|
|
$
|
10,335
|
|
Net income attributable to the Company
|
953
|
|
|
901
|
|
||
Dividend equivalents declared – (per share amounts: $0.96 in 2016 and $0.87 in 2015)
|
(4
|
)
|
|
(2
|
)
|
||
Dividends declared – (per share amounts: $0.96 in 2016 and $0.87 in 2015)
|
(500
|
)
|
|
(466
|
)
|
||
Balance, end of period
|
$
|
11,751
|
|
|
$
|
10,768
|
|
ACCUMULATED OTHER COMPREHENSIVE LOSS
|
|
|
|
||||
Balance, beginning of year
|
$
|
(4,220
|
)
|
|
$
|
(3,847
|
)
|
Other comprehensive loss, net of tax
|
(81
|
)
|
|
(76
|
)
|
||
Balance, end of period
|
$
|
(4,301
|
)
|
|
$
|
(3,923
|
)
|
TREASURY SHARES
|
|
|
|
||||
Balance, beginning of year
|
$
|
(1,991
|
)
|
|
$
|
(925
|
)
|
Issuance of shares under stock compensation plans and employee stock purchase plans
|
225
|
|
|
235
|
|
||
Purchase of treasury shares
|
(410
|
)
|
|
(775
|
)
|
||
Balance, end of period
|
$
|
(2,176
|
)
|
|
$
|
(1,465
|
)
|
NON-CONTROLLING INTERESTS
|
|
|
|
||||
Balance, beginning of year
|
$
|
89
|
|
|
$
|
79
|
|
Net income attributable to non-controlling interests
|
17
|
|
|
23
|
|
||
Deconsolidation of subsidiary
|
(14
|
)
|
|
—
|
|
||
Distributions and other changes
|
(11
|
)
|
|
(13
|
)
|
||
Balance, end of period
|
$
|
81
|
|
|
$
|
89
|
|
TOTAL EQUITY
|
$
|
6,705
|
|
|
$
|
6,872
|
|
Basic and Diluted EPS Calculation -
Continuing Operations
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
(In millions, except per share figures)
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
||||
Net income from continuing operations
|
$
|
480
|
|
|
$
|
429
|
|
|
$
|
970
|
|
|
$
|
927
|
|
Less: Net income attributable to non-controlling interests
|
8
|
|
|
10
|
|
|
17
|
|
|
23
|
|
||||
|
$
|
472
|
|
|
$
|
419
|
|
|
$
|
953
|
|
|
$
|
904
|
|
Basic weighted average common shares outstanding
|
521
|
|
|
535
|
|
|
521
|
|
|
537
|
|
||||
Dilutive effect of potentially issuable common shares
|
4
|
|
|
6
|
|
|
5
|
|
|
6
|
|
||||
Diluted weighted average common shares outstanding
|
525
|
|
|
541
|
|
|
526
|
|
|
543
|
|
||||
Average stock price used to calculate common stock equivalents
|
$
|
64.17
|
|
|
$
|
57.75
|
|
|
$
|
60.01
|
|
|
$
|
57.06
|
|
(In millions of dollars)
|
|
2016
|
|
|
2015
|
|
||
Assets acquired, excluding cash
|
|
$
|
107
|
|
|
$
|
338
|
|
Liabilities assumed
|
|
(4
|
)
|
|
(12
|
)
|
||
Contingent/deferred purchase consideration
|
|
(26
|
)
|
|
(95
|
)
|
||
Net cash outflow for current year acquisitions
|
|
$
|
77
|
|
|
$
|
231
|
|
Cash paid into escrow for future acquisition
|
|
—
|
|
|
29
|
|
||
Net cash outflow for acquisitions
|
|
$
|
77
|
|
|
$
|
260
|
|
(In millions of dollars)
|
2016
|
|
|
2015
|
|
||
Interest paid
|
$
|
86
|
|
|
$
|
69
|
|
Income taxes paid, net of refunds
|
$
|
303
|
|
|
$
|
223
|
|
(In millions of dollars)
|
Unrealized Investment Gains
|
|
Pension/Post-Retirement Plans Gains (Losses)
|
|
Foreign Currency Translation Gains (Losses)
|
|
Total Gains (Losses)
|
||||||||
Balance as of April 1, 2016
|
$
|
6
|
|
|
$
|
(3,014
|
)
|
|
$
|
(1,089
|
)
|
|
$
|
(4,097
|
)
|
Other comprehensive income (loss) before reclassifications
|
—
|
|
|
98
|
|
|
(333
|
)
|
|
(235
|
)
|
||||
Amounts reclassified from accumulated other comprehensive income
|
—
|
|
|
31
|
|
|
—
|
|
|
31
|
|
||||
Net current period other comprehensive income (loss)
|
—
|
|
|
129
|
|
|
(333
|
)
|
|
(204
|
)
|
||||
Balance as of June 30, 2016
|
$
|
6
|
|
|
$
|
(2,885
|
)
|
|
$
|
(1,422
|
)
|
|
$
|
(4,301
|
)
|
(In millions of dollars)
|
Unrealized Investment Gains
|
|
Pension/Post-Retirement Plans Gains (Losses)
|
|
Foreign Currency Translation Gains (Losses)
|
|
Total Gains (Losses)
|
||||||||
Balance as of April 1, 2015
|
$
|
5
|
|
|
$
|
(3,213
|
)
|
|
$
|
(882
|
)
|
|
$
|
(4,090
|
)
|
Other comprehensive income (loss) before reclassifications
|
—
|
|
|
(126
|
)
|
|
243
|
|
|
117
|
|
||||
Amounts reclassified from accumulated other comprehensive income
|
—
|
|
|
50
|
|
|
—
|
|
|
50
|
|
||||
Net current period other comprehensive income (loss)
|
—
|
|
|
(76
|
)
|
|
243
|
|
|
167
|
|
||||
Balance as of June 30, 2015
|
$
|
5
|
|
|
$
|
(3,289
|
)
|
|
$
|
(639
|
)
|
|
$
|
(3,923
|
)
|
(In millions of dollars)
|
Unrealized Investment Gains
|
|
Pension/Post-Retirement Plans Gains (Losses)
|
|
Foreign Currency Translation Adjustments
|
|
Total Gains (Losses)
|
||||||||
Balance as of January 1, 2016
|
$
|
6
|
|
|
$
|
(3,124
|
)
|
|
$
|
(1,102
|
)
|
|
$
|
(4,220
|
)
|
Other comprehensive income (loss) before reclassifications
|
—
|
|
|
178
|
|
|
(320
|
)
|
|
(142
|
)
|
||||
Amounts reclassified from accumulated other comprehensive income
|
—
|
|
|
61
|
|
|
—
|
|
|
61
|
|
||||
Net current period other comprehensive income (loss)
|
—
|
|
|
239
|
|
|
(320
|
)
|
|
(81
|
)
|
||||
Balance as of June 30, 2016
|
$
|
6
|
|
|
$
|
(2,885
|
)
|
|
$
|
(1,422
|
)
|
|
$
|
(4,301
|
)
|
(In millions of dollars)
|
Unrealized Investment Gains
|
|
Pension/Post-Retirement Plans Gains (Losses)
|
|
Foreign Currency Translation Adjustments
|
|
Total Gains (Losses)
|
||||||||
Balance as of January 1, 2015
|
$
|
5
|
|
|
$
|
(3,393
|
)
|
|
$
|
(459
|
)
|
|
$
|
(3,847
|
)
|
Other comprehensive income (loss) before reclassifications
|
—
|
|
|
2
|
|
|
(180
|
)
|
|
(178
|
)
|
||||
Amounts reclassified from accumulated other comprehensive income
|
—
|
|
|
102
|
|
|
—
|
|
|
102
|
|
||||
Net current period other comprehensive income (loss)
|
—
|
|
|
104
|
|
|
(180
|
)
|
|
(76
|
)
|
||||
Balance as of June 30, 2015
|
$
|
5
|
|
|
$
|
(3,289
|
)
|
|
$
|
(639
|
)
|
|
$
|
(3,923
|
)
|
•
|
February – Marsh & McLennan Agency ("MMA") acquired The Celedinas Agency, Inc., a Florida-based brokerage firm providing property and casualty and marine insurance as well as employee benefits services to businesses and individuals, and Aviation Solutions, LLC, a Missouri-based aviation risk advisor and insurance broker.
|
•
|
March – MMA acquired Corporate Consulting Services, Ltd., a New York-based insurance brokerage and human resource consulting firm.
|
•
|
January – Mercer acquired The Positive Ageing Company Limited, a U.K.-based firm providing advice on issues surrounding the aging workforce.
|
•
|
April – Mercer acquired the Extratextual software system and related client contracts. Extratextual is a web based compliance system that helps clients manage and meet their compliance and risk management obligations.
|
For the Six Months Ended June 30, 2016
|
|
||
(In millions of dollars)
|
|
||
Cash
|
$
|
79
|
|
Estimated fair value of deferred/contingent consideration
|
26
|
|
|
Total Consideration
|
$
|
105
|
|
Allocation of purchase price:
|
|
||
Cash and cash equivalents
|
$
|
2
|
|
Accounts receivable, net
|
1
|
|
|
Property, plant, and equipment
|
1
|
|
|
Other intangible assets
|
43
|
|
|
Goodwill
|
62
|
|
|
Total assets acquired
|
109
|
|
|
Current liabilities
|
2
|
|
|
Other liabilities
|
2
|
|
|
Total liabilities assumed
|
4
|
|
|
Net assets acquired
|
$
|
105
|
|
|
|
Amount
|
|
Weighted Average Amortization Period
|
||
Client relationships
|
|
$
|
41
|
|
|
10 years
|
Other (a)
|
|
2
|
|
|
3 years
|
|
|
|
$
|
43
|
|
|
|
•
|
January – Marsh acquired INGESEG S.A., an insurance brokerage located in Argentina.
|
•
|
May – Marsh acquired Sylvite Financial Services, Inc., a Canada-based insurance consulting firm and Sumitomo Life Insurance Agency America, Inc., an employee benefits brokerage and consulting firm providing employee benefit and other services to U.S.-based subsidiaries of Japanese companies.
|
•
|
June – Marsh & McLennan Agency ("MMA") acquired MHBT, Inc., a Texas-based insurance broker and Marsh acquired SIS Co. Ltd, a Korea-based insurance broker and advisor.
|
•
|
July – MMA acquired Vezina, a Canada-based independent insurance brokerage firm, Tequesta Insurance Advisors, an employee benefits insurance provider based in Florida, Cline Wood Agency, a Kansas City-based independent specialty insurance agency and J.W. Terrill, a Missouri-based independent insurance agency. Marsh acquired SMEI Group Ltd., a U.K.-based insurance broker providing specialist commercial insurance to small and medium-sized firms.
|
•
|
August – Marsh acquired Dovetail Insurance, a leading provider of insurance technology services to the U.S. small commercial market.
|
•
|
October – MMA acquired Dawson Insurance Agency, a North Dakota-based agency providing commercial and personal insurance, surety bonds, safety and loss control programs, and employee benefits services.
|
•
|
December – Marsh acquired Jelf Group, PLC, a U.K.-based insurance broking and financial consulting firm.
|
•
|
February – Oliver Wyman acquired TeamSAI, a Georgia-based provider of consulting and technical services to the transportation industry, and Mercer acquired Strategic Capital Management AG, a Switzerland-based institutional investment advisor.
|
•
|
June – Mercer acquired Kepler Associates, a U.K.-based executive remuneration specialist.
|
•
|
August – OWG acquired the Hong Kong and Shanghai franchises of OC&C Strategy Consultants.
|
•
|
September – Mercer acquired Comptryx, a global pay and workforce metrics business specializing in the technology sector.
|
•
|
November – Mercer acquired HR Business Solutions (Asia) Limited, a Hong Kong-based compensation and employee benefits consulting firm, and Gama Consultores Associados Ltda, a Brazil-based retirement consulting firm.
|
•
|
December – Mercer acquired CPSG Partners, a Workday Services partner assisting clients worldwide to maximize the value of Workday Financial Management and Human Capital Management.
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
(In millions, except per share figures)
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
||||
Revenue
|
$
|
3,376
|
|
|
$
|
3,328
|
|
|
$
|
6,721
|
|
|
$
|
6,658
|
|
Income from continuing operations
|
$
|
480
|
|
|
$
|
441
|
|
|
$
|
973
|
|
|
$
|
949
|
|
Net income attributable to the Company
|
$
|
472
|
|
|
$
|
431
|
|
|
$
|
955
|
|
|
$
|
922
|
|
Basic net income per share:
|
|
|
|
|
|
|
|
||||||||
– Continuing operations
|
$
|
0.91
|
|
|
$
|
0.80
|
|
|
$
|
1.83
|
|
|
$
|
1.72
|
|
– Net income attributable to the Company
|
$
|
0.91
|
|
|
$
|
0.81
|
|
|
$
|
1.83
|
|
|
$
|
1.72
|
|
Diluted net income per share:
|
|
|
|
|
|
|
|
||||||||
– Continuing operations
|
$
|
0.90
|
|
|
$
|
0.80
|
|
|
$
|
1.82
|
|
|
$
|
1.70
|
|
– Net income attributable to the Company
|
$
|
0.90
|
|
|
$
|
0.80
|
|
|
$
|
1.82
|
|
|
$
|
1.70
|
|
June 30,
|
|
|
|
||||
(In millions of dollars)
|
2016
|
|
|
2015
|
|
||
Balance as of January 1, as reported
|
$
|
7,889
|
|
|
$
|
7,241
|
|
Goodwill acquired
|
62
|
|
|
188
|
|
||
Other adjustments
(a)
|
(6
|
)
|
|
(48
|
)
|
||
Balance at June 30,
|
$
|
7,945
|
|
|
$
|
7,381
|
|
(a)
|
Primarily reflects the impact of foreign exchange in each period.
|
|
June 30, 2016
|
|
December 31, 2015
|
||||||||||||||||||||
(In millions of dollars)
|
Gross
Cost
|
|
|
Accumulated
Amortization
|
|
|
Net
Carrying
Amount
|
|
|
Gross
Cost
|
|
|
Accumulated
Amortization
|
|
|
Net
Carrying
Amount
|
|
||||||
Client Relationships
|
$
|
1,229
|
|
|
$
|
359
|
|
|
$
|
870
|
|
|
$
|
1,281
|
|
|
$
|
347
|
|
|
$
|
934
|
|
Other (a)
|
150
|
|
|
65
|
|
|
85
|
|
|
176
|
|
|
74
|
|
|
102
|
|
||||||
Amortized intangibles
|
$
|
1,379
|
|
|
$
|
424
|
|
|
$
|
955
|
|
|
$
|
1,457
|
|
|
$
|
421
|
|
|
$
|
1,036
|
|
For the Years Ending December 31,
|
|
||
(In millions of dollars)
|
Estimated Expense
|
|
|
2016 (excludes amortization through June 30, 2016)
|
$
|
66
|
|
2017
|
120
|
|
|
2018
|
117
|
|
|
2019
|
114
|
|
|
2020
|
95
|
|
|
Subsequent years
|
443
|
|
|
|
$
|
955
|
|
Level 1.
|
Assets and liabilities whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market (examples include active exchange-traded equity securities and money market mutual funds).
|
Level 2.
|
Assets and liabilities whose values are based on the following:
|
a)
|
Quoted prices for similar assets or liabilities in active markets;
|
b)
|
Quoted prices for identical or similar assets or liabilities in non-active markets (examples include corporate and municipal bonds, which trade infrequently);
|
c)
|
Pricing models whose inputs are observable for substantially the full term of the asset or liability (examples include most over-the-counter derivatives, including interest rate and currency swaps); and
|
d)
|
Pricing models whose inputs are derived principally from or corroborated by observable market data through correlation or other means for substantially the full asset or liability (for example, certain mortgage loans).
|
Level 3.
|
Assets and liabilities whose values are based on prices, or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs reflect management’s own assumptions about the assumptions a market participant would use in pricing the asset or liability (examples include private equity investments, certain commercial mortgage whole loans, and long-dated or complex derivatives including certain foreign exchange options and long-dated options on gas and power).
|
|
Identical Assets
(Level 1)
|
|
Observable Inputs
(Level 2)
|
|
Unobservable
Inputs
(Level 3)
|
|
Total
|
||||||||||||||||||||||||
(In millions of dollars)
|
06/30/16
|
|
|
12/31/15
|
|
|
06/30/16
|
|
|
12/31/15
|
|
|
06/30/16
|
|
|
12/31/15
|
|
|
06/30/16
|
|
|
12/31/15
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Financial instruments owned:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Mutual funds
(a)
|
$
|
133
|
|
|
$
|
142
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
133
|
|
|
$
|
142
|
|
Money market funds
(b)
|
43
|
|
|
140
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
43
|
|
|
140
|
|
||||||||
Total assets measured at fair value
|
$
|
176
|
|
|
$
|
282
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
176
|
|
|
$
|
282
|
|
Fiduciary Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Money market funds
|
$
|
27
|
|
|
$
|
48
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
27
|
|
|
$
|
48
|
|
Total fiduciary assets measured
at fair value
|
$
|
27
|
|
|
$
|
48
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
27
|
|
|
$
|
48
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Contingent purchase
consideration liability
(c)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
279
|
|
|
$
|
309
|
|
|
$
|
279
|
|
|
$
|
309
|
|
Total liabilities measured at fair value
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
279
|
|
|
$
|
309
|
|
|
$
|
279
|
|
|
$
|
309
|
|
(a)
|
Included in other assets in the consolidated balance sheets.
|
(b)
|
Included in cash and cash equivalents in the consolidated balance sheets.
|
(c)
|
Included in accounts payable and accrued liabilities and other liabilities in the consolidated balance sheets.
|
(In millions of dollars)
|
2016
|
|
|
2015
|
|
||
Balance at January 1,
|
$
|
309
|
|
|
$
|
207
|
|
Additions
|
8
|
|
|
49
|
|
||
Payments
|
(50
|
)
|
|
(33
|
)
|
||
Revaluation Impact
|
18
|
|
|
21
|
|
||
Other
(a)
|
(6
|
)
|
|
—
|
|
||
Balance at June 30,
|
$
|
279
|
|
|
$
|
244
|
|
Combined U.S. and significant non-U.S. Plans
|
Pension
|
|
Post-retirement
|
||||||||||||
For the Three Months Ended June 30,
|
Benefits
|
|
Benefits
|
||||||||||||
(In millions of dollars)
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
||||
Service cost
|
$
|
46
|
|
|
$
|
50
|
|
|
$
|
—
|
|
|
$
|
1
|
|
Interest cost
|
138
|
|
|
146
|
|
|
1
|
|
|
2
|
|
||||
Expected return on plan assets
|
(242
|
)
|
|
(243
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service (credit) cost
|
(1
|
)
|
|
—
|
|
|
1
|
|
|
1
|
|
||||
Recognized actuarial loss (gain)
|
42
|
|
|
78
|
|
|
—
|
|
|
(1
|
)
|
||||
Net periodic benefit (credit) cost
|
$
|
(17
|
)
|
|
$
|
31
|
|
|
$
|
2
|
|
|
$
|
3
|
|
Curtailment gain
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Settlement loss
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total (credit) cost
|
$
|
(21
|
)
|
|
$
|
31
|
|
|
$
|
2
|
|
|
$
|
3
|
|
|
|
|
|
|
|
|
|
||||||||
Combined U.S. and significant non-U.S. Plans
|
Pension
|
|
Post-retirement
|
||||||||||||
For the Six Months Ended June 30,
|
Benefits
|
|
Benefits
|
||||||||||||
(In millions of dollars)
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
||||
Service cost
|
$
|
90
|
|
|
$
|
102
|
|
|
$
|
—
|
|
|
$
|
2
|
|
Interest cost
|
275
|
|
|
292
|
|
|
3
|
|
|
4
|
|
||||
Expected return on plan assets
|
(483
|
)
|
|
(486
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service (credit) cost
|
(1
|
)
|
|
—
|
|
|
2
|
|
|
1
|
|
||||
Recognized actuarial loss (gain)
|
84
|
|
|
154
|
|
|
(1
|
)
|
|
(1
|
)
|
||||
Net periodic benefit (credit) cost
|
$
|
(35
|
)
|
|
$
|
62
|
|
|
$
|
4
|
|
|
$
|
6
|
|
Curtailment gain
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Settlement loss
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Plan termination
|
—
|
|
|
—
|
|
|
—
|
|
|
(128
|
)
|
||||
Total (credit) cost
|
$
|
(39
|
)
|
|
$
|
62
|
|
|
$
|
4
|
|
|
$
|
(122
|
)
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
U.S. Plans only
|
Pension
|
|
Post-retirement
|
||||||||||||
For the Three Months Ended June 30,
|
Benefits
|
|
Benefits
|
||||||||||||
(In millions of dollars)
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
||||
Service cost
|
$
|
27
|
|
|
$
|
29
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest cost
|
66
|
|
|
63
|
|
|
—
|
|
|
1
|
|
||||
Expected return on plan assets
|
(95
|
)
|
|
(92
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service cost
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
||||
Recognized actuarial loss (gain)
|
18
|
|
|
46
|
|
|
—
|
|
|
(1
|
)
|
||||
Net periodic benefit cost
|
$
|
16
|
|
|
$
|
46
|
|
|
$
|
1
|
|
|
$
|
1
|
|
Plan termination
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total cost
|
$
|
16
|
|
|
$
|
46
|
|
|
$
|
1
|
|
|
$
|
1
|
|
U.S. Plans only
|
Pension
|
|
Post-retirement
|
||||||||||||
For the Six Months Ended June 30,
|
Benefits
|
|
Benefits
|
||||||||||||
(In millions of dollars)
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
||||
Service cost
|
$
|
53
|
|
|
$
|
59
|
|
|
$
|
—
|
|
|
$
|
1
|
|
Interest cost
|
132
|
|
|
125
|
|
|
1
|
|
|
2
|
|
||||
Expected return on plan assets
|
(190
|
)
|
|
(184
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service cost
|
—
|
|
|
—
|
|
|
2
|
|
|
1
|
|
||||
Recognized actuarial loss (gain)
|
36
|
|
|
91
|
|
|
(1
|
)
|
|
(1
|
)
|
||||
Net periodic benefit cost
|
$
|
31
|
|
|
$
|
91
|
|
|
$
|
2
|
|
|
$
|
3
|
|
Plan termination
|
—
|
|
|
—
|
|
|
—
|
|
|
(128
|
)
|
||||
Total cost (credit)
|
$
|
31
|
|
|
$
|
91
|
|
|
$
|
2
|
|
|
$
|
(125
|
)
|
|
|
|
|
|
|
|
|
Significant non-U.S. Plans only
|
Pension
|
|
Post-retirement
|
||||||||||||
For the Three Months Ended June 30,
|
Benefits
|
|
Benefits
|
||||||||||||
(In millions of dollars)
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
||||
Service cost
|
$
|
19
|
|
|
$
|
21
|
|
|
$
|
—
|
|
|
$
|
1
|
|
Interest cost
|
72
|
|
|
83
|
|
|
1
|
|
|
1
|
|
||||
Expected return on plan assets
|
(147
|
)
|
|
(151
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service credit
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Recognized actuarial loss
|
24
|
|
|
32
|
|
|
—
|
|
|
—
|
|
||||
Net periodic benefit (credit) cost
|
$
|
(33
|
)
|
|
$
|
(15
|
)
|
|
$
|
1
|
|
|
$
|
2
|
|
Curtailment (gain)
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Settlement loss
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total (credit) cost
|
$
|
(37
|
)
|
|
$
|
(15
|
)
|
|
$
|
1
|
|
|
$
|
2
|
|
Significant non-U.S. Plans only
|
Pension
|
|
Post-retirement
|
||||||||||||
For the Six Months Ended June 30,
|
Benefits
|
|
Benefits
|
||||||||||||
(In millions of dollars)
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
||||
Service cost
|
$
|
37
|
|
|
$
|
43
|
|
|
$
|
—
|
|
|
$
|
1
|
|
Interest cost
|
143
|
|
|
167
|
|
|
2
|
|
|
2
|
|
||||
Expected return on plan assets
|
(293
|
)
|
|
(302
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service credit
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Recognized actuarial loss
|
48
|
|
|
63
|
|
|
—
|
|
|
—
|
|
||||
Net periodic benefit (credit) cost
|
$
|
(66
|
)
|
|
$
|
(29
|
)
|
|
$
|
2
|
|
|
$
|
3
|
|
Curtailment gain
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Settlement loss
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total (credit) cost
|
$
|
(70
|
)
|
|
$
|
(29
|
)
|
|
$
|
2
|
|
|
$
|
3
|
|
|
|
|
|
|
|
|
|
Combined U.S. and significant non-U.S. Plans
|
Pension
Benefits
|
|
Post-retirement
Benefits
|
||||||||
June 30,
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
Weighted average assumptions:
|
|
|
|
|
|
|
|
||||
Expected return on plan assets
|
7.07
|
%
|
|
7.25
|
%
|
|
—
|
|
|
—
|
|
Discount rate
|
4.11
|
%
|
|
3.79
|
%
|
|
4.12
|
%
|
|
4.08
|
%
|
Rate of compensation increase
|
2.44
|
%
|
|
2.42
|
%
|
|
—
|
|
|
—
|
|
(In millions of dollars)
|
June 30,
2016 |
|
|
December 31,
2015 |
|
||
Short-term:
|
|
|
|
||||
Current portion of long-term debt
|
$
|
261
|
|
|
$
|
12
|
|
Long-term:
|
|
|
|
||||
Senior notes – 2.30% due 2017
|
250
|
|
|
249
|
|
||
Senior notes – 2.55% due 2018
|
249
|
|
|
249
|
|
||
Senior notes – 2.35% due 2019
|
298
|
|
|
298
|
|
||
Senior notes – 2.35% due 2020
|
497
|
|
|
496
|
|
||
Senior notes – 4.80% due 2021
|
498
|
|
|
497
|
|
||
Senior notes – 3.30% due 2023
|
347
|
|
|
—
|
|
||
Senior notes – 4.05% due 2023
|
248
|
|
|
248
|
|
||
Senior notes – 3.50% due 2024
|
595
|
|
|
595
|
|
||
Senior notes – 3.50% due 2025
|
495
|
|
|
495
|
|
||
Senior notes – 3.750% due 2026
|
595
|
|
|
595
|
|
||
Senior notes – 5.875% due 2033
|
297
|
|
|
297
|
|
||
Mortgage – 5.70% due 2035
|
387
|
|
|
393
|
|
||
Other
|
1
|
|
|
2
|
|
||
|
4,757
|
|
|
4,414
|
|
||
Less current portion
|
261
|
|
|
12
|
|
||
|
$
|
4,496
|
|
|
$
|
4,402
|
|
|
June 30, 2016
|
|
December 31, 2015
|
||||||||||||
(In millions of dollars)
|
Carrying
Amount
|
|
|
Fair
Value
|
|
|
Carrying
Amount
|
|
|
Fair
Value
|
|
||||
Short-term debt
|
$
|
261
|
|
|
$
|
264
|
|
|
$
|
12
|
|
|
$
|
12
|
|
Long-term debt
|
$
|
4,496
|
|
|
$
|
4,755
|
|
|
$
|
4,402
|
|
|
$
|
4,513
|
|
(In millions of dollars)
|
Liability at 1/1/15
|
|
Amounts
Accrued
|
|
|
Cash
Paid
|
|
|
Other
|
|
|
Liability at 12/31/15
|
|
Amounts
Accrued
|
|
|
Cash
Paid
|
|
|
Other
|
|
|
Liability at 6/30/16
|
||||||||||||
Severance
|
$
|
7
|
|
|
$
|
17
|
|
|
$
|
(7
|
)
|
|
$
|
(2
|
)
|
|
$
|
15
|
|
|
$
|
4
|
|
|
$
|
(12
|
)
|
|
$
|
—
|
|
|
$
|
7
|
|
Future rent under non-cancelable leases and other costs
|
85
|
|
|
11
|
|
|
(21
|
)
|
|
3
|
|
|
78
|
|
|
4
|
|
|
(10
|
)
|
|
(2
|
)
|
|
70
|
|
|||||||||
Total
|
$
|
92
|
|
|
$
|
28
|
|
|
$
|
(28
|
)
|
|
$
|
1
|
|
|
$
|
93
|
|
|
$
|
8
|
|
|
$
|
(22
|
)
|
|
$
|
(2
|
)
|
|
$
|
77
|
|
▪
|
Risk and Insurance Services
, comprising insurance services (Marsh) and reinsurance services (Guy Carpenter); and
|
▪
|
Consulting
, comprising Mercer and Oliver Wyman Group.
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
(In millions of dollars)
|
Revenue
|
|
Operating
Income
(Loss)
|
|
Revenue
|
|
Operating
Income
(Loss)
|
||||||||
2016–
|
|
|
|
|
|
|
|
||||||||
Risk and Insurance Services
|
$
|
1,850
|
|
(a)
|
$
|
490
|
|
|
$
|
3,718
|
|
(c)
|
$
|
1,025
|
|
Consulting
|
1,539
|
|
(b)
|
285
|
|
|
3,017
|
|
(d)
|
530
|
|
||||
Total Operating Segments
|
3,389
|
|
|
775
|
|
|
6,735
|
|
|
1,555
|
|
||||
Corporate / Eliminations
|
(13
|
)
|
|
(49
|
)
|
|
(23
|
)
|
|
(96
|
)
|
||||
Total Consolidated
|
$
|
3,376
|
|
|
$
|
726
|
|
|
$
|
6,712
|
|
|
$
|
1,459
|
|
2015–
|
|
|
|
|
|
|
|
||||||||
Risk and Insurance Services
|
$
|
1,750
|
|
(a)
|
$
|
427
|
|
|
$
|
3,553
|
|
(c)
|
$
|
960
|
|
Consulting
|
1,487
|
|
(b)
|
248
|
|
|
2,908
|
|
(d)
|
496
|
|
||||
Total Operating Segments
|
3,237
|
|
|
675
|
|
|
6,461
|
|
|
1,456
|
|
||||
Corporate / Eliminations
|
(12
|
)
|
|
(46
|
)
|
|
(21
|
)
|
|
(92
|
)
|
||||
Total Consolidated
|
$
|
3,225
|
|
|
$
|
629
|
|
|
$
|
6,440
|
|
|
$
|
1,364
|
|
(a)
|
Includes inter-segment revenue of
$3 million
and
$4 million
in
2016
and
2015
, respectively, interest income on fiduciary funds of
$6 million
and
$5 million
in
2016
and
2015
, respectively, and equity method income of
$6 million
in
2016
and
$0 million
in
2015
, respectively.
|
(b)
|
Includes inter-segment revenue of
$10 million
and
$8 million
in
2016
and
2015
, respectively, interest income on fiduciary funds of less than
$1 million
and
$1 million
in
2016
and
2015
, respectively, and equity method income of
$5 million
in both
2016
and
2015
.
|
(c)
|
Includes inter-segment revenue of
$4 million
in
2016
and
$5 million
in
2015
, interest income on fiduciary funds of
$12 million
and
$10 million
in
2016
and
2015
, respectively, and equity method income of
$7 million
and
$2 million
in
2016
and
2015
, respectively.
|
(d)
|
Includes inter-segment revenue of
$19 million
and
$16 million
in
2016
and
2015
, respectively, interest income on fiduciary funds of
$1 million
and
$2 million
in
2016
and
2015
, respectively, and equity method income of
$9 million
and
$8 million
in
2016
and
2015
, respectively.
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
(In millions of dollars)
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
||||
Risk and Insurance Services
|
|
|
|
|
|
|
|
||||||||
Marsh
|
$
|
1,564
|
|
|
$
|
1,474
|
|
|
$
|
3,057
|
|
|
$
|
2,908
|
|
Guy Carpenter
|
286
|
|
|
276
|
|
|
661
|
|
|
645
|
|
||||
Total Risk and Insurance Services
|
1,850
|
|
|
1,750
|
|
|
3,718
|
|
|
3,553
|
|
||||
Consulting
|
|
|
|
|
|
|
|
||||||||
Mercer
|
1,079
|
|
|
1,046
|
|
|
2,118
|
|
|
2,083
|
|
||||
Oliver Wyman Group
|
460
|
|
|
441
|
|
|
899
|
|
|
825
|
|
||||
Total Consulting
|
1,539
|
|
|
1,487
|
|
|
3,017
|
|
|
2,908
|
|
||||
Total Operating Segments
|
3,389
|
|
|
3,237
|
|
|
6,735
|
|
|
6,461
|
|
||||
Corporate
/
Eliminations
|
(13
|
)
|
|
(12
|
)
|
|
(23
|
)
|
|
(21
|
)
|
||||
Total
|
$
|
3,376
|
|
|
$
|
3,225
|
|
|
$
|
6,712
|
|
|
$
|
6,440
|
|
|
Period Ended June 30, 2015
|
||||||||||||||
|
As Previously Reported
|
|
Change in Deferred Tax Presentation
|
|
Change in Prepaid Debt Fees Presentation
|
|
As Amended
|
||||||||
Consolidated Statement of Cash Flows
|
|
|
|
|
|
|
|
||||||||
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
||||||||
Other current assets
|
$
|
39
|
|
|
$
|
(46
|
)
|
|
$
|
1
|
|
|
$
|
(6
|
)
|
Other assets
|
(62
|
)
|
|
42
|
|
|
5
|
|
|
(15
|
)
|
||||
Accrued income taxes
|
31
|
|
|
6
|
|
|
—
|
|
|
37
|
|
||||
Other liabilities
|
(57
|
)
|
|
(2
|
)
|
|
—
|
|
|
(59
|
)
|
||||
Net cash provided by operations
|
106
|
|
|
—
|
|
|
6
|
|
|
112
|
|
||||
Proceeds from debt
|
500
|
|
|
—
|
|
|
(6
|
)
|
|
494
|
|
||||
Net cash used for financing activities
|
$
|
(488
|
)
|
|
$
|
—
|
|
|
$
|
(6
|
)
|
|
$
|
(494
|
)
|
•
|
Risk and Insurance Services
includes risk management activities (risk advice, risk transfer and risk control and mitigation solutions) as well as insurance and reinsurance broking and services. We conduct business in this segment through Marsh and Guy Carpenter.
|
•
|
Consulting
includes Health, Retirement, Talent and Investments consulting services and products, and specialized management, economic and brand consulting services. We conduct business in this segment through Mercer and Oliver Wyman Group.
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
|||||||||||
(In millions, except per share figures)
|
2016
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
||||
Revenue
|
$
|
3,376
|
|
$
|
3,225
|
|
|
$
|
6,712
|
|
|
$
|
6,440
|
|
Expense:
|
|
|
|
|
|
|
||||||||
Compensation and Benefits
|
1,872
|
|
1,826
|
|
|
3,726
|
|
|
3,556
|
|
||||
Other Operating Expenses
|
778
|
|
770
|
|
|
1,527
|
|
|
1,520
|
|
||||
Operating Expenses
|
2,650
|
|
2,596
|
|
|
5,253
|
|
|
5,076
|
|
||||
Operating Income
|
726
|
|
629
|
|
|
1,459
|
|
|
1,364
|
|
||||
Income from Continuing Operations
|
480
|
|
429
|
|
|
970
|
|
|
927
|
|
||||
Discontinued Operations, net of tax
|
—
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
||||
Net Income Before Non-Controlling Interests
|
480
|
|
429
|
|
|
970
|
|
|
924
|
|
||||
Net Income Attributable to the Company
|
$
|
472
|
|
$
|
419
|
|
|
$
|
953
|
|
|
$
|
901
|
|
Income From Continuing Operations Per Share:
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.91
|
|
$
|
0.78
|
|
|
$
|
1.83
|
|
|
$
|
1.68
|
|
Diluted
|
$
|
0.90
|
|
$
|
0.77
|
|
|
$
|
1.81
|
|
|
$
|
1.66
|
|
Net Income Per Share Attributable to the Company:
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.91
|
|
$
|
0.78
|
|
|
$
|
1.83
|
|
|
$
|
1.68
|
|
Diluted
|
$
|
0.90
|
|
$
|
0.77
|
|
|
$
|
1.81
|
|
|
$
|
1.66
|
|
Average Number of Shares Outstanding:
|
|
|
|
|
|
|
||||||||
Basic
|
521
|
|
535
|
|
|
521
|
|
|
537
|
|
||||
Diluted
|
525
|
|
541
|
|
|
526
|
|
|
543
|
|
||||
Shares Outstanding at June 30
|
519
|
|
531
|
|
|
519
|
|
|
531
|
|
|
Three Months Ended
June 30, |
|
%
Change
GAAP
Revenue
|
|
Components of Revenue Change*
|
||||||||||||||
Currency
Impact
|
|
Acquisitions/
Dispositions
Impact
|
|
Underlying
Revenue
|
|||||||||||||||
(In millions of dollars)
|
2016
|
|
|
2015
|
|
|
|||||||||||||
Risk and Insurance Services
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Marsh
|
$
|
1,559
|
|
|
$
|
1,470
|
|
|
6
|
%
|
|
(2
|
)%
|
|
6
|
%
|
|
2
|
%
|
Guy Carpenter
|
285
|
|
|
275
|
|
|
3
|
%
|
|
1
|
%
|
|
—
|
|
|
3
|
%
|
||
Subtotal
|
1,844
|
|
|
1,745
|
|
|
6
|
%
|
|
(2
|
)%
|
|
5
|
%
|
|
2
|
%
|
||
Fiduciary Interest Income
|
6
|
|
|
5
|
|
|
|
|
|
|
|
|
|
||||||
Total Risk and Insurance Services
|
1,850
|
|
|
1,750
|
|
|
6
|
%
|
|
(2
|
)%
|
|
5
|
%
|
|
2
|
%
|
||
Consulting
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Mercer
|
1,079
|
|
|
1,046
|
|
|
3
|
%
|
|
(2
|
)%
|
|
—
|
|
|
4
|
%
|
||
Oliver Wyman Group
|
460
|
|
|
441
|
|
|
5
|
%
|
|
(1
|
)%
|
|
1
|
%
|
|
5
|
%
|
||
Total Consulting
|
1,539
|
|
|
1,487
|
|
|
4
|
%
|
|
(2
|
)%
|
|
1
|
%
|
|
5
|
%
|
||
Corporate / Eliminations
|
(13
|
)
|
|
(12
|
)
|
|
|
|
|
|
|
|
|
||||||
Total Revenue
|
$
|
3,376
|
|
|
$
|
3,225
|
|
|
5
|
%
|
|
(2
|
)%
|
|
3
|
%
|
|
3
|
%
|
|
Three Months Ended
June 30, |
|
%
Change
GAAP
Revenue
|
|
Components of Revenue Change*
|
||||||||||||||
Currency
Impact
|
|
Acquisitions/
Dispositions
Impact
|
|
Underlying
Revenue
|
|||||||||||||||
(In millions of dollars)
|
2016
|
|
|
2015
|
|
|
|||||||||||||
Marsh:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
EMEA
|
$
|
479
|
|
|
$
|
439
|
|
|
9
|
%
|
|
(3
|
)%
|
|
9
|
%
|
|
3
|
%
|
Asia Pacific
|
183
|
|
|
176
|
|
|
4
|
%
|
|
(2
|
)%
|
|
3
|
%
|
|
2
|
%
|
||
Latin America
|
93
|
|
|
95
|
|
|
(1
|
)%
|
|
(12
|
)%
|
|
—
|
|
|
11
|
%
|
||
Total International
|
755
|
|
|
710
|
|
|
6
|
%
|
|
(4
|
)%
|
|
6
|
%
|
|
4
|
%
|
||
U.S. / Canada
|
804
|
|
|
760
|
|
|
6
|
%
|
|
—
|
|
|
6
|
%
|
|
—
|
|
||
Total Marsh
|
$
|
1,559
|
|
|
$
|
1,470
|
|
|
6
|
%
|
|
(2
|
)%
|
|
6
|
%
|
|
2
|
%
|
Mercer:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Health
|
$
|
410
|
|
|
$
|
391
|
|
|
5
|
%
|
|
(1
|
)%
|
|
—
|
%
|
|
5
|
%
|
Retirement
|
314
|
|
|
325
|
|
|
(4
|
)%
|
|
(2
|
)%
|
|
(4
|
)%
|
|
2
|
%
|
||
Investments
|
210
|
|
|
207
|
|
|
2
|
%
|
|
(3
|
)%
|
|
—
|
|
|
6
|
%
|
||
Talent
|
145
|
|
|
123
|
|
|
18
|
%
|
|
(1
|
)%
|
|
13
|
%
|
|
6
|
%
|
||
Total Mercer
|
$
|
1,079
|
|
|
$
|
1,046
|
|
|
3
|
%
|
|
(2
|
)%
|
|
—
|
|
|
4
|
%
|
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 and transfers among businesses and the deconsolidation of Marsh India.
|
|
*
|
Components of revenue change may not add due to rounding.
|
|
Six Months Ended
June 30, |
|
%
Change
GAAP
Revenue
|
|
Components of Revenue Change*
|
||||||||||||||
Currency
Impact
|
|
Acquisitions/
Dispositions
Impact
|
|
Underlying
Revenue
|
|||||||||||||||
(In millions of dollars)
|
2016
|
|
|
2015
|
|
|
|||||||||||||
Risk and Insurance Services
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Marsh
|
$
|
3,047
|
|
|
$
|
2,900
|
|
|
5
|
%
|
|
(3
|
)%
|
|
6
|
%
|
|
2
|
%
|
Guy Carpenter
|
659
|
|
|
643
|
|
|
2
|
%
|
|
(1
|
)%
|
|
—
|
|
|
3
|
%
|
||
Subtotal
|
3,706
|
|
|
3,543
|
|
|
5
|
%
|
|
(3
|
)%
|
|
5
|
%
|
|
2
|
%
|
||
Fiduciary Interest Income
|
12
|
|
|
10
|
|
|
|
|
|
|
|
|
|
||||||
Total Risk and Insurance Services
|
3,718
|
|
|
3,553
|
|
|
5
|
%
|
|
(3
|
)%
|
|
5
|
%
|
|
2
|
%
|
||
Consulting
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Mercer
|
2,118
|
|
|
2,083
|
|
|
2
|
%
|
|
(3
|
)%
|
|
1
|
%
|
|
4
|
%
|
||
Oliver Wyman Group
|
899
|
|
|
825
|
|
|
9
|
%
|
|
(1
|
)%
|
|
1
|
%
|
|
9
|
%
|
||
Total Consulting
|
3,017
|
|
|
2,908
|
|
|
4
|
%
|
|
(2
|
)%
|
|
1
|
%
|
|
5
|
%
|
||
Corporate / Eliminations
|
(23
|
)
|
|
(21
|
)
|
|
|
|
|
|
|
|
|
||||||
Total Revenue
|
$
|
6,712
|
|
|
$
|
6,440
|
|
|
4
|
%
|
|
(2
|
)%
|
|
3
|
%
|
|
4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
June 30, |
|
%
Change
GAAP
Revenue
|
|
Components of Revenue Change*
|
||||||||||||||
Currency
Impact
|
|
Acquisitions/
Dispositions
Impact
|
|
Underlying
Revenue
|
|||||||||||||||
(In millions of dollars)
|
2016
|
|
|
2015
|
|
|
|||||||||||||
Marsh:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
EMEA
|
$
|
1,049
|
|
|
$
|
1,002
|
|
|
5
|
%
|
|
(4
|
)%
|
|
7
|
%
|
|
2
|
%
|
Asia Pacific
|
329
|
|
|
324
|
|
|
2
|
%
|
|
(3
|
)%
|
|
2
|
%
|
|
2
|
%
|
||
Latin America
|
164
|
|
|
176
|
|
|
(7
|
)%
|
|
(15
|
)%
|
|
—
|
|
|
9
|
%
|
||
Total International
|
1,542
|
|
|
1,502
|
|
|
3
|
%
|
|
(5
|
)%
|
|
5
|
%
|
|
3
|
%
|
||
U.S. / Canada
|
1,505
|
|
|
1,398
|
|
|
8
|
%
|
|
(1
|
)%
|
|
7
|
%
|
|
1
|
%
|
||
Total Marsh
|
$
|
3,047
|
|
|
$
|
2,900
|
|
|
5
|
%
|
|
(3
|
)%
|
|
6
|
%
|
|
2
|
%
|
Mercer:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Health
|
$
|
810
|
|
|
$
|
775
|
|
|
5
|
%
|
|
(1
|
)%
|
|
—
|
|
|
6
|
%
|
Retirement
|
626
|
|
|
656
|
|
|
(5
|
)%
|
|
(3
|
)%
|
|
(3
|
)%
|
|
1
|
%
|
||
Investments
|
406
|
|
|
412
|
|
|
(1
|
)%
|
|
(5
|
)%
|
|
—
|
|
|
3
|
%
|
||
Talent
|
276
|
|
|
240
|
|
|
15
|
%
|
|
(2
|
)%
|
|
13
|
%
|
|
4
|
%
|
||
Total Mercer
|
$
|
2,118
|
|
|
$
|
2,083
|
|
|
2
|
%
|
|
(3
|
)%
|
|
1
|
%
|
|
4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
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 and transfers among businesses and the deconsolidation of Marsh India.
|
|
*
|
Components of revenue change may not add due to rounding.
|
|
|
For the Three and Six Months Ended June 30,
|
Three Months
|
|
Six Months
|
||||||||||
(In millions of dollars)
|
2016
|
|
2015
|
|
|
2016
|
|
2015
|
|
||||
Revenue
|
$
|
1,850
|
|
$
|
1,750
|
|
|
$
|
3,718
|
|
$
|
3,553
|
|
Compensation and Benefits
|
934
|
|
909
|
|
|
1,855
|
|
1,771
|
|
||||
Other Expenses
|
426
|
|
414
|
|
|
838
|
|
822
|
|
||||
Expense
|
1,360
|
|
1,323
|
|
|
2,693
|
|
2,593
|
|
||||
Operating Income
|
$
|
490
|
|
$
|
427
|
|
|
$
|
1,025
|
|
$
|
960
|
|
Operating Income Margin
|
26.6
|
%
|
24.4
|
%
|
|
27.6
|
%
|
27.0
|
%
|
For the Three and Six Months Ended June 30,
|
Three Months
|
|
Six Months
|
||||||||||
(In millions of dollars)
|
2016
|
|
2015
|
|
|
2016
|
|
2015
|
|
||||
Revenue
|
$
|
1,539
|
|
$
|
1,487
|
|
|
$
|
3,017
|
|
$
|
2,908
|
|
Compensation and Benefits
|
852
|
|
831
|
|
|
1,699
|
|
1,614
|
|
||||
Other Expenses
|
402
|
|
408
|
|
|
788
|
|
798
|
|
||||
Expense
|
1,254
|
|
1,239
|
|
|
2,487
|
|
2,412
|
|
||||
Operating Income
|
$
|
285
|
|
$
|
248
|
|
|
$
|
530
|
|
$
|
496
|
|
Operating Income Margin
|
18.5
|
%
|
16.7
|
%
|
|
17.6
|
%
|
17.1
|
%
|
|
|
|
|
|
|
(
In millions of dollars
)
|
Payment due by Period
|
||||||||||||||||||
Contractual Obligations
|
Total
|
|
|
Within
1 Year
|
|
|
1-3 Years
|
|
|
4-5 Years
|
|
|
After
5 Years
|
|
|||||
Short-term debt
|
$
|
261
|
|
|
$
|
261
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Long-term debt
|
4,527
|
|
|
—
|
|
|
276
|
|
|
828
|
|
|
3,423
|
|
|||||
Interest on long-term debt
|
1,494
|
|
|
177
|
|
|
337
|
|
|
303
|
|
|
677
|
|
|||||
Net operating leases
|
1,987
|
|
|
311
|
|
|
530
|
|
|
400
|
|
|
746
|
|
|||||
Service agreements
|
199
|
|
|
118
|
|
|
72
|
|
|
8
|
|
|
1
|
|
|||||
Other long-term obligations
|
449
|
|
|
135
|
|
|
276
|
|
|
33
|
|
|
5
|
|
|||||
Total
|
$
|
8,917
|
|
|
$
|
1,002
|
|
|
$
|
1,491
|
|
|
$
|
1,572
|
|
|
$
|
4,852
|
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk.
|
(In millions of dollars)
|
June 30, 2016
|
||
Cash and cash equivalents invested in money market funds, certificates of deposit and time deposits
|
$
|
974
|
|
Fiduciary cash and investments
|
$
|
4,538
|
|
Item 4.
|
Controls & Procedures.
|
Period
|
(a)
Total
Number of
Shares (or
Units)
Purchased
|
|
|
(b)
Average
Price
Paid per
Share
(or Unit)
|
|
|
(c)
Total Number of
Shares (or
Units)
Purchased as
Part of Publicly
Announced
Plans or
Programs
|
|
|
(d)
Maximum
Number (or
Approximate
Dollar Value) of
Shares (or
Units) that May
Yet Be
Purchased
Under the Plans
or Programs
|
|
||
April 1-30, 2016
|
813,890
|
|
|
$
|
61.4333
|
|
|
813,890
|
|
|
$
|
905,471,811
|
|
May 1-31, 2016
|
1,221,962
|
|
|
$
|
64.3288
|
|
|
1,221,962
|
|
|
$
|
826,864,510
|
|
June 1-30, 2016
|
1,459,274
|
|
|
$
|
66.0551
|
|
|
1,459,274
|
|
|
$
|
730,471,960
|
|
Total
|
3,495,126
|
|
|
$
|
64.3753
|
|
|
3,495,126
|
|
|
$
|
730,471,960
|
|
Date:
|
August 1, 2016
|
/s/ Mark C. McGivney
|
|
|
|
Mark C. McGivney
|
|
|
|
Chief Financial Officer
|
|
|
|
|
|
Date:
|
August 1, 2016
|
/s/ Robert J. Rapport
|
|
|
|
Robert J. Rapport
|
|
|
|
Senior Vice President & Controller
|
|
|
|
(Chief Accounting Officer)
|
|
Exhibit No.
|
|
Exhibit Name
|
|
|
|
10.1
|
|
Letter Agreement, effective as of February 22, 2016, between Marsh & McLennan Companies, Inc. and Daniel S. Glaser
|
|
|
|
10.2
|
|
Form of Restricted Stock Unit Award, dated as of April 1, 2016, under the Marsh & McLennan Companies, Inc. 2011 Incentive and Stock Award Plan
|
|
|
|
10.3
|
|
Waiver and Release Agreement, dated April 5, 2016, between Marsh & McLennan Companies, Inc. and J. Michael Bischoff
|
|
|
|
10.4
|
|
Letter Agreement, effective as of May 18, 2016, between Marsh & McLennan Companies, Inc. and Julio A. Portalatin
|
|
|
|
10.5
|
|
Letter Agreement, effective as of May 18, 2016, between Marsh & McLennan Companies, Inc. and Peter Zaffino
|
|
|
|
10.6
|
|
Description of Compensation Arrangements for Independent Directors of Marsh & McLennan Companies, Inc., effective June 1, 2016
|
|
|
|
12.1
|
|
Statement Re: Computation of Ratio of Earnings to Fixed Charges
|
|
|
|
31.1
|
|
Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer
|
|
|
|
31.2
|
|
Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer
|
|
|
|
32.1
|
|
Section 1350 Certifications
|
|
|
|
101.INS
|
|
XBRL Instance Document
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase
|
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