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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 | 26.30 | 98.8B |
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 fourth quarter and year ended December 31, 2017.
Dan Glaser, President and CEO, said: "Marsh & McLennan Companies generated strong results in the fourth quarter of 2017. On a consolidated basis, we produced 10% revenue growth with underlying revenue growth of 4%, including 3% in Risk & Insurance Services and 6% in Consulting. Adjusted operating income increased 12% in the quarter with double-digit growth in both segments."
"For the year, Marsh & McLennan Companies generated solid underlying revenue growth of 3%, adjusted EPS growth of 15% and adjusted operating margin expansion of 70 basis points, with higher margins in both segments for the eighth consecutive year."
"In addition to our excellent underlying performance, we had another active year of acquisitions while delivering on our capital return commitments. We are proud of our accomplishments this past year and believe we are well positioned for another strong year in 2018," concluded Mr. Glaser.
Consolidated Results
Consolidated revenue in the fourth quarter of 2017 was $3.7 billion, an increase of 10% compared with the fourth quarter of 2016, or 4% on an underlying basis. Operating income rose 8% to $686 million and included a $54 million pension charge as described in the supplemental schedules. Adjusted operating income, which excludes noteworthy items as presented in the attached supplemental schedules, increased 12% to $755 million. Earnings per share declined to $0.06 reflecting a charge of $460 million related to the changes in U.S. tax reform as well as the pension charge noted above. Adjusted earnings per share rose 18% to $1.05 compared with $0.89 in the prior fourth quarter.
For the year 2017, revenue was $14 billion, an increase of 6% compared with 2016, or 3% on an underlying basis. Earnings per share declined 15% to $2.87 and includes the previously mentioned tax and pension charges. Adjusted earnings per share increased 15% to $3.92 compared with $3.42 in 2016.
Risk & Insurance Services
Risk & Insurance Services revenue was $2 billion in the fourth quarter of 2017, an increase of 9%, or 3% on an underlying basis. Operating income of $416 million was essentially flat with the prior year and includes $47 million of the previously mentioned pension charge. Adjusted operating income increased 12% to $473 million. For the year 2017, revenue was $7.6 billion, an increase of 7%, or 3% on an underlying basis. Operating income rose 7% to $1.9 billion while adjusted operating income rose 11%.
Marsh's revenue in the fourth quarter of 2017 was $1.7 billion, an increase of 9%, or 3% on an underlying basis. In U.S./Canada, underlying revenue rose 4%. International operations produced underlying revenue growth of 1%, reflecting underlying growth of 5% in Asia Pacific, and 9% in Latin America partially offset by a decline of 3% in EMEA. For the year 2017, Marsh's revenue growth was 7%, or 3% on an underlying basis.
Guy Carpenter's fourth quarter revenue was $239 million, up 7% on an underlying basis. For the year 2017, Guy Carpenter's underlying revenue growth was 4%.
Consulting
Consulting revenue was $1.7 billion in the fourth quarter of 2017, an increase of 10%, or 6% on an underlying basis. Operating income of $321 million rose 21%. Adjusted operating income increased 10% to $330 million. For the year 2017, revenue was $6.4 billion, up 5%, or 4% on an underlying basis. Operating income increased 6% to $1.2 billion on both a GAAP and adjusted basis.
Mercer's revenue was $1.2 billion in the fourth quarter, an increase of 9%, or 4% on an underlying basis. Wealth revenue grew 4% on an underlying basis. Within Wealth, Defined Benefit Consulting & Administration increased 1% on an underlying basis, while Investment Management & Related Services increased 12%. Health revenue increased 3% on an underlying basis and Career increased 6%. For the year 2017, Mercer's revenue growth was 5%, or 2% on an underlying basis.
Oliver Wyman Group's revenue was $546 million in the fourth quarter, an increase of 9% on an underlying basis. For the year 2017, Oliver Wyman Group's revenue increased to $1.9 billion, up 7% on an underlying basis.
Other Items
The effective tax rate in the fourth quarter of 2017 was 95.5% compared with 24.9% in the year ago period. For the year 2017, the effective tax rate was 42.9% compared with 27.6% for the year ago period.
The effective tax rate in the fourth quarter and full year 2017 reflects the estimated impact of the enactment, in December 2017, of U.S. tax reform. An aggregate provisional charge of $460 million reflects a $220 million write down of our net deferred tax asset to reflect the decrease of the U.S. federal corporate income tax rate from 35% to 21% and a $240 million charge related to deemed repatriation.
The tax rate in the fourth quarter and year 2017 also reflects the impact of the required change in accounting for equity awards.
The Company repurchased 3.6 million shares of stock for $300 million in the fourth quarter. For the year, 11.5 million shares were repurchased for $900 million.
Conference Call
A conference call to discuss fourth quarter 2017 results will be held today at 8:30 a.m. Eastern time. To participate in the teleconference, please dial +1 800 289 0438. Callers from outside the United States should dial +1 323 994 2083. The access code for both numbers is 3400073. The live audio webcast may be accessed at mmc.com . A replay of the webcast will be available approximately two hours after the event.
About Marsh & McLennan Companies
Marsh & McLennan (NYSE: MMC) is the world's leading professional services firm in the areas of risk, strategy and people. The company's nearly 65,000 colleagues advise clients in over 130 countries. With annual revenue over $14 billion, Marsh & McLennan helps clients navigate an increasingly dynamic and complex environment through four market-leading firms. Marsh advises individual and commercial clients of all sizes on insurance broking and innovative risk management solutions. Guy Carpenter develops advanced risk, reinsurance and capital strategies that help clients grow profitably and pursue emerging opportunities. Mercer delivers advice and technology-driven solutions that help organizations meet the health, wealth and career needs of a changing workforce. Oliver Wyman serves as a critical strategic, economic and brand advisor to private sector and governmental clients. For more information, visit mmc.com , follow us on LinkedIn and Twitter @mmc_global or subscribe to BRINK .
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:
Hot Features
Premium
-- the impact of any investigations, reviews, market studies or other
activity by regulatory or law enforcement authorities, including the
recently-announced UK FCA wholesale insurance broker market study and
the ongoing investigations by the European Commission;
-- the impact from lawsuits, other contingent liabilities and loss
contingencies arising from errors and omissions, breach of fiduciary
duty or other 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 our vendor
network and the need to patch software vulnerabilities;
-- our ability to compete effectively and adapt to changes in the
competitive environment, including to respond to disintermediation,
digital disruption and other types of innovation;
-- the financial and operational impact of complying with laws and
regulations where we operate, including cybersecurity and data privacy
regulations such as the E.U.'s General Data Protection Regulation,
anti-corruption laws and trade sanctions regimes;
-- the regulatory, contractual and reputational risks that arise based on
insurance placement activities and various broker revenue streams;
-- the extent to which we manage risks associated with the various
services, including fiduciary and investments and other advisory
services;
-- our ability to successfully recover if we experience a business
continuity problem due to cyberattack, natural disaster or otherwise;
-- the impact of changes in tax laws, guidance and interpretations,
including related to certain provisions of the U.S. Tax Cuts and Jobs
Act, or disagreements with tax authorities;
-- the impact of fluctuations in foreign exchange and interest rates on
our results;
-- the impact of macroeconomic, political, regulatory or market
conditions on us, our clients and the industries in which we operate;
and
-- the impact of changes in accounting rules or in our accounting
estimates or assumptions, including the impact of the adoption of the
new revenue recognition and pension accounting standards.
The factors identified above are not exhaustive. 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. 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. We undertake no obligation to update or revise any forward-looking statement to reflect events or circumstances arising after the date on which it is made.
Marsh
& McLennan
Companies,
Inc.
Consolidated
Statements
of Income
(In millions,
except
per share
figures)
(Unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
2017 2016 2017 2016
Revenue $ 3,685 $ 3,364 $ 14,024 $ 13,211
Expense:
Compensation 2,098 1,918 7,884 7,461
and Benefits
Other 901 813 3,284 3,086
Operating
Expenses
Operating 2,999 2,731 11,168 10,547
Expenses
Operating 686 633 2,856 2,664
Income
Interest 3 1 9 5
Income
Interest (59 ) (48 ) (237 ) (189 )
Expense
Investment 12 2 15 -
Income
Income Before 642 588 2,643 2,480
Income Taxes
Income Tax 614 147 1,133 685
Expense
Income from 28 441 1,510 1,795
Continuing
Operations
Discontinued 2 - 2 -
Operations,
Net of Tax
Net Income 30 441 1,512 1,795
Before
Non-Controlling
Interests
Less: Net 1 5 20 27
Income
Attributable
to
Non-Controlling
Interests
Net $ 29 $ 436 $ 1,492 $ 1,768
Income
Attributable
to the Company
Basic Net
Income
Per Share
- Continuing $ 0.05 $ 0.85 $ 2.91 $ 3.41
Operations
- Net Income $ 0.06 $ 0.85 $ 2.91 $ 3.41
Attributable
to the Company
Diluted Net
Income
Per Share
- Continuing $ 0.05 $ 0.84 $ 2.87 $ 3.38
Operations
- Net Income $ 0.06 $ 0.84 $ 2.87 $ 3.38
Attributable
to the Company
Average Number
of Shares
Outstanding
- Basic 510 515 513 519
- Diluted 517 521 519 524
Shares 509 514 509 514
Outstanding
at 12/31
Marsh & McLennan
Companies, Inc.
Supplemental Information
- Revenue Analysis
Three Months Ended
December 31, 2017
(Millions) (Unaudited)
Components of Revenue Change*
Three Months Ended % ChangeGAAPRevenue CurrencyImpact Acquisitions/DispositionsImpact UnderlyingRevenue
December 31,
2017 2016
Risk and Insurance Services
Marsh $ 1,712 $ 1,565 9 % 1 % 6 % 3 %
Guy Carpenter 239 222 8 % 1 % - 7 %
Subtotal 1,951 1,787 9 % 1 % 5 % 3 %
Fiduciary Interest Income 11 6
Total Risk and Insurance 1,962 1,793 9 % 1 % 5 % 3 %
Services
Consulting
Mercer 1,193 1,096 9 % 2 % 2 % 4 %
Oliver Wyman Group 546 486 12 % 3 % - 9 %
Total Consulting 1,739 1,582 10 % 2 % 2 % 6 %
Corporate / Eliminations (16 ) (11 )
Total Revenue $ 3,685 $ 3,364 10 % 2 % 3 % 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 CurrencyImpact Acquisitions/DispositionsImpact UnderlyingRevenue
December 31,
2017 2016
Marsh:
EMEA $ 521 $ 481 8 % 4 % 7 % (3 )%
Asia Pacific 161 153 5 % 1 % - 5 %
Latin America 130 122 7 % (5 )% 3 % 9 %
Total International 812 756 8 % 2 % 5 % 1 %
U.S. / Canada 900 809 11 % - 6 % 4 %
Total Marsh $ 1,712 $ 1,565 9 % 1 % 6 % 3 %
Mercer:
Defined Benefit Consulting $ 371 $ 364 2 % 3 % (2 )% 1 %
& Administration
Investment Management 195 152 28 % 2 % 14 % 12 %
& Related Services
Total Wealth 566 516 10 % 3 % 3 % 4 %
Health 409 381 7 % 1 % 2 % 3 %
Career 218 199 10 % 2 % 2 % 6 %
Total Mercer $ 1,193 $ 1,096 9 % 2 % 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, 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 Investment business. The 2016
information in the chart above has been conformed
to the current presentation. Please refer to the "Supplemental
Information - Mercer" schedules included
in the first quarter 2017 press release for additional
information about the Wealth business.
* Components of revenue change may not add due to rounding.
Marsh & McLennan
Companies, Inc.
Supplemental Information
- Revenue Analysis
Twelve Months Ended
December 31, 2017
(Millions) (Unaudited)
Components of Revenue Change*
Twelve Months Ended % ChangeGAAPRevenue CurrencyImpact Acquisitions/DispositionsImpact UnderlyingRevenue
December 31,
2017 2016
Risk and Insurance Services
Marsh $ 6,404 $ 5,976 7 % - 5 % 3 %
Guy Carpenter 1,187 1,141 4 % - - 4 %
Subtotal 7,591 7,117 7 % - 4 % 3 %
Fiduciary Interest Income 39 26
Total Risk and Insurance 7,630 7,143 7 % - 4 % 3 %
Services
Consulting
Mercer 4,528 4,323 5 % - 2 % 2 %
Oliver Wyman Group 1,916 1,789 7 % - - 7 %
Total Consulting 6,444 6,112 5 % - 2 % 4 %
Corporate / Eliminations (50 ) (44 )
Total Revenue $ 14,024 $ 13,211 6 % - 3 % 3 %
Revenue Details
The following table provides more detailed revenue information for certain of the components presented above:
Components of Revenue Change*
Twelve Months Ended % ChangeGAAPRevenue CurrencyImpact Acquisitions/DispositionsImpact UnderlyingRevenue
December 31,
2017 2016
Marsh:
EMEA $ 2,033 $ 1,924 6 % (1 )% 7 % -
Asia Pacific 645 635 2 % - (5 )% 6 %
Latin America 404 374 8 % (3 )% 3 % 7 %
Total International 3,082 2,933 5 % (1 )% 4 % 2 %
U.S. / Canada 3,322 3,043 9 % - 6 % 4 %
Total Marsh $ 6,404 $ 5,976 7 % - 5 % 3 %
Mercer:
Defined Benefit Consulting $ 1,381 $ 1,447 (5 )% (1 )% (2 )% (2 )%
& Administration
Investment Management 767 606 26 % 1 % 15 % 10 %
& Related Services
Total Wealth 2,148 2,053 5 % - 3 % 2 %
Health 1,648 1,588 4 % - 2 % 2 %
Career 732 682 7 % - 2 % 5 %
Total Mercer $ 4,528 $ 4,323 5 % - 2 % 2 %
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 Investment business. The 2016
information in the chart above has been conformed
to the current presentation. Please refer to the "Supplemental
Information - Mercer" schedules included
in the first quarter 2017 press release 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 Measures
Three Months Ended December 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 businesses, 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 reconcile adjusted operating income (loss) to GAAP operating income or loss, on a consolidated and segment basis, for the three and twelve months ended December 31, 2017 and 2016. The following tables also present adjusted operating margin . For the three and twelve months ended December 31, 2017 and 2016, adjusted operating margin is calculated by dividing adjusted operating income by consolidated or segment GAAP revenue less, where applicable, the net gain on the deconsolidation of Marsh's India subsidiary and the proceeds related to the disposal of Mercer's U.S. defined contribution recordkeeping business.
Risk &InsuranceServices Consulting Corporate/Eliminations Total
Three Months
Ended
December
31, 2017
Operating $ 416 $ 321 $ (51 ) $ 686
income
(loss)
Add impact of
Noteworthy
Items:
Restructuring 4 1 3 8
(a)
Adjustments to 5 1 - 6
acquisition
related accounts
(b)
Pension 47 7 - 54
settlement
charge (c)
Other 1 - - 1
Operating 57 9 3 69
income
adjustments
Adjusted $ 473 $ 330 $ (48 ) $ 755
operating
income (loss)
Operating 21.2 % 18.5 % N/A 18.6 %
margin
Adjusted 24.1 % 19.0 % N/A 20.5 %
operating
margin
Three Months
Ended
December
31, 2016
Operating $ 413 $ 265 $ (45 ) $ 633
income
(loss)
Add impact of
Noteworthy
Items:
Restructuring 1 33 1 35
(a)
Adjustments to 5 1 - 6
acquisition
related accounts
(b)
Deconsolidation 1 - - 1
of
business (d)
Other 1 - - 1
Operating 8 34 1 43
income
adjustments
Adjusted $ 421 $ 299 $ (44 ) $ 676
operating
income (loss)
Operating 23.0 % 16.8 % N/A 18.8 %
margin
Adjusted 23.5 % 18.9 % N/A 20.1 %
operating
margin
(a) Includes severance and related charges
from restructuring activities,
adjustments to restructuring liabilities for future rent under
non-cancellable leases and other real estate costs, and restructuring
costs related to the integration of recent acquisitions.
(b) Primarily includes the change in fair value as measured each
quarter of contingent consideration related to acquisitions.
(c) Pension settlement charge resulting
from lump sum settlements elected by
participants in certain U.K. pension plans.
Recognition of these payments as
a partial settlement was required because
in each respective plan the lump
sum payments exceeded the total of interest
and service cost for the year.
(d) Relates to net gain on the deconsolidation of Marsh India.
Marsh & McLennan Companies, Inc.
Reconciliation of Non-GAAP Measures
Twelve Months Ended December 31
(Millions) (Unaudited)
Adjusted Operating Income (Loss) and Adjusted Operating Margin (cont'd)
Risk &InsuranceServices Consulting Corporate/Eliminations Total
Twelve Months Ended
December 31, 2017
Operating income $ 1,871 $ 1,174 $ (189 ) $ 2,856
(loss)
Add impact of
Noteworthy
Items:
Restructuring (a) 11 19 10 40
Adjustments to - 3 - 3
acquisition
related accounts
(b)
Other Settlement, 15 - - 15
Legal
and Regulatory (c)
Pension settlement 47 7 - 54
charge (d)
Other 1 - - 1
Operating income 74 29 10 113
adjustments
Adjusted operating $ 1,945 $ 1,203 $ (179 ) $ 2,969
income (loss)
Operating margin 24.5 % 18.2 % N/A 20.4 %
Adjusted operating 25.5 % 18.7 % N/A 21.2 %
margin
Twelve Months Ended
December 31, 2016
Operating income $ 1,753 $ 1,103 $ (192 ) $ 2,664 (loss) Add (Deduct) impact of Noteworthy Items: Restructuring (a) 3 34 7 44 Adjustments to 12 3 - 15 acquisition related accounts (b) Disposal/deconsolidation (11 ) (6 ) - (17 ) of business (e) Other 2 - - 2 Operating income 6 31 7 44 adjustments Adjusted operating $ 1,759 $ 1,134 $ (185 ) $ 2,708 income (loss) Operating margin 24.5 % 18.1 % N/A 20.2 % Adjusted operating 24.7 % 18.6 % N/A 20.5 % margin (a) Includes severance and related charges from restructuring activities and the Mercer business restructure (initially announced in Q4 2016), adjustments to restructuring liabilities related to future rent under non-cancellable leases and other real estate costs, as well as restructuring costs related to the integration of recent acquisitions. (b) Primarily includes the change in fair value as measured each quarter of contingent consideration related to acquisitions. (c) Reflects the settlement of the final legacy litigation, originally filed in 2006, regarding Marsh's use of market service agreements. (d) Pension settlement charge resulting from lump sum settlements elected by participants in certain U.K. pension plans. Recognition of these payments as a partial settlement was required because in each respective plan the lump sum payments exceeded the total of interest and service cost for the year. (e) Relates to a net gain on the deconsolidation of Marsh India and contingent proceeds related to the disposal of Mercer's U.S. defined contribution recordkeeping business. The amounts are excluded from GAAP revenue in the calculation of adjusted operating margin. Marsh & McLennan Companies, Inc. Reconciliation of Non-GAAP Measures Three and Twelve Months Ended December 31 (Millions) (Unaudited)
Adjusted income, net of tax and Adjusted Earnings per Share
Adjusted income, net of tax is 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 and the impact related to recently enacted U.S. tax reform legislation. Adjusted EPS is calculated by dividing the Company's adjusted income, net of tax , by MMC's average number of shares outstanding-diluted for the relevant period. The following tables reconcile adjusted income, net of tax to GAAP income from continuing operations and adjusted EPS to GAAP EPS for the three and twelve months ended December 31, 2017 and 2016.
Three Months Ended December 31, 2017 Three Months Ended December 31, 2016
Amount AdjustedEPS Amount Adjusted EPS
Income from continuing $ 28 $ 441
operations
Less: Non-controlling 1 5
interest, net of tax
Subtotal $ 27 $ 0.05 $ 436 $ 0.84
Operating income $ 69 $ 43
adjustments
Impact of income taxes (12 ) (14 )
Subtotal 57 29
Impact of U.S. 460 -
tax reform*
517 1.00 29 0.05
Adjusted income, $ 544 $ 1.05 $ 465 $ 0.89
net of tax
Twelve Months Ended December 31, 2017 Twelve Months Ended December 31, 2016
Amount AdjustedEPS Amount Adjusted EPS
Income from continuing $ 1,510 $ 1,795
operations
Less: Non-controlling 20 27
interest, net of tax
Subtotal $ 1,490 $ 2.87 $ 1,768 $ 3.38
Operating income $ 113 $ 44
adjustments
Impact of income taxes (28 ) (21 )
Subtotal 85 23
Impact of U.S. 460 -
tax reform*
545 1.05 23 0.04
Adjusted income, $ 2,035 $ 3.92 $ 1,791 $ 3.42
net of tax
*The provisional estimates are based on the Company's initial
analysis of the Tax Cuts and Jobs Act (the "Act").
Given the significant complexity of the Act, anticipated
guidance from the U.S. Treasury about implementing
the Act, and the potential for additional guidance
from the Securities and Exchange Commission or the
Financial Accounting Standards Board related to the Act,
these estimates may be adjusted during 2018.
Marsh & McLennan
Companies, Inc.
Supplemental
Information
Three and Twelve
Months
Ended December 31
(Millions)
(Unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
2017 2016 2017 2016
Consolidated
Compensation $ 2,098 $ 1,918 $ 7,884 $ 7,461
and Benefits
Other operating 901 813 3,284 3,086
expenses
Total Expenses $ 2,999 $ 2,731 $ 11,168 $ 10,547
Depreciation and $ 78 $ 77 $ 312 $ 308
amortization
expense
Identified 47 31 169 130
intangible
amortization
expense
Total $ 125 $ 108 $ 481 $ 438
Stock option $ 1 $ 3 $ 20 $ 21
expense
Capital $ 85 $ 79 $ 302 $ 253
expenditures
Risk
and Insurance
Services
Compensation $ 1,084 $ 953 $ 4,031 $ 3,732
and Benefits
Other operating 462 427 1,728 1,658
expenses
Total Expenses $ 1,546 $ 1,380 $ 5,759 $ 5,390
Depreciation and $ 37 $ 34 $ 143 $ 139
amortization
expense
Identified 39 26 139 109
intangible
amortization
expense
Total $ 76 $ 60 $ 282 $ 248
Consulting
Compensation $ 926 $ 879 $ 3,509 $ 3,385
and Benefits
Other operating 492 438 1,761 1,624
expenses
Total Expenses $ 1,418 $ 1,317 $ 5,270 $ 5,009
Depreciation and $ 23 $ 25 $ 99 $ 100
amortization
expense
Identified 8 5 30 21
intangible
amortization
expense
Total $ 31 $ 30 $ 129 $ 121
Marsh & McLennan
Companies, Inc.
Consolidated Balance Sheets
(Millions) (Unaudited)
December 31, 2017 December 31, 2016
ASSETS
Current assets:
Cash and cash equivalents $ 1,205 $ 1,026
Net receivables 4,133 3,643
Other current assets 224 215
Total current assets 5,562 4,884
Goodwill and intangible assets 10,363 9,495
Fixed assets, net 712 725
Pension related assets 1,693 776
Deferred tax assets 669 1,097
Other assets 1,430 1,213
TOTAL ASSETS $ 20,429 $ 18,190
LIABILITIES AND EQUITY
Current liabilities:
Short-term debt $ 262 $ 312
Accounts payable and 2,083 1,969
accrued liabilities
Accrued compensation and 1,718 1,655
employee benefits
Accrued income taxes 199 146
Total current liabilities 4,262 4,082
Fiduciary liabilities 4,847 4,241
Less - cash and investments (4,847 ) (4,241 )
held
in a fiduciary capacity
- -
Long-term debt 5,225 4,495
Pension, post-retirement and 1,888 2,076
post-employment benefits
Liabilities for errors 301 308
and omissions
Other liabilities 1,311 957
Total equity 7,442 6,272
TOTAL LIABILITIES AND EQUITY $ 20,429 $ 18,190
Marsh & McLennan Companies, Inc.
Supplemental Information
Revised Presentation Under the New Retirement
Benefits Accounting Standard
(Millions) (Unaudited)
On January 1, 2018, new accounting guidance became effective that changes the presentation of net periodic pension and postretirement benefit cost ("net benefit cost") under ASC 715. Under the new standard, the service cost component of net benefit cost will continue to be included in compensation and benefit costs in operating income. All other components of net benefit cost, which include interest cost, expected return on plan assets, amortization of gains and losses and settlements costs or credits, will be reported in a separate line item below operating income. This change in presentation will have no impact on income before income taxes, net income, earnings per share or cash flow. To aid investors in their understanding of these presentation changes, the tables below provide the restatements of both 2017 and 2016 results that will be reflected when the Company files its 2018 financial statements.
2016 2017
Consolidated FY Q1 Q2 Q3 Q4 FY
Income
Statements
Revenue $ 13,211 $ 3,503 $ 3,495 $ 3,341 $ 3,685 $ 14,024
Expense:
Compensation 7,461 1,945 1,935 1,906 2,098 7,884
and
Benefits
As
Reported
Add: 233 60 63 62 16 201
Other
Net
Benefit
Credits
(a)
Compensation 7,694 2,005 1,998 1,968 2,114 8,085
and
Benefits
As
Restated
Other 3,086 749 796 838 901 3,284
Operating
Expenses
Operating 10,780 2,754 2,794 2,806 3,015 11,369
Expenses
As
Restated
Operating 2,431 749 701 535 670 2,655
Income
As
Restated
Other 233 60 63 62 16 201
Net
Benefit
Credits
(a)
Interest 5 2 2 2 3 9
Income
Interest (189 ) (58 ) (60 ) (60 ) (59 ) (237 )
Expense
Investment - - 5 (2 ) 12 15
Income
(Loss)
Income $ 2,480 $ 753 $ 711 $ 537 $ 642 $ 2,643
Before
Income
Taxes
Operating
Income
and
Margin
Risk
and
Insurance
Services
GAAP
Operating
Income
Originally $ 1,753 $ 613 $ 528 $ 314 $ 416 $ 1,871
Reported
Other (172 ) (45 ) (46 ) (46 ) (3 ) (140 )
Net
Benefit
Credits
(a)
As $ 1,581 $ 568 $ 482 $ 268 $ 413 $ 1,731
Restated
GAAP
Operating
Margin
Originally 24.5 % 30.8 % 27.5 % 17.8 % 21.2 % 24.5 %
Reported
As 22.1 % 28.6 % 25.2 % 15.2 % 21.0 % 22.7 %
Restated
Consulting
GAAP
Operating
Income
Originally $ 1,103 $ 241 $ 283 $ 329 $ 321 $ 1,174
Reported
Other (65 ) (16 ) (18 ) (18 ) (12 ) (64 )
Net
Benefit
Credits
(a)
As $ 1,038 $ 225 $ 265 $ 311 $ 309 $ 1,110
Restated
GAAP
Operating
Margin
Originally 18.1 % 15.8 % 17.8 % 20.7 % 18.5 % 18.2 %
Reported
As 17.0 % 14.7 % 16.6 % 19.6 % 17.8 % 17.2 %
Restated
Consolidated
GAAP
Operating
Income
Originally $ 2,664 $ 809 $ 764 $ 597 $ 686 $ 2,856
Reported
Other (233 ) (60 ) (63 ) (62 ) (16 ) (201 )
Net
Benefit
Credits
(a)
As $ 2,431 $ 749 $ 701 $ 535 $ 670 $ 2,655
Restated
GAAP
Operating
Margin
Originally 20.2 % 23.1 % 21.9 % 17.9 % 18.6 % 20.4 %
Reported
As 18.4 % 21.4 % 20.1 % 16.0 % 18.2 % 18.9 %
Restated
(a) The net benefit credit in the fourth quarter
of 2017 includes the U.K. pension
settlement charge of $54 million, which is
excluded from our adjusted results.
Media:
Marsh & McLennan Companies
Laura Schooler, +1 212-345-0370
laura.schooler@mmc.com
or
Investors:
Marsh & McLennan Companies
Dan Farrell, +1 212-345-3713
daniel.farrell@mmc.com
View source version on businesswire.com:http://www.businesswire.com/news/home/20180201005706/en/
This information is provided by Business Wire
(END) Dow Jones Newswires
February 01, 2018 08:27 ET (13:27 GMT)
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