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 0.0% 81.00 0.00 0.00 0.00 0.00 0.00 13 00:00:00
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Nonlife Insurance 14,950.0 2,244.0 326.0 24.8 43,821

Marsh & McLennan. Marsh & McLennan Companies Reports First Quarter 2019 Results

25/04/2019 12:00pm

UK Regulatory (RNS & others)


Marsh & Mclennan Cos (LSE:MHM)
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1 Year : From Nov 2018 to Nov 2019

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Marsh & McLennan Companies, Inc. (NYSE: MMC), the world's leading professional services firm in the areas of risk, strategy and people, today reported financial results for the first quarter ended March 31, 2019.

 

Dan Glaser, President and CEO, said: "We delivered strong growth in underlying revenue and profitability in the first quarter, including double-digit adjusted earnings growth and meaningful adjusted margin expansion in both Risk & Insurance Services and Consulting. The Company's underlying revenue growth was 4%, adjusted operating income rose 11%, and the adjusted margin increased 210 basis points to 26.2%."

 

"With our successful completion of the acquisition of Jardine Lloyd Thompson Group and a great start to the year we believe the Company is well positioned to deliver solid results in 2019," concluded Mr. Glaser.

 

Consolidated Results

 

Consolidated revenue in the first quarter of 2019 was $4.1 billion, an increase of 2%, or 4% on an underlying basis, compared with the first quarter of 2018. Operating income was $938 million compared with $908 million in the prior year. Adjusted operating income, which excludes noteworthy items as presented in the attached supplemental schedules, rose 11% to $1.0 billion.

 

Net income attributable to the Company was $716 million, or $1.40 per diluted share, in the first quarter. This compares with $690 million, or $1.34 per diluted share, in the prior year. Adjusted earnings per share rose 10% to $1.52 per diluted share from the prior year period.

 

Risk & Insurance Services

 

Risk & Insurance Services revenue was $2.4 billion in the first quarter of 2019, an increase of 3% compared with the first quarter of 2018, or 5% on an underlying basis. Operating income of $733 million increased 2% from the prior year. Adjusted operating income rose 7% to $775 million compared with $723 million in the prior year.

 

Marsh's revenue in the first quarter was $1.7 billion, an increase of 5% on an underlying basis. In U.S./Canada, underlying revenue also rose 5%. International operations produced underlying revenue growth of 5%, reflecting growth of 11% in Latin America; 8% in Asia Pacific; and 3% in EMEA.

 

Guy Carpenter's revenue in the first quarter was $663 million, an increase of 6% on an underlying basis.

 

Consulting

 

Consulting revenue in the first quarter was $1.7 billion, flat compared with the first quarter of 2018, or an increase of 2% on an underlying basis. Operating income increased 13% to $279 million compared with $247 million in the prior year. Adjusted operating income increased 18% to $291 million compared with $248 million in the prior year.

 

Mercer's revenue was $1.2 billion in the first quarter, flat on an underlying basis. Wealth, with revenue of $543 million, declined 3% on an underlying basis. Health revenue of $442 million was up 3% on an underlying basis and Career revenue of $170 million increased 2% on an underlying basis.

 

Oliver Wyman Group's revenue was $518 million in the first quarter, an increase of 7% on an underlying basis.

 

Other Items

 

On April 1, 2019, the Company completed the acquisition of Jardine Lloyd Thompson Group (JLT) for $5.6 billion in fully diluted equity value, and assumed existing JLT debt of approximately $1 billion.

 

As part of the financing for the acquisition of JLT, the Company issued EUR1.1 billion aggregate principal amount of senior notes in March 2019. The two tranches consisted of EUR550 million of 1.349% senior notes due in 2026 and EUR550 million of 1.979% senior notes due in 2030. Also in March 2019, the Company entered into a further issuance of $250 million aggregate principal amount of 4.375% senior notes due in 2029. As previously disclosed, the Company had also issued $5 billion aggregate amount of senior notes in January 2019. The Company used the net proceeds of these offerings to fund the acquisition of JLT, including the payment of related fees and expenses, and to repay in part certain existing JLT debt.

 

Marsh & McLennan Agency closed the acquisition of Clearwater, FL based Bouchard Insurance Inc. in February, and in April announced the acquisition of Phoenix, AZ based Lovitt & Touché Inc.

 

Conference Call

 

A conference call to discuss first quarter 2019 results will be held today at 8:30 a.m. Eastern time. To participate in the teleconference, please dial +1 888 204 4368. Callers from outside the United States should dial +1 323 794 2423. The access code for both numbers is 4584204. 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 75,000 colleagues advise clients in over 130 countries. With annualized revenue approaching $17 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:

 
 
    -- our ability to successfully integrate or achieve the intended benefits 

of the acquisition of JLT;

 
    -- the impact of any investigations, reviews, or other activity by 

regulatory or law enforcement authorities, including the ongoing

investigations by the European Commission competition authority;

 
    -- 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 large 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 impact of macroeconomic, political, regulatory or market 

conditions on us, our clients and the industries in which we operate,

including the impact and uncertainty around Brexit or the inability to

collect on our receivables;

 
    -- the regulatory, contractual and reputational risks that arise based on 

insurance placement activities and various broker revenue streams;

 
    -- our ability to manage risks associated with our investment management 

and related services business, including potential conflicts of

interest between investment consulting and fiduciary management

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 certain provisions of the U.S. Tax Cuts and Jobs Act, or

disagreements with tax authorities;

 
    -- our ability to repay our outstanding long-term debt in a timely manner 

and on favorable terms, including approximately $6.5 billion issued in

connection with the acquisition of JLT;

 
    -- the impact of fluctuations in foreign exchange and interest rates on 

our results; and

 
    -- the impact of changes in accounting rules or in our accounting 

estimates or assumptions, including the impact of the adoption of the

new lease accounting standard.

 

The factors identified above are not exhaustive. Marsh & McLennan Companies and its subsidiaries operate in a dynamic business environment in which new risks emerge frequently. Accordingly, we caution readers not to place undue reliance on any forward-looking statements, which are based only on information currently available to us and speak only as of the dates on which they are made. The Company undertakes no obligation to update or revise any forward-looking statement to reflect events or circumstances arising after the date on which it is made.

 

Further information concerning Marsh & McLennan Companies and its businesses, including information about factors that could materially affect our results of operations and financial condition, is contained in the Company's filings with the Securities and Exchange Commission, including the "Risk Factors" section and the "Management's Discussion and Analysis of Financial Condition and Results of Operations" section of our most recently filed Annual Report on Form 10-K.

 
Marsh & McLennan Companies, Inc. 
Consolidated Statements of Income 
(In millions, except per share figures) 
(Unaudited) 
                                                Three Months Ended 
                                                March 31, 
                                                2019       2018 
Revenue                                         $ 4,071    $ 4,000 
Expense: 
Compensation and Benefits                       2,282      2,224 
Other Operating Expenses                        851        868 
Operating Expenses                              3,133      3,092 
Operating Income                                938        908 
Other Net Benefit Credits                       64         66 
Interest Income                                 28         3 
Interest Expense                                (120    )  (61     ) 
Investment Income                               5          - 
Acquisition Related Derivative Contracts (a)    29         - 
Income Before Income Taxes                      944        916 
Income Tax Expense                              217        220 
Net Income Before Non-Controlling Interests     727        696 
Less: Net Income Attributable                   11         6 
to Non-Controlling Interests 
Net Income Attributable to the Company          $ 716      $ 690 
Net Income Per Share Attributable 
to the Company: 
- Basic                                         $ 1.42     $ 1.36 
- Diluted                                       $ 1.40     $ 1.34 
Average Number of Shares Outstanding 
- Basic                                         505        508 
- Diluted                                       511        514 
Shares Outstanding at March 31                  507        508 
 
 
(a) Net gains from hedging contracts related to the JLT acquisition. 
 
 
Marsh & McLennan Companies, Inc. 
Supplemental Information - Revenue Analysis 
Three Months Ended March 31, 2019 
(Millions) (Unaudited) 
                                                                                                   Components of Revenue Change* 
                                     Three Months EndedMarch 31,        % Change GAAP Revenue      Currency Impact       Acquisitions/                                Underlying Revenue 
                                                                                                                         Dispositions/ Other Impact 
                                     2019       2018 
Risk and Insurance Services 
Marsh                                $ 1,737    $ 1,694                 3   %                      (3   )%               1   %                                        5   % 
Guy Carpenter                        663        637                     4   %                      (2   )%               -                                            6   % 
Subtotal                             2,400      2,331                   3   %                      (3   )%               1   %                                        5   % 
Fiduciary Interest Income            23         13 
Total Risk and Insurance Services    2,423      2,344                   3   %                      (3   )%               1   %                                        5   % 
Consulting 
Mercer                               1,155      1,171                   (1  )%                     (4   )%               2   %                                        - 
Oliver Wyman Group                   518        497                     4   %                      (3   )%               -                                            7   % 
Total Consulting                     1,673      1,668                   -                          (3   )%               2   %                                        2   % 
Corporate/Eliminations               (25     )  (12     ) 
Total Revenue                        $ 4,071    $ 4,000                 2   %                      (3   )%               1   %                                        4   % 
Revenue Details 
The following table provides more detailed revenue information for  certain of the components presented above: 
                                                                                                   Components of Revenue Change* 
                                     Three Months EndedMarch 31,        % Change                   Currency Impact       Acquisitions/Dispositions/ Other  Impact     Underlying Revenue 
                                                                        GAAP Revenue 
                                     2019       2018 
Marsh: 
EMEA                                 $ 633      $ 643                   (2  )%                     (6   )%               1   %                                        3   % 
Asia Pacific                         165        164                     1   %                      (4   )%               (3  )%                                       8   % 
Latin America                        78         84                      (7  )%                     (13  )%               (4  )%                                       11  % 
Total International                  876        891                     (2  )%                     (6   )%               -                                            5   % 
U.S./Canada                          861        803                     7   %                      -                     3   %                                        5   % 
Total Marsh                          $ 1,737    $ 1,694                 3   %                      (3   )%               1   %                                        5   % 
Mercer: 
Wealth                               543        565                     (4  )%                     (5   )%               4   %                                        (3  )% 
Health                               442        442                     -                          (2   )%               (1  )%                                       3   % 
Career                               170        164                     4   %                      (4   )%               5   %                                        2   % 
Total Mercer                         $ 1,155    $ 1,171                 (1  )%                     (4   )%               2   %                                        - 
 
 
Notes 
Underlying revenue measures the change in revenue using consistent 
currency exchange rates, excluding the impact of certain items 
that  affect comparability such as: acquisitions, dispositions, transfers 
among businesses, and changes in estimate methodology. 
* Components of revenue change may not add due to rounding. 
 
 

Marsh & McLennan Companies, Inc.Reconciliation of Non-GAAP MeasuresThree Months Ended March 31(Millions) (Unaudited)

 
Overview 
The Company reports its financial results in accordance with  accounting principles generally 
accepted in the United States  (referred to in this release as "GAAP" or "reported" 
results). The  Company also refers to and presents below certain additional  non-GAAP financial 
measures, within the meaning of Regulation G  under the Securities Exchange Act 
of 1934. These measures are:adjusted  operating income (loss),adjusted operating margin, adjusted 
income, net of taxandadjusted 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 reconcileadjusted operating income (loss)to 
GAAP operating income or loss, on a consolidated and segment  basis, 
for the three months ended March 31, 2019 and 2018. The 
following tables also presentadjusted operating margin.In  2019, 
the Company changed its methodology for calculatingadjusted 
operating margindue to the significant amount of identified  intangible 
asset amortization expected after completion of the 
JLT  Transaction, on April 1, 2019. Effective for the three 
months ended  March 31, 2019 and 2018,adjusted operating 
marginis  calculated by dividing the sum ofadjusted operating incomeplus 
identified intangible asset amortization by consolidated 
or  segmentadjusted revenue. See page 12 for additional  information related toadjusted operating margin. 
 
 
                      Risk & Insurance Services    Consulting    Corporate/Eliminations    Total 
Three Months Ended 
March 31, 2019 
Operating income      $ 733                        $ 279         $ (74 )                   $ 938 
(loss) 
Operating margin      30.2  %                      16.7  %       N/A                       23.0    % 
Add impact of 
Noteworthy 
Items: 
Restructuring (a)     5                            11            2                         18 
Adjustments to        10                           1             -                         11 
acquisition 
related accounts 
(b) 
JLT acquisition       25                           -             22                        47 
and 
integration 
related costs (c) 
Other                 2                            -             -                         2 
Operating income      42                           12            24                        78 
adjustments 
Adjusted operating    $ 775                        $ 291         $ (50 )                   $ 1,016 
income (loss) 
Identified            $ 41                         $ 10          $ -                       $ 51 
intangible 
amortization 
expense 
Adjusted operating    33.6  %                      18.0  %       N/A                       26.2    % 
margin 
Three Months Ended 
March 31, 2018 
Operating income      $ 716                        $ 247         $ (55 )                   $ 908 
(loss) 
Operating margin      30.5  %                      14.8  %       N/A                       22.7    % 
Add impact of 
Noteworthy 
Items: 
Restructuring (a)     3                            1             2                         6 
Adjustments to        4                            -             -                         4 
acquisition 
related accounts 
(b) 
Operating income      7                            1             2                         10 
adjustments 
Adjusted operating    $ 723                        $ 248         $ (53 )                   $ 918 
income (loss) 
Identified            $ 37                         $ 8           $ -                       $ 45 
intangible 
amortization 
expense 
Adjusted operating    32.5  %                      15.3  %       N/A                       24.1    % 
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) Includes restructuring costs incurred in Marsh and Corporate 
of  $20 million for staff reductions made in anticipation 
of closing the  JLT transaction, as well as acquisition and 
integration costs,  primarily legal and consulting costs. 
 
 

Marsh & McLennan Companies, Inc.Reconciliation of Non-GAAP MeasuresThree Months Ended March 31(Millions) (Unaudited)

 
Adjusted income, net of taxis calculated as the Company's  GAAP 
income from continuing operations, adjusted to reflect 
the  after tax impact of the operating income adjustments 
set forth in  the preceding tables and investments 
gains or losses related to the  impact of mark-to-market adjustments 
on certain equity securities  and adjustments 
to provisional 2017 tax estimates. Adjustments also  include 
JLT acquisition related items, including change 
in fair  value of derivative contracts, financing costs and interest 
income  on funds held in escrow.Adjusted EPSis calculated 
by  dividing the Company'sadjusted income, net of tax, 
by MMC's  average number of shares outstanding-diluted 
for the relevant  period. The following tables reconcileadjusted 
income, net of taxto GAAP income from 
continuing operations andadjusted EPSto  GAAP EPS for 
the three months ended March 31, 2019 and 2018. 
 
 
                          Three Months EndedMarch 31, 2019            Three Months EndedMarch 31, 2018 
                          Amount          Adjusted EPS                Amount          AdjustedEPS 
Net income before                 $ 727                                       $ 696 
non-controlling 
interests 
Less: Non-controlling             11                                          6 
interest, net of tax 
Subtotal                          $ 716   $ 1.40                              $ 690   $ 1.34 
Operating income          $ 78                                        $ 10 
adjustments 
Investments adjustment    (4   )                                      8 
(a) 
Change in fair value      (29  )                                      - 
of acquisition 
relatedderivative 
contracts (b) 
Financing costs (c)       54                                          - 
Interest on funds held    (25  )                                      - 
in escrow (d) 
Impact of income taxes    (12  )                                      (4   ) 
on above items 
Adjustments to            -                                           3 
provisional 
2017 tax estimates (e) 
                                  62      0.12                                17      0.04 
Adjusted income,                  $ 778   $ 1.52                              $ 707   $ 1.38 
net of tax 
 
 
(a) The Company recorded mark-to-market gains of $4 million and 
losses of $8 million for the three month period ended March 31, 
2019  and March 31, 2018, respectively, which are included in 
investment  income in the consolidated statements of income. 
(b) Primarily reflects the gain related to the change in 
fair value  of the deal contingent foreign exchange 
contract partly offset by  the impact of derivative 
contracts related to the debt issuances. 
(c) Reflects interest expense on debt issuances and 
amortization of  bridge financing fees related 
to the acquisition of JLT included in  interest 
expense for the quarter ended March 31, 2019. 
(d) Interest income earned on funds held in 
escrow related to the  JLT acquisition. 
(e) Reflects adjustments to provisional 
2017 year-end estimates of  transition 
taxes and U.S. deferred tax assets and liabilities from  U.S. tax reform. 
 
 
Marsh & McLennan Companies, Inc. 
Supplemental Information 
Three Months Ended March 31 
(Millions) (Unaudited) 
                                         Three Months Ended March 31, 
                                         2019      2018 
Consolidated 
Compensation and Benefits                $ 2,282   $ 2,224 
Other Operating Expenses                 851       868 
Total Expenses                           $ 3,133   $ 3,092 
Depreciation and amortization expense    $ 74      $ 80 
Identified intangible                    51        45 
amortization expense 
Total                                    $ 125     $ 125 
Stock option expense                     $ 15      $ 14 
Risk and Insurance Services 
Compensation and Benefits                $ 1,221   $ 1,168 
Other Operating Expenses                 469       460 
Total Expenses                           $ 1,690   $ 1,628 
Depreciation and amortization expense    $ 32      $ 37 
Identified intangible                    41        37 
amortization expense 
Total                                    $ 73      $ 74 
Consulting 
Compensation and Benefits                $ 956     $ 956 
Other Operating Expenses                 438       465 
Total Expenses                           $ 1,394   $ 1,421 
Depreciation and amortization expense    $ 24      $ 25 
Identified intangible                    10        8 
amortization expense 
Total                                    $ 34      $ 33 
 
 
Marsh & McLennan 
Companies, Inc. 
Consolidated Balance 
Sheets 
(Millions) 
                        (Unaudited)March 31, 2019    December 31,2018 
ASSETS 
Current assets: 
Cash and cash           $ 1,117                      $ 1,066 
equivalents 
Net receivables         4,630                        4,317 
Funds held in escrow    6,359                        - 
for acquisition 
Other current assets    569                          551 
Total current assets    12,675                       5,934 
Goodwill and            11,203                       11,036 
intangible 
assets 
Fixed assets, net       716                          701 
Pension related         1,815                        1,688 
assets 
Right of use assets     1,625                        - 
Deferred tax assets     680                          680 
Other assets            1,423                        1,539 
TOTAL ASSETS            $ 30,137                     $ 21,578 
LIABILITIES 
AND EQUITY 
Current liabilities: 
Short-term debt         $ 1,562                      $ 314 
Accounts payable and    2,244                        2,234 
accrued liabilities 
Accrued compensation    892                          1,778 
and 
employee benefits 
Acquisition related     283                          441 
derivatives 
Current lease           291                          - 
liabilities 
Accrued income taxes    256                          157 
Dividends payable       211                          - 
Total current           5,739                        4,924 
liabilities 
Fiduciary               5,243                        5,001 
liabilities 
Less - cash and         (5,243   )                   (5,001   ) 
investments 
held 
in a fiduciary 
capacity 
                        -                            - 
Long-term debt          11,472                       5,510 
Pension,                1,874                        1,911 
post-retirement 
and 
post-employment 
benefits 
Long-term lease         1,590                        - 
liabilities 
Liabilities             282                          287 
for errors 
and omissions 
Other liabilities       1,194                        1,362 
Total equity            7,986                        7,584 
TOTAL LIABILITIES       $ 30,137                     $ 21,578 
AND EQUITY 
 
 
Marsh & McLennan Companies, Inc. 
Consolidated Statements 
of Cash Flows 
(Millions) (Unaudited) 
                                     Three Months Ended March 31, 
                                     2019       2018 
Operating cash flows: 
Net income before non-controlling    $ 727      $ 696 
interests 
Adjustments to reconcile 
net income 
to cash used for operations: 
Depreciation and amortization        74         80 
of fixed 
assets and capitalized  software 
Amortization of intangible assets    51         45 
Amortization of right                68         - 
of use asset 
Adjustments and payments             (18     )  (5      ) 
related to contingent 
consideration  liability 
Provision for deferred               (9      )  11 
income taxes 
(Gain) loss on investments           (5      )  - 
(Gain) loss on disposition           -          (1      ) 
of assets 
Share-based compensation expense     57         50 
Change in fair value of              (29     )  - 
acquisition-related 
derivative contracts 
Changes in assets 
and liabilities: 
Net receivables                      (309    )  (357    ) 
Other current assets                 (37     )  2 
Other assets                         (1      )  (32     ) 
Accounts payable and                 79         135 
accrued liabilities 
Accrued compensation and             (886    )  (905    ) 
employee benefits 
Accrued income taxes                 96         61 
Contributions to pension             (80     )  (96     ) 
and other benefit plans 
in excess of  current 
year expense/credit 
Other liabilities                    42         17 
Operating lease liabilities          (73     )  - 
Effect of exchange rate changes      (23     )  (65     ) 
Net cash used for operations         (276    )  (364    ) 
Financing cash flows: 
Purchase of treasury shares          -          (250    ) 
Net increase in commercial paper     748        249 
Proceeds from issuance of debt       6,462      592 
Repayments of debt                   (3      )  (3      ) 
Acquisition-related                  (129    )  - 
hedging payments 
Shares withheld for                  (86     )  (61     ) 
taxes on vested 
units - treasury shares 
Issuance of common stock             77         32 
from treasury shares 
Payments of deferred                 (29     )  (70     ) 
and contingent 
consideration for acquisitions 
Distributions of non-controlling     (4      )  (6      ) 
interests 
Dividends paid                       (210    )  (189    ) 
Net cash provided by                 6,826      294 
financing activities 
Investing cash flows: 
Capital expenditures                 (73     )  (58     ) 
Sales of long-term investments       115        9 
Purchase of equity investment        (88     )  - 
Proceeds from sales                  1          1 
of fixed assets 
Dispositions                         -          3 
Acquisitions                         (140    )  (24     ) 
Other, net                           (2      )  (1      ) 
Net cash used for investing          (187    )  (70     ) 
activities 
Effect of exchange rate changes      47         103 
on cash and cash equivalents 
Increase (decrease) in cash          6,410      (37     ) 
and cash equivalents 
and funds held  in escrow 
Cash and cash equivalents            1,066      1,205 
at beginning of period 
Cash balances, end of period 
Cash and cash equivalents            1,117      1,168 
at end of period 
Funds held in escrow                 6,359      - 
for acquisition 
Total                                $ 7,476    $ 1,168 
 
 

Marsh & McLennan Companies, Inc.Supplemental Historical Adjusted Operating MarginsFor the Years Ended December 31, 2018 and 2017(Millions)

 
Due to the significant amount of identified intangible asset  amortization 
expected after completion of the JLT Transaction, 
and  the lack of comparability with prior years the Company 
changed the  method for calculating adjusted 
operating margin to exclude deal  amortization. Beginning this 
quarter, adjusted operating margin will  be calculated 
by dividing the sum of adjusted operating income plus 
the intangible asset amortization for all acquisitions 
and dividing  that total by applicable consolidated or segment 
adjusted revenue.  The reconciliation of adjusted 
operating income to operating income  reported under 
generally accepted accounting principles is included 
in the respective earnings release Forms 8-K furnished to the 
SEC in  2018 and 2019. The table below shows adjusted 
operating margin for  the full year and each quarter 
of 2018 and 2017 using the revised  methodology. 
 
 
                2018 
                FirstQuarter    SecondQuarter    ThirdQuarter    FourthQuarter    FullYear 
Risk 
& 
Insurance 
Services 
Adjusted        $ 723           $ 532            $ 283           $ 418            $ 1,956 
Operating 
Income 
Amortization    $ 37            $ 35             $ 39            $ 40             $ 151 
Expense 
Adjusted        32.5  %         27.0  %          17.7  %         23.7  %          25.7    % 
Operating 
Margin 
Consulting 
Adjusted        $ 248           $ 267            $ 293           $ 359            $ 1,167 
Operating 
Income 
Amortization    $ 8             $ 8              $ 8             $ 8              $ 32 
Expense 
Adjusted        15.3  %         16.7  %          18.2  %         20.3  %          17.7    % 
Operating 
Margin 
Total 
Company 
Adjusted        $ 918           $ 754            $ 535           $ 731            $ 2,938 
Operating 
Income 
Amortization    $ 45            $ 43             $ 47            $ 48             $ 183 
Expense 
Adjusted        24.1  %         21.3  %          16.8  %         20.9  %          20.9    % 
Operating 
Margin 
                2017 
                FirstQuarter    SecondQuarter    ThirdQuarter    FourthQuarter    FullYear 
Risk 
& 
Insurance 
Services 
Adjusted        $ 555           $ 489            $ 291           $ 423            $ 1,758 
Operating 
Income 
Amortization    $ 32            $ 33             $ 35            $ 39             $ 139 
Expense 
Adjusted        29.5  %         27.2  %          18.5  %         23.5  %          24.9    % 
Operating 
Margin 
Consulting 
Adjusted        $ 229           $ 280            $ 312           $ 311            $ 1,132 
Operating 
Income 
Amortization    $ 8             $ 7              $ 7             $ 8              $ 30 
Expense 
Adjusted        15.5  %         18.0  %          20.1  %         18.3  %          18.0    % 
Operating 
Margin 
Total 
Company 
Adjusted        $ 742           $ 725            $ 562           $ 685            $ 2,714 
Operating 
Income 
Amortization    $ 40            $ 40             $ 42            $ 47             $ 169 
Expense 
Adjusted        22.3  %         21.9  %          18.1  %         19.9  %          20.6    % 
Operating 
Margin 
 
 

Media:Erick R. GustafsonMarsh & McLennan Companies+1 202 263 7788erick.gustafson@mmc.com

 

Investor:Sarah DeWittMarsh & McLennan Companies+1 212 345 6750sarah.dewitt@mmc.com

 
 

View source version on businesswire.com: https://www.businesswire.com/news/home/20190425005473/en/

 
This information is provided by Business Wire 
 
 

(END) Dow Jones Newswires

April 25, 2019 07:00 ET (11:00 GMT)

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