News
Marsh & McLennan Companies Reports First Quarter 2013 Results
May 2, 2013 at 7:00 AM EDT
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Email:media@mmc.com
Operating Income Increases 15%
Adjusted Operating Income Grows 16%
GAAP EPS Rises 17% to
Adjusted EPS Increases 16% to
"
Consolidated Results
Consolidated revenue in the first quarter of 2013 was
Net income attributable to the Company was
Risk and Insurance Services
Risk and Insurance Services revenue increased 5% to
Marsh's revenue in the first quarter of 2013 was
Consulting
Consulting segment revenue was
Mercer's revenue was
Other Items
In the first quarter of 2013, the Company had investment income of
As previously indicated, beginning in the first quarter of this year, Mercer has reoriented its operations around four core lines of business: Health, Retirement, Talent, and Investments. Also in the first quarter, a substantial portion of Marsh's U.S. Consumer operations was transferred to Mercer. This business represented revenue of
Conference Call
A conference call to discuss first quarter 2013 results will be held today at
About
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," "future," "intend," "plan," "project" and similar terms, and future or conditional tense verbs like "could," "may," "might," "should," "will" and "would." For example, we may use forward-looking statements when addressing topics such as: the outcome of contingencies; the expected impact of acquisitions and dispositions; pension obligations; market and industry conditions; the impact of foreign currency exchange rates; our effective tax rates; the impact of competition; changes in our business strategies and methods of generating revenue; the development and performance of our services and products; changes in the composition or level of our revenues; our cost structure, dividend policy, cash flow and liquidity; future actions by regulators; and the impact of changes in accounting rules.
Forward-looking statements are subject to inherent risks and uncertainties. Factors that could cause actual results to differ materially from those expressed or implied in our forward-looking statements include, among other things:
- our exposure to potential liabilities arising from errors and omissions claims against us, particularly in our Marsh and Mercer businesses;
- our ability to make strategic acquisitions and dispositions and to integrate, and realize expected synergies, savings or strategic benefits from the businesses we acquire;
- the impact of any regional, national or global political, economic, regulatory or market conditions on our results of operations and financial condition;
- changes in the funded status of our global defined benefit pension plans and the impact of any increased pension funding resulting from those changes;
- the impact of competition, including with respect to our geographic reach, the sophistication and quality of our services, our pricing relative to competitors, our customers' option to self-insure or utilize internal resources instead of consultants, and our corporate tax rates relative to a number of our competitors;
- the extent to which we retain existing clients and attract new business, and our ability to incentivize and retain key employees;
- our exposure to potential criminal sanctions or civil remedies if we fail to comply with foreign and U.S. laws and regulations that are applicable to our international operations, including trade sanctions laws such as the Iran Threat Reduction and Syria Human Rights Act of 2012, anti-corruption laws such as the U.S. Foreign Corrupt Practices Act and the
U.K. Bribery Act 2010, local laws prohibiting corrupt payments to government officials, as well as import and export restrictions; - our ability to maintain adequate physical, technical and administrative safeguards to protect the security of data;
- the impact of changes in interest rates and deterioration of counterparty credit quality on our results related to our cash balances and investment portfolios, including corporate and fiduciary funds;
- the impact on our net income or cash flows and our effective tax rate in a particular period caused by settled tax audits and expired statutes of limitation;
- the impact on our net income caused by fluctuations in foreign currency exchange rates;
- the potential impact of rating agency actions on our cost of financing and ability to borrow, as well as on our operating costs and competitive position;
- our ability to successfully recover should we experience a disaster or other business continuity problem;
- changes in applicable tax or accounting requirements; and
- potential income statement effects from the application of FASB's ASC Topic No. 740 ("Income Taxes") regarding accounting treatment of uncertain tax benefits and valuation allowances, including the effect of any subsequent adjustments to the estimates we use in applying this accounting standard.
The factors identified above are not exhaustive.
Marsh & McLennan Companies, Inc. | ||||||||||||
Three Months Ended | ||||||||||||
2013 | 2012 | |||||||||||
Revenue | $ | 3,126 | $ | 3,051 | ||||||||
Expense: | ||||||||||||
Compensation and Benefits | 1,803 | 1,796 | ||||||||||
Other Operating Expenses | 716 | 728 | ||||||||||
Operating Expenses | 2,519 | 2,524 | ||||||||||
Operating Income | 607 | 527 | ||||||||||
Interest Income | 4 | 6 | ||||||||||
Interest Expense | (44 | ) | (46 | ) | ||||||||
Investment Income | 21 | 20 | ||||||||||
Income Before Income Taxes | 588 | 507 | ||||||||||
Income Tax Expense | 176 | 153 | ||||||||||
Income from Continuing Operations | 412 | 354 | ||||||||||
Discontinued Operations, Net of Tax | 12 | - | ||||||||||
Net Income Before Non-Controlling Interests | $ | 424 | $ | 354 | ||||||||
Less: Net Income Attributable to Non-Controlling Interests | 11 | 7 | ||||||||||
Net Income Attributable to the Company | $ | 413 | $ | 347 | ||||||||
Basic Net Income Per Share | ||||||||||||
- Continuing Operations | $ | 0.73 | $ | 0.64 | ||||||||
- Net Income Attributable to the Company | $ | 0.75 | $ | 0.64 | ||||||||
Diluted Net Income Per Share | ||||||||||||
- Continuing Operations | $ | 0.72 | $ | 0.63 | ||||||||
- Net Income Attributable to the Company | $ | 0.74 | $ | 0.63 | ||||||||
Average Number of Shares Outstanding | ||||||||||||
- Basic | 548 | 542 | ||||||||||
- Diluted | 557 | 551 | ||||||||||
Shares Outstanding at 3/31 | 550 | 546 | ||||||||||
Marsh & McLennan Companies, Inc. | |||||||||||||||||||||||||
Components of Revenue Change* | |||||||||||||||||||||||||
Three Months Ended |
% Change |
Currency |
Acquisitions/ |
Underlying | |||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||||
Risk and Insurance Services | |||||||||||||||||||||||||
Marsh | $ | 1,388 | $ | 1,321 | 5 | % | - | 2 | % | 4 | % | ||||||||||||||
Guy Carpenter | 375 | 357 | 5 | % | 1 | % | - | 4 | % | ||||||||||||||||
Subtotal | 1,763 | 1,678 | 5 | % | - | 2 | % | 4 | % | ||||||||||||||||
Fiduciary Interest Income | 8 | 11 | |||||||||||||||||||||||
Total Risk and Insurance Services | 1,771 | 1,689 | 5 | % | - | 2 | % | 3 | % | ||||||||||||||||
Consulting | |||||||||||||||||||||||||
Mercer | 1,041 | 1,015 | 3 | % | - | - | 3 | % | |||||||||||||||||
Oliver Wyman Group | 321 | 356 | (10 | )% | - | (2 | )% | (9 | )% | ||||||||||||||||
Total Consulting | 1,362 | 1,371 | (1 | )% | - | - | - | ||||||||||||||||||
Corporate / Eliminations | (7 | ) | (9 | ) | |||||||||||||||||||||
Total Revenue | $ | 3,126 | $ | 3,051 | 2 | % | - | 1 | % | 2 | % | ||||||||||||||
Revenue Details
The following table provides more detailed revenue information for certain of the components presented above:
Components of Revenue Change* | |||||||||||||||||||||||||
Three Months Ended |
% Change |
Currency |
Acquisitions/ |
Underlying | |||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||||
Marsh: | |||||||||||||||||||||||||
EMEA | $ | 594 | $ | 577 | 3 | % | 1 | % | (1 | )% | 3 | % | |||||||||||||
Asia Pacific | 147 | 142 | 4 | % | (2 | )% | - | 6 | % | ||||||||||||||||
Latin America | 78 | 74 | 5 | % | (8 | )% | - | 13 | % | ||||||||||||||||
Total International |
819 | 793 | 3 | % | (1 | )% | - | 5 | % | ||||||||||||||||
U.S. / Canada | 569 | 528 | 8 | % | - | 6 | % | 2 | % | ||||||||||||||||
Total Marsh | $ | 1,388 | $ | 1,321 | 5 | % | - | 2 | % | 4 | % | ||||||||||||||
Mercer: | |||||||||||||||||||||||||
Health | $ | 381 | $ | 351 | 9 | % | - | 2 | % | 6 | % | ||||||||||||||
Retirement | 343 | 360 | (5 | )% | - | (3 | )% | (1 | )% | ||||||||||||||||
Talent | 123 | 125 | (1 | )% | (1 | )% | 4 | % | (4 | )% | |||||||||||||||
Investments | 194 | 179 | 8 | % | (1 | )% | 1 | % | 9 | % | |||||||||||||||
Total Mercer | $ | 1,041 | $ | 1,015 | 3 | % | - | - | 3 | % | |||||||||||||||
Notes |
Underlying revenue measures the change in revenue using consistent currency exchange rates, excluding the impact of certain items such as: acquisitions, dispositions and transfers among businesses. |
* Components of revenue change may not add due to rounding. |
Marsh & McLennan Companies, Inc. |
The Company presents below certain additional financial measures that are "non-GAAP measures," within the meaning of Regulation G under the Securities Exchange Act of 1934. These measures are: adjusted operating income (loss); adjusted operating margin; and adjusted income, net of tax. |
The Company presents these non-GAAP measures to provide investors with additional information to analyze the Company's performance from period to period. Management also uses these measures to assess performance for incentive compensation purposes and to allocate resources in managing the Company's businesses. 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 reflect subjective determinations by management, 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 months ended March 31, 2013 and 2012. The following tables also present adjusted operating margin, which is calculated by dividing adjusted operating income by consolidated or segment GAAP revenue. |
Risk & |
Consulting |
Corporate/ |
Total | |||||||||||||||||
Three Months Ended March 31, 2013 | ||||||||||||||||||||
Operating income (loss) | $ | 468 | $ | 187 | $ | (48 | ) | $ | 607 | |||||||||||
Add (Deduct) impact of Noteworthy Items: | ||||||||||||||||||||
Restructuring charges (a) | 2 | 2 | 3 | 7 | ||||||||||||||||
Adjustments to acquisition related accounts (b) | 1 | - | - | 1 | ||||||||||||||||
Operating income adjustments | $ | 3 | $ | 2 | $ | 3 | $ | 8 | ||||||||||||
Adjusted operating income (loss) | $ | 471 | $ | 189 | $ | (45 | ) | $ | 615 | |||||||||||
Operating margin | 26.4 | % | 13.7 | % | N/A | 19.4 | % | |||||||||||||
Adjusted operating margin | 26.6 | % | 13.9 | % | N/A | 19.7 | % | |||||||||||||
Three Months Ended March 31, 2012 | ||||||||||||||||||||
Operating income (loss) | $ | 412 | $ | 164 | $ | (49 | ) | $ | 527 | |||||||||||
Add (Deduct) impact of Noteworthy Items: | ||||||||||||||||||||
Restructuring charges (a) | (1 | ) | 3 | 2 | 4 | |||||||||||||||
Adjustments to acquisition related accounts (b) | 3 | (2 | ) | - | 1 | |||||||||||||||
Other | - | - | (1 | ) | (1 | ) | ||||||||||||||
Operating income adjustments | 2 | 1 | 1 | 4 | ||||||||||||||||
Adjusted operating income (loss) | $ | 414 | $ | 165 | $ | (48 | ) | $ | 531 | |||||||||||
Operating margin | 24.4 | % | 12.0 | % | N/A | 17.3 | % | |||||||||||||
Adjusted operating margin | 24.5 | % | 12.0 | % | N/A | 17.4 | % | |||||||||||||
(a) |
Primarily severance, reserve for future rent, and integration costs related to cost reduction activities for recent acquisitions. | |
(b) |
Reflects the change from the re-measurement to fair value each quarter of contingent consideration related to acquisitions. | |
Marsh & McLennan Companies, Inc. |
Adjusted income, net of tax |
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 table; divided by MMC's average number of shares outstanding-diluted for the period. |
Reconciliation of the Impact of Non-GAAP Measures on diluted earnings per share - | |||||||||||||||||||||||||||||||
Three Months Ended March 31, 2013 | Three Months Ended March 31, 2012 | ||||||||||||||||||||||||||||||
Amount | Diluted EPS | Amount | Diluted EPS | ||||||||||||||||||||||||||||
Income from continuing operations | $ | 412 | $ | 354 | |||||||||||||||||||||||||||
Less: Non-controlling interest, net of tax | 11 | 7 | |||||||||||||||||||||||||||||
Subtotal | $ | 401 | $ | 0.72 | $ | 347 | $ | 0.63 | |||||||||||||||||||||||
Add operating loss adjustments |
$ |
8 |
$ |
4 | |||||||||||||||||||||||||||
Deduct impact of income taxes | (3 | ) | (2 | ) | |||||||||||||||||||||||||||
5 |
0.01 |
2 |
- | ||||||||||||||||||||||||||||
Adjusted income, net of tax | $ | 406 | $ | 0.73 | $ | 349 | $ | 0.63 | |||||||||||||||||||||||
Marsh & McLennan Companies, Inc. | |||||||||||
Three Months Ended March 31, | |||||||||||
2013 |
2012 | ||||||||||
Depreciation and amortization expense | $ | 70 | $ | 66 | |||||||
Identified intangible amortization expense | $ | 18 | $ | 17 | |||||||
Stock option expense | $ | 7 | $ | 11 | |||||||
Capital expenditures | $ | 126 | $ | 51 | |||||||
Marsh & McLennan Companies, Inc. |
(Millions) (Unaudited) |
Effective January 1, 2013, the Corporate Benefits and Association businesses, which were previously part of Marsh's US Consumer operations, were transferred to Mercer. The following schedule summarizes the quarterly impact on the revenue, operating income and operating margin of the Risk & Insurance Services segment resulting from this transfer for each of the three years ended December 31, 2010, 2011 and 2012. The businesses transferred to Mercer are referred to below as "US Consumer". |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2010 | 2011 | 2012 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Q1 | Q2 | Q3 | Q4 | FY | Q1 | Q2 | Q3 | Q4 | FY | Q1 | Q2 | Q3 | Q4 | FY | ||||||||||||||||||||||||||||||||||||||||||||||||||
Risk and Insurance Services | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Originally Reported | $ | 1,492 | $ | 1,459 | $ | 1,327 | $ | 1,486 | $ | 5,764 | $ | 1,634 | $ | 1,620 | $ | 1,475 | $ | 1,572 | $ | 6,301 | $ | 1,747 | $ | 1,698 | $ | 1,510 | $ | 1,626 | $ | 6,581 | ||||||||||||||||||||||||||||||||||
US Consumer | (49 | ) | (51 | ) | (52 | ) | (55 | ) | (207 | ) | (53 | ) | (57 | ) | (55 | ) | (57 | ) | (222 | ) | (58 | ) | (57 | ) | (59 | ) | (57 | ) | (231 | ) | ||||||||||||||||||||||||||||||||||
As Reclassified | $ | 1,443 | $ | 1,408 | $ | 1,275 | $ | 1,431 | $ | 5,557 | $ | 1,581 | $ | 1,563 | $ | 1,420 | $ | 1,515 | $ | 6,079 | $ | 1,689 | $ | 1,641 | $ | 1,451 | $ | 1,569 | $ | 6,350 | ||||||||||||||||||||||||||||||||||
Revenue, As Reclassified | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Marsh | $ | 1,117 | $ | 1,154 | $ | 1,031 | $ | 1,235 | $ | 4,537 | $ | 1,229 | $ | 1,296 | $ | 1,155 | $ | 1,311 | $ | 4,991 | $ | 1,321 | $ | 1,356 | $ | 1,192 | $ | 1,363 | $ | 5,232 | ||||||||||||||||||||||||||||||||||
Guy Carpenter | 315 | 243 | 233 | 184 | 975 | 340 | 257 | 251 | 193 | 1,041 | 357 | 275 | 249 | 198 | 1,079 | |||||||||||||||||||||||||||||||||||||||||||||||||
Subtotal | 1,432 | 1,397 | 1,264 | 1,419 | 5,512 | 1,569 | 1,553 | 1,406 | 1,504 | 6,032 | 1,678 | 1,631 | 1,441 | 1,561 | 6,311 | |||||||||||||||||||||||||||||||||||||||||||||||||
Fiduciary Interest Income | 11 | 11 | 11 | 12 | 45 | 12 | 10 | 14 | 11 | 47 | 11 | 10 | 10 | 8 | 39 | |||||||||||||||||||||||||||||||||||||||||||||||||
Total Risk and Insurance Services | $ | 1,443 | $ | 1,408 | $ | 1,275 | $ | 1,431 | $ | 5,557 | $ | 1,581 | $ | 1,563 | $ | 1,420 | $ | 1,515 | $ | 6,079 | $ | 1,689 | $ | 1,641 | $ | 1,451 | $ | 1,569 | $ | 6,350 | ||||||||||||||||||||||||||||||||||
Revenue Details: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Marsh: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EMEA | $ | 527 | $ | 397 | $ | 332 | $ | 418 | $ | 1,674 | $ | 551 | $ | 445 | $ | 367 | $ | 433 | $ | 1,796 | $ | 577 | $ | 455 | $ | 376 | $ | 452 | $ | 1,860 | ||||||||||||||||||||||||||||||||||
Asia Pacific | 99 | 139 | 125 | 140 | 503 | 125 | 169 | 158 | 160 | 612 | 142 | 181 | 165 | 168 | 656 | |||||||||||||||||||||||||||||||||||||||||||||||||
Latin America | 52 | 66 | 73 | 107 | 298 | 61 | 83 | 84 | 106 | 334 | 74 | 87 | 81 | 111 | 353 | |||||||||||||||||||||||||||||||||||||||||||||||||
Total International | 678 | 602 | 530 | 665 | 2,475 | 737 | 697 | 609 | 699 | 2,742 | 793 | 723 | 622 | 731 | 2,869 | |||||||||||||||||||||||||||||||||||||||||||||||||
U.S./Canada | 439 | 552 | 501 | 570 | 2,062 | 492 | 599 | 546 | 612 | 2,249 | 528 | 633 | 570 | 632 | 2,363 | |||||||||||||||||||||||||||||||||||||||||||||||||
Total Marsh | $ | 1,117 | $ | 1,154 | $ | 1,031 | $ | 1,235 | $ | 4,537 | $ | 1,229 | $ | 1,296 | $ | 1,155 | $ | 1,311 | $ | 4,991 | $ | 1,321 | $ | 1,356 | $ | 1,192 | $ | 1,363 | $ | 5,232 | ||||||||||||||||||||||||||||||||||
Risk and Insurance Services | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GAAP Operating Income | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Originally Reported | $ | 347 | $ | 258 | $ | 142 | $ | 225 | $ | 972 | $ | 383 | $ | 356 | $ | 186 | $ | 304 | $ | 1,229 | $ | 417 | $ | 401 | $ | 234 | $ | 322 | $ | 1,374 | ||||||||||||||||||||||||||||||||||
US Consumer | - | (3 | ) | (5 | ) | (7 | ) | (15 | ) | (3 | ) | (7 | ) | (10 | ) | (9 | ) | (29 | ) | (5 | ) | (11 | ) | (12 | ) | (12 | ) | (40 | ) | |||||||||||||||||||||||||||||||||||
As Reclassified | $ | 347 | $ | 255 | $ | 137 | $ | 218 | $ | 957 | $ | 380 | $ | 349 | $ | 176 | $ | 295 | $ | 1,200 | $ | 412 | $ | 390 | $ | 222 | $ | 310 | $ | 1,334 | ||||||||||||||||||||||||||||||||||
GAAP Operating Margin | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Originally Reported | 23.3 | % | 17.7 | % | 10.7 | % | 15.1 | % | 16.9 | % | 23.4 | % | 22.0 | % | 12.6 | % | 19.3 | % | 19.5 | % | 23.9 | % | 23.6 | % | 15.5 | % | 19.8 | % | 20.9 | % | ||||||||||||||||||||||||||||||||||
As Reclassified | 24.0 | % | 18.1 | % | 10.7 | % | 15.2 | % | 17.2 | % | 24.0 | % | 22.3 | % | 12.4 | % | 19.5 | % | 19.7 | % | 24.4 | % | 23.8 | % | 15.3 | % | 19.8 | % | 21.0 | % | ||||||||||||||||||||||||||||||||||
Adjusted Operating Income | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Originally Reported | $ | 358 | $ | 305 | $ | 165 | $ | 261 | $ | 1,089 | $ | 377 | $ | 352 | $ | 189 | $ | 290 | $ | 1,208 | $ | 419 | $ | 404 | $ | 213 | $ | 312 | $ | 1,348 | ||||||||||||||||||||||||||||||||||
US Consumer | - | (3 | ) | (5 | ) | (7 | ) | (15 | ) | (3 | ) | (7 | ) | (10 | ) | (9 | ) | (29 | ) | (5 | ) | (11 | ) | (12 | ) | (12 | ) | (40 | ) | |||||||||||||||||||||||||||||||||||
As Reclassified | $ | 358 | $ | 302 | $ | 160 | $ | 254 | $ | 1,074 | $ | 374 | $ | 345 | $ | 179 | $ | 281 | $ | 1,179 | $ | 414 | $ | 393 | $ | 201 | $ | 300 | $ | 1,308 | ||||||||||||||||||||||||||||||||||
Adjusted Operating Margin | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Originally Reported | 24.0 | % | 20.9 | % | 12.4 | % | 17.6 | % | 18.9 | % | 23.1 | % | 21.7 | % | 12.8 | % | 18.4 | % | 19.2 | % | 24.0 | % | 23.8 | % | 14.1 | % | 19.2 | % | 20.5 | % | ||||||||||||||||||||||||||||||||||
As Reclassified | 24.8 | % | 21.4 | % | 12.5 | % | 17.7 | % | 19.3 | % | 23.7 | % | 22.1 | % | 12.6 | % | 18.5 | % | 19.4 | % | 24.5 | % | 23.9 | % | 13.9 | % | 19.1 | % | 20.6 | % | ||||||||||||||||||||||||||||||||||
Marsh & McLennan Companies, Inc. |
(Millions) (Unaudited) |
Effective January 1, 2013, the Corporate Benefits and Association businesses, which were previously part of Marsh's US Consumer operations, were transferred to Mercer. In addition, also effective January 1, 2013, Mercer realigned management responsibility for its Outsourcing business within its other lines of business. The following schedule summarizes the quarterly impact on the revenue, operating income and operating margin of the Consulting segment resulting from this transfer and realignment for each of the three years ended December 31, 2010, 2011 and 2012. The businesses transferred to Mercer from Marsh are referred to below as "US Consumer". |
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2010 | 2011 | 2012 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Q1 | Q2 | Q3 | Q4 | FY | Q1 | Q2 | Q3 | Q4 | FY | Q1 | Q2 | Q3 | Q4 | FY | ||||||||||||||||||||||||||||||||||||||||||||||||||
Consulting | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Originally Reported | $ | 1,155 | $ | 1,168 | $ | 1,203 | $ | 1,309 | $ | 4,835 | $ | 1,261 | $ | 1,319 | $ | 1,339 | $ | 1,346 | $ | 5,265 | $ | 1,313 | $ | 1,341 | $ | 1,346 | $ | 1,382 | $ | 5,382 | ||||||||||||||||||||||||||||||||||
US Consumer | 49 | 51 | 52 | 55 | 207 | 53 | 57 | 55 | 57 | 222 | 58 | 57 | 59 | 57 | 231 | |||||||||||||||||||||||||||||||||||||||||||||||||
As Reclassified | $ | 1,204 | $ | 1,219 | $ | 1,255 | $ | 1,364 | $ | 5,042 | $ | 1,314 | $ | 1,376 | $ | 1,394 | $ | 1,403 | $ | 5,487 | $ | 1,371 | $ | 1,398 | $ | 1,405 | $ | 1,439 | $ | 5,613 | ||||||||||||||||||||||||||||||||||
Revenue, As Reclassified | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mercer | $ | 898 | $ | 889 | $ | 933 | $ | 965 | $ | 3,685 | $ | 975 | $ | 1,002 | $ | 1,030 | $ | 997 | $ | 4,004 | $ | 1,015 | $ | 1,017 | $ | 1,054 | $ | 1,061 | $ | 4,147 | ||||||||||||||||||||||||||||||||||
Oliver Wyman Group | 306 | 330 | 322 | 399 | 1,357 | 339 | 374 | 364 | 406 | 1,483 | 356 | 381 | 351 | 378 | 1,466 | |||||||||||||||||||||||||||||||||||||||||||||||||
Total Consulting | $ | 1,204 | $ | 1,219 | $ | 1,255 | $ | 1,364 | $ | 5,042 | $ | 1,314 | $ | 1,376 | $ | 1,394 | $ | 1,403 | $ | 5,487 | $ | 1,371 | $ | 1,398 | $ | 1,405 | $ | 1,439 | $ | 5,613 | ||||||||||||||||||||||||||||||||||
Revenue Details: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mercer: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Health | $ | 306 | $ | 311 | $ | 310 | $ | 316 | $ | 1,243 | $ | 329 | $ | 337 | $ | 334 | $ | 320 | $ | 1,320 | $ | 351 | $ | 353 | $ | 354 | $ | 354 | $ | 1,412 | ||||||||||||||||||||||||||||||||||
Retirement | 369 | 344 | 344 | 351 | 1,408 | 367 | 362 | 348 | 346 | 1,423 | 360 | 350 | 334 | 352 | 1,396 | |||||||||||||||||||||||||||||||||||||||||||||||||
Talent | 93 | 102 | 142 | 151 | 488 | 117 | 127 | 173 | 159 | 576 | 125 | 132 | 179 | 168 | 604 | |||||||||||||||||||||||||||||||||||||||||||||||||
Investments | 130 | 132 | 137 | 147 | 546 | 162 | 176 | 175 | 172 | 685 | 179 | 182 | 187 | 187 | 735 | |||||||||||||||||||||||||||||||||||||||||||||||||
Total Mercer | $ | 898 | $ | 889 | $ | 933 | $ | 965 | $ | 3,685 | $ | 975 | $ | 1,002 | $ | 1,030 | $ | 997 | $ | 4,004 | $ | 1,015 | $ | 1,017 | $ | 1,054 | $ | 1,061 | $ | 4,147 | ||||||||||||||||||||||||||||||||||
Consulting | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GAAP Operating Income | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Originally Reported | $ | 116 | $ | (275 | ) | $ | 138 | $ | 150 | $ | 129 | $ | 128 | $ | 152 | $ | 161 | $ | 147 | $ | 588 | $ | 159 | $ | 172 | $ | 193 | $ | 128 | $ | 652 | |||||||||||||||||||||||||||||||||
US Consumer | - | 3 | 5 | 7 | 15 | 3 | 7 | 10 | 9 | 29 | 5 | 11 | 12 | 12 | 40 | |||||||||||||||||||||||||||||||||||||||||||||||||
As Reclassified | $ | 116 | $ | (272 | ) | $ | 143 | $ | 157 | $ | 144 | $ | 131 | $ | 159 | $ | 171 | $ | 156 | $ | 617 | $ | 164 | $ | 183 | $ | 205 | $ | 140 | $ | 692 | |||||||||||||||||||||||||||||||||
GAAP Operating Margin | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Originally Reported | 10.0 | % | N/A | 11.5 | % | 11.5 | % | 2.7 | % | 10.2 | % | 11.5 | % | 12.0 | % | 10.9 | % | 11.2 | % | 12.1 | % | 12.8 | % | 14.3 | % | 9.3 | % | 12.1 | % | |||||||||||||||||||||||||||||||||||
As Reclassified | 9.6 | % | N/A | 11.4 | % | 11.5 | % | 2.9 | % | 10.0 | % | 11.6 | % | 12.3 | % | 11.1 | % | 11.2 | % | 12.0 | % | 13.1 | % | 14.6 | % | 9.7 | % | 12.3 | % | |||||||||||||||||||||||||||||||||||
Adjusted Operating Income | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Originally Reported | $ | 116 | $ | 127 | $ | 144 | $ | 166 | $ | 553 | $ | 131 | $ | 154 | $ | 168 | $ | 166 | $ | 619 | $ | 160 | $ | 176 | $ | 192 | $ | 179 | $ | 707 | ||||||||||||||||||||||||||||||||||
US Consumer | - | 3 | 5 | 7 | 15 | 3 | 7 | 10 | 9 | 29 | 5 | 11 | 12 | 12 | 40 | |||||||||||||||||||||||||||||||||||||||||||||||||
As Reclassified | $ | 116 | $ | 130 | $ | 149 | $ | 173 | $ | 568 | $ | 134 | $ | 161 | $ | 178 | $ | 175 | $ | 648 | $ | 165 | $ | 187 | $ | 204 | $ | 191 | $ | 747 | ||||||||||||||||||||||||||||||||||
Adjusted Operating Margin | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Originally Reported | 10.0 | % | 10.9 | % | 12.0 | % | 12.7 | % | 11.4 | % | 10.4 | % | 11.7 | % | 12.5 | % | 12.3 | % | 11.8 | % | 12.2 | % | 13.1 | % | 14.3 | % | 13.0 | % | 13.2 | % | ||||||||||||||||||||||||||||||||||
As Reclassified | 9.6 | % | 10.7 | % | 11.9 | % | 12.7 | % | 11.3 | % | 10.2 | % | 11.7 | % | 12.8 | % | 12.5 | % | 11.8 | % | 12.0 | % | 13.4 | % | 14.5 | % | 13.3 | % | 13.3 | % | ||||||||||||||||||||||||||||||||||
Marsh & McLennan Companies, Inc. | |||||||||||||||
March 31, |
December 31, | ||||||||||||||
ASSETS | |||||||||||||||
Current assets: | |||||||||||||||
Cash and cash equivalents | $ | 1,263 | $ | 2,301 | |||||||||||
Net receivables | 3,176 | 3,058 | |||||||||||||
Other current assets | 658 | 604 | |||||||||||||
Total current assets | 5,097 | 5,963 | |||||||||||||
Goodwill and intangible assets | 7,199 | 7,261 | |||||||||||||
Fixed assets, net | 793 | 809 | |||||||||||||
Pension related assets | 580 | 260 | |||||||||||||
Deferred tax assets | 1,129 | 1,223 | |||||||||||||
Other assets | 739 | 772 | |||||||||||||
TOTAL ASSETS | $ | 15,537 | $ | 16,288 | |||||||||||
LIABILITIES AND EQUITY | |||||||||||||||
Current liabilities: | |||||||||||||||
Short-term debt | $ | 10 | $ | 260 | |||||||||||
Accounts payable and accrued liabilities | 1,808 | 1,721 | |||||||||||||
Accrued compensation and employee benefits | 746 | 1,473 | |||||||||||||
Accrued income taxes | 148 | 110 | |||||||||||||
Dividends payable | 128 | - | |||||||||||||
Total current liabilities | 2,840 | 3,564 | |||||||||||||
Fiduciary liabilities | 3,964 | 3,992 | |||||||||||||
Less - cash and investments held in a fiduciary capacity | (3,964 | ) | (3,992 | ) | |||||||||||
- | - | ||||||||||||||
Long-term debt | 2,705 | 2,658 | |||||||||||||
Pension, post-retirement and post-employment benefits | 1,993 | 2,094 | |||||||||||||
Liabilities for errors and omissions | 433 | 460 | |||||||||||||
Other liabilities | 853 | 906 | |||||||||||||
Total equity | 6,713 | 6,606 | |||||||||||||
TOTAL LIABILITIES AND EQUITY | $ | 15,537 | $ | 16,288 | |||||||||||
Source:
Media:
Marsh & McLennan Companies
Laura Cora, +1-212-345-2731
laura.cora@mmc.com
or
Investors:
Marsh & McLennan Companies
Keith Walsh, +1-212-345-0057
keith.walsh@mmc.com