News
Marsh & McLennan Companies Reports Fourth Quarter and Full-Year 2017 Results
February 1, 2018 at 7:01 AM EST
Media Contact
Email:media@mmc.com
Underlying Revenue Growth of 4% for the Quarter and 3% for the Year
GAAP Operating Income Rises 8% for the Quarter and 7% for the Year
Adjusted Operating Income Increases 12% for the Quarter and 10% for the Year
GAAP EPS Declines to
"For the 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
For the year 2017, revenue was
Risk & Insurance Services
Risk & Insurance Services revenue was
Marsh's revenue in the fourth quarter of 2017 was
Consulting
Consulting revenue was
Mercer's revenue was
Oliver Wyman Group's revenue was
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
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
Conference Call
A conference call to discuss fourth quarter 2017 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," "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:
-
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, Inc. Consolidated Statements of Income (In millions, except per share figures) (Unaudited) |
||||||||||||||||||||
Three Months Ended December 31, |
Twelve Months Ended December 31, |
|||||||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||||||
Revenue | $ | 3,685 | $ | 3,364 | $ | 14,024 | $ | 13,211 | ||||||||||||
Expense: | ||||||||||||||||||||
Compensation and Benefits | 2,098 | 1,918 | 7,884 | 7,461 | ||||||||||||||||
Other Operating Expenses | 901 | 813 | 3,284 | 3,086 | ||||||||||||||||
Operating Expenses | 2,999 | 2,731 | 11,168 | 10,547 | ||||||||||||||||
Operating Income | 686 | 633 | 2,856 | 2,664 | ||||||||||||||||
Interest Income | 3 | 1 | 9 | 5 | ||||||||||||||||
Interest Expense | (59 | ) | (48 | ) | (237 | ) | (189 | ) | ||||||||||||
Investment Income | 12 | 2 | 15 | — | ||||||||||||||||
Income Before Income Taxes | 642 | 588 | 2,643 | 2,480 | ||||||||||||||||
Income Tax Expense | 614 | 147 | 1,133 | 685 | ||||||||||||||||
Income from Continuing Operations | 28 | 441 | 1,510 | 1,795 | ||||||||||||||||
Discontinued Operations, Net of Tax | 2 | — | 2 | — | ||||||||||||||||
Net Income Before Non-Controlling Interests | 30 | 441 | 1,512 | 1,795 | ||||||||||||||||
Less: Net Income Attributable to Non-Controlling Interests | 1 | 5 | 20 | 27 | ||||||||||||||||
Net Income Attributable to the Company | $ | 29 | $ | 436 | $ | 1,492 | $ | 1,768 | ||||||||||||
Basic Net Income Per Share | ||||||||||||||||||||
- Continuing Operations | $ | 0.05 | $ | 0.85 | $ | 2.91 | $ | 3.41 | ||||||||||||
- Net Income Attributable to the Company | $ | 0.06 | $ | 0.85 | $ | 2.91 | $ | 3.41 | ||||||||||||
Diluted Net Income Per Share | ||||||||||||||||||||
- Continuing Operations | $ | 0.05 | $ | 0.84 | $ | 2.87 | $ | 3.38 | ||||||||||||
- Net Income Attributable to the Company | $ | 0.06 | $ | 0.84 | $ | 2.87 | $ | 3.38 | ||||||||||||
Average Number of Shares Outstanding | ||||||||||||||||||||
- Basic | 510 | 515 | 513 | 519 | ||||||||||||||||
- Diluted | 517 | 521 | 519 | 524 | ||||||||||||||||
Shares Outstanding at 12/31 | 509 | 514 | 509 | 514 | ||||||||||||||||
Marsh & McLennan Companies, Inc. Supplemental Information - Revenue Analysis Three Months Ended December 31, 2017 (Millions) (Unaudited) |
||||||||||||||||||||||||||
Components of Revenue Change* | ||||||||||||||||||||||||||
Three Months Ended December 31, |
% Change |
Currency |
Acquisitions/ |
Underlying |
||||||||||||||||||||||
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 Services | 1,962 | 1,793 | 9 | % | 1 | % | 5 | % | 3 | % | ||||||||||||||||
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 December 31, |
% Change |
Currency |
Acquisitions/ |
Underlying |
||||||||||||||||||||||
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 & Administration | $ | 371 | $ | 364 | 2 | % | 3 | % | (2 | )% | 1 | % | ||||||||||||||
Investment Management & Related Services | 195 | 152 | 28 | % | 2 | % | 14 | % | 12 | % | ||||||||||||||||
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 December 31, |
% Change |
Currency |
Acquisitions/ |
Underlying |
||||||||||||||||||||||
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 Services | 7,630 | 7,143 | 7 | % | — | 4 | % | 3 | % | |||||||||||||||||
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 December 31, |
% Change |
Currency |
Acquisitions/ |
Underlying |
||||||||||||||||||||||
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 & Administration | $ | 1,381 | $ | 1,447 | (5 | )% | (1 | )% | (2 | )% | (2 | )% | ||||||||||||||
Investment Management & Related Services | 767 | 606 | 26 | % | 1 | % | 15 | % | 10 | % | ||||||||||||||||
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 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
Risk & |
Consulting |
Corporate/ |
Total | |||||||||||||||||
Three Months Ended December 31, 2017 | ||||||||||||||||||||
Operating income (loss) | $ | 416 | $ | 321 | $ | (51 | ) | $ | 686 | |||||||||||
Add impact of Noteworthy Items: | ||||||||||||||||||||
Restructuring (a) | 4 | 1 | 3 | 8 | ||||||||||||||||
Adjustments to acquisition related accounts (b) | 5 | 1 | — | 6 | ||||||||||||||||
Pension settlement charge (c) | 47 | 7 | — | 54 | ||||||||||||||||
Other | 1 | — | — | 1 | ||||||||||||||||
Operating income adjustments | 57 | 9 | 3 | 69 | ||||||||||||||||
Adjusted operating income (loss) | $ | 473 | $ | 330 | $ | (48 | ) | $ | 755 | |||||||||||
Operating margin | 21.2 | % | 18.5 | % | N/A | 18.6 | % | |||||||||||||
Adjusted operating margin | 24.1 | % | 19.0 | % | N/A | 20.5 | % | |||||||||||||
Three Months Ended December 31, 2016 | ||||||||||||||||||||
Operating income (loss) | $ | 413 | $ | 265 | $ | (45 | ) | $ | 633 | |||||||||||
Add impact of Noteworthy Items: | ||||||||||||||||||||
Restructuring (a) | 1 | 33 | 1 | 35 | ||||||||||||||||
Adjustments to acquisition related accounts (b) | 5 | 1 | — | 6 | ||||||||||||||||
Deconsolidation of business (d) | 1 | — | — | 1 | ||||||||||||||||
Other | 1 | — | — | 1 | ||||||||||||||||
Operating income adjustments | 8 | 34 | 1 | 43 | ||||||||||||||||
Adjusted operating income (loss) | $ | 421 | $ | 299 | $ | (44 | ) | $ | 676 | |||||||||||
Operating margin | 23.0 | % | 16.8 | % | N/A | 18.8 | % | |||||||||||||
Adjusted operating margin | 23.5 | % | 18.9 | % | N/A | 20.1 | % | |||||||||||||
(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 & |
Consulting |
Corporate/ |
Total | |||||||||||||||||
Twelve Months Ended December 31, 2017 | ||||||||||||||||||||
Operating income (loss) | $ | 1,871 | $ | 1,174 | $ | (189 | ) | $ | 2,856 | |||||||||||
Add impact of Noteworthy Items: | ||||||||||||||||||||
Restructuring (a) | 11 | 19 | 10 | 40 | ||||||||||||||||
Adjustments to acquisition related accounts (b) | — | 3 | — | 3 | ||||||||||||||||
Other Settlement, Legal and Regulatory (c) | 15 | — | — | 15 | ||||||||||||||||
Pension settlement charge (d) | 47 | 7 | — | 54 | ||||||||||||||||
Other | 1 | — | — | 1 | ||||||||||||||||
Operating income adjustments | 74 | 29 | 10 | 113 | ||||||||||||||||
Adjusted operating income (loss) | $ | 1,945 | $ | 1,203 | $ | (179 | ) | $ | 2,969 | |||||||||||
Operating margin | 24.5 | % | 18.2 | % | N/A | 20.4 | % | |||||||||||||
Adjusted operating margin | 25.5 | % | 18.7 | % | N/A | 21.2 | % | |||||||||||||
Twelve Months Ended December 31, 2016 | ||||||||||||||||||||
Operating income (loss) | $ | 1,753 | $ | 1,103 | $ | (192 | ) | $ | 2,664 | |||||||||||
Add (Deduct) impact of Noteworthy Items: | ||||||||||||||||||||
Restructuring (a) | 3 | 34 | 7 | 44 | ||||||||||||||||
Adjustments to acquisition related accounts (b) | 12 | 3 | — | 15 | ||||||||||||||||
Disposal/deconsolidation of business (e) | (11 | ) | (6 | ) | — | (17 | ) | |||||||||||||
Other | 2 | — | — | 2 | ||||||||||||||||
Operating income adjustments | 6 | 31 | 7 | 44 | ||||||||||||||||
Adjusted operating income (loss) | $ | 1,759 | $ | 1,134 | $ | (185 | ) | $ | 2,708 | |||||||||||
Operating margin | 24.5 | % | 18.1 | % | N/A | 20.2 | % | |||||||||||||
Adjusted operating margin | 24.7 | % | 18.6 | % | N/A | 20.5 | % | |||||||||||||
(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
Three Months Ended December 31, 2017 | Three Months Ended December 31, 2016 | ||||||||||||||||||||||||||||
Amount |
Adjusted |
Amount |
Adjusted |
||||||||||||||||||||||||||
Income from continuing operations | $ | 28 | $ | 441 | |||||||||||||||||||||||||
Less: Non-controlling interest, net of tax | 1 | 5 | |||||||||||||||||||||||||||
Subtotal | $ | 27 | $ | 0.05 | $ | 436 | $ | 0.84 | |||||||||||||||||||||
Operating income adjustments | $ | 69 | $ | 43 | |||||||||||||||||||||||||
Impact of income taxes | (12 | ) | (14 | ) | |||||||||||||||||||||||||
Subtotal | 57 | 29 | |||||||||||||||||||||||||||
Impact of U.S. tax reform* | 460 | — | |||||||||||||||||||||||||||
517 | 1.00 | 29 | 0.05 | ||||||||||||||||||||||||||
Adjusted income, net of tax | $ | 544 | $ | 1.05 | $ | 465 | $ | 0.89 | |||||||||||||||||||||
Twelve Months Ended December 31, 2017 | Twelve Months Ended December 31, 2016 | ||||||||||||||||||||||||||||
Amount |
Adjusted |
Amount |
Adjusted |
||||||||||||||||||||||||||
Income from continuing operations | $ | 1,510 | $ | 1,795 | |||||||||||||||||||||||||
Less: Non-controlling interest, net of tax | 20 | 27 | |||||||||||||||||||||||||||
Subtotal | $ | 1,490 | $ | 2.87 | $ | 1,768 | $ | 3.38 | |||||||||||||||||||||
Operating income adjustments | $ | 113 | $ | 44 | |||||||||||||||||||||||||
Impact of income taxes | (28 | ) | (21 | ) | |||||||||||||||||||||||||
Subtotal | 85 | 23 | |||||||||||||||||||||||||||
Impact of U.S. tax reform* | 460 | — | |||||||||||||||||||||||||||
545 | 1.05 | 23 | 0.04 | ||||||||||||||||||||||||||
Adjusted income, net of tax | $ | 2,035 | $ | 3.92 | $ | 1,791 | $ | 3.42 | |||||||||||||||||||||
*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 and Benefits | $ | 2,098 | $ | 1,918 | $ | 7,884 | $ | 7,461 | |||||||||||
Other operating expenses | 901 | 813 | 3,284 | 3,086 | |||||||||||||||
Total Expenses | $ | 2,999 | $ | 2,731 | $ | 11,168 | $ | 10,547 | |||||||||||
Depreciation and amortization expense | $ | 78 | $ | 77 | $ | 312 | $ | 308 | |||||||||||
Identified intangible amortization expense | 47 | 31 | 169 | 130 | |||||||||||||||
Total | $ | 125 | $ | 108 | $ | 481 | $ | 438 | |||||||||||
Stock option expense | $ | 1 | $ | 3 | $ | 20 | $ | 21 | |||||||||||
Capital expenditures | $ | 85 | $ | 79 | $ | 302 | $ | 253 | |||||||||||
Risk and Insurance Services | |||||||||||||||||||
Compensation and Benefits | $ | 1,084 | $ | 953 | $ | 4,031 | $ | 3,732 | |||||||||||
Other operating expenses | 462 | 427 | 1,728 | 1,658 | |||||||||||||||
Total Expenses | $ | 1,546 | $ | 1,380 | $ | 5,759 | $ | 5,390 | |||||||||||
Depreciation and amortization expense | $ | 37 | $ | 34 | $ | 143 | $ | 139 | |||||||||||
Identified intangible amortization expense | 39 | 26 | 139 | 109 | |||||||||||||||
Total | $ | 76 | $ | 60 | $ | 282 | $ | 248 | |||||||||||
Consulting | |||||||||||||||||||
Compensation and Benefits | $ | 926 | $ | 879 | $ | 3,509 | $ | 3,385 | |||||||||||
Other operating expenses | 492 | 438 | 1,761 | 1,624 | |||||||||||||||
Total Expenses | $ | 1,418 | $ | 1,317 | $ | 5,270 | $ | 5,009 | |||||||||||
Depreciation and amortization expense | $ | 23 | $ | 25 | $ | 99 | $ | 100 | |||||||||||
Identified intangible amortization expense | 8 | 5 | 30 | 21 | |||||||||||||||
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 accrued liabilities | 2,083 | 1,969 | ||||||||
Accrued compensation and employee benefits | 1,718 | 1,655 | ||||||||
Accrued income taxes | 199 | 146 | ||||||||
Total current liabilities | 4,262 | 4,082 | ||||||||
Fiduciary liabilities | 4,847 | 4,241 | ||||||||
Less - cash and investments held in a fiduciary capacity | (4,847 | ) | (4,241 | ) | ||||||
— | — | |||||||||
Long-term debt | 5,225 | 4,495 | ||||||||
Pension, post-retirement and post-employment benefits | 1,888 | 2,076 | ||||||||
Liabilities for errors and omissions | 301 | 308 | ||||||||
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
2016 | 2017 | |||||||||||||||||||||||||||||||
Consolidated Income Statements | FY | Q1 | Q2 | Q3 | Q4 | FY | ||||||||||||||||||||||||||
Revenue | $ | 13,211 | $ | 3,503 | $ | 3,495 | $ | 3,341 | $ | 3,685 | $ | 14,024 | ||||||||||||||||||||
Expense: | ||||||||||||||||||||||||||||||||
Compensation and Benefits As Reported | 7,461 | 1,945 | 1,935 | 1,906 | 2,098 | 7,884 | ||||||||||||||||||||||||||
Add: Other Net Benefit Credits (a) | 233 | 60 | 63 | 62 | 16 | 201 | ||||||||||||||||||||||||||
Compensation and Benefits As Restated | 7,694 | 2,005 | 1,998 | 1,968 | 2,114 | 8,085 | ||||||||||||||||||||||||||
Other Operating Expenses | 3,086 | 749 | 796 | 838 | 901 | 3,284 | ||||||||||||||||||||||||||
Operating Expenses As Restated | 10,780 | 2,754 | 2,794 | 2,806 | 3,015 | 11,369 | ||||||||||||||||||||||||||
Operating Income As Restated | 2,431 | 749 | 701 | 535 | 670 | 2,655 | ||||||||||||||||||||||||||
Other Net Benefit Credits (a) | 233 | 60 | 63 | 62 | 16 | 201 | ||||||||||||||||||||||||||
Interest Income | 5 | 2 | 2 | 2 | 3 | 9 | ||||||||||||||||||||||||||
Interest Expense | (189 | ) | (58 | ) | (60 | ) | (60 | ) | (59 | ) | (237 | ) | ||||||||||||||||||||
Investment Income (Loss) | — | — | 5 | (2 | ) | 12 | 15 | |||||||||||||||||||||||||
Income Before Income Taxes | $ | 2,480 | $ | 753 | $ | 711 | $ | 537 | $ | 642 | $ | 2,643 | ||||||||||||||||||||
Operating Income and Margin | ||||||||||||||||||||||||||||||||
Risk and Insurance Services | ||||||||||||||||||||||||||||||||
GAAP Operating Income | ||||||||||||||||||||||||||||||||
Originally Reported | $ | 1,753 | $ | 613 | $ | 528 | $ | 314 | $ | 416 | $ | 1,871 | ||||||||||||||||||||
Other Net Benefit Credits (a) | (172 | ) | (45 | ) | (46 | ) | (46 | ) | (3 | ) | (140 | ) | ||||||||||||||||||||
As Restated | $ | 1,581 | $ | 568 | $ | 482 | $ | 268 | $ | 413 | $ | 1,731 | ||||||||||||||||||||
GAAP Operating Margin | ||||||||||||||||||||||||||||||||
Originally Reported | 24.5 | % | 30.8 | % | 27.5 | % | 17.8 | % | 21.2 | % | 24.5 | % | ||||||||||||||||||||
As Restated | 22.1 | % | 28.6 | % | 25.2 | % | 15.2 | % | 21.0 | % | 22.7 | % | ||||||||||||||||||||
Consulting | ||||||||||||||||||||||||||||||||
GAAP Operating Income | ||||||||||||||||||||||||||||||||
Originally Reported | $ | 1,103 | $ | 241 | $ | 283 | $ | 329 | $ | 321 | $ | 1,174 | ||||||||||||||||||||
Other Net Benefit Credits (a) | (65 | ) | (16 | ) | (18 | ) | (18 | ) | (12 | ) | (64 | ) | ||||||||||||||||||||
As Restated | $ | 1,038 | $ | 225 | $ | 265 | $ | 311 | $ | 309 | $ | 1,110 | ||||||||||||||||||||
GAAP Operating Margin | ||||||||||||||||||||||||||||||||
Originally Reported | 18.1 | % | 15.8 | % | 17.8 | % | 20.7 | % | 18.5 | % | 18.2 | % | ||||||||||||||||||||
As Restated | 17.0 | % | 14.7 | % | 16.6 | % | 19.6 | % | 17.8 | % | 17.2 | % | ||||||||||||||||||||
Consolidated | ||||||||||||||||||||||||||||||||
GAAP Operating Income | ||||||||||||||||||||||||||||||||
Originally Reported | $ | 2,664 | $ | 809 | $ | 764 | $ | 597 | $ | 686 | $ | 2,856 | ||||||||||||||||||||
Other Net Benefit Credits (a) | (233 | ) | (60 | ) | (63 | ) | (62 | ) | (16 | ) | (201 | ) | ||||||||||||||||||||
As Restated | $ | 2,431 | $ | 749 | $ | 701 | $ | 535 | $ | 670 | $ | 2,655 | ||||||||||||||||||||
GAAP Operating Margin | ||||||||||||||||||||||||||||||||
Originally Reported | 20.2 | % | 23.1 | % | 21.9 | % | 17.9 | % | 18.6 | % | 20.4 | % | ||||||||||||||||||||
As Restated | 18.4 | % | 21.4 | % | 20.1 | % | 16.0 | % | 18.2 | % | 18.9 | % | ||||||||||||||||||||
(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. |
View source version on businesswire.com: http://www.businesswire.com/news/home/20180201005590/en/
Source:
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