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Large Accelerated Filer
x
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Accelerated Filer
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Non-Accelerated Filer
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(Do not check if a smaller reporting company)
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Smaller Reporting Company
¨
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•
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our ability to maintain adequate safeguards to protect the security of our information systems and confidential, personal or proprietary information;
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•
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our ability to successfully recover if we experience a business continuity problem due to cyberattack, natural disaster or otherwise;
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our exposure to potential losses and liabilities, including reputational impact, arising from errors and omissions, breach of fiduciary duty and similar claims against us;
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our ability to compete effectively and adapt to changes in the competitive environment, including to technological and other types of innovation;
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the impact of potential changes in global economic, political and market conditions on us, our clients and the industries in which we operate, including the impact of the vote in the UK to exit the EU;
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the impact of changes in applicable tax laws and regulations, including of the regulations recently proposed by the U.S. Treasury Department;
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•
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the effect of our global pension obligations on our financial position, earnings and cash flows and the impact of low interest rates on those obligations;
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our exposure to potential civil remedies or criminal penalties if we fail to comply with U.S. and non-U.S. laws and regulations applicable in the jurisdictions in which we operate;
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•
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the financial and operational impact of complying with laws and regulations where we operate;
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•
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the impact of fluctuations in foreign exchange, interest rates and securities markets on our results;
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•
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the impact on our competitive position of our tax rate relative to our competitors;
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•
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our ability to incentivize and retain key employees; and
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•
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the impact of changes in accounting rules or in our accounting estimates or assumptions.
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ITEM 1.
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FINANCIAL STATEMENTS
(UNAUDITED)
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ITEM 2.
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OF OPERATIONS
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ITEM 3.
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ITEM 4.
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ITEM 1.
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ITEM 1A.
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ITEM 2.
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ITEM 3.
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ITEM 4.
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ITEM 5.
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ITEM 6.
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Item 1.
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Financial Statements.
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Three Months Ended
June 30, |
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Six Months Ended
June 30, |
||||||||||||
(In millions, except per share figures)
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2016
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2015
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2016
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2015
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Revenue
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$
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3,376
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$
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3,225
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$
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6,712
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$
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6,440
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Expense:
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Compensation and benefits
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1,872
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1,826
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3,726
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3,556
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Other operating expenses
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778
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770
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1,527
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1,520
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Operating expenses
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2,650
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2,596
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5,253
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5,076
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Operating income
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726
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629
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1,459
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1,364
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Interest income
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2
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3
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4
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6
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Interest expense
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(48
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)
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(40
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)
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(94
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)
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(76
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)
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Investment income (loss)
|
1
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3
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(2
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)
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5
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Income before income taxes
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681
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595
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1,367
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1,299
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Income tax expense
|
201
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166
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397
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372
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Income from continuing operations
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480
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429
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970
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927
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Discontinued operations, net of tax
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—
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—
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—
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(3
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)
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Net income before non-controlling interests
|
480
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429
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970
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924
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Less: Net income attributable to non-controlling interests
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8
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10
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17
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23
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Net income attributable to the Company
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$
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472
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$
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419
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$
|
953
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$
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901
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Basic net income per share – Continuing operations
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$
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0.91
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$
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0.78
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$
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1.83
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$
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1.68
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– Net income attributable to
the Company
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$
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0.91
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$
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0.78
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$
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1.83
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$
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1.68
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Diluted net income per share – Continuing operations
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$
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0.90
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$
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0.77
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$
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1.81
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$
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1.66
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– Net income attributable to
the Company |
$
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0.90
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$
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0.77
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$
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1.81
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$
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1.66
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Average number of shares outstanding – Basic
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521
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535
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521
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537
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– Diluted
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525
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541
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526
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543
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Shares outstanding at June 30,
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519
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531
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519
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531
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Three Months Ended
June 30, |
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Six Months Ended
June 30, |
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(In millions)
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2016
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2015
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2016
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2015
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Net income before non-controlling interests
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$
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480
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$
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429
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$
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970
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$
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924
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Other comprehensive (loss) income, before tax:
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Foreign currency translation adjustments
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(334
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)
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246
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(321
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)
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(180
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)
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Gain (loss) related to pension/post-retirement plans
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163
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(83
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)
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301
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153
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Other comprehensive (loss) income, before tax
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(171
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)
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163
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(20
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)
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(27
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)
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Income tax expense (credit) on other comprehensive income
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33
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(4
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)
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61
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49
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Other comprehensive (loss) income, net of tax
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(204
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)
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167
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(81
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)
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(76
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)
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Comprehensive income
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276
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596
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889
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848
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Less: comprehensive income attributable to non-controlling interest
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8
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10
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17
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23
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Comprehensive income attributable to the Company
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$
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268
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$
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586
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$
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872
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$
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825
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(In millions, except share and per share figures)
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June 30,
2016 |
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December 31,
2015 |
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ASSETS
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Current assets:
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Cash and cash equivalents
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$
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974
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$
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1,374
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Receivables
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Commissions and fees
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3,473
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3,198
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Advanced premiums and claims
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47
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51
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Other
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287
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309
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3,807
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3,558
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Less-allowance for doubtful accounts and cancellations
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(86
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)
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(87
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)
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Net receivables
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3,721
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3,471
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Other current assets
|
235
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199
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|
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Total current assets
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4,930
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5,044
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Goodwill
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7,945
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7,889
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Other intangible assets
|
955
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1,036
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Fixed assets
(net of accumulated depreciation and amortization of $1,666 at June 30, 2016 and $1,621 at December 31, 2015)
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736
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773
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Pension related assets
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1,197
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1,159
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Deferred tax assets
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1,093
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1,138
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Other assets
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1,220
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1,177
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$
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18,076
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$
|
18,216
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(In millions, except share and per share figures)
|
June 30,
2016 |
|
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December 31,
2015 |
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LIABILITIES AND EQUITY
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Current liabilities:
|
|
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Short-term debt
|
$
|
261
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$
|
12
|
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Accounts payable and accrued liabilities
|
1,868
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|
|
1,886
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|
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Accrued compensation and employee benefits
|
1,015
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1,656
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Accrued income taxes
|
182
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|
|
154
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Dividends payable
|
178
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|
|
—
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Total current liabilities
|
3,504
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|
3,708
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Fiduciary liabilities
|
4,538
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4,146
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Less – cash and investments held in a fiduciary capacity
|
(4,538
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)
|
|
(4,146
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)
|
||
|
—
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|
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—
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Long-term debt
|
4,496
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|
|
4,402
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|
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Pension, post-retirement and post-employment benefits
|
2,004
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|
|
2,058
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|
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Liabilities for errors and omissions
|
322
|
|
|
318
|
|
||
Other liabilities
|
1,045
|
|
|
1,128
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|
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Commitments and contingencies
|
—
|
|
|
—
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|
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Equity:
|
|
|
|
||||
Preferred stock, $1 par value, authorized 6,000,000 shares, none issued
|
—
|
|
|
—
|
|
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Common stock, $1 par value, authorized
|
|
|
|
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1,600,000,000 shares, issued 560,641,640 shares at June 30, 2016
|
|
|
|
||||
and December 31, 2015
|
561
|
|
|
561
|
|
||
Additional paid-in capital
|
789
|
|
|
861
|
|
||
Retained earnings
|
11,751
|
|
|
11,302
|
|
||
Accumulated other comprehensive loss
|
(4,301
|
)
|
|
(4,220
|
)
|
||
Non-controlling interests
|
81
|
|
|
89
|
|
||
|
8,881
|
|
|
8,593
|
|
||
Less – treasury shares, at cost, 41,593,434 shares at June 30, 2016
|
|
|
|
||||
and 38,743,686 shares at December 31, 2015
|
(2,176
|
)
|
|
(1,991
|
)
|
||
Total equity
|
6,705
|
|
|
6,602
|
|
||
|
$
|
18,076
|
|
|
$
|
18,216
|
|
For the Six Months Ended June 30,
|
|
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|
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(In millions)
|
2016
|
|
|
2015
|
|
||
Operating cash flows:
|
|
|
|
||||
Net income before non-controlling interests
|
$
|
970
|
|
|
$
|
924
|
|
Adjustments to reconcile net income to cash provided by operations:
|
|
|
|
||||
Depreciation and amortization of fixed assets and capitalized software
|
154
|
|
|
156
|
|
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Amortization of intangible assets
|
67
|
|
|
48
|
|
||
Adjustments and payments related to contingent consideration liability
|
(8
|
)
|
|
—
|
|
||
Gain on deconsolidation of subsidiary
|
(12
|
)
|
|
—
|
|
||
Provision for deferred income taxes
|
48
|
|
|
90
|
|
||
Loss (gain) on investments
|
2
|
|
|
(2
|
)
|
||
Loss on disposition of assets
|
3
|
|
|
1
|
|
||
Share-based compensation expense
|
58
|
|
|
46
|
|
||
Changes in assets and liabilities:
|
|
|
|
||||
Net receivables
|
(280
|
)
|
|
(274
|
)
|
||
Other current assets
|
(37
|
)
|
|
(6
|
)
|
||
Other assets
|
(1
|
)
|
|
(15
|
)
|
||
Accounts payable and accrued liabilities
|
(24
|
)
|
|
(75
|
)
|
||
Accrued compensation and employee benefits
|
(645
|
)
|
|
(659
|
)
|
||
Accrued income taxes
|
35
|
|
|
37
|
|
||
Contributions to pension and other benefit plans in excess of current year expense/credit
|
(139
|
)
|
|
(149
|
)
|
||
Other liabilities
|
(10
|
)
|
|
(59
|
)
|
||
Effect of exchange rate changes
|
48
|
|
|
49
|
|
||
Net cash provided by operations
|
229
|
|
|
112
|
|
||
Financing cash flows:
|
|
|
|
||||
Purchase of treasury shares
|
(410
|
)
|
|
(775
|
)
|
||
Net increase in commercial paper
|
—
|
|
|
50
|
|
||
Proceeds from debt
|
347
|
|
|
494
|
|
||
Repayments of debt
|
(6
|
)
|
|
(5
|
)
|
||
Shares withheld for taxes on vested units – treasury shares
|
(38
|
)
|
|
(48
|
)
|
||
Issuance of common stock from treasury shares
|
131
|
|
|
147
|
|
||
Payments of deferred and contingent consideration for acquisitions
|
(63
|
)
|
|
(40
|
)
|
||
Distributions of non-controlling interests
|
(11
|
)
|
|
(15
|
)
|
||
Dividends paid
|
(326
|
)
|
|
(302
|
)
|
||
Net cash used for financing activities
|
(376
|
)
|
|
(494
|
)
|
||
Investing cash flows:
|
|
|
|
||||
Capital expenditures
|
(114
|
)
|
|
(176
|
)
|
||
Net purchases of long-term investments
|
(4
|
)
|
|
(90
|
)
|
||
Proceeds from sales of fixed assets
|
1
|
|
|
1
|
|
||
Acquisitions
|
(77
|
)
|
|
(260
|
)
|
||
Other, net
|
4
|
|
|
(3
|
)
|
||
Net cash used for investing activities
|
(190
|
)
|
|
(528
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
(63
|
)
|
|
(118
|
)
|
||
Decrease in cash and cash equivalents
|
(400
|
)
|
|
(1,028
|
)
|
||
Cash and cash equivalents at beginning of period
|
1,374
|
|
|
1,958
|
|
||
Cash and cash equivalents at end of period
|
$
|
974
|
|
|
$
|
930
|
|
For the Six Months Ended June 30,
|
|
|
|
||||
(In millions, except per share figures)
|
2016
|
|
|
2015
|
|
||
COMMON STOCK
|
|
|
|
||||
Balance, beginning and end of period
|
$
|
561
|
|
|
$
|
561
|
|
ADDITIONAL PAID-IN CAPITAL
|
|
|
|
||||
Balance, beginning of year
|
$
|
861
|
|
|
$
|
930
|
|
Change in accrued stock compensation costs
|
(10
|
)
|
|
(19
|
)
|
||
Issuance of shares under stock compensation plans and employee stock purchase plans and related tax impact
|
(62
|
)
|
|
(69
|
)
|
||
Balance, end of period
|
$
|
789
|
|
|
$
|
842
|
|
RETAINED EARNINGS
|
|
|
|
||||
Balance, beginning of year
|
$
|
11,302
|
|
|
$
|
10,335
|
|
Net income attributable to the Company
|
953
|
|
|
901
|
|
||
Dividend equivalents declared – (per share amounts: $0.96 in 2016 and $0.87 in 2015)
|
(4
|
)
|
|
(2
|
)
|
||
Dividends declared – (per share amounts: $0.96 in 2016 and $0.87 in 2015)
|
(500
|
)
|
|
(466
|
)
|
||
Balance, end of period
|
$
|
11,751
|
|
|
$
|
10,768
|
|
ACCUMULATED OTHER COMPREHENSIVE LOSS
|
|
|
|
||||
Balance, beginning of year
|
$
|
(4,220
|
)
|
|
$
|
(3,847
|
)
|
Other comprehensive loss, net of tax
|
(81
|
)
|
|
(76
|
)
|
||
Balance, end of period
|
$
|
(4,301
|
)
|
|
$
|
(3,923
|
)
|
TREASURY SHARES
|
|
|
|
||||
Balance, beginning of year
|
$
|
(1,991
|
)
|
|
$
|
(925
|
)
|
Issuance of shares under stock compensation plans and employee stock purchase plans
|
225
|
|
|
235
|
|
||
Purchase of treasury shares
|
(410
|
)
|
|
(775
|
)
|
||
Balance, end of period
|
$
|
(2,176
|
)
|
|
$
|
(1,465
|
)
|
NON-CONTROLLING INTERESTS
|
|
|
|
||||
Balance, beginning of year
|
$
|
89
|
|
|
$
|
79
|
|
Net income attributable to non-controlling interests
|
17
|
|
|
23
|
|
||
Deconsolidation of subsidiary
|
(14
|
)
|
|
—
|
|
||
Distributions and other changes
|
(11
|
)
|
|
(13
|
)
|
||
Balance, end of period
|
$
|
81
|
|
|
$
|
89
|
|
TOTAL EQUITY
|
$
|
6,705
|
|
|
$
|
6,872
|
|
Basic and Diluted EPS Calculation -
Continuing Operations
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
(In millions, except per share figures)
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
||||
Net income from continuing operations
|
$
|
480
|
|
|
$
|
429
|
|
|
$
|
970
|
|
|
$
|
927
|
|
Less: Net income attributable to non-controlling interests
|
8
|
|
|
10
|
|
|
17
|
|
|
23
|
|
||||
|
$
|
472
|
|
|
$
|
419
|
|
|
$
|
953
|
|
|
$
|
904
|
|
Basic weighted average common shares outstanding
|
521
|
|
|
535
|
|
|
521
|
|
|
537
|
|
||||
Dilutive effect of potentially issuable common shares
|
4
|
|
|
6
|
|
|
5
|
|
|
6
|
|
||||
Diluted weighted average common shares outstanding
|
525
|
|
|
541
|
|
|
526
|
|
|
543
|
|
||||
Average stock price used to calculate common stock equivalents
|
$
|
64.17
|
|
|
$
|
57.75
|
|
|
$
|
60.01
|
|
|
$
|
57.06
|
|
(In millions of dollars)
|
|
2016
|
|
|
2015
|
|
||
Assets acquired, excluding cash
|
|
$
|
107
|
|
|
$
|
338
|
|
Liabilities assumed
|
|
(4
|
)
|
|
(12
|
)
|
||
Contingent/deferred purchase consideration
|
|
(26
|
)
|
|
(95
|
)
|
||
Net cash outflow for current year acquisitions
|
|
$
|
77
|
|
|
$
|
231
|
|
Cash paid into escrow for future acquisition
|
|
—
|
|
|
29
|
|
||
Net cash outflow for acquisitions
|
|
$
|
77
|
|
|
$
|
260
|
|
(In millions of dollars)
|
2016
|
|
|
2015
|
|
||
Interest paid
|
$
|
86
|
|
|
$
|
69
|
|
Income taxes paid, net of refunds
|
$
|
303
|
|
|
$
|
223
|
|
(In millions of dollars)
|
Unrealized Investment Gains
|
|
Pension/Post-Retirement Plans Gains (Losses)
|
|
Foreign Currency Translation Gains (Losses)
|
|
Total Gains (Losses)
|
||||||||
Balance as of April 1, 2016
|
$
|
6
|
|
|
$
|
(3,014
|
)
|
|
$
|
(1,089
|
)
|
|
$
|
(4,097
|
)
|
Other comprehensive income (loss) before reclassifications
|
—
|
|
|
98
|
|
|
(333
|
)
|
|
(235
|
)
|
||||
Amounts reclassified from accumulated other comprehensive income
|
—
|
|
|
31
|
|
|
—
|
|
|
31
|
|
||||
Net current period other comprehensive income (loss)
|
—
|
|
|
129
|
|
|
(333
|
)
|
|
(204
|
)
|
||||
Balance as of June 30, 2016
|
$
|
6
|
|
|
$
|
(2,885
|
)
|
|
$
|
(1,422
|
)
|
|
$
|
(4,301
|
)
|
(In millions of dollars)
|
Unrealized Investment Gains
|
|
Pension/Post-Retirement Plans Gains (Losses)
|
|
Foreign Currency Translation Gains (Losses)
|
|
Total Gains (Losses)
|
||||||||
Balance as of April 1, 2015
|
$
|
5
|
|
|
$
|
(3,213
|
)
|
|
$
|
(882
|
)
|
|
$
|
(4,090
|
)
|
Other comprehensive income (loss) before reclassifications
|
—
|
|
|
(126
|
)
|
|
243
|
|
|
117
|
|
||||
Amounts reclassified from accumulated other comprehensive income
|
—
|
|
|
50
|
|
|
—
|
|
|
50
|
|
||||
Net current period other comprehensive income (loss)
|
—
|
|
|
(76
|
)
|
|
243
|
|
|
167
|
|
||||
Balance as of June 30, 2015
|
$
|
5
|
|
|
$
|
(3,289
|
)
|
|
$
|
(639
|
)
|
|
$
|
(3,923
|
)
|
(In millions of dollars)
|
Unrealized Investment Gains
|
|
Pension/Post-Retirement Plans Gains (Losses)
|
|
Foreign Currency Translation Adjustments
|
|
Total Gains (Losses)
|
||||||||
Balance as of January 1, 2016
|
$
|
6
|
|
|
$
|
(3,124
|
)
|
|
$
|
(1,102
|
)
|
|
$
|
(4,220
|
)
|
Other comprehensive income (loss) before reclassifications
|
—
|
|
|
178
|
|
|
(320
|
)
|
|
(142
|
)
|
||||
Amounts reclassified from accumulated other comprehensive income
|
—
|
|
|
61
|
|
|
—
|
|
|
61
|
|
||||
Net current period other comprehensive income (loss)
|
—
|
|
|
239
|
|
|
(320
|
)
|
|
(81
|
)
|
||||
Balance as of June 30, 2016
|
$
|
6
|
|
|
$
|
(2,885
|
)
|
|
$
|
(1,422
|
)
|
|
$
|
(4,301
|
)
|
(In millions of dollars)
|
Unrealized Investment Gains
|
|
Pension/Post-Retirement Plans Gains (Losses)
|
|
Foreign Currency Translation Adjustments
|
|
Total Gains (Losses)
|
||||||||
Balance as of January 1, 2015
|
$
|
5
|
|
|
$
|
(3,393
|
)
|
|
$
|
(459
|
)
|
|
$
|
(3,847
|
)
|
Other comprehensive income (loss) before reclassifications
|
—
|
|
|
2
|
|
|
(180
|
)
|
|
(178
|
)
|
||||
Amounts reclassified from accumulated other comprehensive income
|
—
|
|
|
102
|
|
|
—
|
|
|
102
|
|
||||
Net current period other comprehensive income (loss)
|
—
|
|
|
104
|
|
|
(180
|
)
|
|
(76
|
)
|
||||
Balance as of June 30, 2015
|
$
|
5
|
|
|
$
|
(3,289
|
)
|
|
$
|
(639
|
)
|
|
$
|
(3,923
|
)
|
•
|
February – Marsh & McLennan Agency ("MMA") acquired The Celedinas Agency, Inc., a Florida-based brokerage firm providing property and casualty and marine insurance as well as employee benefits services to businesses and individuals, and Aviation Solutions, LLC, a Missouri-based aviation risk advisor and insurance broker.
|
•
|
March – MMA acquired Corporate Consulting Services, Ltd., a New York-based insurance brokerage and human resource consulting firm.
|
•
|
January – Mercer acquired The Positive Ageing Company Limited, a U.K.-based firm providing advice on issues surrounding the aging workforce.
|
•
|
April – Mercer acquired the Extratextual software system and related client contracts. Extratextual is a web based compliance system that helps clients manage and meet their compliance and risk management obligations.
|
For the Six Months Ended June 30, 2016
|
|
||
(In millions of dollars)
|
|
||
Cash
|
$
|
79
|
|
Estimated fair value of deferred/contingent consideration
|
26
|
|
|
Total Consideration
|
$
|
105
|
|
Allocation of purchase price:
|
|
||
Cash and cash equivalents
|
$
|
2
|
|
Accounts receivable, net
|
1
|
|
|
Property, plant, and equipment
|
1
|
|
|
Other intangible assets
|
43
|
|
|
Goodwill
|
62
|
|
|
Total assets acquired
|
109
|
|
|
Current liabilities
|
2
|
|
|
Other liabilities
|
2
|
|
|
Total liabilities assumed
|
4
|
|
|
Net assets acquired
|
$
|
105
|
|
|
|
Amount
|
|
Weighted Average Amortization Period
|
||
Client relationships
|
|
$
|
41
|
|
|
10 years
|
Other (a)
|
|
2
|
|
|
3 years
|
|
|
|
$
|
43
|
|
|
|
•
|
January – Marsh acquired INGESEG S.A., an insurance brokerage located in Argentina.
|
•
|
May – Marsh acquired Sylvite Financial Services, Inc., a Canada-based insurance consulting firm and Sumitomo Life Insurance Agency America, Inc., an employee benefits brokerage and consulting firm providing employee benefit and other services to U.S.-based subsidiaries of Japanese companies.
|
•
|
June – Marsh & McLennan Agency ("MMA") acquired MHBT, Inc., a Texas-based insurance broker and Marsh acquired SIS Co. Ltd, a Korea-based insurance broker and advisor.
|
•
|
July – MMA acquired Vezina, a Canada-based independent insurance brokerage firm, Tequesta Insurance Advisors, an employee benefits insurance provider based in Florida, Cline Wood Agency, a Kansas City-based independent specialty insurance agency and J.W. Terrill, a Missouri-based independent insurance agency. Marsh acquired SMEI Group Ltd., a U.K.-based insurance broker providing specialist commercial insurance to small and medium-sized firms.
|
•
|
August – Marsh acquired Dovetail Insurance, a leading provider of insurance technology services to the U.S. small commercial market.
|
•
|
October – MMA acquired Dawson Insurance Agency, a North Dakota-based agency providing commercial and personal insurance, surety bonds, safety and loss control programs, and employee benefits services.
|
•
|
December – Marsh acquired Jelf Group, PLC, a U.K.-based insurance broking and financial consulting firm.
|
•
|
February – Oliver Wyman acquired TeamSAI, a Georgia-based provider of consulting and technical services to the transportation industry, and Mercer acquired Strategic Capital Management AG, a Switzerland-based institutional investment advisor.
|
•
|
June – Mercer acquired Kepler Associates, a U.K.-based executive remuneration specialist.
|
•
|
August – OWG acquired the Hong Kong and Shanghai franchises of OC&C Strategy Consultants.
|
•
|
September – Mercer acquired Comptryx, a global pay and workforce metrics business specializing in the technology sector.
|
•
|
November – Mercer acquired HR Business Solutions (Asia) Limited, a Hong Kong-based compensation and employee benefits consulting firm, and Gama Consultores Associados Ltda, a Brazil-based retirement consulting firm.
|
•
|
December – Mercer acquired CPSG Partners, a Workday Services partner assisting clients worldwide to maximize the value of Workday Financial Management and Human Capital Management.
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
(In millions, except per share figures)
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
||||
Revenue
|
$
|
3,376
|
|
|
$
|
3,328
|
|
|
$
|
6,721
|
|
|
$
|
6,658
|
|
Income from continuing operations
|
$
|
480
|
|
|
$
|
441
|
|
|
$
|
973
|
|
|
$
|
949
|
|
Net income attributable to the Company
|
$
|
472
|
|
|
$
|
431
|
|
|
$
|
955
|
|
|
$
|
922
|
|
Basic net income per share:
|
|
|
|
|
|
|
|
||||||||
– Continuing operations
|
$
|
0.91
|
|
|
$
|
0.80
|
|
|
$
|
1.83
|
|
|
$
|
1.72
|
|
– Net income attributable to the Company
|
$
|
0.91
|
|
|
$
|
0.81
|
|
|
$
|
1.83
|
|
|
$
|
1.72
|
|
Diluted net income per share:
|
|
|
|
|
|
|
|
||||||||
– Continuing operations
|
$
|
0.90
|
|
|
$
|
0.80
|
|
|
$
|
1.82
|
|
|
$
|
1.70
|
|
– Net income attributable to the Company
|
$
|
0.90
|
|
|
$
|
0.80
|
|
|
$
|
1.82
|
|
|
$
|
1.70
|
|
June 30,
|
|
|
|
||||
(In millions of dollars)
|
2016
|
|
|
2015
|
|
||
Balance as of January 1, as reported
|
$
|
7,889
|
|
|
$
|
7,241
|
|
Goodwill acquired
|
62
|
|
|
188
|
|
||
Other adjustments
(a)
|
(6
|
)
|
|
(48
|
)
|
||
Balance at June 30,
|
$
|
7,945
|
|
|
$
|
7,381
|
|
(a)
|
Primarily reflects the impact of foreign exchange in each period.
|
|
June 30, 2016
|
|
December 31, 2015
|
||||||||||||||||||||
(In millions of dollars)
|
Gross
Cost
|
|
|
Accumulated
Amortization
|
|
|
Net
Carrying
Amount
|
|
|
Gross
Cost
|
|
|
Accumulated
Amortization
|
|
|
Net
Carrying
Amount
|
|
||||||
Client Relationships
|
$
|
1,229
|
|
|
$
|
359
|
|
|
$
|
870
|
|
|
$
|
1,281
|
|
|
$
|
347
|
|
|
$
|
934
|
|
Other (a)
|
150
|
|
|
65
|
|
|
85
|
|
|
176
|
|
|
74
|
|
|
102
|
|
||||||
Amortized intangibles
|
$
|
1,379
|
|
|
$
|
424
|
|
|
$
|
955
|
|
|
$
|
1,457
|
|
|
$
|
421
|
|
|
$
|
1,036
|
|
For the Years Ending December 31,
|
|
||
(In millions of dollars)
|
Estimated Expense
|
|
|
2016 (excludes amortization through June 30, 2016)
|
$
|
66
|
|
2017
|
120
|
|
|
2018
|
117
|
|
|
2019
|
114
|
|
|
2020
|
95
|
|
|
Subsequent years
|
443
|
|
|
|
$
|
955
|
|
Level 1.
|
Assets and liabilities whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market (examples include active exchange-traded equity securities and money market mutual funds).
|
Level 2.
|
Assets and liabilities whose values are based on the following:
|
a)
|
Quoted prices for similar assets or liabilities in active markets;
|
b)
|
Quoted prices for identical or similar assets or liabilities in non-active markets (examples include corporate and municipal bonds, which trade infrequently);
|
c)
|
Pricing models whose inputs are observable for substantially the full term of the asset or liability (examples include most over-the-counter derivatives, including interest rate and currency swaps); and
|
d)
|
Pricing models whose inputs are derived principally from or corroborated by observable market data through correlation or other means for substantially the full asset or liability (for example, certain mortgage loans).
|
Level 3.
|
Assets and liabilities whose values are based on prices, or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs reflect management’s own assumptions about the assumptions a market participant would use in pricing the asset or liability (examples include private equity investments, certain commercial mortgage whole loans, and long-dated or complex derivatives including certain foreign exchange options and long-dated options on gas and power).
|
|
Identical Assets
(Level 1)
|
|
Observable Inputs
(Level 2)
|
|
Unobservable
Inputs
(Level 3)
|
|
Total
|
||||||||||||||||||||||||
(In millions of dollars)
|
06/30/16
|
|
|
12/31/15
|
|
|
06/30/16
|
|
|
12/31/15
|
|
|
06/30/16
|
|
|
12/31/15
|
|
|
06/30/16
|
|
|
12/31/15
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Financial instruments owned:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Mutual funds
(a)
|
$
|
133
|
|
|
$
|
142
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
133
|
|
|
$
|
142
|
|
Money market funds
(b)
|
43
|
|
|
140
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
43
|
|
|
140
|
|
||||||||
Total assets measured at fair value
|
$
|
176
|
|
|
$
|
282
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
176
|
|
|
$
|
282
|
|
Fiduciary Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Money market funds
|
$
|
27
|
|
|
$
|
48
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
27
|
|
|
$
|
48
|
|
Total fiduciary assets measured
at fair value
|
$
|
27
|
|
|
$
|
48
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
27
|
|
|
$
|
48
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Contingent purchase
consideration liability
(c)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
279
|
|
|
$
|
309
|
|
|
$
|
279
|
|
|
$
|
309
|
|
Total liabilities measured at fair value
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
279
|
|
|
$
|
309
|
|
|
$
|
279
|
|
|
$
|
309
|
|
(a)
|
Included in other assets in the consolidated balance sheets.
|
(b)
|
Included in cash and cash equivalents in the consolidated balance sheets.
|
(c)
|
Included in accounts payable and accrued liabilities and other liabilities in the consolidated balance sheets.
|
(In millions of dollars)
|
2016
|
|
|
2015
|
|
||
Balance at January 1,
|
$
|
309
|
|
|
$
|
207
|
|
Additions
|
8
|
|
|
49
|
|
||
Payments
|
(50
|
)
|
|
(33
|
)
|
||
Revaluation Impact
|
18
|
|
|
21
|
|
||
Other
(a)
|
(6
|
)
|
|
—
|
|
||
Balance at June 30,
|
$
|
279
|
|
|
$
|
244
|
|
Combined U.S. and significant non-U.S. Plans
|
Pension
|
|
Post-retirement
|
||||||||||||
For the Three Months Ended June 30,
|
Benefits
|
|
Benefits
|
||||||||||||
(In millions of dollars)
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
||||
Service cost
|
$
|
46
|
|
|
$
|
50
|
|
|
$
|
—
|
|
|
$
|
1
|
|
Interest cost
|
138
|
|
|
146
|
|
|
1
|
|
|
2
|
|
||||
Expected return on plan assets
|
(242
|
)
|
|
(243
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service (credit) cost
|
(1
|
)
|
|
—
|
|
|
1
|
|
|
1
|
|
||||
Recognized actuarial loss (gain)
|
42
|
|
|
78
|
|
|
—
|
|
|
(1
|
)
|
||||
Net periodic benefit (credit) cost
|
$
|
(17
|
)
|
|
$
|
31
|
|
|
$
|
2
|
|
|
$
|
3
|
|
Curtailment gain
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Settlement loss
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total (credit) cost
|
$
|
(21
|
)
|
|
$
|
31
|
|
|
$
|
2
|
|
|
$
|
3
|
|
|
|
|
|
|
|
|
|
||||||||
Combined U.S. and significant non-U.S. Plans
|
Pension
|
|
Post-retirement
|
||||||||||||
For the Six Months Ended June 30,
|
Benefits
|
|
Benefits
|
||||||||||||
(In millions of dollars)
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
||||
Service cost
|
$
|
90
|
|
|
$
|
102
|
|
|
$
|
—
|
|
|
$
|
2
|
|
Interest cost
|
275
|
|
|
292
|
|
|
3
|
|
|
4
|
|
||||
Expected return on plan assets
|
(483
|
)
|
|
(486
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service (credit) cost
|
(1
|
)
|
|
—
|
|
|
2
|
|
|
1
|
|
||||
Recognized actuarial loss (gain)
|
84
|
|
|
154
|
|
|
(1
|
)
|
|
(1
|
)
|
||||
Net periodic benefit (credit) cost
|
$
|
(35
|
)
|
|
$
|
62
|
|
|
$
|
4
|
|
|
$
|
6
|
|
Curtailment gain
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Settlement loss
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Plan termination
|
—
|
|
|
—
|
|
|
—
|
|
|
(128
|
)
|
||||
Total (credit) cost
|
$
|
(39
|
)
|
|
$
|
62
|
|
|
$
|
4
|
|
|
$
|
(122
|
)
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
U.S. Plans only
|
Pension
|
|
Post-retirement
|
||||||||||||
For the Three Months Ended June 30,
|
Benefits
|
|
Benefits
|
||||||||||||
(In millions of dollars)
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
||||
Service cost
|
$
|
27
|
|
|
$
|
29
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest cost
|
66
|
|
|
63
|
|
|
—
|
|
|
1
|
|
||||
Expected return on plan assets
|
(95
|
)
|
|
(92
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service cost
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
||||
Recognized actuarial loss (gain)
|
18
|
|
|
46
|
|
|
—
|
|
|
(1
|
)
|
||||
Net periodic benefit cost
|
$
|
16
|
|
|
$
|
46
|
|
|
$
|
1
|
|
|
$
|
1
|
|
Plan termination
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total cost
|
$
|
16
|
|
|
$
|
46
|
|
|
$
|
1
|
|
|
$
|
1
|
|
U.S. Plans only
|
Pension
|
|
Post-retirement
|
||||||||||||
For the Six Months Ended June 30,
|
Benefits
|
|
Benefits
|
||||||||||||
(In millions of dollars)
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
||||
Service cost
|
$
|
53
|
|
|
$
|
59
|
|
|
$
|
—
|
|
|
$
|
1
|
|
Interest cost
|
132
|
|
|
125
|
|
|
1
|
|
|
2
|
|
||||
Expected return on plan assets
|
(190
|
)
|
|
(184
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service cost
|
—
|
|
|
—
|
|
|
2
|
|
|
1
|
|
||||
Recognized actuarial loss (gain)
|
36
|
|
|
91
|
|
|
(1
|
)
|
|
(1
|
)
|
||||
Net periodic benefit cost
|
$
|
31
|
|
|
$
|
91
|
|
|
$
|
2
|
|
|
$
|
3
|
|
Plan termination
|
—
|
|
|
—
|
|
|
—
|
|
|
(128
|
)
|
||||
Total cost (credit)
|
$
|
31
|
|
|
$
|
91
|
|
|
$
|
2
|
|
|
$
|
(125
|
)
|
|
|
|
|
|
|
|
|
Significant non-U.S. Plans only
|
Pension
|
|
Post-retirement
|
||||||||||||
For the Three Months Ended June 30,
|
Benefits
|
|
Benefits
|
||||||||||||
(In millions of dollars)
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
||||
Service cost
|
$
|
19
|
|
|
$
|
21
|
|
|
$
|
—
|
|
|
$
|
1
|
|
Interest cost
|
72
|
|
|
83
|
|
|
1
|
|
|
1
|
|
||||
Expected return on plan assets
|
(147
|
)
|
|
(151
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service credit
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Recognized actuarial loss
|
24
|
|
|
32
|
|
|
—
|
|
|
—
|
|
||||
Net periodic benefit (credit) cost
|
$
|
(33
|
)
|
|
$
|
(15
|
)
|
|
$
|
1
|
|
|
$
|
2
|
|
Curtailment (gain)
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Settlement loss
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total (credit) cost
|
$
|
(37
|
)
|
|
$
|
(15
|
)
|
|
$
|
1
|
|
|
$
|
2
|
|
Significant non-U.S. Plans only
|
Pension
|
|
Post-retirement
|
||||||||||||
For the Six Months Ended June 30,
|
Benefits
|
|
Benefits
|
||||||||||||
(In millions of dollars)
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
||||
Service cost
|
$
|
37
|
|
|
$
|
43
|
|
|
$
|
—
|
|
|
$
|
1
|
|
Interest cost
|
143
|
|
|
167
|
|
|
2
|
|
|
2
|
|
||||
Expected return on plan assets
|
(293
|
)
|
|
(302
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service credit
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Recognized actuarial loss
|
48
|
|
|
63
|
|
|
—
|
|
|
—
|
|
||||
Net periodic benefit (credit) cost
|
$
|
(66
|
)
|
|
$
|
(29
|
)
|
|
$
|
2
|
|
|
$
|
3
|
|
Curtailment gain
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Settlement loss
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total (credit) cost
|
$
|
(70
|
)
|
|
$
|
(29
|
)
|
|
$
|
2
|
|
|
$
|
3
|
|
|
|
|
|
|
|
|
|
Combined U.S. and significant non-U.S. Plans
|
Pension
Benefits
|
|
Post-retirement
Benefits
|
||||||||
June 30,
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
Weighted average assumptions:
|
|
|
|
|
|
|
|
||||
Expected return on plan assets
|
7.07
|
%
|
|
7.25
|
%
|
|
—
|
|
|
—
|
|
Discount rate
|
4.11
|
%
|
|
3.79
|
%
|
|
4.12
|
%
|
|
4.08
|
%
|
Rate of compensation increase
|
2.44
|
%
|
|
2.42
|
%
|
|
—
|
|
|
—
|
|
(In millions of dollars)
|
June 30,
2016 |
|
|
December 31,
2015 |
|
||
Short-term:
|
|
|
|
||||
Current portion of long-term debt
|
$
|
261
|
|
|
$
|
12
|
|
Long-term:
|
|
|
|
||||
Senior notes – 2.30% due 2017
|
250
|
|
|
249
|
|
||
Senior notes – 2.55% due 2018
|
249
|
|
|
249
|
|
||
Senior notes – 2.35% due 2019
|
298
|
|
|
298
|
|
||
Senior notes – 2.35% due 2020
|
497
|
|
|
496
|
|
||
Senior notes – 4.80% due 2021
|
498
|
|
|
497
|
|
||
Senior notes – 3.30% due 2023
|
347
|
|
|
—
|
|
||
Senior notes – 4.05% due 2023
|
248
|
|
|
248
|
|
||
Senior notes – 3.50% due 2024
|
595
|
|
|
595
|
|
||
Senior notes – 3.50% due 2025
|
495
|
|
|
495
|
|
||
Senior notes – 3.750% due 2026
|
595
|
|
|
595
|
|
||
Senior notes – 5.875% due 2033
|
297
|
|
|
297
|
|
||
Mortgage – 5.70% due 2035
|
387
|
|
|
393
|
|
||
Other
|
1
|
|
|
2
|
|
||
|
4,757
|
|
|
4,414
|
|
||
Less current portion
|
261
|
|
|
12
|
|
||
|
$
|
4,496
|
|
|
$
|
4,402
|
|
|
June 30, 2016
|
|
December 31, 2015
|
||||||||||||
(In millions of dollars)
|
Carrying
Amount
|
|
|
Fair
Value
|
|
|
Carrying
Amount
|
|
|
Fair
Value
|
|
||||
Short-term debt
|
$
|
261
|
|
|
$
|
264
|
|
|
$
|
12
|
|
|
$
|
12
|
|
Long-term debt
|
$
|
4,496
|
|
|
$
|
4,755
|
|
|
$
|
4,402
|
|
|
$
|
4,513
|
|
(In millions of dollars)
|
Liability at 1/1/15
|
|
Amounts
Accrued
|
|
|
Cash
Paid
|
|
|
Other
|
|
|
Liability at 12/31/15
|
|
Amounts
Accrued
|
|
|
Cash
Paid
|
|
|
Other
|
|
|
Liability at 6/30/16
|
||||||||||||
Severance
|
$
|
7
|
|
|
$
|
17
|
|
|
$
|
(7
|
)
|
|
$
|
(2
|
)
|
|
$
|
15
|
|
|
$
|
4
|
|
|
$
|
(12
|
)
|
|
$
|
—
|
|
|
$
|
7
|
|
Future rent under non-cancelable leases and other costs
|
85
|
|
|
11
|
|
|
(21
|
)
|
|
3
|
|
|
78
|
|
|
4
|
|
|
(10
|
)
|
|
(2
|
)
|
|
70
|
|
|||||||||
Total
|
$
|
92
|
|
|
$
|
28
|
|
|
$
|
(28
|
)
|
|
$
|
1
|
|
|
$
|
93
|
|
|
$
|
8
|
|
|
$
|
(22
|
)
|
|
$
|
(2
|
)
|
|
$
|
77
|
|
▪
|
Risk and Insurance Services
, comprising insurance services (Marsh) and reinsurance services (Guy Carpenter); and
|
▪
|
Consulting
, comprising Mercer and Oliver Wyman Group.
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
(In millions of dollars)
|
Revenue
|
|
Operating
Income
(Loss)
|
|
Revenue
|
|
Operating
Income
(Loss)
|
||||||||
2016–
|
|
|
|
|
|
|
|
||||||||
Risk and Insurance Services
|
$
|
1,850
|
|
(a)
|
$
|
490
|
|
|
$
|
3,718
|
|
(c)
|
$
|
1,025
|
|
Consulting
|
1,539
|
|
(b)
|
285
|
|
|
3,017
|
|
(d)
|
530
|
|
||||
Total Operating Segments
|
3,389
|
|
|
775
|
|
|
6,735
|
|
|
1,555
|
|
||||
Corporate / Eliminations
|
(13
|
)
|
|
(49
|
)
|
|
(23
|
)
|
|
(96
|
)
|
||||
Total Consolidated
|
$
|
3,376
|
|
|
$
|
726
|
|
|
$
|
6,712
|
|
|
$
|
1,459
|
|
2015–
|
|
|
|
|
|
|
|
||||||||
Risk and Insurance Services
|
$
|
1,750
|
|
(a)
|
$
|
427
|
|
|
$
|
3,553
|
|
(c)
|
$
|
960
|
|
Consulting
|
1,487
|
|
(b)
|
248
|
|
|
2,908
|
|
(d)
|
496
|
|
||||
Total Operating Segments
|
3,237
|
|
|
675
|
|
|
6,461
|
|
|
1,456
|
|
||||
Corporate / Eliminations
|
(12
|
)
|
|
(46
|
)
|
|
(21
|
)
|
|
(92
|
)
|
||||
Total Consolidated
|
$
|
3,225
|
|
|
$
|
629
|
|
|
$
|
6,440
|
|
|
$
|
1,364
|
|
(a)
|
Includes inter-segment revenue of
$3 million
and
$4 million
in
2016
and
2015
, respectively, interest income on fiduciary funds of
$6 million
and
$5 million
in
2016
and
2015
, respectively, and equity method income of
$6 million
in
2016
and
$0 million
in
2015
, respectively.
|
(b)
|
Includes inter-segment revenue of
$10 million
and
$8 million
in
2016
and
2015
, respectively, interest income on fiduciary funds of less than
$1 million
and
$1 million
in
2016
and
2015
, respectively, and equity method income of
$5 million
in both
2016
and
2015
.
|
(c)
|
Includes inter-segment revenue of
$4 million
in
2016
and
$5 million
in
2015
, interest income on fiduciary funds of
$12 million
and
$10 million
in
2016
and
2015
, respectively, and equity method income of
$7 million
and
$2 million
in
2016
and
2015
, respectively.
|
(d)
|
Includes inter-segment revenue of
$19 million
and
$16 million
in
2016
and
2015
, respectively, interest income on fiduciary funds of
$1 million
and
$2 million
in
2016
and
2015
, respectively, and equity method income of
$9 million
and
$8 million
in
2016
and
2015
, respectively.
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
(In millions of dollars)
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
||||
Risk and Insurance Services
|
|
|
|
|
|
|
|
||||||||
Marsh
|
$
|
1,564
|
|
|
$
|
1,474
|
|
|
$
|
3,057
|
|
|
$
|
2,908
|
|
Guy Carpenter
|
286
|
|
|
276
|
|
|
661
|
|
|
645
|
|
||||
Total Risk and Insurance Services
|
1,850
|
|
|
1,750
|
|
|
3,718
|
|
|
3,553
|
|
||||
Consulting
|
|
|
|
|
|
|
|
||||||||
Mercer
|
1,079
|
|
|
1,046
|
|
|
2,118
|
|
|
2,083
|
|
||||
Oliver Wyman Group
|
460
|
|
|
441
|
|
|
899
|
|
|
825
|
|
||||
Total Consulting
|
1,539
|
|
|
1,487
|
|
|
3,017
|
|
|
2,908
|
|
||||
Total Operating Segments
|
3,389
|
|
|
3,237
|
|
|
6,735
|
|
|
6,461
|
|
||||
Corporate
/
Eliminations
|
(13
|
)
|
|
(12
|
)
|
|
(23
|
)
|
|
(21
|
)
|
||||
Total
|
$
|
3,376
|
|
|
$
|
3,225
|
|
|
$
|
6,712
|
|
|
$
|
6,440
|
|
|
Period Ended June 30, 2015
|
||||||||||||||
|
As Previously Reported
|
|
Change in Deferred Tax Presentation
|
|
Change in Prepaid Debt Fees Presentation
|
|
As Amended
|
||||||||
Consolidated Statement of Cash Flows
|
|
|
|
|
|
|
|
||||||||
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
||||||||
Other current assets
|
$
|
39
|
|
|
$
|
(46
|
)
|
|
$
|
1
|
|
|
$
|
(6
|
)
|
Other assets
|
(62
|
)
|
|
42
|
|
|
5
|
|
|
(15
|
)
|
||||
Accrued income taxes
|
31
|
|
|
6
|
|
|
—
|
|
|
37
|
|
||||
Other liabilities
|
(57
|
)
|
|
(2
|
)
|
|
—
|
|
|
(59
|
)
|
||||
Net cash provided by operations
|
106
|
|
|
—
|
|
|
6
|
|
|
112
|
|
||||
Proceeds from debt
|
500
|
|
|
—
|
|
|
(6
|
)
|
|
494
|
|
||||
Net cash used for financing activities
|
$
|
(488
|
)
|
|
$
|
—
|
|
|
$
|
(6
|
)
|
|
$
|
(494
|
)
|
•
|
Risk and Insurance Services
includes risk management activities (risk advice, risk transfer and risk control and mitigation solutions) as well as insurance and reinsurance broking and services. We conduct business in this segment through Marsh and Guy Carpenter.
|
•
|
Consulting
includes Health, Retirement, Talent and Investments consulting services and products, and specialized management, economic and brand consulting services. We conduct business in this segment through Mercer and Oliver Wyman Group.
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
|||||||||||
(In millions, except per share figures)
|
2016
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
||||
Revenue
|
$
|
3,376
|
|
$
|
3,225
|
|
|
$
|
6,712
|
|
|
$
|
6,440
|
|
Expense:
|
|
|
|
|
|
|
||||||||
Compensation and Benefits
|
1,872
|
|
1,826
|
|
|
3,726
|
|
|
3,556
|
|
||||
Other Operating Expenses
|
778
|
|
770
|
|
|
1,527
|
|
|
1,520
|
|
||||
Operating Expenses
|
2,650
|
|
2,596
|
|
|
5,253
|
|
|
5,076
|
|
||||
Operating Income
|
726
|
|
629
|
|
|
1,459
|
|
|
1,364
|
|
||||
Income from Continuing Operations
|
480
|
|
429
|
|
|
970
|
|
|
927
|
|
||||
Discontinued Operations, net of tax
|
—
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
||||
Net Income Before Non-Controlling Interests
|
480
|
|
429
|
|
|
970
|
|
|
924
|
|
||||
Net Income Attributable to the Company
|
$
|
472
|
|
$
|
419
|
|
|
$
|
953
|
|
|
$
|
901
|
|
Income From Continuing Operations Per Share:
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.91
|
|
$
|
0.78
|
|
|
$
|
1.83
|
|
|
$
|
1.68
|
|
Diluted
|
$
|
0.90
|
|
$
|
0.77
|
|
|
$
|
1.81
|
|
|
$
|
1.66
|
|
Net Income Per Share Attributable to the Company:
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.91
|
|
$
|
0.78
|
|
|
$
|
1.83
|
|
|
$
|
1.68
|
|
Diluted
|
$
|
0.90
|
|
$
|
0.77
|
|
|
$
|
1.81
|
|
|
$
|
1.66
|
|
Average Number of Shares Outstanding:
|
|
|
|
|
|
|
||||||||
Basic
|
521
|
|
535
|
|
|
521
|
|
|
537
|
|
||||
Diluted
|
525
|
|
541
|
|
|
526
|
|
|
543
|
|
||||
Shares Outstanding at June 30
|
519
|
|
531
|
|
|
519
|
|
|
531
|
|
|
Three Months Ended
June 30, |
|
%
Change
GAAP
Revenue
|
|
Components of Revenue Change*
|
||||||||||||||
Currency
Impact
|
|
Acquisitions/
Dispositions
Impact
|
|
Underlying
Revenue
|
|||||||||||||||
(In millions of dollars)
|
2016
|
|
|
2015
|
|
|
|||||||||||||
Risk and Insurance Services
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Marsh
|
$
|
1,559
|
|
|
$
|
1,470
|
|
|
6
|
%
|
|
(2
|
)%
|
|
6
|
%
|
|
2
|
%
|
Guy Carpenter
|
285
|
|
|
275
|
|
|
3
|
%
|
|
1
|
%
|
|
—
|
|
|
3
|
%
|
||
Subtotal
|
1,844
|
|
|
1,745
|
|
|
6
|
%
|
|
(2
|
)%
|
|
5
|
%
|
|
2
|
%
|
||
Fiduciary Interest Income
|
6
|
|
|
5
|
|
|
|
|
|
|
|
|
|
||||||
Total Risk and Insurance Services
|
1,850
|
|
|
1,750
|
|
|
6
|
%
|
|
(2
|
)%
|
|
5
|
%
|
|
2
|
%
|
||
Consulting
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Mercer
|
1,079
|
|
|
1,046
|
|
|
3
|
%
|
|
(2
|
)%
|
|
—
|
|
|
4
|
%
|
||
Oliver Wyman Group
|
460
|
|
|
441
|
|
|
5
|
%
|
|
(1
|
)%
|
|
1
|
%
|
|
5
|
%
|
||
Total Consulting
|
1,539
|
|
|
1,487
|
|
|
4
|
%
|
|
(2
|
)%
|
|
1
|
%
|
|
5
|
%
|
||
Corporate / Eliminations
|
(13
|
)
|
|
(12
|
)
|
|
|
|
|
|
|
|
|
||||||
Total Revenue
|
$
|
3,376
|
|
|
$
|
3,225
|
|
|
5
|
%
|
|
(2
|
)%
|
|
3
|
%
|
|
3
|
%
|
|
Three Months Ended
June 30, |
|
%
Change
GAAP
Revenue
|
|
Components of Revenue Change*
|
||||||||||||||
Currency
Impact
|
|
Acquisitions/
Dispositions
Impact
|
|
Underlying
Revenue
|
|||||||||||||||
(In millions of dollars)
|
2016
|
|
|
2015
|
|
|
|||||||||||||
Marsh:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
EMEA
|
$
|
479
|
|
|
$
|
439
|
|
|
9
|
%
|
|
(3
|
)%
|
|
9
|
%
|
|
3
|
%
|
Asia Pacific
|
183
|
|
|
176
|
|
|
4
|
%
|
|
(2
|
)%
|
|
3
|
%
|
|
2
|
%
|
||
Latin America
|
93
|
|
|
95
|
|
|
(1
|
)%
|
|
(12
|
)%
|
|
—
|
|
|
11
|
%
|
||
Total International
|
755
|
|
|
710
|
|
|
6
|
%
|
|
(4
|
)%
|
|
6
|
%
|
|
4
|
%
|
||
U.S. / Canada
|
804
|
|
|
760
|
|
|
6
|
%
|
|
—
|
|
|
6
|
%
|
|
—
|
|
||
Total Marsh
|
$
|
1,559
|
|
|
$
|
1,470
|
|
|
6
|
%
|
|
(2
|
)%
|
|
6
|
%
|
|
2
|
%
|
Mercer:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Health
|
$
|
410
|
|
|
$
|
391
|
|
|
5
|
%
|
|
(1
|
)%
|
|
—
|
%
|
|
5
|
%
|
Retirement
|
314
|
|
|
325
|
|
|
(4
|
)%
|
|
(2
|
)%
|
|
(4
|
)%
|
|
2
|
%
|
||
Investments
|
210
|
|
|
207
|
|
|
2
|
%
|
|
(3
|
)%
|
|
—
|
|
|
6
|
%
|
||
Talent
|
145
|
|
|
123
|
|
|
18
|
%
|
|
(1
|
)%
|
|
13
|
%
|
|
6
|
%
|
||
Total Mercer
|
$
|
1,079
|
|
|
$
|
1,046
|
|
|
3
|
%
|
|
(2
|
)%
|
|
—
|
|
|
4
|
%
|
Underlying revenue measures the change in revenue using consistent currency exchange rates, excluding the impact of certain items that affect comparability such as: acquisitions, dispositions and transfers among businesses and the deconsolidation of Marsh India.
|
|
*
|
Components of revenue change may not add due to rounding.
|
|
Six Months Ended
June 30, |
|
%
Change
GAAP
Revenue
|
|
Components of Revenue Change*
|
||||||||||||||
Currency
Impact
|
|
Acquisitions/
Dispositions
Impact
|
|
Underlying
Revenue
|
|||||||||||||||
(In millions of dollars)
|
2016
|
|
|
2015
|
|
|
|||||||||||||
Risk and Insurance Services
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Marsh
|
$
|
3,047
|
|
|
$
|
2,900
|
|
|
5
|
%
|
|
(3
|
)%
|
|
6
|
%
|
|
2
|
%
|
Guy Carpenter
|
659
|
|
|
643
|
|
|
2
|
%
|
|
(1
|
)%
|
|
—
|
|
|
3
|
%
|
||
Subtotal
|
3,706
|
|
|
3,543
|
|
|
5
|
%
|
|
(3
|
)%
|
|
5
|
%
|
|
2
|
%
|
||
Fiduciary Interest Income
|
12
|
|
|
10
|
|
|
|
|
|
|
|
|
|
||||||
Total Risk and Insurance Services
|
3,718
|
|
|
3,553
|
|
|
5
|
%
|
|
(3
|
)%
|
|
5
|
%
|
|
2
|
%
|
||
Consulting
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Mercer
|
2,118
|
|
|
2,083
|
|
|
2
|
%
|
|
(3
|
)%
|
|
1
|
%
|
|
4
|
%
|
||
Oliver Wyman Group
|
899
|
|
|
825
|
|
|
9
|
%
|
|
(1
|
)%
|
|
1
|
%
|
|
9
|
%
|
||
Total Consulting
|
3,017
|
|
|
2,908
|
|
|
4
|
%
|
|
(2
|
)%
|
|
1
|
%
|
|
5
|
%
|
||
Corporate / Eliminations
|
(23
|
)
|
|
(21
|
)
|
|
|
|
|
|
|
|
|
||||||
Total Revenue
|
$
|
6,712
|
|
|
$
|
6,440
|
|
|
4
|
%
|
|
(2
|
)%
|
|
3
|
%
|
|
4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
June 30, |
|
%
Change
GAAP
Revenue
|
|
Components of Revenue Change*
|
||||||||||||||
Currency
Impact
|
|
Acquisitions/
Dispositions
Impact
|
|
Underlying
Revenue
|
|||||||||||||||
(In millions of dollars)
|
2016
|
|
|
2015
|
|
|
|||||||||||||
Marsh:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
EMEA
|
$
|
1,049
|
|
|
$
|
1,002
|
|
|
5
|
%
|
|
(4
|
)%
|
|
7
|
%
|
|
2
|
%
|
Asia Pacific
|
329
|
|
|
324
|
|
|
2
|
%
|
|
(3
|
)%
|
|
2
|
%
|
|
2
|
%
|
||
Latin America
|
164
|
|
|
176
|
|
|
(7
|
)%
|
|
(15
|
)%
|
|
—
|
|
|
9
|
%
|
||
Total International
|
1,542
|
|
|
1,502
|
|
|
3
|
%
|
|
(5
|
)%
|
|
5
|
%
|
|
3
|
%
|
||
U.S. / Canada
|
1,505
|
|
|
1,398
|
|
|
8
|
%
|
|
(1
|
)%
|
|
7
|
%
|
|
1
|
%
|
||
Total Marsh
|
$
|
3,047
|
|
|
$
|
2,900
|
|
|
5
|
%
|
|
(3
|
)%
|
|
6
|
%
|
|
2
|
%
|
Mercer:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Health
|
$
|
810
|
|
|
$
|
775
|
|
|
5
|
%
|
|
(1
|
)%
|
|
—
|
|
|
6
|
%
|
Retirement
|
626
|
|
|
656
|
|
|
(5
|
)%
|
|
(3
|
)%
|
|
(3
|
)%
|
|
1
|
%
|
||
Investments
|
406
|
|
|
412
|
|
|
(1
|
)%
|
|
(5
|
)%
|
|
—
|
|
|
3
|
%
|
||
Talent
|
276
|
|
|
240
|
|
|
15
|
%
|
|
(2
|
)%
|
|
13
|
%
|
|
4
|
%
|
||
Total Mercer
|
$
|
2,118
|
|
|
$
|
2,083
|
|
|
2
|
%
|
|
(3
|
)%
|
|
1
|
%
|
|
4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Underlying revenue measures the change in revenue using consistent currency exchange rates, excluding the impact of certain items that affect comparability, such as: acquisitions, dispositions and transfers among businesses and the deconsolidation of Marsh India.
|
|
*
|
Components of revenue change may not add due to rounding.
|
|
|
For the Three and Six Months Ended June 30,
|
Three Months
|
|
Six Months
|
||||||||||
(In millions of dollars)
|
2016
|
|
2015
|
|
|
2016
|
|
2015
|
|
||||
Revenue
|
$
|
1,850
|
|
$
|
1,750
|
|
|
$
|
3,718
|
|
$
|
3,553
|
|
Compensation and Benefits
|
934
|
|
909
|
|
|
1,855
|
|
1,771
|
|
||||
Other Expenses
|
426
|
|
414
|
|
|
838
|
|
822
|
|
||||
Expense
|
1,360
|
|
1,323
|
|
|
2,693
|
|
2,593
|
|
||||
Operating Income
|
$
|
490
|
|
$
|
427
|
|
|
$
|
1,025
|
|
$
|
960
|
|
Operating Income Margin
|
26.6
|
%
|
24.4
|
%
|
|
27.6
|
%
|
27.0
|
%
|
For the Three and Six Months Ended June 30,
|
Three Months
|
|
Six Months
|
||||||||||
(In millions of dollars)
|
2016
|
|
2015
|
|
|
2016
|
|
2015
|
|
||||
Revenue
|
$
|
1,539
|
|
$
|
1,487
|
|
|
$
|
3,017
|
|
$
|
2,908
|
|
Compensation and Benefits
|
852
|
|
831
|
|
|
1,699
|
|
1,614
|
|
||||
Other Expenses
|
402
|
|
408
|
|
|
788
|
|
798
|
|
||||
Expense
|
1,254
|
|
1,239
|
|
|
2,487
|
|
2,412
|
|
||||
Operating Income
|
$
|
285
|
|
$
|
248
|
|
|
$
|
530
|
|
$
|
496
|
|
Operating Income Margin
|
18.5
|
%
|
16.7
|
%
|
|
17.6
|
%
|
17.1
|
%
|
|
|
|
|
|
|
(
In millions of dollars
)
|
Payment due by Period
|
||||||||||||||||||
Contractual Obligations
|
Total
|
|
|
Within
1 Year
|
|
|
1-3 Years
|
|
|
4-5 Years
|
|
|
After
5 Years
|
|
|||||
Short-term debt
|
$
|
261
|
|
|
$
|
261
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Long-term debt
|
4,527
|
|
|
—
|
|
|
276
|
|
|
828
|
|
|
3,423
|
|
|||||
Interest on long-term debt
|
1,494
|
|
|
177
|
|
|
337
|
|
|
303
|
|
|
677
|
|
|||||
Net operating leases
|
1,987
|
|
|
311
|
|
|
530
|
|
|
400
|
|
|
746
|
|
|||||
Service agreements
|
199
|
|
|
118
|
|
|
72
|
|
|
8
|
|
|
1
|
|
|||||
Other long-term obligations
|
449
|
|
|
135
|
|
|
276
|
|
|
33
|
|
|
5
|
|
|||||
Total
|
$
|
8,917
|
|
|
$
|
1,002
|
|
|
$
|
1,491
|
|
|
$
|
1,572
|
|
|
$
|
4,852
|
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk.
|
(In millions of dollars)
|
June 30, 2016
|
||
Cash and cash equivalents invested in money market funds, certificates of deposit and time deposits
|
$
|
974
|
|
Fiduciary cash and investments
|
$
|
4,538
|
|
Item 4.
|
Controls & Procedures.
|
Period
|
(a)
Total
Number of
Shares (or
Units)
Purchased
|
|
|
(b)
Average
Price
Paid per
Share
(or Unit)
|
|
|
(c)
Total Number of
Shares (or
Units)
Purchased as
Part of Publicly
Announced
Plans or
Programs
|
|
|
(d)
Maximum
Number (or
Approximate
Dollar Value) of
Shares (or
Units) that May
Yet Be
Purchased
Under the Plans
or Programs
|
|
||
April 1-30, 2016
|
813,890
|
|
|
$
|
61.4333
|
|
|
813,890
|
|
|
$
|
905,471,811
|
|
May 1-31, 2016
|
1,221,962
|
|
|
$
|
64.3288
|
|
|
1,221,962
|
|
|
$
|
826,864,510
|
|
June 1-30, 2016
|
1,459,274
|
|
|
$
|
66.0551
|
|
|
1,459,274
|
|
|
$
|
730,471,960
|
|
Total
|
3,495,126
|
|
|
$
|
64.3753
|
|
|
3,495,126
|
|
|
$
|
730,471,960
|
|
Date:
|
August 1, 2016
|
/s/ Mark C. McGivney
|
|
|
|
Mark C. McGivney
|
|
|
|
Chief Financial Officer
|
|
|
|
|
|
Date:
|
August 1, 2016
|
/s/ Robert J. Rapport
|
|
|
|
Robert J. Rapport
|
|
|
|
Senior Vice President & Controller
|
|
|
|
(Chief Accounting Officer)
|
|
Exhibit No.
|
|
Exhibit Name
|
|
|
|
10.1
|
|
Letter Agreement, effective as of February 22, 2016, between Marsh & McLennan Companies, Inc. and Daniel S. Glaser
|
|
|
|
10.2
|
|
Form of Restricted Stock Unit Award, dated as of April 1, 2016, under the Marsh & McLennan Companies, Inc. 2011 Incentive and Stock Award Plan
|
|
|
|
10.3
|
|
Waiver and Release Agreement, dated April 5, 2016, between Marsh & McLennan Companies, Inc. and J. Michael Bischoff
|
|
|
|
10.4
|
|
Letter Agreement, effective as of May 18, 2016, between Marsh & McLennan Companies, Inc. and Julio A. Portalatin
|
|
|
|
10.5
|
|
Letter Agreement, effective as of May 18, 2016, between Marsh & McLennan Companies, Inc. and Peter Zaffino
|
|
|
|
10.6
|
|
Description of Compensation Arrangements for Independent Directors of Marsh & McLennan Companies, Inc., effective June 1, 2016
|
|
|
|
12.1
|
|
Statement Re: Computation of Ratio of Earnings to Fixed Charges
|
|
|
|
31.1
|
|
Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer
|
|
|
|
31.2
|
|
Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer
|
|
|
|
32.1
|
|
Section 1350 Certifications
|
|
|
|
101.INS
|
|
XBRL Instance Document
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase
|
|
|
H. Edward Hanway
Chairman of the Compensation Committee of the Board of Directors
Marsh & McLennan Companies, Inc.
1166 Avenue of the Americas
New York, New York 10036
www.mmc.com
|
1.
|
Exhibit A to the 2013 Letter Agreement shall be deleted and replaced in its entirety with the attached Exhibit A.
|
Board or Committee Memberships
|
International Advisory Board of BritishAmerican
Business
Board of Trustees of the American Institute for
Chartered Property Casualty Underwriters
Insurance Information Institute
Board of Trustees of Ohio Wesleyan University
|
Annual Base Salary
|
$1,400,000
|
Annual Target Bonus Opportunity
|
Bonus awards are discretionary. Target bonus of $2,800,000 commencing with the 2016 performance year (awarded in 2017). Actual bonus may range from 0% - 200% of target, based on achievement of individual performance objectives, and/or Marsh & McLennan Companies’ performance as Marsh & McLennan Companies may establish from time to time.
|
Annual Target Long Term Incentive Opportunity
|
Long-term incentive awards are discretionary. Target award of $9,500,000 (based on grant date fair value), commencing with the award made in 2017.
|
Other Benefits
|
You will have access to a car and driver for business
purposes and for work/home travel purposes.
You will have access to corporate aircraft for personal
travel, up to $100,000 in aggregate incremental cost
each calendar year as calculated by the Company
for disclosure purposes for the Summary
Compensation Table of the Company’s Proxy
Statement; provided that this amount and calculation
methodology will be reviewed from time to time and
subject to adjustment to reflect market trends. The
Company currently calculates incremental cost by
adding the incremental variable costs associated
with personal flights on the aircraft (including hourly
charges, taxes, passenger fees, international fees
and catering).
If the imputed income attributable to these benefits is taxable to you, then the taxes associated with this taxable income will not be reimbursed or paid by the Company.
|
I. BACKGROUND
|
1
|
|
II. AWARDS
|
1
|
|
A. General
|
1
|
|
1. Award Acceptance
|
1
|
|
2. Rights of Award Holders
|
1
|
|
3. Waiver and Release Agreement
|
2
|
|
B. Stock Units
|
2
|
|
1. General
|
2
|
|
2. Vesting
|
2
|
|
3. Dividend Equivalents
|
2
|
|
4. Delivery
|
3
|
|
C. Satisfaction of Tax Obligations
|
3
|
|
1. Personal Tax Advisor
|
3
|
|
2. U.S. Employees
|
4
|
|
3. Non-U.S. Employees
|
4
|
|
a. Stock Units and Dividend Equivalents
|
4
|
|
b. Withholding
|
4
|
|
III. EMPLOYMENT EVENTS
|
5
|
|
A. Death
|
5
|
|
B. Permanent Disability
|
5
|
|
C. Termination by You Outside of the European Union - Age and Service Treatment
|
5
|
|
D. Termination by You Within the European Union - Retirement Treatment
|
6
|
|
E. Termination by the Company Other Than for Cause
|
6
|
|
1. General
|
6
|
|
2. Prior Satisfaction of Age and Service Criteria for Full Vesting
|
7
|
|
3. Important Notes
|
7
|
|
a. Sale of Business Unit
|
7
|
|
b. Constructive Discharge
|
8
|
|
F. All Other Terminations
|
8
|
|
G. Date of Termination of Employment
|
8
|
|
H. Conditions for All or a Portion of the Award to Remain Outstanding
Following a Termination of Employment
|
9
|
|
1. Waiver and Release Agreement
|
9
|
|
2. Waiver and Release and Restrictive Covenants Agreement
|
9
|
|
I. Determination of Pro-Rata Calculation upon Termination of Employment
|
10
|
|
J. Section 409A of the Code for Award Recipients Subject to U.S. Federal Income
Tax
|
10
|
|
IV. CHANGE IN CONTROL PROVISIONS
|
14
|
|
V. DEFINITIONS
|
15
|
|
VI. ADDITIONAL PROVISIONS
|
18
|
|
A. Additional Provisions—General
|
18
|
|
1. Administrative Rules
|
18
|
|
2. Amendment
|
18
|
|
3. Limitations
|
18
|
|
4. Cancellation or Clawback of Awards
|
18
|
|
5. Governing Law; Choice of Forum
|
19
|
|
6. Severability; Captions
|
19
|
|
7. Electronic Delivery and Acceptance
|
19
|
|
8. Waiver
|
20
|
|
B. Additional Provisions—Outside of the United States
|
20
|
|
1. Changes to Delivery
|
20
|
|
2. Amendment and Modification
|
20
|
|
VII. QUESTIONS AND ADDITIONAL INFORMATION
|
21
|
|
1.
|
Award Acceptance.
The grant of this Award is contingent upon your acceptance in the manner specified in the Grant Documentation of these Terms and Conditions, the Country-Specific Notices (if applicable), and your execution of the Waiver and Release Agreement as described in Section II.A.3. by [DATE]. If you decline the Award, do not accept the Award, do not execute the Waiver and Release Agreement, revoke the Waiver and Release Agreement or do not accept any applicable documents described in the preceding sentence by [DATE] and in the manner specified in the Grant Documentation, then the Award will be cancelled as of the grant date of the Award.
|
2.
|
Rights of Award Holders.
Unless and until the vesting conditions of the Award have been satisfied and cash or shares of Common Stock, as applicable, have been delivered to you in accordance with the Award Documentation, you have only the rights of a general unsecured creditor of Marsh & McLennan Companies. Unless and until shares of Common Stock have been delivered to you, you have none of the
|
3.
|
Waiver and Release Agreement.
As described in Section II.A.1., you must execute and not revoke the Waiver and Release Agreement (“
Waiver and Release Agreement
”) provided previously to you in order for the Award to vest pursuant to certain employment events as described in Section III., and you must further execute or reaffirm, as determined by Marsh & McLennan Companies in its sole discretion, and be in compliance with the Waiver and Release Agreement in order for the Award to become distributable to you whether or not you are employed by the Company (as defined in Section V.D.) at that time. Failure to timely execute the Waiver and Release Agreement by [DATE] or failure to timely execute or reaffirm and comply with the Waiver and Release Agreement as described in Section III.H.1. or 2., as applicable, will result in cancellation or forfeiture of any rights, title and interest in and to the Award, without any liability to the Company.
|
1.
|
General.
A restricted stock unit (“
Stock Unit
”) represents an unfunded and unsecured promise to deliver (or cause to be delivered) to you, subject to the terms of the Award Documentation, one share of Common Stock after vesting.
|
2.
|
Vesting.
Subject to your continued employment, 33-1/3% of the Stock Units will vest on [DATES]. Each date on which a Stock Unit is scheduled to vest pursuant to this Section II.B.2. is a “
Scheduled Vesting Date
.” In the event of your termination of employment, the occurrence of your Permanent Disability (as defined in Section V.G.) or the occurrence of a “
Change in Control
” (as defined in the Plan) prior to a Scheduled Vesting Date, your right to any Stock Units that are unvested immediately prior to your termination of employment or occurrence of your Permanent Disability, as applicable, will be determined in accordance with Section III. or Section IV., as applicable. For the avoidance of doubt, the date of your termination of employment for purposes of determining vesting under this Section II.B.2. will be determined in accordance with Section III.G.
|
3.
|
Dividend Equivalents.
For each outstanding Stock Unit covered by the Award, an amount equal to the dividend payment (if any) made in respect of one share of Common Stock (a “
Dividend Equivalent
”) will accrue in U.S. dollars on each dividend record date that occurs on or after the grant date of the Award while the Award is outstanding, with
|
4.
|
Delivery.
|
a.
|
Shares of Common Stock deliverable in respect of the Stock Units covered by the Award shall be delivered to you as soon as practicable following the Scheduled Vesting Date, and in no event later than 60 days following the Scheduled Vesting Date, except as otherwise provided in Sections III., IV., and VI.B.
|
b.
|
The value of vested Dividend Equivalents will be delivered to you in cash as soon as practicable after delivery of the shares of Common Stock described in II.B.4.a above, and in no event later than 60 days following the Scheduled Vesting Date, except as otherwise provided in Sections III., IV., and VI.B.
|
c.
|
The delivery of shares of Common Stock and/or cash or other property that may be deliverable under these Terms and Conditions, is conditioned on the satisfaction or withholding of any applicable tax obligations, as described in Section II.C.
|
d.
|
Any shares of Common Stock and/or cash or other property that may be deliverable following your death shall be delivered to the person or persons to whom your rights pass by will or the law of descent and distribution, and such delivery shall completely discharge Marsh & McLennan Companies and any of its subsidiaries’ or affiliates’ obligations under the Award.
|
e.
|
Notwithstanding the foregoing, additional delivery rules for certain Award recipients subject to U.S. federal income tax (whether or not the recipient is a U.S. citizen or employed in the U.S.) are reflected in Section III.J.
|
1.
|
Personal Tax Advisor.
Neither the Company nor any Company employee is authorized to provide personal tax advice to you. It is recommended that you consult with your personal tax advisor for more
|
2.
|
U.S. Employees.
Applicable employment taxes are required by law to be withheld when a Stock Unit or Dividend Equivalent vests. Applicable income taxes are required by law to be withheld when shares of Common Stock in respect of Stock Units or cash in respect of Dividend Equivalents are delivered to you. A sufficient number of whole shares of Common Stock, cash or other property, as applicable, will be retained by Marsh & McLennan Companies to satisfy the tax-withholding obligation.
|
3.
|
Non-U.S. Employees.
|
a.
|
Stock Units and Dividend Equivalents.
In most countries, the value of a Stock Unit or Dividend Equivalent is generally not taxable on the grant date. If the value of the Stock Unit or Dividend Equivalent is not taxable on the grant date, it will, in most countries, be taxed at a later time, for example, upon delivery of a share of Common Stock in respect of the Stock Unit that vests, and/or the subsequent sale of the share of Common Stock received in connection with the vesting of the Stock Unit or upon delivery of cash in respect of a Dividend Equivalent.
|
b.
|
Withholding.
Marsh & McLennan Companies and/or your employer shall have the power and the right to deduct and withhold from the Award and other compensation or to require you to remit to Marsh & McLennan Companies and/or to your employer, an amount sufficient to satisfy any taxes that Marsh & McLennan Companies expects to be payable under the laws of any country, state, province, city or other jurisdiction, including but not limited to income taxes, payroll taxes, fringe benefits, payment on account, capital gain taxes, transfer taxes, social security contributions and National Insurance Contributions with respect to the Award, and any and all associated tax events derived therefrom. If applicable, Marsh & McLennan Companies and/or your employer may retain and sell a sufficient number of whole shares of Common Stock distributable in respect of the Award for this purpose.
|
A.
|
Death.
In the event your employment is terminated because of your death, all of the unvested Stock Units that are outstanding as of such termination of employment will fully vest and will be distributed within 60 days following such termination of employment.
|
B.
|
Permanent Disability.
Upon the occurrence of your Permanent Disability, all of the unvested Stock Units that are outstanding as of the occurrence of your Permanent Disability will remain outstanding and will be distributed as soon as practicable following the next Scheduled Vesting Date as described in Section II.B.4.; provided that you have satisfied the conditions described in Section III.H.1.
|
C.
|
Termination by You Outside of the European Union - Age and Service Treatment.
If you have satisfied the Age and Service Criteria for Pro-Rata Vesting (as defined in Section V.B.) or the Age and Service Criteria for Full Vesting (as defined in Section V.A.) on or before the date you terminate your employment with the Company for any reason other than death or the occurrence of your Permanent Disability and you are determined by Marsh & McLennan Companies, in its sole discretion, to be employed outside of the European Union, then:
|
1.
|
If you have satisfied the Age and Service Criteria for Pro-Rata Vesting but not the Age and Service Criteria for Full Vesting, upon such termination of employment, a pro-rata portion of the unvested Stock Units that are outstanding as of such termination of employment will remain outstanding (as described in Section III.I) and will be distributed as soon as practicable following the next Scheduled Vesting Date as described in Section II.B.4.; provided that you have satisfied the conditions described in Section III.H.1. The portion of the unvested Stock Units that does not remain outstanding pursuant to this paragraph will be forfeited and cancelled.
|
2.
|
If you have satisfied the Age and Service Criteria for Full Vesting, upon such termination of employment, all of the unvested Stock Units that are outstanding as of such termination of employment will remain outstanding and be distributed as soon as practicable following the
|
D.
|
Termination by You Within the European Union - Retirement Treatment.
If you are determined by the Retirement Treatment Committee (as defined in Section V.H.) to be eligible for retirement treatment on or following the time you terminate your employment with the Company for any reason other than death or the occurrence of your Permanent Disability and you are determined by the Company, in its sole discretion, to be employed within the European Union, then upon your termination of employment a pro-rata portion of the unvested Stock Units that are outstanding as of such termination of employment will remain outstanding (as described in Section III.I) until the later to occur of the next Scheduled Vesting Date or the determination by the Retirement Treatment Committee that you are eligible for retirement treatment, and will be distributed as soon as practicable, and in no event later than 60 days thereafter; provided that you have satisfied the conditions described in Section III.H.1. Prior to distribution, Marsh & McLennan Companies in its sole discretion may ask you to reaffirm the existence of the facts and factors upon which the determination to provide retirement treatment was made. The portion of the unvested Stock Units that does not remain outstanding pursuant to this paragraph will be forfeited and cancelled. For the avoidance of doubt, Section III.E.1. will govern the treatment of the Award in the event your employment is terminated by the Company other than for Cause. For the further avoidance of doubt, if your termination of employment occurs on a Scheduled Vesting Date, distribution will occur within 60 days following such Scheduled Vesting Date (or, if later, within 60 days following the determination by the Retirement Treatment Committee that you are eligible for retirement treatment).
|
1.
|
General.
Except as otherwise provided in Sections III.E.2. and IV., in the event the Company, in its sole discretion, determines that your employment is terminated by the Company other than for Cause, a pro-rata portion of the unvested Stock Units that are outstanding as of such
|
2.
|
Prior Satisfaction of Age and Service Criteria for Full Vesting.
In the event the Company, in its sole discretion, determines that your employment is terminated by the Company other than for Cause, and on or before your termination of employment you satisfy the Age and Service Criteria for Full Vesting, all of the unvested Stock Units that are outstanding as of such termination of employment will remain outstanding and will be distributed as soon as practicable following the next Scheduled Vesting Date as described in Section II.B.4.; provided that you have satisfied the conditions described in Section III.H.2. For the avoidance of doubt, this section III.E.2. shall not apply (and rather Section III.E.1. shall apply) if you are determined by the Company, in its sole discretion, to be employed within the European Union.
|
3.
|
Important Notes.
|
a.
|
Sale of Business Unit.
For purposes of this Award, in the event of a sale or similar transaction involving the business unit for which you work (“
Employing Company
”) as a result of which the Employing Company ceases to be a subsidiary or affiliate of Marsh & McLennan Companies, your employment will be deemed terminated by the Company other than for Cause, even if your employment with the Employing Company continues after the sale or similar transaction.
|
b.
|
Constructive Discharge.
The Award will not vest, whether on a pro-rata or full basis, upon a constructive discharge, including if any court or regulatory agency retroactively concludes or interprets events to have constituted a constructive discharge.
|
F.
|
All Other Terminations.
For all other terminations of employment not described in Sections III.A. through E. or Section IV. (including, but not limited to, a termination by the Company for Cause, your resignation without having satisfied the Age and Service Criteria for Pro-Rata Vesting or the Age and Service Criteria for Full Vesting as described in Section III.C., or your resignation without having been determined by the Retirement Treatment Committee to be eligible for retirement treatment on or following your termination of employment as described in Section III.D.), any rights, title and interest in and to any remaining unvested portion of the Award shall be cancelled as of the date your employment is treated as having terminated as described in Section III.G.
|
1.
|
If Section III.G.2. does not apply to you, then for purposes of determining vesting under Section II.B.2. and the number of unvested Stock Units that vest on a pro-rata basis as described in Section III.I., your employment will be treated as having terminated on your last day of employment with the Company.
|
2.
|
If you are a Guy Carpenter employee in the United States who is obligated to provide the Company at least 60 days advance written notice of your intention to terminate your employment for any reason, then, if your employment terminates pursuant to Section III.F., your employment will be treated as having terminated for purposes of determining vesting under Section II.B.2. on the date that is 60 days prior to your last day of employment with the Company. Notwithstanding the foregoing, if your employment is terminated after providing notice pursuant to the preceding sentence but prior to the intended termination date provided in such notice (i) by the Company other than for Cause or (ii) pursuant to a written agreement, the terms of which provide that your termination of employment has been by mutual agreement between you and the Company, then the Company may, in its sole discretion, determine that for purposes of determining vesting under Section II.B.2. your employment will be treated as having terminated on a date later than the date that is 60 days prior to your last day of employment with the Company, but in no event later than your last day of employment with the Company.
|
H.
|
Conditions for All or a Portion of the Award to Remain Outstanding Following a Termination of Employment
|
1.
|
Waiver and Release Agreement.
In the event of (i) the occurrence of your Permanent Disability as described in Section III.B., (ii) your termination of employment after satisfying the Age and Service Criteria for Pro-Rata Vesting or the Age and Service Criteria for Full Vesting as described in Section III.C. or (iii) a determination by the Retirement Treatment Committee that you are eligible for retirement treatment as described in Section III.D., you will be required to execute or reaffirm, as determined by Marsh & McLennan Companies in its sole discretion, and return to Marsh & McLennan Companies (or an agent appointed by Marsh & McLennan Companies) the Waiver and Release Agreement. Failure to (a) execute or reaffirm such an agreement by the date specified by the Company, which shall be in no event later than 60 days following the occurrence of your Permanent Disability as described in Section III.B. or your termination of employment as described in Section III.C. and no later than 60 days following vesting if your termination of employment is pursuant to Section III.D., or (b) comply with the Waiver and Release Agreement or to continue to be in compliance with the Waiver and Release Agreement as of the delivery date (as described in Section II.B.4.) or, at the Company’s discretion, to reaffirm compliance prior to the delivery date, will result in the cancellation or forfeiture of any rights, title and interest in and to the Award without any liability to the Company.
|
2.
|
Waiver and Release and Restrictive Covenants Agreement.
In the event of your termination of employment by the Company other than for Cause as described in Section III.E., you will be required to (i) execute or reaffirm, as determined by Marsh & McLennan Companies in its sole discretion, and return to Marsh & McLennan Companies (or an agent appointed by Marsh & McLennan Companies) a Restrictive Covenants Agreement and (ii) execute and not revoke a waiver and release agreement, if provided to you by the Company at the time of your termination of employment. Failure to meet these requirements by the date specified by the Company, which shall be in no event later than 60 days following your termination of employment, or failure to comply with the waiver and release agreement or the Restrictive Covenants Agreement, as applicable, or continue to be in compliance with the applicable agreement as of the delivery date (as described in Section II.B.4.) and, at the Company’s discretion, to reaffirm compliance prior to the delivery date, will result in the cancellation or forfeiture of any rights, title and interest in and to the Award without any liability to the Company.
|
I.
|
Determination of Pro-Rata Calculation upon Termination of Employment.
|
J.
|
Section 409A of the Code for Award Recipients Subject to U.S. Federal Income Tax (whether or not the recipient is a U.S. citizen or employed in the U.S.).
|
1.
|
For Award recipients subject to U.S. federal income tax, notwithstanding any other provision herein, the Award may be subject to additional restrictions to ensure compliance with (or continued exemption from) the requirements of Section 409A of the Code (as defined in Section V.I.). The Compensation Committee of the Board of Directors of Marsh & McLennan Companies (the “
Committee
”) intends to administer the Award in accordance with Section 409A of the Code and reserves the right to make changes in the terms or operations of the Award (including changes that may have retroactive effect) deemed necessary or desirable to comply with Section 409A of the Code. This means, for example, that the timing of distributions may be different from those described in the Award Documentation that do not reflect
|
2.
|
Notwithstanding any other provision herein, if any portion of the Award is determined to be nonqualified deferred compensation subject to Section 409A of the Code, any references to “termination of employment,” or “when you are no longer employed” in these Terms and Conditions shall have the following meaning:
|
3.
|
Notwithstanding any other provision herein, if at the time of your termination of employment you are a “specified employee” (as defined in Section 409A of the Code), no portion of the Award that is determined to be nonqualified deferred compensation subject to Section 409A of the Code can be distributed prior to the first day of the seventh month after your termination of employment and any such distributions to which you would otherwise be entitled during the first six months following your termination of employment will be accumulated and paid without interest on the first day of the seventh month after your termination of employment. The provisions of this subparagraph will only apply if and to the extent required to avoid any “additional tax” under Section 409A of the Code.
|
4.
|
Notwithstanding any other provision herein other than Section III.J.6., (and any dividend equivalents payable with respect to the Stock Units)
|
a.
|
If you have satisfied the Age and Service Criteria for Pro-Rata Vesting at any time prior to [DATE] and you do not satisfy the Age and Service Criteria for Full Vesting at any time prior to [DATE], then for each Scheduled Vesting Date following the date that you satisfy the Age and Service Criteria for Pro-Rata Vesting, shares of Common Stock and/or cash pursuant to Section II.B.4. will be delivered by March 15 of the year in which the Scheduled Vesting Date occurs.
|
b.
|
If you first satisfy the Age and Service Criteria for Full Vesting in calendar year [YEAR], then shares of Common Stock and/or cash pursuant to Section II.B.4. with respect to the [DATE] Scheduled Vesting Date will be delivered by [DATE].
|
c.
|
If your employment is terminated on or after March 1 but on or before December 31 in any year pursuant to Section III.B. (Permanent Disability), C.1. (Age and Service Pro-rata Vesting), or E. (Termination Other Than for Cause), then shares of Common Stock and/or cash pursuant to Section II.B.4. will be delivered by March 15 of the year following the year of such termination.
|
5.
|
Notwithstanding any provision herein, for distributions of Stock Units or cash attributable to such Stock Units that are subject to one or more Employment-Related Actions (as defined in Section V.E.) where you have not satisfied, and would not satisfy, the Age and Service Criteria for Full Vesting prior to [DATE]:
|
a.
|
With respect to Stock Units, no later than March 15
th
of the year following the year in which the substantial risk of forfeiture (as determined under Section 409A of the Code) (the “
Substantial Risk of Forfeiture
”) lapses with respect to such Stock Units, shares of Common Stock underlying such Stock Units shall be delivered to you (to the extent not previously delivered), subject to a stop transfer order and subject to withholding of any applicable tax obligations, as described in Section II.C. at the time of such
|
b.
|
With respect to a cash payment attributable to Stock Units, to the extent that such payment will not be made by March 15
th
of the year following the year in which the Substantial Risk of Forfeiture lapses with respect to such payment, such payment shall be placed in escrow or contributed to a secular trust (in the sole discretion of the Marsh & McLennan Companies) for your benefit on or before such March 15
th
and subject to withholding of any applicable tax obligations, as described in Section II.C. at the time of such placement or contribution. Upon your timely satisfaction of all applicable Employment-Related Actions, Marsh & McLennan Companies shall cause such amounts to be released from escrow or paid to you out of such trust.
|
6.
|
Notwithstanding any provision herein, with respect to distributions of Stock Units or cash attributable to such Stock Units (i) where you have satisfied or would satisfy the Age and Service Criteria for Full Vesting prior to [DATE] and (ii) where such distributions are subject to one or more Employment-Related Actions:
|
a.
|
With respect to Stock Units, no later than December 31
st
of the year in which Scheduled Vesting Date occurs, shares of Common Stock underlying such Stock Units shall be delivered to you (to the extent not previously delivered), subject to a stop transfer order and subject to withholding of any applicable tax obligations, as described in Section II.C. at the time of such delivery. Upon your timely satisfaction of all applicable Employment-Related Actions, Marsh & McLennan Companies will remove or cause to be removed such stop transfer order; and
|
b.
|
With respect to a cash payment attributable to Stock Units, to the extent any such payment will not be made by December 31
st
of the year in which the Scheduled Vesting Date occurs, any payment that relates to such Scheduled Vesting Date shall be placed in escrow or contributed to a secular trust (in the sole discretion of
|
7.
|
Nothing in this Section III.J. is intended to nor does it guarantee that the Award will not be subject to “additional tax” or other adverse tax consequences under Section 409A of the Code or any similar state tax law.
|
A.
|
Upon the occurrence of a Change in Control, the Award will continue to vest in accordance with the vesting schedule specified in Section II.B.2., subject to earlier vesting or forfeiture pursuant to Section III.; provided that upon your termination of employment by the Company other than for Cause, or by you for Good Reason (as defined in V.F.), during the 24-month period following such Change in Control, all unvested Stock Units that are outstanding as of your termination of employment will remain outstanding and will be distributed as soon as practicable following the next Scheduled Vesting Date as described in Section II.B.4.; provided that you have satisfied the conditions described in Section IV.B. Notwithstanding the foregoing, if the Stock Units are not assumed, converted or replaced in connection with a Change in Control on an equivalent basis, the Stock Units will fully vest immediately prior to the Change in Control and will be distributed as soon as practicable following vesting and in no event later than 60 days following vesting.
|
B.
|
In the event of your termination of employment by the Company other than for Cause or by you for Good Reason during the 24-month period following such Change in Control, you will be required to execute and not revoke a waiver and release agreement, if provided by the Company at the time of your termination of employment. Failure to meet these requirements by the date specified by the Company, which shall be in no event later than 60
|
C.
|
For the avoidance of doubt, in the event of your termination of employment by the Company other than for Cause or by you for Good Reason during the 24-month period following such Change in Control and, on or before the date of your termination of employment you satisfy the Age and Service Criteria for Pro-Rata Vesting or the Age and Service Criteria for Full Vesting as described in Section III.C., or you are determined by the Retirement Treatment Committee to be eligible for retirement treatment on or following your termination of employment as described in Section III.D., any unvested Stock Units covered by the Award will be treated as described in this Section IV.; provided that you have satisfied the conditions described in Section IV.B.
|
A.
|
“Age and Service Criteria for Full Vesting”
shall mean you are at least age 65 and have a minimum of one year of service with the Company. For the avoidance of doubt, Age and Service Criteria for Full Vesting is not applicable to you if you are determined by the Company, in its sole discretion, to be employed within the European Union.
|
B.
|
“Age and Service Criteria for Pro-Rata Vesting”
shall mean you are at least age 55 but are not yet age 65 and have a minimum of five years of service with the Company. For the avoidance of doubt, Age and Service Criteria for Pro-Rata Vesting is not applicable to you if you are determined by the Company, in its sole discretion, to be employed within the European Union.
|
C.
|
“Cause”
shall mean:
|
1.
|
willful failure to substantially perform the duties consistent with your position which is not remedied within 30 days after receipt of written notice from the Company specifying such failure;
|
2.
|
willful violation of any written Company policies, including but not limited to, The Marsh & McLennan Companies Code of Conduct,
The Greater Good
;
|
3.
|
commission at any time of any act or omission that results in a conviction, plea of no contest, plea of
nolo contendere
, or imposition of unadjudicated probation for any felony or crime involving moral turpitude;
|
4.
|
unlawful use (including being under the influence) or possession of illegal drugs;
|
5.
|
any gross negligence or willful misconduct resulting in a material loss to the Company, or material damage to the reputation of the Company; or
|
6.
|
any violation of any statutory or common law duty of loyalty to the Company, including the commission at any time of any act of fraud, embezzlement, or material breach of fiduciary duty against the Company.
|
D.
|
“Company”
shall mean Marsh & McLennan Companies or any of its subsidiaries or affiliates.
|
E.
|
“Employment-Related Action”
shall mean the execution and effectiveness of a release of claims and/or a restrictive covenant.
|
F.
|
“Good Reason”
shall mean any one of the following events without your written consent:
|
1.
|
material reduction in your base salary;
|
2.
|
material reduction in your annual incentive opportunity (including a material adverse change in the method of calculating your annual incentive);
|
3.
|
material diminution of your duties, responsibilities or authority; or
|
4.
|
relocation of more than 50 miles from your principal place of employment immediately prior to the Change in Control; provided that you provide Marsh & McLennan Companies with written notice of your intent to terminate your employment for Good Reason within 60 days of your becoming aware of any circumstances set forth above (with
|
G.
|
“Permanent Disability”
will be deemed to occur when it is determined (by Marsh & McLennan Companies’ disability carrier for the primary long-term disability plan or program applicable to you because of your employment with the Company) that you are unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months.
|
H.
|
“Retirement Treatment Committee”
is comprised of employees of the Company appointed by the Committee.
|
I
.
|
“Section 409A of the Code”
shall mean Section 409A of the U.S. Internal Revenue Code of 1986, as amended, and the regulations and guidance thereunder (regarding nonqualified deferred compensation).
|
J.
|
Additional Definitions.
|
Award
|
1
|
|
Award Documentation
|
1
|
|
Change in Control
|
2
|
|
Committee
|
10
|
|
Common Stock
|
1
|
|
Country-Specific Notices
|
1
|
|
Dividend Equivalent
|
2
|
|
Employing Company
|
7
|
|
Grant Documentation
|
1
|
|
Marsh & McLennan Companies
|
1
|
|
Plan
|
1
|
|
Restrictive Covenants Agreement
|
2
|
|
Scheduled Vesting Date
|
2
|
|
Stock Unit
|
2
|
|
Substantial Risk of Forfeiture
|
12
|
|
Terms and Conditions
|
1
|
|
A.
|
Additional Provisions-General
|
1.
|
Administrative Rules.
The Award shall be subject to such additional administrative regulations as the Committee may, from time to time, adopt. All decisions of the Committee upon any questions arising under the Award Documentation and Grant Documentation shall be conclusive and binding. The Committee may delegate to any other individual or entity the authority to perform any or all of the functions of the Committee under the Award, and references to the Committee shall be deemed to include any such delegate.
|
2.
|
Amendment.
The Committee may, in its sole discretion, amend the terms of the Award, including, without limitation, to impose additional requirements on the Award and on any shares of Common Stock with respect to the Award; provided, however, that if the Committee concludes, in its sole discretion, that such amendment is likely to materially impair your rights with respect to the Award, such amendment shall not be implemented with respect to the Award without your consent, except to the extent that any such action is made to cause the Award to comply with applicable law, currency controls, stock market or exchange rules and regulations, or accounting or tax rules and regulations, or is otherwise made in accordance with Section VI.A.4.
|
3.
|
Limitations.
Payment of the Award is not secured by trust, insurance contract or other funding medium, and you do not have any interest in any fund or specific asset of Marsh & McLennan Companies by reason of the Award. Your right to payment of the Award is the same as the right of an unsecured general creditor of Marsh & McLennan Companies.
|
4.
|
Cancellation or Clawback of Awards.
|
a.
|
Marsh & McLennan Companies may, to the extent permitted or required by any applicable law, stock exchange rules, currency controls, or any applicable Company policy or arrangement in effect prior to the vesting of any unvested portion of the Award, or as specified in the Award Documentation or Grant Documentation, cancel, reduce or require reimbursement of the Award.
|
b.
|
If (i) Section III.G.2. is applicable to you, (ii) you terminate your employment with the Company under Section III.F. and such
|
c.
|
If you fail to repay any amount due pursuant to this Section VI.A.4., the Company may bring an action in court to recover the amount due. You acknowledge that, by accepting the Award, you agree to pay all costs, expenses and attorney’s fees incurred by the Company in any proceeding for the collection of amounts due pursuant to this Section VI.A.4., provided that the Company prevails in whole or in part in any such proceeding. The Company may also, to the extent permitted by applicable law, reduce any amounts owed to you by the Company in an amount up to the full amount of the repayment due.
|
5.
|
Governing Law; Choice of Forum.
The Award and the Award Documentation applicable to the Award are governed by, and subject to the laws of the state of Delaware, without regard to the conflict of law provisions, as set forth in Section 10.J of the Plan. For purposes of any action, lawsuit, or other proceedings arising out of or relating to this Award, including without limitation, to enforce the Award Documentation, the Company and you each hereby irrevocably and unconditionally submits to the exclusive jurisdiction of any New York state court or federal court of the United States of America sitting in the State of New York, and any appellate court thereof. The Company and you agree that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.
|
6.
|
Severability; Captions.
In the event that any provision of this Award is determined to be invalid or unenforceable, in whole or in part, the remaining provisions of this Award will be unaffected thereby and will remain in full force and effect to the fullest extent permitted by law. The captions of this Award are not part of the provisions of this Award and will have no force or effect.
|
7.
|
Electronic Delivery and Acceptance.
Marsh & McLennan Companies may, in its sole discretion, decide to deliver any documents related to the Award and/or your current or future participation in the
|
8.
|
Waiver.
You acknowledge that neither a waiver by Marsh & McLennan Companies of your breach of any provision of the Award Documentation nor a prior waiver by Marsh & McLennan Companies of a breach of any provision of the Award Documentation by any other participant of the Plan shall operate or be construed as a waiver of any other provision of the Award Documentation, or of any subsequent breach by you.
|
B.
|
Additional Provisions-Outside of the United States
|
1.
|
Changes to Delivery.
In the event that Marsh & McLennan Companies considers that due to legal, regulatory or tax issues the normal delivery of an Award (as described in these Terms and Conditions) to a participant outside the United States would not be appropriate, then Marsh & McLennan Companies may, in its sole discretion, determine how and when the value of the Award will be delivered. Without limitation, this may include making any payments due under the Award in cash instead of shares of Common Stock or in shares of Common Stock instead of cash, in an amount equivalent to the value of the Award on the date of vesting after payment of applicable taxes and fees, or, delivering or paying out the Award as soon as practicable following a termination of employment. If the value of an Award is to be delivered in cash instead of shares of Common Stock, Marsh & McLennan Companies may sell any shares of Common Stock distributable in respect of the Award on your behalf and use the proceeds (after payment of applicable taxes and fees) to satisfy the Award.
|
2.
|
Amendment and Modification.
The Committee may modify the terms of any Award under the Plan granted to you in any manner deemed by the Committee to be necessary or appropriate in order for such Award to conform to laws, regulations, and customs of the country (other than the United States) in which you are then resident or primarily employed or were resident or primarily employed at the time of grant or during the term of the Award, or so that the value and other benefits of the Award to you, as affected by non-U.S. tax laws and other restrictions applicable as a result of your residence or employment outside of the United States, shall be comparable to the value of such an Award to an individual who is resident or primarily employed in the United States.
|
|
|
Daniel S. Glaser
President and Chief Executive Officer
Marsh & McLennan Companies, Inc.
1166 Avenue of the Americas
New York, New York 10036
212 345 4874 Fax 212 345 6676
dan.glaser@mmc.com
www.mmc.com
|
1.
|
Exhibit A to the Letter Agreement shall be deleted and replaced in its entirety with the attached Exhibit A.
|
Board or Committee Memberships
|
Hofstra University Board of Trustees
|
Annual Base Salary
|
$900,000
|
Annual Target Bonus Opportunity
|
Bonus awards are discretionary. Target bonus of $1,800,000 commencing with the 2016 performance year (awarded in 2017). Actual bonus may range from 0% - 200% of target, based on achievement of individual performance objectives, Mercer’s performance and/or Marsh & McLennan Companies’ performance as Marsh & McLennan Companies may establish from time to time.
|
Annual Target Long Term Incentive Opportunity
|
Long-term incentive awards are discretionary. Target award of $2,500,000 (based on grant date fair value), commencing with the award made in 2017.
|
|
|
Daniel S. Glaser
President and Chief Executive Officer
Marsh & McLennan Companies, Inc.
1166 Avenue of the Americas
New York, New York 10036
212 345 4874 Fax 212 345 6676
dan.glaser@mmc.com
www.mmc.com
|
1.
|
Your title is Chairman of the Risk and Insurance Services segment and Chief Executive Officer of Marsh LLC.
|
2.
|
Exhibit A to the Letter Agreement shall be deleted and replaced in its entirety with the attached Exhibit A.
|
Board or Committee Memberships
|
New York Police & Fire Widows’ &
Children’s Benefit Fund
National Advisory Board of Youth INC
The Michael J. Fox Foundation
|
Annual Base Salary
|
$1,000,000
|
Annual Target Bonus Opportunity
|
Bonus awards are discretionary. Target bonus of $2,250,000 commencing with the 2016 performance year (awarded in 2017). Actual bonus may range from 0% - 200% of target, based on achievement of individual performance objectives, the Risk and Insurance Services segment’s performance and/or Marsh & McLennan Companies’ performance as Marsh & McLennan Companies may establish from time to time.
|
Annual Target Long Term Incentive Opportunity
|
Long-term incentive awards are discretionary. Target award of $3,750,000 (based on grant date fair value), commencing with the award made in 2017.
|
|
Six Months Ended June 30, 2016
|
Years Ended December 31,
|
|||||||||||||||||||||
|
(Unaudited)
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
||||||||||||
Earnings
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income before income taxes
|
$
|
1,367
|
|
|
$
|
2,307
|
|
|
$
|
2,057
|
|
|
$
|
1,973
|
|
|
$
|
1,696
|
|
|
$
|
1,404
|
|
Interest expense
|
94
|
|
|
163
|
|
|
165
|
|
|
167
|
|
|
181
|
|
|
199
|
|
||||||
Portion of rents representative of the interest factor
|
72
|
|
|
127
|
|
|
131
|
|
|
134
|
|
|
139
|
|
|
143
|
|
||||||
|
$
|
1,533
|
|
|
$
|
2,597
|
|
|
$
|
2,353
|
|
|
$
|
2,274
|
|
|
$
|
2,016
|
|
|
$
|
1,746
|
|
Fixed Charges
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest expense
|
$
|
94
|
|
|
$
|
163
|
|
|
$
|
165
|
|
|
$
|
167
|
|
|
$
|
181
|
|
|
$
|
199
|
|
Portion of rents representative of the interest factor
|
72
|
|
|
127
|
|
|
131
|
|
|
134
|
|
|
139
|
|
|
143
|
|
||||||
|
$
|
166
|
|
|
$
|
290
|
|
|
$
|
296
|
|
|
$
|
301
|
|
|
$
|
320
|
|
|
$
|
342
|
|
Ratio of Earnings to Fixed Charges
|
9.2
|
|
|
9.0
|
|
|
7.9
|
|
|
7.6
|
|
|
6.3
|
|
|
5.1
|
|
Date:
|
August 1, 2016
|
|
/s/ Daniel S. Glaser
|
|
|
|
Daniel S. Glaser
|
|
|
|
President and Chief Executive Officer
|
Date:
|
August 1, 2016
|
|
/s/ Mark C. McGivney
|
|
|
|
Mark C. McGivney
|
|
|
|
Chief Financial Officer
|
1.
|
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act; and
|
2.
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Marsh & McLennan Companies, Inc.
|
Date:
|
August 1, 2016
|
|
/s/ Daniel S. Glaser
|
|
|
|
Daniel S. Glaser
|
|
|
|
President and Chief Executive Officer
|
Date:
|
August 1, 2016
|
|
/s/ Mark C. McGivney
|
|
|
|
Mark C. McGivney
|
|
|
|
Chief Financial Officer
|