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Large Accelerated Filer
x
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Accelerated Filer
¨
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Non-Accelerated Filer
¨
(Do not check if a smaller reporting company)
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Smaller Reporting Company
¨
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Emerging Growth Company
¨
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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
September 30, |
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Nine Months Ended
September 30, |
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(In millions, except per share amounts)
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2017
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2016
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2017
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2016
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Revenue
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$
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3,341
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$
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3,135
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$
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10,339
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$
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9,847
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Expense:
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Compensation and benefits
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1,906
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1,817
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5,786
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5,543
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Other operating expenses
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838
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746
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2,383
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2,273
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Operating expenses
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2,744
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2,563
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8,169
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7,816
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Operating income
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597
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572
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2,170
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2,031
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Interest income
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2
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—
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6
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4
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Interest expense
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(60
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)
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(47
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)
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(178
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)
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(141
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)
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Investment (loss) income
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(2
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)
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—
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3
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(2
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)
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Income before income taxes
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537
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525
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2,001
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1,892
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Income tax expense
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140
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141
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519
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538
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Net income before non-controlling interests
|
397
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384
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1,482
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1,354
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Less: Net income attributable to non-controlling interests
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4
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5
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19
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22
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Net income attributable to the Company
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$
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393
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$
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379
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$
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1,463
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$
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1,332
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Net income Per Share Attributable to the Company:
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Basic
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$
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0.77
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$
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0.73
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$
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2.85
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$
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2.56
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Diluted
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$
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0.76
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$
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0.73
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$
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2.81
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$
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2.54
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Average number of shares outstanding:
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Basic
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512
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518
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514
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520
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Diluted
|
519
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523
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520
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525
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Shares outstanding at September 30,
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511
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516
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511
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516
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Three Months Ended
September 30, |
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Nine Months Ended
September 30, |
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(In millions)
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2017
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2016
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2017
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2016
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Net income before non-controlling interests
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$
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397
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$
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384
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$
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1,482
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$
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1,354
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Other comprehensive income (loss), before tax:
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|
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Foreign currency translation adjustments
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127
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(52
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)
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652
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(373
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)
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Unrealized investment (losses) gains
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(8
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)
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1
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11
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1
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(Loss) gain related to pension/post-retirement plans
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(168
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)
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82
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(140
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)
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383
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Other comprehensive (loss) income, before tax
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(49
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)
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31
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523
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11
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Income tax (credit) expense on other comprehensive income
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(30
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)
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19
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(10
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)
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80
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Other comprehensive (loss) income, net of tax
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(19
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)
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12
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533
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(69
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)
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Comprehensive income
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378
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396
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2,015
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1,285
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Less: comprehensive income attributable to non-controlling interest
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4
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5
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19
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22
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Comprehensive income attributable to the Company
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$
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374
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$
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391
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$
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1,996
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$
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1,263
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(In millions, except share amounts)
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(Unaudited)
September 30,
2017
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December 31,
2016 |
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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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1,078
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$
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1,026
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Receivables
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Commissions and fees
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3,651
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3,370
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Advanced premiums and claims
|
52
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83
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Other
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311
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286
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4,014
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3,739
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Less-allowance for doubtful accounts and cancellations
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(105
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)
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(96
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)
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Net receivables
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3,909
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3,643
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Other current assets
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228
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215
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Total current assets
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5,215
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4,884
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Goodwill
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9,100
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8,369
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Other intangible assets
|
1,320
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1,126
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Fixed assets
(net of accumulated depreciation and amortization of $1,822 at September 30, 2017 and $1,683 at December 31, 2016) |
728
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725
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Pension related assets
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1,155
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|
776
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Deferred tax assets
|
947
|
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1,097
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Other assets
|
1,225
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1,213
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$
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19,690
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$
|
18,190
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(In millions, except share amounts)
|
(Unaudited)
September 30,
2017
|
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December 31,
2016 |
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LIABILITIES AND EQUITY
|
|
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|
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Current liabilities:
|
|
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|
||||
Short-term debt
|
$
|
13
|
|
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$
|
312
|
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Accounts payable and accrued liabilities
|
2,002
|
|
|
1,969
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|
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Accrued compensation and employee benefits
|
1,377
|
|
|
1,655
|
|
||
Accrued income taxes
|
229
|
|
|
146
|
|
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Dividends payable
|
193
|
|
|
—
|
|
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Total current liabilities
|
3,814
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|
|
4,082
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|
||
Fiduciary liabilities
|
5,128
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4,241
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|
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Less – cash and investments held in a fiduciary capacity
|
(5,128
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)
|
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(4,241
|
)
|
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|
—
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—
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Long-term debt
|
5,475
|
|
|
4,495
|
|
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Pension, post-retirement and post-employment benefits
|
1,948
|
|
|
2,076
|
|
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Liabilities for errors and omissions
|
316
|
|
|
308
|
|
||
Other liabilities
|
1,006
|
|
|
957
|
|
||
Commitments and contingencies
|
—
|
|
|
—
|
|
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Equity:
|
|
|
|
||||
Preferred stock, $1 par value, authorized 6,000,000 shares, none issued
|
—
|
|
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—
|
|
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Common stock, $1 par value, authorized
|
|
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|
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1,600,000,000 shares, issued 560,641,640 shares at September 30, 2017
|
|
|
|
||||
and December 31, 2016
|
561
|
|
|
561
|
|
||
Additional paid-in capital
|
783
|
|
|
842
|
|
||
Retained earnings
|
13,113
|
|
|
12,388
|
|
||
Accumulated other comprehensive loss
|
(4,560
|
)
|
|
(5,093
|
)
|
||
Non-controlling interests
|
85
|
|
|
80
|
|
||
|
9,982
|
|
|
8,778
|
|
||
Less – treasury shares, at cost, 49,484,693 shares at September 30, 2017
|
|
|
|
||||
and 46,150,415 shares at December 31, 2016
|
(2,851
|
)
|
|
(2,506
|
)
|
||
Total equity
|
7,131
|
|
|
6,272
|
|
||
|
$
|
19,690
|
|
|
$
|
18,190
|
|
For the Nine Months Ended September 30,
|
|
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|
||||
(In millions)
|
2017
|
|
|
2016
|
|
||
Operating cash flows:
|
|
|
|
||||
Net income before non-controlling interests
|
$
|
1,482
|
|
|
$
|
1,354
|
|
Adjustments to reconcile net income to cash provided by operations:
|
|
|
|
||||
Depreciation and amortization of fixed assets and capitalized software
|
234
|
|
|
231
|
|
||
Amortization of intangible assets
|
122
|
|
|
99
|
|
||
Adjustments and payments related to contingent consideration liability
|
(30
|
)
|
|
(37
|
)
|
||
Gain on deconsolidation of subsidiary
|
—
|
|
|
(12
|
)
|
||
Provision for deferred income taxes
|
52
|
|
|
43
|
|
||
(Gain) loss on investments
|
(3
|
)
|
|
2
|
|
||
Loss on disposition of assets
|
9
|
|
|
3
|
|
||
Share-based compensation expense
|
111
|
|
|
84
|
|
||
Changes in assets and liabilities:
|
|
|
|
||||
Net receivables
|
(248
|
)
|
|
(162
|
)
|
||
Other current assets
|
(14
|
)
|
|
(20
|
)
|
||
Other assets
|
(18
|
)
|
|
(2
|
)
|
||
Accounts payable and accrued liabilities
|
11
|
|
|
(29
|
)
|
||
Accrued compensation and employee benefits
|
(278
|
)
|
|
(349
|
)
|
||
Accrued income taxes
|
77
|
|
|
65
|
|
||
Contributions to pension and other benefit plans in excess of current year expense/credit
|
(337
|
)
|
|
(214
|
)
|
||
Other liabilities
|
83
|
|
|
(3
|
)
|
||
Effect of exchange rate changes
|
(116
|
)
|
|
59
|
|
||
Net cash provided by operations
|
1,137
|
|
|
1,112
|
|
||
Financing cash flows:
|
|
|
|
||||
Purchase of treasury shares
|
(600
|
)
|
|
(625
|
)
|
||
Proceeds from debt
|
987
|
|
|
347
|
|
||
Repayments of debt
|
(313
|
)
|
|
(9
|
)
|
||
Shares withheld for taxes on vested units – treasury shares
|
(49
|
)
|
|
(38
|
)
|
||
Issuance of common stock from treasury shares
|
134
|
|
|
154
|
|
||
Payments of deferred and contingent consideration for acquisitions
|
(127
|
)
|
|
(96
|
)
|
||
Distributions of non-controlling interests
|
(14
|
)
|
|
(12
|
)
|
||
Dividends paid
|
(545
|
)
|
|
(504
|
)
|
||
Net cash used for financing activities
|
(527
|
)
|
|
(783
|
)
|
||
Investing cash flows:
|
|
|
|
||||
Capital expenditures
|
(217
|
)
|
|
(174
|
)
|
||
Net sales (purchases) of long-term investments
|
(21
|
)
|
|
(4
|
)
|
||
Proceeds from sales of fixed assets
|
4
|
|
|
5
|
|
||
Acquisitions
|
(629
|
)
|
|
(88
|
)
|
||
Other, net
|
4
|
|
|
3
|
|
||
Net cash used for investing activities
|
(859
|
)
|
|
(258
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
301
|
|
|
(57
|
)
|
||
Increase in cash and cash equivalents
|
52
|
|
|
14
|
|
||
Cash and cash equivalents at beginning of period
|
1,026
|
|
|
1,374
|
|
||
Cash and cash equivalents at end of period
|
$
|
1,078
|
|
|
$
|
1,388
|
|
For the Nine Months Ended September 30,
|
|
|
|
||||
(In millions, except per share amounts)
|
2017
|
|
|
2016
|
|
||
COMMON STOCK
|
|
|
|
||||
Balance, beginning and end of period
|
$
|
561
|
|
|
$
|
561
|
|
ADDITIONAL PAID-IN CAPITAL
|
|
|
|
||||
Balance, beginning of year
|
$
|
842
|
|
|
$
|
861
|
|
Change in accrued stock compensation costs
|
26
|
|
|
14
|
|
||
Issuance of shares under stock compensation plans and employee stock purchase plans and related tax impact in 2016
|
(82
|
)
|
|
(63
|
)
|
||
Other
|
(3
|
)
|
|
—
|
|
||
Balance, end of period
|
$
|
783
|
|
|
$
|
812
|
|
RETAINED EARNINGS
|
|
|
|
||||
Balance, beginning of year
|
$
|
12,388
|
|
|
$
|
11,302
|
|
Net income attributable to the Company
|
1,463
|
|
|
1,332
|
|
||
Dividend equivalents declared – (per share amounts: $1.43 in 2017 and $1.30 in 2016)
|
(4
|
)
|
|
(5
|
)
|
||
Dividends declared – (per share amounts: $1.43 in 2017 and $1.30 in 2016)
|
(734
|
)
|
|
(676
|
)
|
||
Balance, end of period
|
$
|
13,113
|
|
|
$
|
11,953
|
|
ACCUMULATED OTHER COMPREHENSIVE LOSS
|
|
|
|
||||
Balance, beginning of year
|
$
|
(5,093
|
)
|
|
$
|
(4,220
|
)
|
Other comprehensive income (loss), net of tax
|
533
|
|
|
(69
|
)
|
||
Balance, end of period
|
$
|
(4,560
|
)
|
|
$
|
(4,289
|
)
|
TREASURY SHARES
|
|
|
|
||||
Balance, beginning of year
|
$
|
(2,506
|
)
|
|
$
|
(1,991
|
)
|
Issuance of shares under stock compensation plans and employee stock purchase plans
|
255
|
|
|
250
|
|
||
Purchase of treasury shares
|
(600
|
)
|
|
(625
|
)
|
||
Balance, end of period
|
$
|
(2,851
|
)
|
|
$
|
(2,366
|
)
|
NON-CONTROLLING INTERESTS
|
|
|
|
||||
Balance, beginning of year
|
$
|
80
|
|
|
$
|
89
|
|
Net income attributable to non-controlling interests
|
19
|
|
|
22
|
|
||
Deconsolidation of subsidiary
|
—
|
|
|
(14
|
)
|
||
Distributions and other changes
|
(14
|
)
|
|
(14
|
)
|
||
Balance, end of period
|
$
|
85
|
|
|
$
|
83
|
|
TOTAL EQUITY
|
$
|
7,131
|
|
|
$
|
6,754
|
|
Basic and Diluted EPS Calculation
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
(In millions, except per share amounts)
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
||||
Net income before non-controlling interests
|
$
|
397
|
|
|
$
|
384
|
|
|
$
|
1,482
|
|
|
$
|
1,354
|
|
Less: Net income attributable to non-controlling interests
|
4
|
|
|
5
|
|
|
19
|
|
|
22
|
|
||||
Net income attributable to the Company
|
$
|
393
|
|
|
$
|
379
|
|
|
$
|
1,463
|
|
|
$
|
1,332
|
|
Basic weighted average common shares outstanding
|
512
|
|
|
518
|
|
|
514
|
|
|
520
|
|
||||
Dilutive effect of potentially issuable common shares
|
7
|
|
|
5
|
|
|
6
|
|
|
5
|
|
||||
Diluted weighted average common shares outstanding
|
519
|
|
|
523
|
|
|
520
|
|
|
525
|
|
||||
Average stock price used to calculate common stock equivalents
|
$
|
79.35
|
|
|
$
|
66.98
|
|
|
$
|
75.36
|
|
|
$
|
62.33
|
|
(In millions)
|
|
2017
|
|
|
2016
|
|
||
Assets acquired, excluding cash
|
|
$
|
852
|
|
|
$
|
121
|
|
Liabilities assumed
|
|
(129
|
)
|
|
(4
|
)
|
||
Contingent/deferred purchase consideration
|
|
(94
|
)
|
|
(29
|
)
|
||
Net cash outflow for current year acquisitions
|
|
$
|
629
|
|
|
$
|
88
|
|
(In millions)
|
2017
|
|
|
2016
|
|
||
Interest paid
|
$
|
174
|
|
|
$
|
148
|
|
Income taxes paid, net of refunds
|
$
|
406
|
|
|
$
|
417
|
|
(In millions)
|
Unrealized Investment Gains (Losses)
|
|
Pension/Post-Retirement Plans Gains (Losses)
|
|
Foreign Currency Translation Gains (Losses)
|
|
Total Gains (Losses)
|
||||||||
Balance as of July 1, 2017
|
$
|
30
|
|
|
$
|
(3,215
|
)
|
|
$
|
(1,356
|
)
|
|
$
|
(4,541
|
)
|
Other comprehensive (loss) income before reclassifications
|
(5
|
)
|
|
(173
|
)
|
|
126
|
|
|
(52
|
)
|
||||
Amounts reclassified from accumulated other comprehensive income
|
—
|
|
|
33
|
|
|
—
|
|
|
33
|
|
||||
Net current period other comprehensive (loss) income
|
(5
|
)
|
|
(140
|
)
|
|
126
|
|
|
(19
|
)
|
||||
Balance as of September 30, 2017
|
$
|
25
|
|
|
$
|
(3,355
|
)
|
|
$
|
(1,230
|
)
|
|
$
|
(4,560
|
)
|
(In millions)
|
Unrealized Investment Gains
|
|
Pension/Post-Retirement Plans Gains (Losses)
|
|
Foreign Currency Translation Gains (Losses)
|
|
Total Gains (Losses)
|
||||||||
Balance as of July 1, 2016
|
$
|
6
|
|
|
$
|
(2,885
|
)
|
|
$
|
(1,422
|
)
|
|
$
|
(4,301
|
)
|
Other comprehensive income (loss) before reclassifications
|
1
|
|
|
36
|
|
|
(54
|
)
|
|
(17
|
)
|
||||
Amounts reclassified from accumulated other comprehensive income
|
—
|
|
|
29
|
|
|
—
|
|
|
29
|
|
||||
Net current period other comprehensive income (loss)
|
1
|
|
|
65
|
|
|
(54
|
)
|
|
12
|
|
||||
Balance as of September 30, 2016
|
$
|
7
|
|
|
$
|
(2,820
|
)
|
|
$
|
(1,476
|
)
|
|
$
|
(4,289
|
)
|
(In millions)
|
Unrealized Investment Gains
|
|
Pension/Post-Retirement Plans Gains (Losses)
|
|
Foreign Currency Translation Gains (Losses)
|
|
Total Gains (Losses)
|
||||||||
Balance as of January 1, 2017
|
$
|
19
|
|
|
$
|
(3,232
|
)
|
|
$
|
(1,880
|
)
|
|
$
|
(5,093
|
)
|
Other comprehensive income (loss) before reclassifications
|
6
|
|
|
(219
|
)
|
|
650
|
|
|
437
|
|
||||
Amounts reclassified from accumulated other comprehensive income
|
—
|
|
|
96
|
|
|
—
|
|
|
96
|
|
||||
Net current period other comprehensive income (loss)
|
6
|
|
|
(123
|
)
|
|
650
|
|
|
533
|
|
||||
Balance as of September 30, 2017
|
$
|
25
|
|
|
$
|
(3,355
|
)
|
|
$
|
(1,230
|
)
|
|
$
|
(4,560
|
)
|
(In millions)
|
Unrealized Investment Gains
|
|
Pension/Post-Retirement Plans Gains (Losses)
|
|
Foreign Currency Translation Gains (Losses)
|
|
Total Gains (Losses)
|
||||||||
Balance as of January 1, 2016
|
$
|
6
|
|
|
$
|
(3,124
|
)
|
|
$
|
(1,102
|
)
|
|
$
|
(4,220
|
)
|
Other comprehensive income (loss) before reclassifications
|
1
|
|
|
214
|
|
|
(374
|
)
|
|
(159
|
)
|
||||
Amounts reclassified from accumulated other comprehensive income
|
—
|
|
|
90
|
|
|
—
|
|
|
90
|
|
||||
Net current period other comprehensive income (loss)
|
1
|
|
|
304
|
|
|
(374
|
)
|
|
(69
|
)
|
||||
Balance as of September 30, 2016
|
$
|
7
|
|
|
$
|
(2,820
|
)
|
|
$
|
(1,476
|
)
|
|
$
|
(4,289
|
)
|
•
|
January – Marsh & McLennan Agency ("MMA") acquired J. Smith Lanier & Co. ("JSL"), a privately held insurance brokerage firm providing insurance, risk management, and employee benefits solutions to businesses and individuals throughout the U.S.
|
•
|
February – MMA acquired iaConsulting Services, a Texas-based employee benefits consulting firm.
|
•
|
March – MMA acquired Blakestad, Inc., a Minnesota-based private client and commercial lines insurance agency, and RJF Financial Services, a Minnesota-based retirement advisory firm.
|
•
|
May – MMA acquired Insurance Partners of Texas, a Texas-based employee benefits consulting firm.
|
•
|
August – Marsh acquired International Catastrophe Insurance Managers, LLC, a Colorado-based property and casualty insurance agent, and MMA acquired Hendrick & Hendrick, Inc., a Texas-based insurance agency.
|
•
|
August – Mercer acquired Jaeson Associates, a Portugal-based talent management consulting organization.
|
For the Nine Months Ended September 30
,
2017
|
|
||
(In millions)
|
|
||
Cash
|
$
|
640
|
|
Estimated fair value of deferred/contingent consideration
|
94
|
|
|
Total Consideration
|
$
|
734
|
|
Allocation of purchase price:
|
|
||
Cash and cash equivalents
|
$
|
11
|
|
Accounts receivable, net
|
17
|
|
|
Property, plant, and equipment
|
7
|
|
|
Other intangible assets
|
293
|
|
|
Goodwill
|
533
|
|
|
Other assets
|
2
|
|
|
Total assets acquired
|
863
|
|
|
Current liabilities
|
21
|
|
|
Other liabilities
|
108
|
|
|
Total liabilities assumed
|
129
|
|
|
Net assets acquired
|
$
|
734
|
|
|
|
Amount
|
|
Weighted Average Amortization Period
|
||
Client relationships
|
|
$
|
252
|
|
|
12 years
|
Other
|
|
41
|
|
|
5 years
|
|
|
|
$
|
293
|
|
|
|
•
|
February – MMA acquired The Celedinas Agency, Inc., a Florida-based brokerage firm, providing property, casualty and marine insurance, as well as employee benefits services, 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.
|
•
|
August – MMA acquired Benefits Advisory Group LLC, an Atlanta-based employee benefits consulting firm.
|
•
|
September – MMA acquired Vero Insurance, Inc., a Florida-based agency specializing in private client insurance services.
|
•
|
November – MMA acquired Benefits Resource Group Agency, LLC, an Ohio-based benefits consulting firm and Presidio Benefits Group, Inc., a California-based employee benefits consulting firm.
|
•
|
December – Marsh acquired AD Corretora, a multi-line broker located in Brazil, and Bluefin Insurance Group, Ltd, a U.K.-based insurance brokerage.
|
•
|
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 assists clients to manage and meet their compliance and risk management obligations.
|
•
|
December – Oliver Wyman acquired LShift Limited, a software development company, and Mercer acquired Sirota Consulting LLC, a global provider of employee benefit solutions; Pillar Administration, a superannuation provider located in Australia; and Thomsons Online Benefits, a U.K.-based global benefits software business.
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
(In millions, except per share figures)
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
||||
Revenue
|
$
|
3,349
|
|
|
$
|
3,256
|
|
|
$
|
10,416
|
|
|
$
|
10,232
|
|
Net income attributable to the Company
|
$
|
392
|
|
|
$
|
372
|
|
|
$
|
1,466
|
|
|
$
|
1,320
|
|
Basic net income per share attributable to the Company
|
$
|
0.77
|
|
|
$
|
0.72
|
|
|
$
|
2.85
|
|
|
$
|
2.54
|
|
Diluted net income per share attributable to the Company
|
$
|
0.76
|
|
|
$
|
0.71
|
|
|
$
|
2.82
|
|
|
$
|
2.52
|
|
September 30
,
|
|
|
|
||||
(In millions)
|
2017
|
|
|
2016
|
|
||
Balance as of January 1, as reported
|
$
|
8,369
|
|
|
$
|
7,889
|
|
Goodwill acquired
|
533
|
|
|
74
|
|
||
Other adjustments
(a)
|
198
|
|
|
12
|
|
||
Balance at September 30,
|
$
|
9,100
|
|
|
$
|
7,975
|
|
(a)
|
The increase in 2017 primarily reflects the impact of foreign exchange.
|
|
September 30, 2017
|
|
December 31, 2016
|
||||||||||||||||||||
(In millions)
|
Gross
Cost
|
|
|
Accumulated
Amortization
|
|
|
Net
Carrying
Amount
|
|
|
Gross
Cost
|
|
|
Accumulated
Amortization
|
|
|
Net
Carrying
Amount
|
|
||||||
Client Relationships
|
$
|
1,679
|
|
|
$
|
487
|
|
|
$
|
1,192
|
|
|
$
|
1,390
|
|
|
$
|
392
|
|
|
$
|
998
|
|
Other
(a)
|
231
|
|
|
103
|
|
|
128
|
|
|
204
|
|
|
76
|
|
|
128
|
|
||||||
Amortized intangibles
|
$
|
1,910
|
|
|
$
|
590
|
|
|
$
|
1,320
|
|
|
$
|
1,594
|
|
|
$
|
468
|
|
|
$
|
1,126
|
|
For the Years Ending December 31,
|
|
||
(In millions)
|
Estimated Expense
|
|
|
2017 (excludes amortization through September 30, 2017)
|
$
|
50
|
|
2018
|
176
|
|
|
2019
|
166
|
|
|
2020
|
145
|
|
|
2021
|
135
|
|
|
Subsequent years
|
648
|
|
|
|
$
|
1,320
|
|
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 exchange-traded 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.
|
|
Identical Assets
(Level 1)
|
|
Observable Inputs
(Level 2)
|
|
Unobservable
Inputs
(Level 3)
|
|
Total
|
||||||||||||||||||||||||
(In millions)
|
09/30/17
|
|
|
12/31/16
|
|
|
09/30/17
|
|
|
12/31/16
|
|
|
09/30/17
|
|
|
12/31/16
|
|
|
09/30/17
|
|
|
12/31/16
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Financial instruments owned:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Exchange traded equity securities
(a)
|
$
|
99
|
|
|
$
|
89
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
99
|
|
|
$
|
89
|
|
Mutual funds
(a)
|
143
|
|
|
141
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
143
|
|
|
141
|
|
||||||||
Money market funds
(b)
|
54
|
|
|
22
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
54
|
|
|
22
|
|
||||||||
Total assets measured at fair value
|
$
|
296
|
|
|
$
|
252
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
296
|
|
|
$
|
252
|
|
Fiduciary Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Money market funds
|
$
|
50
|
|
|
$
|
90
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
50
|
|
|
$
|
90
|
|
Total fiduciary assets measured
at fair value
|
$
|
50
|
|
|
$
|
90
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
50
|
|
|
$
|
90
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Contingent purchase
consideration liability
(c)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
170
|
|
|
$
|
241
|
|
|
$
|
170
|
|
|
$
|
241
|
|
Total liabilities measured at fair value
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
170
|
|
|
$
|
241
|
|
|
$
|
170
|
|
|
$
|
241
|
|
(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.
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||
(In millions)
|
2017
|
|
2016
|
|
|
2017
|
|
2016
|
|
||||
Balance at beginning of period,
|
$
|
203
|
|
$
|
279
|
|
|
$
|
241
|
|
$
|
309
|
|
Additions
|
2
|
|
1
|
|
|
36
|
|
9
|
|
||||
Payments
|
(42
|
)
|
(35
|
)
|
|
(107
|
)
|
(85
|
)
|
||||
Revaluation Impact
|
5
|
|
(13
|
)
|
|
(3
|
)
|
5
|
|
||||
Other
(a)
|
2
|
|
—
|
|
|
3
|
|
(6
|
)
|
||||
Balance at September 30,
|
$
|
170
|
|
$
|
232
|
|
|
$
|
170
|
|
$
|
232
|
|
Combined U.S. and significant non-U.S. plans
|
Pension
Benefits
|
|
Post-retirement
Benefits
|
||||||||||||
For the Three Months Ended September 30,
|
|
||||||||||||||
(In millions)
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
||||
Service cost
|
$
|
19
|
|
|
$
|
43
|
|
|
$
|
—
|
|
|
$
|
1
|
|
Interest cost
|
125
|
|
|
132
|
|
|
1
|
|
|
—
|
|
||||
Expected return on plan assets
|
(232
|
)
|
|
(232
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service cost
|
—
|
|
|
1
|
|
|
1
|
|
|
1
|
|
||||
Recognized actuarial loss
|
42
|
|
|
43
|
|
|
—
|
|
|
—
|
|
||||
Net periodic benefit (credit) cost
|
$
|
(46
|
)
|
|
$
|
(13
|
)
|
|
$
|
2
|
|
|
$
|
2
|
|
Settlement loss
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total (credit) cost
|
$
|
(45
|
)
|
|
$
|
(13
|
)
|
|
$
|
2
|
|
|
$
|
2
|
|
|
|
|
|
|
|
|
|
||||||||
Combined U.S. and significant non-U.S. plans
|
Pension
Benefits
|
|
Post-retirement
Benefits
|
||||||||||||
For the Nine Months Ended September 30,
|
|
||||||||||||||
(In millions)
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
||||
Service cost
|
$
|
56
|
|
|
$
|
133
|
|
|
$
|
—
|
|
|
$
|
1
|
|
Interest cost
|
371
|
|
|
407
|
|
|
3
|
|
|
3
|
|
||||
Expected return on plan assets
|
(686
|
)
|
|
(715
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service (credit) cost
|
(1
|
)
|
|
—
|
|
|
2
|
|
|
3
|
|
||||
Recognized actuarial loss (gain)
|
125
|
|
|
127
|
|
|
—
|
|
|
(1
|
)
|
||||
Net periodic benefit (credit) cost
|
$
|
(135
|
)
|
|
$
|
(48
|
)
|
|
$
|
5
|
|
|
$
|
6
|
|
Curtailment gain
|
(1
|
)
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
||||
Settlement loss
|
2
|
|
|
1
|
|
|
—
|
|
|
—
|
|
||||
Total (credit) cost
|
$
|
(134
|
)
|
|
$
|
(52
|
)
|
|
$
|
5
|
|
|
$
|
6
|
|
|
|
|
|
|
|
|
|
||||||||
U.S. Plans only
|
Pension
Benefits |
|
Post-retirement
Benefits |
||||||||||||
For the Three Months Ended September 30,
|
|
||||||||||||||
(In millions)
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
||||
Service cost
|
$
|
—
|
|
|
$
|
26
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest cost
|
66
|
|
|
66
|
|
|
—
|
|
|
—
|
|
||||
Expected return on plan assets
|
(89
|
)
|
|
(95
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service cost
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
||||
Recognized actuarial loss
|
9
|
|
|
19
|
|
|
—
|
|
|
—
|
|
||||
Net periodic benefit (credit) cost
|
$
|
(14
|
)
|
|
$
|
16
|
|
|
$
|
1
|
|
|
$
|
1
|
|
U.S. Plans only
|
Pension
Benefits |
|
Post-retirement
Benefits |
||||||||||||
For the Nine Months Ended September 30,
|
|
||||||||||||||
(In millions)
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
||||
Service cost
|
$
|
—
|
|
|
$
|
79
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest cost
|
198
|
|
|
198
|
|
|
1
|
|
|
1
|
|
||||
Expected return on plan assets
|
(268
|
)
|
|
(285
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service cost
|
—
|
|
|
—
|
|
|
3
|
|
|
3
|
|
||||
Recognized actuarial loss (gain)
|
28
|
|
|
55
|
|
|
(1
|
)
|
|
(1
|
)
|
||||
Net periodic benefit (credit) cost
|
$
|
(42
|
)
|
|
$
|
47
|
|
|
$
|
3
|
|
|
$
|
3
|
|
Significant non-U.S. plans only
|
Pension
Benefits |
|
Post-retirement
Benefits |
||||||||||||
For the Three Months Ended September 30,
|
|
||||||||||||||
(In millions)
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
||||
Service cost
|
$
|
19
|
|
|
$
|
17
|
|
|
$
|
—
|
|
|
$
|
1
|
|
Interest cost
|
59
|
|
|
66
|
|
|
1
|
|
|
—
|
|
||||
Expected return on plan assets
|
(143
|
)
|
|
(137
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service cost
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
||||
Recognized actuarial loss
|
33
|
|
|
24
|
|
|
—
|
|
|
—
|
|
||||
Net periodic benefit (credit) cost
|
$
|
(32
|
)
|
|
$
|
(29
|
)
|
|
$
|
1
|
|
|
$
|
1
|
|
Settlement loss
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total (credit) cost
|
$
|
(31
|
)
|
|
$
|
(29
|
)
|
|
$
|
1
|
|
|
$
|
1
|
|
Significant non-U.S. plans only
|
Pension
Benefits |
|
Post-retirement
Benefits |
||||||||||||
For the Nine Months Ended September 30,
|
|
||||||||||||||
(In millions)
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
||||
Service cost
|
$
|
56
|
|
|
$
|
54
|
|
|
$
|
—
|
|
|
$
|
1
|
|
Interest cost
|
173
|
|
|
209
|
|
|
2
|
|
|
2
|
|
||||
Expected return on plan assets
|
(418
|
)
|
|
(430
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service credit
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
||||
Recognized actuarial loss
|
97
|
|
|
72
|
|
|
1
|
|
|
—
|
|
||||
Net periodic benefit (credit) cost
|
$
|
(93
|
)
|
|
$
|
(95
|
)
|
|
$
|
2
|
|
|
$
|
3
|
|
Curtailment gain
|
(1
|
)
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
||||
Settlement loss
|
2
|
|
|
1
|
|
|
—
|
|
|
—
|
|
||||
Total (credit) cost
|
$
|
(92
|
)
|
|
$
|
(99
|
)
|
|
$
|
2
|
|
|
$
|
3
|
|
Combined U.S. and significant non-U.S. plans
|
Pension
Benefits
|
|
Post-retirement
Benefits
|
||||||||
September 30
,
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
Weighted average assumptions:
|
|
|
|
|
|
|
|
||||
Expected return on plan assets
|
6.64
|
%
|
|
7.07
|
%
|
|
—
|
|
|
—
|
|
Discount rate
|
3.40
|
%
|
|
4.11
|
%
|
|
3.64
|
%
|
|
4.12
|
%
|
Rate of compensation increase*
|
1.77
|
%
|
|
2.44
|
%
|
|
—
|
|
|
—
|
|
(In millions)
|
September 30,
2017 |
|
|
December 31,
2016 |
|
||
Short-term:
|
|
|
|
||||
Commercial paper
|
$
|
—
|
|
|
$
|
50
|
|
Current portion of long-term debt
|
13
|
|
|
262
|
|
||
|
13
|
|
|
312
|
|
||
Long-term:
|
|
|
|
||||
Senior notes – 2.30% due 2017
|
—
|
|
|
250
|
|
||
Senior notes – 2.55% due 2018
|
250
|
|
|
249
|
|
||
Senior notes – 2.35% due 2019
|
299
|
|
|
299
|
|
||
Senior notes – 2.35% due 2020
|
498
|
|
|
497
|
|
||
Senior notes – 4.80% due 2021
|
498
|
|
|
498
|
|
||
Senior notes – 2.75% due 2022
|
496
|
|
|
—
|
|
||
Senior notes – 3.30% due 2023
|
347
|
|
|
347
|
|
||
Senior notes – 4.05% due 2023
|
248
|
|
|
248
|
|
||
Senior notes – 3.50% due 2024
|
596
|
|
|
596
|
|
||
Senior notes – 3.50% due 2025
|
496
|
|
|
495
|
|
||
Senior notes – 3.75% due 2026
|
596
|
|
|
596
|
|
||
Senior notes – 5.875% due 2033
|
297
|
|
|
297
|
|
||
Senior notes – 4.35% due 2047
|
492
|
|
|
—
|
|
||
Mortgage – 5.70% due 2035
|
373
|
|
|
382
|
|
||
Other
|
2
|
|
|
3
|
|
||
|
5,488
|
|
|
4,757
|
|
||
Less current portion
|
13
|
|
|
262
|
|
||
|
$
|
5,475
|
|
|
$
|
4,495
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||||||||||
(In millions)
|
Carrying
Amount
|
|
|
Fair
Value
|
|
|
Carrying
Amount
|
|
|
Fair
Value
|
|
||||
Short-term debt
|
$
|
13
|
|
|
$
|
13
|
|
|
$
|
312
|
|
|
$
|
313
|
|
Long-term debt
|
$
|
5,475
|
|
|
$
|
5,720
|
|
|
$
|
4,495
|
|
|
$
|
4,625
|
|
(In millions)
|
Liability at 1/1/16
|
|
Amounts
Accrued
|
|
Cash
Paid
|
|
Other
|
|
Liability at 12/31/16
|
|
Amounts
Accrued
|
|
Cash
Paid
|
|
Other
|
|
Liability at 9/30/17
|
||||||||||||||||||
Severance
|
$
|
15
|
|
|
$
|
40
|
|
|
$
|
(22
|
)
|
|
$
|
(1
|
)
|
|
$
|
32
|
|
|
$
|
24
|
|
|
$
|
(42
|
)
|
|
$
|
—
|
|
|
$
|
14
|
|
Future rent under non-cancelable leases and other costs
|
78
|
|
|
4
|
|
|
(17
|
)
|
|
(4
|
)
|
|
61
|
|
|
8
|
|
|
(15
|
)
|
|
1
|
|
|
55
|
|
|||||||||
Total
|
$
|
93
|
|
|
$
|
44
|
|
|
$
|
(39
|
)
|
|
$
|
(5
|
)
|
|
$
|
93
|
|
|
$
|
32
|
|
|
$
|
(57
|
)
|
|
$
|
1
|
|
|
$
|
69
|
|
▪
|
Risk and Insurance Services
, comprising insurance services (Marsh) and reinsurance services (Guy Carpenter); and
|
▪
|
Consulting
, comprising Mercer and Oliver Wyman Group.
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
(In millions)
|
Revenue
|
|
Operating
Income
(Loss)
|
|
Revenue
|
|
Operating
Income
(Loss)
|
||||||||
2017–
|
|
|
|
|
|
|
|
||||||||
Risk and Insurance Services
|
$
|
1,763
|
|
(a)
|
$
|
314
|
|
|
$
|
5,668
|
|
(c)
|
$
|
1,455
|
|
Consulting
|
1,587
|
|
(b)
|
329
|
|
|
4,705
|
|
(d)
|
853
|
|
||||
Total Operating Segments
|
3,350
|
|
|
643
|
|
|
10,373
|
|
|
2,308
|
|
||||
Corporate / Eliminations
|
(9
|
)
|
|
(46
|
)
|
|
(34
|
)
|
|
(138
|
)
|
||||
Total Consolidated
|
$
|
3,341
|
|
|
$
|
597
|
|
|
$
|
10,339
|
|
|
$
|
2,170
|
|
2016–
|
|
|
|
|
|
|
|
||||||||
Risk and Insurance Services
|
$
|
1,632
|
|
(a)
|
$
|
315
|
|
|
$
|
5,350
|
|
(c)
|
$
|
1,340
|
|
Consulting
|
1,513
|
|
(b)
|
308
|
|
|
4,530
|
|
(d)
|
838
|
|
||||
Total Operating Segments
|
3,145
|
|
|
623
|
|
|
9,880
|
|
|
2,178
|
|
||||
Corporate / Eliminations
|
(10
|
)
|
|
(51
|
)
|
|
(33
|
)
|
|
(147
|
)
|
||||
Total Consolidated
|
$
|
3,135
|
|
|
$
|
572
|
|
|
$
|
9,847
|
|
|
$
|
2,031
|
|
(a)
|
Includes inter-segment revenue of
$1 million
in both
2017
and
2016
, interest income on fiduciary funds of
$11 million
and
$8 million
in
2017
and
2016
, respectively, and equity method income of
$2 million
and
$4 million
in
2017
and
2016
, respectively.
|
(b)
|
Includes inter-segment revenue of
$8 million
and
$9 million
in
2017
and
2016
, respectively, interest income on fiduciary funds of
$2 million
in
2017
and
$1 million
in
2016
, respectively, and equity method income of
$3 million
in
2017
and
$5 million
in
2016
, respectively.
|
(c)
|
Includes inter-segment revenue of
$5 million
in both
2017
and
2016
, interest income on fiduciary funds of
$28 million
and
$20 million
in
2017
and
2016
, respectively, and equity method income of
$11 million
in both
2017
and
2016
.
|
(d)
|
Includes inter-segment revenue of
$29 million
and
$28 million
in
2017
and
2016
, respectively, interest income on fiduciary funds of
$3 million
in
2017
and
$2 million
in
2016
, respectively, and equity method income of
$12 million
in
2017
and
$14 million
in
2016
, respectively.
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
(In millions)
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
||||
Risk and Insurance Services
|
|
|
|
|
|
|
|
||||||||
Marsh
|
$
|
1,490
|
|
|
$
|
1,370
|
|
|
$
|
4,713
|
|
|
$
|
4,427
|
|
Guy Carpenter
|
273
|
|
|
262
|
|
|
955
|
|
|
923
|
|
||||
Total Risk and Insurance Services
|
1,763
|
|
|
1,632
|
|
|
5,668
|
|
|
5,350
|
|
||||
Consulting
|
|
|
|
|
|
|
|
||||||||
Mercer
|
1,149
|
|
|
1,109
|
|
|
3,335
|
|
|
3,227
|
|
||||
Oliver Wyman Group
|
438
|
|
|
404
|
|
|
1,370
|
|
|
1,303
|
|
||||
Total Consulting
|
1,587
|
|
|
1,513
|
|
|
4,705
|
|
|
4,530
|
|
||||
Total Operating Segments
|
3,350
|
|
|
3,145
|
|
|
10,373
|
|
|
9,880
|
|
||||
Corporate
/
Eliminations
|
(9
|
)
|
|
(10
|
)
|
|
(34
|
)
|
|
(33
|
)
|
||||
Total
|
$
|
3,341
|
|
|
$
|
3,135
|
|
|
$
|
10,339
|
|
|
$
|
9,847
|
|
•
|
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. The Company conducts business in this segment through Marsh and Guy Carpenter.
|
•
|
Consulting
includes wealth, health and career consulting services and products, and specialized management, economic and brand consulting services. The Company conducts business in this segment through Mercer and Oliver Wyman Group.
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
|||||||||||
(In millions, except per share figures)
|
2017
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
||||
Revenue
|
$
|
3,341
|
|
$
|
3,135
|
|
|
$
|
10,339
|
|
|
$
|
9,847
|
|
Expense:
|
|
|
|
|
|
|
||||||||
Compensation and Benefits
|
1,906
|
|
1,817
|
|
|
5,786
|
|
|
5,543
|
|
||||
Other Operating Expenses
|
838
|
|
746
|
|
|
2,383
|
|
|
2,273
|
|
||||
Operating Expenses
|
2,744
|
|
2,563
|
|
|
8,169
|
|
|
7,816
|
|
||||
Operating Income
|
597
|
|
572
|
|
|
2,170
|
|
|
2,031
|
|
||||
Net Income Before Non-Controlling Interests
|
397
|
|
384
|
|
|
1,482
|
|
|
1,354
|
|
||||
Net Income Attributable to the Company
|
$
|
393
|
|
$
|
379
|
|
|
$
|
1,463
|
|
|
$
|
1,332
|
|
Net Income Per Share Attributable to the Company:
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.77
|
|
$
|
0.73
|
|
|
$
|
2.85
|
|
|
$
|
2.56
|
|
Diluted
|
$
|
0.76
|
|
$
|
0.73
|
|
|
$
|
2.81
|
|
|
$
|
2.54
|
|
Average Number of Shares Outstanding:
|
|
|
|
|
|
|
||||||||
Basic
|
512
|
|
518
|
|
|
514
|
|
|
520
|
|
||||
Diluted
|
519
|
|
523
|
|
|
520
|
|
|
525
|
|
||||
Shares Outstanding at September 30
|
511
|
|
516
|
|
|
511
|
|
|
516
|
|
|
Three Months Ended
September 30, |
|
%
Change
GAAP
Revenue
|
|
Components of Revenue Change*
|
||||||||||||||
Currency
Impact
|
|
Acquisitions/
Dispositions
Impact
|
|
Underlying
Revenue
|
|||||||||||||||
(In millions)
|
2017
|
|
|
2016
|
|
|
|||||||||||||
Risk and Insurance Services
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Marsh
|
$
|
1,482
|
|
|
$
|
1,364
|
|
|
9
|
%
|
|
—
|
|
|
6
|
%
|
|
3
|
%
|
Guy Carpenter
|
270
|
|
|
260
|
|
|
4
|
%
|
|
—
|
|
|
—
|
|
|
4
|
%
|
||
Subtotal
|
1,752
|
|
|
1,624
|
|
|
8
|
%
|
|
—
|
|
|
5
|
%
|
|
3
|
%
|
||
Fiduciary Interest Income
|
11
|
|
|
8
|
|
|
|
|
|
|
|
|
|
||||||
Total Risk and Insurance Services
|
1,763
|
|
|
1,632
|
|
|
8
|
%
|
|
—
|
|
|
5
|
%
|
|
3
|
%
|
||
Consulting
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Mercer
|
1,149
|
|
|
1,109
|
|
|
4
|
%
|
|
1
|
%
|
|
3
|
%
|
|
—
|
|
||
Oliver Wyman Group
|
438
|
|
|
404
|
|
|
8
|
%
|
|
1
|
%
|
|
—
|
|
|
7
|
%
|
||
Total Consulting
|
1,587
|
|
|
1,513
|
|
|
5
|
%
|
|
1
|
%
|
|
2
|
%
|
|
2
|
%
|
||
Corporate / Eliminations
|
(9
|
)
|
|
(10
|
)
|
|
|
|
|
|
|
|
|
||||||
Total Revenue
|
$
|
3,341
|
|
|
$
|
3,135
|
|
|
7
|
%
|
|
1
|
%
|
|
3
|
%
|
|
3
|
%
|
|
Three Months Ended
September 30, |
|
%
Change
GAAP
Revenue
|
|
Components of Revenue Change*
|
||||||||||||||
Currency
Impact
|
|
Acquisitions/
Dispositions
Impact
|
|
Underlying
Revenue
|
|||||||||||||||
(In millions)
|
2017
|
|
|
2016
|
|
|
|||||||||||||
Marsh:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
EMEA
|
$
|
426
|
|
|
$
|
394
|
|
|
8
|
%
|
|
2
|
%
|
|
8
|
%
|
|
(2
|
)%
|
Asia Pacific
|
164
|
|
|
153
|
|
|
7
|
%
|
|
—
|
|
|
—
|
|
|
7
|
%
|
||
Latin America
|
95
|
|
|
88
|
|
|
8
|
%
|
|
(3
|
)%
|
|
3
|
%
|
|
9
|
%
|
||
Total International
|
685
|
|
|
635
|
|
|
8
|
%
|
|
1
|
%
|
|
5
|
%
|
|
2
|
%
|
||
U.S. / Canada
|
797
|
|
|
729
|
|
|
9
|
%
|
|
—
|
|
|
6
|
%
|
|
3
|
%
|
||
Total Marsh
|
$
|
1,482
|
|
|
$
|
1,364
|
|
|
9
|
%
|
|
—
|
|
|
6
|
%
|
|
3
|
%
|
Mercer:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Defined Benefit Consulting & Administration
|
$
|
336
|
|
|
$
|
351
|
|
|
(5
|
)%
|
|
1
|
%
|
|
—
|
|
|
(5
|
)%
|
Investment Management & Related Services
|
194
|
|
|
154
|
|
|
26
|
%
|
|
3
|
%
|
|
14
|
%
|
|
10
|
%
|
||
Total Wealth
|
530
|
|
|
505
|
|
|
5
|
%
|
|
1
|
%
|
|
4
|
%
|
|
(1
|
)%
|
||
Health
|
401
|
|
|
397
|
|
|
1
|
%
|
|
1
|
%
|
|
—
|
|
|
—
|
|
||
Career
|
218
|
|
|
207
|
|
|
5
|
%
|
|
1
|
%
|
|
3
|
%
|
|
2
|
%
|
||
Total Mercer
|
$
|
1,149
|
|
|
$
|
1,109
|
|
|
4
|
%
|
|
1
|
%
|
|
3
|
%
|
|
—
|
|
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.
|
|
Nine Months Ended
September 30, |
|
%
Change
GAAP
Revenue
|
|
Components of Revenue Change*
|
||||||||||||||
Currency
Impact
|
|
Acquisitions/
Dispositions
Impact
|
|
Underlying
Revenue
|
|||||||||||||||
(In millions)
|
2017
|
|
|
2016
|
|
|
|||||||||||||
Risk and Insurance Services
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Marsh
|
$
|
4,692
|
|
|
$
|
4,411
|
|
|
6
|
%
|
|
(1
|
)%
|
|
4
|
%
|
|
3
|
%
|
Guy Carpenter
|
948
|
|
|
919
|
|
|
3
|
%
|
|
(1
|
)%
|
|
—
|
|
|
4
|
%
|
||
Subtotal
|
5,640
|
|
|
5,330
|
|
|
6
|
%
|
|
(1
|
)%
|
|
4
|
%
|
|
3
|
%
|
||
Fiduciary Interest Income
|
28
|
|
|
20
|
|
|
|
|
|
|
|
|
|
||||||
Total Risk and Insurance Services
|
5,668
|
|
|
5,350
|
|
|
6
|
%
|
|
(1
|
)%
|
|
4
|
%
|
|
3
|
%
|
||
Consulting
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Mercer
|
3,335
|
|
|
3,227
|
|
|
3
|
%
|
|
(1
|
)%
|
|
2
|
%
|
|
2
|
%
|
||
Oliver Wyman Group
|
1,370
|
|
|
1,303
|
|
|
5
|
%
|
|
(1
|
)%
|
|
—
|
|
|
6
|
%
|
||
Total Consulting
|
4,705
|
|
|
4,530
|
|
|
4
|
%
|
|
(1
|
)%
|
|
2
|
%
|
|
3
|
%
|
||
Corporate / Eliminations
|
(34
|
)
|
|
(33
|
)
|
|
|
|
|
|
|
|
|
||||||
Total Revenue
|
$
|
10,339
|
|
|
$
|
9,847
|
|
|
5
|
%
|
|
(1
|
)%
|
|
3
|
%
|
|
3
|
%
|
|
Nine Months Ended
September 30, |
|
%
Change
GAAP
Revenue
|
|
Components of Revenue Change*
|
||||||||||||||
Currency
Impact
|
|
Acquisitions/
Dispositions
Impact
|
|
Underlying
Revenue
|
|||||||||||||||
(In millions)
|
2017
|
|
|
2016
|
|
|
|||||||||||||
Marsh:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
EMEA
|
$
|
1,512
|
|
|
$
|
1,443
|
|
|
5
|
%
|
|
(2
|
)%
|
|
7
|
%
|
|
1
|
%
|
Asia Pacific
|
484
|
|
|
482
|
|
|
1
|
%
|
|
—
|
|
|
(7
|
)%
|
|
7
|
%
|
||
Latin America
|
274
|
|
|
252
|
|
|
9
|
%
|
|
(1
|
)%
|
|
4
|
%
|
|
7
|
%
|
||
Total International
|
2,270
|
|
|
2,177
|
|
|
4
|
%
|
|
(2
|
)%
|
|
3
|
%
|
|
3
|
%
|
||
U.S. / Canada
|
2,422
|
|
|
2,234
|
|
|
8
|
%
|
|
—
|
|
|
5
|
%
|
|
3
|
%
|
||
Total Marsh
|
$
|
4,692
|
|
|
$
|
4,411
|
|
|
6
|
%
|
|
(1
|
)%
|
|
4
|
%
|
|
3
|
%
|
Mercer:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Defined Benefit Consulting & Administration
|
$
|
1,010
|
|
|
$
|
1,083
|
|
|
(7
|
)%
|
|
(2
|
)%
|
|
(2
|
)%
|
|
(3
|
)%
|
Investment Management & Related Services
|
572
|
|
|
454
|
|
|
26
|
%
|
|
1
|
%
|
|
15
|
%
|
|
10
|
%
|
||
Total Wealth
|
1,582
|
|
|
1,537
|
|
|
3
|
%
|
|
(1
|
)%
|
|
3
|
%
|
|
1
|
%
|
||
Health
|
1,239
|
|
|
1,207
|
|
|
3
|
%
|
|
(1
|
)%
|
|
1
|
%
|
|
2
|
%
|
||
Career
|
514
|
|
|
483
|
|
|
6
|
%
|
|
(1
|
)%
|
|
3
|
%
|
|
4
|
%
|
||
Total Mercer
|
$
|
3,335
|
|
|
$
|
3,227
|
|
|
3
|
%
|
|
(1
|
)%
|
|
2
|
%
|
|
2
|
%
|
Underlying revenue measures the change in revenue using consistent currency exchange rates, excluding the impact of certain items that affect comparability, such as: acquisitions, dispositions and transfers among businesses and the deconsolidation of Marsh India.
|
|
*
|
Components of revenue change may not add due to rounding.
|
For the Three and Nine Months Ended September 30,
|
Three Months
|
|
Nine Months
|
||||||||||
(In millions)
|
2017
|
|
2016
|
|
|
2017
|
|
2016
|
|
||||
Revenue
|
$
|
1,763
|
|
$
|
1,632
|
|
|
$
|
5,668
|
|
$
|
5,350
|
|
Compensation and Benefits
|
999
|
|
924
|
|
|
2,947
|
|
2,779
|
|
||||
Other Expenses
|
450
|
|
393
|
|
|
1,266
|
|
1,231
|
|
||||
Expense
|
1,449
|
|
1,317
|
|
|
4,213
|
|
4,010
|
|
||||
Operating Income
|
$
|
314
|
|
$
|
315
|
|
|
$
|
1,455
|
|
$
|
1,340
|
|
Operating Income Margin
|
17.8
|
%
|
19.2
|
%
|
|
25.7
|
%
|
25.0
|
%
|
For the Three and Nine Months Ended September 30,
|
Three Months
|
|
Nine Months
|
||||||||||
(In millions)
|
2017
|
|
2016
|
|
|
2017
|
|
2016
|
|
||||
Revenue
|
$
|
1,587
|
|
$
|
1,513
|
|
|
$
|
4,705
|
|
$
|
4,530
|
|
Compensation and Benefits
|
825
|
|
807
|
|
|
2,583
|
|
2,506
|
|
||||
Other Expenses
|
433
|
|
398
|
|
|
1,269
|
|
1,186
|
|
||||
Expense
|
1,258
|
|
1,205
|
|
|
3,852
|
|
3,692
|
|
||||
Operating Income
|
$
|
329
|
|
$
|
308
|
|
|
$
|
853
|
|
$
|
838
|
|
Operating Income Margin
|
20.7
|
%
|
20.4
|
%
|
|
18.1
|
%
|
18.5
|
%
|
|
|
|
|
|
|
(
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
|
$
|
13
|
|
|
13
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Long-term debt
|
5,512
|
|
|
—
|
|
|
1,077
|
|
|
1,030
|
|
|
3,405
|
|
|||||
Interest on long-term debt
|
1,959
|
|
|
206
|
|
|
387
|
|
|
325
|
|
|
1,041
|
|
|||||
Net operating leases
|
1,928
|
|
|
309
|
|
|
508
|
|
|
397
|
|
|
714
|
|
|||||
Service agreements
|
234
|
|
|
138
|
|
|
90
|
|
|
6
|
|
|
—
|
|
|||||
Other long-term obligations
|
324
|
|
|
107
|
|
|
209
|
|
|
5
|
|
|
3
|
|
|||||
Total
|
$
|
9,970
|
|
|
$
|
773
|
|
|
$
|
2,271
|
|
|
$
|
1,763
|
|
|
$
|
5,163
|
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk.
|
(In millions)
|
September 30, 2017
|
||
Cash and cash equivalents invested in money market funds, certificates of deposit and time deposits
|
$
|
1,078
|
|
Fiduciary cash and investments
|
$
|
5,128
|
|
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
|
|
||
July 1-31, 2017
|
914,641
|
|
|
$
|
78.4382
|
|
|
914,641
|
|
|
$
|
1,969,009,378
|
|
August 1-31, 2017
|
1,272,689
|
|
|
$
|
77.8602
|
|
|
1,272,689
|
|
|
$
|
1,869,917,605
|
|
September 1-30, 2017
|
361,716
|
|
|
$
|
80.3440
|
|
|
361,716
|
|
|
$
|
1,840,855,893
|
|
Total
|
2,549,046
|
|
|
$
|
78.4200
|
|
|
2,549,046
|
|
|
$
|
1,840,855,893
|
|
Date:
|
October 27, 2017
|
/s/ Mark C. McGivney
|
|
|
|
Mark C. McGivney
|
|
|
|
Chief Financial Officer
|
|
|
|
|
|
Date:
|
October 27, 2017
|
/s/ Robert J. Rapport
|
|
|
|
Robert J. Rapport
|
|
|
|
Senior Vice President & Controller
|
|
|
|
(Chief Accounting Officer)
|
|
Exhibit No.
|
|
Exhibit Name
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101.INS
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XBRL Instance Document
|
|
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|
101.SCH
|
|
XBRL Taxonomy Extension Schema
|
|
|
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101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase
|
|
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|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase
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101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase
|
|
|
Steven A. Mills
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 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 Institutes
• 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. 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).
|
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 $130,000 in aggregate incremental cost each calendar year, commencing with the 2017 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.
|
|
|
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
|
• Board of Directors of DXC Technology
• Hofstra University Board of Trustees
|
Annual Base Salary
|
$1,000,000, effective August 1, 2017
|
Annual Target Bonus Opportunity
|
Bonus awards are discretionary. Target bonus of $2,250,000 commencing with the 2017 performance year (awarded in 2018). 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).
|
|
Nine Months Ended September 30, 2017
|
Years Ended December 31,
|
|||||||||||||||||||||
|
(Unaudited)
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||||
Earnings
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income before income taxes
|
$
|
2,001
|
|
|
$
|
2,480
|
|
|
$
|
2,307
|
|
|
$
|
2,057
|
|
|
$
|
1,973
|
|
|
$
|
1,696
|
|
Interest expense
|
178
|
|
|
189
|
|
|
163
|
|
|
165
|
|
|
167
|
|
|
181
|
|
||||||
Portion of rents representative of the interest factor
|
84
|
|
|
122
|
|
|
127
|
|
|
131
|
|
|
134
|
|
|
139
|
|
||||||
|
$
|
2,263
|
|
|
$
|
2,791
|
|
|
$
|
2,597
|
|
|
$
|
2,353
|
|
|
$
|
2,274
|
|
|
$
|
2,016
|
|
Fixed Charges
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest expense
|
$
|
178
|
|
|
$
|
189
|
|
|
$
|
163
|
|
|
$
|
165
|
|
|
$
|
167
|
|
|
$
|
181
|
|
Portion of rents representative of the interest factor
|
84
|
|
|
122
|
|
|
127
|
|
|
131
|
|
|
134
|
|
|
139
|
|
||||||
|
$
|
262
|
|
|
$
|
311
|
|
|
$
|
290
|
|
|
$
|
296
|
|
|
$
|
301
|
|
|
$
|
320
|
|
Ratio of Earnings to Fixed Charges
|
8.6
|
|
|
9.0
|
|
|
9.0
|
|
|
7.9
|
|
|
7.6
|
|
|
6.3
|
|
Date:
|
October 27, 2017
|
|
/s/ Daniel S. Glaser
|
|
|
|
Daniel S. Glaser
|
|
|
|
President and Chief Executive Officer
|
Date:
|
October 27, 2017
|
|
/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:
|
October 27, 2017
|
|
/s/ Daniel S. Glaser
|
|
|
|
Daniel S. Glaser
|
|
|
|
President and Chief Executive Officer
|
Date:
|
October 27, 2017
|
|
/s/ Mark C. McGivney
|
|
|
|
Mark C. McGivney
|
|
|
|
Chief Financial Officer
|