|
Date of report (Date of earliest event reported)
|
May 9, 2018
|
Marsh & McLennan Companies, Inc.
|
(Exact Name of Registrant as Specified in Charter)
|
Delaware
|
1-5998
|
36-2668272
|
(State or Other Jurisdiction of Incorporation)
|
(Commission File Number)
|
(IRS Employer
Identification No.)
|
1166 Avenue of the Americas, New York, NY
|
10036
|
(Address of Principal Executive Offices)
|
(Zip Code)
|
Registrant’s telephone number, including area code
|
(212) 345-5000
|
|
o
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
|
o
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
|
o
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
|
o
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
|
|
Emerging growth company
o
|
|
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
o
|
|
•
|
Item 6. Selected Financial Data
|
•
|
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations; and
|
•
|
Item 8. Financial Statements and Supplementary Data
|
23.1
|
Consent of Independent Registered Public Accounting Firm
|
99.1
|
Retrospective revisions to the following portions of Marsh & McLennan Companies, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2017, as originally filed with the Securities and Exchange Commission on February 22, 2018: Item 6. Selected Financial Data; Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations; and Item 8. Financial Statements and Supplementary Data.
|
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
|
|
MARSH & McLENNAN COMPANIES, INC.
|
|
|
|
|
|
|
|
By:
|
/s/ Katherine J. Brennan
|
|
|
Name:
|
Katherine J. Brennan
|
|
|
Title:
|
Deputy General Counsel,
Chief Compliance Officer &
Corporate Secretary
|
|
Exhibit No.
|
Exhibit
|
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
|
•
|
Item 6. Selected Financial Data
|
•
|
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations; and
|
•
|
Item 8. Financial Statements and Supplementary Data
|
TABLE OF CONTENTS
|
||
|
|
|
|
|
|
Item 6 —
|
||
|
|
|
Item 7 —
|
||
|
|
|
Item 8 —
|
•
|
the impact of any investigations, reviews, market studies or other activity by regulatory or law enforcement authorities, including the U.K. FCA wholesale insurance broker market study and the ongoing investigations by the European Commission;
|
•
|
the impact from lawsuits, other contingent liabilities and loss contingencies arising from errors and omissions, breach of fiduciary duty or other claims against us;
|
•
|
our organization's ability to maintain adequate safeguards to protect the security of our information systems and confidential, personal or proprietary information, particularly given the large volume of our vendor network and the need to patch software vulnerabilities;
|
•
|
our ability to compete effectively and adapt to changes in the competitive environment, including to respond to disintermediation, digital disruption and other types of innovation;
|
•
|
the financial and operational impact of complying with laws and regulations where we operate, including cybersecurity and data privacy regulations such as the E.U.’s General Data Protection Regulation, anti-corruption laws and trade sanctions regimes;
|
•
|
the regulatory, contractual and reputational risks that arise based on insurance placement activities and various broker revenue streams;
|
•
|
the extent to which we manage risks associated with the various services, including fiduciary and investments and other advisory services;
|
•
|
our ability to successfully recover if we experience a business continuity problem due to cyberattack, natural disaster or otherwise;
|
•
|
the impact of changes in tax laws, guidance and interpretations, including related to certain provisions of the U.S. Tax Cuts and Jobs Act, or disagreements with tax authorities;
|
•
|
the impact of fluctuations in foreign exchange and interest rates on our results;
|
•
|
the impact of macroeconomic, political, regulatory or market conditions on us, our clients and the industries in which we operate; and
|
•
|
the impact of changes in accounting rules or in our accounting estimates or assumptions, including the impact of the adoption of the new revenue recognition, pension and lease accounting standards.
|
For the Years Ended December 31,
(In millions, except per share figures)
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
||||||||||
Revenue
|
$
|
14,024
|
|
|
$
|
13,211
|
|
|
$
|
12,893
|
|
|
$
|
12,951
|
|
|
$
|
12,261
|
|
|
Expense:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Compensation and Benefits
|
8,085
|
|
|
7,694
|
|
|
7,569
|
|
|
7,692
|
|
|
7,250
|
|
|
|||||
Other Operating Expenses
|
3,284
|
|
|
3,086
|
|
|
3,140
|
|
|
3,135
|
|
|
2,958
|
|
|
|||||
Operating Expenses
|
11,369
|
|
|
10,780
|
|
|
10,709
|
|
|
10,827
|
|
|
10,208
|
|
|
|||||
Operating Income
(a)
|
2,655
|
|
|
2,431
|
|
|
2,184
|
|
|
2,124
|
|
|
2,053
|
|
|
|||||
Other net benefit credits
|
201
|
|
|
233
|
|
|
235
|
|
|
177
|
|
|
24
|
|
|
|||||
Interest Income
|
9
|
|
|
5
|
|
|
13
|
|
|
21
|
|
|
18
|
|
|
|||||
Interest Expense
|
(237
|
)
|
|
(189
|
)
|
|
(163
|
)
|
|
(165
|
)
|
|
(167
|
)
|
|
|||||
Cost of Extinguishment of Debt
|
—
|
|
|
—
|
|
|
—
|
|
|
(137
|
)
|
|
(24
|
)
|
|
|||||
Investment Income
|
15
|
|
|
—
|
|
|
38
|
|
|
37
|
|
|
69
|
|
|
|||||
Income Before Income Taxes
|
2,643
|
|
|
2,480
|
|
|
2,307
|
|
|
2,057
|
|
|
1,973
|
|
|
|||||
Income Tax Expense
(b)
|
1,133
|
|
|
685
|
|
|
671
|
|
|
586
|
|
|
594
|
|
|
|||||
Income From Continuing Operations
|
1,510
|
|
|
1,795
|
|
|
1,636
|
|
|
1,471
|
|
|
1,379
|
|
|
|||||
Discontinued Operations, Net of Tax
|
2
|
|
|
—
|
|
|
—
|
|
|
26
|
|
|
6
|
|
|
|||||
Net Income Before Non-Controlling Interests
|
1,512
|
|
|
1,795
|
|
|
1,636
|
|
|
1,497
|
|
|
1,385
|
|
|
|||||
Less: Net Income Attributable to Non-Controlling Interests
|
20
|
|
|
27
|
|
|
37
|
|
|
32
|
|
|
28
|
|
|
|||||
Net Income Attributable to the Company
|
$
|
1,492
|
|
|
$
|
1,768
|
|
|
$
|
1,599
|
|
|
$
|
1,465
|
|
|
$
|
1,357
|
|
|
Basic Net Income Per Share Information:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income From Continuing Operations
|
$
|
2.91
|
|
|
$
|
3.41
|
|
|
$
|
3.01
|
|
|
$
|
2.64
|
|
|
$
|
2.46
|
|
|
Income From Discontinued Operations
|
—
|
|
|
—
|
|
|
—
|
|
|
0.05
|
|
|
0.01
|
|
|
|||||
Net Income Attributable to the Company
|
$
|
2.91
|
|
|
$
|
3.41
|
|
|
$
|
3.01
|
|
|
$
|
2.69
|
|
|
$
|
2.47
|
|
|
Average Number of Shares Outstanding
|
513
|
|
|
519
|
|
|
531
|
|
|
545
|
|
|
549
|
|
|
|||||
Diluted Income Per Share Information:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income From Continuing Operations
|
$
|
2.87
|
|
|
$
|
3.38
|
|
|
$
|
2.98
|
|
|
$
|
2.61
|
|
|
$
|
2.42
|
|
|
Discontinued Operations, Net of Tax Per Share
|
—
|
|
|
—
|
|
|
—
|
|
|
0.04
|
|
|
0.01
|
|
|
|||||
Net Income Attributable to the Company
|
$
|
2.87
|
|
|
$
|
3.38
|
|
|
$
|
2.98
|
|
|
$
|
2.65
|
|
|
$
|
2.43
|
|
|
Average Number of Shares Outstanding
|
519
|
|
|
524
|
|
|
536
|
|
|
553
|
|
|
558
|
|
|
|||||
Dividends Paid Per Share
|
$
|
1.43
|
|
|
$
|
1.30
|
|
|
$
|
1.18
|
|
|
$
|
1.06
|
|
|
$
|
0.96
|
|
|
Return on Average Equity
|
22
|
%
|
|
27
|
%
|
|
23
|
%
|
|
19
|
%
|
|
19
|
%
|
|
|||||
Year-End Financial Position:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Working capital
|
$
|
1,300
|
|
|
$
|
802
|
|
|
$
|
1,336
|
|
|
$
|
1,856
|
|
|
$
|
2,027
|
|
|
Total assets
|
$
|
20,429
|
|
|
$
|
18,190
|
|
|
$
|
18,216
|
|
|
$
|
17,793
|
|
|
$
|
16,960
|
|
|
Long-term debt
|
$
|
5,225
|
|
|
$
|
4,495
|
|
|
$
|
4,402
|
|
|
$
|
3,368
|
|
|
$
|
2,619
|
|
|
Total equity
|
$
|
7,442
|
|
|
$
|
6,272
|
|
|
$
|
6,602
|
|
|
$
|
7,133
|
|
|
$
|
7,975
|
|
|
Total shares outstanding (net of treasury shares)
|
509
|
|
|
514
|
|
|
522
|
|
|
540
|
|
|
547
|
|
|
|||||
Other Information:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Number of employees
|
64,000
|
|
|
60,000
|
|
|
60,000
|
|
|
57,000
|
|
|
55,000
|
|
|
|||||
Stock price ranges—
|
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. exchanges — High
|
$
|
86.54
|
|
|
$
|
69.77
|
|
|
$
|
59.99
|
|
|
$
|
58.74
|
|
|
$
|
48.56
|
|
|
— Low
|
$
|
66.75
|
|
|
$
|
50.81
|
|
|
$
|
50.90
|
|
|
$
|
44.25
|
|
|
$
|
34.43
|
|
|
(a)
|
Includes the impact of net restructuring costs of $40 million, $44 million, $28 million, $12 million and $22 million in 2017, 2016, 2015, 2014 and 2013, respectively.
|
(b)
|
Income tax expense in 2017 includes a $460 million provisional charge related to the enactment of U.S. tax reform.
|
•
|
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 health, retirement, talent and investments 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.
|
For the Years Ended December 31,
(In millions, except per share figures)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Revenue
|
$
|
14,024
|
|
|
$
|
13,211
|
|
|
$
|
12,893
|
|
Expense
|
|
|
|
|
|
||||||
Compensation and Benefits
|
8,085
|
|
|
7,694
|
|
|
7,569
|
|
|||
Other Operating Expenses
|
3,284
|
|
|
3,086
|
|
|
3,140
|
|
|||
Operating Expenses
|
11,369
|
|
|
10,780
|
|
|
10,709
|
|
|||
Operating Income
|
$
|
2,655
|
|
|
$
|
2,431
|
|
|
$
|
2,184
|
|
Income from Continuing Operations
|
$
|
1,510
|
|
|
$
|
1,795
|
|
|
$
|
1,636
|
|
Discontinued Operations, Net of Tax
|
2
|
|
|
—
|
|
|
—
|
|
|||
Net Income Before Non-Controlling Interests
|
$
|
1,512
|
|
|
$
|
1,795
|
|
|
$
|
1,636
|
|
Net Income Attributable to the Company
|
$
|
1,492
|
|
|
$
|
1,768
|
|
|
$
|
1,599
|
|
Net Income from Continuing Operations Per Share:
|
|
|
|
|
|
||||||
Basic
|
$
|
2.91
|
|
|
$
|
3.41
|
|
|
$
|
3.01
|
|
Diluted
|
$
|
2.87
|
|
|
$
|
3.38
|
|
|
$
|
2.98
|
|
Net Income Per Share Attributable to the Company:
|
|
|
|
|
|
||||||
Basic
|
$
|
2.91
|
|
|
$
|
3.41
|
|
|
$
|
3.01
|
|
Diluted
|
$
|
2.87
|
|
|
$
|
3.38
|
|
|
$
|
2.98
|
|
Average number of shares outstanding:
|
|
|
|
|
|
||||||
Basic
|
513
|
|
|
519
|
|
|
531
|
|
|||
Diluted
|
519
|
|
|
524
|
|
|
536
|
|
|||
Shares outstanding at December 31,
|
509
|
|
|
514
|
|
|
522
|
|
•
|
U.S. tax reform - On December 22, 2017, the U.S. enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the "TCJA"). The TCJA provides for a reduction in the U.S. corporate tax rate to 21% and the creation of a territorial tax system.
The TCJA also changes the deductibility of certain expenses, primarily executive officers compensation. An aggregate charge of $460 million was recorded in the fourth quarter of 2017 as a result of the enactment of the TCJA. The TCJA provides for a transition to the territorial system through a deemed repatriation tax (the "transition tax") on undistributed earnings of non-U.S. subsidiaries. The Company recorded a provisional charge of $240 million in the fourth quarter of 2017 as an estimate of U.S. transition taxes and ancillary effects, including state taxes and foreign withholding taxes related to the change in permanent reinvestment status with respect to our pre-2018 foreign earnings. This transition tax is payable over eight years. The reduction of the U.S. corporate tax rate from 35% to 21%, reduces the value of the U.S. deferred tax assets and liabilities, accordingly, a net charge of $220 million was recorded. A more complete discussion of the TCJA and its impact on the Company’s results is included under the heading "Income Taxes".
|
•
|
Pension Settlement charge in the U.K. - The Defined Benefit Pension Plans in the U.K. allow participants an option for the payment of a lump sum distribution from plan assets before retirement in full satisfaction of the retirement benefits due to the participant as well as any survivor’s benefit. The Company’s policy under applicable U.S. GAAP is to treat these lump sum payments as a partial settlement of the plan liability if they exceed the sum of service cost plus interest cost components of net period pension cost of a plan for the year ("settlement thresholds"). The amount of lump sum payments through December 31, 2017 exceeded the settlement thresholds in two of the U.K. plans. This resulted in a non-cash settlement charge of $54 million recorded in December 2017, which is included in other net benefit credits in the consolidated statement of income.
|
|
Year Ended
December 31,
|
|
|
|
Components of Revenue Change*
|
||||||||||||||
(In millions, except percentage figures)
|
2017
|
|
|
2016
|
|
|
% Change
GAAP
Revenue
|
|
Currency
Impact
|
|
Acquisitions/
Dispositions
Impact
|
|
Underlying
Revenue
|
||||||
Risk and Insurance Services
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Marsh
|
$
|
6,404
|
|
|
$
|
5,976
|
|
|
7
|
%
|
|
—
|
|
|
5
|
%
|
|
3
|
%
|
Guy Carpenter
|
1,187
|
|
|
1,141
|
|
|
4
|
%
|
|
—
|
|
|
—
|
|
|
4
|
%
|
||
Subtotal
|
7,591
|
|
|
7,117
|
|
|
7
|
%
|
|
—
|
|
|
4
|
%
|
|
3
|
%
|
||
Fiduciary Interest Income
|
39
|
|
|
26
|
|
|
|
|
|
|
|
|
|
||||||
Total Risk and Insurance Services
|
7,630
|
|
|
7,143
|
|
|
7
|
%
|
|
—
|
|
|
4
|
%
|
|
3
|
%
|
||
Consulting
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Mercer
|
4,528
|
|
|
4,323
|
|
|
5
|
%
|
|
—
|
|
|
2
|
%
|
|
2
|
%
|
||
Oliver Wyman Group
|
1,916
|
|
|
1,789
|
|
|
7
|
%
|
|
—
|
|
|
—
|
|
|
7
|
%
|
||
Total Consulting
|
6,444
|
|
|
6,112
|
|
|
5
|
%
|
|
—
|
|
|
2
|
%
|
|
4
|
%
|
||
Corporate/Eliminations
|
(50
|
)
|
|
(44
|
)
|
|
|
|
|
|
|
|
|
||||||
Total Revenue
|
$
|
14,024
|
|
|
$
|
13,211
|
|
|
6
|
%
|
|
—
|
|
|
3
|
%
|
|
3
|
%
|
*
|
Components of revenue change may not add due to rounding.
|
|
Year Ended
December 31,
|
|
|
|
Components of Revenue Change*
|
||||||||||||||
(In millions, except percentage figures)
|
2017
|
|
|
2016
|
|
|
% Change
GAAP
Revenue
|
|
Currency
Impact
|
|
Acquisitions/
Dispositions
Impact
|
|
Underlying
Revenue
|
||||||
Marsh:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
EMEA
|
$
|
2,033
|
|
|
$
|
1,924
|
|
|
6
|
%
|
|
(1
|
)%
|
|
7
|
%
|
|
—
|
|
Asia Pacific
|
645
|
|
|
635
|
|
|
2
|
%
|
|
—
|
|
|
(5
|
)%
|
|
6
|
%
|
||
Latin America
|
404
|
|
|
374
|
|
|
8
|
%
|
|
(3
|
)%
|
|
3
|
%
|
|
7
|
%
|
||
Total International
|
3,082
|
|
|
2,933
|
|
|
5
|
%
|
|
(1
|
)%
|
|
4
|
%
|
|
2
|
%
|
||
U.S. / Canada
|
3,322
|
|
|
3,043
|
|
|
9
|
%
|
|
—
|
|
|
6
|
%
|
|
4
|
%
|
||
Total Marsh
|
$
|
6,404
|
|
|
$
|
5,976
|
|
|
7
|
%
|
|
—
|
|
|
5
|
%
|
|
3
|
%
|
Mercer:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Defined Benefit Consulting & Administration
|
$
|
1,381
|
|
|
$
|
1,447
|
|
|
(5
|
)%
|
|
(1
|
)%
|
|
(2
|
)%
|
|
(2
|
)%
|
Investment Management & Related Services
|
767
|
|
|
606
|
|
|
26
|
%
|
|
1
|
%
|
|
15
|
%
|
|
10
|
%
|
||
Total Wealth
|
2,148
|
|
|
2,053
|
|
|
5
|
%
|
|
—
|
|
|
3
|
%
|
|
2
|
%
|
||
Health
|
1,648
|
|
|
1,588
|
|
|
4
|
%
|
|
—
|
|
|
2
|
%
|
|
2
|
%
|
||
Career
|
732
|
|
|
682
|
|
|
7
|
%
|
|
—
|
|
|
2
|
%
|
|
5
|
%
|
||
Total Mercer
|
$
|
4,528
|
|
|
$
|
4,323
|
|
|
5
|
%
|
|
—
|
|
|
2
|
%
|
|
2
|
%
|
Underlying revenue measures the change in revenue using consistent currency exchange rates, excluding the impact of certain items that affect comparability such as: acquisitions, dispositions, transfers among businesses and the deconsolidation of Marsh India.
|
Effective January 1, 2017, Mercer established a Wealth business reflecting a unified client strategy for its former Retirement and Investment business. The 2016 information in the chart above has been conformed to the current presentation.
|
* Components of revenue change may not add due to rounding.
|
|
Year Ended
December 31,
|
|
|
|
Components of Revenue Change*
|
||||||||||||||
(In millions, except percentage figures)
|
2016
|
|
|
2015
|
|
|
% Change
GAAP
Revenue
|
|
Currency
Impact
|
|
Acquisitions/
Dispositions
Impact
|
|
Underlying
Revenue
|
||||||
Risk and Insurance Services
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Marsh
|
$
|
5,976
|
|
|
$
|
5,727
|
|
|
4
|
%
|
|
(2
|
)%
|
|
4
|
%
|
|
3
|
%
|
Guy Carpenter
|
1,141
|
|
|
1,121
|
|
|
2
|
%
|
|
—
|
|
|
—
|
|
|
2
|
%
|
||
Subtotal
|
7,117
|
|
|
6,848
|
|
|
4
|
%
|
|
(2
|
)%
|
|
3
|
%
|
|
3
|
%
|
||
Fiduciary Interest Income
|
26
|
|
|
21
|
|
|
|
|
|
|
|
|
|
||||||
Total Risk and Insurance Services
|
7,143
|
|
|
6,869
|
|
|
4
|
%
|
|
(2
|
)%
|
|
3
|
%
|
|
3
|
%
|
||
Consulting
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Mercer
|
4,323
|
|
|
4,313
|
|
|
—
|
|
|
(2
|
)%
|
|
—
|
|
|
3
|
%
|
||
Oliver Wyman Group
|
1,789
|
|
|
1,751
|
|
|
2
|
%
|
|
(2
|
)%
|
|
—
|
|
|
3
|
%
|
||
Total Consulting
|
6,112
|
|
|
6,064
|
|
|
1
|
%
|
|
(2
|
)%
|
|
—
|
|
|
3
|
%
|
||
Corporate/Eliminations
|
(44
|
)
|
|
(40
|
)
|
|
|
|
|
|
|
|
|
||||||
Total Revenue
|
$
|
13,211
|
|
|
$
|
12,893
|
|
|
2
|
%
|
|
(2
|
)%
|
|
2
|
%
|
|
3
|
%
|
*
|
Components of revenue change may not add due to rounding.
|
|
Year Ended
December 31,
|
|
|
|
Components of Revenue Change*
|
||||||||||||||
(In millions, except percentage figures)
|
2016
|
|
|
2015
|
|
|
% Change
GAAP
Revenue
|
|
Currency
Impact
|
|
Acquisitions/
Dispositions
Impact
|
|
Underlying
Revenue
|
||||||
Marsh:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
EMEA
|
$
|
1,924
|
|
|
$
|
1,848
|
|
|
4
|
%
|
|
(4
|
)%
|
|
6
|
%
|
|
2
|
%
|
Asia Pacific
|
635
|
|
|
636
|
|
|
—
|
|
|
—
|
|
|
(3
|
)%
|
|
3
|
%
|
||
Latin America
|
374
|
|
|
380
|
|
|
(2
|
)%
|
|
(10
|
)%
|
|
—
|
|
|
8
|
%
|
||
Total International
|
2,933
|
|
|
2,864
|
|
|
2
|
%
|
|
(4
|
)%
|
|
4
|
%
|
|
3
|
%
|
||
U.S. / Canada
|
3,043
|
|
|
2,863
|
|
|
6
|
%
|
|
—
|
|
|
4
|
%
|
|
2
|
%
|
||
Total Marsh
|
$
|
5,976
|
|
|
$
|
5,727
|
|
|
4
|
%
|
|
(2
|
)%
|
|
4
|
%
|
|
3
|
%
|
Mercer:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Defined Benefit Consulting & Administration
|
$
|
1,447
|
|
|
$
|
1,579
|
|
|
(8
|
)%
|
|
(4
|
)%
|
|
(6
|
)%
|
|
—
|
|
Investment Management & Related Services
|
606
|
|
|
584
|
|
|
4
|
%
|
|
(3
|
)%
|
|
1
|
%
|
|
6
|
%
|
||
Total Wealth
|
2,053
|
|
|
2,163
|
|
|
(5
|
)%
|
|
(3
|
)%
|
|
(4
|
)%
|
|
2
|
%
|
||
Health
|
1,588
|
|
|
1,558
|
|
|
2
|
%
|
|
(1
|
)%
|
|
—
|
|
|
3
|
%
|
||
Career
|
682
|
|
|
592
|
|
|
15
|
%
|
|
(2
|
)%
|
|
12
|
%
|
|
5
|
%
|
||
Total Mercer
|
$
|
4,323
|
|
|
$
|
4,313
|
|
|
—
|
|
|
(2
|
)%
|
|
—
|
|
|
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. For 2015, the impact of a $37 million gain from the disposal of Mercer's U.S. defined contribution recordkeeping business is included in acquisitions/dispositions in Mercer's Defined Benefit Consulting & Administration business.
|
|
*
|
Components of revenue change may not add due to rounding.
|
(In millions of dollars, except percentages)
|
2017
|
|
2016
|
|
2015
|
||||||
Revenue
|
$
|
7,630
|
|
|
$
|
7,143
|
|
|
$
|
6,869
|
|
Compensation and Benefits
|
4,171
|
|
|
3,904
|
|
|
3,802
|
|
|||
Other Operating Expenses
|
1,728
|
|
|
1,658
|
|
|
1,701
|
|
|||
Operating Expenses
|
5,899
|
|
|
5,562
|
|
|
5,503
|
|
|||
Operating Income
|
$
|
1,731
|
|
|
$
|
1,581
|
|
|
$
|
1,366
|
|
Operating Income Margin
|
22.7
|
%
|
|
22.1
|
%
|
|
19.9
|
%
|
(In millions of dollars, except percentages)
|
2017
|
|
2016
|
|
2015
|
||||||
Revenue
|
$
|
6,444
|
|
|
$
|
6,112
|
|
|
$
|
6,064
|
|
Compensation and Benefits
|
3,573
|
|
|
3,450
|
|
|
3,415
|
|
|||
Other Operating Expenses
|
1,761
|
|
|
1,624
|
|
|
1,635
|
|
|||
Operating Expenses
|
5,334
|
|
|
5,074
|
|
|
5,050
|
|
|||
Operating Income
|
$
|
1,110
|
|
|
$
|
1,038
|
|
|
$
|
1,014
|
|
Operating Income Margin
|
17.2
|
%
|
|
17.0
|
%
|
|
16.7
|
%
|
|
|
|
|
|
|
|
Payment due by Period
|
||||||||||||||||||
Contractual Obligations
(In millions of dollars)
|
Total
|
|
|
Within
1 Year
|
|
|
1-3
Years
|
|
|
4-5
Years
|
|
|
After 5
Years
|
|
|||||
Current portion of long-term debt
|
$
|
262
|
|
|
$
|
262
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Long-term debt
|
5,261
|
|
|
—
|
|
|
830
|
|
|
1,030
|
|
|
3,401
|
|
|||||
Interest on long-term debt
|
1,935
|
|
|
206
|
|
|
384
|
|
|
325
|
|
|
1,020
|
|
|||||
Net operating leases
|
2,057
|
|
|
314
|
|
|
542
|
|
|
429
|
|
|
772
|
|
|||||
Service agreements
|
387
|
|
|
228
|
|
|
134
|
|
|
12
|
|
|
13
|
|
|||||
Other long-term obligations
|
338
|
|
|
136
|
|
|
185
|
|
|
13
|
|
|
4
|
|
|||||
Total
|
$
|
10,240
|
|
|
$
|
1,146
|
|
|
$
|
2,075
|
|
|
$
|
1,809
|
|
|
$
|
5,210
|
|
|
Total Company
|
|
U.S.
|
|
ROW
|
|||
Assumed Rate of Return on Plan Assets
|
5.83
|
%
|
|
7.95
|
%
|
|
4.94
|
%
|
Discount Rate
|
3.07
|
%
|
|
3.86
|
%
|
|
2.58
|
%
|
|
0.5 Percentage
Point Increase
|
|
0.5 Percentage
Point Decrease
|
||||||||||||
(In millions of dollars)
|
U.S.
|
|
|
U.K.
|
|
|
U.S.
|
|
|
U.K.
|
|
||||
Assumed Rate of Return on Plan Assets
|
$
|
(23
|
)
|
|
$
|
(40
|
)
|
|
$
|
23
|
|
|
$
|
40
|
|
Discount Rate
|
$
|
(1
|
)
|
|
$
|
(3
|
)
|
|
$
|
—
|
|
|
$
|
2
|
|
For the Years Ended December 31,
|
|
|
|
|
|
|
||||||
(In millions, except per share figures)
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Revenue
|
|
$
|
14,024
|
|
|
$
|
13,211
|
|
|
$
|
12,893
|
|
Expense:
|
|
|
|
|
|
|
||||||
Compensation and benefits
|
|
8,085
|
|
|
7,694
|
|
|
7,569
|
|
|||
Other operating expenses
|
|
3,284
|
|
|
3,086
|
|
|
3,140
|
|
|||
Operating expenses
|
|
11,369
|
|
|
10,780
|
|
|
10,709
|
|
|||
Operating income
|
|
2,655
|
|
|
2,431
|
|
|
2,184
|
|
|||
Other net benefit credits
|
|
201
|
|
|
233
|
|
|
235
|
|
|||
Interest income
|
|
9
|
|
|
5
|
|
|
13
|
|
|||
Interest expense
|
|
(237
|
)
|
|
(189
|
)
|
|
(163
|
)
|
|||
Investment income
|
|
15
|
|
|
—
|
|
|
38
|
|
|||
Income before income taxes
|
|
2,643
|
|
|
2,480
|
|
|
2,307
|
|
|||
Income tax expense
|
|
1,133
|
|
|
685
|
|
|
671
|
|
|||
Income from continuing operations
|
|
1,510
|
|
|
1,795
|
|
|
1,636
|
|
|||
Discontinued operations, net of tax
|
|
2
|
|
|
—
|
|
|
—
|
|
|||
Net income before non-controlling interests
|
|
1,512
|
|
|
1,795
|
|
|
1,636
|
|
|||
Less: Net income attributable to non-controlling interests
|
|
20
|
|
|
27
|
|
|
37
|
|
|||
Net income attributable to the Company
|
|
$
|
1,492
|
|
|
$
|
1,768
|
|
|
$
|
1,599
|
|
Basic net income per share – Continuing operations
|
|
$
|
2.91
|
|
|
$
|
3.41
|
|
|
$
|
3.01
|
|
– Net income attributable to the Company
|
|
$
|
2.91
|
|
|
$
|
3.41
|
|
|
$
|
3.01
|
|
Diluted net income per share – Continuing operations
|
|
$
|
2.87
|
|
|
$
|
3.38
|
|
|
$
|
2.98
|
|
– Net income attributable to the Company
|
|
$
|
2.87
|
|
|
$
|
3.38
|
|
|
$
|
2.98
|
|
Average number of shares outstanding – Basic
|
|
513
|
|
|
519
|
|
|
531
|
|
|||
– Diluted
|
|
519
|
|
|
524
|
|
|
536
|
|
|||
Shares outstanding at December 31,
|
|
509
|
|
|
514
|
|
|
522
|
|
For the Years Ended December 31,
(In millions)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Net income before non-controlling interests
|
$
|
1,512
|
|
|
$
|
1,795
|
|
|
$
|
1,636
|
|
Other comprehensive income (loss), before tax:
|
|
|
|
|
|
||||||
Foreign currency translation adjustments
|
717
|
|
|
(742
|
)
|
|
(639
|
)
|
|||
Unrealized investment (loss) income
|
(7
|
)
|
|
21
|
|
|
1
|
|
|||
Gain (loss) related to pension/post-retirement plans
|
408
|
|
|
(119
|
)
|
|
337
|
|
|||
Other comprehensive income (loss), before tax
|
1,118
|
|
|
(840
|
)
|
|
(301
|
)
|
|||
Income tax expense on other comprehensive income
|
68
|
|
|
33
|
|
|
72
|
|
|||
Other comprehensive income (loss), net of tax
|
1,050
|
|
|
(873
|
)
|
|
(373
|
)
|
|||
Comprehensive income
|
2,562
|
|
|
922
|
|
|
1,263
|
|
|||
Less: Comprehensive income attributable to non-controlling interests
|
20
|
|
|
27
|
|
|
37
|
|
|||
Comprehensive income attributable to the Company
|
$
|
2,542
|
|
|
$
|
895
|
|
|
$
|
1,226
|
|
December 31,
|
|
|
|
||||
(In millions, except share figures)
|
2017
|
|
|
2016
|
|
||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
1,205
|
|
|
$
|
1,026
|
|
Receivables
|
|
|
|
||||
Commissions and fees
|
3,777
|
|
|
3,370
|
|
||
Advanced premiums and claims
|
65
|
|
|
83
|
|
||
Other
|
401
|
|
|
286
|
|
||
|
4,243
|
|
|
3,739
|
|
||
Less-allowance for doubtful accounts and cancellations
|
(110
|
)
|
|
(96
|
)
|
||
Net receivables
|
4,133
|
|
|
3,643
|
|
||
Other current assets
|
224
|
|
|
215
|
|
||
Total current assets
|
5,562
|
|
|
4,884
|
|
||
Goodwill
|
9,089
|
|
|
8,369
|
|
||
Other intangible assets
|
1,274
|
|
|
1,126
|
|
||
Fixed assets, net
|
712
|
|
|
725
|
|
||
Pension related assets
|
1,693
|
|
|
776
|
|
||
Deferred tax assets
|
669
|
|
|
1,097
|
|
||
Other assets
|
1,430
|
|
|
1,213
|
|
||
|
$
|
20,429
|
|
|
$
|
18,190
|
|
LIABILITIES AND EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Short-term debt
|
$
|
262
|
|
|
$
|
312
|
|
Accounts payable and accrued liabilities
|
2,083
|
|
|
1,969
|
|
||
Accrued compensation and employee benefits
|
1,718
|
|
|
1,655
|
|
||
Accrued income taxes
|
199
|
|
|
146
|
|
||
Total current liabilities
|
4,262
|
|
|
4,082
|
|
||
Fiduciary liabilities
|
4,847
|
|
|
4,241
|
|
||
Less – cash and investments held in a fiduciary capacity
|
(4,847
|
)
|
|
(4,241
|
)
|
||
|
—
|
|
|
—
|
|
||
Long-term debt
|
5,225
|
|
|
4,495
|
|
||
Pension, postretirement and postemployment benefits
|
1,888
|
|
|
2,076
|
|
||
Liability for errors and omissions
|
301
|
|
|
308
|
|
||
Other liabilities
|
1,311
|
|
|
957
|
|
||
Commitments and contingencies
|
—
|
|
|
—
|
|
||
Equity:
|
|
|
|
||||
Preferred stock, $1 par value, authorized 6,000,000 shares, none issued
|
—
|
|
|
—
|
|
||
Common stock, $1 par value, authorized
|
|
|
|
||||
1,600,000,000 shares, issued 560,641,640 shares at December 31, 2017 and December 31, 2016
|
561
|
|
|
561
|
|
||
Additional paid-in capital
|
784
|
|
|
842
|
|
||
Retained earnings
|
13,140
|
|
|
12,388
|
|
||
Accumulated other comprehensive loss
|
(4,043
|
)
|
|
(5,093
|
)
|
||
Non-controlling interests
|
83
|
|
|
80
|
|
||
|
10,525
|
|
|
8,778
|
|
||
Less – treasury shares, at cost, 51,930,135 shares at December 31, 2017 and 46,150,415 shares at December 31, 2016
|
(3,083
|
)
|
|
(2,506
|
)
|
||
Total equity
|
7,442
|
|
|
6,272
|
|
||
|
$
|
20,429
|
|
|
$
|
18,190
|
|
For the Years Ended December 31,
|
|
|
|
|
|
||||||
(In millions)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Operating cash flows:
|
|
|
|
|
|
||||||
Net income before non-controlling interests
|
$
|
1,512
|
|
|
$
|
1,795
|
|
|
$
|
1,636
|
|
Adjustments to reconcile net income to cash provided by operations:
|
|
|
|
|
|
||||||
Depreciation and amortization of fixed assets and capitalized software
|
312
|
|
|
308
|
|
|
314
|
|
|||
Amortization of intangible assets
|
169
|
|
|
130
|
|
|
109
|
|
|||
Adjustments and payments related to contingent consideration liability
|
(24
|
)
|
|
(33
|
)
|
|
11
|
|
|||
Gain on deconsolidation of entity
|
—
|
|
|
(11
|
)
|
|
—
|
|
|||
Provision for deferred income taxes
|
396
|
|
|
68
|
|
|
178
|
|
|||
Gain on investments
|
(15
|
)
|
|
—
|
|
|
(38
|
)
|
|||
Loss (Gain) on disposition of assets
|
10
|
|
|
6
|
|
|
(13
|
)
|
|||
Share-based compensation expense
|
149
|
|
|
109
|
|
|
88
|
|
|||
Changes in assets and liabilities:
|
|
|
|
|
|
||||||
Net receivables
|
(454
|
)
|
|
(154
|
)
|
|
(52
|
)
|
|||
Other current assets
|
(3
|
)
|
|
(9
|
)
|
|
3
|
|
|||
Other assets
|
(199
|
)
|
|
34
|
|
|
(10
|
)
|
|||
Accounts payable and accrued liabilities
|
87
|
|
|
55
|
|
|
(125
|
)
|
|||
Accrued compensation and employee benefits
|
63
|
|
|
2
|
|
|
23
|
|
|||
Accrued income taxes
|
37
|
|
|
(21
|
)
|
|
(15
|
)
|
|||
Contributions to pension and other benefit plans in excess of current year expense/credit
|
(457
|
)
|
|
(279
|
)
|
|
(231
|
)
|
|||
Other liabilities
|
406
|
|
|
(97
|
)
|
|
(60
|
)
|
|||
Effect of exchange rate changes
|
(96
|
)
|
|
104
|
|
|
70
|
|
|||
Net cash provided by operations
|
1,893
|
|
|
2,007
|
|
|
1,888
|
|
|||
Financing cash flows:
|
|
|
|
|
|
||||||
Purchase of treasury shares
|
(900
|
)
|
|
(800
|
)
|
|
(1,400
|
)
|
|||
Net increase in commercial paper
|
—
|
|
|
50
|
|
|
—
|
|
|||
Proceeds from issuance of debt
|
987
|
|
|
347
|
|
|
1,091
|
|
|||
Repayments of debt
|
(315
|
)
|
|
(12
|
)
|
|
(61
|
)
|
|||
Shares withheld for taxes on vested units – treasury shares
|
(49
|
)
|
|
(39
|
)
|
|
(49
|
)
|
|||
Issuance of common stock from treasury shares
|
166
|
|
|
188
|
|
|
224
|
|
|||
Payments of deferred and contingent consideration for acquisitions
|
(136
|
)
|
|
(98
|
)
|
|
(49
|
)
|
|||
Distributions of non-controlling interests
|
(22
|
)
|
|
(21
|
)
|
|
(30
|
)
|
|||
Dividends paid
|
(740
|
)
|
|
(682
|
)
|
|
(632
|
)
|
|||
Net cash used for financing activities
|
(1,009
|
)
|
|
(1,067
|
)
|
|
(906
|
)
|
|||
Investing cash flows:
|
|
|
|
|
|
||||||
Capital expenditures
|
(302
|
)
|
|
(253
|
)
|
|
(325
|
)
|
|||
Net (purchases) sales of long-term investments
|
(13
|
)
|
|
2
|
|
|
(65
|
)
|
|||
Proceeds from sales of fixed assets
|
8
|
|
|
4
|
|
|
2
|
|
|||
Dispositions
|
—
|
|
|
—
|
|
|
71
|
|
|||
Acquisitions
|
(655
|
)
|
|
(813
|
)
|
|
(952
|
)
|
|||
Other, net
|
6
|
|
|
4
|
|
|
4
|
|
|||
Net cash used for investing activities
|
(956
|
)
|
|
(1,056
|
)
|
|
(1,265
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
251
|
|
|
(232
|
)
|
|
(301
|
)
|
|||
Increase (decrease) in cash and cash equivalents
|
179
|
|
|
(348
|
)
|
|
(584
|
)
|
|||
Cash and cash equivalents at beginning of year
|
1,026
|
|
|
1,374
|
|
|
1,958
|
|
|||
Cash and cash equivalents at end of year
|
$
|
1,205
|
|
|
$
|
1,026
|
|
|
$
|
1,374
|
|
For the Years Ended December 31,
|
|
|
|
|
|
||||||
(In millions, except per share figures)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
COMMON STOCK
|
|
|
|
|
|
||||||
Balance, beginning and end of year
|
$
|
561
|
|
|
$
|
561
|
|
|
$
|
561
|
|
ADDITIONAL PAID-IN CAPITAL
|
|
|
|
|
|
||||||
Balance, beginning of year
|
$
|
842
|
|
|
$
|
861
|
|
|
$
|
930
|
|
Change in accrued stock compensation costs
|
63
|
|
|
44
|
|
|
16
|
|
|||
Issuance of shares under stock compensation plans and employee stock purchase plans and related tax impact
|
(120
|
)
|
|
(63
|
)
|
|
(85
|
)
|
|||
Other
|
(1
|
)
|
|
—
|
|
|
—
|
|
|||
Balance, end of year
|
$
|
784
|
|
|
$
|
842
|
|
|
$
|
861
|
|
RETAINED EARNINGS
|
|
|
|
|
|
||||||
Balance, beginning of year
|
$
|
12,388
|
|
|
$
|
11,302
|
|
|
$
|
10,335
|
|
Net income attributable to the Company
|
1,492
|
|
|
1,768
|
|
|
1,599
|
|
|||
Dividend equivalents declared - (per share amounts: $1.43 in 2017, $1.30 in 2016, and $1.18 in 2015)
|
(6
|
)
|
|
(7
|
)
|
|
(4
|
)
|
|||
Dividends declared – (per share amounts: $1.43 in 2017, $1.30 in 2016, and $1.18 in 2015)
|
(734
|
)
|
|
(675
|
)
|
|
(628
|
)
|
|||
Balance, end of year
|
$
|
13,140
|
|
|
$
|
12,388
|
|
|
$
|
11,302
|
|
ACCUMULATED OTHER COMPREHENSIVE LOSS
|
|
|
|
|
|
||||||
Balance, beginning of year
|
$
|
(5,093
|
)
|
|
$
|
(4,220
|
)
|
|
$
|
(3,847
|
)
|
Other comprehensive income (loss), net of tax
|
1,050
|
|
|
(873
|
)
|
|
(373
|
)
|
|||
Balance, end of year
|
$
|
(4,043
|
)
|
|
$
|
(5,093
|
)
|
|
$
|
(4,220
|
)
|
TREASURY SHARES
|
|
|
|
|
|
||||||
Balance, beginning of year
|
$
|
(2,506
|
)
|
|
$
|
(1,991
|
)
|
|
$
|
(925
|
)
|
Issuance of shares under stock compensation plans and employee stock purchase plans
|
323
|
|
|
285
|
|
|
334
|
|
|||
Purchase of treasury shares
|
(900
|
)
|
|
(800
|
)
|
|
(1,400
|
)
|
|||
Balance, end of year
|
$
|
(3,083
|
)
|
|
$
|
(2,506
|
)
|
|
$
|
(1,991
|
)
|
NON-CONTROLLING INTERESTS
|
|
|
|
|
|
||||||
Balance, beginning of year
|
$
|
80
|
|
|
$
|
89
|
|
|
$
|
79
|
|
Net income attributable to non-controlling interests
|
20
|
|
|
27
|
|
|
37
|
|
|||
Distributions and other changes
|
(17
|
)
|
|
(22
|
)
|
|
(27
|
)
|
|||
Deconsolidation of subsidiary
|
—
|
|
|
(14
|
)
|
|
—
|
|
|||
Balance, end of year
|
$
|
83
|
|
|
$
|
80
|
|
|
$
|
89
|
|
TOTAL EQUITY
|
$
|
7,442
|
|
|
$
|
6,272
|
|
|
$
|
6,602
|
|
December 31,
|
|
|
|
|
||||
(In millions of dollars)
|
|
2017
|
|
|
2016
|
|
||
Furniture and equipment
|
|
$
|
1,179
|
|
|
$
|
1,113
|
|
Land and buildings
|
|
385
|
|
|
389
|
|
||
Leasehold and building improvements
|
|
974
|
|
|
906
|
|
||
|
|
2,538
|
|
|
2,408
|
|
||
Less-accumulated depreciation and amortization
|
|
(1,826
|
)
|
|
(1,683
|
)
|
||
|
|
$
|
712
|
|
|
$
|
725
|
|
(In millions of dollars)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Assets acquired, excluding cash
|
$
|
898
|
|
|
$
|
960
|
|
|
$
|
1,327
|
|
Liabilities assumed
|
(134
|
)
|
|
(111
|
)
|
|
(199
|
)
|
|||
Contingent/deferred purchase consideration
|
(109
|
)
|
|
(36
|
)
|
|
(176
|
)
|
|||
Net cash outflow for acquisitions
|
$
|
655
|
|
|
$
|
813
|
|
|
$
|
952
|
|
(In millions of dollars)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Interest paid
|
$
|
199
|
|
|
$
|
178
|
|
|
$
|
146
|
|
Income taxes paid, net of refunds
|
$
|
583
|
|
|
$
|
642
|
|
|
$
|
433
|
|
For the Years Ended December 31,
|
|||||||||||
(In millions of dollars)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Balance at beginning of year
|
$
|
96
|
|
|
$
|
87
|
|
|
$
|
95
|
|
Provision charged to operations
|
31
|
|
|
31
|
|
|
14
|
|
|||
Accounts written-off, net of recoveries
|
(17
|
)
|
|
(20
|
)
|
|
(18
|
)
|
|||
Effect of exchange rate changes and other
|
—
|
|
|
(2
|
)
|
|
(4
|
)
|
|||
Balance at end of year
|
$
|
110
|
|
|
$
|
96
|
|
|
$
|
87
|
|
(In millions of dollars)
|
Unrealized Investment Gains (Losses)
|
|
Pension/Post-Retirement Plans Gains (Losses)
|
|
Foreign Currency Translation Adjustments
|
|
Total
|
||||||||
Balance as of January 1, 2017
|
$
|
19
|
|
|
$
|
(3,232
|
)
|
|
$
|
(1,880
|
)
|
|
$
|
(5,093
|
)
|
Other comprehensive (loss) income before reclassifications
|
(5
|
)
|
|
160
|
|
|
715
|
|
|
870
|
|
||||
Amounts reclassified from accumulated other comprehensive loss
|
—
|
|
|
180
|
|
|
—
|
|
|
180
|
|
||||
Net current period other comprehensive (loss)
income
|
(5
|
)
|
|
340
|
|
|
715
|
|
|
1,050
|
|
||||
Balance as of December 31, 2017
|
$
|
14
|
|
|
$
|
(2,892
|
)
|
|
$
|
(1,165
|
)
|
|
$
|
(4,043
|
)
|
(In millions of dollars)
|
Unrealized Investment Gains
|
|
Pension/Post-Retirement Plans Gains (Losses)
|
|
Foreign Currency Translation Adjustments
|
|
Total
|
||||||||
Balance as of January 1, 2016
|
$
|
6
|
|
|
$
|
(3,124
|
)
|
|
$
|
(1,102
|
)
|
|
$
|
(4,220
|
)
|
Other comprehensive income (loss) before reclassifications
|
13
|
|
|
(294
|
)
|
|
(778
|
)
|
|
(1,059
|
)
|
||||
Amounts reclassified from accumulated other comprehensive loss
|
—
|
|
|
186
|
|
|
—
|
|
|
186
|
|
||||
Net current period other comprehensive income (loss)
|
13
|
|
|
(108
|
)
|
|
(778
|
)
|
|
(873
|
)
|
||||
Balance as of December 31, 2016
|
$
|
19
|
|
|
$
|
(3,232
|
)
|
|
$
|
(1,880
|
)
|
|
$
|
(5,093
|
)
|
For the Years Ended December 31,
|
2017
|
||||||||
(In millions of dollars)
|
Pre-Tax
|
Tax (Credit)
|
Net of Tax
|
||||||
Foreign currency translation adjustments
|
$
|
717
|
|
$
|
2
|
|
$
|
715
|
|
Unrealized investment losses
|
(7
|
)
|
(2
|
)
|
(5
|
)
|
|||
Pension/post-retirement plans:
|
|
|
|
||||||
Amortization of losses included in net periodic pension cost:
|
|
|
|
||||||
Prior service credits (a)
|
(1
|
)
|
—
|
|
(1
|
)
|
|||
Net actuarial losses (a)
|
167
|
|
30
|
|
137
|
|
|||
Effect of curtailment (a)
|
(1
|
)
|
—
|
|
(1
|
)
|
|||
Effect of settlement (a)
|
54
|
|
9
|
|
45
|
|
|||
Subtotal
|
219
|
|
39
|
|
180
|
|
|||
Net gains arising during period
|
374
|
|
62
|
|
312
|
|
|||
Foreign currency translation adjustments
|
(201
|
)
|
(36
|
)
|
(165
|
)
|
|||
Other adjustments
|
16
|
|
3
|
|
13
|
|
|||
Pension/post-retirement plans gains
|
408
|
|
68
|
|
340
|
|
|||
Other comprehensive income
|
$
|
1,118
|
|
$
|
68
|
|
$
|
1,050
|
|
For the Years Ended December 31,
|
2016
|
||||||||
(In millions of dollars)
|
Pre-Tax
|
Tax (Credit)
|
Net of Tax
|
||||||
Foreign currency translation adjustments
|
$
|
(742
|
)
|
$
|
36
|
|
$
|
(778
|
)
|
Unrealized investment gains
|
21
|
|
8
|
|
13
|
|
|||
Pension/post-retirement plans:
|
|
|
|
||||||
Amortization of losses included in net periodic pension cost:
|
|
|
|
||||||
Prior service losses (a)
|
3
|
|
1
|
|
2
|
|
|||
Net actuarial losses (a)
|
166
|
|
46
|
|
120
|
|
|||
Subtotal
|
169
|
|
47
|
|
122
|
|
|||
Effect of curtailment
|
102
|
|
38
|
|
64
|
|
|||
Net losses arising during period
|
(855
|
)
|
(175
|
)
|
(680
|
)
|
|||
Foreign currency translation adjustments
|
416
|
|
70
|
|
346
|
|
|||
Other adjustments
|
49
|
|
9
|
|
40
|
|
|||
Pension/post-retirement plans losses
|
(119
|
)
|
(11
|
)
|
(108
|
)
|
|||
Other comprehensive (loss) income
|
$
|
(840
|
)
|
$
|
33
|
|
$
|
(873
|
)
|
For the Years Ended December 31,
|
2015
|
||||||||
(In millions of dollars)
|
Pre-Tax
|
Tax (Credit)
|
Net of Tax
|
||||||
Foreign currency translation adjustments
|
$
|
(639
|
)
|
$
|
4
|
|
$
|
(643
|
)
|
Unrealized investment gains
|
1
|
|
—
|
|
1
|
|
|||
Pension/post-retirement plans:
|
|
|
|
||||||
Amortization of (gains) losses included in net periodic pension cost:
|
|
|
|
||||||
Prior service credits (a)
|
(1
|
)
|
—
|
|
(1
|
)
|
|||
Net actuarial losses (a)
|
271
|
|
96
|
|
175
|
|
|||
Subtotal
|
270
|
|
96
|
|
174
|
|
|||
Effect of curtailment (a)
|
(3
|
)
|
—
|
|
(3
|
)
|
|||
Plan Termination (a)
|
(6
|
)
|
(3
|
)
|
(3
|
)
|
|||
Net losses arising during period
|
(125
|
)
|
(62
|
)
|
(63
|
)
|
|||
Foreign currency translation adjustments
|
214
|
|
43
|
|
171
|
|
|||
Other
|
(13
|
)
|
(6
|
)
|
(7
|
)
|
|||
Pension/post-retirement plans gains
|
337
|
|
68
|
|
269
|
|
|||
Other comprehensive (loss) income
|
$
|
(301
|
)
|
$
|
72
|
|
$
|
(373
|
)
|
(In millions of dollars)
|
December 31, 2017
|
|
|
December 31, 2016
|
|
||
Foreign currency translation adjustments (net of deferred tax adjustments of $(11) in 2017 and deferred tax adjustments of $(9) in 2016, respectively)
|
$
|
(1,165
|
)
|
|
$
|
(1,880
|
)
|
Net unrealized investment gains (net of deferred tax liability of $7 in 2017 and $10 in 2016)
|
14
|
|
|
19
|
|
||
Net charges related to pension/post-retirement plans (net of deferred tax asset of $1,462 and $1,530 in 2017 and 2016, respectively)
|
(2,892
|
)
|
|
(3,232
|
)
|
||
|
$
|
(4,043
|
)
|
|
$
|
(5,093
|
)
|
•
|
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, 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 managing general agent providing property catastrophe insurance to business and homeowners, and MMA acquired Hendrick & Hendrick, Inc., a Texas-based insurance agency.
|
•
|
August – Mercer acquired Jaeson Associates, a Portugal-based talent management consulting organization.
|
•
|
December – Mercer acquired Promerit AG, a Germany-based consultancy specializing in HR digitalization and business and HR transformation and BFC Asset Management Co., Ltd., a Japan-based independently owned asset manager, focused on alternative investment strategies.
|
(In millions)
|
2017
|
|
|
Cash
|
$
|
668
|
|
Estimated fair value of deferred/contingent consideration
|
109
|
|
|
Total consideration
|
$
|
777
|
|
Allocation of purchase price:
|
|
||
Cash and cash equivalents
|
$
|
13
|
|
Accounts receivable, net
|
30
|
|
|
Other current assets
|
6
|
|
|
Property, plant, and equipment
|
6
|
|
|
Other intangible assets
|
304
|
|
|
Goodwill
|
551
|
|
|
Other assets
|
1
|
|
|
Total assets acquired
|
911
|
|
|
Current liabilities
|
25
|
|
|
Other liabilities
|
109
|
|
|
Total liabilities assumed
|
134
|
|
|
Net assets acquired
|
$
|
777
|
|
|
|
Amount
|
|
Weighted Average Amortization Period
|
||
Client relationships
|
|
$
|
263
|
|
|
12 years
|
Other (a)
|
|
41
|
|
|
5 years
|
|
|
|
$
|
304
|
|
|
|
•
|
February – MMA acquired The Celedinas Agency, Inc., a Florida-based brokerage firm providing property and 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 helps clients 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.
|
|
Years Ended December 31,
|
||||||||||
(In millions, except per share data)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Revenue
|
$
|
14,100
|
|
|
$
|
13,724
|
|
|
$
|
13,528
|
|
Income from continuing operations
|
$
|
1,514
|
|
|
$
|
1,787
|
|
|
$
|
1,643
|
|
Net income attributable to the Company
|
$
|
1,496
|
|
|
$
|
1,759
|
|
|
$
|
1,606
|
|
Basic net income per share:
|
|
|
|
|
|
||||||
– Continuing operations
|
$
|
2.91
|
|
|
$
|
3.39
|
|
|
$
|
3.02
|
|
– Net income attributable to the Company
|
$
|
2.92
|
|
|
$
|
3.39
|
|
|
$
|
3.02
|
|
Diluted net income per share:
|
|
|
|
|
|
||||||
– Continuing operations
|
$
|
2.88
|
|
|
$
|
3.36
|
|
|
$
|
2.99
|
|
– Net income attributable to the Company
|
$
|
2.88
|
|
|
$
|
3.36
|
|
|
$
|
2.99
|
|
(In millions of dollars)
|
2017
|
|
|
2016
|
|
||
Balance as of January 1, as reported
|
$
|
8,369
|
|
|
$
|
7,889
|
|
Goodwill acquired
|
551
|
|
|
556
|
|
||
Other adjustments
(a)
|
169
|
|
|
(76
|
)
|
||
Balance at December 31,
|
$
|
9,089
|
|
|
$
|
8,369
|
|
(In millions of dollars)
|
2017
|
|
2016
|
||||||||||||||||||||
|
Gross
Cost
|
|
|
Accumulated
Amortization
|
|
|
Net
Carrying
Amount
|
|
|
Gross
Cost
|
|
|
Accumulated
Amortization
|
|
|
Net
Carrying
Amount
|
|
||||||
Client relationships
|
$
|
1,672
|
|
|
$
|
518
|
|
|
$
|
1,154
|
|
|
$
|
1,390
|
|
|
$
|
392
|
|
|
$
|
998
|
|
Other (a)
|
234
|
|
|
114
|
|
|
120
|
|
|
204
|
|
|
76
|
|
|
128
|
|
||||||
Amortized intangibles
|
$
|
1,906
|
|
|
$
|
632
|
|
|
$
|
1,274
|
|
|
$
|
1,594
|
|
|
$
|
468
|
|
|
$
|
1,126
|
|
For the Years Ended December 31,
|
|||||||||||
(In millions of dollars)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Income before income taxes:
|
|
|
|
|
|
||||||
U.S.
|
$
|
819
|
|
|
$
|
725
|
|
|
$
|
702
|
|
Other
|
1,824
|
|
|
1,755
|
|
|
1,605
|
|
|||
|
$
|
2,643
|
|
|
$
|
2,480
|
|
|
$
|
2,307
|
|
|
|
|
|
|
|
||||||
The expense for income taxes is comprised of:
|
|
|
|
|
|||||||
Current–
|
|
|
|
|
|
||||||
U.S. Federal
|
$
|
313
|
|
|
$
|
208
|
|
|
$
|
90
|
|
Other national governments
|
388
|
|
|
366
|
|
|
385
|
|
|||
U.S. state and local
|
36
|
|
|
43
|
|
|
52
|
|
|||
|
737
|
|
|
617
|
|
|
527
|
|
|||
Deferred–
|
|
|
|
|
|
||||||
U.S. Federal
|
286
|
|
|
26
|
|
|
125
|
|
|||
Other national governments
|
72
|
|
|
32
|
|
|
15
|
|
|||
U.S. state and local
|
38
|
|
|
10
|
|
|
4
|
|
|||
|
396
|
|
|
68
|
|
|
144
|
|
|||
Total income taxes
|
$
|
1,133
|
|
|
$
|
685
|
|
|
$
|
671
|
|
December 31,
|
|||||||
(In millions of dollars)
|
2017
|
|
|
2016
|
|
||
Deferred tax assets:
|
|
|
|
||||
Accrued expenses not currently deductible
|
$
|
369
|
|
|
$
|
582
|
|
Differences related to non-U.S. operations
(a)
|
139
|
|
|
127
|
|
||
Accrued U.S. retirement benefits
|
394
|
|
|
629
|
|
||
Net operating losses
(b)
|
67
|
|
|
56
|
|
||
Income currently recognized for tax
|
49
|
|
|
71
|
|
||
Other
|
31
|
|
|
50
|
|
||
|
$
|
1,049
|
|
|
$
|
1,515
|
|
Deferred tax liabilities:
|
|
|
|
||||
Differences related to non-U.S. operations
|
$
|
235
|
|
|
$
|
217
|
|
Depreciation and amortization
|
338
|
|
|
377
|
|
||
Accrued retirement & postretirement benefits - non-U.S. operations
|
172
|
|
|
10
|
|
||
Other
|
16
|
|
|
14
|
|
||
|
$
|
761
|
|
|
$
|
618
|
|
(a)
|
Net of valuation allowances of
$18 million
in
2017
and
$3 million
in
2016
.
|
(b)
|
Net of valuation allowances of
$11 million
in
2017
and
$17 million
in
2016
.
|
December 31,
|
|||||||
(In millions of dollars)
|
2017
|
|
|
2016
|
|
||
Balance sheet classifications:
|
|
|
|
||||
Deferred tax assets
|
$
|
669
|
|
|
$
|
1,097
|
|
Other liabilities
|
$
|
381
|
|
|
$
|
200
|
|
For the Years Ended December 31,
|
2017
|
|
|
2016
|
|
|
2015
|
|
U.S. Federal statutory rate
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
U.S. state and local income taxes—net of U.S. Federal income tax benefit
|
1.5
|
|
|
1.5
|
|
|
1.6
|
|
Differences related to non-U.S. operations
|
(8.6
|
)
|
|
(9.2
|
)
|
|
(8.0
|
)
|
U.S. Tax Reform
|
17.4
|
|
|
—
|
|
|
—
|
|
Equity compensation
|
(2.6
|
)
|
|
—
|
|
|
—
|
|
Other
|
0.2
|
|
|
0.3
|
|
|
0.5
|
|
Effective tax rate
|
42.9
|
%
|
|
27.6
|
%
|
|
29.1
|
%
|
(In millions of dollars)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Balance at January 1,
|
$
|
65
|
|
|
$
|
74
|
|
|
$
|
97
|
|
Additions, based on tax positions related to current year
|
1
|
|
|
2
|
|
|
3
|
|
|||
Additions for tax positions of prior years
|
14
|
|
|
6
|
|
|
22
|
|
|||
Reductions for tax positions of prior years
|
(6
|
)
|
|
(6
|
)
|
|
(10
|
)
|
|||
Settlements
|
—
|
|
|
(7
|
)
|
|
(20
|
)
|
|||
Lapses in statutes of limitation
|
(3
|
)
|
|
(4
|
)
|
|
(18
|
)
|
|||
Balance at December 31,
|
$
|
71
|
|
|
$
|
65
|
|
|
$
|
74
|
|
|
Pension
Benefits
|
|
Postretirement
Benefits
|
||||||||
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
Weighted average assumptions:
|
|
|
|
|
|
|
|
||||
Discount rate (for expense)
|
3.40
|
%
|
|
4.10
|
%
|
|
3.64
|
%
|
|
4.12
|
%
|
Expected return on plan assets
|
6.64
|
%
|
|
7.06
|
%
|
|
—
|
|
|
—
|
|
Rate of compensation increase (for expense)
|
1.77
|
%
|
|
2.44
|
%
|
|
—
|
|
|
—
|
|
Discount rate (for benefit obligation)
|
3.07
|
%
|
|
3.40
|
%
|
|
3.21
|
%
|
|
3.64
|
%
|
Rate of compensation increase (for benefit obligation)*
|
1.73
|
%
|
|
1.77
|
%
|
|
—
|
|
|
—
|
|
Combined U.S. and significant non-U.S. Plans
|
Pension
|
|
Postretirement
|
||||||||||||||||||||
For the Years Ended December 31,
|
Benefits
|
|
Benefits
|
||||||||||||||||||||
(In millions of dollars)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
||||||
Service cost (a)
|
$
|
76
|
|
|
$
|
178
|
|
|
$
|
196
|
|
|
$
|
1
|
|
|
$
|
2
|
|
|
$
|
3
|
|
Interest cost
|
497
|
|
|
537
|
|
|
587
|
|
|
4
|
|
|
5
|
|
|
5
|
|
||||||
Expected return on plan assets
|
(921
|
)
|
|
(940
|
)
|
|
(977
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Amortization of prior service (credit) cost
|
(2
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|
1
|
|
|
4
|
|
|
3
|
|
||||||
Recognized actuarial loss (gain)
|
167
|
|
|
168
|
|
|
271
|
|
|
—
|
|
|
(2
|
)
|
|
(1
|
)
|
||||||
Net periodic benefit (credit) cost
|
$
|
(183
|
)
|
|
$
|
(58
|
)
|
|
$
|
76
|
|
|
$
|
6
|
|
|
$
|
9
|
|
|
$
|
10
|
|
Curtailment (loss) gain
|
(1
|
)
|
|
(4
|
)
|
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Plan termination
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(128
|
)
|
||||||
Settlement loss
|
54
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total (credit) cost
|
$
|
(130
|
)
|
|
$
|
(62
|
)
|
|
$
|
82
|
|
|
$
|
6
|
|
|
$
|
9
|
|
|
$
|
(118
|
)
|
|
U.S. Pension
Benefits
|
|
U.S. Postretirement
Benefits
|
||||||||||||
(In millions of dollars)
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
||||
Change in benefit obligation:
|
|
|
|
|
|
|
|
||||||||
Benefit obligation at beginning of year
|
$
|
5,894
|
|
|
$
|
5,685
|
|
|
$
|
37
|
|
|
$
|
40
|
|
Service cost
|
—
|
|
|
106
|
|
|
—
|
|
|
—
|
|
||||
Interest cost
|
264
|
|
|
264
|
|
|
2
|
|
|
2
|
|
||||
Employee contributions
|
—
|
|
|
—
|
|
|
3
|
|
|
3
|
|
||||
Effect of curtailment
|
—
|
|
|
(98
|
)
|
|
—
|
|
|
—
|
|
||||
Actuarial loss (gain)
|
538
|
|
|
160
|
|
|
3
|
|
|
—
|
|
||||
Benefits paid
|
(475
|
)
|
|
(223
|
)
|
|
(9
|
)
|
|
(8
|
)
|
||||
Benefit obligation, December 31
|
$
|
6,221
|
|
|
$
|
5,894
|
|
|
$
|
36
|
|
|
$
|
37
|
|
Change in plan assets:
|
|
|
|
|
|
|
|
||||||||
Fair value of plan assets at beginning of year
|
$
|
4,365
|
|
|
$
|
4,160
|
|
|
$
|
2
|
|
|
$
|
3
|
|
Actual return on plan assets
|
812
|
|
|
401
|
|
|
—
|
|
|
—
|
|
||||
Employer contributions
|
85
|
|
|
27
|
|
|
6
|
|
|
5
|
|
||||
Employee contributions
|
—
|
|
|
—
|
|
|
3
|
|
|
3
|
|
||||
Benefits paid
|
(475
|
)
|
|
(223
|
)
|
|
(9
|
)
|
|
(8
|
)
|
||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
||||
Fair value of plan assets, December 31
|
$
|
4,787
|
|
|
$
|
4,365
|
|
|
$
|
2
|
|
|
$
|
2
|
|
Net funded status, December 31
|
$
|
(1,434
|
)
|
|
$
|
(1,529
|
)
|
|
$
|
(34
|
)
|
|
$
|
(35
|
)
|
Amounts recognized in the consolidated balance sheets:
|
|
|
|
|
|
|
|
||||||||
Current liabilities
|
$
|
(27
|
)
|
|
$
|
(27
|
)
|
|
$
|
(2
|
)
|
|
$
|
(2
|
)
|
Non-current liabilities
|
(1,407
|
)
|
|
(1,502
|
)
|
|
(32
|
)
|
|
(33
|
)
|
||||
Net liability recognized, December 31
|
$
|
(1,434
|
)
|
|
$
|
(1,529
|
)
|
|
$
|
(34
|
)
|
|
$
|
(35
|
)
|
Amounts recognized in other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Prior service (cost) credit
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(3
|
)
|
Net actuarial (loss) gain
|
(1,766
|
)
|
|
(1,720
|
)
|
|
6
|
|
|
11
|
|
||||
Total recognized accumulated other comprehensive (loss) income, December 31
|
$
|
(1,766
|
)
|
|
$
|
(1,720
|
)
|
|
$
|
6
|
|
|
$
|
8
|
|
Cumulative employer contributions in excess of (less than) net periodic cost
|
332
|
|
|
191
|
|
|
(40
|
)
|
|
(43
|
)
|
||||
Net amount recognized in consolidated balance sheet
|
$
|
(1,434
|
)
|
|
$
|
(1,529
|
)
|
|
$
|
(34
|
)
|
|
$
|
(35
|
)
|
Accumulated benefit obligation at December 31
|
$
|
6,221
|
|
|
$
|
5,894
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
U.S. Pension
Benefits
|
|
U.S. Postretirement
Benefits
|
||||||||||||
(In millions of dollars)
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
||||
Reconciliation of prior service credit (cost) recognized in accumulated other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Beginning balance
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(3
|
)
|
|
$
|
(7
|
)
|
Recognized as component of net periodic benefit cost
|
—
|
|
|
—
|
|
|
3
|
|
|
4
|
|
||||
Prior service cost, December 31
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(3
|
)
|
|
U.S. Pension
Benefits
|
|
U.S. Postretirement
Benefits
|
||||||||||||
(In millions of dollars)
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
||||
Reconciliation of net actuarial (loss) gain recognized in accumulated other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Beginning balance
|
$
|
(1,720
|
)
|
|
$
|
(1,754
|
)
|
|
$
|
11
|
|
|
$
|
13
|
|
Recognized as component of net periodic benefit cost (credit)
|
37
|
|
|
74
|
|
|
(1
|
)
|
|
(2
|
)
|
||||
Changes in plan assets and benefit obligations recognized in other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Effect of curtailment
|
—
|
|
|
98
|
|
|
—
|
|
|
—
|
|
||||
Other
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
||||
Liability experience
|
(538
|
)
|
|
(160
|
)
|
|
(3
|
)
|
|
—
|
|
||||
Asset experience
|
455
|
|
|
22
|
|
|
—
|
|
|
—
|
|
||||
Total (loss) gain recognized as change in plan assets and benefit obligations
|
(83
|
)
|
|
(40
|
)
|
|
(4
|
)
|
|
—
|
|
||||
Net actuarial (loss) gain, December 31
|
$
|
(1,766
|
)
|
|
$
|
(1,720
|
)
|
|
$
|
6
|
|
|
$
|
11
|
|
For the Years Ended December 31,
|
U.S. Pension
Benefits
|
|
U.S. Postretirement
Benefits
|
||||||||||||||||||||
(In millions of dollars)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
||||||
Total recognized in net periodic benefit cost and other comprehensive (income) loss
|
$
|
(10
|
)
|
|
$
|
31
|
|
|
$
|
146
|
|
|
$
|
5
|
|
|
$
|
2
|
|
|
$
|
(138
|
)
|
|
U.S. Pension
Benefits
|
|
U.S. Postretirement
Benefits
|
||||
(In millions of dollars)
|
2018
|
|
|
2018
|
|
||
Net actuarial loss
|
$
|
54
|
|
|
$
|
1
|
|
|
U.S. Pension
Benefits
|
|
U.S. Postretirement Benefits
|
||||||||
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
Weighted average assumptions:
|
|
|
|
|
|
|
|
||||
Discount rate (for expense)
|
4.58
|
%
|
|
4.71
|
%
|
|
4.12
|
%
|
|
4.36
|
%
|
Expected return on plan assets
|
7.95
|
%
|
|
8.72
|
%
|
|
—
|
|
|
—
|
|
Rate of compensation increase (for expense)
|
—
|
|
|
2.00
|
%
|
|
—
|
|
|
—
|
|
Discount rate (for benefit obligation)
|
3.86
|
%
|
|
4.58
|
%
|
|
3.67
|
%
|
|
4.12
|
%
|
U.S. Plans only
|
Pension
Benefits
|
|
Postretirement
Benefits
|
||||||||||||||||||||
For the Years Ended December 31,
|
|
||||||||||||||||||||||
(In millions of dollars)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
||||||
Service cost (a)
|
$
|
—
|
|
|
$
|
106
|
|
|
$
|
114
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1
|
|
Interest cost
|
264
|
|
|
264
|
|
|
254
|
|
|
2
|
|
|
2
|
|
|
2
|
|
||||||
Expected return on plan assets
|
(357
|
)
|
|
(379
|
)
|
|
(373
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Amortization of prior service (credit) cost
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
4
|
|
|
3
|
|
||||||
Recognized actuarial loss (gain)
|
37
|
|
|
74
|
|
|
146
|
|
|
(1
|
)
|
|
(2
|
)
|
|
(2
|
)
|
||||||
Net periodic benefit (credit) cost
|
$
|
(56
|
)
|
|
$
|
65
|
|
|
$
|
141
|
|
|
$
|
4
|
|
|
$
|
4
|
|
|
$
|
4
|
|
Plan termination
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(128
|
)
|
||||||
Total (credit) cost
|
$
|
(56
|
)
|
|
$
|
65
|
|
|
$
|
141
|
|
|
$
|
4
|
|
|
$
|
4
|
|
|
$
|
(124
|
)
|
|
|
|
|
|
Non-U.S. Pension
Benefits
|
|
Non-U.S.
Postretirement Benefits
|
||||||||||||
(In millions of dollars)
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
||||
Change in benefit obligation:
|
|
|
|
|
|
|
|
||||||||
Benefit obligation at beginning of year
|
$
|
9,670
|
|
|
$
|
9,076
|
|
|
$
|
81
|
|
|
$
|
79
|
|
Service cost
|
76
|
|
|
72
|
|
|
1
|
|
|
2
|
|
||||
Interest cost
|
233
|
|
|
273
|
|
|
2
|
|
|
3
|
|
||||
Employee contributions
|
7
|
|
|
7
|
|
|
—
|
|
|
—
|
|
||||
Actuarial (gain) loss
|
(149
|
)
|
|
1,966
|
|
|
—
|
|
|
5
|
|
||||
Plan amendments
|
—
|
|
|
(49
|
)
|
|
(17
|
)
|
|
—
|
|
||||
Effect of settlement
|
(211
|
)
|
|
(27
|
)
|
|
—
|
|
|
—
|
|
||||
Effect of curtailment
|
(1
|
)
|
|
(7
|
)
|
|
—
|
|
|
—
|
|
||||
Benefits paid
|
(291
|
)
|
|
(352
|
)
|
|
(3
|
)
|
|
(3
|
)
|
||||
Foreign currency changes
|
703
|
|
|
(1,290
|
)
|
|
4
|
|
|
(5
|
)
|
||||
Other
|
16
|
|
|
1
|
|
|
—
|
|
|
—
|
|
||||
Benefit obligation December 31
|
$
|
10,053
|
|
|
$
|
9,670
|
|
|
$
|
68
|
|
|
$
|
81
|
|
Change in plan assets:
|
|
|
|
|
|
|
|
||||||||
Fair value of plan assets at beginning of year
|
$
|
10,017
|
|
|
$
|
9,826
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Actual return on plan assets
|
875
|
|
|
1,815
|
|
|
—
|
|
|
—
|
|
||||
Effect of settlement
|
(211
|
)
|
|
(27
|
)
|
|
—
|
|
|
—
|
|
||||
Company contributions
|
229
|
|
|
187
|
|
|
3
|
|
|
3
|
|
||||
Employee contributions
|
7
|
|
|
7
|
|
|
—
|
|
|
—
|
|
||||
Benefits paid
|
(291
|
)
|
|
(352
|
)
|
|
(3
|
)
|
|
(3
|
)
|
||||
Foreign currency changes
|
749
|
|
|
(1,439
|
)
|
|
—
|
|
|
—
|
|
||||
Other
|
13
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Fair value of plan assets, December 31
|
$
|
11,388
|
|
|
$
|
10,017
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Net funded status, December 31
|
$
|
1,335
|
|
|
$
|
347
|
|
|
$
|
(68
|
)
|
|
$
|
(81
|
)
|
Amounts recognized in the consolidated balance sheets:
|
|
|
|
|
|
|
|
||||||||
Non-current assets
|
$
|
1,684
|
|
|
$
|
766
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Current liabilities
|
(6
|
)
|
|
(5
|
)
|
|
(4
|
)
|
|
(3
|
)
|
||||
Non-current liabilities
|
(343
|
)
|
|
(414
|
)
|
|
(64
|
)
|
|
(78
|
)
|
||||
Net asset (liability) recognized, December 31
|
$
|
1,335
|
|
|
$
|
347
|
|
|
$
|
(68
|
)
|
|
$
|
(81
|
)
|
Amounts recognized in other comprehensive (loss) income:
|
|
|
|
|
|
|
|
||||||||
Prior service credit
|
$
|
43
|
|
|
$
|
43
|
|
|
$
|
15
|
|
|
$
|
—
|
|
Net actuarial loss
|
(2,646
|
)
|
|
(3,081
|
)
|
|
(10
|
)
|
|
(11
|
)
|
||||
Total recognized accumulated other comprehensive (loss) income, December 31
|
$
|
(2,603
|
)
|
|
$
|
(3,038
|
)
|
|
$
|
5
|
|
|
$
|
(11
|
)
|
Cumulative employer contributions in excess of (less than) net periodic cost
|
3,938
|
|
|
3,385
|
|
|
(73
|
)
|
|
(70
|
)
|
||||
Net asset (liability) recognized in consolidated balance sheets, December 31
|
$
|
1,335
|
|
|
$
|
347
|
|
|
$
|
(68
|
)
|
|
$
|
(81
|
)
|
Accumulated benefit obligation, December 31
|
$
|
9,783
|
|
|
$
|
9,397
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Non-U.S. Pension
Benefits
|
|
Non-U.S.
Postretirement Benefits
|
||||||||||||
(In millions of dollars)
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
||||
Reconciliation of prior service credit (cost) recognized in accumulated other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Beginning balance
|
$
|
43
|
|
|
$
|
(3
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Recognized as component of net periodic benefit credit:
|
|
|
|
|
|
|
|
||||||||
Amortization of prior service credit
|
(2
|
)
|
|
(1
|
)
|
|
(2
|
)
|
|
—
|
|
||||
Effect of curtailment
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total recognized as component of net periodic benefit credit
|
(3
|
)
|
|
(1
|
)
|
|
(2
|
)
|
|
—
|
|
||||
Changes in plan assets and benefit obligations recognized in other comprehensive income:
|
|
|
|
|
|
|
|
||||||||
Plan amendments
|
—
|
|
|
49
|
|
|
17
|
|
|
—
|
|
||||
Exchange rate adjustments
|
3
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
||||
Prior service credit, December 31
|
$
|
43
|
|
|
$
|
43
|
|
|
$
|
15
|
|
|
$
|
—
|
|
|
Non-U.S. Pension
Benefits
|
|
Non-U.S.
Postretirement Benefits
|
||||||||||||
(In millions of dollars)
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
||||
Reconciliation of net actuarial (loss) gain recognized in accumulated other comprehensive (loss) income:
|
|
|
|
|
|
|
|
||||||||
Beginning balance
|
$
|
(3,081
|
)
|
|
$
|
(2,887
|
)
|
|
$
|
(11
|
)
|
|
$
|
(6
|
)
|
Recognized as component of net periodic benefit cost:
|
|
|
|
|
|
|
|
||||||||
Amortization of net loss
|
130
|
|
|
94
|
|
|
1
|
|
|
—
|
|
||||
Effect of settlement
|
54
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total recognized as component of net periodic benefit credit
|
184
|
|
|
94
|
|
|
1
|
|
|
—
|
|
||||
Changes in plan assets and benefit obligations recognized in other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Liability experience
|
149
|
|
|
(1,966
|
)
|
|
—
|
|
|
(5
|
)
|
||||
Asset experience
|
311
|
|
|
1,254
|
|
|
—
|
|
|
—
|
|
||||
Other
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Effect of curtailment
|
1
|
|
|
3
|
|
|
—
|
|
|
—
|
|
||||
Total amount recognized as change in plan assets and benefit obligations
|
456
|
|
|
(709
|
)
|
|
—
|
|
|
(5
|
)
|
||||
Exchange rate adjustments
|
(205
|
)
|
|
421
|
|
|
—
|
|
|
—
|
|
||||
Net actuarial loss, December 31
|
$
|
(2,646
|
)
|
|
$
|
(3,081
|
)
|
|
$
|
(10
|
)
|
|
$
|
(11
|
)
|
For the Years Ended December 31,
|
Non-U.S. Pension
Benefits
|
|
Non-U.S. Postretirement
Benefits
|
||||||||||||||||||||
(In millions of dollars)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
||||||
Total recognized in net periodic benefit cost and other comprehensive loss (income)
|
$
|
(513
|
)
|
|
$
|
21
|
|
|
$
|
(407
|
)
|
|
$
|
(14
|
)
|
|
$
|
10
|
|
|
$
|
(2
|
)
|
|
Non-U.S. Pension
Benefits
|
|
Non-U.S.
Postretirement Benefits
|
||||
(In millions of dollars)
|
2018
|
|
|
2018
|
|
||
Prior service credit
|
$
|
(2
|
)
|
|
$
|
(2
|
)
|
Net actuarial loss
|
90
|
|
|
—
|
|
||
Projected cost
|
$
|
88
|
|
|
$
|
(2
|
)
|
|
Non-U.S. Pension
Benefits
|
|
Non-U.S.
Postretirement Benefits
|
||||||||
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
Weighted average assumptions:
|
|
|
|
|
|
|
|
||||
Discount rate (for expense)
|
2.69
|
%
|
|
3.71
|
%
|
|
3.42
|
%
|
|
4.00
|
%
|
Expected return on plan assets
|
6.07
|
%
|
|
6.36
|
%
|
|
—
|
|
|
—
|
|
Rate of compensation increase (for expense)
|
2.85
|
%
|
|
2.72
|
%
|
|
—
|
|
|
—
|
|
Discount rate (for benefit obligation)
|
2.58
|
%
|
|
2.69
|
%
|
|
2.97
|
%
|
|
3.42
|
%
|
Rate of compensation increase (for benefit obligation)
|
2.80
|
%
|
|
2.85
|
%
|
|
—
|
|
|
—
|
|
For the Years Ended December 31,
|
Non-U.S. Pension
Benefits
|
|
Non-U.S. Postretirement
Benefits
|
||||||||||||||||||||
(In millions of dollars)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
||||||
Service cost (a)
|
$
|
76
|
|
|
$
|
72
|
|
|
$
|
82
|
|
|
$
|
1
|
|
|
$
|
2
|
|
|
$
|
2
|
|
Interest cost
|
233
|
|
|
273
|
|
|
333
|
|
|
2
|
|
|
3
|
|
|
3
|
|
||||||
Expected return on plan assets
|
(564
|
)
|
|
(561
|
)
|
|
(604
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Amortization of prior service credit
|
(2
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
||||||
Recognized actuarial loss
|
130
|
|
|
94
|
|
|
125
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||||
Net periodic benefit (credit) cost
|
(127
|
)
|
|
(123
|
)
|
|
(65
|
)
|
|
2
|
|
|
5
|
|
|
6
|
|
||||||
Settlement loss
|
54
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Curtailment (gain) loss
|
(1
|
)
|
|
(4
|
)
|
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total (credit) cost
|
$
|
(74
|
)
|
|
$
|
(127
|
)
|
|
$
|
(59
|
)
|
|
$
|
2
|
|
|
$
|
5
|
|
|
$
|
6
|
|
(In millions of dollars)
|
1 Percentage
Point Increase
|
|
1 Percentage
Point Decrease
|
||||
Effect on total of service and interest cost components
|
$
|
—
|
|
|
$
|
—
|
|
Effect on postretirement benefit obligation
|
$
|
7
|
|
|
$
|
(6
|
)
|
For the Years Ended December 31,
|
Pension
Benefits
|
|
Postretirement
Benefits
|
||||||||||||
(In millions of dollars)
|
U.S.
|
|
Non-U.S.
|
|
U.S.
|
|
Non-U.S.
|
||||||||
2018
|
$
|
254
|
|
|
$
|
279
|
|
|
$
|
4
|
|
|
$
|
3
|
|
2019
|
$
|
268
|
|
|
$
|
297
|
|
|
$
|
4
|
|
|
$
|
4
|
|
2020
|
$
|
285
|
|
|
$
|
305
|
|
|
$
|
4
|
|
|
$
|
4
|
|
2021
|
$
|
294
|
|
|
$
|
316
|
|
|
$
|
4
|
|
|
$
|
3
|
|
2022
|
$
|
303
|
|
|
$
|
326
|
|
|
$
|
3
|
|
|
$
|
3
|
|
2023-2027
|
$
|
1,642
|
|
|
$
|
1,837
|
|
|
$
|
14
|
|
|
$
|
17
|
|
|
Fair Value Measurements at December 31, 2017
|
||||||||||||||||||
Assets
(In millions of dollars)
|
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
NAV
|
|
Total
|
||||||||||
Common/collective trusts
|
$
|
375
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,611
|
|
|
$
|
7,986
|
|
Corporate obligations
|
—
|
|
|
3,620
|
|
|
20
|
|
|
—
|
|
|
3,640
|
|
|||||
Corporate stocks
|
1,467
|
|
|
34
|
|
|
2
|
|
|
—
|
|
|
1,503
|
|
|||||
Private equity/partnerships
|
—
|
|
|
—
|
|
|
—
|
|
|
803
|
|
|
803
|
|
|||||
Government securities
|
15
|
|
|
556
|
|
|
—
|
|
|
—
|
|
|
571
|
|
|||||
Real estate
|
—
|
|
|
—
|
|
|
—
|
|
|
566
|
|
|
566
|
|
|||||
Short-term investment funds
|
391
|
|
|
16
|
|
|
—
|
|
|
—
|
|
|
407
|
|
|||||
Company common stock
|
326
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
326
|
|
|||||
Other investments
|
12
|
|
|
12
|
|
|
350
|
|
|
—
|
|
|
374
|
|
|||||
Total investments
|
$
|
2,586
|
|
|
$
|
4,238
|
|
|
$
|
372
|
|
|
$
|
8,980
|
|
|
$
|
16,176
|
|
|
Fair Value Measurements at December 31, 2016
|
||||||||||||||||||
Assets
(In millions of dollars)
|
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
NAV
|
|
Total
|
||||||||||
Common/collective trusts
|
$
|
16
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,805
|
|
|
$
|
6,821
|
|
Corporate obligations
|
—
|
|
|
3,024
|
|
|
9
|
|
|
—
|
|
|
3,033
|
|
|||||
Corporate stocks
|
2,009
|
|
|
3
|
|
|
2
|
|
|
—
|
|
|
2,014
|
|
|||||
Private equity/partnerships
|
—
|
|
|
—
|
|
|
—
|
|
|
722
|
|
|
722
|
|
|||||
Government securities
|
11
|
|
|
380
|
|
|
—
|
|
|
—
|
|
|
391
|
|
|||||
Real estate
|
—
|
|
|
—
|
|
|
—
|
|
|
412
|
|
|
412
|
|
|||||
Short-term investment funds
|
297
|
|
|
22
|
|
|
—
|
|
|
—
|
|
|
319
|
|
|||||
Company common stock
|
270
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
270
|
|
|||||
Other investments
|
15
|
|
|
23
|
|
|
312
|
|
|
—
|
|
|
350
|
|
|||||
Total investments
|
$
|
2,618
|
|
|
$
|
3,452
|
|
|
$
|
323
|
|
|
$
|
7,939
|
|
|
$
|
14,332
|
|
Assets
(In millions)
|
Fair Value,
January 1, 2017
|
|
Purchases
|
|
Sales
|
|
Unrealized
Gain/
(Loss)
|
|
Realized
Gain/
(Loss)
|
|
Exchange
Rate
Impact
|
|
Transfers
in/(out)
and
Other
|
|
Fair
Value, December 31, 2017
|
||||||||||||||||
Other investments
|
$
|
312
|
|
|
$
|
20
|
|
|
$
|
(15
|
)
|
|
$
|
(7
|
)
|
|
$
|
—
|
|
|
$
|
40
|
|
|
$
|
—
|
|
|
$
|
350
|
|
Corporate stocks
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||||||
Corporate obligations
|
9
|
|
|
9
|
|
|
(1
|
)
|
|
9
|
|
|
—
|
|
|
1
|
|
|
(7
|
)
|
|
20
|
|
||||||||
Total assets
|
$
|
323
|
|
|
$
|
29
|
|
|
$
|
(16
|
)
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
41
|
|
|
$
|
(7
|
)
|
|
$
|
372
|
|
Assets
(In millions)
|
Fair Value,
January 1, 2016 |
|
Purchases
|
|
Sales
|
|
Unrealized
Gain/ (Loss) |
|
Realized
Gain/ (Loss) |
|
Exchange
Rate Impact |
|
Transfers
in/(out) and Other |
|
Fair
Value, December 31, 2016 |
||||||||||||||||
Other investments
|
$
|
257
|
|
|
$
|
27
|
|
|
$
|
(28
|
)
|
|
$
|
67
|
|
|
$
|
1
|
|
|
$
|
(12
|
)
|
|
$
|
—
|
|
|
$
|
312
|
|
Corporate stocks
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||||||
Corporate obligations
|
1
|
|
|
8
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
9
|
|
||||||||
Total assets
|
$
|
260
|
|
|
$
|
35
|
|
|
$
|
(28
|
)
|
|
$
|
68
|
|
|
$
|
1
|
|
|
$
|
(13
|
)
|
|
$
|
—
|
|
|
$
|
323
|
|
|
2017
|
|
2016
|
|
2015
|
Risk-free interest rate
|
2.09%
|
|
1.39%
|
|
1.78%
|
Expected life (in years)
|
6.0
|
|
6.0
|
|
6.0
|
Expected volatility
|
23.23%
|
|
25.55%
|
|
23.75%
|
Expected dividend yield
|
1.86%
|
|
2.15%
|
|
1.97%
|
|
Shares
|
|
|
Weighted
Average Exercise
Price
|
|
Weighted
Average
Remaining
Contractual
Term
|
|
Aggregate
Intrinsic Value
($000)
|
||||
Balance at January 1, 2017
|
13,242,529
|
|
|
$
|
39.15
|
|
|
|
|
|
||
Granted
|
1,710,853
|
|
|
$
|
73.20
|
|
|
|
|
|
||
Exercised
|
(4,258,027
|
)
|
|
$
|
30.42
|
|
|
|
|
|
||
Forfeited
|
(494,653
|
)
|
|
$
|
62.00
|
|
|
|
|
|
||
Balance at December 31, 2017
|
10,200,702
|
|
|
$
|
47.39
|
|
|
5.9 years
|
|
$
|
351,317
|
|
Options vested or expected to vest at December 31, 2017
|
10,052,720
|
|
|
$
|
47.17
|
|
|
5.9 years
|
|
$
|
348,494
|
|
Options exercisable at December 31, 2017
|
6,247,224
|
|
|
$
|
37.75
|
|
|
4.6 years
|
|
$
|
275,398
|
|
|
Restricted Stock Units
|
|
Performance Stock Units
|
||||||||
|
Shares
|
|
Weighted Average
Grant Date
Fair Value
|
|
|
Shares
|
|
Weighted Average Grant Date Fair Value
|
|
||
Non-vested balance at January 1, 2017
|
3,044,029
|
|
$
|
56.40
|
|
|
722,017
|
|
$
|
54.68
|
|
Granted
|
2,610,599
|
|
$
|
73.23
|
|
|
260,387
|
|
$
|
73.20
|
|
Vested
|
(1,307,825
|
)
|
$
|
55.31
|
|
|
(212,458
|
)
|
$
|
48.19
|
|
Forfeited
|
(294,056
|
)
|
$
|
65.06
|
|
|
(79,345
|
)
|
$
|
61.92
|
|
Non-vested balance at December 31, 2017
|
4,052,747
|
|
$
|
66.97
|
|
|
690,601
|
|
$
|
62.82
|
|
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 (certain commercial mortgage whole loans, and long-dated or complex derivatives including certain foreign exchange options and long-dated options on gas and power).
|
(In millions of dollars)
|
Identical Assets
(Level 1)
|
|
Observable Inputs
(Level 2)
|
|
Unobservable
Inputs
(Level 3)
|
|
Total
|
||||||||||||||||||||||||
|
12/31/17
|
|
|
12/31/16
|
|
|
12/31/17
|
|
|
12/31/16
|
|
|
12/31/17
|
|
|
12/31/16
|
|
|
12/31/17
|
|
|
12/31/16
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Financial instruments owned:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Exchange traded equity securities
(a)
|
$
|
81
|
|
|
$
|
89
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
81
|
|
|
$
|
89
|
|
Mutual funds
(a)
|
158
|
|
|
141
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
158
|
|
|
141
|
|
||||||||
Money market funds
(b)
|
143
|
|
|
22
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
143
|
|
|
22
|
|
||||||||
Total assets measured at fair value
|
$
|
382
|
|
|
$
|
252
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
382
|
|
|
$
|
252
|
|
Fiduciary Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Money market funds
|
$
|
111
|
|
|
$
|
90
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
111
|
|
|
$
|
90
|
|
Total fiduciary assets measured at fair value
|
$
|
111
|
|
|
$
|
90
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
111
|
|
|
$
|
90
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Contingent purchase consideration liability
(c)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
189
|
|
|
$
|
241
|
|
|
$
|
189
|
|
|
$
|
241
|
|
Total liabilities measured at fair value
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
189
|
|
|
$
|
241
|
|
|
$
|
189
|
|
|
$
|
241
|
|
(In millions)
|
2017
|
|
|
2016
|
|
||
Balance at January 1,
|
$
|
241
|
|
|
$
|
309
|
|
Additions
|
51
|
|
|
17
|
|
||
Payments
|
(108
|
)
|
|
(86
|
)
|
||
Revaluation Impact
|
3
|
|
|
9
|
|
||
Other
(a)
|
2
|
|
|
(8
|
)
|
||
Balance at December 31,
|
$
|
189
|
|
|
$
|
241
|
|
As of September 30,
|
|
|
|
|
||||
(In millions of dollars)
|
|
2017
|
|
|
2016
|
|
||
Total assets
|
|
$
|
24,739
|
|
|
$
|
22,997
|
|
Total liabilities
|
|
$
|
22,817
|
|
|
$
|
21,087
|
|
Non-controlling interests
|
|
$
|
19
|
|
|
$
|
12
|
|
For the Years Ended December 31,
|
Gross
Rental
Commitments
|
|
Rentals
from
Subleases
|
|
Net
Rental
Commitments
|
||||||
(In millions of dollars)
|
|
|
|||||||||
2018
|
$
|
355
|
|
|
$
|
41
|
|
|
$
|
314
|
|
2019
|
$
|
316
|
|
|
$
|
34
|
|
|
$
|
282
|
|
2020
|
$
|
291
|
|
|
$
|
31
|
|
|
$
|
260
|
|
2021
|
$
|
226
|
|
|
$
|
3
|
|
|
$
|
223
|
|
2022
|
$
|
207
|
|
|
$
|
1
|
|
|
$
|
206
|
|
Subsequent years
|
$
|
773
|
|
|
$
|
1
|
|
|
$
|
772
|
|
For the Years Ended December 31,
|
Future
Minimum
Commitments
|
||
(In millions of dollars)
|
|||
2018
|
$
|
228
|
|
2019
|
106
|
|
|
2020
|
28
|
|
|
Subsequent years
|
25
|
|
|
|
$
|
387
|
|
December 31,
|
|
|
|
||||
(In millions)
|
2017
|
|
|
2016
|
|
||
Short-term:
|
|
|
|
||||
Commercial paper
|
$
|
—
|
|
|
$
|
50
|
|
Current portion of long-term debt
|
262
|
|
|
262
|
|
||
|
262
|
|
|
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
|
348
|
|
|
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
|
370
|
|
|
382
|
|
||
Other
|
3
|
|
|
3
|
|
||
|
5,487
|
|
|
4,757
|
|
||
Less current portion
|
262
|
|
|
262
|
|
||
|
$
|
5,225
|
|
|
$
|
4,495
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||||
(In millions of dollars)
|
Carrying
Amount |
|
Fair
Value |
|
Carrying
Amount |
|
Fair
Value |
||||||||
Short-term debt
|
$
|
262
|
|
|
$
|
264
|
|
|
$
|
312
|
|
|
$
|
313
|
|
Long-term debt
|
$
|
5,225
|
|
|
$
|
5,444
|
|
|
$
|
4,495
|
|
|
$
|
4,625
|
|
(In millions)
|
Balance at
1/1/16
|
|
|
Expense
Incurred
|
|
|
Cash
Paid
|
|
|
Other
|
|
Balance at
12/31/16
|
|
|
Expense
Incurred
|
|
|
Cash
Paid
|
|
|
Other
|
|
|
Balance at
12/31/17
|
|
||||||||||
Severance
|
$
|
15
|
|
|
$
|
40
|
|
|
$
|
(22
|
)
|
|
$
|
(1
|
)
|
|
$
|
32
|
|
|
$
|
31
|
|
|
$
|
(49
|
)
|
|
$
|
1
|
|
|
$
|
15
|
|
Future rent under non-cancelable leases and other costs
|
78
|
|
|
4
|
|
|
(17
|
)
|
|
(4
|
)
|
|
61
|
|
|
9
|
|
|
(22
|
)
|
|
2
|
|
|
50
|
|
|||||||||
Total
|
$
|
93
|
|
|
$
|
44
|
|
|
$
|
(39
|
)
|
|
$
|
(5
|
)
|
|
$
|
93
|
|
|
$
|
40
|
|
|
$
|
(71
|
)
|
|
$
|
3
|
|
|
$
|
65
|
|
▪
|
Risk and Insurance Services
, comprising insurance services (Marsh) and reinsurance services (Guy Carpenter); and
|
▪
|
Consulting
, comprising Mercer and Oliver Wyman Group
|
For the Year Ended December 31,
(In millions of dollars)
|
Revenue
|
|
|
Operating
Income
(Loss)
|
|
Total
Assets
|
|
Depreciation
and
Amortization
|
|
Capital
Expenditures
|
|||||||||
2017 –
|
|
|
|
|
|
|
|
|
|
||||||||||
Risk and Insurance Services
|
$
|
7,630
|
|
(a)
|
$
|
1,731
|
|
|
$
|
16,490
|
|
|
$
|
282
|
|
|
$
|
139
|
|
Consulting
|
6,444
|
|
(b)
|
1,110
|
|
|
8,200
|
|
|
129
|
|
|
88
|
|
|||||
Total Segments
|
14,074
|
|
|
2,841
|
|
|
24,690
|
|
|
411
|
|
|
227
|
|
|||||
Corporate/Eliminations
|
(50
|
)
|
|
(186
|
)
|
|
(4,261
|
)
|
(c)
|
70
|
|
|
75
|
|
|||||
Total Consolidated
|
$
|
14,024
|
|
|
$
|
2,655
|
|
|
$
|
20,429
|
|
|
$
|
481
|
|
|
$
|
302
|
|
2016 –
|
|
|
|
|
|
|
|
|
|
||||||||||
Risk and Insurance Services
|
$
|
7,143
|
|
(a)
|
$
|
1,581
|
|
|
$
|
14,728
|
|
|
$
|
248
|
|
|
$
|
128
|
|
Consulting
|
6,112
|
|
(b)
|
1,038
|
|
|
6,770
|
|
|
121
|
|
|
68
|
|
|||||
Total Segments
|
13,255
|
|
|
2,619
|
|
|
21,498
|
|
|
369
|
|
|
196
|
|
|||||
Corporate/Eliminations
|
(44
|
)
|
|
(188
|
)
|
|
(3,308
|
)
|
(c)
|
69
|
|
|
57
|
|
|||||
Total Consolidated
|
$
|
13,211
|
|
|
$
|
2,431
|
|
|
$
|
18,190
|
|
|
$
|
438
|
|
|
$
|
253
|
|
2015 –
|
|
|
|
|
|
|
|
|
|
||||||||||
Risk and Insurance Services
|
$
|
6,869
|
|
(a)
|
$
|
1,366
|
|
|
$
|
13,290
|
|
|
$
|
240
|
|
|
$
|
136
|
|
Consulting
|
6,064
|
|
(b)
|
1,014
|
|
|
6,485
|
|
|
120
|
|
|
108
|
|
|||||
Total Segments
|
12,933
|
|
|
2,380
|
|
|
19,775
|
|
|
360
|
|
|
244
|
|
|||||
Corporate/Eliminations
|
(40
|
)
|
|
(196
|
)
|
|
(1,559
|
)
|
(c)
|
63
|
|
|
81
|
|
|||||
Total Consolidated
|
$
|
12,893
|
|
|
$
|
2,184
|
|
|
$
|
18,216
|
|
|
$
|
423
|
|
|
$
|
325
|
|
(a)
|
Includes inter-segment revenue of
$5 million
in
2017
and
$6 million
in both
2016
and
2015
, interest income on fiduciary funds of
$39 million
,
$26 million
and
$21 million
in
2017
,
2016
and
2015
, respectively, and equity method income of
$14 million
,
$12 million
and
$6 million
in
2017
,
2016
and
2015
, respectively.
|
(b)
|
Includes inter-segment revenue of
$45 million
,
$38 million
and
$34 million
in
2017
,
2016
and
2015
, respectively, interest income on fiduciary funds of
$4 million
,
$3 million
and
$4 million
in
2017
,
2016
and
2015
, respectively and equity method income of
$17 million
,
$19 million
and
$21 million
in
2017
,
2016
and
2015
, respectively.
|
(c)
|
Corporate assets primarily include insurance recoverables, pension related assets, the owned portion of the Company headquarters building and intercompany eliminations.
|
For the Years Ended December 31,
|
|||||||||||
(In millions of dollars)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Risk and Insurance Services
|
|
|
|
|
|
||||||
Marsh
|
$
|
6,433
|
|
|
$
|
5,997
|
|
|
$
|
5,745
|
|
Guy Carpenter
|
1,197
|
|
|
1,146
|
|
|
1,124
|
|
|||
Total Risk and Insurance Services
|
7,630
|
|
|
7,143
|
|
|
6,869
|
|
|||
Consulting
|
|
|
|
|
|
||||||
Mercer
|
4,528
|
|
|
4,323
|
|
|
4,313
|
|
|||
Oliver Wyman Group
|
1,916
|
|
|
1,789
|
|
|
1,751
|
|
|||
Total Consulting
|
6,444
|
|
|
6,112
|
|
|
6,064
|
|
|||
Total Segments
|
14,074
|
|
|
13,255
|
|
|
12,933
|
|
|||
Corporate/Eliminations
|
(50
|
)
|
|
(44
|
)
|
|
(40
|
)
|
|||
Total
|
$
|
14,024
|
|
|
$
|
13,211
|
|
|
$
|
12,893
|
|
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
||||||||
(In millions, except per share figures)
|
|
||||||||||||||
2017:
|
|
|
|
|
|
|
|
||||||||
Revenue
|
$
|
3,503
|
|
|
$
|
3,495
|
|
|
$
|
3,341
|
|
|
$
|
3,685
|
|
Operating income
|
$
|
749
|
|
|
$
|
701
|
|
|
$
|
535
|
|
|
$
|
670
|
|
Income from continuing operations
|
$
|
578
|
|
|
$
|
507
|
|
|
$
|
397
|
|
|
$
|
28
|
|
Discontinued operations, net of tax
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2
|
|
Net income attributable to the Company
|
$
|
569
|
|
|
$
|
501
|
|
|
$
|
393
|
|
|
$
|
29
|
|
Basic Per Share Data
(a)
:
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
1.10
|
|
|
$
|
0.98
|
|
|
$
|
0.77
|
|
|
$
|
0.05
|
|
Discontinued operations, net of tax
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.01
|
|
Net income attributable to the Company
|
$
|
1.10
|
|
|
$
|
0.98
|
|
|
$
|
0.77
|
|
|
$
|
0.06
|
|
Diluted Per Share Data
(a)
:
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
1.09
|
|
|
$
|
0.96
|
|
|
$
|
0.76
|
|
|
$
|
0.05
|
|
Discontinued operations, net of tax
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.01
|
|
Net income attributable to the Company
|
$
|
1.09
|
|
|
$
|
0.96
|
|
|
$
|
0.76
|
|
|
$
|
0.06
|
|
Dividends Paid Per Share
|
$
|
0.34
|
|
|
$
|
0.34
|
|
|
$
|
0.375
|
|
|
$
|
0.375
|
|
2016:
|
|
|
|
|
|
|
|
||||||||
Revenue
|
$
|
3,336
|
|
|
$
|
3,376
|
|
|
$
|
3,135
|
|
|
$
|
3,364
|
|
Operating income
|
$
|
673
|
|
|
$
|
661
|
|
|
$
|
517
|
|
|
$
|
580
|
|
Income from continuing operations
|
$
|
490
|
|
|
$
|
480
|
|
|
$
|
384
|
|
|
$
|
441
|
|
Discontinued operations, net of tax
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Net income attributable to the Company
|
$
|
481
|
|
|
$
|
472
|
|
|
$
|
379
|
|
|
$
|
436
|
|
Basic Per Share Data:
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
0.92
|
|
|
$
|
0.91
|
|
|
$
|
0.73
|
|
|
$
|
0.85
|
|
Discontinued operations, net of tax
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Net income attributable to the Company
|
$
|
0.92
|
|
|
$
|
0.91
|
|
|
$
|
0.73
|
|
|
$
|
0.85
|
|
Diluted Per Share Data:
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
0.91
|
|
|
$
|
0.90
|
|
|
$
|
0.73
|
|
|
$
|
0.84
|
|
Discontinued operations, net of tax
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Net income attributable to the Company
|
$
|
0.91
|
|
|
$
|
0.90
|
|
|
$
|
0.73
|
|
|
$
|
0.84
|
|
Dividends Paid Per Share
|
$
|
0.31
|
|
|
$
|
0.31
|
|
|
$
|
0.34
|
|
|
$
|
0.34
|
|