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MRSH · MARSH & MCLENNAN COMPANIES, INC.

31 filings

10-K

MRSH 10-K Annual Reports

MARSH & MCLENNAN COMPANIES, INC. - 31 annual reports

Filing record · 2016–202610-K1110-Q338-K115

2025
MARSH & MCLENNAN COMPANIES, INC. Annual Report, Year Ended Dec 31, 2025
Marsh & McLennan Companies, Inc. (MRSH) reported strong financial performance for the fiscal year ending December 31, 2025. The company generated $27.0 billion in consolidated revenue, representing a 10% increase (4% on an underlying basis) compared to the prior year. This growth was driven by robust performance in both the Risk and Insurance Services segment, which saw revenue increase by 12% to $17.3 billion, and the Consulting segment, with revenue up 7% to $9.8 billion. Net income attributable to the company rose to $4.2 billion, resulting in diluted earnings per share of $8.43, a 3% increase year-over-year. The company continues to execute its strategic growth initiatives, including significant investment in technology and operational efficiency through its 'Thrive' program. Acquisitions remain a key part of the strategy, with the company completing 20 acquisitions in 2025 for a total consideration of $857 million. Notably, the McGriff acquisition, completed in late 2024, significantly contributed to the Risk and Insurance Services segment's growth. Marsh & McLennan also demonstrated a strong commitment to shareholder returns, repurchasing $2.0 billion of its common stock and paying $1.7 billion in dividends during 2025. The company's financial position remains solid, with a credit rating of A- (Stable) from S&P and Fitch, and A3 (Stable) from Moody's.
Feb 9, 2026
2024
MARSH & MCLENNAN COMPANIES, INC. Annual Report, Year Ended Dec 31, 2024
Marsh McLennan Companies, Inc. (MRSH) reported a solid performance for the fiscal year ending December 30, 2024, with consolidated revenue reaching $24.5 billion, an increase of 8% year-over-year. This growth was driven by strong performance across both its Risk and Insurance Services segment (up 9%) and Consulting segment (up 5%), with underlying revenue increases of 8% and 6%, respectively. The company's strategic acquisitions, including the significant purchase of McGriff Insurance Services for $7.75 billion, contributed to this expansion, although also increasing debt levels. Key financial highlights include a 10% increase in operating income to $5.8 billion and a 9% rise in diluted earnings per share to $8.18. Marsh McLennan also demonstrated a commitment to shareholder returns by repurchasing $900 million of its stock and increasing dividends paid. The company continues to focus on talent development, including AI skills, and navigating a complex geopolitical and macroeconomic environment. Investors should note the company's robust revenue growth, driven by core business operations and strategic acquisitions, while also monitoring the integration of McGriff and the impact of broader economic trends.
Feb 10, 2025
2023
MARSH & MCLENNAN COMPANIES, INC. Annual Report, Year Ended Dec 31, 2023
Marsh & McLennan Companies, Inc. (MRSH) reported strong financial performance in its 2023 10-K filing, with consolidated revenue reaching $22.7 billion, an increase of 10% year-over-year. This growth was driven by robust performance in both its Risk and Insurance Services segment (up 11%) and its Consulting segment (up 7%), with underlying revenue increases across both. The company highlighted significant operating income growth of 23% to $5.3 billion and a 25% increase in diluted earnings per share to $7.53, reflecting continued demand for its advisory and risk management solutions, improved market pricing, and higher interest rates boosting fiduciary income. Strategic initiatives, including 14 acquisitions throughout 2023 across its segments, demonstrate the company's commitment to growth and market expansion. Marsh McLennan also actively managed its capital structure, issuing new senior notes and repurchasing approximately $1.15 billion of its own stock. The company continues to navigate a complex macroeconomic and geopolitical landscape, with management focused on talent development and technological enhancements to maintain its competitive edge. Overall, the filing indicates a healthy and growing business with a clear strategy for expansion and shareholder value creation.
Feb 12, 2024
2022
MARSH & MCLENNAN COMPANIES, INC. Annual Report, Year Ended Dec 31, 2022
Marsh & McLennan Companies, Inc. (MRSH) reported solid revenue growth in 2022, with consolidated revenue reaching $20.7 billion, a 5% increase (9% on an underlying basis) from the prior year. This growth was driven by strong demand across both its Risk and Insurance Services and Consulting segments, reflecting the company's ability to navigate complex global environments for its clients. Operating income saw a slight decrease of 1% to $4.3 billion, impacted by higher expenses related to increased headcount, incentive compensation, and restructuring activities amounting to $427 million. The company continues to focus on strategic growth through acquisitions, completing 20 in 2022. These included significant entities in both the Risk and Insurance Services and Consulting sectors, demonstrating an ongoing commitment to expanding its market reach and service offerings. Marsh McLennan's financial health remains robust, supported by consistent operating cash flow and active capital management, including share repurchases and dividend payments.
Feb 13, 2023
2021
MARSH & MCLENNAN COMPANIES, INC. Annual Report, Year Ended Dec 31, 2021
Marsh & McLennan Companies, Inc. (MRSH) reported strong financial performance for the year ended December 31, 2021, with consolidated revenue reaching $19.8 billion, a 15% increase from the prior year. Both the Risk and Insurance Services segment and the Consulting segment demonstrated robust underlying revenue growth of 10%, driven by increased demand for their advisory and consulting services and a recovering global economy. The company's operating income saw a significant increase of 41% to $4.3 billion, with diluted earnings per share rising 56% to $6.13, reflecting improved operational performance and strategic initiatives. The company continues to execute its growth strategy, including strategic acquisitions, with Marsh & McLennan Agency (MMA) completing several transactions and Marsh India seeing increased ownership. Marsh McLennan also demonstrated a commitment to returning value to shareholders through $1.2 billion in share repurchases during the year and consistent dividend payments. The company's robust financial health is supported by a strong balance sheet and consistent operating cash flow generation.
Feb 16, 2022
2020
MARSH & MCLENNAN COMPANIES, INC. Annual Report, Year Ended Dec 31, 2020
Marsh & McLennan Companies, Inc. (MMC) reported solid results for the fiscal year ended December 31, 2020, demonstrating resilience despite the challenging economic environment influenced by the COVID-19 pandemic. The company, a global leader in professional services offering advice in risk, strategy, and people, generated $17.224 billion in revenue, an increase from $16.652 billion in 2019, reflecting underlying growth driven primarily by its Risk and Insurance Services segment. MMC's operational performance was robust, with operating income rising to $3.066 billion from $2.677 billion in the prior year. Diluted earnings per share also saw a significant increase, reaching $3.94 compared to $3.41 in 2019. This performance was supported by disciplined expense management and strategic integration of the JLT acquisition, which was substantially completed. While the Consulting segment experienced a slight revenue dip, the Risk and Insurance Services segment showed strong underlying growth. The company also maintained a strong balance sheet and generated substantial operating cash flow, underscoring its financial stability and ability to navigate market uncertainties.
Feb 17, 2021
2019
MARSH & MCLENNAN COMPANIES, INC. Annual Report, Year Ended Dec 31, 2019
Marsh & McLennan Companies, Inc. (MMC) reported strong performance in its 2019 10-K filing, driven by the significant acquisition of Jardine Lloyd Thompson Group plc (JLT) on April 1, 2019. This acquisition, valued at approximately $5.6 billion, expanded MMC's global reach and service offerings, particularly in insurance and reinsurance broking. Consolidated revenue increased by 11% to $16.7 billion, with underlying revenue growth of 4%. The company's two primary segments, Risk and Insurance Services and Consulting, both contributed to this growth. Risk and Insurance Services, including Marsh and Guy Carpenter, saw revenue increase by 17% (4% underlying), while the Consulting segment, encompassing Mercer and Oliver Wyman Group, reported a 5% revenue increase (3% underlying). Despite integration and restructuring costs related to the JLT acquisition, which impacted operating income, the company demonstrated resilient underlying operational performance. Management highlighted strategic investments in technology and data analytics as key to future growth and client service enhancement.
Feb 20, 2020
2018
MARSH & MCLENNAN COMPANIES, INC. Annual Report, Year Ended Dec 31, 2018
Marsh & McLennan Companies, Inc. (MRSH) reported solid financial performance for the fiscal year ended December 31, 2018, with total revenue reaching $14.95 billion, representing a 7% increase over the previous year. The company operates through two primary segments: Risk and Insurance Services, which accounted for approximately 55% of revenue, and Consulting, contributing the remaining 45%. Both segments demonstrated underlying revenue growth, reflecting the company's strategic focus and market positioning. The company announced a significant development with its agreement to acquire Jardine Lloyd Thompson Group plc (JLT) for approximately $5.6 billion, expected to close in the spring of 2019, which will significantly expand its global footprint. During 2018, Marsh & McLennan experienced a net income attributable to the company of $1.65 billion, an 11% increase from 2017, driven by operational improvements and revenue growth, partially offset by significant one-time items including derivative losses and acquisition-related expenses related to the JLT transaction. Diluted earnings per share also saw a healthy increase. The company continues to focus on strategic acquisitions and organic growth, while managing operational expenses and investing in technology and talent to maintain its competitive edge in the global professional services market.
Feb 21, 2019
2017
MARSH & MCLENNAN COMPANIES, INC. Annual Report, Year Ended Dec 31, 2017
Marsh & McLennan Companies (MMC) reported solid performance in 2017, with revenue growing 6% to $14 billion. The company operates through two main segments: Risk and Insurance Services (54% of revenue) and Consulting (46% of revenue). The Risk and Insurance Services segment, driven by Marsh and Guy Carpenter, showed strong underlying revenue growth. The Consulting segment, comprising Mercer and Oliver Wyman Group, also demonstrated consistent revenue increases. A significant event impacting the 2017 results was the enactment of the Tax Cuts and Jobs Act (TCJA), which resulted in a provisional charge of $460 million. This charge primarily relates to the re-measurement of deferred tax assets and a one-time repatriation tax on foreign earnings. Despite this one-time expense, the company's operating income increased by 7% year-over-year. MMC also continued its commitment to shareholder returns, repurchasing $900 million of its common stock and paying dividends. Looking ahead, the company faces ongoing regulatory scrutiny in Europe related to competition practices, particularly for Marsh. Cybersecurity and data protection remain key risk areas, as does the company's ability to adapt to digital disruption. The company's financial health appears robust, supported by strong operating cash flows and a revolving credit facility.
Feb 22, 2018
2016
MARSH & MCLENNAN COMPANIES, INC. Annual Report, Year Ended Dec 31, 2016
Marsh & McLennan Companies, Inc. (MMC) operates as a global professional services firm, delivering advice and solutions in risk, strategy, and people. In 2016, the company generated over $13 billion in revenue, with approximately 60,000 employees across more than 130 countries. The business is structured into two main segments: Risk and Insurance Services (54% of revenue) and Consulting (46% of revenue). The Risk and Insurance Services segment, primarily through Marsh and Guy Carpenter, focuses on risk management, insurance broking, and reinsurance. The Consulting segment, through Mercer and Oliver Wyman Group, offers services in health, retirement, talent, investments, and management consulting. Financially, MMC demonstrated solid performance in 2016, with consolidated revenue reaching $13.21 billion, a 2% increase from the prior year. Operating income also grew by 10% to $2.66 billion. Diluted earnings per share from continuing operations were $3.38, reflecting an increase from $2.98 in 2015. The company actively engaged in share repurchases, investing $800 million in 2016, and continued to pay dividends, underscoring a commitment to returning value to shareholders. Acquisitions played a role in growth, with nine acquisitions in the Risk and Insurance Services segment and six in the Consulting segment during 2016.
Feb 24, 2017
2015
MARSH & MCLENNAN COMPANIES, INC. Annual Report, Year Ended Dec 31, 2015
Marsh & McLennan Companies, Inc. (MMC) is a global professional services firm specializing in risk, strategy, and people advisory. In 2015, the company generated approximately $12.9 billion in revenue, with its Risk and Insurance Services segment (Marsh, Guy Carpenter) accounting for 53% and its Consulting segment (Mercer, Oliver Wyman Group) accounting for 47%. The company demonstrated resilience, achieving underlying revenue growth across both segments despite a strong U.S. dollar negatively impacting translated earnings. Operational efficiencies led to a decrease in consolidated operating expenses on a reported basis, contributing to a 5% increase in operating income to $2.4 billion and a 10% increase in diluted EPS from continuing operations to $2.98. MMC's strategic focus on growth through acquisitions continued in 2015, with 21 acquisitions completed across its segments. The company also actively returned capital to shareholders through share repurchases totaling $1.4 billion and dividends. While facing competitive markets and economic uncertainties, MMC's diversified business model and global presence position it for continued performance. Investors should note the significant amount of goodwill and intangible assets on the balance sheet, which represents a substantial portion of total assets, indicating a strategy heavily reliant on acquisitions.
Feb 24, 2016
2014
MARSH & MCLENNAN COMPANIES, INC. Annual Report, Year Ended Dec 31, 2014
Marsh & McLennan Companies, Inc. (MMC), a global professional services firm, reported solid financial performance for the year ended December 31, 2014. The company operates in two primary segments: Risk and Insurance Services, and Consulting. Risk and Insurance Services, which includes Marsh and Guy Carpenter, generated 54% of the company's revenue, driven by strong performance in insurance and reinsurance broking and risk advisory services. The Consulting segment, comprised of Mercer and Oliver Wyman Group, accounted for 46% of revenue, with notable growth in Oliver Wyman Group's consulting services. Financially, MMC demonstrated revenue growth, with consolidated revenue reaching $12.95 billion, a 6% increase from the prior year, driven by underlying revenue growth across both segments. The company also managed its expenses effectively, leading to an increase in operating income to $2.3 billion. MMC continued to return value to shareholders through share repurchases, authorizing up to $2 billion in repurchases and completing $800 million in 2014. The company's financial health appears stable, supported by strong operating cash flows and a diversified business model.
Feb 26, 2015
2013
MARSH & MCLENNAN COMPANIES, INC. Annual Report, Year Ended Dec 31, 2013
Marsh & McLennan Companies, Inc. (MMC) demonstrated solid financial performance in 2013, reporting a consolidated revenue of $12.3 billion, an increase of 3% from the prior year. The company operates across two primary segments: Risk and Insurance Services (54% of revenue) and Consulting (46% of revenue). The Risk and Insurance Services segment, led by Marsh and Guy Carpenter, saw a 4% revenue increase, driven by growth in both brokerage and reinsurance operations. The Consulting segment, encompassing Mercer and Oliver Wyman Group, experienced a 2% revenue increase, with Mercer showing stronger growth compared to Oliver Wyman. Net income attributable to the Company rose to $1.36 billion, a 15% increase from 2012, resulting in diluted EPS of $2.43. The company also continued its share repurchase program, buying back $550 million in stock during 2013, signaling a commitment to returning value to shareholders. MMC's financial health appears robust, with a strong operating income and continued revenue growth across its diversified service offerings.
Feb 27, 2014
2012
MARSH & MCLENNAN COMPANIES, INC. Annual Report, Year Ended Dec 31, 2012
Marsh & McLennan Companies, Inc. (MRSH) demonstrated solid performance in its 2012 fiscal year, with consolidated revenue reaching $11.92 billion, a 3% increase over 2011. The company's two primary segments, Risk and Insurance Services, and Consulting, both contributed to this growth. The Risk and Insurance Services segment, driven by Marsh and Guy Carpenter, saw a 4% revenue increase, while the Consulting segment, led by Mercer and Oliver Wyman Group, experienced a 2% revenue increase. Net income attributable to the company grew to $1.18 billion, an 18% increase from the prior year, reflecting improved operating efficiency and expense management. The company also continued its strategic acquisition activity, further expanding its capabilities and market reach. Despite economic uncertainties, Marsh & McLennan Companies maintained a strong financial position with robust operating income and a stable outlook for its senior debt ratings, positioning it well for continued growth and value creation for shareholders.
Feb 27, 2013
2011
MARSH & MCLENNAN COMPANIES, INC. Annual Report, Year Ended Dec 31, 2011
Marsh & McLennan Companies, Inc. (MMC) reported strong performance in 2011, with total revenue reaching $11.5 billion, a 9% increase from the prior year. This growth was driven by a solid 5% underlying revenue increase across both its Risk and Insurance Services segment and its Consulting segment. The company demonstrated effective expense management, leading to a significant improvement in operating income to $1.6 billion from $939 million in 2010. This performance was bolstered by strategic acquisitions and a positive foreign currency translation impact. Despite a challenging economic environment, MMC maintained financial stability, with a healthy cash flow from operations and a robust share repurchase program active throughout the year.
Feb 28, 2012
2010
MARSH & MCLENNAN COMPANIES, INC. Annual Report, Year Ended Dec 31, 2010
Marsh & McLennan Companies (MMC) reported a strong 2010 rebound in its 10-K filed February 2011. Revenue rose 7% to $10.55 billion, and net income attributable to the Company reached $855 million, versus $227 million in 2009. Results were held back by a $400 million net charge (after insurance) to settle the Alaska Retirement Management Board litigation against Mercer, which cut Consulting segment operating income to $129 million. Excluding that and other restructuring and noteworthy items, consolidated operating income was about $1.5 billion in 2010 versus $1.3 billion in 2009. Underlying revenue growth was 3%, with acquisitions adding 3% and currency 1%. The balance sheet and cash flow picture is mixed. Operating cash flow was $722 million, up from $640 million, and the company repurchased about $86 million of stock under a new $500 million authorization. It sold Kroll for $1.13 billion in August 2010, which funded debt repayment and acquisitions. Senior debt is rated Baa2 by Moody's and BBB- by S&P, the lowest investment-grade rating at S&P, with a negative outlook there. Pension obligations of roughly $11 billion remain a meaningful earnings and cash sensitivity, and the company expects a further pension expense increase of about $60 million in 2011. Key risks for investors include errors and omissions litigation, which the company says can be significant and is largely uninsured, a heavy reliance on non-U.S. operations (56% of operating segment revenue), and goodwill and intangibles of $6.8 billion, about 45% of total assets. Consulting, in particular Mercer and Oliver Wyman, is exposed to client spending cuts and pension-plan trends.
Feb 28, 2011
2009
MARSH & MCLENNAN COMPANIES, INC. Annual Report, Year Ended Dec 31, 2009
Marsh & McLennan Companies, Inc. (MMC) reported consolidated revenue of $10.5 billion for the year ended December 31, 2009. The company operates across three segments: Risk and Insurance Services, Consulting, and Risk Consulting & Technology. Despite a challenging economic environment, the company demonstrated resilience, with its Risk and Insurance Services segment showing a revenue increase of 8% at Guy Carpenter, offsetting a slight decline at Marsh. The Consulting segment experienced a revenue decrease, largely due to reduced client spending on advisory services. The company addressed significant legal and regulatory matters, including a substantial settlement for class-action lawsuits, and incurred goodwill impairment charges primarily within its Risk Consulting & Technology segment. MMC's financial performance was impacted by these charges and the broader economic downturn, resulting in a net income of $227 million attributable to MMC for the year, a significant improvement from a net loss in the prior year. The company remains focused on expense management and strategic acquisitions to drive future growth.
Feb 26, 2010
2008
MARSH & MCLENNAN COMPANIES, INC. Annual Report, Year Ended Dec 31, 2008
Marsh & McLennan Companies, Inc. (MMC) reported a net loss of $73 million for the fiscal year ended December 31, 2008, a significant decline from the $2.5 billion net income reported in 2007. This downturn was primarily driven by a substantial $540 million goodwill impairment charge related to the Risk Consulting & Technology segment and approximately $388 million in restructuring and related charges across the company. Revenue saw a modest increase of 4% to $11.6 billion, supported by growth in the Consulting and Risk & Insurance Services segments, although the latter experienced a decline in Guy Carpenter's business. The company's financial performance was significantly impacted by the challenging macroeconomic environment, particularly the global financial crisis, which led to reduced client spending on consulting services and negatively affected various aspects of its operations. Despite these headwinds, MMC emphasized its ongoing efforts in restructuring and cost management to improve operational efficiencies. Investors should note the significant goodwill impairment and restructuring costs, which masked underlying operational performance, and remain vigilant regarding the company's ability to navigate the ongoing economic uncertainty and its potential impact on future revenues and profitability.
Feb 27, 2009
2007
MARSH & MCLENNAN COMPANIES, INC. Annual Report, Year Ended Dec 31, 2007
Marsh & McLennan Companies, Inc. (MMC) reported a significant increase in net income for the fiscal year ended December 31, 2007, largely driven by a substantial gain from the disposal of its Putnam investment management segment. Consolidated revenue grew by 8% year-over-year, reaching $11.4 billion, with positive contributions across its key segments, particularly Consulting. The company continued to navigate the ongoing decline in market service revenues within its Risk and Insurance Services segment, a trend stemming from earlier business model changes. Despite the strong top-line growth and the positive impact of the Putnam sale on net income, the company faced increased operating expenses, partly due to higher compensation costs and restructuring charges. Management highlighted ongoing efforts to drive profitable revenue growth and manage expenses across its diverse professional services offerings. The company also continued its share repurchase program and paid dividends, signaling a focus on shareholder returns.
Feb 29, 2008
2006
MARSH & MCLENNAN COMPANIES, INC. Annual Report, Year Ended Dec 31, 2006
Marsh & McLennan Companies, Inc. (MMC) filed its 2006 10-K on March 1, 2007, detailing its performance and financial condition. The company operates across four segments: Risk and Insurance Services, Risk Consulting & Technology, Consulting, and Investment Management. The filing highlights a significant recovery in operating income to $1.46 billion in 2006, a substantial increase from $853 million in 2005, driven by revenue growth across most segments and improved operating expenses due to restructuring initiatives and cost savings. A key strategic development announced after the fiscal year-end was the agreement to sell the Investment Management segment, Putnam Investments, for $3.9 billion, signaling a strategic shift. Despite the positive financial turnaround, the company continues to navigate the fallout from past legal and regulatory issues, particularly those impacting Marsh, its largest segment. The filing details ongoing litigation and regulatory inquiries, as well as the impact of these matters on the company's reputation and financial performance. Management is focused on driving profitable revenue growth through value-added services and has initiated restructuring plans aimed at enhancing operational efficiency and achieving significant cost savings.
Mar 1, 2007
2005
MARSH & MCLENNAN COMPANIES, INC. Annual Report, Year Ended Dec 31, 2005
Marsh & McLennan Companies, Inc. (MMC) reported significant financial shifts in its 2005 10-K filing. The company is navigating a period of business model transformation, including the elimination of contingent compensation (market services agreements) which substantially impacted revenue. This shift, coupled with a major settlement with the New York Attorney General and Insurance Department related to Marsh's brokerage compensation practices, marked a challenging but transitional year. Despite revenue pressures in its largest segment, Risk and Insurance Services, MMC saw growth in its Risk Consulting & Technology and Consulting segments. The company also divested several non-core businesses, including its wholesale broking operation and a stake in claims management services. Financially, MMC focused on restructuring initiatives to achieve cost savings and managed its debt through strategic refinancing. The filing highlights ongoing efforts to adapt to a new regulatory and business environment.
Mar 2, 2006
2004
MARSH & MCLENNAN COMPANIES, INC. Annual Report, Year Ended Dec 31, 2004
Marsh & McLennan Companies, Inc. (MMC) in 2004 faced significant challenges, particularly stemming from investigations and lawsuits initiated by the New York Attorney General's Office concerning its Marsh subsidiary's compensation practices. These issues led to substantial settlement charges, impacting overall profitability. The company also experienced a notable decline in its Investment Management segment, primarily due to reduced assets under management at Putnam Investments, further exacerbated by regulatory settlements related to market timing issues. Despite these headwinds, MMC continued to operate across its core segments: Risk and Insurance Services, Investment Management, and Consulting. The company made strategic moves, including the significant acquisition of Kroll Inc. to bolster its risk consulting capabilities. Significant restructuring initiatives were also undertaken across the organization to streamline operations and reduce costs in response to the challenging environment. Investors would be closely watching the company's ability to navigate the regulatory landscape, rebuild client trust, and achieve profitability targets under its revised business models.
Mar 9, 2005
2003
MARSH & MCLENNAN COMPANIES, INC. Annual Report, Year Ended Dec 31, 2003
Marsh & McLennan Companies (MMC) reported a strong 2003 operating year, with consolidated revenue up 11% to $11.6 billion, net income up 13% to $1.54 billion, and diluted EPS up 15% to $2.81. The growth was driven by the Risk and Insurance Services segment (Marsh Inc.), where revenue rose 16% to $6.9 billion and operating income rose 18% to $1.8 billion, and by Mercer consulting, whose revenue rose 15% to $2.7 billion (only 3% on an underlying basis). Cash generation was solid: operating cash flow was $1.9 billion, and the company repurchased 26.1 million shares for about $1.2 billion and paid $631 million in dividends. The dominant risk for investors is the Putnam Investments market-timing scandal. The SEC and the Massachusetts Secretary of the Commonwealth brought administrative proceedings in October 2003, and MMC faces roughly 70 civil actions, including ten securities class actions and an ERISA suit. Putnam's assets under management fell from $251 billion to $240 billion at year-end, with $61 billion in net redemptions, and further fell to $233 billion by February 29, 2004. Putnam's 2003 operating income declined 11% to $497 million, and management has said future revenue may be pressured by fund expense caps and reduced front-end sales charges. Management could not estimate the financial impact of the litigation, though it believes the outcome should not have a material adverse effect on MMC's consolidated financial position or cash flows, while acknowledging it could be material to results in a given period. MMC's balance sheet remains sound, with total stockholders' equity of $5.45 billion, long-term debt of $2.9 billion, and total debt of $3.4 billion. The company has also increased its dividend for 41 consecutive years. Investors should weigh the strong core franchise and cash flow against the uncertainty around Putnam's legal exposure and its ongoing asset outflows.
Mar 15, 2004
2002
MARSH & MCLENNAN COMPANIES, INC. Annual Report, Year Ended Dec 31, 2002
Marsh & McLennan Companies (MMC) reported a strong 2002 in its 10-K filed March 26, 2003. Operating revenue rose 6% to $10.44 billion, operating income rose 29% to $2.27 billion, and net income grew 40% to $1.365 billion, or $2.45 per diluted share. Much of the improvement reflects the Risk and Insurance Services segment (Marsh), where revenue grew 15% to $5.9 billion and operating income rose 31% to $1.49 billion, aided by a higher volume of business and sharply higher commercial insurance rates after September 11. Management notes that 2002 comparisons are flattered by the 2001 charges and by the cessation of goodwill amortization under SFAS 142, which added roughly $131 million to 2001 expense that is absent in 2002. The picture is more mixed beneath the headline. Putnam, the investment management segment, saw revenue fall 10% to $2.17 billion and average assets under management drop 15% to $279 billion, as three consecutive years of equity market declines produced $10.3 billion of net redemptions. Year-end AUM fell to $251 billion. Mercer, the consulting segment, grew revenue only 2% to $2.36 billion. Pension funding is a notable pressure point: unfunded non-U.S. pension obligations rose to $742 million, and MMC contributed $460 million to retirement plans in 2002. Balance sheet items to watch include $2.9 billion of long-term debt, after $750 million of senior notes were issued in 2002 and a further $500 million in February 2003, and $1.0 billion of share repurchases in 2002 (24.2 million shares). The filing also discloses the continuing Sedgwick personal pension redress review (about $525 million paid to date) and a management view that pending litigation will not be materially adverse. For investors, the filing describes a company whose core brokerage franchise is benefiting from a hard insurance market, while its asset management and consulting businesses remain tied to slower-recovering end markets. Cash generation was solid, with $1.28 billion of operating cash flow, but operating cash flow declined from $1.50 billion in 2001 because of higher income tax payments and larger other asset build-ups.
Mar 26, 2003
2001
MARSH & MCLENNAN COMPANIES, INC. Annual Report, Year Ended Dec 31, 2001
Marsh & McLennan Companies (MMC) closed 2001 with revenue of $9.94 billion, down 2% from $10.16 billion in 2000, and reported net income of $974 million, or $3.39 per diluted share, down from $1.18 billion and $4.10 in 2000. Excluding one-time items totaling $396 million (a $222 million write-down of its Bipop investment at Putnam, plus September 11 and special charges), MMC reported adjusted diluted EPS of $4.24, up 3% from $4.10. The results were pressured by a 19% revenue decline at Putnam as equity markets fell, offset by strong growth at the risk and insurance services unit, Marsh, where revenue rose 8% to $5.2 billion and operating income rose 21% to $1.14 billion. The September 11, 2001 attacks had a direct human and operational impact: 295 MMC colleagues were lost, and the company recorded $187 million in pretax charges net of expected insurance recoveries. Management said the event's uninsured cash impact has not been significant, though insurance recoveries on certain property items remain contingent. The attacks also accelerated a hardening commercial insurance market, with rising premium rates and reduced capacity, which management cited as a driver of Marsh's growth. MMC Capital helped form AXIS Specialty Limited, a Bermuda reinsurer capitalized at $1.6 billion, to add capacity. Balance sheet and capital allocation remain solid: cash rose to $537 million, long-term debt was $2.3 billion, stockholders' equity was $5.2 billion, and operating cash flow was $1.4 billion. MMC repurchased 7.8 million shares for $763 million and paid $567 million in dividends. Management expects the adoption of SFAS 142 to add at least $0.40 to diluted EPS in 2002 by ending goodwill amortization, and expects the effective tax rate to fall to about 36%. Key risks include the UK Personal Investment Authority pension review (estimated remaining exposure of $160 million, mostly insurer-recoverable), the Nelson v. AIM mutual fund fee class action against Putnam, and the sensitivity of Putnam's fee revenue to equity market levels.
Mar 29, 2002
2000
MARSH & MCLENNAN COMPANIES, INC. Annual Report, Year Ended Dec 31, 2000
Marsh & McLennan Companies, Inc. (MMC) reported a strong fiscal 2000 in its 10-K filed March 29, 2001. Consolidated revenue rose 11% to $10.16 billion, and net income increased 23% to $1.18 billion, or $4.10 per diluted share. Operating income reached $2.18 billion, up from $1.47 billion in 1999, though the comparison is distorted by $337 million of 1999 special charges tied to the Sedgwick acquisition. Excluding those charges, diluted EPS grew 18% from $3.48. All three segments grew: risk and insurance services (Marsh) revenue rose 6% to $4.78 billion, investment management (Putnam) revenue rose 21% to $3.24 billion, and consulting (Mercer) revenue rose 9% to $2.14 billion. Segment operating margins improved in each business. The filing also highlights several risks and watch items. Putnam's assets under management fell to $370 billion at year-end from $391 billion, as a roughly $54 billion market-driven decline offset $33 billion of net new sales, reflecting exposure to equity market volatility. Management expects to benefit from firmer U.S. commercial insurance pricing, with rates up roughly 10% by mid-2000 and still rising into 2001. Balance sheet items to monitor include $2.35 billion of long-term debt, a $1.0 billion commercial paper program classified as long-term, and an ongoing UK Personal Investment Authority pension redress review with contingent exposure estimated at about $350 million, of which $250 million is expected to be recovered from insurers. From a cash flow standpoint, operating cash generation was $1.36 billion, covering dividends of $514 million and capital expenditures of $512 million. Management expects to step up share repurchases starting in the first quarter of 2001. Investors should note that the filing largely incorporates financial statements and MD&A by reference from the 2000 Annual Report, and that the company stated litigation (principally errors and omissions claims) is not expected to be material.
Mar 29, 2001
1999
MARSH & MCLENNAN COMPANIES, INC. Annual Report, Year Ended Dec 31, 1999
Marsh & McLennan Companies (MMC) reported record 1999 results, with revenue up 27% to $9.157 billion from $7.190 billion in 1998, driven largely by the November 1998 acquisition of Sedgwick Group plc. Reported net income was $726 million ($2.62 diluted EPS), down from $796 million ($2.98) in 1998, because of $337 million in pre-tax special charges tied to the Sedgwick integration. Excluding those charges, management cites net income of $959 million and diluted EPS of $3.48, a 20% and 17% increase respectively. Operating income before special charges rose to about $1.8 billion, and the three segments (Marsh risk and insurance services, Putnam investment management, and Mercer consulting) all grew. The growth engine was investment management. Putnam's assets under management rose 33% to $391 billion, driven by a strong equity market, and segment operating margins improved to 31.3%. Risk and insurance services, the largest segment at $4.5 billion of revenue, grew organically only about 4% because commercial premium rates continued to decline, and management expects low single-digit growth in early 2000. Consulting (Mercer) grew 26% reported and about 9% organically. Management expects roughly $160 million in net annual Sedgwick savings when integration completes, with about $30 million realized in 1999. The balance sheet absorbed significant leverage from the Sedgwick deal. Long-term debt rose to $2.36 billion from $1.59 billion, and goodwill and intangibles reached $5.5 billion, about 42% of total assets. Operating cash flow was $1.0 billion. Key risks disclosed include a UK personal pension redress review with a contingent exposure of about $500 million (roughly $300 million expected to be recovered from insurers), ongoing J&H-related litigation, equity market dependence at Putnam, and the potential for softer insurance pricing to pressure the core broking business.
Mar 29, 2000
1998
MARSH & MCLENNAN COMPANIES, INC. Annual Report, Year Ended Dec 31, 1998
Marsh & McLennan Companies (MMC) closed 1998 with revenue of $7.19 billion, up 20% from $6.01 billion in 1997, and net income of $796 million, up 34% (or roughly 26% in diluted EPS to $2.98 when excluding 1997 special charges, per management). Growth was driven by the full-year effect of the Johnson & Higgins combination, the late-1998 acquisition of Sedgwick Group plc for about $2.2 billion, and strong asset growth at Putnam. Excluding acquisitions and dispositions, revenue grew about 11%, with investment management up 22%, risk and insurance services up about 5%, and consulting up about 12%. The three segments show clearly different economics. Investment management (Putnam) delivered the highest operating margin at 29.5%, with year-end assets under management of $294 billion. Risk and insurance services (Marsh Inc.) generated $613 million of operating income at an 18.3% margin, and consulting (Mercer) earned $202 million at a 13.1% margin. Operating cash flow rose to $1.13 billion, and the balance sheet expanded substantially, with total assets reaching $11.9 billion and goodwill-driven intangibles of $4.8 billion. Short-term debt jumped to $2.2 billion, largely commercial paper used to fund Sedgwick, and management planned to refinance this with long-term debt and equity during 1999. Investors should weigh several risks. Management expects premium rate declines to continue to pressure brokerage revenue, and Putnam's fees are tied to equity market levels, with 73% of assets in equities. The company also disclosed a UK personal pension redress exposure estimated at about $355 million, of which $170 million is expected to be recovered from insurers, plus an ongoing J&H litigation (Aiena) and an EEOC age discrimination case. Management stated these matters are not expected to have a material adverse effect, and it guided to about $200 million of gross synergy savings from the Sedgwick integration, with a further special charge to be recorded in 1999.
Mar 31, 1999
1997-A
MARSH & MCLENNAN COMPANIES, INC. Annual Report (Amendment), Year Ended Dec 31, 1997
This is Amendment No. 1 to Marsh & McLennan Companies' (NYSE ticker MMC, as stated in the filing) 10-K for fiscal 1997. It restates 1997 results after management determined that certain costs accrued for the 1997 Johnson & Higgins (J&H) acquisition and London real estate consolidations should have been expensed as incurred. Special charges fell by $53 million to $243.8 million, which raised restated 1997 net income to $434.2 million from $399.4 million originally reported. Diluted EPS was restated to $2.60 from $2.39. Revenue rose 36% to $6,008.6 million, driven mainly by the J&H combination (completed March 27, 1997, for about $1.8 billion) and the CECAR acquisition. Excluding acquisitions, dispositions and special charges, revenue grew about 14%, and investment management revenue rose 41% on higher assets under management. The segment picture was mixed. Investment management (Putnam) was the strongest performer, with operating income of $462.8 million on a 24.6% margin and year-end assets under management of $235.1 billion, up from $173.4 billion. Risk and insurance services had a 9.7% reported operating margin, or 17.8% excluding special charges. Consulting earned an 11.1% margin before special charges. Balance sheet leverage increased sharply: total assets reached $7,912.0 million and long-term debt rose to $1,239.8 million from $458.2 million, largely to finance the J&H cash consideration. Management expects roughly $200 million in gross annual savings from the J&H integration once it is completed by the end of 1999. For investors, the key points are the restatement itself, the earnings-quality implications of heavy acquisition-related charges, the rising debt load, and the dependence of results on asset-based fee growth at Putnam. The filing also notes that the 1997 financial statements are subject to restatement and that the auditors' report on Note 16 is dated March 19, 1999.
Mar 24, 1999
1996
MARSH & MCLENNAN COMPANIES, INC. Annual Report, Year Ended Dec 31, 1996
Marsh & McLennan Companies (MRSH) filed its 10-K for fiscal 1996 on March 31, 1997, describing itself as a professional services holding company spanning three segments: insurance services (insurance and reinsurance brokerage through Marsh & McLennan, Incorporated and Guy Carpenter), investment management (Putnam Investments), and consulting (Mercer Consulting Group, including William M. Mercer, Mercer Management Consulting and NERA). As of year-end 1996 the company employed about 27,000 people, and it reported roughly 72.7 million shares outstanding with a non-affiliate market value of about $8.45 billion as of February 28, 1997. Putnam's assets under management reached $173.4 billion at December 31, 1996, up from $125.7 billion a year earlier, with about 62% in equities and 38% in fixed income. Most financial detail is incorporated by reference from the 1996 Annual Report, so the filing body itself offers limited numerical performance data. The most significant event disclosed is the March 27, 1997 completion of the acquisition of Johnson & Higgins, a privately held insurance services and employee benefits consulting firm with 1996 revenues of about $1.2 billion, under an agreement signed March 12, 1997. The filing notes that its figures do not yet reflect this transaction. Other notable activity includes the January 1997 acquisition of CECAR SA, which made the company the largest insurance broker in France, and the 1996 sale of The Frizzell Group, which produced a $142.5 million reduction in goodwill. Goodwill write-offs of $17 million were also recorded, and total net intangibles fell to $545.3 million from $729.7 million. For investors, the key considerations are the scale of the Johnson & Higgins integration, the sensitivity of brokerage revenue to insurance premium rate cycles and catastrophe losses, and the exposure of Putnam's fee revenue to market performance and to potential loss of distribution through proprietary dealer funds. Legal risks are primarily errors-and-omissions claims, including disputes over Lloyd's run-off reinsurance placements and Executive Life annuity advice, which management believes will not have a material adverse effect.
Mar 31, 1997
1994
MARSH & MCLENNAN COMPANIES, INC. Annual Report, Year Ended Dec 31, 1994
Marsh & McLennan Companies (MMC, reported as MRSH in the request) closed 1994 with revenue of $3,435.0 million, up 9% from $3,163.4 million in 1993, and net income of $371.5 million, or $5.05 per share, versus $332.4 million ($4.52) a year earlier. Income before the cumulative effect of accounting changes rose to $382.0 million ($5.19 per share). The $10.5 million after-tax charge for adopting SFAS No. 112 (postemployment benefits) reduced reported net income. Return on average stockholders' equity was 26%, and stockholders' equity reached $1,460.6 million. The company operates three segments: insurance services (broking, reinsurance broking, program management), consulting (Mercer), and investment management (Putnam). Growth was broad-based but uneven across segments. Investment management was the fastest grower, with revenue up 19% to $615.4 million and operating margin expanding to 33.8%, helped by average Putnam assets under management of $93.5 billion and year-end AUM of $95.3 billion. Insurance services grew 5% to $1,886.5 million, with about $27 million of the gain coming from realizing holdings in insurers that MMRC helped organize, so underlying growth was weaker. Management flagged that North American casualty renewal rates were flat to down and that reinsurance premium rates declined in the second half of 1994. Consulting grew 9% to $933.1 million, but its operating margin was only 10.3%, down from 12.8% in 1992. For investors, the key items are the strong cash generation (operating cash flow of $368.5 million), the dividend increase to $2.80 per share, and the company's exposure to contingent liabilities. The filing discloses claims tied to London market run-off reinsurance disputes and to guaranteed investment contracts sold through Executive Life, but management believes these will not have a material adverse effect. Total debt is moderate, with long-term debt of $409.4 million and short-term debt of $403.0 million. Note that this filing predates the company's current ticker and naming conventions, and the figures are as originally reported in 1995.
Mar 28, 1995