01—Abstract
Summary
Summary of the 10-K filed February 24, 2016. Cited figures are marked; the original filing is the authoritative source.
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 billiona 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 billionb 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.
02—Key points
Key Highlights
- Consolidated revenue was $12.9 billion in 2015, with underlying revenue growth of 4%.
- Operating income increased by 5% to $2.4 billion, with diluted EPS from continuing operations rising to $2.98.
- Risk and Insurance Services segment revenue grew 3% on an underlying basis, driven by Marsh (+3%) and Guy Carpenter (+2%).
- Consulting segment revenue grew 5% on an underlying basis, with Mercer (+4%) and Oliver Wyman Group (+7%) showing positive momentum.
- The company completed 21 acquisitions in 2015, investing $1.2 billion in cash and deferred consideration.
- Shareholder returns were significant, with $1.4 billion in share repurchases and $632 million in dividends paid.
- Goodwill and intangible assets amounted to $8.9 billion at year-end 2015, representing a substantial portion of total assets.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2015filed February 24, 2016Financial Statements
FY2015 against FY2014
| Line item | FY2015FY2014 | Change |
|---|---|---|
| Revenue | $12.89B$12.95B | −0.4% |
| Operating Expenses | $10.47B$10.65B | −1.7% |
| Operating Income | $2.42B$2.30B | +5.1% |
| Interest Expense | $163.00M$165.00M | −1.2% |
| Net Income | $1.60B$1.47B | +9.1% |
| EPS (Basic) | $3.01$2.69 | +11.9% |
| EPS (Diluted) | $2.98$2.65 | +12.5% |
| Shares Outstanding (Basic) | 531.00M545.00M | −2.6% |
| Shares Outstanding (Diluted) | 536.00M553.00M | −3.1% |
05—Questions
Frequently Asked Questions
What were Marsh & McLennan's primary business segments in 2015?
Marsh & McLennan operated through two primary segments: Risk and Insurance Services (including Marsh and Guy Carpenter) and Consulting (including Mercer and Oliver Wyman Group).
How did currency fluctuations affect MMC's reported revenue in 2015?
The strengthening U.S. dollar had a negative impact on reported revenue. Consolidated revenue decreased by 1% on a reported basis, but increased by 4% on an underlying basis, excluding currency impacts.
What was MMC's strategy regarding acquisitions in 2015?
Acquisitions remained a key part of MMC's business strategy. In 2015, the company completed 21 acquisitions across its segments, investing approximately $1.2 billion in cash and deferred consideration.
How did MMC return capital to shareholders in 2015?
In 2015, MMC repurchased approximately $1.4 billion of its common stock and paid $632 million in dividends to shareholders.
06—Continue