01—Abstract
Summary
Summary of the 10-K filed February 24, 2017. Cited figures are marked; the original filing is the authoritative source.
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 billiona 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 billionb, 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 $3.38c, 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.
02—Key points
Key Highlights
- Consolidated revenue grew to $13.21 billion in 2016, up 2% from $12.89 billion in 2015.
- Operating income increased by 10% to $2.66 billion in 2016.
- Diluted EPS from continuing operations was $3.38 in 2016, up from $2.98 in 2015.
- The Risk and Insurance Services segment generated $7.14 billion in revenue, a 4% increase.
- The Consulting segment generated $6.11 billion in revenue, a 1% increase.
- The company repurchased $800 million of its common stock in 2016.
- MMC completed multiple acquisitions across both its Risk and Insurance Services and Consulting segments throughout 2016.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2016filed February 24, 2017Financial Statements
FY2016 against FY2015
| Line item | FY2016FY2015 | Change |
|---|---|---|
| Revenue | $13.21B$12.89B | +2.5% |
| Operating Expenses | $10.78B$10.47B | +2.9% |
| Operating Income | $2.43B$2.42B | +0.5% |
| Interest Expense | $189.00M$163.00M | +16.0% |
| Net Income | $1.77B$1.60B | +10.6% |
| EPS (Basic) | $3.41$3.01 | +13.3% |
| EPS (Diluted) | $3.38$2.98 | +13.4% |
| Shares Outstanding (Basic) | 519.00M531.00M | −2.3% |
| Shares Outstanding (Diluted) | 524.00M536.00M | −2.2% |
05—Questions
Frequently Asked Questions
What were the main segments of Marsh & McLennan Companies in 2016?
Marsh & McLennan Companies operated through two primary segments: Risk and Insurance Services, which accounted for 54% of revenue and included businesses like Marsh and Guy Carpenter, and Consulting, which accounted for 46% of revenue and included businesses like Mercer and Oliver Wyman Group.
How did Marsh & McLennan's revenue and profitability change in 2016 compared to 2015?
In 2016, consolidated revenue increased by 2% to $13.21 billion, and operating income saw a significant increase of 10% to $2.66 billion. Diluted EPS from continuing operations also rose to $3.38 from $2.98 in the prior year.
What was Marsh & McLennan's strategy regarding capital allocation in 2016?
In 2016, Marsh & McLennan Companies focused on returning value to shareholders through share repurchases, buying back $800 million of its common stock. The company also continued to pay dividends to its shareholders.
Did Marsh & McLennan engage in any acquisitions during 2016?
Yes, Marsh & McLennan Companies was active in acquisitions during 2016, completing nine acquisitions within its Risk and Insurance Services segment and six acquisitions within its Consulting segment to support its growth strategy.
06—Continue