10-KPeriod: FY2018

MARSH & MCLENNAN COMPANIES, INC. Annual Report, Year Ended Dec 31, 2018

Filed February 21, 2019For Securities:MRSHMMC

Summary

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.

Financial Statements
Beta
Revenue$14.95B
Operating Expenses$12.19B
Operating Income$2.76B
Interest Expense$290.00M
Net Income$1.65B
EPS (Basic)$3.26
EPS (Diluted)$3.23
Shares Outstanding (Basic)506.00M
Shares Outstanding (Diluted)511.00M

Key Highlights

  • 1Reported total revenue of $14.95 billion for the fiscal year ended December 31, 2018, an increase of 7% year-over-year.
  • 2Generated operating income of $2.76 billion in 2018, up 4% from 2017.
  • 3Achieved net income attributable to the company of $1.65 billion, an 11% increase from the prior year.
  • 4Announced the pending acquisition of Jardine Lloyd Thompson Group plc (JLT) for approximately $5.6 billion, expected to close in spring 2019.
  • 5The Risk and Insurance Services segment (Marsh and Guy Carpenter) represented 55% of revenue, while the Consulting segment (Mercer and Oliver Wyman Group) represented 45%.
  • 6Underlying revenue growth was reported across both major segments, indicating organic growth drivers.
  • 7Repurchased $675 million of common stock in 2018, demonstrating a commitment to returning capital to shareholders.

Frequently Asked Questions

Marsh & McLennan Companies operates through two main segments: Risk and Insurance Services, which includes Marsh (insurance brokerage and risk advisory) and Guy Carpenter (reinsurance specialist), and Consulting, which includes Mercer (HR and investment consulting) and Oliver Wyman Group (management and economic consulting).

In 2018, Marsh & McLennan Companies reported total revenue of $14.95 billion, an increase of 7% from 2017. Operating income was $2.76 billion, up 4% year-over-year. Net income attributable to the company was $1.65 billion, an 11% increase from 2017, and diluted earnings per share rose to $3.23.

Marsh & McLennan announced its agreement to acquire Jardine Lloyd Thompson Group plc (JLT) for approximately $5.6 billion, expected to close in the spring of 2019. This strategic acquisition is poised to significantly expand the company's global reach and service offerings in the risk and insurance services sector.

Marsh & McLennan returned capital to shareholders through share repurchases, buying back $675 million of its common stock in 2018. The company also paid dividends totaling $807 million. Debt levels increased due to financing activities related to the JLT acquisition.