01—Abstract
Summary
Summary of the 10-K filed February 21, 2019. Cited figures are marked; the original filing is the authoritative source.
Marsh & McLennan Companies, Inc. (MRSH) reported solid financial performance for the fiscal year ended December 31, 2018, with total revenue reaching $14.95 billiona, 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 billionb, 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 billionc, 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.
02—Key points
Key Highlights
- Reported total revenue of $14.95 billion for the fiscal year ended December 31, 2018, an increase of 7% year-over-year.
- Generated operating income of $2.76 billion in 2018, up 4% from 2017.
- Achieved net income attributable to the company of $1.65 billion, an 11% increase from the prior year.
- Announced the pending acquisition of Jardine Lloyd Thompson Group plc (JLT) for approximately $5.6 billion, expected to close in spring 2019.
- The Risk and Insurance Services segment (Marsh and Guy Carpenter) represented 55% of revenue, while the Consulting segment (Mercer and Oliver Wyman Group) represented 45%.
- Underlying revenue growth was reported across both major segments, indicating organic growth drivers.
- Repurchased $675 million of common stock in 2018, demonstrating a commitment to returning capital to shareholders.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2018filed February 21, 2019Financial Statements
FY2018 against FY2017
| Line item | FY2018FY2017 | Change |
|---|---|---|
| Revenue | $14.95B$14.02B | +6.6% |
| Operating Expenses | $12.19B$11.37B | +7.2% |
| Operating Income | $2.76B$2.65B | +4.0% |
| Interest Expense | $290.00M$237.00M | +22.4% |
| Net Income | $1.65B$1.49B | +10.6% |
| EPS (Basic) | $3.26$2.91 | +12.0% |
| EPS (Diluted) | $3.23$2.87 | +12.5% |
| Shares Outstanding (Basic) | 506.00M513.00M | −1.4% |
| Shares Outstanding (Diluted) | 511.00M519.00M | −1.5% |
05—Questions
Frequently Asked Questions
What are Marsh & McLennan Companies' main business segments?
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).
What was the company's financial performance in 2018?
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.
What is the significance of the JLT acquisition?
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.
How did the company manage its capital in 2018?
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.
06—Continue