Date of report (Date of earliest event reported)
|
August 3, 2011
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Marsh & McLennan Companies, Inc.
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(Exact Name of Registrant as Specified in Charter)
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Delaware
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1-5998
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36-2668272
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(State or Other Jurisdiction of Incorporation)
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(Commission File Number)
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(IRS Employer
Identification No.)
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1166 Avenue of the Americas, New York, NY
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10036
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(Address of Principal Executive Offices)
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(Zip Code)
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Registrant’s telephone number, including area code
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(212) 345-5000
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|
o
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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|
o
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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|
o
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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|
o
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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MARSH & McLENNAN COMPANIES, INC.
|
||
By:
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/s/ Luciana Fato
|
|
Name:
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Luciana Fato
|
|
Title:
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Deputy General Counsel &
|
|
Corporate Secretary
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99.1
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Press release issued by Marsh & McLennan Companies, Inc. on August 3, 2011.
|
§
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our exposure to potential liabilities arising from errors and omissions claims against us, particularly in our Marsh and Mercer businesses;
|
§
|
our ability to make strategic acquisitions and dispositions and to integrate, and realize expected synergies, savings or strategic benefits from the businesses we acquire;
|
§
|
changes in the funded status of our global defined benefit pension plans and the impact of any increased pension funding resulting from those changes;
|
§
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the impact on our net income caused by fluctuations in foreign currency exchange rates;
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§
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the impact on our net income or cash flows and our effective tax rate in a particular period caused by settled tax audits and expired statutes of limitation;
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§
|
the extent to which we retain existing clients and attract new business, and our ability to incentivize and retain key employees;
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§
|
the impact of any regional, national or global political, economic, regulatory or market conditions on our results of operations and financial condition;
|
§
|
our exposure to potential criminal sanctions or civil remedies if we fail to comply with foreign and U.S. laws and regulations that are applicable to our international operations, including import and export requirements, anti-corruption laws such as the U.S. Foreign Corrupt Practices Act and the UK Bribery Act 2010, local laws prohibiting corrupt payments to government officials, as well as various trade sanctions laws;
|
§
|
the impact of competition, including with respect to pricing;
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§
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the potential impact of rating agency actions on our cost of financing and ability to borrow, as well as on our operating costs and competitive position;
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§
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our ability to successfully recover should we experience a disaster or other business continuity problem;
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§
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changes in applicable tax or accounting requirements; and
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§
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potential income statement effects from the application of FASB’s ASC Topic No. 740 (“Income Taxes”) regarding accounting treatment of uncertain tax benefits and valuation allowances and ASC Topic No. 350 (“Intangibles – Goodwill and Other”), including the effect of any subsequent adjustments to the estimates we use in applying these accounting standards.
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Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Revenue
|
$ | 2,928 | $ | 2,606 | $ | 5,812 | $ | 5,241 | ||||||||
Expense:
|
||||||||||||||||
Compensation and Benefits
|
1,728 | 1,614 | 3,449 | 3,189 | ||||||||||||
Other Operating Expenses
|
735 | 1,042 | 1,426 | 1,677 | ||||||||||||
Total Expense
|
2,463 | 2,656 | 4,875 | 4,866 | ||||||||||||
Operating Income (Loss)
|
465 | (50 | ) | 937 | 375 | |||||||||||
Interest Income
|
5 | 3 | 12 | 7 | ||||||||||||
Interest Expense
|
(49 | ) | (60 | ) | (100 | ) | (120 | ) | ||||||||
Investment (Loss) Income
|
(6 | ) | 18 | 13 | 26 | |||||||||||
Income (Loss) Before Income Taxes
|
415 | (89 | ) | 862 | 288 | |||||||||||
Income Tax Expense (Credit)
|
129 | (60 | ) | 257 | 43 | |||||||||||
Income (Loss) from Continuing Operations
|
286 | (29 | ) | 605 | 245 | |||||||||||
Discontinued Operations, Net of Tax
|
3 | 271 | 15 | 249 | ||||||||||||
Net Income (Loss) Before Non-Controlling Interest
|
$ | 289 | $ | 242 | $ | 620 | $ | 494 | ||||||||
Less: Net Income Attributable to Non-Controlling Interest
|
7 | 6 | 13 | 10 | ||||||||||||
Net Income Attributable to the Company
|
$ | 282 | $ | 236 | $ | 607 | $ | 484 | ||||||||
Basic Net Income (Loss) Per Share
– Continuing Operations
|
$ | 0.51 | $ | (0.06 | ) | $ | 1.08 | $ | 0.43 | |||||||
Net Income Attributable to the Company
|
$ | 0.51 | $ | 0.43 | $ | 1.10 | $ | 0.89 | ||||||||
Diluted Net Income (Loss) Per Share
– Continuing Operations
|
$ | 0.50 | $ | (0.06 | ) | $ | 1.06 | $ | 0.43 | |||||||
– Net Income Attributable to the Company
|
$ | 0.50 | $ | 0.43 | $ | 1.09 | $ | 0.88 | ||||||||
Average Number of Shares Outstanding – Basic
|
547 | 541 | 545 | 537 | ||||||||||||
Diluted
|
555 | 545 | 554 | 541 | ||||||||||||
Shares Outstanding at 6/30
|
541 | 542 | 541 | 542 |
Components of Revenue Change*
|
||||||||||||||||||||||||
Three Months Ended
June 30,
|
% Change
GAAP
|
Currency
|
Acquisitions/
Dispositions
|
Underlying
|
||||||||||||||||||||
2011
|
2010
|
Revenue
|
Impact
|
Impact
|
Revenue
|
|||||||||||||||||||
Risk and Insurance Services
|
||||||||||||||||||||||||
Marsh
|
$ | 1,353 | $ | 1,205 | 12 | % | 5 | % | 3 | % | 5 | % | ||||||||||||
Guy Carpenter
|
257 | 243 | 6 | % | 2 | % | (1 | )% | 5 | % | ||||||||||||||
Subtotal
|
1,610 | 1,448 | 11 | % | 4 | % | 2 | % | 5 | % | ||||||||||||||
Fiduciary Interest Income
|
10 | 11 | ||||||||||||||||||||||
Total Risk and Insurance Services
|
1,620 | 1,459 | 11 | % | 4 | % | 2 | % | 5 | % | ||||||||||||||
Consulting
|
||||||||||||||||||||||||
Mercer
|
945 | 838 | 13 | % | 6 | % | 2 | % | 4 | % | ||||||||||||||
Oliver Wyman Group
|
374 | 330 | 14 | % | 6 | % | – | 8 | % | |||||||||||||||
Total Consulting
|
1,319 | 1,168 | 13 | % | 6 | % | 2 | % | 5 | % | ||||||||||||||
Corporate / Eliminations
|
(11 | ) | (21 | ) | ||||||||||||||||||||
Total Revenue
|
$ | 2,928 | $ | 2,606 | 12 | % | 5 | % | 2 | % | 5 | % |
Components of Revenue Change*
|
||||||||||||||||||||||||
Three Months Ended
June 30,
|
% Change
GAAP
|
Currency
|
Acquisitions/
Dispositions
|
Underlying
|
||||||||||||||||||||
2011
|
2010
|
Revenue
|
Impact
|
Impact
|
Revenue
|
|||||||||||||||||||
Marsh:
|
||||||||||||||||||||||||
EMEA
|
$ | 445 | $ | 397 | 12 | % | 8 | % | – | 4 | % | |||||||||||||
Asia Pacific
|
169 | 139 | 21 | % | 13 | % | 3 | % | 6 | % | ||||||||||||||
Latin America
|
83 | 66 | 25 | % | 7 | % | – | 18 | % | |||||||||||||||
Total International
|
697 | 602 | 16 | % | 9 | % | 1 | % | 6 | % | ||||||||||||||
U.S. / Canada
|
656 | 603 | 9 | % | 1 | % | 5 | % | 3 | % | ||||||||||||||
Total Marsh
|
$ | 1,353 | $ | 1,205 | 12 | % | 5 | % | 3 | % | 5 | % | ||||||||||||
Mercer:
|
||||||||||||||||||||||||
Retirement
|
$ | 271 | $ | 259 | 5 | % | 6 | % | – | (1 | )% | |||||||||||||
Health and Benefits
|
241 | 227 | 6 | % | 4 | % | (3 | )% | 5 | % | ||||||||||||||
Rewards, Talent & Communications
|
127 | 102 | 26 | % | 6 | % | 10 | % | 10 | % | ||||||||||||||
Mercer Consulting
|
639 | 588 | 9 | % | 5 | % | – | 3 | % | |||||||||||||||
Outsourcing
|
188 | 161 | 16 | % | 9 | % | 5 | % | 2 | % | ||||||||||||||
Investment Consulting & Management
|
118 | 89 | 32 | % | 11 | % | 8 | % | 13 | % | ||||||||||||||
Total Mercer
|
$ | 945 | $ | 838 | 13 | % | 6 | % | 2 | % | 4 | % | ||||||||||||
Notes
|
Underlying revenue measures the change in revenue, before the impact of acquisitions and dispositions, including transfers among businesses using consistent currency exchange rates.
|
* Components of revenue change may not add due to rounding.
|
Components of Revenue Change*
|
||||||||||||||||||||||||
Six Months Ended
June 30,
|
% Change
GAAP
|
Currency
|
Acquisitions/
Dispositions
|
Underlying
|
||||||||||||||||||||
2011
|
2010
|
Revenue
|
Impact
|
Impact
|
Revenue
|
|||||||||||||||||||
Risk and Insurance Services
|
||||||||||||||||||||||||
Marsh
|
$ | 2,635 | $ | 2,371 | 11 | % | 2 | % | 5 | % | 4 | % | ||||||||||||
Guy Carpenter
|
597 | 558 | 7 | % | 1 | % | – | 6 | % | |||||||||||||||
Subtotal
|
3,232 | 2,929 | 10 | % | 2 | % | 4 | % | 5 | % | ||||||||||||||
Fiduciary Interest Income
|
22 | 22 | ||||||||||||||||||||||
Total Risk and Insurance Services
|
3,254 | 2,951 | 10 | % | 2 | % | 4 | % | 5 | % | ||||||||||||||
Consulting
|
||||||||||||||||||||||||
Mercer
|
1,867 | 1,687 | 11 | % | 4 | % | 2 | % | 4 | % | ||||||||||||||
Oliver Wyman Group
|
713 | 636 | 12 | % | 4 | % | – | 9 | % | |||||||||||||||
Total Consulting
|
2,580 | 2,323 | 11 | % | 4 | % | 2 | % | 6 | % | ||||||||||||||
Corporate / Eliminations
|
(22 | ) | (33 | ) | ||||||||||||||||||||
Total Revenue
|
$ | 5,812 | $ | 5,241 | 11 | % | 3 | % | 3 | % | 5 | % |
Components of Revenue Change*
|
||||||||||||||||||||||||
Six Months Ended
June 30,
|
% Change
GAAP
|
Currency
|
Acquisitions/
Dispositions
|
Underlying
|
||||||||||||||||||||
2011
|
2010
|
Revenue
|
Impact
|
Impact
|
Revenue
|
|||||||||||||||||||
Marsh:
|
||||||||||||||||||||||||
EMEA
|
$ | 996 | $ | 924 | 8 | % | 2 | % | 3 | % | 3 | % | ||||||||||||
Asia Pacific
|
294 | 238 | 24 | % | 10 | % | 6 | % | 7 | % | ||||||||||||||
Latin America
|
144 | 118 | 21 | % | 2 | % | – | 19 | % | |||||||||||||||
Total International
|
1,434 | 1,280 | 12 | % | 4 | % | 3 | % | 5 | % | ||||||||||||||
U.S. / Canada
|
1,201 | 1,091 | 10 | % | 1 | % | 6 | % | 3 | % | ||||||||||||||
Total Marsh
|
$ | 2,635 | $ | 2,371 | 11 | % | 2 | % | 5 | % | 4 | % | ||||||||||||
Mercer:
|
||||||||||||||||||||||||
Retirement
|
$ | 552 | $ | 539 | 2 | % | 4 | % | – | (1 | )% | |||||||||||||
Health and Benefits
|
478 | 452 | 6 | % | 2 | % | (3 | )% | 7 | % | ||||||||||||||
Rewards, Talent & Communications
|
244 | 195 | 26 | % | 4 | % | 10 | % | 12 | % | ||||||||||||||
Mercer Consulting
|
1,274 | 1,186 | 7 | % | 3 | % | – | 4 | % | |||||||||||||||
Outsourcing
|
364 | 323 | 12 | % | 6 | % | 5 | % | 1 | % | ||||||||||||||
Investment Consulting & Management
|
229 | 178 | 29 | % | 8 | % | 8 | % | 13 | % | ||||||||||||||
Total Mercer
|
$ | 1,867 | $ | 1,687 | 11 | % | 4 | % | 2 | % | 4 | % | ||||||||||||
Notes
|
Underlying revenue measures the change in revenue, before the impact of acquisitions and dispositions, including transfers among businesses using consistent currency exchange rates.
|
* Components of revenue change may not add due to rounding.
|
The Company presents below certain additional financial measures that are “non-GAAP measures” within the meaning of Regulation G under the Securities Exchange Act of 1934. These measures are: adjusted operating income (loss); adjusted operating margin; and adjusted income, net of tax.
|
The Company presents these non-GAAP measures to provide investors with additional information to analyze the Company’s performance from period to period. Management also uses these measures to assess performance for incentive compensation purposes and to allocate resources in managing the Company’s businesses. However, investors should not consider these non-GAAP measures in isolation from, or as a substitute for, the financial information that the Company reports in accordance with GAAP. The Company’s non-GAAP measures reflect subjective determinations by management, and may differ from similarly titled non-GAAP measures presented by other companies.
|
Adjusted Operating Income (Loss) and Adjusted Operating Margin
|
Adjusted operating income (loss) is calculated by excluding the impact of certain noteworthy items from the Company’s GAAP operating income or loss. The following table identifies these noteworthy items and reconciles adjusted operating income (loss) to GAAP operating income or loss, on a consolidated and segment basis, for the three months ended June 30, 2011 and 2010. The following table also presents adjusted operating margin, which is calculated by dividing adjusted operating income by consolidated or segment GAAP revenue.
|
Risk & Insurance Services
|
Consulting
|
Corporate/
Eliminations
|
Total
|
|||||||||||||
Three Months Ended June 30, 2011
|
||||||||||||||||
Operating income (loss)
|
$ | 356 | $ | 152 | $ | (43 | ) | $ | 465 | |||||||
Add (deduct) impact of noteworthy items:
|
||||||||||||||||
Restructuring Charges (a)
|
(2 | ) | 2 | 1 | 1 | |||||||||||
Settlement, Legal and Regulatory (b)
|
(2 | ) | – | – | (2 | ) | ||||||||||
Other
|
– | – | (2 | ) (c) | (2 | ) | ||||||||||
Operating income adjustments
|
(4 | ) | 2 | (1 | ) | (3 | ) | |||||||||
Adjusted operating income (loss)
|
$ | 352 | $ | 154 | $ | (44 | ) | $ | 462 | |||||||
Operating margin
|
22.0 | % | 11.5 | % | N/A | 15.9 | % | |||||||||
Adjusted operating margin
|
21.7 | % | 11.7 | % | N/A | 15.8 | % | |||||||||
Three Months Ended June 30, 2010
|
||||||||||||||||
Operating income (loss)
|
$ | 258 | $ | (275 | ) | $ | (33 | ) | $ | (50 | ) | |||||
Add (deduct) impact of noteworthy items:
|
||||||||||||||||
Restructuring Charges (a)
|
44 | 2 | 2 | 48 | ||||||||||||
Alaska Litigation Settlement
|
– | 400 | (d) | – | 400 | |||||||||||
Settlement, Legal and Regulatory (b)
|
1 | – | – | 1 | ||||||||||||
Other
|
(1 | ) | – | (5 | ) (c) | (6 | ) | |||||||||
Operating income adjustments
|
44 | 402 | (3 | ) | 443 | |||||||||||
Adjusted operating income (loss)
|
$ | 302 | $ | 127 | $ | (36 | ) | $ | 393 | |||||||
Operating margin
|
17.7 | % | N/A | N/A | N/A | |||||||||||
Adjusted operating margin
|
20.7 | % | 10.9 | % | N/A | 15.1 | % |
(a) Includes severance from restructuring activities and related charges, costs for future rent and other real estate costs, and fees and consulting costs related to recent acquisitions and cost reduction initiatives.
|
(b) Reflects settlements of and legal fees arising out of the civil complaint relating to market service agreements and other issues filed against the Company and Marsh by the New York State Attorney General in October 2004 and settled in January 2005 and similar actions initiated by other states, including indemnification of former employees for legal fees, less insurance recoveries.
|
(c) Reflects payments received related to the Corporate Advisory and Restructuring businesses divested in 2008, which was previously included in the Risk Consulting & Technology segment.
|
(d) Reflects net settlement of litigation brought by the Alaska Retirement Management Board against Mercer.
|
The Company presents below certain additional financial measures that are “non-GAAP measures,” within the meaning of Regulation G under the Securities Exchange Act of 1934. These measures are: adjusted operating income; adjusted operating margin; and adjusted income, net of tax.
|
The Company presents these non-GAAP measures to provide investors with additional information to analyze the Company’s performance from period to period. Management also uses these measures to assess performance for incentive compensation purposes and to allocate resources in managing the Company’s businesses. However, investors should not consider these non-GAAP measures in isolation from, or as a substitute for, the financial information that the Company reports in accordance with GAAP. The Company’s non-GAAP measures reflect subjective determinations by management, and may differ from similarly titled non-GAAP measures presented by other companies.
|
Adjusted Operating Income and Adjusted Operating Margin
|
Adjusted operating income is calculated by excluding the impact of certain noteworthy items from the Company’s GAAP operating income. The following tables identify these noteworthy items and reconcile adjusted operating income to GAAP operating income, on a consolidated and segment basis, for the six months ended June 30, 2011 and 2010. The following tables also present adjusted operating margin, which is calculated by dividing adjusted operating income by consolidated or segment GAAP revenue.
|
Risk & Insurance Services
|
Consulting
|
Corporate/
Eliminations
|
Total
|
|||||||||||||
Six Months Ended June 30, 2011
|
||||||||||||||||
Operating income (loss)
|
$ | 739 | $ | 280 | $ | (82 | ) | $ | 937 | |||||||
Add (deduct) impact of noteworthy items:
|
||||||||||||||||
Restructuring Charges (a)
|
(2 | ) | 5 | 2 | 5 | |||||||||||
Settlement, Legal and Regulatory (b)
|
(2 | ) | – | – | (2 | ) | ||||||||||
Other
|
– | – | (5 | ) (c) | (5 | ) | ||||||||||
Operating income adjustments
|
(4 | ) | 5 | (3 | ) | (2 | ) | |||||||||
Adjusted operating income (loss)
|
$ | 735 | $ | 285 | $ | (85 | ) | $ | 935 | |||||||
Operating margin
|
22.7 | % | 10.9 | % | N/A | 16.1 | % | |||||||||
Adjusted operating margin
|
22.6 | % | 11.1 | % | N/A | 16.1 | % |
Six Months Ended June 30, 2010
|
||||||||||||||||
Operating income (loss)
|
$ | 605 | $ | (159 | ) | $ | (71 | ) | $ | 375 | ||||||
Add (deduct) impact of noteworthy items:
|
||||||||||||||||
Restructuring Charges (a)
|
50 | 2 | 5 | 57 | ||||||||||||
Alaska Litigation Settlement
|
– | 400 | (d) | – | 400 | |||||||||||
Settlement, Legal and Regulatory (b)
|
5 | – | – | 5 | ||||||||||||
Accelerated Amortization | 1 | – | – | 1 | ||||||||||||
Other
|
(1 | ) | – | (7 | ) (c) | (8 | ) | |||||||||
Operating income adjustments
|
55 | 402 | (2 | ) | 455 | |||||||||||
Adjusted operating income (loss)
|
$ | 660 | $ | 243 | $ | (73 | ) | $ | 830 | |||||||
Operating margin
|
20.5 | % | N/A | N/A | 7.2 | % | ||||||||||
Adjusted operating margin
|
22.4 | % | 10.5 | % | N/A | 15.8 | % |
(a) Includes severance from restructuring activities and related charges, costs for future rent and other real estate costs, and fees and consulting costs related to cost reduction activities.
|
|||||||||||||||||
(b) Reflects settlements of and legal fees arising out of the civil complaint relating to market service agreements and other issues filed against the Company and Marsh by the New York State Attorney General in October 2004 and settled in January 2005 and similar actions initiated by other states, including indemnification of former employees for legal fees, less insurance recoveries.
|
|||||||||||||||||
(c) Reflects payments received related to the Corporate Advisory and Restructuring businesses divested in 2008, which was previously included in the Risk Consulting & Technology segment.
|
|||||||||||||||||
(d) Reflects net settlement of litigation brought by the Alaska Retirement Management Board against Mercer.
|
Adjusted income, net of tax
|
Adjusted income, net of tax is calculated as: the Company’s GAAP income from continuing operations, adjusted to reflect the after-tax impact of the operating income adjustments set forth in the preceding table. The related adjusted diluted earnings per share as calculated under the two-class method, reflects reductions for the portion of each item attributable to non-controlling interests and participating securities so that the calculation is based only on the amounts attributable to common shareholders.
|
Reconciliation of the impact of non-GAAP measures and Kroll discontinued operations on diluted earnings per share – Three and Six Months Ended June 30, 2011 and 2010:
|
Consolidated Results
|
Portion
Attributable to Common Shareholders
|
Adjusted Diluted EPS
|
||||||||||||||
Three Months Ended June 30, 2011
|
||||||||||||||||
Income from continuing operations
|
$ | 286 | $ | 278 | $ | 0.50 | ||||||||||
(Deduct) operating income adjustments
|
$ | (3 | ) | |||||||||||||
Add impact of related income tax expense
|
3 | |||||||||||||||
– | (1 | ) | – | |||||||||||||
Income from continuing operations, as adjusted
|
$ | 286 | $ | 277 | $ | 0.50 |
Six Months Ended June 30, 2011
|
||||||||||||||||
Income from continuing operations
|
$ | 605 | $ | 588 | $ | 1.06 | ||||||||||
(Deduct) operating income adjustments
|
$ | (2 | ) | |||||||||||||
Add impact of related income tax expense
|
3 | |||||||||||||||
1 | – | – | ||||||||||||||
Income from continuing operations, as adjusted
|
$ | 606 | $ | 588 | $ | 1.06 |
Three Months Ended June 30, 2010
|
||||||||||||||||
Loss from continuing operations
|
$ | (29 | ) | $ | (34 | ) | $ | (0.06 | ) | |||||||
Add operating income adjustments
|
$ | 443 | ||||||||||||||
Deduct impact of related income tax expense
|
(173 | ) | ||||||||||||||
270 | 266 | 0.49 | ||||||||||||||
Income from continuing operations, as adjusted
|
$ | 241 | $ | 232 | $ | 0.43 | ||||||||||
Add Kroll adjusted operating income, net of tax
|
17 | 16 | 0.03 | |||||||||||||
Adjusted income, net of tax
|
$ | 258 | $ | 248 | $ | 0.46 |
Six Months Ended June 30, 2010
|
||||||||||||||||
Income from continuing operations
|
$ | 245 | $ | 231 | $ | 0.43 | ||||||||||
Add operating income adjustments
|
$ | 455 | ||||||||||||||
Deduct impact of related income tax expense
|
(175 | ) | ||||||||||||||
280 | 275 | 0.51 | ||||||||||||||
Income from continuing operations, as adjusted
|
$ | 525 | $ | 506 | $ | 0.94 | ||||||||||
Add Kroll adjusted operating income, net of tax
|
17 | 16 | 0.03 | |||||||||||||
Adjusted income, net of tax
|
$ | 542 | $ | 522 | $ | 0.97 |
Adjusted income, net of tax for the three and six months ended June 30, 2010 includes the adjusted after-tax operating income of Kroll (but not the impact of the disposal transaction) to appropriately reflect the operating benefit derived by the Company during its ownership. This facilitates a more meaningful comparison to 2011 results which will benefit from the use of proceeds from the Kroll sale. For the three and six months ended June 30, 2010, Kroll’s adjusted operating income, net of tax was insignificant.
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Depreciation and Amortization Expense
|
$ | 82 | $ | 77 | $ | 165 | $ | 158 | ||||||||
Stock Option Expense
|
$ | 5 | $ | 5 | $ | 12 | $ | 11 | ||||||||
Capital Expenditures
|
$ | 75 | $ | 56 | $ | 142 | $ | 131 |
Three Months Ended
|
Three Months Ended
|
|||||||
June 30, 2011
|
June 30, 2010
|
|||||||
Kroll Operations
|
||||||||
Revenue
|
$ | – | $ | 163 | ||||
Expense
|
– | 146 | ||||||
Net operating income
|
– | 17 | ||||||
Provision for income tax
|
– | – | ||||||
Income from discontinued operations, net of tax
|
– | 17 | ||||||
Other discontinued operations, net of tax
|
– | – | ||||||
Income (loss) from discontinued operations, net of tax
|
– | 17 | ||||||
Disposals of discontinued operations
|
8 | (8 | ) | |||||
Provision (credit) for income tax (a)
|
5 | (262 | ) | |||||
Disposals of discontinued operations, net of tax
|
3 | 254 | ||||||
Discontinued operations, net of tax
|
$ | 3 | $ | 271 |
Six Months Ended
|
Six Months Ended
|
|||||||
June 30, 2011
|
June 30, 2010
|
|||||||
Kroll Operations
|
||||||||
Revenue
|
$ | – | $ | 325 | ||||
Expense
|
– | 293 | ||||||
Net operating income
|
– | 32 | ||||||
Provision for income tax
|
– | 15 | ||||||
Income from discontinued operations, net of tax
|
– | 17 | ||||||
Other discontinued operations, net of tax
|
– | – | ||||||
Income (loss) from discontinued operations, net of tax
|
– | 17 | ||||||
Disposals of discontinued operations
|
8 | 7 | ||||||
Provision (credit) for income tax (a)
|
(7 | ) | (225 | ) | ||||
Disposals of discontinued operations, net of tax
|
15 | 232 | ||||||
Discontinued operations, net of tax
|
$ | 15 | $ | 249 |
(a) Represents primarily the recognition of estimated deferred tax assets associated with anticipated sale of Kroll in the three and six month periods of 2010. The six months of 2010 also includes a tax provision of $36 million on the sale of Kroll Lab Specialists.
|
June 30,
2011
|
December 31,
2010
|
|||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$ | 1,659 | $ | 1,894 | ||||
Net receivables
|
3,111 | 3,035 | ||||||
Other current assets
|
416 | 347 | ||||||
Total current assets | 5,186 | 5,276 | ||||||
Goodwill and intangible assets
|
7,000 | 6,823 | ||||||
Fixed assets, net
|
823 | 822 | ||||||
Pension related assets
|
421 | 265 | ||||||
Deferred tax assets
|
1,107 | 1,205 | ||||||
Other assets
|
914 | 919 | ||||||
TOTAL ASSETS
|
$ | 15,451 | $ | 15,310 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
Current liabilities:
|
||||||||
Short-term debt
|
$ | 260 | $ | 8 | ||||
Accounts payable and accrued liabilities
|
1,881 | 1,741 | ||||||
Accrued compensation and employee benefits
|
871 | 1,294 | ||||||
Accrued income taxes
|
110 | 62 | ||||||
Dividends payable
|
120 |
|
||||||
Total current liabilities
|
3,242 | 3,105 | ||||||
Fiduciary liabilities
|
4,177 | 3,824 | ||||||
Less – cash and investments held in a fiduciary capacity
|
(4,177 | ) | (3,824 | ) | ||||
|
|
|||||||
Long-term debt
|
2,773 | 3,026 | ||||||
Pension, postretirement and postemployment benefits
|
1,178 | 1,211 | ||||||
Liabilities for errors and omissions
|
451 | 430 | ||||||
Other liabilities
|
1,027 | 1,123 | ||||||
Total equity
|
6,780 | 6,415 | ||||||
TOTAL LIABILITIES AND EQUITY
|
$ | 15,451 | $ | 15,310 |
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