Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Feb. 19, 2018 | Jun. 30, 2017 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2017 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | MMC | ||
Entity Registrant Name | MARSH & MCLENNAN COMPANIES, INC. | ||
Entity Central Index Key | 62,709 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 507,621,360 | ||
Entity Public Float | $ 39,350,425,982 |
Consolidated Statements Of Inco
Consolidated Statements Of Income - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Statement [Abstract] | |||||
Revenue | $ 3,685 | $ 3,364 | $ 14,024 | $ 13,211 | $ 12,893 |
Expense: | |||||
Compensation and benefits | 7,884 | 7,461 | 7,334 | ||
Other operating expenses | 3,284 | 3,086 | 3,140 | ||
Operating expenses | 11,168 | 10,547 | 10,474 | ||
Operating income | 686 | 633 | 2,856 | 2,664 | 2,419 |
Interest income | 9 | 5 | 13 | ||
Interest expense | (237) | (189) | (163) | ||
Investment income | 15 | 1 | 38 | ||
Income before income taxes | 2,643 | 2,480 | 2,307 | ||
Income tax expense | 1,133 | 685 | 671 | ||
Income from continuing operations | 28 | 441 | 1,510 | 1,795 | 1,636 |
Discontinued operations, net of tax | 2 | 0 | 2 | 0 | 0 |
Net income before non-controlling interests | 1,512 | 1,795 | 1,636 | ||
Less: Net income attributable to non-controlling interests | 20 | 27 | 37 | ||
Net income attributable to the Company | $ 29 | $ 436 | $ 1,492 | $ 1,768 | $ 1,599 |
Basic Per Share Data: | |||||
Basic net income per share – Continuing operations (in dollars per share) | $ 0.05 | $ 0.85 | $ 2.91 | $ 3.41 | $ 3.01 |
Net income attributable to the Company (in dollars per share) | 0.06 | 0.85 | 2.91 | 3.41 | 3.01 |
Diluted Per Share Data: | |||||
Diluted net income per share - Continuing operations (in dollars per share) | 0.05 | 0.84 | 2.87 | 3.38 | 2.98 |
Net income attributable to the Company (in dollars per share) | $ 0.06 | $ 0.84 | $ 2.87 | $ 3.38 | $ 2.98 |
Average number of shares outstanding | |||||
Basic (in shares) | 513 | 519 | 531 | ||
Diluted (in shares) | 519 | 524 | 536 | ||
Shares outstanding at December 31 (in shares) | 509 | 514 | 509 | 514 | 522 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | |||
Net income before non-controlling interests | $ 1,512 | $ 1,795 | $ 1,636 |
Other comprehensive income (loss), before tax: | |||
Foreign currency translation adjustments | 717 | (742) | (639) |
Unrealized investment (loss) income | (7) | 21 | 1 |
Gain (loss) related to pension/post-retirement plans | 408 | (119) | 337 |
Other comprehensive income (loss), before tax | 1,118 | (840) | (301) |
Income tax expense on other comprehensive income | 68 | 33 | 72 |
Other comprehensive income (loss), net of tax | 1,050 | (873) | (373) |
Comprehensive income | 2,562 | 922 | 1,263 |
Less: Comprehensive income attributable to non-controlling interests | 20 | 27 | 37 |
Comprehensive income attributable to the Company | $ 2,542 | $ 895 | $ 1,226 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 1,205 | $ 1,026 |
Receivables | ||
Commissions and fees | 3,777 | 3,370 |
Advanced premiums and claims | 65 | 83 |
Other | 401 | 286 |
Gross receivables | 4,243 | 3,739 |
Less-allowance for doubtful accounts and cancellations | (110) | (96) |
Net receivables | 4,133 | 3,643 |
Other current assets | 224 | 215 |
Total current assets | 5,562 | 4,884 |
Goodwill | 9,089 | 8,369 |
Other intangible assets | 1,274 | 1,126 |
Fixed assets, net | 712 | 725 |
Pension related assets | 1,693 | 776 |
Deferred tax assets | 669 | 1,097 |
Other assets | 1,430 | 1,213 |
Total assets | 20,429 | 18,190 |
Current liabilities: | ||
Short-term debt | 262 | 312 |
Accounts payable and accrued liabilities | 2,083 | 1,969 |
Accrued compensation and employee benefits | 1,718 | 1,655 |
Accrued income taxes | 199 | 146 |
Total current liabilities | 4,262 | 4,082 |
Fiduciary liabilities | 4,847 | 4,241 |
Less – cash and investments held in a fiduciary capacity | (4,847) | (4,241) |
Fiduciary liabilities, net, noncurrent | 0 | 0 |
Long-term debt | 5,225 | 4,495 |
Pension, postretirement and postemployment benefits | 1,888 | 2,076 |
Liability for errors and omissions | 301 | 308 |
Other liabilities | 1,311 | 957 |
Commitments and contingencies | 0 | 0 |
Equity: | ||
Preferred stock, $1 par value, authorized 6,000,000 shares, none issued | 0 | 0 |
Common stock, $1 par value, authorized 1,600,000,000 shares, issued 560,641,640 shares at December 31, 2017 and December 31, 2016 | 561 | 561 |
Additional paid-in capital | 784 | 842 |
Retained earnings | 13,140 | 12,388 |
Accumulated other comprehensive loss | (4,043) | (5,093) |
Non-controlling interests | 83 | 80 |
Stockholders Equity Subtotal Before Treasury Stock | 10,525 | 8,778 |
Less – treasury shares, at cost, 51,930,135 shares at December 31, 2017 and 46,150,415 shares at December 31, 2016 | (3,083) | (2,506) |
Total equity | 7,442 | 6,272 |
Total liabilities and stockholders' equity | $ 20,429 | $ 18,190 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 1 | $ 1 |
Preferred stock, shares authorized (in shares) | 6,000,000 | 6,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, shares authorized (in shares) | 1,600,000,000 | 1,600,000,000 |
Common stock, shares issued (in shares) | 560,641,640 | 560,641,640 |
Treasury shares, shares (in shares) | 51,930,135 | 46,150,415 |
Consolidated Statements Of Cash
Consolidated Statements Of Cash Flows - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Operating cash flows: | |||
Net income before non-controlling interests | $ 1,512 | $ 1,795 | $ 1,636 |
Adjustments to reconcile net income to cash provided by operations: | |||
Depreciation and amortization of fixed assets and capitalized software | 312 | 308 | 314 |
Amortization of intangible assets | 169 | 130 | 109 |
Adjustments and payments related to contingent consideration liability | (24) | (33) | 11 |
Gain on deconsolidation of entity | 0 | (11) | 0 |
Provision for deferred income taxes | 396 | 68 | 178 |
Gain on investments | (15) | 0 | (38) |
Loss (Gain) on disposition of assets | 10 | 6 | (13) |
Share-based compensation expense | 149 | 109 | 88 |
Changes in assets and liabilities: | |||
Net receivables | (454) | (154) | (52) |
Other current assets | (3) | (9) | 3 |
Other assets | (199) | 34 | (10) |
Accounts payable and accrued liabilities | 87 | 55 | (125) |
Accrued compensation and employee benefits | 63 | 2 | 23 |
Accrued income taxes | 37 | (21) | (15) |
Contributions to pension and other benefit plans in excess of current year expense/credit | (457) | (279) | (231) |
Other liabilities | 406 | (97) | (60) |
Effect of exchange rate changes | (96) | 104 | 70 |
Net cash provided by operations | 1,893 | 2,007 | 1,888 |
Financing cash flows: | |||
Purchase of treasury shares | (900) | (800) | (1,400) |
Net increase in commercial paper | 0 | 50 | 0 |
Proceeds from issuance of debt | 987 | 347 | 1,091 |
Repayments of debt | (315) | (12) | (61) |
Shares withheld for taxes on vested units – treasury shares | (49) | (39) | (49) |
Issuance of common stock from treasury shares | 166 | 188 | 224 |
Payments of deferred and contingent consideration for acquisitions | (136) | (98) | (49) |
Distributions of non-controlling interests | (22) | (21) | (30) |
Dividends paid | (740) | (682) | (632) |
Net cash used for financing activities | (1,009) | (1,067) | (906) |
Investing cash flows: | |||
Capital expenditures | (302) | (253) | (325) |
Net (purchases) sales of long-term investments | (13) | 2 | (65) |
Proceeds from sales of fixed assets | 8 | 4 | 2 |
Dispositions | 0 | 0 | 71 |
Acquisitions | (655) | (813) | (952) |
Other, net | 6 | 4 | 4 |
Net cash used for investing activities | (956) | (1,056) | (1,265) |
Effect of exchange rate changes on cash and cash equivalents | 251 | (232) | (301) |
Increase (decrease) in cash and cash equivalents | 179 | (348) | (584) |
Cash and cash equivalents at beginning of year | 1,026 | 1,374 | 1,958 |
Cash and cash equivalents at end of year | $ 1,205 | $ 1,026 | $ 1,374 |
Consolidated Statements Of Equi
Consolidated Statements Of Equity - USD ($) $ in Millions | Total | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Shares | Non-Controlling Interests |
Beginning balance at Dec. 31, 2014 | $ 561 | $ 930 | $ 10,335 | $ (3,847) | $ (925) | $ 79 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Change in accrued stock compensation costs | 16 | ||||||
Issuance of shares under stock compensation plans and employee stock purchase plans and related tax impact | (85) | 334 | |||||
Other | 0 | ||||||
Net income attributable to the Company | $ 1,636 | 1,599 | 37 | ||||
Dividend equivalents declared - (per share amounts: $1.43 in 2017, $1.30 in 2016, and $1.18 in 2015) | (4) | ||||||
Dividends declared – (per share amounts: $1.43 in 2017, $1.30 in 2016, and $1.18 in 2015) | (628) | ||||||
Other comprehensive income (loss), net of tax | (373) | (373) | |||||
Purchase of treasury shares | (1,400) | ||||||
Distributions and other changes | (27) | ||||||
Deconsolidation of subsidiary | 0 | ||||||
Ending balance at Dec. 31, 2015 | 6,602 | 561 | 861 | 11,302 | (4,220) | (1,991) | 89 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Change in accrued stock compensation costs | 44 | ||||||
Issuance of shares under stock compensation plans and employee stock purchase plans and related tax impact | (63) | 285 | |||||
Other | 0 | ||||||
Net income attributable to the Company | 1,795 | 1,768 | 27 | ||||
Dividend equivalents declared - (per share amounts: $1.43 in 2017, $1.30 in 2016, and $1.18 in 2015) | (7) | ||||||
Dividends declared – (per share amounts: $1.43 in 2017, $1.30 in 2016, and $1.18 in 2015) | (675) | ||||||
Other comprehensive income (loss), net of tax | (873) | (873) | |||||
Purchase of treasury shares | (800) | ||||||
Distributions and other changes | (22) | ||||||
Deconsolidation of subsidiary | (14) | ||||||
Ending balance at Dec. 31, 2016 | 6,272 | $ 561 | 842 | 12,388 | (5,093) | (2,506) | 80 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Change in accrued stock compensation costs | 63 | ||||||
Issuance of shares under stock compensation plans and employee stock purchase plans and related tax impact | (120) | 323 | |||||
Other | (1) | ||||||
Net income attributable to the Company | 1,512 | 1,492 | 20 | ||||
Dividend equivalents declared - (per share amounts: $1.43 in 2017, $1.30 in 2016, and $1.18 in 2015) | (6) | ||||||
Dividends declared – (per share amounts: $1.43 in 2017, $1.30 in 2016, and $1.18 in 2015) | (734) | ||||||
Other comprehensive income (loss), net of tax | 1,050 | 1,050 | |||||
Purchase of treasury shares | (900) | ||||||
Distributions and other changes | (17) | ||||||
Deconsolidation of subsidiary | 0 | ||||||
Ending balance at Dec. 31, 2017 | $ 7,442 | $ 784 | $ 13,140 | $ (4,043) | $ (3,083) | $ 83 |
Consolidated Statements Of Equ8
Consolidated Statements Of Equity (Parenthetical) - $ / shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Statement of Stockholders' Equity [Abstract] | |||
Dividend equivalents per share (in dollars per share) | $ 1.43 | $ 1.30 | $ 1.18 |
Dividends declared per share (in dollars per share) | $ 1.43 | $ 1.30 | $ 1.18 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Nature of Operations: Marsh & McLennan Companies, Inc. (the "Company"), a global professional services firm, is organized based on the different services that it offers. Under this structure, the Company’s two business segments are Risk and Insurance Services and Consulting. The Risk and Insurance Services segment provides risk management solutions, services, advice and insurance broking, reinsurance broking and insurance program management services for businesses, public entities, insurance companies, associations, professional services organizations, and private clients. The Company conducts business in this segment through Marsh and Guy Carpenter. The Company conducts business in its Consulting segment through Mercer and Oliver Wyman Group. Mercer provides consulting expertise, advice, services and solutions in the areas of health, retirement, talent and investments. Oliver Wyman Group provides specialized management and economic and brand consulting services. Acquisitions impacting the Risk and Insurance Services and Consulting segments are discussed in Note 4 below. Principles of Consolidation: The accompanying consolidated financial statements include all wholly-owned and majority-owned subsidiaries. All significant inter-company transactions and balances have been eliminated. Fiduciary Assets and Liabilities: In its capacity as an insurance broker or agent, generally the Company collects premiums from insureds and after deducting its commissions, remits the premiums to the respective insurance underwriters. The Company also collects claims or refunds from underwriters on behalf of insureds. Unremitted insurance premiums and claims proceeds are held by the Company in a fiduciary capacity. Risk and Insurance Services revenue includes interest on fiduciary funds of $39 million , $26 million and $21 million in 2017 , 2016 and 2015 , respectively. The Consulting segment recorded fiduciary interest income of $4 million , $3 million and $4 million in 2017 , 2016 and 2015 , respectively. Since fiduciary assets are not available for corporate use, they are shown in the consolidated balance sheets as an offset to fiduciary liabilities. Net uncollected premiums and claims and the related payables were $6.8 billion and $7 billion at December 31, 2017 and 2016 , respectively. The Company is not a principal to the contracts under which the right to receive premiums or the right to receive reimbursement of insured losses arises. Accordingly, net uncollected premiums and claims and the related payables are not assets and liabilities of the Company and are not included in the accompanying consolidated balance sheets. In certain instances, the Company advances premiums, refunds or claims to insurance underwriters or insureds prior to collection. These advances are made from corporate funds and are reflected in the accompanying consolidated balance sheets as receivables. Mercer manages approximately $227 billion of assets in trusts or funds for which Mercer’s management or trustee fee is not considered a variable interest, since the fees are commensurate with the level of effort required to provide those services. Mercer is not the primary beneficiary of these trusts or funds. Mercer’s maximum exposure to loss of its interests is, therefore, limited to collection of its fees. Revenue: Risk and Insurance Services revenue includes insurance commissions, fees for services rendered and interest income on certain fiduciary funds. Insurance commissions and fees for risk transfer services generally are recorded as of the effective date of the applicable policies or, in certain cases (primarily in the Company's reinsurance broking operations), as of the effective date or billing date, whichever is later. A reserve for policy cancellation is provided based on historic and current data on cancellations. Consideration for fee arrangements covering multiple insurance placements, the provision of risk management and/or other services is allocated to all deliverables on the basis of the relative selling prices. Fees for non-risk transfer services provided to clients are recognized over the period in which the services are provided, using a proportional performance model. Fees resulting from achievement of certain performance thresholds are recorded when such levels are attained and such fees are not subject to forfeiture. Consulting revenue includes fees paid by clients for advice and services and commissions from insurance companies for the placement of individual and group contracts. Fee revenue for engagements where remuneration is based on time plus out-of-pocket expenses is recognized based on the amount of time consulting professionals expend on the engagement. For fixed fee engagements, revenue is recognized using a proportional performance model. Revenue from insurance commissions not subject to a fee arrangement is recorded over the effective period of the applicable policies. Revenue for asset based fees is recognized on an accrual basis by applying the daily/monthly rate as contractually agreed with the client to the applicable net asset value. On a limited number of engagements, performance fees may also be earned for achieving certain prescribed performance criteria. Such fees are recognized when the performance criteria have been achieved and, when required, agreed to by the client. Reimbursable expenses incurred by professional staff in the generation of revenue and sub-advisory fees related to the majority of funds in the investment management business are included in revenue and the related expenses are included in other operating expenses. Cash and Cash Equivalents: Cash and cash equivalents primarily consist of certificates of deposit and time deposits, with original maturities of three months or less, and money market funds. The estimated fair value of the Company's cash and cash equivalents approximates their carrying value. The Company is required to maintain operating funds primarily related to regulatory requirements outside the United States or as collateral under captive insurance arrangements. At December 31, 2017 , the Company maintained $187 million related to these regulatory requirements. Fixed Assets: Fixed assets are stated at cost less accumulated depreciation and amortization. Expenditures for improvements are capitalized. Upon sale or retirement of an asset, the cost and related accumulated depreciation and amortization are removed from the accounts and any gain or loss is reflected in income. Expenditures for maintenance and repairs are charged to operations as incurred. Depreciation of buildings, building improvements, furniture, and equipment is provided on a straight-line basis over the estimated useful lives of these assets. Furniture and equipment is depreciated over periods ranging from three to ten years. Leasehold improvements are amortized on a straight-line basis over the periods covered by the applicable leases or the estimated useful life of the improvement, whichever is less. Buildings are depreciated over periods ranging from thirty to forty years. The Company periodically reviews long-lived assets for impairment whenever events or changes indicate that the carrying value of assets may not be recoverable. The components of fixed assets are as follows: December 31, (In millions of dollars) 2017 2016 Furniture and equipment $ 1,179 $ 1,113 Land and buildings 385 389 Leasehold and building improvements 974 906 2,538 2,408 Less-accumulated depreciation and amortization (1,826 ) (1,683 ) $ 712 $ 725 Investments: The Company holds investments in certain private equity funds. Investments in private equity funds are accounted for under the equity method of accounting using a consistently applied three-month lag period adjusted for any known significant changes from the lag period to the reporting date of the Company. The underlying private equity funds follow investment company accounting, where investments within the fund are carried at fair value. Investment gains or losses for its proportionate share of the change in fair value of the funds are recorded in earnings. Investments using the equity method of accounting are included in other assets in the consolidated balance sheets. In 2017 , the Company recorded investment income of $15 million compared to less than $1 million in 2016 and $38 million in 2015 . The investment income in 2015 was primarily due to general partner carried interest from the Company's investment in Trident III, which was substantially liquidated in 2015. Goodwill and Other Intangible Assets: Goodwill represents acquisition costs in excess of the fair value of net assets acquired. Goodwill is reviewed at least annually for impairment. The Company performs an annual impairment test for each of its reporting units during the third quarter of each year. When a step 1 test is performed, fair values of the reporting units are estimated using either a market approach or a discounted cash flow model. Carrying values for the reporting units are based on balances at the prior quarter end and include directly identified assets and liabilities as well as an allocation of those assets and liabilities not recorded at the reporting unit level. As discussed in Note 5, the Company may elect to assess qualitative factors to determine if a step 1 test is necessary. Other intangible assets, which primarily consist of acquired customer lists, that are not deemed to have an indefinite life, are amortized over their estimated lives, typically ranging from 10 to 15 years, and reviewed for impairment upon the occurrence of certain triggering events in accordance with applicable accounting literature. The Company had no indefinite lived identified intangible assets at December 31, 2017 and 2016 . Capitalized Software Costs: The Company capitalizes certain costs to develop, purchase or modify software for the internal use of the Company. These costs are amortized on a straight-line basis over periods ranging from 3 to 10 years. Costs incurred during the preliminary project stage and post implementation stage, are expensed as incurred. Costs incurred during the application development stage are capitalized. Costs related to updates and enhancements are only capitalized if they will result in additional functionality. Capitalized computer software costs of $488 million and $482 million , net of accumulated amortization of $1.3 billion and $1.1 billion at December 31, 2017 and 2016 , respectively, are included in other assets in the consolidated balance sheets. Legal and Other Loss Contingencies: The Company and its subsidiaries are subject to a significant number of claims, lawsuits and proceedings including claims for errors and omissions ("E&O"). The preparation of financial statements in conformity with accounting principles generally accepted in the United States ("GAAP") requires that a liability be recorded when a loss is both probable and reasonably estimable. Significant management judgment is required to apply this guidance. The Company utilizes case level reviews by inside and outside counsel, an internal actuarial analysis by Oliver Wyman Group, a subsidiary of the Company, and other methods to estimate potential losses. The liability is reviewed quarterly and adjusted as developments warrant. In many cases, the Company has not recorded a liability, other than for legal fees to defend the claim, because we are unable, at the present time, to make a determination that a loss is both probable and reasonably estimable. Given the unpredictability of E&O claims and of litigation that could flow from them, it is possible that an adverse outcome in a particular matter could have a material adverse effect on the Company’s businesses, results of operations, financial condition or cash flow in a given quarterly or annual period. In addition, to the extent that insurance coverage is available, significant management judgment is required to determine the amount of recoveries that are probable of collection under the Company’s various insurance programs. The legal and other contingent liabilities described above are not discounted. Income Taxes: The Company's effective tax rate reflects its income, statutory tax rates and tax planning in the various jurisdictions in which it operates. Significant judgment is required in determining the annual tax provision and in evaluating uncertain tax positions and the ability to realize deferred tax assets. Specific considerations related to the enactment of U.S. tax reform are discussed in more detail in Note 6 to the consolidated financial statements. The Company reports a liability for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in a tax return. The Company determines whether it is more likely than not that a tax position will be sustained upon tax examination, including resolution of any related appeals or litigation, based on only the technical merits of the position. The technical merits of a tax position derive from both statutory and judicial authority (legislation and statutes, legislative intent, regulations, rulings, and case law) and their applicability to the facts and circumstances of the tax position. If a tax position does not meet the more-likely-than-not recognition threshold, the benefit of that position is not recognized in the financial statements. A tax position that meets the more-likely-than-not recognition threshold is measured to determine the amount of benefit to recognize in the financial statements. The tax position is measured as the largest amount of benefit that is greater than 50 percent likely to be realized upon ultimate resolution with a taxing authority. Uncertain tax positions are evaluated based upon the facts and circumstances that exist at each reporting period. Subsequent changes in judgment based upon new information may lead to changes in recognition, de-recognition, and measurement. Adjustments may result, for example, upon resolution of an issue with the taxing authorities, or expiration of a statute of limitations barring an assessment for an issue. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits in income tax expense. Tax law may require items be included in the Company's tax returns at different times than the items are reflected in the financial statements. As a result, the annual tax expense reflected in the consolidated statements of income is different than that reported in the income tax returns. Some of these differences are permanent, such as expenses that are not deductible in the returns, and some differences are temporary and reverse over time, such as depreciation expense. Temporary differences create deferred tax assets and liabilities. Deferred tax assets generally represent items that can be used as a tax deduction or credit in tax returns in future years for which benefit has already been recorded in the financial statements. Valuation allowances are established for deferred tax assets when it is estimated that future taxable income will be insufficient to use a deduction or credit in that jurisdiction. Deferred tax liabilities generally represent tax expense recognized in the financial statements for which payment has been deferred, or expense for which a deduction has been taken already in the tax return but the expense has not yet been recognized in the financial statements. Derivative Instruments: All derivatives, whether designated in hedging relationships or not, are recorded on the balance sheet at fair value. If the derivative is designated as a fair value hedge, the changes in the fair value of the derivative and of the hedged item attributable to the hedged risk are recognized in earnings. The fair value of the derivative is recorded in the consolidated balance sheet in other receivables or accounts payable and accrued liabilities. The change in the fair value of a derivative is recorded in the consolidated statement of income in other operating expenses. If the derivative is designated as a cash flow hedge, the effective portions of changes in the fair value of the derivative are recorded in other comprehensive income and are recognized in the income statement when the hedged item affects earnings. Changes in the fair value attributable to the ineffective portion of cash flow hedges are recognized in earnings. Concentrations of Credit Risk: Financial instruments which potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, commissions and fees receivable and insurance recoverables. The Company maintains a policy providing for the diversification of cash and cash equivalent investments and places its investments in a large number of high quality financial institutions to limit the amount of credit risk exposure. Concentrations of credit risk with respect to receivables are generally limited due to the large number of clients and markets in which the Company does business, as well as the dispersion across many geographic areas. Per Share Data: Basic net income per share attributable to the Company and income from continuing operations per share are calculated by dividing the respective after-tax income attributable to common shares by the weighted average number of outstanding shares of the Company’s common stock. Diluted net income per share attributable to the Company and income from continuing operations per share are calculated by dividing the respective after-tax income attributable to common shares by the weighted average number of outstanding shares of the Company’s common stock, which have been adjusted for the dilutive effect of potentially issuable common shares. Reconciliations of the applicable components used to calculate basic and diluted EPS - Continuing Operations are presented below. The reconciling items related to the EPS calculation are the same for both basic and diluted EPS. Basic and Diluted EPS Calculation - Continuing Operations (In millions, except per share figures) 2017 2016 2015 Net income from continuing operations $ 1,510 $ 1,795 $ 1,636 Less: Net income attributable to non-controlling interests 20 27 37 $ 1,490 $ 1,768 $ 1,599 Basic weighted average common shares outstanding 513 519 531 Dilutive effect of potentially issuable common shares 6 5 5 Diluted weighted average common shares outstanding 519 524 536 Average stock price used to calculate common stock equivalents $ 77.30 $ 63.51 $ 56.27 There were 10.2 million , 13.2 million and 14.8 million stock options outstanding as of December 31, 2017 , 2016 and 2015 , respectively. Estimates: GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results may vary from those estimates. New Accounting Pronouncements Recently Adopted: In October 2016, the FASB issued new guidance which changes the evaluation of whether a reporting entity is the primary beneficiary of a variable interest entity by changing how a reporting entity that is a single decision maker of a variable interest entity treats indirect interests in the entity held through related parties that are under common control with the reporting entity. If a reporting entity satisfies the first characteristic of a primary beneficiary (such that it is the single decision maker of a variable interest entity), the new guidance requires that reporting entity, in determining whether it satisfies the second characteristic of a primary beneficiary, include all of its direct variable interest in a variable interest entity and, on a proportionate basis, its indirect variable interests in a variable interest entity held through related parties, including related parties that are under common control with the reporting entity. The adoption of this guidance did not have a significant impact on its financial position, results of operations and statement of cash flows. In April 2016, the FASB issued new guidance which simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures and statutory tax withholding requirements, as well as classification in the statement of cash flows. The new guidance requires that companies record all excess tax benefits and tax deficiencies as an income tax benefit or expense in the income statement and classify excess tax benefits as an operating activity in the statement of cash flows. The Company adopted this new guidance prospectively, effective January 1, 2017 and prior periods have not been adjusted. For the year ended December 31, 2017, the adoption of this new standard reduced income tax expense in the consolidated statement of income by approximately $79 million . For the years ended December 31, 2016 and 2015, the Company recorded an excess tax benefit of $44 million and $53 million , respectively, as an increase to equity in its consolidated balance sheets, which was reflected as cash provided by financing activities in the consolidated statements of cash flows. In March 2016, the FASB issued new guidance which eliminates the requirement that when an investment qualifies for use of the equity method as a result of an increase in the level of ownership interest or degree of influence, an investor must adjust the investment, results of operations and retained earnings retroactively on a step-by-step basis as if the equity method had been in effect during all previous periods that the investment had been held. The amendments require that the equity method investor add the cost of acquiring the additional interest in the investee to the current basis of the investor’s previously held interest and adopt the equity method of accounting as of the date the investment becomes qualified for equity method accounting. Therefore, upon qualifying for the equity method of accounting, no retroactive adjustment of the investment is required. The amendments require that an entity that has an available-for-sale equity security that becomes qualified for the equity method of accounting recognize through earnings the unrealized holding gain or loss in accumulated other comprehensive income at the date the investment becomes qualified for use of the equity method. The new guidance is effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. The guidance was adopted on January 1, 2017 and did not have an impact on the Company's financial position or results of operations. In September 2015, the FASB issued new guidance intended to simplify the accounting for adjustments made to provisional amounts recognized in business combinations. The guidance requires the acquirer to recognize adjustments to estimated amounts that are identified during the measurement period in the reporting period in which the adjustments are determined, and to record, in the same period's financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the estimated amounts, calculated as if the accounting had been completed as of the acquisition date. The guidance also requires additional disclosures required for the amounts recorded in current period earnings arising from such adjustments. The guidance was adopted on January 1, 2016 and did not have a material impact on the Company's financial position or results of operations. In May 2015, the FASB issued new guidance which removes the requirement to present certain investments for which the practical expedient is used to measure fair value at net asset value within the fair value hierarchy table. Instead, an entity is required to include those investments as a reconciling item so that the total fair value amount of investments in the disclosure is consistent with the fair value investment balance in the consolidated balance sheets. This guidance is effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years. The adoption of this new guidance affected footnote disclosure only, and therefore did not have a material impact on the Company's financial position or results of operations. In February 2015, the FASB issued new accounting guidance intended to improve targeted areas of consolidation guidance for legal entities such as limited partnerships, limited liability corporations and securitization structures. The guidance focuses on the consolidation evaluation for reporting organizations that are required to evaluate whether they should consolidate certain legal entities. The guidance is effective for periods beginning after December 15, 2015. The adoption of this guidance did not have a material impact on the Company's financial statements. In January 2015, the FASB issued new accounting guidance that eliminated the concept of extraordinary items. The guidance is effective for annual periods beginning after December 15, 2015. Adoption of the guidance did not materially affect the Company's financial condition, results of operations or cash flows. New Accounting Pronouncements Effective January 1, 2018: New Revenue Recognition Pronouncement In May 2014, the FASB issued new accounting guidance related to revenue from contracts with customers. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company adopted the new guidance effective January 1, 2018, using the modified retrospective method, which applies the new guidance beginning with the year of adoption, with the cumulative effect of initially applying the guidance recognized as an adjustment to retained earnings at January 1, 2018. The Company elected to apply the modified retrospective method to all contracts. The guidance includes requirements to estimate variable or contingent consideration to be received, which will result in revenue being recognized earlier than under legacy GAAP. In addition, the guidance requires the capitalization and amortization of certain costs which were expensed as incurred under legacy GAAP. As discussed in more detail below, the adoption of this new revenue recognition standard will shift revenue among quarters from historical patterns, but is not expected to have a significant year-over-year impact on annual revenue. In the Risk and Insurance Services segment, there will be significant movement in the quarterly timing of revenue recognition. In particular, under the new standard the recognition of revenue in the Company’s reinsurance broking operations will be accelerated from historical patterns. Prior to the adoption of this standard, revenue related to most reinsurance placements was recognized on the later of billing or effective date as premiums are determined by the primary insurers and attached to the reinsurance treaties. Typically, this resulted in revenue being recognized over a 12 to 24 month period. Under the new guidance, estimated revenue from these treaties will be recognized largely at the policy effective date. In the insurance brokerage operations, revenue from commission based arrangements will continue to be recorded at the policy effective date, while the timing of revenue recognition for certain fee based arrangements will shift among quarters. However, since the vast majority of our fee arrangements involve contracts that cover a single year of services, the Company does not expect there will be a significant change in the amount of revenue recognized in an annual period. In the Risk and Insurance Services segment, certain pre-placement costs will be deferred and amortized into earnings when the revenue from the placement is recognized. These costs were previously expensed as incurred. As such, the Company expects the recognition of costs to shift among quarters. In the Consulting segment, the adoption of the new revenue standard will not have a significant impact on the timing of revenue recognition in quarterly or annual periods. In its Consulting segment, the Company incurs implementation costs necessary to facilitate the delivery of the contracted services. Although certain implementation costs are deferred under current GAAP, the Company has concluded that certain additional implementation costs currently expensed under legacy GAAP will be deferred under the new guidance. In addition, the amortization period for these implementation costs will be longer under the new guidance as the amortization period will include the initial contract term plus expected renewals. Currently, deferred implementation costs are amortized over the initial contract term. The cumulative effect of adopting the standard, net of tax, on January 1, 2018 are expected to result in an increase to the opening balance of retained earnings of approximately $ 325 million to $ 425 million , with offsetting increases/decreases to other balance sheet accounts, e.g. accounts receivable, other assets and deferred income taxes. The comparative information and prior periods will not be restated and will continue to be reported under the legacy accounting standards that were in effect for those periods. Other Standards Adopted Effective January 1, 2018 In March 2017, the FASB issued new guidance that changes the presentation of net periodic pension cost and net periodic postretirement cost (''net periodic benefit costs"). The new guidance requires employers to report the service cost component of net periodic benefit costs in the same line item as other compensation costs in the income statement. The other components of net periodic benefit costs are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations. In addition, only the service cost component is eligible for capitalization, when applicable. The guidance is effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods. The new guidance requires retrospective application for the presentation of the service cost component and the other components of net periodic benefit costs as discussed in more detail below, and prospective application for the capitalization of the service cost component. The adoption of this guidance will impact the line item presentation of the Company's results of operations, and will not change income before taxes, net income or earnings per share. When the Company files its financial statements for 2018, the consolidated statements of income for 2017 and 2016 will include the following reclassification: 2017 2016 Risk and Insurance Services $ 140 $ 172 Consulting 64 65 Corporate (3 ) (4 ) Increase in Compensation and Benefits 201 233 Other Net Periodic Benefit Credit (201 ) (233 ) Net Impact of Reclassification $ — $ — In January 2016, the FASB issued new guidance intended to improve the recognition and measurement of financial instruments. The new guidance requires equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income; requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (i.e., securities or loans and receivables) on the balance sheet or the accompanying notes to the financial statements; eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet; and requires a reporting organization to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk (also referred to as "own credit") when the organization has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. The new guidance is effective f |
Supplemental Disclosures
Supplemental Disclosures | 12 Months Ended |
Dec. 31, 2017 | |
Supplemental Cash Flow Information [Abstract] | |
Supplemental Disclosures | Supplemental Disclosures The following schedule provides additional information concerning acquisitions, interest and income taxes paid: (In millions of dollars) 2017 2016 2015 Assets acquired, excluding cash $ 898 $ 960 $ 1,327 Liabilities assumed (134 ) (111 ) (199 ) Contingent/deferred purchase consideration (109 ) (36 ) (176 ) Net cash outflow for acquisitions $ 655 $ 813 $ 952 (In millions of dollars) 2017 2016 2015 Interest paid $ 199 $ 178 $ 146 Income taxes paid, net of refunds $ 583 $ 642 $ 433 The classification of contingent consideration payments in the consolidated statement of cash flows is dependent upon whether the payment was part of the initial liability established on the acquisition date (financing) or an adjustment to the acquisition date liability (operating). Deferred payments are classified as financing activities in the consolidated statements of cash flows. The following amounts are included in the consolidated statements of cash flows as a financing activity. The Company paid deferred and contingent consideration of $136 million in the year ended December 31, 2017, consisting of deferred purchase consideration of $55 million and contingent purchase consideration of $81 million . In the year ended December 31, 2016 the Company paid deferred and contingent consideration of $98 million , consisting of deferred purchase consideration of $54 million and contingent consideration of $44 million , and in the year ended December 31, 2015 the Company paid deferred and contingent consideration of $49 million , consisting of deferred purchase consideration of $36 million and contingent consideration of $13 million . The following amounts are included in the operating section of the consolidated statements of cash flows. For the year ended December 31, 2017, the Company recorded a net charge for adjustments to acquisition related accounts of $3 million and contingent consideration payments of $27 million . For the year ended December 31, 2016, the Company recorded a net charge for adjustments to acquisition related accounts of $9 million and contingent consideration payments of $42 million , and for the year ended December 31, 2015 the Company recorded a net charge for adjustments to acquisition related accounts of $45 million and contingent consideration payments of $34 million . The Company had non-cash issuances of common stock under its share-based payment plan of $88 million , $73 million and $72 million for the years ended December 31, 2017 , 2016 and 2015 , respectively. The Company recorded stock-based compensation expense related to restricted stock units, performance stock units and stock options of $149 million , $109 million and $88 million for the years ended December 31, 2017 , 2016 and 2015 , respectively. In 2015, the consolidated statement of cash flows includes the cash flow impact of discontinued operations from indemnification payments related to the Putnam disposition that reduced the net cash flow provided by operations by $82 million . As discussed in Note 1, for the years ended December 31, 2016 and 2015, the Company recorded an excess tax benefit of $44 million and $53 million , respectively, as an increase to equity in its consolidated balance sheets, which was reflected as cash provided by financing activities in the consolidated statements of cash flows. An analysis of the allowance for doubtful accounts is as follows: For the Years Ended December 31, (In millions of dollars) 2017 2016 2015 Balance at beginning of year $ 96 $ 87 $ 95 Provision charged to operations 31 31 14 Accounts written-off, net of recoveries (17 ) (20 ) (18 ) Effect of exchange rate changes and other — (2 ) (4 ) Balance at end of year $ 110 $ 96 $ 87 |
Other Comprehensive Income (Los
Other Comprehensive Income (Loss) | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Other Comprehensive Income (Loss) | Other Comprehensive Income (Loss) The changes in the balances of each component of Accumulated Other Comprehensive Income ("AOCI") for the years ended December 31, 2017 and 2016 , including amounts reclassified out of AOCI, are as follows: (In millions of dollars) Unrealized Investment Gains (Losses) Pension/Post-Retirement Plans Gains (Losses) Foreign Currency Translation Adjustments Total Balance as of January 1, 2017 $ 19 $ (3,232 ) $ (1,880 ) $ (5,093 ) Other comprehensive (loss) income before reclassifications (5 ) 160 715 870 Amounts reclassified from accumulated other comprehensive loss — 180 — 180 Net current period other comprehensive (loss) income (5 ) 340 715 1,050 Balance as of December 31, 2017 $ 14 $ (2,892 ) $ (1,165 ) $ (4,043 ) (In millions of dollars) Unrealized Investment Gains Pension/Post-Retirement Plans Gains (Losses) Foreign Currency Translation Adjustments Total Balance as of January 1, 2016 $ 6 $ (3,124 ) $ (1,102 ) $ (4,220 ) Other comprehensive income (loss) before reclassifications 13 (294 ) (778 ) (1,059 ) Amounts reclassified from accumulated other comprehensive loss — 186 — 186 Net current period other comprehensive income (loss) 13 (108 ) (778 ) (873 ) Balance as of December 31, 2016 $ 19 $ (3,232 ) $ (1,880 ) $ (5,093 ) The components of other comprehensive income (loss) are as follows: For the Years Ended December 31, 2017 (In millions of dollars) Pre-Tax Tax (Credit) Net of Tax Foreign currency translation adjustments $ 717 $ 2 $ 715 Unrealized investment losses (7 ) (2 ) (5 ) Pension/post-retirement plans: Amortization of losses included in net periodic pension cost: Prior service credits (a) (1 ) — (1 ) Net actuarial losses (a) 167 30 137 Effect of curtailment (a) (1 ) — (1 ) Effect of settlement (a) 54 9 45 Subtotal 219 39 180 Net gains arising during period 374 62 312 Foreign currency translation adjustments (201 ) (36 ) (165 ) Other adjustments 16 3 13 Pension/post-retirement plans gains 408 68 340 Other comprehensive income $ 1,118 $ 68 $ 1,050 (a) Components of net periodic pension cost are included in compensation and benefits in the Consolidated Statements of Income. Tax on prior service gains and net actuarial losses is included in income tax expense. For the Years Ended December 31, 2016 (In millions of dollars) Pre-Tax Tax (Credit) Net of Tax Foreign currency translation adjustments $ (742 ) $ 36 $ (778 ) Unrealized investment gains 21 8 13 Pension/post-retirement plans: Amortization of losses included in net periodic pension cost: Prior service losses (a) 3 1 2 Net actuarial losses (a) 166 46 120 Subtotal 169 47 122 Effect of curtailment 102 38 64 Net losses arising during period (855 ) (175 ) (680 ) Foreign currency translation adjustments 416 70 346 Other adjustments 49 9 40 Pension/post-retirement plans losses (119 ) (11 ) (108 ) Other comprehensive (loss) income $ (840 ) $ 33 $ (873 ) (a) Components of net periodic pension cost are included in compensation and benefits in the Consolidated Statements of Income. Tax on prior service gains and net actuarial losses is included in income tax expense. For the Years Ended December 31, 2015 (In millions of dollars) Pre-Tax Tax (Credit) Net of Tax Foreign currency translation adjustments $ (639 ) $ 4 $ (643 ) Unrealized investment gains 1 — 1 Pension/post-retirement plans: Amortization of (gains) losses included in net periodic pension cost: Prior service credits (a) (1 ) — (1 ) Net actuarial losses (a) 271 96 175 Subtotal 270 96 174 Effect of curtailment (3 ) — (3 ) Plan Termination (6 ) (3 ) (3 ) Net losses arising during period (125 ) (62 ) (63 ) Foreign currency translation adjustments 214 43 171 Other (13 ) (6 ) (7 ) Pension/post-retirement plans gains 337 68 269 Other comprehensive (loss) income $ (301 ) $ 72 $ (373 ) (a) Components of net periodic pension cost are included in compensation and benefits in the Consolidated Statements of Income. Tax on prior service gains and net actuarial losses is included in income tax expense. The components of accumulated other comprehensive income (loss) are as follows: (In millions of dollars) December 31, 2017 December 31, 2016 Foreign currency translation adjustments (net of deferred tax adjustments of $(11) in 2017 and deferred tax adjustments of $(9) in 2016, respectively) $ (1,165 ) $ (1,880 ) Net unrealized investment gains (net of deferred tax liability of $7 in 2017 and $10 in 2016) 14 19 Net charges related to pension/post-retirement plans (net of deferred tax asset of $1,462 and $1,530 in 2017 and 2016, respectively) (2,892 ) (3,232 ) $ (4,043 ) $ (5,093 ) |
Acquisitions _ Dispositions
Acquisitions / Dispositions | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Acquisitions / Dispositions | Acquisitions / Dispositions The Company’s acquisitions have been accounted for as business combinations. Net assets and results of operations are included in the Company’s consolidated financial statements commencing at the respective purchase closing dates. In connection with acquisitions, the Company records the estimated value of the net tangible assets purchased and the value of the identifiable intangible assets purchased, which typically consist of purchased customer lists, trademarks and non-compete agreements. The valuation of purchased intangible assets involves significant estimates and assumptions. Until final valuations are complete, any change in assumptions could affect the carrying value of tangible assets, goodwill and identifiable intangible assets. The Risk and Insurance Services segment completed seven acquisitions during 2017 . • January – Marsh & McLennan Agency ("MMA") acquired J. Smith Lanier & Co. ("JSL"), a privately held insurance brokerage firm providing insurance, risk management, and employee benefits solutions to businesses and individuals throughout the U.S. • February – MMA acquired iaConsulting, a Texas-based employee benefits consulting firm. • March – MMA acquired Blakestad, Inc., a Minnesota-based private client and commercial lines insurance agency, and RJF Financial Services, a Minnesota-based retirement advisory firm. • May – MMA acquired Insurance Partners of Texas, a Texas-based employee benefits consulting firm. • August – Marsh acquired International Catastrophe Insurance Managers, LLC, a Colorado-based managing general agent providing property catastrophe insurance to business and homeowners, and MMA acquired Hendrick & Hendrick, Inc., a Texas-based insurance agency. The Consulting segment completed three acquisitions during 2017 . • August – Mercer acquired Jaeson Associates, a Portugal-based talent management consulting organization. • December – Mercer acquired Promerit AG, a Germany-based consultancy specializing in HR digitalization and business and HR transformation and BFC Asset Management Co., Ltd., a Japan-based independently owned asset manager, focused on alternative investment strategies. Total purchase consideration for acquisitions made during 2017 was approximately $777 million , which consisted of cash paid of $668 million and deferred purchase and estimated contingent consideration of $109 million . Contingent consideration arrangements are based primarily on EBITDA and/or revenue targets over periods of two to four years. The fair value of the contingent consideration was based on projected revenue and earnings of the acquired entities. Estimated fair values of assets acquired and liabilities assumed are subject to adjustment when purchase accounting is finalized. During 2017 , the Company also paid $55 million of deferred purchase consideration and $108 million of contingent consideration related to acquisitions made in prior years. The following table presents the preliminary allocation of the acquisition cost to the assets acquired and liabilities assumed, based on their fair values: (In millions) 2017 Cash $ 668 Estimated fair value of deferred/contingent consideration 109 Total consideration $ 777 Allocation of purchase price: Cash and cash equivalents $ 13 Accounts receivable, net 30 Other current assets 6 Property, plant, and equipment 6 Other intangible assets 304 Goodwill 551 Other assets 1 Total assets acquired 911 Current liabilities 25 Other liabilities 109 Total liabilities assumed 134 Net assets acquired $ 777 Other intangible assets acquired are based on initial estimates and subject to change based on final valuations during the measurement period post acquisition date. The following chart provides information of other intangible assets acquired during 2017: Amount Weighted Average Amortization Period Client relationships $ 263 12 years Other (a) 41 5 years $ 304 (a) Primarily non-compete agreements, trade names and developed technology. Prior Year Acquisitions During 2016, the Risk and Insurance Services segment completed nine acquisitions. • February – MMA acquired The Celedinas Agency, Inc., a Florida-based brokerage firm providing property and casualty and marine insurance as well as employee benefits services, and Aviation Solutions, LLC, a Missouri-based aviation risk advisor and insurance broker. • March – MMA acquired Corporate Consulting Services, Ltd., a New York-based insurance brokerage and human resource consulting firm. • August – MMA acquired Benefits Advisory Group LLC, an Atlanta-based employee benefits consulting firm. • September – MMA acquired Vero Insurance, Inc., a Florida-based agency specializing in private client insurance services. • November – MMA acquired Benefits Resource Group Agency, LLC, an Ohio-based benefits consulting firm and Presidio Benefits Group, Inc., a California-based employee benefits consulting firm. • December – Marsh acquired AD Corretora, a multi-line broker located in Brazil, and Bluefin Insurance Group, Ltd, a U.K.-based insurance brokerage. The Consulting segment completed six acquisitions during 2016. • January – Mercer acquired The Positive Ageing Company Limited, a U.K.-based firm providing advice on issues surrounding the aging workforce. • April – Mercer acquired the Extratextual software system and related client contracts. Extratextual is a web based compliance system that helps clients manage and meet their compliance and risk management obligations. • December – Oliver Wyman acquired LShift Limited, a software development company, and Mercer acquired Sirota Consulting LLC, a global provider of employee benefit solutions; Pillar Administration, a superannuation provider located in Australia; and Thomsons Online Benefits, a U.K.-based global benefits software business. Total purchase consideration for acquisitions made during 2016 was approximately $901 million , which consisted of cash paid of $865 million and deferred purchase and estimated contingent consideration of $36 million . Contingent consideration arrangements are based primarily on EBITDA and/or revenue targets over periods of two to four years. The fair value of the contingent consideration was based on projected revenue and earnings of the acquired entities. Estimated fair values of assets acquired and liabilities assumed are subject to adjustment when purchase accounting is finalized. During 2016, the Company also paid $54 million of deferred purchase consideration and $86 million of contingent consideration related to acquisitions made in prior years. Pro-Forma Information The following unaudited pro-forma financial data gives effect to the acquisitions made by the Company during 2017 , 2016 and 2015. In accordance with accounting guidance related to pro-forma disclosures, the information presented for current year acquisitions is as if they occurred on January 1, 2016 and reflects acquisitions made in 2016 as if they occurred on January 1, 2015. The pro-forma information includes the effects of amortization of acquired intangibles. The unaudited pro-forma financial data is presented for illustrative purposes only and is not necessarily indicative of the operating results that would have been achieved if such acquisitions had occurred on the dates indicated, nor is it necessarily indicative of future consolidated results. Years Ended December 31, (In millions, except per share data) 2017 2016 2015 Revenue $ 14,100 $ 13,724 $ 13,528 Income from continuing operations $ 1,514 $ 1,787 $ 1,643 Net income attributable to the Company $ 1,496 $ 1,759 $ 1,606 Basic net income per share: – Continuing operations $ 2.91 $ 3.39 $ 3.02 – Net income attributable to the Company $ 2.92 $ 3.39 $ 3.02 Diluted net income per share: – Continuing operations $ 2.88 $ 3.36 $ 2.99 – Net income attributable to the Company $ 2.88 $ 3.36 $ 2.99 The consolidated statement of income for 2017 includes approximately $156 million of revenue and $19 million of operating income related to acquisitions made during 2017 . The consolidated statement of income for 2016 includes approximately $25 million of revenue and $4 million of operating income related to acquisitions made during 2016, and the consolidated statement of income for 2015 includes approximately $124 million of revenue and $7 million of operating income related to acquisitions made during 2015. Acquisition-related expenses incurred in 2017 and 2016 were $3 million and $14 million , respectively. Dispositions In December 2015, Mercer sold its U.S. defined contribution recordkeeping business. The Company recognized pre-tax gains of $37 million in 2015 and $6 million in 2016 from this transaction, which are included in revenue in the consolidated statements of income in those years. |
Goodwill And Other Intangibles
Goodwill And Other Intangibles | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill And Other Intangibles | Goodwill and Other Intangibles The Company is required to assess goodwill and any indefinite-lived intangible assets for impairment annually, or more frequently if circumstances indicate impairment may have occurred. The Company performs the annual impairment assessment for each of its reporting units during the third quarter of each year. In accordance with applicable accounting guidance, the Company assesses qualitative factors to determine whether it is necessary to perform the two-step goodwill impairment test. As part of its assessment, the Company considers numerous factors, including that the fair value of each reporting unit exceeds its carrying value by a substantial margin based on its most recent estimates, whether significant acquisitions or dispositions occurred which might alter the fair value of its reporting units, macroeconomic conditions and their potential impact on reporting unit fair values, actual performance compared with budget and prior projections used in its estimation of reporting unit fair values, industry and market conditions, and the year-over-year change in the Company’s share price. The Company completed its qualitative assessment in the third quarter of 2017 and concluded that a two-step goodwill impairment test was not required in 2017 and that goodwill was not impaired. Other intangible assets that are not deemed to have an indefinite life are amortized over their estimated lives and reviewed for impairment upon the occurrence of certain triggering events in accordance with applicable accounting literature. The Company concluded that these intangible assets are not impaired. Changes in the carrying amount of goodwill are as follows: (In millions of dollars) 2017 2016 Balance as of January 1, as reported $ 8,369 $ 7,889 Goodwill acquired 551 556 Other adjustments (a) 169 (76 ) Balance at December 31, $ 9,089 $ 8,369 (a) Primarily due to the impact of foreign exchange in both years. The goodwill acquired of $551 million in 2017 (approximately $9 million of which is deductible for tax purposes) is comprised of $522 million related to the Risk and Insurance Services segment and $29 million related to the Consulting segment. Goodwill allocable to the Company’s reportable segments is as follows: Risk and Insurance Services, $6.5 billion and Consulting, $2.6 billion . The gross cost and accumulated amortization at December 31, 2017 and 2016 are as follows: (In millions of dollars) 2017 2016 Gross Cost Accumulated Amortization Net Carrying Amount Gross Cost Accumulated Amortization Net Carrying Amount Client relationships $ 1,672 $ 518 $ 1,154 $ 1,390 $ 392 $ 998 Other (a) 234 114 120 204 76 128 Amortized intangibles $ 1,906 $ 632 $ 1,274 $ 1,594 $ 468 $ 1,126 (a) Primarily non-compete agreements, trade names and developed technology. Aggregate amortization expense was $169 million for the year ended December 31, 2017 , $130 million for the year ended December 31, 2016 and $109 million for the year ended December 31, 2015 . The estimated future aggregate amortization expense is as follows: For the Years Ending December 31, (In millions of dollars) 2018 $ 180 2019 170 2020 149 2021 139 2022 125 Subsequent years 511 $ 1,274 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The tax information presented below includes a provisional estimate of the impact of the enactment, in December 2017, of U.S. tax legislation commonly known as the Tax Cuts and Job Act (the "TCJA"), which is discussed in more detail below. For financial reporting purposes, income before income taxes includes the following components: For the Years Ended December 31, (In millions of dollars) 2017 2016 2015 Income before income taxes: U.S. $ 819 $ 725 $ 702 Other 1,824 1,755 1,605 $ 2,643 $ 2,480 $ 2,307 The expense for income taxes is comprised of: Current– U.S. Federal $ 313 $ 208 $ 90 Other national governments 388 366 385 U.S. state and local 36 43 52 737 617 527 Deferred– U.S. Federal 286 26 125 Other national governments 72 32 15 U.S. state and local 38 10 4 396 68 144 Total income taxes $ 1,133 $ 685 $ 671 The significant components of deferred income tax assets and liabilities and their balance sheet classifications are as follows: December 31, (In millions of dollars) 2017 2016 Deferred tax assets: Accrued expenses not currently deductible $ 369 $ 582 Differences related to non-U.S. operations (a) 139 127 Accrued U.S. retirement benefits 394 629 Net operating losses (b) 67 56 Income currently recognized for tax 49 71 Other 31 50 $ 1,049 $ 1,515 Deferred tax liabilities: Differences related to non-U.S. operations $ 235 $ 217 Depreciation and amortization 338 377 Accrued retirement & postretirement benefits - non-U.S. operations 172 10 Other 16 14 $ 761 $ 618 (a) Net of valuation allowances of $18 million in 2017 and $3 million in 2016 . (b) Net of valuation allowances of $11 million in 2017 and $17 million in 2016 . December 31, (In millions of dollars) 2017 2016 Balance sheet classifications: Deferred tax assets $ 669 $ 1,097 Other liabilities $ 381 $ 200 A reconciliation from the U.S. Federal statutory income tax rate to the Company’s effective income tax rate is shown below: For the Years Ended December 31, 2017 2016 2015 U.S. Federal statutory rate 35.0 % 35.0 % 35.0 % U.S. state and local income taxes—net of U.S. Federal income tax benefit 1.5 1.5 1.6 Differences related to non-U.S. operations (8.6 ) (9.2 ) (8.0 ) U.S. Tax Reform 17.4 — — Equity compensation (2.6 ) — — Other 0.2 0.3 0.5 Effective tax rate 42.9 % 27.6 % 29.1 % The Company’s consolidated effective tax rate was 42.9% , 27.6% and 29.1% in 2017 , 2016 and 2015 , respectively. The tax rate in each year reflects foreign operations, which are generally taxed at rates lower than the U.S. statutory tax rate. The effective tax rate in 2017 reflects a provisional estimate of the impact of the enactment of the TCJA, as well as the impact of the required change in accounting for equity awards. As a result of TCJA, two discrete charges were recorded. The transition to the new territorial tax system resulted in a transition tax payable over eight years on undistributed earnings of non-U.S. subsidiaries. This mandatory taxation of accumulated foreign earnings substantially changed the economic considerations of continued permanent investment of those accumulated earnings, a key component of our global capital strategy. As a result of the transition tax, the Company anticipates repatriating the majority of the accumulated earnings that it previously intended to permanently invest. A charge of $240 million was recorded in the fourth quarter as a provisional estimate of the transition tax and ancillary effects. The provisional estimate of transition tax includes state taxes and foreign withholding taxes related to the change in the Company's indefinite reinvestment assertion with respect to our pre-2018 foreign earnings. The Company previously considered most unremitted earnings of our non-U.S. subsidiaries, except amounts repatriated in the year earned, to be permanently reinvested and, accordingly, recorded no deferred U.S. income taxes on such earnings. The Company has initially analyzed our global capital requirements and potential tax liabilities attributable to repatriation. The Company estimates that it will repatriate $ 3.4 billion that was previously considered indefinitely invested. Included in the $240 million charge is a $53 million provisional estimate for withholding and state income taxes. These estimates may be adjusted during 2018 after the Company has finalized its analysis of all the relevant information. U.S. federal income taxes are not provided on the excess of the amount for financial reporting over the tax basis of investments in foreign subsidiaries that are essentially permanent in duration. The determination of the unrecognized deferred tax liability with respect to these investments is not practicable. In addition, reducing the U.S. corporate tax rate from 35% to 21% , and the change in deductibility of certain compensation awards to executive officers of the Company effective on January 1, 2018, resulted in a net charge of $220 million to reduce the value of our U.S. deferred tax assets and liabilities. In December of 2017, the SEC issued Staff Accounting Bulletin 118 ("SAB 118"), establishing a one-year measurement period to complete the accounting for the income tax effects of the TCJA. SAB 118 anticipates three alternative states of completion at the end of the reporting period of accounting for these effects: (1) the tax accounting work has been completed with respect to an item; (2) a provisional amount has been recognized because a reasonable estimate was possible, or (3) a reasonable estimate cannot be provided. The Company believes its analysis of the TCJA to date provides an appropriate basis to record a provisional estimate. Our provisional estimates include the effects of the deemed repatriation tax and the Company's position with respect to permanently reinvested earnings, the impacts of the Global Intangible Low Taxed Income ("GILTI") and Base Erosion and Anti-abuse Tax ("BEAT") provisions, and the remeasurement of U.S. deferred tax based on estimated enactment-date deferred tax balances, which may be adjusted in 2018 when the 2017 tax return is filed. However, given the significant complexity of the TCJA, anticipated guidance from the U.S. Treasury about its implementation, the potential for additional guidance from the SEC or FASB, and the global complexity of the Company, these estimates may be adjusted during 2018. Valuation allowances had net increases of $9 million in 2017 and net decreases of $8 million and $69 million in 2016 and 2015 , respectively. During 2017, adjustments of the beginning of the year balances of valuation allowances increased income tax expense by $11 million , and decreased income tax expense by $7 million and $14 million in 2016, and 2015, respectively. The decrease in the valuation allowance in 2015 also reflects the write down of a deferred tax asset along with its full valuation allowance because the Company cannot utilize a net operating loss. Approximately 81% of the Company’s net operating loss carryforwards expire from 2018 through 2036 , and others are unlimited. The potential tax benefit from net operating loss carryforwards at the end of 2017 comprised federal, state and local, and non-U.S. tax benefits of $6 million , $49 million and $31 million , respectively, before reduction for valuation allowances. The realization of deferred tax assets depends on generating future taxable income during the periods in which the tax benefits are deductible or creditable. Tax liabilities are determined and assessed jurisdictionally by legal entity or filing group. Certain taxing jurisdictions allow or require combined or consolidated tax filings. The Company assessed the realizability of its deferred tax assets, and considered all available evidence, including the existence of a recent history of losses, placing particular weight on evidence that could be objectively verified. A valuation allowance was recorded to reduce deferred tax assets to the amount that the Company believes is more likely than not to be realized. Following is a reconciliation of the Company’s total gross unrecognized tax benefits for the years ended December 31, 2017 , 2016 and 2015 : (In millions of dollars) 2017 2016 2015 Balance at January 1, $ 65 $ 74 $ 97 Additions, based on tax positions related to current year 1 2 3 Additions for tax positions of prior years 14 6 22 Reductions for tax positions of prior years (6 ) (6 ) (10 ) Settlements — (7 ) (20 ) Lapses in statutes of limitation (3 ) (4 ) (18 ) Balance at December 31, $ 71 $ 65 $ 74 Of the total unrecognized tax benefits at December 31, 2017 , 2016 and 2015 , $56 million , $53 million and $53 million , respectively, represent the amount that, if recognized, would favorably affect the effective tax rate in any future periods. The total gross amount of accrued interest and penalties at December 31, 2017 , 2016 and 2015 , before any applicable federal benefit, was $12 million , $11 million and $8 million , respectively. The Company is routinely examined by tax authorities in the jurisdictions in which it has significant operations. In the US federal jurisdiction the Company participates in the Internal Revenue Service’s ("IRS") Compliance Assurance Process ("CAP"), which is structured to conduct real-time compliance reviews. The IRS is currently examining the Company’s 2015 and 2016 tax returns and is performing a pre-filing review of 2017. In 2015, the Company settled its federal tax audit for the year 2014. New York State and New York City have examinations underway for various entities covering the years 2007 through 2014. Outside the United States, there are ongoing examinations in Germany for the years 2009 through 2012, in France for the years 2011 and 2012, and in Italy for the year 2015. There are ongoing examinations in Canada of tax years 2013 and 2014. The United Kingdom's examination of year 2014 is ongoing and an examination of year 2015 has been commenced. The Company regularly considers the likelihood of assessments in each of the taxing jurisdictions resulting from examinations. The Company has established liabilities for uncertain tax positions in relation to the potential assessments. The Company believes the resolution of tax matters will not have a material effect on the consolidated financial position of the Company, although a resolution of tax matters could have a material impact on the Company's net income or cash flows and on its effective tax rate in a particular future period. It is reasonably possible that the total amount of unrecognized tax benefits will decrease between zero and approximately $6 million within the next twelve months due to settlement of audits and expiration of statutes of limitation. |
Retirement Benefits
Retirement Benefits | 12 Months Ended |
Dec. 31, 2017 | |
Defined Benefit Plan [Abstract] | |
Retirement Benefits | Retirement Benefits The Company maintains qualified and non-qualified defined benefit pension plans for its U.S. and non-U.S. eligible employees. The Company’s policy for funding its tax qualified defined benefit retirement plans is to contribute amounts at least sufficient to meet the funding requirements set forth by U.S. law and the laws of the non-U.S. jurisdictions in which the Company offers defined benefit plans. Combined U.S. and non-U.S. Plans The weighted average actuarial assumptions utilized for the U.S. and significant non-U.S. defined benefit plans and postretirement benefit plans are as follows: Pension Benefits Postretirement Benefits 2017 2016 2017 2016 Weighted average assumptions: Discount rate (for expense) 3.40 % 4.10 % 3.64 % 4.12 % Expected return on plan assets 6.64 % 7.06 % — — Rate of compensation increase (for expense) 1.77 % 2.44 % — — Discount rate (for benefit obligation) 3.07 % 3.40 % 3.21 % 3.64 % Rate of compensation increase (for benefit obligation)* 1.73 % 1.77 % — — *The 2017 and 2016 assumption do not include a rate of compensation increase for the U.S. defined benefit plans since future benefit accruals were discontinued for those plans after December 31, 2016 . The Company uses actuaries from Mercer, a subsidiary of the Company, to perform valuations of its pension plans. The long-term rate of return on plan assets assumption is determined for each plan based on the facts and circumstances that exist as of the measurement date, and the specific portfolio mix of each plan’s assets. The Company utilizes a model developed by the Mercer actuaries to assist in the determination of this assumption. The model takes into account several factors, including: actual and target portfolio allocation; investment, administrative and trading expenses incurred directly by the plan trust; historical portfolio performance; relevant forward-looking economic analysis; and expected returns, variances and correlations for different asset classes. These measures are used to determine probabilities using standard statistical techniques to calculate a range of expected returns on the portfolio. Generally, the Company does not adjust the rate of return assumption from year to year if, at the measurement date, it is within the range between the 25 th and 75 th percentile of the expected long-term annual returns. Historical long-term average asset returns of the most significant plans are also reviewed to determine whether they are consistent and reasonable compared with the rate selected. The expected return on plan assets is determined by applying the assumed long-term rate of return to the market-related value of plan assets. This market-related value recognizes investment gains or losses over a five -year period from the year in which they occur. Investment gains or losses for this purpose are the difference between the expected return calculated using the market-related value of assets and the actual return based on the market value of assets. Since the market-related value of assets recognizes gains or losses over a five -year period, the future market-related value of the assets will be impacted as previously deferred gains or losses are reflected. The target asset allocation for the U.S. Plans is 64% equities and equity alternatives and 36% fixed income. At the end of 2017 , the actual allocation for the U.S. Plans was 63% equities and equity alternatives and 37% fixed income. The target asset allocation for the U.K. Plans, which comprise approximately 81% of non-U.S. Plan assets, is 34% equities and equity alternatives and 66% fixed income. At the end of 2017 , the actual allocation for the U.K. Plans was 48% equities and equity alternatives and 52% fixed income. The assets of the Company's defined benefit plans are diversified and are managed in accordance with applicable laws and with the goal of maximizing the plans' real return within acceptable risk parameters. The Company uses threshold-based portfolio re-balancing to ensure the actual portfolio remains consistent with target asset allocation ranges. The Company reduced the U.K. Plans' target asset allocation to equity and equity alternatives to 34% effective December 31, 2017. The re-balancing took place in early January 2018. The discount rate selected for each U.S. plan is based on a model bond portfolio with coupons and redemptions that closely match the expected liability cash flows from the plan. Discount rates for non-U.S. plans are based on appropriate bond indices adjusted for duration; in the U.K., the plan duration is reflected using the Mercer yield curve. The components of the net periodic benefit cost for defined benefit and other postretirement plans are as follows: Combined U.S. and significant non-U.S. Plans Pension Postretirement For the Years Ended December 31, Benefits Benefits (In millions of dollars) 2017 2016 2015 2017 2016 2015 Service cost $ 76 $ 178 $ 196 $ 1 $ 2 $ 3 Interest cost 497 537 587 4 5 5 Expected return on plan assets (921 ) (940 ) (977 ) — — — Amortization of prior service (credit) cost (2 ) (1 ) (1 ) 1 4 3 Recognized actuarial loss (gain) 167 168 271 — (2 ) (1 ) Net periodic benefit (credit) cost $ (183 ) $ (58 ) $ 76 $ 6 $ 9 $ 10 Curtailment (loss) gain (1 ) (4 ) 5 — — — Plan termination — — — — — (128 ) Settlement loss 54 — 1 — — — Total (credit) cost $ (130 ) $ (62 ) $ 82 $ 6 $ 9 $ (118 ) Pension Settlement Charge Defined Benefit Pension Plans in the U.K. allow participants an option for the payment of a lump sum distribution from plan assets before retirement in full satisfaction of the retirement benefits due to the participant as well as any survivor’s benefit. The Company’s policy under applicable U.S. GAAP is to treat these lump sum payments as a partial settlement of the plan liability if they exceed the total of interest plus service costs ("settlement thresholds"). Based on the amount of lump sum payments through December 31, 2017, the lump sum payments exceeded the settlement thresholds in two of the U.K. plans. This resulted in a non-cash settlement charge of $54 million which was recorded in December 2017. Plan Assets For the U.S. Plans, investment allocation decisions are made by a fiduciary committee composed of senior executives appointed by the Company’s Chief Executive Officer. For the non-U.S. plans, investment allocation decisions are made by local fiduciaries, in consultation with the Company for the larger plans. Plan assets are invested in a manner consistent with the fiduciary standards set forth in all relevant laws relating to pensions and trusts in each country. Primary investment objectives are (1) to achieve an investment return that, in combination with current and future contributions, will provide sufficient funds to pay benefits as they become due, and (2) to minimize the risk of large losses. The investment allocations are designed to meet these objectives by broadly diversifying plan assets among numerous asset classes with differing expected returns, volatilities, and correlations. The major categories of plan assets include equity securities, equity alternative investments, and fixed income securities. For the U.S. Plan, the category ranges are 59 - 69% for equities and equity alternatives, and 31 - 41 % for fixed income. For the U.K. Plans, the category ranges are 35 - 41 % for equities and equity alternatives, and 59 - 65 % for fixed income. Asset allocation is monitored frequently and re-balancing actions are taken as appropriate. Plan investments are exposed to stock market, interest rate, and credit risk. Concentrations of these risks are generally limited due to diversification by investment style within each asset class, diversification by investment manager, diversification by industry sectors and issuers, and the dispersion of investments across many geographic areas. Unrecognized Actuarial Gains/Losses In accordance with applicable accounting guidance, the funded status of the Company's pension plans is recorded in the consolidated balance sheets and provides for a delayed recognition of actuarial gains or losses arising from changes in the projected benefit obligation due to changes in the assumed discount rates, differences between the actual and expected value of plan assets and other assumption changes. The unrecognized pension plan actuarial gains or losses and prior service costs not yet recognized in net periodic pension cost are recognized in Accumulated Other Comprehensive Income ("AOCI"), net of tax. These gains and losses are amortized prospectively out of AOCI over a period that approximates the remaining life expectancy of participants in plans where substantially all participants are inactive, or the average remaining service period of active participants for plans with active participants. Interest and Service Cost In 2016, the Company modified the approach used to estimate the service and interest cost components of net periodic benefit cost for its significant non-U.S. plans. Historically, service and interest costs were estimated using a single weighted average discount rate derived from the yield curves used to measure the benefit obligations at the beginning of the period. This change in approach was made to improve the correlation between the projected benefit cash flows and the corresponding yield curve spot rates and to provide a more precise measurement of service and interest costs. The change does not impact the measurement of the plans’ total Projected Benefit Obligation. The Company has accounted for this change as a change in estimate, that was applied prospectively beginning in 2016. U.S. Plans The following schedules provide information concerning the Company’s U.S. defined benefit pension plans and postretirement benefit plans: U.S. Pension Benefits U.S. Postretirement Benefits (In millions of dollars) 2017 2016 2017 2016 Change in benefit obligation: Benefit obligation at beginning of year $ 5,894 $ 5,685 $ 37 $ 40 Service cost — 106 — — Interest cost 264 264 2 2 Employee contributions — — 3 3 Effect of curtailment — (98 ) — — Actuarial loss (gain) 538 160 3 — Benefits paid (475 ) (223 ) (9 ) (8 ) Benefit obligation, December 31 $ 6,221 $ 5,894 $ 36 $ 37 Change in plan assets: Fair value of plan assets at beginning of year $ 4,365 $ 4,160 $ 2 $ 3 Actual return on plan assets 812 401 — — Employer contributions 85 27 6 5 Employee contributions — — 3 3 Benefits paid (475 ) (223 ) (9 ) (8 ) Other — — — (1 ) Fair value of plan assets, December 31 $ 4,787 $ 4,365 $ 2 $ 2 Net funded status, December 31 $ (1,434 ) $ (1,529 ) $ (34 ) $ (35 ) Amounts recognized in the consolidated balance sheets: Current liabilities $ (27 ) $ (27 ) $ (2 ) $ (2 ) Non-current liabilities (1,407 ) (1,502 ) (32 ) (33 ) Net liability recognized, December 31 $ (1,434 ) $ (1,529 ) $ (34 ) $ (35 ) Amounts recognized in other comprehensive income (loss): Prior service (cost) credit $ — $ — $ — $ (3 ) Net actuarial (loss) gain (1,766 ) (1,720 ) 6 11 Total recognized accumulated other comprehensive (loss) income, December 31 $ (1,766 ) $ (1,720 ) $ 6 $ 8 Cumulative employer contributions in excess of (less than) net periodic cost 332 191 (40 ) (43 ) Net amount recognized in consolidated balance sheet $ (1,434 ) $ (1,529 ) $ (34 ) $ (35 ) Accumulated benefit obligation at December 31 $ 6,221 $ 5,894 $ — $ — U.S. Pension Benefits U.S. Postretirement Benefits (In millions of dollars) 2017 2016 2017 2016 Reconciliation of prior service credit (cost) recognized in accumulated other comprehensive income (loss): Beginning balance $ — $ — $ (3 ) $ (7 ) Recognized as component of net periodic benefit cost — — 3 4 Prior service cost, December 31 $ — $ — $ — $ (3 ) U.S. Pension Benefits U.S. Postretirement Benefits (In millions of dollars) 2017 2016 2017 2016 Reconciliation of net actuarial (loss) gain recognized in accumulated other comprehensive income (loss): Beginning balance $ (1,720 ) $ (1,754 ) $ 11 $ 13 Recognized as component of net periodic benefit cost (credit) 37 74 (1 ) (2 ) Changes in plan assets and benefit obligations recognized in other comprehensive income (loss): Effect of curtailment — 98 — — Other — — (1 ) — Liability experience (538 ) (160 ) (3 ) — Asset experience 455 22 — — Total (loss) gain recognized as change in plan assets and benefit obligations (83 ) (40 ) (4 ) — Net actuarial (loss) gain, December 31 $ (1,766 ) $ (1,720 ) $ 6 $ 11 For the Years Ended December 31, U.S. Pension Benefits U.S. Postretirement Benefits (In millions of dollars) 2017 2016 2015 2017 2016 2015 Total recognized in net periodic benefit cost and other comprehensive (income) loss $ (10 ) $ 31 $ 146 $ 5 $ 2 $ (138 ) Estimated amounts that will be amortized from accumulated other comprehensive loss to net periodic pension cost in the next fiscal year: U.S. Pension Benefits U.S. Postretirement Benefits (In millions of dollars) 2018 2018 Net actuarial loss $ 54 $ 1 The weighted average actuarial assumptions utilized in determining the above amounts for the U.S. defined benefit and other U.S. postretirement plans as of the end of the year are as follows: U.S. Pension Benefits U.S. Postretirement Benefits 2017 2016 2017 2016 Weighted average assumptions: Discount rate (for expense) 4.58 % 4.71 % 4.12 % 4.36 % Expected return on plan assets 7.95 % 8.72 % — — Rate of compensation increase (for expense) — 2.00 % — — Discount rate (for benefit obligation) 3.86 % 4.58 % 3.67 % 4.12 % In recent years, the Society of Actuaries in the United States has issued new mortality tables and mortality improvement scales. The Company considered the effect of these tables and scales, along with other available information on mortality improvement and industry specific mortality studies, to select its assumptions for measurement of the plans’ benefit obligations at December 31, 2017 and 2016. The projected benefit obligation, accumulated benefit obligation and aggregate fair value of plan assets for U.S. pension plans with accumulated benefit obligations in excess of plan assets were $6.2 billion , $6.2 billion and $4.8 billion , respectively, as of December 31, 2017 and $5.9 billion , $5.9 billion and $4.4 billion , respectively, as of December 31, 2016 . The projected benefit obligation and fair value of plan assets for U.S. pension plans with projected benefit obligations in excess of plan assets was $6.2 billion and $4.8 billion , respectively, as of December 31, 2017 and $5.9 billion and $4.4 billion , respectively, as of December 31, 2016 . As of December 31, 2017 , the U.S. qualified plan holds 4 million shares of the Company’s common stock which were contributed to the qualified plan by the Company in 2005. This represented approximately 6.8% of that plan's assets as of December 31, 2017 . In addition, plan assets may be invested in funds managed by Mercer Investments, a subsidiary of the Company. The components of the net periodic benefit cost (credit) for the U.S. defined benefit and other postretirement benefit plans are as follows: U.S. Plans only Pension Benefits Postretirement Benefits For the Years Ended December 31, (In millions of dollars) 2017 2016 2015 2017 2016 2015 Service cost $ — $ 106 $ 114 $ — $ — $ 1 Interest cost 264 264 254 2 2 2 Expected return on plan assets (357 ) (379 ) (373 ) — — — Amortization of prior service (credit) cost — — — 3 4 3 Recognized actuarial loss (gain) 37 74 146 (1 ) (2 ) (2 ) Net periodic benefit (credit) cost $ (56 ) $ 65 $ 141 $ 4 $ 4 $ 4 Plan termination — — — — — (128 ) Total (credit) cost $ (56 ) $ 65 $ 141 $ 4 $ 4 $ (124 ) Effective September 1, 2015, the Company divided its U.S. qualified defined benefit plan to provide enhanced flexibility to manage the risk associated with those participants not receiving benefit accruals. The existing plan was amended to cover only the retirees then receiving benefits and terminated vested participants as of August 1, 2015. The Company's active participants as of that date were transferred into a newly established, legally separate qualified defined benefit plan. The benefits offered to the plans' participants were unchanged. As a result of the plan amendment and establishment of the new plan, the Company re-measured the assets and liabilities of the two plans as required under U.S. GAAP, based on assumptions and market conditions at the amendment date. The net periodic pension expense recognized in 2015 reflects the weighted average costs of the December 31, 2014 measurement and the September 1, 2015 re-measurement. In October 2016, the Company modified its U.S. defined benefit pension plans to discontinue further benefit accruals for participants after December 31, 2016. At the same time, the Company amended its U.S. defined contribution retirement plans for most of its U.S. employees to add an automatic Company contribution equal to 4% of eligible base pay beginning on January 1, 2017. This new Company contribution, together with the Company’s matching contribution, provides eligible U.S. employees with the opportunity to receive a total contribution of up to 7% of eligible base pay. As required under GAAP, the defined benefit plans that were significantly impacted by the modification were re-measured in October 2016 using market data and assumptions as of the modification date. The net periodic pension expense recognized in 2016 reflects the weighted average costs of the December 31, 2015 measurement and the October 2016 re-measurement. In addition, the U.S. qualified plans were merged effective December 30, 2016, since no participants would be receiving benefit accruals after December 31, 2016. In March 2015, the Company amended its U.S. Post-65 retiree medical reimbursement plan (the "RRA plan"), resulting in its termination, with benefits to certain participants paid through December 31, 2016 . As a result of the termination of the RRA plan, the Company recognized a net credit of approximately $125 million in the first quarter of 2015. The assumed health care cost trend rate for Medicare eligibles and non-Medicare eligibles is approximately 6.38% in 2017 , gradually declining to 4.5% in 2039. Assumed health care cost trend rates have a small effect on the amounts reported for the U.S. health care plans because the Company caps its share of health care trend at 5% . A one percentage point change in assumed health care cost trend rates would have no effect on the total service and interest cost components or the postretirement benefit obligation. Estimated Future Contributions The Company expects to contribute approximately $27 million to its U.S. plans in 2018 . The Company’s policy for funding its tax-qualified defined benefit retirement plans is to contribute amounts at least sufficient to meet the funding requirements set forth in the U.S. and applicable foreign law. Non-U.S. Plans The following schedules provide information concerning the Company’s non-U.S. defined benefit pension plans and non-U.S. postretirement benefit plans: Non-U.S. Pension Benefits Non-U.S. Postretirement Benefits (In millions of dollars) 2017 2016 2017 2016 Change in benefit obligation: Benefit obligation at beginning of year $ 9,670 $ 9,076 $ 81 $ 79 Service cost 76 72 1 2 Interest cost 233 273 2 3 Employee contributions 7 7 — — Actuarial (gain) loss (149 ) 1,966 — 5 Plan amendments — (49 ) (17 ) — Effect of settlement (211 ) (27 ) — — Effect of curtailment (1 ) (7 ) — — Benefits paid (291 ) (352 ) (3 ) (3 ) Foreign currency changes 703 (1,290 ) 4 (5 ) Other 16 1 — — Benefit obligation December 31 $ 10,053 $ 9,670 $ 68 $ 81 Change in plan assets: Fair value of plan assets at beginning of year $ 10,017 $ 9,826 $ — $ — Actual return on plan assets 875 1,815 — — Effect of settlement (211 ) (27 ) — — Company contributions 229 187 3 3 Employee contributions 7 7 — — Benefits paid (291 ) (352 ) (3 ) (3 ) Foreign currency changes 749 (1,439 ) — — Other 13 — — — Fair value of plan assets, December 31 $ 11,388 $ 10,017 $ — $ — Net funded status, December 31 $ 1,335 $ 347 $ (68 ) $ (81 ) Amounts recognized in the consolidated balance sheets: Non-current assets $ 1,684 $ 766 $ — $ — Current liabilities (6 ) (5 ) (4 ) (3 ) Non-current liabilities (343 ) (414 ) (64 ) (78 ) Net asset (liability) recognized, December 31 $ 1,335 $ 347 $ (68 ) $ (81 ) Amounts recognized in other comprehensive (loss) income: Prior service credit $ 43 $ 43 $ 15 $ — Net actuarial loss (2,646 ) (3,081 ) (10 ) (11 ) Total recognized accumulated other comprehensive (loss) income, December 31 $ (2,603 ) $ (3,038 ) $ 5 $ (11 ) Cumulative employer contributions in excess of (less than) net periodic cost 3,938 3,385 (73 ) (70 ) Net asset (liability) recognized in consolidated balance sheets, December 31 $ 1,335 $ 347 $ (68 ) $ (81 ) Accumulated benefit obligation, December 31 $ 9,783 $ 9,397 $ — $ — Non-U.S. Pension Benefits Non-U.S. Postretirement Benefits (In millions of dollars) 2017 2016 2017 2016 Reconciliation of prior service credit (cost) recognized in accumulated other comprehensive income (loss): Beginning balance $ 43 $ (3 ) $ — $ — Recognized as component of net periodic benefit credit: Amortization of prior service credit (2 ) (1 ) (2 ) — Effect of curtailment (1 ) — — — Total recognized as component of net periodic benefit credit (3 ) (1 ) (2 ) — Changes in plan assets and benefit obligations recognized in other comprehensive income: Plan amendments — 49 17 — Exchange rate adjustments 3 (2 ) — — Prior service credit, December 31 $ 43 $ 43 $ 15 $ — Non-U.S. Pension Benefits Non-U.S. Postretirement Benefits (In millions of dollars) 2017 2016 2017 2016 Reconciliation of net actuarial (loss) gain recognized in accumulated other comprehensive (loss) income: Beginning balance $ (3,081 ) $ (2,887 ) $ (11 ) $ (6 ) Recognized as component of net periodic benefit cost: Amortization of net loss 130 94 1 — Effect of settlement 54 — — — Total recognized as component of net periodic benefit credit 184 94 1 — Changes in plan assets and benefit obligations recognized in other comprehensive income (loss): Liability experience 149 (1,966 ) — (5 ) Asset experience 311 1,254 — — Other (5 ) — — — Effect of curtailment 1 3 — — Total amount recognized as change in plan assets and benefit obligations 456 (709 ) — (5 ) Exchange rate adjustments (205 ) 421 — — Net actuarial loss, December 31 $ (2,646 ) $ (3,081 ) $ (10 ) $ (11 ) For the Years Ended December 31, Non-U.S. Pension Benefits Non-U.S. Postretirement Benefits (In millions of dollars) 2017 2016 2015 2017 2016 2015 Total recognized in net periodic benefit cost and other comprehensive loss (income) $ (513 ) $ 21 $ (407 ) $ (14 ) $ 10 $ (2 ) Estimated amounts that will be amortized from accumulated other comprehensive loss to net periodic pension cost in the next fiscal year: Non-U.S. Pension Benefits Non-U.S. Postretirement Benefits (In millions of dollars) 2018 2018 Prior service credit $ (2 ) $ (2 ) Net actuarial loss 90 — Projected cost $ 88 $ (2 ) The weighted average actuarial assumptions utilized for the non-U.S. defined and postretirement benefit plans as of the end of the year are as follows: Non-U.S. Pension Benefits Non-U.S. Postretirement Benefits 2017 2016 2017 2016 Weighted average assumptions: Discount rate (for expense) 2.69 % 3.71 % 3.42 % 4.00 % Expected return on plan assets 6.07 % 6.36 % — — Rate of compensation increase (for expense) 2.85 % 2.72 % — — Discount rate (for benefit obligation) 2.58 % 2.69 % 2.97 % 3.42 % Rate of compensation increase (for benefit obligation) 2.80 % 2.85 % — — The projected benefit obligation, accumulated benefit obligation and fair value of plan assets for the non-U.S. pension plans with accumulated benefit obligations in excess of plan assets were $1.3 billion , $1.2 billion and $1.0 billion , respectively, as of December 31, 2017 and $1.2 billion , $1.2 billion and $0.9 billion , respectively, as of December 31, 2016 . The projected benefit obligation and fair value of plan assets for non-U.S. pension plans with projected benefit obligations in excess of plan assets was $2.2 billion and $1.9 billion , respectively, as of December 31, 2017 and $2.1 billion and $1.7 billion , respectively, as of December 31, 2016 . Non-U.S. Plan Amendments In March 2017, the Company modified its defined benefit pension plans in Canada to discontinue further benefit accruals for participants after December 31, 2017 and replaced them with a defined contribution arrangement. The Company also amended its post-retirement benefits plan in Canada so that individuals who retire after April 1, 2019 will not be eligible to participate, except in certain situations. The Company re-measured the assets and liabilities of the plans, based on assumptions and market conditions on the amendment date. Effective August 1, 2015, the Company amended its Ireland defined benefit pension plans to close those plans to future benefit accruals and replaced those plans with a defined contribution arrangement. The Company re-measured the assets and liabilities of the plans, based on assumptions and market conditions on the amendment date. The net periodic pension costs recognized in 2015 reflect the weighted average costs of the December 31, 2014 measurement and the August 1, 2015 re-measurement. After completion of a consultation period with affected colleagues, in January 2015 , the Company amended its U.K. defined benefit pension plans to close those plans to future benefit accruals effective August 1, 2015 and replaced those plans, along with its existing defined contribution plans, with a new, comprehensive defined contribution arrangement. This change resulted in a curtailment of the U.K. defined benefit plans and, as required under GAAP, the Company re-measured the defined benefit plans’ assets and liabilities at the amendment date, based on assumptions and market conditions at that date. The net periodic benefit costs recognized in 2015 are the weighted average resulting from the December 31, 2014 measurement and the January 2015 re-measurement. Components of Net Periodic Benefits Costs The components of the net periodic benefit cost for the non-U.S. defined benefit and other postretirement benefit plans and the curtailment, settlement and termination expenses are as follows: For the Years Ended December 31, Non-U.S. Pension Benefits Non-U.S. Postretirement Benefits (In millions of dollars) 2017 2016 2015 2017 2016 2015 Service cost $ 76 $ 72 $ 82 $ 1 $ 2 $ 2 Interest cost 233 273 333 2 3 3 Expected return on plan assets (564 ) (561 ) (604 ) — — — Amortization of prior service credit (2 ) (1 ) (1 ) (2 ) — — Recognized actuarial loss 130 94 125 1 — 1 Net periodic benefit (credit) cost (127 ) (123 ) (65 ) 2 5 6 Settlement loss 54 — 1 — — — Curtailment (gain) loss (1 ) (4 ) 5 — — — Total (credit) cost $ (74 ) $ (127 ) $ (59 ) $ 2 $ 5 $ 6 The non-U.S. pension credit in 2017 includes the impact of the pension settlement charge in the U.K., as previously discussed. The assumed health care cost trend rate was approximately 5.12% in 2017 , gradually declining to 4.41% in 2027. Assumed health care cost trend rates can have a significant effect on the amounts reported for the non-U.S. health care plans. A one percentage point change in assumed health care cost trend rates would have the following effects: (In millions of dollars) 1 Percentage Point Increase 1 Percentage Point Decrease Effect on total of service and interest cost components $ — $ — Effect on postretirement benefit obligation $ 7 $ (6 ) Estimated Future Contributions The Company expects to contribute approximately $82 million to its non-U.S. pension plans in 2018 . Funding requirements for non-U.S. plans vary by country. Contribution rates are generally based on local funding practices and requirements, which may differ significantly from measurements under U.S. GAAP. Funding amounts may be influenced by future asset performance, the level of discount rates and other variables impacting the assets and/or liabilities of the plan. Discretionary contributions may also be affected by alternative uses of the Company’s cash flows, including dividends, investments and share repurchases. In the U.K., the assumptions used to determine pension contributions are the result of legally-prescribed negotiations between the Company and the plans' trustee that typically occurs every three years in conjunction with the actuarial valuation of the plans. Currently, this results in a lower funded status than under U.S. GAAP and may result in contributions irrespective of the U.S. GAAP funded status. In November 2016, the Company and the Trustee of the U.K. Defined Benefits Plans agreed to a funding deficit recovery plan for the U.K. defined benefit pension plans. The current agreement with the Trustee sets out the annual deficit contributions which would be due based on the deficit at December 31, 2015. The funding level is subject to re-assessment, in most cases on November 1 of each year. If the funding level on November 1 is sufficient, no deficit funding contributions will be required in the following year, and the contribution amount will be deferred. The funding level was re-assessed on November 1, 2017 and no deficit funding contributions are required in 2018. The funding level will be re-assessed on November 1, 2018. As part of a long-term strategy, which depends on having greater influence over asset allocation and overall investment decisions, in November 2016 the Company renewed its agreement to support annual deficit contributions by the U.K. operating companies under certain circumstances, up to GBP 450 million over a seven -year period. Estimated Future Benefit Payments The estimated future benefit payments for the Company's pension and postretirement benefit plans are as follows: For the Years Ended December 31, Pension Benefits Postretirement Benefits (In millions of dollars) U.S. Non-U.S. U.S. Non-U.S. 2018 $ 254 $ 279 $ 4 $ 3 2019 $ 268 $ 297 $ 4 $ 4 2020 $ 285 $ 305 $ 4 $ 4 2021 $ 294 $ 316 $ 4 $ 3 2022 $ 303 $ 326 $ 3 $ 3 2023-2027 $ 1,642 $ 1,837 $ 14 $ 17 Defined Benefit Plans Fair Value Disclosures The U.S. and non-U.S. plan investments are classified into Level 1, which refers to investments valued using quoted prices from active markets for identical assets; Level 2, which refers to investments not traded on an active market but for which observable market inputs are readily available; Level 3, which refers to investments valued based on significant unobservable inputs; and NAV, which refers to investments valued using net asset value as a practical expedient. Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The following table sets forth, by level within the fair value hierarchy, a summary of the U.S. and non-U.S. plans' investments measured at fair value on a recurring basis at December 31, 2017 and 2016 : Fair Value Measurements at December 31, 2017 Assets (In millions of dollars) Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) NAV Total Common/collective trusts $ 375 $ — $ — $ 7,611 $ 7,986 Corporate obligations — 3,620 20 — 3,640 Corporate stocks 1,467 34 2 — 1,503 Private equity/partnerships — — — 803 803 Government securities 15 556 — — 571 Real estate — — — 566 566 Short-term investment funds 391 16 — — 407 Company common stock 326 — — — 326 Other investments 12 12 350 — 374 Total investments $ 2,586 $ 4,238 $ 372 $ 8,980 $ 16,176 Fair Value Measurements at December 31, 2016 Assets (In millions of dollars) Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) NAV Total Common/collective trusts $ 16 $ — $ — $ 6,805 $ 6,821 Corporate obligations — 3,024 9 — 3,033 Corporate stocks 2,009 3 2 — 2,014 Private equity/partnerships — — — 722 722 Government securities 11 380 — — 391 Real estate — — — 412 412 Short-term investment funds 297 22 — — 319 Company common stock 270 — — — 270 Other investments 15 23 312 — 350 Total investments $ 2,618 $ 3,452 $ 323 $ 7,939 $ 14,332 The tables below set forth a summary of changes in the fair value of the plans’ Level 3 assets for the years ended December 31, 2017 and December 31, 2016 : Assets (In millions) Fair Value, January 1, 2017 Purchases Sales Unrealized Gain/ (Loss) Realized Gain/ (Loss) Exchange Rate Impact Transfers in/(out) and Other Fair Value, December 31, 2017 Other investments $ 312 $ 20 $ (15 ) $ (7 ) $ — $ 40 $ — $ 350 Corporate stocks 2 — — — — — — 2 Corporate obligations 9 9 (1 ) 9 — 1 (7 ) 20 Total assets $ 323 $ 2 |
Stock Benefit Plans
Stock Benefit Plans | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Benefit Plans | Stock Benefit Plans The Company maintains multiple stock-based payment arrangements under which employees are awarded grants of restricted stock units, stock options and other forms of stock-based benefits. Marsh & McLennan Companies, Inc. Incentive and Stock Award Plans On May 19, 2011, the Marsh & McLennan Companies, Inc. 2011 Incentive and Stock Award Plan (the "2011 Plan") was approved by the Company's stockholders. The 2011 Plan replaced the Company's two previous equity incentive plans (the 2000 Senior Executive Incentive and Stock Award Plan and the 2000 Employee Incentive and Stock Award Plan). The types of awards permitted under the 2011 Plan include stock options, restricted stock and restricted stock units payable in Company common stock or cash, and other stock-based and performance-based awards. The Compensation Committee of the Board of Directors (the "Compensation Committee") determines, at its discretion, which affiliates may participate in the 2011 Plan, which eligible employees will receive awards, the types of awards to be received, and the terms and conditions thereof. The right of an employee to receive an award may be subject to performance conditions as specified by the Compensation Committee. The 2011 Plan contains a provision which, in the event of a change in control of the Company, may accelerate the vesting of the awards. This provision requires both a change in control of the Company and a subsequent specified termination of employment for vesting to be accelerated. The 2011 Plan retains the remaining share authority of the two previous plans as of the date the 2011 Plan was approved by stockholders. Thus, approximately 23.2 million shares of common stock, plus shares remaining unused under the previous plans, are available for awards over the life of the 2011 Plan. The current practice is to grant non-qualified stock options, restricted stock units and/or performance stock units ("PSUs") on an annual basis to senior executives and a limited number of other employees as part of their total compensation. Restricted stock units are also granted to new hires or as retention awards for certain employees. Restricted stock has not been granted since 2005. Stock Options: Options granted under the 2011 Plan may be designated as either incentive stock options or non-qualified stock options. The Compensation Committee determines the terms and conditions of the option, including the time or times at which an option may be exercised, the methods by which such exercise price may be paid, and the form of such payment. Options are generally granted with an exercise price equal to the market value of the Company's common stock on the date of grant. These option awards generally vest 25% per annum and have a contractual term of 10 years . The estimated fair value of options granted is calculated using the Black-Scholes option pricing valuation model. This model takes into account several factors and assumptions. The risk-free interest rate is based on the yield on U.S. Treasury zero-coupon issues with a remaining term equal to the expected life assumption at the time of grant. The expected life (estimated period of time outstanding) is estimated using the contractual term of the option and the effects of employees' expected exercise and post-vesting employment termination behavior. The Company uses a blended volatility rate based on the following: (i) volatility derived from daily closing price observations for the 10 -year period ended on the valuation date, (ii) implied volatility derived from traded options for the period one week before the valuation date and (iii) average volatility for the 10 -year periods ended on 15 anniversaries prior to the valuation date, using daily closing price observations. The expected dividend yield is based on expected dividends for the expected term of the stock options. The assumptions used in the Black-Scholes option pricing valuation model for options granted by the Company in 2017 , 2016 and 2015 are as follows: 2017 2016 2015 Risk-free interest rate 2.09% 1.39% 1.78% Expected life (in years) 6.0 6.0 6.0 Expected volatility 23.23% 25.55% 23.75% Expected dividend yield 1.86% 2.15% 1.97% A summary of the status of the Company’s stock option awards as of December 31, 2017 and changes during the year then ended is presented below: Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value ($000) Balance at January 1, 2017 13,242,529 $ 39.15 Granted 1,710,853 $ 73.20 Exercised (4,258,027 ) $ 30.42 Forfeited (494,653 ) $ 62.00 Balance at December 31, 2017 10,200,702 $ 47.39 5.9 years $ 351,317 Options vested or expected to vest at December 31, 2017 10,052,720 $ 47.17 5.9 years $ 348,494 Options exercisable at December 31, 2017 6,247,224 $ 37.75 4.6 years $ 275,398 In the above table, forfeited options are unvested options whose requisite service period has not been met. Expired options are vested options that were not exercised. The weighted-average grant-date fair value of the Company's option awards granted during the years ended December 31, 2017 , 2016 and 2015 was $15.01 , $11.57 and $11.34 , respectively. The total intrinsic value of options exercised during the same periods was $195.3 million , $137.7 million and $124.6 million , respectively. As of December 31, 2017 , there was $14.9 million of unrecognized compensation cost related to the Company's option awards. The weighted-average period over which that cost is expected to be recognized is approximately 1.36 years. Cash received from the exercise of stock options for the years ended December 31, 2017 , 2016 and 2015 was $126.7 million , $105.4 million and $134.7 million , respectively. The Company's policy is to issue treasury shares upon option exercises or share unit conversion. The Company intends to issue treasury shares as long as an adequate number of those shares is available. Restricted Stock Units and Performance Stock Units: Restricted stock units may be awarded under the Company's 2011 Incentive and Stock Award Plan. The Compensation Committee determines the restrictions on such units, when the restrictions lapse, when the units vest and are paid, and under what terms the units are forfeited. The cost of these awards is amortized over the vesting period, which is generally three years . Awards to senior executives and other employees may include three-year performance-based restricted stock units and three-year service-based restricted stock units. The payout of performance stock units (payable in shares of the Company's common stock) ranges, generally, from 0 - 200% of the number of units granted, based on the achievement of objective, pre-determined Company performance measure(s), generally, over a three -year performance period. The Company accounts for these awards as performance condition restricted stock units. The performance condition is not considered in the determination of grant date fair value of such awards. Compensation cost is recognized over the performance period based on management's estimate of the number of units expected to vest and shares to be paid and is adjusted to reflect the actual number of shares paid out at the end of the three -year performance period. Dividend equivalents are not paid out unless and until such time that the award vests. A summary of the status of the Company's restricted stock units and performance stock units as of December 31, 2017 and changes during the period then ended is presented below: Restricted Stock Units Performance Stock Units Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value Non-vested balance at January 1, 2017 3,044,029 $ 56.40 722,017 $ 54.68 Granted 2,610,599 $ 73.23 260,387 $ 73.20 Vested (1,307,825 ) $ 55.31 (212,458 ) $ 48.19 Forfeited (294,056 ) $ 65.06 (79,345 ) $ 61.92 Non-vested balance at December 31, 2017 4,052,747 $ 66.97 690,601 $ 62.82 The weighted-average grant-date fair value of the Company's restricted stock units granted during the years ended December 31, 2016 and 2015 was $57.54 and $56.81 , respectively. The weighted average grant date fair value of the Company's performance stock units granted during the years ended December 31, 2016 and 2015 was $57.47 and $57.33 , respectively. The total fair value of the shares distributed during the years ended December 31, 2017 , 2016 and 2015 in connection with the Company's non-option equity awards was $117.1 million , $91.4 million and $114.3 million , respectively. The payout of shares in 2017 with respect to the PSUs awarded in 2014 was 120% of target based on performance for the three-year performance period. The payout of shares with respect to the PSUs that vested in 2017 due to certain types of termination was based on performance for the abbreviated performance period. In aggregate, 254,455 shares became distributable in respect to PSUs vested in 2017. As of December 31, 2017 , there was $197.4 million of unrecognized compensation cost related to the Company's restricted stock units and performance stock unit awards. The weighted-average period over which that cost is expected to be recognized is approximately 1.08 years. Marsh & McLennan Companies Stock Purchase Plans In May 1999, the Company's stockholders approved an employee stock purchase plan (the "1999 Plan") to replace the 1994 Employee Stock Purchase Plan (the "1994 Plan"), which terminated on September 30, 1999 following its fifth annual offering. Under the current terms of the Plan, shares are purchased four times during the plan year at a price that is 95% of the average market price on each quarterly purchase date. Under the 1999 Plan, after including the available remaining unused shares in the 1994 Plan and reducing the shares available by 10,000,000 consistent with the Company's Board of Directors' action in March 2007, no more than 35,600,000 shares of the Company's common stock may be sold. Employees purchased 428,244 shares during the year ended December 31, 2017 and at December 31, 2017, 1,353,166 shares were available for issuance under the 1999 Plan. Under the 1995 Company Stock Purchase Plan for International Employees (the "International Plan"), after reflecting the additional 5,000,000 shares of common stock for issuance approved by the Company's Board of Directors in July 2002, and the addition of 4,000,000 shares due to a shareholder action in May 2007, no more than 12,000,000 shares of the Company's common stock may be sold. Employees purchased 121,292 shares during the year ended December 31, 2017 and there were 2,491,910 shares available for issuance at December 31, 2017 under the International Plan. The plans are considered non-compensatory. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Fair Value Hierarchy The Company has categorized its assets and liabilities that are valued at fair value on a recurring basis into a three-level fair value hierarchy as defined by the FASB. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets and liabilities (Level 1) and lowest priority to unobservable inputs (Level 3). In some cases, the inputs used to measure fair value might fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy, for disclosure purposes, is determined based on the lowest level input that is significant to the fair value measurement. Assets and liabilities recorded in the consolidated balance sheets at fair value are categorized based on the inputs in the valuation techniques as follows: Level 1. Assets and liabilities whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market (examples include active exchange-traded equity securities and exchange-traded money market mutual funds). Assets and liabilities using Level 1 inputs include exchange-traded equity securities, exchange-traded mutual funds and money market funds. Level 2. Assets and liabilities whose values are based on the following: a) Quoted prices for similar assets or liabilities in active markets; b) Quoted prices for identical or similar assets or liabilities in non-active markets (examples include corporate and municipal bonds, which trade infrequently); c) Pricing models whose inputs are observable for substantially the full term of the asset or liability (examples include most over-the-counter derivatives, including interest rate and currency swaps); and d) Pricing models whose inputs are derived principally from or corroborated by observable market data through correlation or other means for substantially the full asset or liability (for example, certain mortgage loans). The Company does not have any assets or liabilities that use Level 2 inputs. Level 3. Assets and liabilities whose values are based on prices, or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs reflect management’s own assumptions about the assumptions a market participant would use in pricing the asset or liability (certain commercial mortgage whole loans, and long-dated or complex derivatives including certain foreign exchange options and long-dated options on gas and power). Liabilities using Level 3 inputs include liabilities for contingent purchase consideration. Valuation Techniques Equity Securities, Money Market Funds and Mutual Funds - Level 1 Investments for which market quotations are readily available are valued at the sale price on their principal exchange or, for certain markets, official closing bid price. Money market funds are valued using a valuation technique that results in price per share at $1.00 . Contingent Purchase Consideration Liability - Level 3 Purchase consideration for some acquisitions made by the Company includes contingent consideration arrangements. These arrangements typically provide for the payment of additional consideration if earnings and revenue targets are met over periods from two to four years. The fair value of contingent consideration is estimated as the present value of future cash flows resulting from the projected revenue and earnings of the acquired entities. The following fair value hierarchy table presents information about the Company’s assets and liabilities measured at fair value on a recurring basis as of December 31, 2017 and 2016 : (In millions of dollars) Identical Assets (Level 1) Observable Inputs (Level 2) Unobservable Inputs (Level 3) Total 12/31/17 12/31/16 12/31/17 12/31/16 12/31/17 12/31/16 12/31/17 12/31/16 Assets: Financial instruments owned: Exchange traded equity securities (a) $ 81 $ 89 $ — $ — $ — $ — $ 81 $ 89 Mutual funds (a) 158 141 — — — — 158 141 Money market funds (b) 143 22 — — — — 143 22 Total assets measured at fair value $ 382 $ 252 $ — $ — $ — $ — $ 382 $ 252 Fiduciary Assets: Money market funds $ 111 $ 90 $ — $ — $ — $ — $ 111 $ 90 Total fiduciary assets measured at fair value $ 111 $ 90 $ — $ — $ — $ — $ 111 $ 90 Liabilities: Contingent purchase consideration liability (c) $ — $ — $ — $ — $ 189 $ 241 $ 189 $ 241 Total liabilities measured at fair value $ — $ — $ — $ — $ 189 $ 241 $ 189 $ 241 (a) Included in other assets in the consolidated balance sheets. (b) Included in cash and cash equivalents in the consolidated balance sheets. (c) Included in accounts payable and accrued liabilities and other liabilities in the consolidated balance sheets. During the year ended December 31, 2017 , there were no assets or liabilities that were transferred between any of the levels. The table below sets forth a summary of the changes in fair value of the Company’s Level 3 liabilities for the years ended December 31, 2017 and December 31, 2016 that represent contingent purchase consideration related to acquisitions: (In millions) 2017 2016 Balance at January 1, $ 241 $ 309 Additions 51 17 Payments (108 ) (86 ) Revaluation Impact 3 9 Other (a) 2 (8 ) Balance at December 31, $ 189 $ 241 (a) Primarily reflects the impact of foreign exchange. The fair value of the contingent purchase consideration liability is based on projections of revenue and earnings for the acquired entities that are reassessed on a quarterly basis. As set forth in the table above, based on the Company's ongoing assessment of the fair value of contingent consideration, the Company recorded a net increase in the estimated fair value of such liabilities for prior period acquisitions of $3 million for the year ended December 31, 2017 . A 5% increase in the above mentioned projections would increase the liability by approximately $18 million . A 5% decrease in the above mentioned projections would decrease the liability by approximately $19 million . Long-Term Investments The Company holds investments in certain private equity investments, public companies and private companies that are accounted for using the equity method of accounting. The carrying value of these investments was $405 million and $389 million at December 31, 2017 and 2016 , respectively. Private Equity Investments The Company's investments in private equity funds were $76 million and $79 million at December 31, 2017 and December 31, 2016 , respectively. The carrying values of these private equity investments approximates fair value. The underlying private equity funds follow investment company accounting, where investments within the fund are carried at fair value. The Company records in earnings, investment gains/losses for its proportionate share of the change in fair value of the funds. These investments are included in other assets in the consolidated balance sheets. Investments in Public and Private Companies Alexander Forbes: The Company owns approximately 33% of the common stock of Alexander Forbes, a South African company listed on the Johannesburg Stock Exchange, which it purchased in 2014 for 7.50 South African Rand per share. As of December 31, 2017 , the carrying value of the Company’s investment in Alexander Forbes was approximately $266 million . As of December 31, 2017 , the market value of the approximately 443 million shares of Alexander Forbes owned by the Company, based on the December 31, 2017 closing share price of 6.87 South African Rand per share, was approximately $239 million . The Company considered several factors in assessing its investment in Alexander Forbes, including its financial position, the near- and long-term prospects of Alexander Forbes and the broader South African economy and capital markets, the length of time and extent to which the market value was below cost and the Company’s intent and ability to retain the investment for a sufficient period of time to allow for anticipated recovery in market value. The shares traded over a broad range during the year, with a high of 7.95 Rand and a low of 5.26 Rand, and experienced several cycles of price declines and recovery in 2017. The shares traded above 7.50 Rand multiple times during the fourth quarter of 2017. Based on its assessment of the factors discussed above, the Company determined the investment was not impaired. The Company’s investment in Alexander Forbes and its other equity investments in private insurance and consulting companies are accounted for using the equity method of accounting, the results of which are included in revenue in the consolidated income statements and the carrying value of which is included in other assets in the consolidated balance sheets. The Company records its share of income or loss on its equity method investments on a one quarter lag basis. Benefitfocus: On February 24, 2015, Mercer purchased shares of common stock of Benefitfocus (NASDAQ:BNFT) constituting approximately 9.9% of BNFT's outstanding capital stock as of the acquisition date. The purchase price for the BNFT shares and certain other rights and other consideration was approximately $75 million . Until December 31, 2016, the Company accounted for this investment under the cost method of accounting as the shares purchased were categorized as restricted. Effective December 31, 2016, these shares were no longer considered restricted for the purpose of determining if they are marketable securities under applicable accounting guidance, and are now accounted for as available for sale securities and included in other assets in the consolidated balance sheets. The value of the BNFT shares based on the closing price on the NASDAQ at December 31, 2017 was approximately $76 million . Deconsolidation of a Subsidiary Marsh operates in India through Marsh India Insurance Brokers Limited (Marsh India), which is owned 26% by Marsh and 74% by local shareholders. Prior to the second quarter of 2016, under the terms of its shareholders’ agreement with the local shareholders, Marsh had a controlling financial interest in Marsh India and its results were consolidated as required under U.S. GAAP. Under the Insurance Laws (Amendment) Act 2015 of India and related regulations issued by the Indian Insurance Regulatory and Development Authority, Indian insurance companies (including insurance intermediaries and brokers like Marsh India) must now be controlled by Indian promoters or Indian investors. In the second quarter of 2016, the shareholders’ agreement among the shareholders of Marsh India was amended to comply with these new regulations, which resulted in Marsh no longer having a controlling financial interest under U.S. GAAP. In accordance with U.S. GAAP, the Company was required to deconsolidate Marsh India and recognize its interest in Marsh India at fair value, with the difference between the carrying value and fair value recognized in earnings. The Company estimated the fair value of its interest in Marsh India, primarily using a discounted cash flow approach, which considered various cash flow scenarios and a discount rate appropriate for the investment. Certain provisions relating to restrictions on sales and repurchase of shares of Marsh India owned by its employees were also required to be removed by the new regulations. As a result, the deferred compensation expense related to those shares was accelerated in the second quarter of 2016. The net gain on the Company’s pre-tax income as a result of these changes was approximately $11 million , which is included in revenue for the year ended 2016. Beginning on May 1, 2016, the Company accounted for its investment in Marsh India using the equity method of accounting. The summarized financial information presented below reflects the aggregated financial information of all equity method investees as of and for the twelve months ended September 30 of each year (or portion of those twelve months the Company owned its investment), consistent with the Company’s recognition of the results of its equity method investments on a one quarter lag. The investment income information presented below reflects the net realized and unrealized gains/losses, net of expenses, related to the Company's investments in several private equity funds. Certain of the Company’s equity method investments, including Alexander Forbes, have unclassified balance sheets. Therefore, the asset and liability information presented below are not split between current and non-current. Below is a summary of the financial information for the Company's equity method investees: For the Twelve Months Ended September 30, (In millions of dollars) 2017 2016 2015 Revenue $ 628 $ 843 $ 1,018 Net investment income (a) $ 1,834 $ 1,824 $ 1,620 Net income $ 476 $ 91 $ 196 As of September 30, (In millions of dollars) 2017 2016 Total assets $ 24,739 $ 22,997 Total liabilities $ 22,817 $ 21,087 Non-controlling interests $ 19 $ 12 (a) Net investment income in 2017, 2016 and 2015 includes approximately $1.5 billion , $1.9 billion and $1.5 billion , respectively, related to Alexander Forbes, substantially all of which is credited to policy holders. |
Long-Term Commitments
Long-Term Commitments | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Long-Term Commitments | Long-term Commitments The Company leases office facilities, equipment and automobiles under non-cancelable operating leases. These leases expire on varying dates, in some instances contain renewal and expansion options, do not restrict the payment of dividends or the incurrence of debt or additional lease obligations, and contain no significant purchase options. In addition to the base rental costs, occupancy lease agreements generally provide for rent escalations resulting from increased assessments for real estate taxes and other charges. Approximately 99% of the Company’s lease obligations are for the use of office space. The consolidated statements of income include net rental costs of $354 million , $367 million and $381 million for 2017 , 2016 and 2015 , respectively, after deducting rentals from subleases ( $8 million in 2017 , $9 million in 2016 and $14 million in 2015 ). These net rental costs exclude rental costs and sublease income for previously accrued restructuring charges related to vacated space. At December 31, 2017 , the aggregate future minimum rental commitments under all non-cancelable operating lease agreements are as follows: For the Years Ended December 31, Gross Rental Commitments Rentals from Subleases Net Rental Commitments (In millions of dollars) 2018 $ 355 $ 41 $ 314 2019 $ 316 $ 34 $ 282 2020 $ 291 $ 31 $ 260 2021 $ 226 $ 3 $ 223 2022 $ 207 $ 1 $ 206 Subsequent years $ 773 $ 1 $ 772 The Company has entered into agreements, primarily with various service companies, to outsource certain information systems activities and responsibilities and processing activities. Under these agreements, the Company is required to pay minimum annual service charges. Additional fees may be payable depending upon the volume of transactions processed, with all future payments subject to increases for inflation. At December 31, 2017 , the aggregate fixed future minimum commitments under these agreements are as follows: For the Years Ended December 31, Future Minimum Commitments (In millions of dollars) 2018 $ 228 2019 106 2020 28 Subsequent years 25 $ 387 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Debt | Debt The Company’s outstanding debt is as follows: December 31, (In millions) 2017 2016 Short-term: Commercial paper $ — $ 50 Current portion of long-term debt 262 262 262 312 Long-term: Senior notes – 2.30% due 2017 — 250 Senior notes – 2.55% due 2018 250 249 Senior notes – 2.35% due 2019 299 299 Senior notes – 2.35% due 2020 498 497 Senior notes – 4.80% due 2021 498 498 Senior notes – 2.75% due 2022 496 — Senior notes – 3.30% due 2023 348 347 Senior notes – 4.05% due 2023 248 248 Senior notes – 3.50% due 2024 596 596 Senior notes – 3.50% due 2025 496 495 Senior notes – 3.75% due 2026 596 596 Senior notes – 5.875% due 2033 297 297 Senior notes – 4.35% due 2047 492 — Mortgage – 5.70% due 2035 370 382 Other 3 3 5,487 4,757 Less current portion 262 262 $ 5,225 $ 4,495 The senior notes in the table above are registered by the Company with the Securities and Exchange Commission, and are not guaranteed. The Company has established a short-term debt financing program of up to $1.5 billion through the issuance of commercial paper. The proceeds from the issuance of commercial paper are used for general corporate purposes. The Company had no commercial paper outstanding at December 31, 2017. In January 2017, the Company issued $500 million of 2.75% senior notes due 2022 and $500 million of 4.35% senior notes due 2047. The Company used the net proceeds for general corporate purposes, including the repayment of a $250 million debt maturity in April 2017. In March 2016, the Company issued $350 million of 3.30% seven -year senior notes. The Company used the net proceeds for general corporate purposes. The Company and certain of its foreign subsidiaries maintain a $1.5 billion multi-currency five -year unsecured revolving credit facility. The interest rate on this facility is based on LIBOR plus a fixed margin which varies with the Company's credit ratings. This facility expires in November 2020 and requires the Company to maintain certain coverage and leverage ratios which are tested quarterly. There were no borrowings outstanding under this facility at December 31, 2017 . Additional credit facilities, guarantees and letters of credit are maintained with various banks, primarily related to operations located outside the United States, aggregating $624 million at December 31, 2017 and $376 million at December 31, 2016 . There was $0 million of outstanding borrowings under these facilities at December 31, 2017 and $1.6 million of outstanding borrowings under these facilities at December 31, 2016 . Scheduled repayments of long-term debt in 2018 and in the four succeeding years are $262 million, $316 million, $514 million, $515 million and $515 million, respectively. Fair value of Short-term and Long-term Debt The estimated fair value of the Company’s short-term and long-term debt is provided below. Certain estimates and judgments were required to develop the fair value amounts. The fair value amounts shown below are not necessarily indicative of the amounts that the Company would realize upon disposition, nor do they indicate the Company’s intent or need to dispose of the financial instrument. December 31, 2017 December 31, 2016 (In millions of dollars) Carrying Fair Carrying Fair Short-term debt $ 262 $ 264 $ 312 $ 313 Long-term debt $ 5,225 $ 5,444 $ 4,495 $ 4,625 The fair value of the Company’s short-term debt consists primarily of commercial paper and term debt maturing within the next year and its fair value approximates its carrying value. The estimated fair value of a primary portion of the Company's long-term debt is based on discounted future cash flows using current interest rates available for debt with similar terms and remaining maturities. Short- and long-term debt would be classified as Level 2 in the fair value hierarchy. |
Integration and Restructuring C
Integration and Restructuring Costs | 12 Months Ended |
Dec. 31, 2017 | |
Restructuring and Related Activities [Abstract] | |
Integration and Restructuring Costs | Integration and Restructuring Costs In 2017 , the Company implemented restructuring actions which resulted in costs totaling $40 million . Restructuring costs consist primarily for severance at Mercer, Marsh and Corporate, as well as future rent under non-cancelable leases at Corporate. These costs were incurred as follows: Risk and Insurance Services— $11 million ; Consulting— $19 million ; and Corporate— $10 million . Details of the restructuring liability activity from January 1, 2016 through December 31, 2017 , including actions taken prior to 2017 , are as follows: (In millions) Balance at 1/1/16 Expense Incurred Cash Paid Other Balance at 12/31/16 Expense Incurred Cash Paid Other Balance at 12/31/17 Severance $ 15 $ 40 $ (22 ) $ (1 ) $ 32 $ 31 $ (49 ) $ 1 $ 15 Future rent under non-cancelable leases and other costs 78 4 (17 ) (4 ) 61 9 (22 ) 2 50 Total $ 93 $ 44 $ (39 ) $ (5 ) $ 93 $ 40 $ (71 ) $ 3 $ 65 As of January 1, 2015, the liability balance related to restructuring activity was $92 million . In 2015, the Company accrued $28 million and had cash payments and other adjustments of $27 million related to restructuring activities that resulted in the liability balance at January 1, 2016 reported above. The expenses associated with the above initiatives are included in compensation and benefits and other operating expenses in the consolidated statements of income. The liabilities associated with these initiatives are classified on the consolidated balance sheets as accounts payable and accrued liabilities, other liabilities, or accrued compensation and employee benefits, depending on the nature of the items. |
Common Stock
Common Stock | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Common Stock | Common Stock During 2017 , the Company repurchased 11.5 million shares of its common stock for total consideration of $900 million . In November 2016, the Board of Directors of the Company authorized the Company to repurchase up to $2.5 billion of the Company's common stock, which superseded any prior authorizations. The Company remains authorized to purchase additional shares of its common stock up to a value of approximately $1.5 billion . There is no time limit on the authorization. During 2016 , the Company purchased 12.7 million shares of its common stock for total consideration of $800 million . The Company issued approximately 5.8 million and 5.3 million shares related to stock compensation and employee stock purchase plans during the years ended December 31, 2017 and 2016 , respectively. |
Claims, Lawsuits And Other Cont
Claims, Lawsuits And Other Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Claims, Lawsuits And Other Contingencies | Claims, Lawsuits and Other Contingencies Litigation Matters The Company and its subsidiaries are subject to a significant number of claims, lawsuits and proceedings in the ordinary course of business. Such claims and lawsuits consist principally of alleged errors and omissions in connection with the performance of professional services, including the placement of insurance, the provision of actuarial services for corporate and public sector clients, the provision of investment advice and investment management services to pension plans, the provision of advice relating to pension buy-out transactions and the provision of consulting services relating to the drafting and interpretation of trust deeds and other documentation governing pension plans. These claims may seek damages, including punitive and treble damages, in amounts that could be significant. In establishing liabilities for errors and omissions claims in accordance with FASB guidance on Contingencies - Loss Contingencies, the Company uses case level reviews by inside and outside counsel, and internal actuarial analysis by Oliver Wyman Group, a subsidiary of the Company, and other methods to estimate potential losses. A liability is established when a loss is both probable and reasonably estimable. The liability is reviewed quarterly and adjusted as developments warrant. In many cases, the Company has not recorded a liability, other than for legal fees to defend the claim, because we are unable, at the present time, to make a determination that a loss is both probable and reasonably estimable. To the extent that expected losses exceed our deductible in any policy year, the Company also records an asset for the amount that we expect to recover under any available third-party insurance programs. The Company has varying levels of third-party insurance coverage, with policy limits and coverage terms varying significantly by policy year. Governmental Inquiries and Enforcement Matters Our activities are regulated under the laws of the United States and its various states, the European Union and its member states, and the other jurisdictions in which the Company operates. Risk and Insurance Services Segment In April 2017, the Financial Conduct Authority in the United Kingdom (the "FCA") commenced a civil competition investigation into the aviation insurance and reinsurance sector. In connection with that investigation, the FCA carried out an on-site inspection at the London office of Marsh Limited, our Marsh and Guy Carpenter operating subsidiary in the United Kingdom. The FCA indicated that it had reasonable grounds for suspecting that Marsh Limited and other participants in the market have been sharing competitively sensitive information within the aviation insurance and reinsurance broking sector. In October 2017, the Company received a notice that the Directorate-General for Competition of the European Commission had commenced a civil investigation of a number of insurance brokers, including Marsh, regarding "the exchange of commercially sensitive information between competitors in relation to aviation and aerospace insurance and reinsurance broking products and services in the European Economic Area ("EEA"), as well as possible coordination between competitors." In light of the action taken by the European Commission, the FCA informed Marsh Limited at the same time that it has discontinued its investigation under U.K. competition law into the aviation insurance and reinsurance sector. In July 2017, the Directorate-General for Competition of the European Commission together with the Irish Competition and Consumer Protection Commission conducted on-site inspections at the offices of Marsh and other industry participants in Dublin in connection with an investigation regarding the "possible participation in anticompetitive agreements and/or concerted practices contrary to [E.U. competition law] in the market for commercial motor insurance in the Republic of Ireland." In December 2017, we received a request from the Directorate-General for Competition of the European Commission seeking documents and information relating to its investigation. We are cooperating with these investigations and are conducting our own reviews. As these investigations are at early stages, we are unable to predict their likely timing, outcome or ultimate impact. There can be no assurance that the ultimate resolution of these or any related matters will not have a material adverse effect on our consolidated results of operations, financial condition or cash flows. In November 2017, the FCA announced the terms of reference for a market study concerning the wholesale insurance broker sector in the United Kingdom, which affects Marsh and Guy Carpenter. The FCA is conducting the study to assess “how effective competition is working in the wholesale insurance broker sector” and "how brokers influence competition in the underwriting sector." The FCA is expected to publish its interim report in the fall of 2018, with a final report expected in 2019. Consulting Segment In June 2017, the FCA issued a final report in connection with a market study of the U.K. asset management industry, which includes asset managers and investment consultants, including Mercer. Following the report, in September 2017, the FCA announced its decision to refer the investment consulting and fiduciary management markets to the U.K. Competition & Markets Authority (the "CMA") for a market investigation. The CMA expects to conclude its investigation of the investment consulting and fiduciary management markets by March 2019. In the ordinary course of business, the Company is also subject to other investigations, market studies, subpoenas, lawsuits and other regulatory actions undertaken by governmental authorities. Other Contingencies-Guarantees In connection with its acquisition of U.K.-based Sedgwick Group in 1998, the Company acquired several insurance underwriting businesses that were already in run-off, including River Thames Insurance Company Limited ("River Thames"), which the Company sold in 2001. Sedgwick guaranteed payment of claims on certain policies underwritten through the Institute of London Underwriters (the "ILU") by River Thames. The policies covered by this guarantee were reinsured up to £40 million by a related party of River Thames. Payment of claims under the reinsurance agreement is collateralized by segregated assets held in a trust. As of December 31, 2017, the reinsurance coverage exceeded the best estimate of the projected liability of the policies covered by the guarantee. To the extent River Thames or the reinsurer is unable to meet its obligations under those policies, a claimant may seek to recover from the Company under the guarantee. From 1980 to 1983, the Company owned indirectly the English & American Insurance Company ("E&A"), which was a member of the ILU. The ILU required the Company to guarantee a portion of E&A's obligations. After E&A became insolvent in 1993, the ILU agreed to discharge the guarantee in exchange for the Company's agreement to post an evergreen letter of credit that is available to pay claims by policyholders on certain E&A policies issued through the ILU and incepting between July 3, 1980 and October 6, 1983. Certain claims have been paid under the letter of credit and the Company anticipates that additional claimants may seek to recover against the letter of credit. * * * * The pending proceedings described above and other matters not explicitly described in this Note 14 on Claims, Lawsuits and Other Contingencies may expose the Company or its subsidiaries to liability for significant monetary damages, fines, penalties or other forms of relief. Where a loss is both probable and reasonably estimable, the Company establishes liabilities in accordance with FASB guidance on Contingencies - Loss Contingencies. Except as described above, the Company is not able at this time to provide a reasonable estimate of the range of possible loss attributable to these matters or the impact they may have on the Company's consolidated results of operations, financial position or cash flows. This is primarily because these matters are still developing and involve complex issues subject to inherent uncertainty. Adverse determinations in one or more of these matters could have a material impact on the Company's consolidated results of operations, financial condition or cash flows in a future period. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information The Company is organized based on the types of services provided. Under this structure, the Company’s segments are: ▪ Risk and Insurance Services , comprising insurance services (Marsh) and reinsurance services (Guy Carpenter); and ▪ Consulting , comprising Mercer and Oliver Wyman Group The accounting policies of the segments are the same as those used for the consolidated financial statements described in Note 1. Segment performance is evaluated based on segment operating income, which includes directly related expenses, and charges or credits related to integration and restructuring but not the Company’s corporate-level expenses. Revenues are attributed to geographic areas on the basis of where the services are performed. Selected information about the Company’s segments and geographic areas of operation are as follows: For the Year Ended December 31, (In millions of dollars) Revenue Operating Income (Loss) Total Assets Depreciation and Amortization Capital Expenditures 2017 – Risk and Insurance Services $ 7,630 (a) $ 1,871 $ 16,490 $ 282 $ 139 Consulting 6,444 (b) 1,174 8,200 129 88 Total Segments 14,074 3,045 24,690 411 227 Corporate/Eliminations (50 ) (189 ) (4,261 ) (c) 70 75 Total Consolidated $ 14,024 $ 2,856 $ 20,429 $ 481 $ 302 2016 – Risk and Insurance Services $ 7,143 (a) $ 1,753 $ 14,728 $ 248 $ 128 Consulting 6,112 (b) 1,103 6,770 121 68 Total Segments 13,255 2,856 21,498 369 196 Corporate/Eliminations (44 ) (192 ) (3,308 ) (c) 69 57 Total Consolidated $ 13,211 $ 2,664 $ 18,190 $ 438 $ 253 2015 – Risk and Insurance Services $ 6,869 (a) $ 1,539 $ 13,290 $ 240 $ 136 Consulting 6,064 (b) 1,075 6,485 120 108 Total Segments 12,933 2,614 19,775 360 244 Corporate/Eliminations (40 ) (195 ) (1,559 ) (c) 63 81 Total Consolidated $ 12,893 $ 2,419 $ 18,216 $ 423 $ 325 (a) Includes inter-segment revenue of $5 million in 2017 and $6 million in both 2016 and 2015 , interest income on fiduciary funds of $39 million , $26 million and $21 million in 2017 , 2016 and 2015 , respectively, and equity method income of $14 million , $12 million and $6 million in 2017 , 2016 and 2015 , respectively. (b) Includes inter-segment revenue of $45 million , $38 million and $34 million in 2017 , 2016 and 2015 , respectively, interest income on fiduciary funds of $4 million , $3 million and $4 million in 2017 , 2016 and 2015 , respectively and equity method income of $17 million , $19 million and $21 million in 2017 , 2016 and 2015 , respectively. (c) Corporate assets primarily include insurance recoverables, pension related assets, the owned portion of the Company headquarters building and intercompany eliminations. Details of operating segment revenue are as follows: For the Years Ended December 31, (In millions of dollars) 2017 2016 2015 Risk and Insurance Services Marsh $ 6,433 $ 5,997 $ 5,745 Guy Carpenter 1,197 1,146 1,124 Total Risk and Insurance Services 7,630 7,143 6,869 Consulting Mercer 4,528 4,323 4,313 Oliver Wyman Group 1,916 1,789 1,751 Total Consulting 6,444 6,112 6,064 Total Segments 14,074 13,255 12,933 Corporate/Eliminations (50 ) (44 ) (40 ) Total $ 14,024 $ 13,211 $ 12,893 Information by geographic area is as follows: For the Years Ended December 31, (In millions of dollars) 2017 2016 2015 Revenue United States $ 6,870 $ 6,573 $ 6,316 United Kingdom 2,112 2,019 2,036 Continental Europe 2,197 2,022 1,902 Asia Pacific 1,517 1,363 1,333 Other 1,378 1,278 1,346 14,074 13,255 12,933 Corporate/Eliminations (50 ) (44 ) (40 ) Total $ 14,024 $ 13,211 $ 12,893 For the Years Ended December 31, (In millions of dollars) 2017 2016 2015 Fixed Assets, Net United States $ 399 $ 412 $ 460 United Kingdom 91 94 115 Continental Europe 57 53 57 Asia Pacific 78 76 49 Other 87 90 92 Total $ 712 $ 725 $ 773 |
Selected Quarterly Financial Da
Selected Quarterly Financial Data and Supplemental Information | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Data [Abstract] | |
Selected Quarterly Financial Data and Supplemental Information | SELECTED QUARTERLY FINANCIAL DATA AND SUPPLEMENTAL INFORMATION (UNAUDITED) First Quarter Second Quarter Third Quarter Fourth Quarter (In millions, except per share figures) 2017: Revenue $ 3,503 $ 3,495 $ 3,341 $ 3,685 Operating income $ 809 $ 764 $ 597 $ 686 Income from continuing operations $ 578 $ 507 $ 397 $ 28 Discontinued operations, net of tax $ — $ — $ — $ 2 Net income attributable to the Company $ 569 $ 501 $ 393 $ 29 Basic Per Share Data (a) : Continuing operations $ 1.10 $ 0.98 $ 0.77 $ 0.05 Discontinued operations, net of tax $ — $ — $ — $ 0.01 Net income attributable to the Company $ 1.10 $ 0.98 $ 0.77 $ 0.06 Diluted Per Share Data (a) : Continuing operations $ 1.09 $ 0.96 $ 0.76 $ 0.05 Discontinued operations, net of tax $ — $ — $ — $ 0.01 Net income attributable to the Company $ 1.09 $ 0.96 $ 0.76 $ 0.06 Dividends Paid Per Share $ 0.34 $ 0.34 $ 0.375 $ 0.375 2016: Revenue $ 3,336 $ 3,376 $ 3,135 $ 3,364 Operating income $ 733 $ 726 $ 572 $ 633 Income from continuing operations $ 490 $ 480 $ 384 $ 441 Discontinued operations, net of tax $ — $ — $ — $ — Net income attributable to the Company $ 481 $ 472 $ 379 $ 436 Basic Per Share Data: Continuing operations $ 0.92 $ 0.91 $ 0.73 $ 0.85 Discontinued operations, net of tax $ — $ — $ — $ — Net income attributable to the Company $ 0.92 $ 0.91 $ 0.73 $ 0.85 Diluted Per Share Data: Continuing operations $ 0.91 $ 0.90 $ 0.73 $ 0.84 Discontinued operations, net of tax $ — $ — $ — $ — Net income attributable to the Company $ 0.91 $ 0.90 $ 0.73 $ 0.84 Dividends Paid Per Share $ 0.31 $ 0.31 $ 0.34 $ 0.34 As of February 19th, 2018, there were 5,346 stockholders of record. (a) Includes the impact of a $460 million provisional charge related to the enactment of U.S. tax reform. |
Summary of Significant Accoun25
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations | Nature of Operations: Marsh & McLennan Companies, Inc. (the "Company"), a global professional services firm, is organized based on the different services that it offers. Under this structure, the Company’s two business segments are Risk and Insurance Services and Consulting. The Risk and Insurance Services segment provides risk management solutions, services, advice and insurance broking, reinsurance broking and insurance program management services for businesses, public entities, insurance companies, associations, professional services organizations, and private clients. The Company conducts business in this segment through Marsh and Guy Carpenter. The Company conducts business in its Consulting segment through Mercer and Oliver Wyman Group. Mercer provides consulting expertise, advice, services and solutions in the areas of health, retirement, talent and investments. Oliver Wyman Group provides specialized management and economic and brand consulting services. |
Principles of Consolidation | Principles of Consolidation: The accompanying consolidated financial statements include all wholly-owned and majority-owned subsidiaries. All significant inter-company transactions and balances have been eliminated. |
Fiduciary Assets And Liabilities | Fiduciary Assets and Liabilities: In its capacity as an insurance broker or agent, generally the Company collects premiums from insureds and after deducting its commissions, remits the premiums to the respective insurance underwriters. The Company also collects claims or refunds from underwriters on behalf of insureds. Unremitted insurance premiums and claims proceeds are held by the Company in a fiduciary capacity. Risk and Insurance Services revenue includes interest on fiduciary funds of $39 million , $26 million and $21 million in 2017 , 2016 and 2015 , respectively. The Consulting segment recorded fiduciary interest income of $4 million , $3 million and $4 million in 2017 , 2016 and 2015 , respectively. Since fiduciary assets are not available for corporate use, they are shown in the consolidated balance sheets as an offset to fiduciary liabilities. Net uncollected premiums and claims and the related payables were $6.8 billion and $7 billion at December 31, 2017 and 2016 , respectively. The Company is not a principal to the contracts under which the right to receive premiums or the right to receive reimbursement of insured losses arises. Accordingly, net uncollected premiums and claims and the related payables are not assets and liabilities of the Company and are not included in the accompanying consolidated balance sheets. In certain instances, the Company advances premiums, refunds or claims to insurance underwriters or insureds prior to collection. These advances are made from corporate funds and are reflected in the accompanying consolidated balance sheets as receivables. Mercer manages approximately $227 billion of assets in trusts or funds for which Mercer’s management or trustee fee is not considered a variable interest, since the fees are commensurate with the level of effort required to provide those services. Mercer is not the primary beneficiary of these trusts or funds. Mercer’s maximum exposure to loss of its interests is, therefore, limited to collection of its fees. |
Revenue | Revenue: Risk and Insurance Services revenue includes insurance commissions, fees for services rendered and interest income on certain fiduciary funds. Insurance commissions and fees for risk transfer services generally are recorded as of the effective date of the applicable policies or, in certain cases (primarily in the Company's reinsurance broking operations), as of the effective date or billing date, whichever is later. A reserve for policy cancellation is provided based on historic and current data on cancellations. Consideration for fee arrangements covering multiple insurance placements, the provision of risk management and/or other services is allocated to all deliverables on the basis of the relative selling prices. Fees for non-risk transfer services provided to clients are recognized over the period in which the services are provided, using a proportional performance model. Fees resulting from achievement of certain performance thresholds are recorded when such levels are attained and such fees are not subject to forfeiture. Consulting revenue includes fees paid by clients for advice and services and commissions from insurance companies for the placement of individual and group contracts. Fee revenue for engagements where remuneration is based on time plus out-of-pocket expenses is recognized based on the amount of time consulting professionals expend on the engagement. For fixed fee engagements, revenue is recognized using a proportional performance model. Revenue from insurance commissions not subject to a fee arrangement is recorded over the effective period of the applicable policies. Revenue for asset based fees is recognized on an accrual basis by applying the daily/monthly rate as contractually agreed with the client to the applicable net asset value. On a limited number of engagements, performance fees may also be earned for achieving certain prescribed performance criteria. Such fees are recognized when the performance criteria have been achieved and, when required, agreed to by the client. Reimbursable expenses incurred by professional staff in the generation of revenue and sub-advisory fees related to the majority of funds in the investment management business are included in revenue and the related expenses are included in other operating expenses. |
Cash and Cash Equivalents | Cash and Cash Equivalents: Cash and cash equivalents primarily consist of certificates of deposit and time deposits, with original maturities of three months or less, and money market funds. The estimated fair value of the Company's cash and cash equivalents approximates their carrying value. The Company is required to maintain operating funds primarily related to regulatory requirements outside the United States or as collateral under captive insurance arrangements. |
Fixed Assets | Fixed Assets: Fixed assets are stated at cost less accumulated depreciation and amortization. Expenditures for improvements are capitalized. Upon sale or retirement of an asset, the cost and related accumulated depreciation and amortization are removed from the accounts and any gain or loss is reflected in income. Expenditures for maintenance and repairs are charged to operations as incurred. Depreciation of buildings, building improvements, furniture, and equipment is provided on a straight-line basis over the estimated useful lives of these assets. Furniture and equipment is depreciated over periods ranging from three to ten years. Leasehold improvements are amortized on a straight-line basis over the periods covered by the applicable leases or the estimated useful life of the improvement, whichever is less. Buildings are depreciated over periods ranging from thirty to forty years. The Company periodically reviews long-lived assets for impairment whenever events or changes indicate that the carrying value of assets may not be recoverable. |
Investments | Investments: The Company holds investments in certain private equity funds. Investments in private equity funds are accounted for under the equity method of accounting using a consistently applied three-month lag period adjusted for any known significant changes from the lag period to the reporting date of the Company. The underlying private equity funds follow investment company accounting, where investments within the fund are carried at fair value. Investment gains or losses for its proportionate share of the change in fair value of the funds are recorded in earnings. Investments using the equity method of accounting are included in other assets in the consolidated balance sheets. |
Goodwill and Intangible Assets | Goodwill and Other Intangible Assets: Goodwill represents acquisition costs in excess of the fair value of net assets acquired. Goodwill is reviewed at least annually for impairment. The Company performs an annual impairment test for each of its reporting units during the third quarter of each year. When a step 1 test is performed, fair values of the reporting units are estimated using either a market approach or a discounted cash flow model. Carrying values for the reporting units are based on balances at the prior quarter end and include directly identified assets and liabilities as well as an allocation of those assets and liabilities not recorded at the reporting unit level. As discussed in Note 5, the Company may elect to assess qualitative factors to determine if a step 1 test is necessary. Other intangible assets, which primarily consist of acquired customer lists, that are not deemed to have an indefinite life, are amortized over their estimated lives, typically ranging from 10 to 15 years, and reviewed for impairment upon the occurrence of certain triggering events in accordance with applicable accounting literature. |
Capitalized Software Costs | Capitalized Software Costs: The Company capitalizes certain costs to develop, purchase or modify software for the internal use of the Company. These costs are amortized on a straight-line basis over periods ranging from 3 to 10 years. Costs incurred during the preliminary project stage and post implementation stage, are expensed as incurred. Costs incurred during the application development stage are capitalized. Costs related to updates and enhancements are only capitalized if they will result in additional functionality. |
Legal and Other Loss Contingencies | Legal and Other Loss Contingencies: The Company and its subsidiaries are subject to a significant number of claims, lawsuits and proceedings including claims for errors and omissions ("E&O"). The preparation of financial statements in conformity with accounting principles generally accepted in the United States ("GAAP") requires that a liability be recorded when a loss is both probable and reasonably estimable. Significant management judgment is required to apply this guidance. The Company utilizes case level reviews by inside and outside counsel, an internal actuarial analysis by Oliver Wyman Group, a subsidiary of the Company, and other methods to estimate potential losses. The liability is reviewed quarterly and adjusted as developments warrant. In many cases, the Company has not recorded a liability, other than for legal fees to defend the claim, because we are unable, at the present time, to make a determination that a loss is both probable and reasonably estimable. Given the unpredictability of E&O claims and of litigation that could flow from them, it is possible that an adverse outcome in a particular matter could have a material adverse effect on the Company’s businesses, results of operations, financial condition or cash flow in a given quarterly or annual period. In addition, to the extent that insurance coverage is available, significant management judgment is required to determine the amount of recoveries that are probable of collection under the Company’s various insurance programs. The legal and other contingent liabilities described above are not discounted. |
Income Taxes | Income Taxes: The Company's effective tax rate reflects its income, statutory tax rates and tax planning in the various jurisdictions in which it operates. Significant judgment is required in determining the annual tax provision and in evaluating uncertain tax positions and the ability to realize deferred tax assets. |
Derivative Instruments | Derivative Instruments: All derivatives, whether designated in hedging relationships or not, are recorded on the balance sheet at fair value. If the derivative is designated as a fair value hedge, the changes in the fair value of the derivative and of the hedged item attributable to the hedged risk are recognized in earnings. The fair value of the derivative is recorded in the consolidated balance sheet in other receivables or accounts payable and accrued liabilities. The change in the fair value of a derivative is recorded in the consolidated statement of income in other operating expenses. If the derivative is designated as a cash flow hedge, the effective portions of changes in the fair value of the derivative are recorded in other comprehensive income and are recognized in the income statement when the hedged item affects earnings. Changes in the fair value attributable to the ineffective portion of cash flow hedges are recognized in earnings. |
Concentrations Of Credit Risk | Concentrations of Credit Risk: Financial instruments which potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, commissions and fees receivable and insurance recoverables. The Company maintains a policy providing for the diversification of cash and cash equivalent investments and places its investments in a large number of high quality financial institutions to limit the amount of credit risk exposure. Concentrations of credit risk with respect to receivables are generally limited due to the large number of clients and markets in which the Company does business, as well as the dispersion across many geographic areas. |
Per Share Data | Per Share Data: Basic net income per share attributable to the Company and income from continuing operations per share are calculated by dividing the respective after-tax income attributable to common shares by the weighted average number of outstanding shares of the Company’s common stock. Diluted net income per share attributable to the Company and income from continuing operations per share are calculated by dividing the respective after-tax income attributable to common shares by the weighted average number of outstanding shares of the Company’s common stock, which have been adjusted for the dilutive effect of potentially issuable common shares. |
Estimates | Estimates: GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results may vary from those estimates. |
New Accounting Pronouncements | New Accounting Pronouncements Recently Adopted: In October 2016, the FASB issued new guidance which changes the evaluation of whether a reporting entity is the primary beneficiary of a variable interest entity by changing how a reporting entity that is a single decision maker of a variable interest entity treats indirect interests in the entity held through related parties that are under common control with the reporting entity. If a reporting entity satisfies the first characteristic of a primary beneficiary (such that it is the single decision maker of a variable interest entity), the new guidance requires that reporting entity, in determining whether it satisfies the second characteristic of a primary beneficiary, include all of its direct variable interest in a variable interest entity and, on a proportionate basis, its indirect variable interests in a variable interest entity held through related parties, including related parties that are under common control with the reporting entity. The adoption of this guidance did not have a significant impact on its financial position, results of operations and statement of cash flows. In April 2016, the FASB issued new guidance which simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures and statutory tax withholding requirements, as well as classification in the statement of cash flows. The new guidance requires that companies record all excess tax benefits and tax deficiencies as an income tax benefit or expense in the income statement and classify excess tax benefits as an operating activity in the statement of cash flows. The Company adopted this new guidance prospectively, effective January 1, 2017 and prior periods have not been adjusted. For the year ended December 31, 2017, the adoption of this new standard reduced income tax expense in the consolidated statement of income by approximately $79 million . For the years ended December 31, 2016 and 2015, the Company recorded an excess tax benefit of $44 million and $53 million , respectively, as an increase to equity in its consolidated balance sheets, which was reflected as cash provided by financing activities in the consolidated statements of cash flows. In March 2016, the FASB issued new guidance which eliminates the requirement that when an investment qualifies for use of the equity method as a result of an increase in the level of ownership interest or degree of influence, an investor must adjust the investment, results of operations and retained earnings retroactively on a step-by-step basis as if the equity method had been in effect during all previous periods that the investment had been held. The amendments require that the equity method investor add the cost of acquiring the additional interest in the investee to the current basis of the investor’s previously held interest and adopt the equity method of accounting as of the date the investment becomes qualified for equity method accounting. Therefore, upon qualifying for the equity method of accounting, no retroactive adjustment of the investment is required. The amendments require that an entity that has an available-for-sale equity security that becomes qualified for the equity method of accounting recognize through earnings the unrealized holding gain or loss in accumulated other comprehensive income at the date the investment becomes qualified for use of the equity method. The new guidance is effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. The guidance was adopted on January 1, 2017 and did not have an impact on the Company's financial position or results of operations. In September 2015, the FASB issued new guidance intended to simplify the accounting for adjustments made to provisional amounts recognized in business combinations. The guidance requires the acquirer to recognize adjustments to estimated amounts that are identified during the measurement period in the reporting period in which the adjustments are determined, and to record, in the same period's financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the estimated amounts, calculated as if the accounting had been completed as of the acquisition date. The guidance also requires additional disclosures required for the amounts recorded in current period earnings arising from such adjustments. The guidance was adopted on January 1, 2016 and did not have a material impact on the Company's financial position or results of operations. In May 2015, the FASB issued new guidance which removes the requirement to present certain investments for which the practical expedient is used to measure fair value at net asset value within the fair value hierarchy table. Instead, an entity is required to include those investments as a reconciling item so that the total fair value amount of investments in the disclosure is consistent with the fair value investment balance in the consolidated balance sheets. This guidance is effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years. The adoption of this new guidance affected footnote disclosure only, and therefore did not have a material impact on the Company's financial position or results of operations. In February 2015, the FASB issued new accounting guidance intended to improve targeted areas of consolidation guidance for legal entities such as limited partnerships, limited liability corporations and securitization structures. The guidance focuses on the consolidation evaluation for reporting organizations that are required to evaluate whether they should consolidate certain legal entities. The guidance is effective for periods beginning after December 15, 2015. The adoption of this guidance did not have a material impact on the Company's financial statements. In January 2015, the FASB issued new accounting guidance that eliminated the concept of extraordinary items. The guidance is effective for annual periods beginning after December 15, 2015. Adoption of the guidance did not materially affect the Company's financial condition, results of operations or cash flows. New Accounting Pronouncements Effective January 1, 2018: New Revenue Recognition Pronouncement In May 2014, the FASB issued new accounting guidance related to revenue from contracts with customers. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company adopted the new guidance effective January 1, 2018, using the modified retrospective method, which applies the new guidance beginning with the year of adoption, with the cumulative effect of initially applying the guidance recognized as an adjustment to retained earnings at January 1, 2018. The Company elected to apply the modified retrospective method to all contracts. The guidance includes requirements to estimate variable or contingent consideration to be received, which will result in revenue being recognized earlier than under legacy GAAP. In addition, the guidance requires the capitalization and amortization of certain costs which were expensed as incurred under legacy GAAP. As discussed in more detail below, the adoption of this new revenue recognition standard will shift revenue among quarters from historical patterns, but is not expected to have a significant year-over-year impact on annual revenue. In the Risk and Insurance Services segment, there will be significant movement in the quarterly timing of revenue recognition. In particular, under the new standard the recognition of revenue in the Company’s reinsurance broking operations will be accelerated from historical patterns. Prior to the adoption of this standard, revenue related to most reinsurance placements was recognized on the later of billing or effective date as premiums are determined by the primary insurers and attached to the reinsurance treaties. Typically, this resulted in revenue being recognized over a 12 to 24 month period. Under the new guidance, estimated revenue from these treaties will be recognized largely at the policy effective date. In the insurance brokerage operations, revenue from commission based arrangements will continue to be recorded at the policy effective date, while the timing of revenue recognition for certain fee based arrangements will shift among quarters. However, since the vast majority of our fee arrangements involve contracts that cover a single year of services, the Company does not expect there will be a significant change in the amount of revenue recognized in an annual period. In the Risk and Insurance Services segment, certain pre-placement costs will be deferred and amortized into earnings when the revenue from the placement is recognized. These costs were previously expensed as incurred. As such, the Company expects the recognition of costs to shift among quarters. In the Consulting segment, the adoption of the new revenue standard will not have a significant impact on the timing of revenue recognition in quarterly or annual periods. In its Consulting segment, the Company incurs implementation costs necessary to facilitate the delivery of the contracted services. Although certain implementation costs are deferred under current GAAP, the Company has concluded that certain additional implementation costs currently expensed under legacy GAAP will be deferred under the new guidance. In addition, the amortization period for these implementation costs will be longer under the new guidance as the amortization period will include the initial contract term plus expected renewals. Currently, deferred implementation costs are amortized over the initial contract term. The cumulative effect of adopting the standard, net of tax, on January 1, 2018 are expected to result in an increase to the opening balance of retained earnings of approximately $ 325 million to $ 425 million , with offsetting increases/decreases to other balance sheet accounts, e.g. accounts receivable, other assets and deferred income taxes. The comparative information and prior periods will not be restated and will continue to be reported under the legacy accounting standards that were in effect for those periods. Other Standards Adopted Effective January 1, 2018 In March 2017, the FASB issued new guidance that changes the presentation of net periodic pension cost and net periodic postretirement cost (''net periodic benefit costs"). The new guidance requires employers to report the service cost component of net periodic benefit costs in the same line item as other compensation costs in the income statement. The other components of net periodic benefit costs are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations. In addition, only the service cost component is eligible for capitalization, when applicable. The guidance is effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods. The new guidance requires retrospective application for the presentation of the service cost component and the other components of net periodic benefit costs as discussed in more detail below, and prospective application for the capitalization of the service cost component. The adoption of this guidance will impact the line item presentation of the Company's results of operations, and will not change income before taxes, net income or earnings per share. When the Company files its financial statements for 2018, the consolidated statements of income for 2017 and 2016 will include the following reclassification: 2017 2016 Risk and Insurance Services $ 140 $ 172 Consulting 64 65 Corporate (3 ) (4 ) Increase in Compensation and Benefits 201 233 Other Net Periodic Benefit Credit (201 ) (233 ) Net Impact of Reclassification $ — $ — In January 2016, the FASB issued new guidance intended to improve the recognition and measurement of financial instruments. The new guidance requires equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income; requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (i.e., securities or loans and receivables) on the balance sheet or the accompanying notes to the financial statements; eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet; and requires a reporting organization to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk (also referred to as "own credit") when the organization has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. The new guidance is effective for public companies for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company holds certain equity investments that are currently treated as available for sale securities, whereby the mark to market change is recorded to other comprehensive income in its consolidated balance sheet. The Company adopted the new accounting guidance prospectively, effective January 1, 2018, recording a cumulative-effect adjustment increase to retained earnings as of the beginning of the period of adoption of $14 million , reflecting the reclassification of cumulative unrealized gains, net of tax as of December 31, 2017 from other comprehensive income to retained earnings. Therefore, prior periods have not been restated. In October 2016, the FASB also issued new guidance which requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. The new guidance eliminates the exception for an intra-entity transfer of an asset other than inventory. The new guidance is effective for public companies for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The new guidance must be applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption. The Company adopted the new guidance prospectively, effective January 1, 2018, recording a cumulative-effect adjustment increase to retained earnings of approximately $15 million as of the beginning of the period of adoption. In November 2016, the FASB issued new guidance which requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash or restricted cash equivalents. As a result, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The new guidance is effective for public companies for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The guidance must be applied retrospectively to all periods presented. Early adoption is permitted. The Company does not expect the adoption of this guidance to impact the Company's consolidated balance sheets or consolidated statements of cash flows. In August 2016, the FASB issued new guidance which adds or clarifies guidance on the classification of certain cash receipts and payments in the statement of cash flows, including cash payments for debt prepayments or debt extinguishment costs, contingent consideration payments made after a business combination and distributions received from equity method investees. The guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The guidance must be applied retrospectively to all periods presented unless retrospective application is impracticable. The Company does not expect the adoption of this guidance to impact the Company's consolidated statements of cash flows. In January 2017, the FASB issued guidance which clarifies the definition of a business in order to assist companies with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The guidance is effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods. The Company does not expect the adoption of this standard to have an impact on the Company's financial position or results of operations. New Accounting Pronouncements Not Yet Adopted: In January 2017, the FASB issued new guidance to simplify the test for goodwill impairment. The new guidance eliminates the second step in the current two-step goodwill impairment process, under which a goodwill impairment loss is measured by comparing the implied fair value of a reporting unit's goodwill with the carrying amount of that goodwill for that reporting unit. The new guidance requires a one-step impairment test, in which the goodwill impairment charge is based on the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. The guidance should be applied on a prospective basis with the nature of and reason for the change in accounting principle disclosed upon transition. The guidance is effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted. The Company does not expect the adoption of this standard to have a material impact on its financial position or results of operations. In February 2016, the FASB issued new guidance intended to improve financial reporting for leases. Under the new guidance, a lessee will be required to recognize assets and liabilities for leases with lease terms of more than 12 months. Consistent with current GAAP, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as a financing or operating lease. However, unlike current GAAP, which requires that only capital leases be recognized on the balance sheet, the new guidance requires that both types of leases be recognized on the balance sheet. The new guidance will require additional disclosures to help investors and other financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. These disclosures include qualitative and quantitative requirements, and additional information about the amounts recorded in the financial statements. The accounting by organizations that own the assets ("lessor") leased by the lessee will remain largely unchanged from current GAAP. However, the guidance contains targeted improvements that are intended to align, where necessary, lessor accounting with the lessee accounting model. The new guidance on leases is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early application is permitted. The Company is currently evaluating the impact the adoption of the guidance will have on its financial position and results of operations, but expects material "right to use" assets and lease liabilities to be recorded on its consolidated balance sheets. |
Summary of Significant Accoun26
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Components of fixed assets | The components of fixed assets are as follows: December 31, (In millions of dollars) 2017 2016 Furniture and equipment $ 1,179 $ 1,113 Land and buildings 385 389 Leasehold and building improvements 974 906 2,538 2,408 Less-accumulated depreciation and amortization (1,826 ) (1,683 ) $ 712 $ 725 |
Diluted earnings per share for continuing operations | Reconciliations of the applicable components used to calculate basic and diluted EPS - Continuing Operations are presented below. The reconciling items related to the EPS calculation are the same for both basic and diluted EPS. Basic and Diluted EPS Calculation - Continuing Operations (In millions, except per share figures) 2017 2016 2015 Net income from continuing operations $ 1,510 $ 1,795 $ 1,636 Less: Net income attributable to non-controlling interests 20 27 37 $ 1,490 $ 1,768 $ 1,599 Basic weighted average common shares outstanding 513 519 531 Dilutive effect of potentially issuable common shares 6 5 5 Diluted weighted average common shares outstanding 519 524 536 Average stock price used to calculate common stock equivalents $ 77.30 $ 63.51 $ 56.27 |
Schedule of Prospective Adoption of New Accounting Pronouncements | When the Company files its financial statements for 2018, the consolidated statements of income for 2017 and 2016 will include the following reclassification: 2017 2016 Risk and Insurance Services $ 140 $ 172 Consulting 64 65 Corporate (3 ) (4 ) Increase in Compensation and Benefits 201 233 Other Net Periodic Benefit Credit (201 ) (233 ) Net Impact of Reclassification $ — $ — |
Supplemental Disclosures (Table
Supplemental Disclosures (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Supplemental Cash Flow Information [Abstract] | |
Additional information concerning acquisitions, interest and income taxes paid | The following schedule provides additional information concerning acquisitions, interest and income taxes paid: (In millions of dollars) 2017 2016 2015 Assets acquired, excluding cash $ 898 $ 960 $ 1,327 Liabilities assumed (134 ) (111 ) (199 ) Contingent/deferred purchase consideration (109 ) (36 ) (176 ) Net cash outflow for acquisitions $ 655 $ 813 $ 952 (In millions of dollars) 2017 2016 2015 Interest paid $ 199 $ 178 $ 146 Income taxes paid, net of refunds $ 583 $ 642 $ 433 |
Analysis of allowance for doubtful accounts | An analysis of the allowance for doubtful accounts is as follows: For the Years Ended December 31, (In millions of dollars) 2017 2016 2015 Balance at beginning of year $ 96 $ 87 $ 95 Provision charged to operations 31 31 14 Accounts written-off, net of recoveries (17 ) (20 ) (18 ) Effect of exchange rate changes and other — (2 ) (4 ) Balance at end of year $ 110 $ 96 $ 87 |
Other Comprehensive Income (L28
Other Comprehensive Income (Loss) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Schedule of accumulated other comprehensive income (loss) | The changes in the balances of each component of Accumulated Other Comprehensive Income ("AOCI") for the years ended December 31, 2017 and 2016 , including amounts reclassified out of AOCI, are as follows: (In millions of dollars) Unrealized Investment Gains (Losses) Pension/Post-Retirement Plans Gains (Losses) Foreign Currency Translation Adjustments Total Balance as of January 1, 2017 $ 19 $ (3,232 ) $ (1,880 ) $ (5,093 ) Other comprehensive (loss) income before reclassifications (5 ) 160 715 870 Amounts reclassified from accumulated other comprehensive loss — 180 — 180 Net current period other comprehensive (loss) income (5 ) 340 715 1,050 Balance as of December 31, 2017 $ 14 $ (2,892 ) $ (1,165 ) $ (4,043 ) (In millions of dollars) Unrealized Investment Gains Pension/Post-Retirement Plans Gains (Losses) Foreign Currency Translation Adjustments Total Balance as of January 1, 2016 $ 6 $ (3,124 ) $ (1,102 ) $ (4,220 ) Other comprehensive income (loss) before reclassifications 13 (294 ) (778 ) (1,059 ) Amounts reclassified from accumulated other comprehensive loss — 186 — 186 Net current period other comprehensive income (loss) 13 (108 ) (778 ) (873 ) Balance as of December 31, 2016 $ 19 $ (3,232 ) $ (1,880 ) $ (5,093 ) The components of accumulated other comprehensive income (loss) are as follows: (In millions of dollars) December 31, 2017 December 31, 2016 Foreign currency translation adjustments (net of deferred tax adjustments of $(11) in 2017 and deferred tax adjustments of $(9) in 2016, respectively) $ (1,165 ) $ (1,880 ) Net unrealized investment gains (net of deferred tax liability of $7 in 2017 and $10 in 2016) 14 19 Net charges related to pension/post-retirement plans (net of deferred tax asset of $1,462 and $1,530 in 2017 and 2016, respectively) (2,892 ) (3,232 ) $ (4,043 ) $ (5,093 ) |
Schedule of other comprehensive income (loss) | The components of other comprehensive income (loss) are as follows: For the Years Ended December 31, 2017 (In millions of dollars) Pre-Tax Tax (Credit) Net of Tax Foreign currency translation adjustments $ 717 $ 2 $ 715 Unrealized investment losses (7 ) (2 ) (5 ) Pension/post-retirement plans: Amortization of losses included in net periodic pension cost: Prior service credits (a) (1 ) — (1 ) Net actuarial losses (a) 167 30 137 Effect of curtailment (a) (1 ) — (1 ) Effect of settlement (a) 54 9 45 Subtotal 219 39 180 Net gains arising during period 374 62 312 Foreign currency translation adjustments (201 ) (36 ) (165 ) Other adjustments 16 3 13 Pension/post-retirement plans gains 408 68 340 Other comprehensive income $ 1,118 $ 68 $ 1,050 (a) Components of net periodic pension cost are included in compensation and benefits in the Consolidated Statements of Income. Tax on prior service gains and net actuarial losses is included in income tax expense. For the Years Ended December 31, 2016 (In millions of dollars) Pre-Tax Tax (Credit) Net of Tax Foreign currency translation adjustments $ (742 ) $ 36 $ (778 ) Unrealized investment gains 21 8 13 Pension/post-retirement plans: Amortization of losses included in net periodic pension cost: Prior service losses (a) 3 1 2 Net actuarial losses (a) 166 46 120 Subtotal 169 47 122 Effect of curtailment 102 38 64 Net losses arising during period (855 ) (175 ) (680 ) Foreign currency translation adjustments 416 70 346 Other adjustments 49 9 40 Pension/post-retirement plans losses (119 ) (11 ) (108 ) Other comprehensive (loss) income $ (840 ) $ 33 $ (873 ) (a) Components of net periodic pension cost are included in compensation and benefits in the Consolidated Statements of Income. Tax on prior service gains and net actuarial losses is included in income tax expense. For the Years Ended December 31, 2015 (In millions of dollars) Pre-Tax Tax (Credit) Net of Tax Foreign currency translation adjustments $ (639 ) $ 4 $ (643 ) Unrealized investment gains 1 — 1 Pension/post-retirement plans: Amortization of (gains) losses included in net periodic pension cost: Prior service credits (a) (1 ) — (1 ) Net actuarial losses (a) 271 96 175 Subtotal 270 96 174 Effect of curtailment (3 ) — (3 ) Plan Termination (6 ) (3 ) (3 ) Net losses arising during period (125 ) (62 ) (63 ) Foreign currency translation adjustments 214 43 171 Other (13 ) (6 ) (7 ) Pension/post-retirement plans gains 337 68 269 Other comprehensive (loss) income $ (301 ) $ 72 $ (373 ) (a) Components of net periodic pension cost are included in compensation and benefits in the Consolidated Statements of Income. Tax on prior service gains and net actuarial losses is included in income tax expense. |
Acquisitions _ Dispositions (Ta
Acquisitions / Dispositions (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Allocation of acquisition costs | The following table presents the preliminary allocation of the acquisition cost to the assets acquired and liabilities assumed, based on their fair values: (In millions) 2017 Cash $ 668 Estimated fair value of deferred/contingent consideration 109 Total consideration $ 777 Allocation of purchase price: Cash and cash equivalents $ 13 Accounts receivable, net 30 Other current assets 6 Property, plant, and equipment 6 Other intangible assets 304 Goodwill 551 Other assets 1 Total assets acquired 911 Current liabilities 25 Other liabilities 109 Total liabilities assumed 134 Net assets acquired $ 777 |
Acquired finite-lived intangible assets | The following chart provides information of other intangible assets acquired during 2017: Amount Weighted Average Amortization Period Client relationships $ 263 12 years Other (a) 41 5 years $ 304 (a) Primarily non-compete agreements, trade names and developed technology |
Pro-forma information | The unaudited pro-forma financial data is presented for illustrative purposes only and is not necessarily indicative of the operating results that would have been achieved if such acquisitions had occurred on the dates indicated, nor is it necessarily indicative of future consolidated results. Years Ended December 31, (In millions, except per share data) 2017 2016 2015 Revenue $ 14,100 $ 13,724 $ 13,528 Income from continuing operations $ 1,514 $ 1,787 $ 1,643 Net income attributable to the Company $ 1,496 $ 1,759 $ 1,606 Basic net income per share: – Continuing operations $ 2.91 $ 3.39 $ 3.02 – Net income attributable to the Company $ 2.92 $ 3.39 $ 3.02 Diluted net income per share: – Continuing operations $ 2.88 $ 3.36 $ 2.99 – Net income attributable to the Company $ 2.88 $ 3.36 $ 2.99 |
Goodwill And Other Intangibles
Goodwill And Other Intangibles (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Changes in the Carrying Amount of Goodwill | Changes in the carrying amount of goodwill are as follows: (In millions of dollars) 2017 2016 Balance as of January 1, as reported $ 8,369 $ 7,889 Goodwill acquired 551 556 Other adjustments (a) 169 (76 ) Balance at December 31, $ 9,089 $ 8,369 (a) Primarily due to the impact of foreign exchange in both years. |
Schedule of Finite-Lived Intangible Assets | The gross cost and accumulated amortization at December 31, 2017 and 2016 are as follows: (In millions of dollars) 2017 2016 Gross Cost Accumulated Amortization Net Carrying Amount Gross Cost Accumulated Amortization Net Carrying Amount Client relationships $ 1,672 $ 518 $ 1,154 $ 1,390 $ 392 $ 998 Other (a) 234 114 120 204 76 128 Amortized intangibles $ 1,906 $ 632 $ 1,274 $ 1,594 $ 468 $ 1,126 (a) Primarily non-compete agreements, trade names and developed technology |
Estimated Future Aggregate Amortization Expense | The estimated future aggregate amortization expense is as follows: For the Years Ending December 31, (In millions of dollars) 2018 $ 180 2019 170 2020 149 2021 139 2022 125 Subsequent years 511 $ 1,274 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Taxes on income | For financial reporting purposes, income before income taxes includes the following components: For the Years Ended December 31, (In millions of dollars) 2017 2016 2015 Income before income taxes: U.S. $ 819 $ 725 $ 702 Other 1,824 1,755 1,605 $ 2,643 $ 2,480 $ 2,307 The expense for income taxes is comprised of: Current– U.S. Federal $ 313 $ 208 $ 90 Other national governments 388 366 385 U.S. state and local 36 43 52 737 617 527 Deferred– U.S. Federal 286 26 125 Other national governments 72 32 15 U.S. state and local 38 10 4 396 68 144 Total income taxes $ 1,133 $ 685 $ 671 |
Deferred income tax assets and liabilities | The significant components of deferred income tax assets and liabilities and their balance sheet classifications are as follows: December 31, (In millions of dollars) 2017 2016 Deferred tax assets: Accrued expenses not currently deductible $ 369 $ 582 Differences related to non-U.S. operations (a) 139 127 Accrued U.S. retirement benefits 394 629 Net operating losses (b) 67 56 Income currently recognized for tax 49 71 Other 31 50 $ 1,049 $ 1,515 Deferred tax liabilities: Differences related to non-U.S. operations $ 235 $ 217 Depreciation and amortization 338 377 Accrued retirement & postretirement benefits - non-U.S. operations 172 10 Other 16 14 $ 761 $ 618 (a) Net of valuation allowances of $18 million in 2017 and $3 million in 2016 . (b) Net of valuation allowances of $11 million in 2017 and $17 million in 2016 . December 31, (In millions of dollars) 2017 2016 Balance sheet classifications: Deferred tax assets $ 669 $ 1,097 Other liabilities $ 381 $ 200 |
U.S. Federal statutory income tax rate | A reconciliation from the U.S. Federal statutory income tax rate to the Company’s effective income tax rate is shown below: For the Years Ended December 31, 2017 2016 2015 U.S. Federal statutory rate 35.0 % 35.0 % 35.0 % U.S. state and local income taxes—net of U.S. Federal income tax benefit 1.5 1.5 1.6 Differences related to non-U.S. operations (8.6 ) (9.2 ) (8.0 ) U.S. Tax Reform 17.4 — — Equity compensation (2.6 ) — — Other 0.2 0.3 0.5 Effective tax rate 42.9 % 27.6 % 29.1 % |
Unrecognized tax benefits | Following is a reconciliation of the Company’s total gross unrecognized tax benefits for the years ended December 31, 2017 , 2016 and 2015 : (In millions of dollars) 2017 2016 2015 Balance at January 1, $ 65 $ 74 $ 97 Additions, based on tax positions related to current year 1 2 3 Additions for tax positions of prior years 14 6 22 Reductions for tax positions of prior years (6 ) (6 ) (10 ) Settlements — (7 ) (20 ) Lapses in statutes of limitation (3 ) (4 ) (18 ) Balance at December 31, $ 71 $ 65 $ 74 |
Retirement Benefits (Tables)
Retirement Benefits (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Defined Benefit Plan [Abstract] | |
Schedule of weighted average actuarial assumptions utilized defined benefit plans | The weighted average actuarial assumptions utilized for the U.S. and significant non-U.S. defined benefit plans and postretirement benefit plans are as follows: Pension Benefits Postretirement Benefits 2017 2016 2017 2016 Weighted average assumptions: Discount rate (for expense) 3.40 % 4.10 % 3.64 % 4.12 % Expected return on plan assets 6.64 % 7.06 % — — Rate of compensation increase (for expense) 1.77 % 2.44 % — — Discount rate (for benefit obligation) 3.07 % 3.40 % 3.21 % 3.64 % Rate of compensation increase (for benefit obligation)* 1.73 % 1.77 % — — *The 2017 and 2016 assumption do not include a rate of compensation increase for the U.S. defined benefit plans since future benefit accruals were discontinued for those plans after December 31, 2016 . The weighted average actuarial assumptions utilized in determining the above amounts for the U.S. defined benefit and other U.S. postretirement plans as of the end of the year are as follows: U.S. Pension Benefits U.S. Postretirement Benefits 2017 2016 2017 2016 Weighted average assumptions: Discount rate (for expense) 4.58 % 4.71 % 4.12 % 4.36 % Expected return on plan assets 7.95 % 8.72 % — — Rate of compensation increase (for expense) — 2.00 % — — Discount rate (for benefit obligation) 3.86 % 4.58 % 3.67 % 4.12 % The weighted average actuarial assumptions utilized for the non-U.S. defined and postretirement benefit plans as of the end of the year are as follows: Non-U.S. Pension Benefits Non-U.S. Postretirement Benefits 2017 2016 2017 2016 Weighted average assumptions: Discount rate (for expense) 2.69 % 3.71 % 3.42 % 4.00 % Expected return on plan assets 6.07 % 6.36 % — — Rate of compensation increase (for expense) 2.85 % 2.72 % — — Discount rate (for benefit obligation) 2.58 % 2.69 % 2.97 % 3.42 % Rate of compensation increase (for benefit obligation) 2.80 % 2.85 % — — |
Schedule of components of net periodic benefit cost for U.S. defined benefit and other postretirement benefit plans | The components of the net periodic benefit cost for the non-U.S. defined benefit and other postretirement benefit plans and the curtailment, settlement and termination expenses are as follows: For the Years Ended December 31, Non-U.S. Pension Benefits Non-U.S. Postretirement Benefits (In millions of dollars) 2017 2016 2015 2017 2016 2015 Service cost $ 76 $ 72 $ 82 $ 1 $ 2 $ 2 Interest cost 233 273 333 2 3 3 Expected return on plan assets (564 ) (561 ) (604 ) — — — Amortization of prior service credit (2 ) (1 ) (1 ) (2 ) — — Recognized actuarial loss 130 94 125 1 — 1 Net periodic benefit (credit) cost (127 ) (123 ) (65 ) 2 5 6 Settlement loss 54 — 1 — — — Curtailment (gain) loss (1 ) (4 ) 5 — — — Total (credit) cost $ (74 ) $ (127 ) $ (59 ) $ 2 $ 5 $ 6 The components of the net periodic benefit cost (credit) for the U.S. defined benefit and other postretirement benefit plans are as follows: U.S. Plans only Pension Benefits Postretirement Benefits For the Years Ended December 31, (In millions of dollars) 2017 2016 2015 2017 2016 2015 Service cost $ — $ 106 $ 114 $ — $ — $ 1 Interest cost 264 264 254 2 2 2 Expected return on plan assets (357 ) (379 ) (373 ) — — — Amortization of prior service (credit) cost — — — 3 4 3 Recognized actuarial loss (gain) 37 74 146 (1 ) (2 ) (2 ) Net periodic benefit (credit) cost $ (56 ) $ 65 $ 141 $ 4 $ 4 $ 4 Plan termination — — — — — (128 ) Total (credit) cost $ (56 ) $ 65 $ 141 $ 4 $ 4 $ (124 ) The components of the net periodic benefit cost for defined benefit and other postretirement plans are as follows: Combined U.S. and significant non-U.S. Plans Pension Postretirement For the Years Ended December 31, Benefits Benefits (In millions of dollars) 2017 2016 2015 2017 2016 2015 Service cost $ 76 $ 178 $ 196 $ 1 $ 2 $ 3 Interest cost 497 537 587 4 5 5 Expected return on plan assets (921 ) (940 ) (977 ) — — — Amortization of prior service (credit) cost (2 ) (1 ) (1 ) 1 4 3 Recognized actuarial loss (gain) 167 168 271 — (2 ) (1 ) Net periodic benefit (credit) cost $ (183 ) $ (58 ) $ 76 $ 6 $ 9 $ 10 Curtailment (loss) gain (1 ) (4 ) 5 — — — Plan termination — — — — — (128 ) Settlement loss 54 — 1 — — — Total (credit) cost $ (130 ) $ (62 ) $ 82 $ 6 $ 9 $ (118 ) |
Schedule of MMC's defined benefit plans and postretirement plans | The following schedules provide information concerning the Company’s U.S. defined benefit pension plans and postretirement benefit plans: U.S. Pension Benefits U.S. Postretirement Benefits (In millions of dollars) 2017 2016 2017 2016 Change in benefit obligation: Benefit obligation at beginning of year $ 5,894 $ 5,685 $ 37 $ 40 Service cost — 106 — — Interest cost 264 264 2 2 Employee contributions — — 3 3 Effect of curtailment — (98 ) — — Actuarial loss (gain) 538 160 3 — Benefits paid (475 ) (223 ) (9 ) (8 ) Benefit obligation, December 31 $ 6,221 $ 5,894 $ 36 $ 37 Change in plan assets: Fair value of plan assets at beginning of year $ 4,365 $ 4,160 $ 2 $ 3 Actual return on plan assets 812 401 — — Employer contributions 85 27 6 5 Employee contributions — — 3 3 Benefits paid (475 ) (223 ) (9 ) (8 ) Other — — — (1 ) Fair value of plan assets, December 31 $ 4,787 $ 4,365 $ 2 $ 2 Net funded status, December 31 $ (1,434 ) $ (1,529 ) $ (34 ) $ (35 ) Amounts recognized in the consolidated balance sheets: Current liabilities $ (27 ) $ (27 ) $ (2 ) $ (2 ) Non-current liabilities (1,407 ) (1,502 ) (32 ) (33 ) Net liability recognized, December 31 $ (1,434 ) $ (1,529 ) $ (34 ) $ (35 ) Amounts recognized in other comprehensive income (loss): Prior service (cost) credit $ — $ — $ — $ (3 ) Net actuarial (loss) gain (1,766 ) (1,720 ) 6 11 Total recognized accumulated other comprehensive (loss) income, December 31 $ (1,766 ) $ (1,720 ) $ 6 $ 8 Cumulative employer contributions in excess of (less than) net periodic cost 332 191 (40 ) (43 ) Net amount recognized in consolidated balance sheet $ (1,434 ) $ (1,529 ) $ (34 ) $ (35 ) Accumulated benefit obligation at December 31 $ 6,221 $ 5,894 $ — $ — U.S. Pension Benefits U.S. Postretirement Benefits (In millions of dollars) 2017 2016 2017 2016 Reconciliation of prior service credit (cost) recognized in accumulated other comprehensive income (loss): Beginning balance $ — $ — $ (3 ) $ (7 ) Recognized as component of net periodic benefit cost — — 3 4 Prior service cost, December 31 $ — $ — $ — $ (3 ) The following schedules provide information concerning the Company’s non-U.S. defined benefit pension plans and non-U.S. postretirement benefit plans: Non-U.S. Pension Benefits Non-U.S. Postretirement Benefits (In millions of dollars) 2017 2016 2017 2016 Change in benefit obligation: Benefit obligation at beginning of year $ 9,670 $ 9,076 $ 81 $ 79 Service cost 76 72 1 2 Interest cost 233 273 2 3 Employee contributions 7 7 — — Actuarial (gain) loss (149 ) 1,966 — 5 Plan amendments — (49 ) (17 ) — Effect of settlement (211 ) (27 ) — — Effect of curtailment (1 ) (7 ) — — Benefits paid (291 ) (352 ) (3 ) (3 ) Foreign currency changes 703 (1,290 ) 4 (5 ) Other 16 1 — — Benefit obligation December 31 $ 10,053 $ 9,670 $ 68 $ 81 Change in plan assets: Fair value of plan assets at beginning of year $ 10,017 $ 9,826 $ — $ — Actual return on plan assets 875 1,815 — — Effect of settlement (211 ) (27 ) — — Company contributions 229 187 3 3 Employee contributions 7 7 — — Benefits paid (291 ) (352 ) (3 ) (3 ) Foreign currency changes 749 (1,439 ) — — Other 13 — — — Fair value of plan assets, December 31 $ 11,388 $ 10,017 $ — $ — Net funded status, December 31 $ 1,335 $ 347 $ (68 ) $ (81 ) Amounts recognized in the consolidated balance sheets: Non-current assets $ 1,684 $ 766 $ — $ — Current liabilities (6 ) (5 ) (4 ) (3 ) Non-current liabilities (343 ) (414 ) (64 ) (78 ) Net asset (liability) recognized, December 31 $ 1,335 $ 347 $ (68 ) $ (81 ) Amounts recognized in other comprehensive (loss) income: Prior service credit $ 43 $ 43 $ 15 $ — Net actuarial loss (2,646 ) (3,081 ) (10 ) (11 ) Total recognized accumulated other comprehensive (loss) income, December 31 $ (2,603 ) $ (3,038 ) $ 5 $ (11 ) Cumulative employer contributions in excess of (less than) net periodic cost 3,938 3,385 (73 ) (70 ) Net asset (liability) recognized in consolidated balance sheets, December 31 $ 1,335 $ 347 $ (68 ) $ (81 ) Accumulated benefit obligation, December 31 $ 9,783 $ 9,397 $ — $ — Non-U.S. Pension Benefits Non-U.S. Postretirement Benefits (In millions of dollars) 2017 2016 2017 2016 Reconciliation of prior service credit (cost) recognized in accumulated other comprehensive income (loss): Beginning balance $ 43 $ (3 ) $ — $ — Recognized as component of net periodic benefit credit: Amortization of prior service credit (2 ) (1 ) (2 ) — Effect of curtailment (1 ) — — — Total recognized as component of net periodic benefit credit (3 ) (1 ) (2 ) — Changes in plan assets and benefit obligations recognized in other comprehensive income: Plan amendments — 49 17 — Exchange rate adjustments 3 (2 ) — — Prior service credit, December 31 $ 43 $ 43 $ 15 $ — Non-U.S. Pension Benefits Non-U.S. Postretirement Benefits (In millions of dollars) 2017 2016 2017 2016 Reconciliation of net actuarial (loss) gain recognized in accumulated other comprehensive (loss) income: Beginning balance $ (3,081 ) $ (2,887 ) $ (11 ) $ (6 ) Recognized as component of net periodic benefit cost: Amortization of net loss 130 94 1 — Effect of settlement 54 — — — Total recognized as component of net periodic benefit credit 184 94 1 — Changes in plan assets and benefit obligations recognized in other comprehensive income (loss): Liability experience 149 (1,966 ) — (5 ) Asset experience 311 1,254 — — Other (5 ) — — — Effect of curtailment 1 3 — — Total amount recognized as change in plan assets and benefit obligations 456 (709 ) — (5 ) Exchange rate adjustments (205 ) 421 — — Net actuarial loss, December 31 $ (2,646 ) $ (3,081 ) $ (10 ) $ (11 ) For the Years Ended December 31, Non-U.S. Pension Benefits Non-U.S. Postretirement Benefits (In millions of dollars) 2017 2016 2015 2017 2016 2015 Total recognized in net periodic benefit cost and other comprehensive loss (income) $ (513 ) $ 21 $ (407 ) $ (14 ) $ 10 $ (2 ) |
Schedule of total recognized in net periodic benefit cost and other comprehensive income (loss) | U.S. Pension Benefits U.S. Postretirement Benefits (In millions of dollars) 2017 2016 2017 2016 Reconciliation of prior service credit (cost) recognized in accumulated other comprehensive income (loss): Beginning balance $ — $ — $ (3 ) $ (7 ) Recognized as component of net periodic benefit cost — — 3 4 Prior service cost, December 31 $ — $ — $ — $ (3 ) U.S. Pension Benefits U.S. Postretirement Benefits (In millions of dollars) 2017 2016 2017 2016 Reconciliation of net actuarial (loss) gain recognized in accumulated other comprehensive income (loss): Beginning balance $ (1,720 ) $ (1,754 ) $ 11 $ 13 Recognized as component of net periodic benefit cost (credit) 37 74 (1 ) (2 ) Changes in plan assets and benefit obligations recognized in other comprehensive income (loss): Effect of curtailment — 98 — — Other — — (1 ) — Liability experience (538 ) (160 ) (3 ) — Asset experience 455 22 — — Total (loss) gain recognized as change in plan assets and benefit obligations (83 ) (40 ) (4 ) — Net actuarial (loss) gain, December 31 $ (1,766 ) $ (1,720 ) $ 6 $ 11 Non-U.S. Pension Benefits Non-U.S. Postretirement Benefits (In millions of dollars) 2017 2016 2017 2016 Reconciliation of prior service credit (cost) recognized in accumulated other comprehensive income (loss): Beginning balance $ 43 $ (3 ) $ — $ — Recognized as component of net periodic benefit credit: Amortization of prior service credit (2 ) (1 ) (2 ) — Effect of curtailment (1 ) — — — Total recognized as component of net periodic benefit credit (3 ) (1 ) (2 ) — Changes in plan assets and benefit obligations recognized in other comprehensive income: Plan amendments — 49 17 — Exchange rate adjustments 3 (2 ) — — Prior service credit, December 31 $ 43 $ 43 $ 15 $ — Non-U.S. Pension Benefits Non-U.S. Postretirement Benefits (In millions of dollars) 2017 2016 2017 2016 Reconciliation of net actuarial (loss) gain recognized in accumulated other comprehensive (loss) income: Beginning balance $ (3,081 ) $ (2,887 ) $ (11 ) $ (6 ) Recognized as component of net periodic benefit cost: Amortization of net loss 130 94 1 — Effect of settlement 54 — — — Total recognized as component of net periodic benefit credit 184 94 1 — Changes in plan assets and benefit obligations recognized in other comprehensive income (loss): Liability experience 149 (1,966 ) — (5 ) Asset experience 311 1,254 — — Other (5 ) — — — Effect of curtailment 1 3 — — Total amount recognized as change in plan assets and benefit obligations 456 (709 ) — (5 ) Exchange rate adjustments (205 ) 421 — — Net actuarial loss, December 31 $ (2,646 ) $ (3,081 ) $ (10 ) $ (11 ) U.S. Pension Benefits U.S. Postretirement Benefits (In millions of dollars) 2017 2016 2017 2016 Reconciliation of net actuarial (loss) gain recognized in accumulated other comprehensive income (loss): Beginning balance $ (1,720 ) $ (1,754 ) $ 11 $ 13 Recognized as component of net periodic benefit cost (credit) 37 74 (1 ) (2 ) Changes in plan assets and benefit obligations recognized in other comprehensive income (loss): Effect of curtailment — 98 — — Other — — (1 ) — Liability experience (538 ) (160 ) (3 ) — Asset experience 455 22 — — Total (loss) gain recognized as change in plan assets and benefit obligations (83 ) (40 ) (4 ) — Net actuarial (loss) gain, December 31 $ (1,766 ) $ (1,720 ) $ 6 $ 11 |
Schedule of amounts recognized in other comprehensive income (loss) | For the Years Ended December 31, Non-U.S. Pension Benefits Non-U.S. Postretirement Benefits (In millions of dollars) 2017 2016 2015 2017 2016 2015 Total recognized in net periodic benefit cost and other comprehensive loss (income) $ (513 ) $ 21 $ (407 ) $ (14 ) $ 10 $ (2 ) For the Years Ended December 31, U.S. Pension Benefits U.S. Postretirement Benefits (In millions of dollars) 2017 2016 2015 2017 2016 2015 Total recognized in net periodic benefit cost and other comprehensive (income) loss $ (10 ) $ 31 $ 146 $ 5 $ 2 $ (138 ) |
Schedule of estimated amounts that will be amortized from accumulated other comprehensive in the next fiscal year | Estimated amounts that will be amortized from accumulated other comprehensive loss to net periodic pension cost in the next fiscal year: U.S. Pension Benefits U.S. Postretirement Benefits (In millions of dollars) 2018 2018 Net actuarial loss $ 54 $ 1 Estimated amounts that will be amortized from accumulated other comprehensive loss to net periodic pension cost in the next fiscal year: Non-U.S. Pension Benefits Non-U.S. Postretirement Benefits (In millions of dollars) 2018 2018 Prior service credit $ (2 ) $ (2 ) Net actuarial loss 90 — Projected cost $ 88 $ (2 ) |
Schedule of change in assumed health care cost trend rates | A one percentage point change in assumed health care cost trend rates would have the following effects: (In millions of dollars) 1 Percentage Point Increase 1 Percentage Point Decrease Effect on total of service and interest cost components $ — $ — Effect on postretirement benefit obligation $ 7 $ (6 ) |
Schedule of estimated future benefit payments for its pension and postretirement benefits | The estimated future benefit payments for the Company's pension and postretirement benefit plans are as follows: For the Years Ended December 31, Pension Benefits Postretirement Benefits (In millions of dollars) U.S. Non-U.S. U.S. Non-U.S. 2018 $ 254 $ 279 $ 4 $ 3 2019 $ 268 $ 297 $ 4 $ 4 2020 $ 285 $ 305 $ 4 $ 4 2021 $ 294 $ 316 $ 4 $ 3 2022 $ 303 $ 326 $ 3 $ 3 2023-2027 $ 1,642 $ 1,837 $ 14 $ 17 |
Summary of the U.S. and non-U.S. plans investments measured at fair value on a recurring basis | The following table sets forth, by level within the fair value hierarchy, a summary of the U.S. and non-U.S. plans' investments measured at fair value on a recurring basis at December 31, 2017 and 2016 : Fair Value Measurements at December 31, 2017 Assets (In millions of dollars) Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) NAV Total Common/collective trusts $ 375 $ — $ — $ 7,611 $ 7,986 Corporate obligations — 3,620 20 — 3,640 Corporate stocks 1,467 34 2 — 1,503 Private equity/partnerships — — — 803 803 Government securities 15 556 — — 571 Real estate — — — 566 566 Short-term investment funds 391 16 — — 407 Company common stock 326 — — — 326 Other investments 12 12 350 — 374 Total investments $ 2,586 $ 4,238 $ 372 $ 8,980 $ 16,176 Fair Value Measurements at December 31, 2016 Assets (In millions of dollars) Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) NAV Total Common/collective trusts $ 16 $ — $ — $ 6,805 $ 6,821 Corporate obligations — 3,024 9 — 3,033 Corporate stocks 2,009 3 2 — 2,014 Private equity/partnerships — — — 722 722 Government securities 11 380 — — 391 Real estate — — — 412 412 Short-term investment funds 297 22 — — 319 Company common stock 270 — — — 270 Other investments 15 23 312 — 350 Total investments $ 2,618 $ 3,452 $ 323 $ 7,939 $ 14,332 |
Summary of changes in the fair value of the plans' Level 3 assets | The tables below set forth a summary of changes in the fair value of the plans’ Level 3 assets for the years ended December 31, 2017 and December 31, 2016 : Assets (In millions) Fair Value, January 1, 2017 Purchases Sales Unrealized Gain/ (Loss) Realized Gain/ (Loss) Exchange Rate Impact Transfers in/(out) and Other Fair Value, December 31, 2017 Other investments $ 312 $ 20 $ (15 ) $ (7 ) $ — $ 40 $ — $ 350 Corporate stocks 2 — — — — — — 2 Corporate obligations 9 9 (1 ) 9 — 1 (7 ) 20 Total assets $ 323 $ 29 $ (16 ) $ 2 $ — $ 41 $ (7 ) $ 372 Assets (In millions) Fair Value, Purchases Sales Unrealized Realized Exchange Transfers Fair Other investments $ 257 $ 27 $ (28 ) $ 67 $ 1 $ (12 ) $ — $ 312 Corporate stocks 2 — — — — — — 2 Corporate obligations 1 8 — 1 — (1 ) — 9 Total assets $ 260 $ 35 $ (28 ) $ 68 $ 1 $ (13 ) $ — $ 323 |
Stock Benefit Plans (Tables)
Stock Benefit Plans (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Option pricing valuation model for options granted | The assumptions used in the Black-Scholes option pricing valuation model for options granted by the Company in 2017 , 2016 and 2015 are as follows: 2017 2016 2015 Risk-free interest rate 2.09% 1.39% 1.78% Expected life (in years) 6.0 6.0 6.0 Expected volatility 23.23% 25.55% 23.75% Expected dividend yield 1.86% 2.15% 1.97% |
Summary of the status of MMC's stock option awards | A summary of the status of the Company’s stock option awards as of December 31, 2017 and changes during the year then ended is presented below: Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value ($000) Balance at January 1, 2017 13,242,529 $ 39.15 Granted 1,710,853 $ 73.20 Exercised (4,258,027 ) $ 30.42 Forfeited (494,653 ) $ 62.00 Balance at December 31, 2017 10,200,702 $ 47.39 5.9 years $ 351,317 Options vested or expected to vest at December 31, 2017 10,052,720 $ 47.17 5.9 years $ 348,494 Options exercisable at December 31, 2017 6,247,224 $ 37.75 4.6 years $ 275,398 |
Summary of restricted stock units and performance stock units | A summary of the status of the Company's restricted stock units and performance stock units as of December 31, 2017 and changes during the period then ended is presented below: Restricted Stock Units Performance Stock Units Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value Non-vested balance at January 1, 2017 3,044,029 $ 56.40 722,017 $ 54.68 Granted 2,610,599 $ 73.23 260,387 $ 73.20 Vested (1,307,825 ) $ 55.31 (212,458 ) $ 48.19 Forfeited (294,056 ) $ 65.06 (79,345 ) $ 61.92 Non-vested balance at December 31, 2017 4,052,747 $ 66.97 690,601 $ 62.82 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Assets and liabilities measured at fair value on a recurring basis | The following fair value hierarchy table presents information about the Company’s assets and liabilities measured at fair value on a recurring basis as of December 31, 2017 and 2016 : (In millions of dollars) Identical Assets (Level 1) Observable Inputs (Level 2) Unobservable Inputs (Level 3) Total 12/31/17 12/31/16 12/31/17 12/31/16 12/31/17 12/31/16 12/31/17 12/31/16 Assets: Financial instruments owned: Exchange traded equity securities (a) $ 81 $ 89 $ — $ — $ — $ — $ 81 $ 89 Mutual funds (a) 158 141 — — — — 158 141 Money market funds (b) 143 22 — — — — 143 22 Total assets measured at fair value $ 382 $ 252 $ — $ — $ — $ — $ 382 $ 252 Fiduciary Assets: Money market funds $ 111 $ 90 $ — $ — $ — $ — $ 111 $ 90 Total fiduciary assets measured at fair value $ 111 $ 90 $ — $ — $ — $ — $ 111 $ 90 Liabilities: Contingent purchase consideration liability (c) $ — $ — $ — $ — $ 189 $ 241 $ 189 $ 241 Total liabilities measured at fair value $ — $ — $ — $ — $ 189 $ 241 $ 189 $ 241 (a) Included in other assets in the consolidated balance sheets. (b) Included in cash and cash equivalents in the consolidated balance sheets. (c) Included in accounts payable and accrued liabilities and other liabilities in the consolidated balance sheets. |
Changes in fair value of level 3 liabilities representing acquisition related contingent consideration | The table below sets forth a summary of the changes in fair value of the Company’s Level 3 liabilities for the years ended December 31, 2017 and December 31, 2016 that represent contingent purchase consideration related to acquisitions: (In millions) 2017 2016 Balance at January 1, $ 241 $ 309 Additions 51 17 Payments (108 ) (86 ) Revaluation Impact 3 9 Other (a) 2 (8 ) Balance at December 31, $ 189 $ 241 |
Equity method investments summarized financial information | Below is a summary of the financial information for the Company's equity method investees: For the Twelve Months Ended September 30, (In millions of dollars) 2017 2016 2015 Revenue $ 628 $ 843 $ 1,018 Net investment income (a) $ 1,834 $ 1,824 $ 1,620 Net income $ 476 $ 91 $ 196 As of September 30, (In millions of dollars) 2017 2016 Total assets $ 24,739 $ 22,997 Total liabilities $ 22,817 $ 21,087 Non-controlling interests $ 19 $ 12 (a) Net investment income in 2017, 2016 and 2015 includes approximately $1.5 billion , $1.9 billion and $1.5 billion , respectively, related to Alexander Forbes, substantially all of which is credited to policy holders. |
Long-Term Commitments (Tables)
Long-Term Commitments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future minimum rental payments for operating leases | At December 31, 2017 , the aggregate future minimum rental commitments under all non-cancelable operating lease agreements are as follows: For the Years Ended December 31, Gross Rental Commitments Rentals from Subleases Net Rental Commitments (In millions of dollars) 2018 $ 355 $ 41 $ 314 2019 $ 316 $ 34 $ 282 2020 $ 291 $ 31 $ 260 2021 $ 226 $ 3 $ 223 2022 $ 207 $ 1 $ 206 Subsequent years $ 773 $ 1 $ 772 |
Future minimum rental commitments | At December 31, 2017 , the aggregate fixed future minimum commitments under these agreements are as follows: For the Years Ended December 31, Future Minimum Commitments (In millions of dollars) 2018 $ 228 2019 106 2020 28 Subsequent years 25 $ 387 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Company’s outstanding debt | The Company’s outstanding debt is as follows: December 31, (In millions) 2017 2016 Short-term: Commercial paper $ — $ 50 Current portion of long-term debt 262 262 262 312 Long-term: Senior notes – 2.30% due 2017 — 250 Senior notes – 2.55% due 2018 250 249 Senior notes – 2.35% due 2019 299 299 Senior notes – 2.35% due 2020 498 497 Senior notes – 4.80% due 2021 498 498 Senior notes – 2.75% due 2022 496 — Senior notes – 3.30% due 2023 348 347 Senior notes – 4.05% due 2023 248 248 Senior notes – 3.50% due 2024 596 596 Senior notes – 3.50% due 2025 496 495 Senior notes – 3.75% due 2026 596 596 Senior notes – 5.875% due 2033 297 297 Senior notes – 4.35% due 2047 492 — Mortgage – 5.70% due 2035 370 382 Other 3 3 5,487 4,757 Less current portion 262 262 $ 5,225 $ 4,495 |
Estimated fair value of short-term and long-term debt | The fair value amounts shown below are not necessarily indicative of the amounts that the Company would realize upon disposition, nor do they indicate the Company’s intent or need to dispose of the financial instrument. December 31, 2017 December 31, 2016 (In millions of dollars) Carrying Fair Carrying Fair Short-term debt $ 262 $ 264 $ 312 $ 313 Long-term debt $ 5,225 $ 5,444 $ 4,495 $ 4,625 |
Integration and Restructuring37
Integration and Restructuring Costs (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Restructuring and Related Activities [Abstract] | |
Restructuring activities | Details of the restructuring liability activity from January 1, 2016 through December 31, 2017 , including actions taken prior to 2017 , are as follows: (In millions) Balance at 1/1/16 Expense Incurred Cash Paid Other Balance at 12/31/16 Expense Incurred Cash Paid Other Balance at 12/31/17 Severance $ 15 $ 40 $ (22 ) $ (1 ) $ 32 $ 31 $ (49 ) $ 1 $ 15 Future rent under non-cancelable leases and other costs 78 4 (17 ) (4 ) 61 9 (22 ) 2 50 Total $ 93 $ 44 $ (39 ) $ (5 ) $ 93 $ 40 $ (71 ) $ 3 $ 65 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Selected information and details for MMC's operating segments | Selected information about the Company’s segments and geographic areas of operation are as follows: For the Year Ended December 31, (In millions of dollars) Revenue Operating Income (Loss) Total Assets Depreciation and Amortization Capital Expenditures 2017 – Risk and Insurance Services $ 7,630 (a) $ 1,871 $ 16,490 $ 282 $ 139 Consulting 6,444 (b) 1,174 8,200 129 88 Total Segments 14,074 3,045 24,690 411 227 Corporate/Eliminations (50 ) (189 ) (4,261 ) (c) 70 75 Total Consolidated $ 14,024 $ 2,856 $ 20,429 $ 481 $ 302 2016 – Risk and Insurance Services $ 7,143 (a) $ 1,753 $ 14,728 $ 248 $ 128 Consulting 6,112 (b) 1,103 6,770 121 68 Total Segments 13,255 2,856 21,498 369 196 Corporate/Eliminations (44 ) (192 ) (3,308 ) (c) 69 57 Total Consolidated $ 13,211 $ 2,664 $ 18,190 $ 438 $ 253 2015 – Risk and Insurance Services $ 6,869 (a) $ 1,539 $ 13,290 $ 240 $ 136 Consulting 6,064 (b) 1,075 6,485 120 108 Total Segments 12,933 2,614 19,775 360 244 Corporate/Eliminations (40 ) (195 ) (1,559 ) (c) 63 81 Total Consolidated $ 12,893 $ 2,419 $ 18,216 $ 423 $ 325 (a) Includes inter-segment revenue of $5 million in 2017 and $6 million in both 2016 and 2015 , interest income on fiduciary funds of $39 million , $26 million and $21 million in 2017 , 2016 and 2015 , respectively, and equity method income of $14 million , $12 million and $6 million in 2017 , 2016 and 2015 , respectively. (b) Includes inter-segment revenue of $45 million , $38 million and $34 million in 2017 , 2016 and 2015 , respectively, interest income on fiduciary funds of $4 million , $3 million and $4 million in 2017 , 2016 and 2015 , respectively and equity method income of $17 million , $19 million and $21 million in 2017 , 2016 and 2015 , respectively. (c) Corporate assets primarily include insurance recoverables, pension related assets, the owned portion of the Company headquarters building and intercompany eliminations. |
Details of operating segment revenue | Details of operating segment revenue are as follows: For the Years Ended December 31, (In millions of dollars) 2017 2016 2015 Risk and Insurance Services Marsh $ 6,433 $ 5,997 $ 5,745 Guy Carpenter 1,197 1,146 1,124 Total Risk and Insurance Services 7,630 7,143 6,869 Consulting Mercer 4,528 4,323 4,313 Oliver Wyman Group 1,916 1,789 1,751 Total Consulting 6,444 6,112 6,064 Total Segments 14,074 13,255 12,933 Corporate/Eliminations (50 ) (44 ) (40 ) Total $ 14,024 $ 13,211 $ 12,893 |
Information by geographic area | Information by geographic area is as follows: For the Years Ended December 31, (In millions of dollars) 2017 2016 2015 Revenue United States $ 6,870 $ 6,573 $ 6,316 United Kingdom 2,112 2,019 2,036 Continental Europe 2,197 2,022 1,902 Asia Pacific 1,517 1,363 1,333 Other 1,378 1,278 1,346 14,074 13,255 12,933 Corporate/Eliminations (50 ) (44 ) (40 ) Total $ 14,024 $ 13,211 $ 12,893 For the Years Ended December 31, (In millions of dollars) 2017 2016 2015 Fixed Assets, Net United States $ 399 $ 412 $ 460 United Kingdom 91 94 115 Continental Europe 57 53 57 Asia Pacific 78 76 49 Other 87 90 92 Total $ 712 $ 725 $ 773 |
Selected Quarterly Financial 39
Selected Quarterly Financial Data and Supplemental Information (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Data [Abstract] | |
Schedule of Quarterly Financial Data and Supplemental Information | First Quarter Second Quarter Third Quarter Fourth Quarter (In millions, except per share figures) 2017: Revenue $ 3,503 $ 3,495 $ 3,341 $ 3,685 Operating income $ 809 $ 764 $ 597 $ 686 Income from continuing operations $ 578 $ 507 $ 397 $ 28 Discontinued operations, net of tax $ — $ — $ — $ 2 Net income attributable to the Company $ 569 $ 501 $ 393 $ 29 Basic Per Share Data (a) : Continuing operations $ 1.10 $ 0.98 $ 0.77 $ 0.05 Discontinued operations, net of tax $ — $ — $ — $ 0.01 Net income attributable to the Company $ 1.10 $ 0.98 $ 0.77 $ 0.06 Diluted Per Share Data (a) : Continuing operations $ 1.09 $ 0.96 $ 0.76 $ 0.05 Discontinued operations, net of tax $ — $ — $ — $ 0.01 Net income attributable to the Company $ 1.09 $ 0.96 $ 0.76 $ 0.06 Dividends Paid Per Share $ 0.34 $ 0.34 $ 0.375 $ 0.375 2016: Revenue $ 3,336 $ 3,376 $ 3,135 $ 3,364 Operating income $ 733 $ 726 $ 572 $ 633 Income from continuing operations $ 490 $ 480 $ 384 $ 441 Discontinued operations, net of tax $ — $ — $ — $ — Net income attributable to the Company $ 481 $ 472 $ 379 $ 436 Basic Per Share Data: Continuing operations $ 0.92 $ 0.91 $ 0.73 $ 0.85 Discontinued operations, net of tax $ — $ — $ — $ — Net income attributable to the Company $ 0.92 $ 0.91 $ 0.73 $ 0.85 Diluted Per Share Data: Continuing operations $ 0.91 $ 0.90 $ 0.73 $ 0.84 Discontinued operations, net of tax $ — $ — $ — $ — Net income attributable to the Company $ 0.91 $ 0.90 $ 0.73 $ 0.84 Dividends Paid Per Share $ 0.31 $ 0.31 $ 0.34 $ 0.34 |
Summary of Significant Accoun40
Summary of Significant Accounting Policies (Narratives) (Details) | 3 Months Ended | 12 Months Ended | |||||||||||
Dec. 31, 2017USD ($)shares | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($)shares | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2017USD ($)segmentshares | Dec. 31, 2016USD ($)shares | Dec. 31, 2015USD ($)shares | Mar. 31, 2018USD ($) | Jan. 01, 2018USD ($) | |
Schedule of Equity Method Investments [Line Items] | |||||||||||||
Number of business segments | segment | 2 | ||||||||||||
Uncollected premiums and claims, net of related payables | $ 6,800,000,000 | $ 7,000,000,000 | $ 6,800,000,000 | $ 7,000,000,000 | |||||||||
Restricted cash and cash equivalents | 187,000,000 | 187,000,000 | |||||||||||
Investment income (less than) | 15,000,000 | 1,000,000 | $ 38,000,000 | ||||||||||
Indefinite-lived intangible assets | 0 | 0 | 0 | 0 | |||||||||
Capitalized computer software costs | 488,000,000 | 482,000,000 | 488,000,000 | 482,000,000 | |||||||||
Capitalized computer software costs accumulated amortization | $ 1,300,000,000 | $ 1,100,000,000 | $ 1,300,000,000 | $ 1,100,000,000 | |||||||||
Stock options outstanding (in shares) | shares | 10,200,702 | 13,242,529 | 10,200,702 | 13,242,529 | 14,800,000 | ||||||||
Retained earnings | $ 13,140,000,000 | $ 12,388,000,000 | $ 13,140,000,000 | $ 12,388,000,000 | |||||||||
Operating Income (Loss) | 686,000,000 | $ 597,000,000 | $ 764,000,000 | $ 809,000,000 | $ 633,000,000 | $ 572,000,000 | $ 726,000,000 | $ 733,000,000 | 2,856,000,000 | 2,664,000,000 | $ 2,419,000,000 | ||
Effective income tax rate reconciliation, share-based compensation, excess tax benefit, amount | 79,000,000 | ||||||||||||
Adjustments to additional paid in capital, income tax benefit from share-based compensation | 44,000,000 | 53,000,000 | |||||||||||
Mercer Consulting Group | |||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||
Assets in trusts or funds for management or trustee fee | 227,000,000,000 | $ 227,000,000,000 | |||||||||||
Minimum | Software Development | |||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||
Property, plant and equipment, useful life | 3 years | ||||||||||||
Maximum | Software Development | |||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||
Property, plant and equipment, useful life | 10 years | ||||||||||||
Risk and Insurance Services Segment | |||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||
Interest income, fiduciary assets | $ 39,000,000 | 26,000,000 | 21,000,000 | ||||||||||
Consulting Segment | |||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||
Interest income, fiduciary assets | $ 4,000,000 | $ 3,000,000 | $ 4,000,000 | ||||||||||
Customer Lists | Minimum | |||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||
Intangible asset useful life | 10 years | ||||||||||||
Customer Lists | Maximum | |||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||
Intangible asset useful life | 15 years | ||||||||||||
Previously Reported | |||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||
Retained earnings | 325,000,000 | $ 325,000,000 | |||||||||||
Forecast | |||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||
Cumulative effect of new accounting principle in period of adoption | $ 15,000,000 | ||||||||||||
Retained earnings | $ 425,000,000 | ||||||||||||
Retained Earnings | |||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||
Cumulative effect of new accounting principle in period of adoption | $ 14,000,000 | $ 14,000,000 |
Summary of Significant Accoun41
Summary of Significant Accounting Policies (Components of Fixed Assets) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 2,538 | $ 2,408 | |
Less-accumulated depreciation and amortization | (1,826) | (1,683) | |
Property, plant and equipment, net | 712 | 725 | $ 773 |
Furniture and Equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 1,179 | 1,113 | |
Land and Building | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 385 | 389 | |
Leasehold Improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 974 | $ 906 | |
Minimum | Furniture and Equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, useful life | 3 years | ||
Minimum | Building | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, useful life | 30 years | ||
Maximum | Furniture and Equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, useful life | 10 years | ||
Maximum | Building | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, useful life | 40 years |
Summary of Significant Accoun42
Summary of Significant Accounting Policies (Basic and Diluted EPS Calculation for Continuing Operations) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||
Income from continuing operations | $ 28 | $ 397 | $ 507 | $ 578 | $ 441 | $ 384 | $ 480 | $ 490 | $ 1,510 | $ 1,795 | $ 1,636 |
Less: Net income attributable to non-controlling interests | 20 | 27 | 37 | ||||||||
Net income attributable to the Company | $ 1,490 | $ 1,768 | $ 1,599 | ||||||||
Basic weighted average common shares outstanding (in shares) | 513 | 519 | 531 | ||||||||
Dilutive effect of potentially issuable common shares (in shares) | 6 | 5 | 5 | ||||||||
Dilutive weighted average common shares outstanding (in shares) | 519 | 524 | 536 | ||||||||
Average stock price used to calculate common stock equivalents (in dollars per share) | $ 77.30 | $ 63.51 | $ 56.27 |
Summary of Significant Accoun43
Summary of Significant Accounting Policies - Prospective Adoption of New Accounting Pronouncements (Details) - Accounting Standards Update 2017-07 - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Item Effected [Line Items] | ||
Increase in Compensation and Benefits | $ 201 | $ 233 |
Other Net Periodic Benefit Credit | (201) | (233) |
Net Impact of Reclassification | 0 | 0 |
Risk and Insurance Services Segment | ||
Item Effected [Line Items] | ||
Increase in Compensation and Benefits | 140 | 172 |
Consulting Segment | ||
Item Effected [Line Items] | ||
Increase in Compensation and Benefits | 64 | 65 |
Corporate, Non-Segment | ||
Item Effected [Line Items] | ||
Increase in Compensation and Benefits | $ (3) | $ (4) |
Supplemental Disclosures (Sched
Supplemental Disclosures (Schedule of Supplemental Cash Flow Disclosures) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Supplemental Cash Flow Information [Abstract] | |||
Assets acquired, excluding cash | $ 898 | $ 960 | $ 1,327 |
Liabilities assumed | (134) | (111) | (199) |
Contingent/deferred purchase consideration | (109) | (36) | (176) |
Net cash outflow for acquisitions | 655 | 813 | 952 |
Interest paid | 199 | 178 | 146 |
Income taxes paid, net of refunds | $ 583 | $ 642 | $ 433 |
Supplemental Disclosures (Narra
Supplemental Disclosures (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Deferred and contingent purchase consideration from prior years' acquisition | $ 136 | $ 98 | $ 49 |
Deferred purchase consideration from prior years' acquisitions | 55 | 54 | 36 |
Contingent purchase consideration from prior years' acquisitions | 81 | 44 | 13 |
Net charge for adjustments related to acquisitions | 3 | 9 | 45 |
Payment of contingent consideration | 27 | 42 | 34 |
Non-cash issuance of common stock | 88 | 73 | 72 |
Stock-based compensation expense, equity awards | 149 | 109 | 88 |
Effective income tax rate reconciliation, share-based compensation, excess tax benefit, amount | $ 79 | ||
Adjustments to additional paid in capital, income tax benefit from share-based compensation | 44 | $ 53 | |
Putnam | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Cash used in operating activities, discontinued operations | $ 82 |
Supplemental Disclosures (Sch46
Supplemental Disclosures (Schedule of Analysis for Doubtful Accounts) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Allowance for Doubtful Accounts Receivable [Roll Forward] | |||
Balance at beginning of year | $ 96 | $ 87 | $ 95 |
Provision charged to operations | 31 | 31 | 14 |
Accounts written-off, net of recoveries | (17) | (20) | (18) |
Effect of exchange rate changes and other | 0 | (2) | (4) |
Balance at end of year | $ 110 | $ 96 | $ 87 |
Other Comprehensive Income (L47
Other Comprehensive Income (Loss) (Components of Other Comprehensive Income Loss) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Beginning balance | $ 6,272 | $ 6,602 | |
Other comprehensive income (loss), net of tax | 1,050 | (873) | $ (373) |
Ending balance | 7,442 | 6,272 | 6,602 |
Foreign currency translation adjustments, tax portion | (11) | (9) | |
Net unrealized investment gains, tax portion | 7 | 10 | |
Net charges related to pension/ retiree plans, tax portion | (1,462) | (1,530) | |
Unrealized Investment Gains | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Beginning balance | 19 | 6 | |
Other comprehensive (loss) income before reclassifications | (5) | 13 | |
Amounts reclassified from accumulated other comprehensive loss | 0 | 0 | |
Other comprehensive income (loss), net of tax | (5) | 13 | |
Ending balance | 14 | 19 | 6 |
Pension/Post-Retirement Plans Gains (Losses) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Beginning balance | (3,232) | (3,124) | |
Other comprehensive (loss) income before reclassifications | 160 | (294) | |
Amounts reclassified from accumulated other comprehensive loss | 180 | 186 | |
Other comprehensive income (loss), net of tax | 340 | (108) | |
Ending balance | (2,892) | (3,232) | (3,124) |
Foreign Currency Translation Adjustments | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Beginning balance | (1,880) | (1,102) | |
Other comprehensive (loss) income before reclassifications | 715 | (778) | |
Amounts reclassified from accumulated other comprehensive loss | 0 | 0 | |
Other comprehensive income (loss), net of tax | 715 | (778) | |
Ending balance | (1,165) | (1,880) | (1,102) |
Accumulated Other Comprehensive Loss | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Beginning balance | (5,093) | (4,220) | (3,847) |
Other comprehensive (loss) income before reclassifications | 870 | (1,059) | |
Amounts reclassified from accumulated other comprehensive loss | 180 | 186 | |
Other comprehensive income (loss), net of tax | 1,050 | (873) | (373) |
Ending balance | $ (4,043) | $ (5,093) | $ (4,220) |
Other Comprehensive Income (L48
Other Comprehensive Income (Loss) (Schedule Of Components Of Other Comprehensive Income (Loss)) (Details) - USD ($) $ in Millions | 12 Months Ended | ||||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |||
Equity [Abstract] | |||||
Foreign currency translation adjustments, Pre-Tax | $ 717 | $ (742) | $ (639) | ||
Foreign currency translation adjustments, Tax (Credit) | 2 | 36 | 4 | ||
Foreign currency translation adjustments, Net of Tax | 715 | (778) | (643) | ||
Unrealized investment gains (losses), Pre-Tax | (7) | 21 | 1 | ||
Unrealized investment gains (losses), Tax (Credit) | (2) | 8 | 0 | ||
Unrealized investment gains (losses), Net of Tax | (5) | 13 | 1 | ||
Pension/post-retirement plans: | |||||
Amortization of prior service credits, Pre-Tax | [1] | (1) | 3 | (1) | |
Amortization of prior service credits, Tax (Credit) | [1] | 0 | 1 | 0 | |
Amortization of prior service credits, Net of Tax | [1] | (1) | 2 | (1) | |
Net actuarial losses, Pre-Tax | [1] | 167 | 166 | 271 | |
Net actuarial losses, Tax (Credit) | [1] | 30 | 46 | 96 | |
Net actuarial losses, Net of Tax | [1] | 137 | 120 | 175 | |
Losses included in periodic pension cost, Pre-Tax | 219 | 169 | 270 | ||
Losses including in periodic pension cost, Tax (Credit) | 39 | 47 | 96 | ||
Losses including in periodic pension cost, Net of Tax | 180 | 122 | 174 | ||
Curtailment gain, Pre-Tax | (1) | [1] | 102 | (3) | |
Curtailment gain, Tax (Credit) | 0 | [1] | 38 | 0 | |
Curtailment gain, Net of Tax | (1) | [1] | 64 | (3) | |
Effect of Settlement, Pre-Tax | [1] | 54 | |||
Effect of Settlement, Tax (Credit) | [1] | 9 | |||
Effect of Settlement, Net of Tax | [1] | 45 | |||
Plan termination, Pre-Tax | (6) | ||||
Plan termination, Tax (Credit) | (3) | ||||
Plan termination, Net of Tax | (3) | ||||
Net gain (loss) arising during period, Pre-Tax | 374 | (855) | (125) | ||
Net gain (loss) arising during period, Tax (Credit) | 62 | (175) | (62) | ||
Net gain (loss) arising during period, Net of Tax | 312 | (680) | (63) | ||
Foreign currency translation adjustments, Pre-Tax | (201) | 416 | 214 | ||
Foreign currency translation adjustments, Tax (Credit) | (36) | 70 | 43 | ||
Foreign currency translation adjustments, Net of Tax | (165) | 346 | 171 | ||
Other adjustments. Pre-Tax | 16 | 49 | (13) | ||
Other adjustments, Tax (Credit) | 3 | 9 | (6) | ||
Other adjustments, Net of Tax | 13 | 40 | (7) | ||
Pension/post-retirement plans gains (losses), Pre-Tax | 408 | (119) | 337 | ||
Pension/post-retirement plans gains (losses), Tax (Credit) | 68 | (11) | 68 | ||
Pension/post-retirement plans gains (losses), Net of Tax | 340 | (108) | 269 | ||
Other comprehensive income (loss), before tax | 1,118 | (840) | (301) | ||
Other comprehensive income (loss), Tax (Credit) | 68 | 33 | 72 | ||
Other comprehensive income (loss), net of tax | $ 1,050 | $ (873) | $ (373) | ||
[1] | (a) Components of net periodic pension cost are included in compensation and benefits in the Consolidated Statements of Income. Tax on prior service gains and net actuarial losses is included in income tax expense. |
Other Comprehensive Income (L49
Other Comprehensive Income (Loss) (Components of Accumulated Other Comprehensive Income Loss) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Equity [Abstract] | ||
Foreign currency translation adjustments (net of deferred tax adjustments of $(11) in 2017 and deferred tax adjustments of $(9) in 2016, respectively) | $ (1,165) | $ (1,880) |
Net unrealized investment gains (net of deferred tax liability of $7 in 2017 and $10 in 2016) | 14 | 19 |
Net charges related to pension / post-retirement plans (net of deferred tax asset of $1,462 and $1,530 in 2017 and 2016, respectively) | (2,892) | (3,232) |
Accumulated other comprehensive loss | $ (4,043) | $ (5,093) |
Acquisitions _ Dispositions (Na
Acquisitions / Dispositions (Narrative) (Details) $ in Millions | 1 Months Ended | 12 Months Ended | ||
Dec. 31, 2015USD ($) | Dec. 31, 2017USD ($)acquisition | Dec. 31, 2016USD ($)acquisition | Dec. 31, 2015USD ($) | |
Business Acquisition [Line Items] | ||||
Total consideration | $ 777 | $ 901 | ||
Cash | 865 | |||
Estimated fair value of deferred/contingent consideration | 109 | 36 | $ 176 | |
Deferred purchase consideration from prior years' acquisitions | 55 | 54 | 36 | |
Contingent payments for acquisitions | 81 | 44 | 13 | |
Deferred purchase consideration | 136 | 98 | 49 | |
Revenue related to acquisitions | 25 | 124 | ||
Net operating income related to acquisitions | 4 | $ 7 | ||
Business Combination, Acquisition Related Costs | 3 | 14 | ||
Gain on disposition of business | $ 37 | 6 | ||
Current Fiscal Period Acquisitions | ||||
Business Acquisition [Line Items] | ||||
Total consideration | 777 | |||
Cash | 668 | |||
Estimated fair value of deferred/contingent consideration | 109 | |||
Revenue related to acquisitions | 156 | |||
Net operating income related to acquisitions | 19 | |||
Prior Fiscal Periods Acquisitions | ||||
Business Acquisition [Line Items] | ||||
Estimated fair value of deferred/contingent consideration | 108 | |||
Deferred purchase consideration from prior years' acquisitions | 54 | |||
Contingent payments for acquisitions | $ 86 | |||
Deferred purchase consideration | $ 55 | |||
Risk and Insurance Services Segment | ||||
Business Acquisition [Line Items] | ||||
Number of acquisitions made | acquisition | 7 | 9 | ||
Consulting Segment | ||||
Business Acquisition [Line Items] | ||||
Number of acquisitions made | acquisition | 3 | 6 | ||
Minimum | ||||
Business Acquisition [Line Items] | ||||
Revenue target period (in years) | 2 years | |||
Maximum | ||||
Business Acquisition [Line Items] | ||||
Revenue target period (in years) | 4 years |
Acquisitions _ Dispositions (Al
Acquisitions / Dispositions (Allocation Of Acquisition Costs) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Business Acquisition [Line Items] | |||
Cash | $ 865 | ||
Estimated fair value of deferred/contingent consideration | $ 109 | 36 | $ 176 |
Total consideration | 777 | 901 | |
Allocation of purchase price: | |||
Goodwill | 9,089 | $ 8,369 | $ 7,889 |
Current Fiscal Period Acquisitions | |||
Business Acquisition [Line Items] | |||
Cash | 668 | ||
Estimated fair value of deferred/contingent consideration | 109 | ||
Total consideration | 777 | ||
Allocation of purchase price: | |||
Cash and cash equivalents | 13 | ||
Accounts receivable, net | 30 | ||
Other current assets | 6 | ||
Property, plant, and equipment | 6 | ||
Other intangible assets | 304 | ||
Goodwill | 551 | ||
Other assets | 1 | ||
Total assets acquired | 911 | ||
Current liabilities | 25 | ||
Other liabilities | 109 | ||
Total liabilities assumed | 134 | ||
Net assets acquired | $ 777 |
Acquisitions _ Dispositions (Ac
Acquisitions / Dispositions (Acquired Finite-Lived Intangibles Assets) (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2017USD ($) | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets acquired | $ 304 | |
Customer Lists | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets acquired | $ 263 | |
Finite-lived intangible assets, remaining amortization period | 12 years | |
Other Intangible Assets | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets acquired | $ 41 | [1] |
Finite-lived intangible assets, remaining amortization period | 5 years | [1] |
[1] | Primarily non-compete agreements, trade names and developed technology |
Acquisitions _ Dispositions (Pr
Acquisitions / Dispositions (Pro-Forma Information) (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Business Combinations [Abstract] | |||
Business Combination, Pro Forma Information, Revenue of Acquiree since Acquisition Date, Actual | $ 25 | $ 124 | |
Revenue | $ 14,100 | 13,724 | 13,528 |
Income from continuing operations | 1,514 | 1,787 | 1,643 |
Net income attributable to the Company | $ 1,496 | $ 1,759 | $ 1,606 |
Basic net income per share: | |||
Basic net income per share - Continuing operations (in dollars per share) | $ 2.91 | $ 3.39 | $ 3.02 |
Basic net income per share - Net income attributable to the Company (in dollars per share) | 2.92 | 3.39 | 3.02 |
Diluted net income per share: | |||
Diluted net income per share - Continuing operations (in dollars per share) | 2.88 | 3.36 | 2.99 |
Diluted net income per share - Net income attributable to the Company (in dollars per share) | $ 2.88 | $ 3.36 | $ 2.99 |
Business Combination, Pro Forma Information, Earnings or Loss of Acquiree since Acquisition Date, Actual | $ 4 | $ 7 | |
Business Combination, Acquisition Related Costs | $ 3 | $ 14 |
Goodwill And Other Intangible54
Goodwill And Other Intangibles (Changes In The Carrying Amount Of Goodwill) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | ||
Goodwill [Roll Forward] | |||
Balance as of January 1, as reported | $ 8,369 | $ 7,889 | |
Goodwill acquired | 551 | 556 | |
Other adjustments | [1] | 169 | (76) |
Balance at December 31, | $ 9,089 | $ 8,369 | |
[1] | Primarily due to the impact of foreign exchange in both years. |
Goodwill And Other Intangible55
Goodwill And Other Intangibles (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Segment Reporting Information [Line Items] | |||
Goodwill acquired | $ 551 | $ 556 | |
Goodwill expected to be tax deductible | 9 | ||
Goodwill | 9,089 | 8,369 | $ 7,889 |
Finite lived assets amortization expense | 169 | $ 130 | $ 109 |
Risk and Insurance Services Segment | |||
Segment Reporting Information [Line Items] | |||
Goodwill acquired | 522 | ||
Goodwill | 6,500 | ||
Consulting Segment | |||
Segment Reporting Information [Line Items] | |||
Goodwill acquired | 29 | ||
Goodwill | $ 2,600 |
Goodwill And Other Intangible56
Goodwill And Other Intangibles (Amortized Intangible Assets) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Cost | $ 1,906 | $ 1,594 |
Accumulated Amortization | 632 | 468 |
Net Carrying Amount | 1,274 | 1,126 |
Customer Lists | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Cost | 1,672 | 1,390 |
Accumulated Amortization | 518 | 392 |
Net Carrying Amount | 1,154 | 998 |
Other Intangible Assets | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Cost | 234 | 204 |
Accumulated Amortization | 114 | 76 |
Net Carrying Amount | $ 120 | $ 128 |
Goodwill And Other Intangible57
Goodwill And Other Intangibles (Estimated Future Aggregate Amortization Expense) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2,018 | $ 180 | |
2,019 | 170 | |
2,020 | 149 | |
2,021 | 139 | |
2,022 | 125 | |
Subsequent years | 511 | |
Net Carrying Amount | $ 1,274 | $ 1,126 |
Income Taxes (Taxes on Income)
Income Taxes (Taxes on Income) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
U.S., income before income taxes | $ 819 | $ 725 | $ 702 |
Other, income before income taxes | 1,824 | 1,755 | 1,605 |
Total income before income taxes | 2,643 | 2,480 | 2,307 |
U.S. Federal, current | 313 | 208 | 90 |
Other national governments, current | 388 | 366 | 385 |
U.S. state and local, current | 36 | 43 | 52 |
Total current income taxes | 737 | 617 | 527 |
U.S. Federal, deferred | 286 | 26 | 125 |
Other national governments, deferred | 72 | 32 | 15 |
U.S. state and local, deferred | 38 | 10 | 4 |
Total deferred income taxes | 396 | 68 | 144 |
Total income taxes | $ 1,133 | $ 685 | $ 671 |
Income Taxes (Deferred Income T
Income Taxes (Deferred Income Tax Assets And Liabilities) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | |
Deferred tax assets: | |||
Accrued expenses not currently deductible | $ 369 | $ 582 | |
Differences related to non-U.S. operations | [1] | 139 | 127 |
Accrued retirement & postretirement benefits | 394 | 629 | |
Net operating losses | [2] | 67 | 56 |
Income currently recognized for tax | 49 | 71 | |
Other | 31 | 50 | |
Total, deferred tax assets | 1,049 | 1,515 | |
Deferred tax liabilities: | |||
Differences related to non-U.S. operations | 235 | 217 | |
Depreciation and amortization | 338 | 377 | |
Accrued retirement & postretirement benefits - non-U.S. operations | 172 | 10 | |
Other | 16 | 14 | |
Total, deferred tax liabilities | 761 | 618 | |
Valuation allowance, amount | 18 | 3 | |
Balance sheet classifications: | |||
Deferred tax assets | 669 | 1,097 | |
Deferred Tax Assets Related To Net Operating Loss | |||
Deferred tax liabilities: | |||
Valuation allowance, amount | 11 | 17 | |
Other Noncurrent Assets | |||
Balance sheet classifications: | |||
Deferred tax assets | 669 | 1,097 | |
Other Noncurrent Liabilities | |||
Balance sheet classifications: | |||
Other liabilities | $ 381 | $ 200 | |
[1] | Net of valuation allowances of $18 million in 2017 and $3 million in 2016. | ||
[2] | Net of valuation allowances of $11 million in 2017 and $17 million in 2016. |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) | Jan. 01, 2018 | Dec. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Income Tax Disclosure [Abstract] | ||||||
Effective tax rate | 42.90% | 27.60% | 29.10% | |||
Provisional estimate of the transition tax | $ 240,000,000 | |||||
Tax Cuts and Jobs Act of 2017, transition tax for accumulated foreign earnings, liability | 3,400,000,000 | $ 3,400,000,000 | ||||
Withholding and state income tax expense (benefit) | 53,000,000 | |||||
Tax Cuts and Jobs Act of 2017, income tax expense (benefit) | 3,400,000,000 | |||||
Charge to reduce value to deferred tax assets and liabilities | 220,000,000 | |||||
Increase (decrease) in valuation allowances | 9,000,000 | $ 8,000,000 | $ 69,000,000 | |||
Increase (decrease) in adjustment of valuation allowances, beginning balance | $ 11,000,000 | $ (7,000,000) | $ (14,000,000) | |||
Net operating loss carryforwards | 81.00% | |||||
Tax Credit Carryforward [Line Items] | ||||||
U.S. Federal statutory rate | 35.00% | 35.00% | 35.00% | |||
Unrecognized tax benefits that would impact effective tax rate | 56,000,000 | $ 56,000,000 | $ 53,000,000 | $ 53,000,000 | ||
Accrued interest and penalties | 12,000,000 | 12,000,000 | 11,000,000 | 8,000,000 | ||
Putnam and issues included in consolidated MMC tax returns | 71,000,000 | 71,000,000 | $ 65,000,000 | $ 74,000,000 | $ 97,000,000 | |
Federal | ||||||
Tax Credit Carryforward [Line Items] | ||||||
Operating loss carryforwards tax benefits | 6,000,000 | 6,000,000 | ||||
State and Local | ||||||
Tax Credit Carryforward [Line Items] | ||||||
Operating loss carryforwards tax benefits | 49,000,000 | 49,000,000 | ||||
Non-U.S. | ||||||
Tax Credit Carryforward [Line Items] | ||||||
Operating loss carryforwards tax benefits | 31,000,000 | 31,000,000 | ||||
Minimum | ||||||
Tax Credit Carryforward [Line Items] | ||||||
Decrease in unrecognized tax benefits is reasonably possible | 0 | 0 | ||||
Maximum | ||||||
Tax Credit Carryforward [Line Items] | ||||||
Decrease in unrecognized tax benefits is reasonably possible | $ 6,000,000 | $ 6,000,000 | ||||
Forecast | ||||||
Tax Credit Carryforward [Line Items] | ||||||
U.S. Federal statutory rate | 21.00% |
Income Taxes (U.S. Federal Stat
Income Taxes (U.S. Federal Statutory Rate) (Details) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
U.S. Federal statutory rate | 35.00% | 35.00% | 35.00% |
U.S. state and local income taxes—net of U.S. Federal income tax benefit | 1.50% | 1.50% | 1.60% |
Differences related to non-U.S. operations | (8.60%) | (9.20%) | (8.00%) |
U.S. Tax Reform | 17.40% | 0.00% | 0.00% |
Equity compensation | (2.60%) | 0.00% | 0.00% |
Other | 0.20% | 0.30% | 0.50% |
Effective tax rate | 42.90% | 27.60% | 29.10% |
Income Taxes (Unrecognized Tax
Income Taxes (Unrecognized Tax Benefits) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Balance at January 1, | $ 65 | $ 74 | $ 97 |
Additions, based on tax positions related to current year | 1 | 2 | 3 |
Additions for tax positions of prior years | 14 | 6 | 22 |
Reductions for tax positions of prior years | (6) | (6) | (10) |
Settlements | 0 | (7) | (20) |
Lapses in statutes of limitation | (3) | (4) | (18) |
Balance at December 31, | $ 71 | $ 65 | $ 74 |
Retirement Benefits (Weighted A
Retirement Benefits (Weighted Average Actuarial Assumptions Utilized) (Details) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Pension Plan | ||
Weighted average assumptions: | ||
Discount rate (for expense) | 3.40% | 4.10% |
Expected return on plan assets | 6.64% | 7.06% |
Rate of compensation increase (for expense) | 1.77% | 2.44% |
Discount rate (for benefit obligation) | 3.07% | 3.40% |
Rate of compensation increase (for benefit obligation) | 1.73% | 1.77% |
Postretirement Benefits | ||
Weighted average assumptions: | ||
Discount rate (for expense) | 3.64% | 4.12% |
Expected return on plan assets | 0.00% | 0.00% |
Rate of compensation increase (for expense) | 0.00% | 0.00% |
Discount rate (for benefit obligation) | 3.21% | 3.64% |
Rate of compensation increase (for benefit obligation) | 0.00% | 0.00% |
Domestic Plan | Pension Plan | ||
Weighted average assumptions: | ||
Discount rate (for expense) | 4.58% | 4.71% |
Expected return on plan assets | 7.95% | 8.72% |
Rate of compensation increase (for expense) | 0.00% | 2.00% |
Discount rate (for benefit obligation) | 3.86% | 4.58% |
Domestic Plan | Postretirement Benefits | ||
Weighted average assumptions: | ||
Discount rate (for expense) | 4.12% | 4.36% |
Expected return on plan assets | 0.00% | 0.00% |
Rate of compensation increase (for expense) | 0.00% | 0.00% |
Discount rate (for benefit obligation) | 3.67% | 4.12% |
Foreign Plan | Pension Plan | ||
Weighted average assumptions: | ||
Discount rate (for expense) | 2.69% | 3.71% |
Expected return on plan assets | 6.07% | 6.36% |
Rate of compensation increase (for expense) | 2.85% | 2.72% |
Discount rate (for benefit obligation) | 2.58% | 2.69% |
Rate of compensation increase (for benefit obligation) | 2.80% | 2.85% |
Foreign Plan | Postretirement Benefits | ||
Weighted average assumptions: | ||
Discount rate (for expense) | 3.42% | 4.00% |
Expected return on plan assets | 0.00% | 0.00% |
Rate of compensation increase (for expense) | 0.00% | 0.00% |
Discount rate (for benefit obligation) | 2.97% | 3.42% |
Rate of compensation increase (for benefit obligation) | 0.00% | 0.00% |
Retirement Benefits (Narrative)
Retirement Benefits (Narrative) (Details) £ in Millions, $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||
Nov. 30, 2016GBP (£) | Oct. 31, 2016 | Mar. 31, 2015USD ($) | Dec. 31, 2017USD ($)shares | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Sep. 30, 2017 | |
Defined Benefit Plan Disclosure [Line Items] | |||||||
Market-related plan assets value, recognition period of investment gains and losses | 5 years | ||||||
Plans with benefit obligations in excess of plan assets, projected benefit obligation | $ 1,300 | $ 1,200 | |||||
Accumulated benefit obligation | 1,200 | 1,200 | |||||
Aggregate fair value of plan assets | 1,000 | 900 | |||||
Plans with benefit obligations in excess of plan assets, aggregate benefit obligation | 2,200 | 2,100 | |||||
Plans with benefit obligations in excess of plan assets, aggregate fair value of plan assets | $ 1,900 | 1,700 | |||||
Employer matching contribution, percent of employees' gross pay (up to) | 4.00% | ||||||
Maximum annual contributions per employee, percent | 7.00% | ||||||
Health care cost trend rate assumed for next fiscal year | 5.12% | ||||||
Ultimate assumed health care cost trend rate | 4.41% | ||||||
Defined Contribution Plan [Abstract] | |||||||
ESOP invested in MMC common stock | $ 499 | 436 | |||||
Pension Plan | |||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||
Net credit due to termination of RRA plan | 130 | 62 | $ (82) | ||||
Curtailment loss (gain) | 1 | 4 | (5) | ||||
Postretirement Benefits | |||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||
Net credit due to termination of RRA plan | $ 125 | (6) | (9) | 118 | |||
Curtailment loss (gain) | 0 | 0 | 0 | ||||
United States | |||||||
Defined Contribution Plan [Abstract] | |||||||
The cost of defined contribution plans | 130 | 53 | 51 | ||||
United Kingdom | |||||||
Defined Contribution Plan [Abstract] | |||||||
The cost of defined contribution plans | $ 75 | 81 | 93 | ||||
Geographic Concentration Risk | Foreign Pension and Postretirement Benefit Plan, Defined Benefit | Pension Plan | |||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||
Target asset allocation percentage for non-U.S. plan assets, U.K. Plans | 81.00% | ||||||
Domestic Plan | Pension Plan | |||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||
Plans with benefit obligations in excess of plan assets, projected benefit obligation | $ 6,200 | 5,900 | |||||
Accumulated benefit obligation | 6,200 | 5,900 | |||||
Aggregate fair value of plan assets | 4,800 | 4,400 | |||||
Plans with benefit obligations in excess of plan assets, aggregate benefit obligation | 6,200 | 5,900 | |||||
Plans with benefit obligations in excess of plan assets, aggregate fair value of plan assets | 4,800 | 4,400 | |||||
Net credit due to termination of RRA plan | 56 | (65) | (141) | ||||
Pension plan assets | $ 4,787 | 4,365 | 4,160 | ||||
Domestic Plan | Postretirement Benefits | |||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||
Number of shares the U.S. qualified plan holds contributed by the Company | shares | 4,000,000 | ||||||
Shares of common stock representing percentage of plan assets | 6.80% | ||||||
Net credit due to termination of RRA plan | $ (4) | (4) | 124 | ||||
Pension plan assets | $ 2 | 2 | 3 | ||||
Domestic Plan | Pension and Postretirement Benefit Plan | |||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||
Health care cost trend rate assumed for next fiscal year | 6.38% | ||||||
Ultimate assumed health care cost trend rate | 4.50% | ||||||
Assumed health care cost trend rate | 5.00% | ||||||
Domestic Plan | Nonqualified Pension Plan | |||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||
Estimated future contributions (less than $1 million for U.S. tax-qualified plan) | $ 27 | ||||||
Domestic Plan | Equity Funds | |||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||
Actual plan asset allocations | 63.00% | ||||||
Domestic Plan | Fixed Income Funds | |||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||
Actual plan asset allocations | 37.00% | ||||||
Foreign Plan | Pension Plan | |||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||
Settlement charge | $ 54 | ||||||
Net credit due to termination of RRA plan | 74 | 127 | 59 | ||||
Estimated future contributions (less than $1 million for U.S. tax-qualified plan) | 82 | ||||||
Curtailment loss (gain) | 1 | 4 | (5) | ||||
Pension plan assets | 11,388 | 10,017 | 9,826 | ||||
Foreign Plan | Postretirement Benefits | |||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||
Net credit due to termination of RRA plan | (2) | (5) | (6) | ||||
Curtailment loss (gain) | 0 | 0 | 0 | ||||
Pension plan assets | $ 0 | $ 0 | $ 0 | ||||
Foreign Plan | Equity Funds | |||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||
Actual plan asset allocations | 48.00% | ||||||
Foreign Plan | Fixed Income Funds | |||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||
Actual plan asset allocations | 52.00% | ||||||
United States Pension and Postretirement Benefit Plan of US Entity, Defined Benefit | Equity Funds | |||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||
Target asset allocation | 64.00% | ||||||
United States Pension and Postretirement Benefit Plan of US Entity, Defined Benefit | Fixed Income Funds | |||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||
Target asset allocation | 36.00% | ||||||
Foreign Pension and Postretirement Benefit Plan, Defined Benefit | Equity Funds | |||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||
Target asset allocation | 34.00% | ||||||
Foreign Pension and Postretirement Benefit Plan, Defined Benefit | Fixed Income Funds | |||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||
Target asset allocation | 66.00% | ||||||
Minimum | United States Pension and Postretirement Benefit Plan of US Entity, Defined Benefit | Equity Funds | |||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||
Target asset allocation | 59.00% | ||||||
Minimum | United States Pension and Postretirement Benefit Plan of US Entity, Defined Benefit | Fixed Income Funds | |||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||
Target asset allocation | 31.00% | ||||||
Minimum | Foreign Pension and Postretirement Benefit Plan, Defined Benefit | United Kingdom | Equity Funds | |||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||
Target asset allocation | 35.00% | ||||||
Minimum | Foreign Pension and Postretirement Benefit Plan, Defined Benefit | United Kingdom | Fixed Income Funds | |||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||
Target asset allocation | 59.00% | ||||||
Maximum | United States Pension and Postretirement Benefit Plan of US Entity, Defined Benefit | Equity Funds | |||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||
Target asset allocation | 69.00% | ||||||
Maximum | United States Pension and Postretirement Benefit Plan of US Entity, Defined Benefit | Fixed Income Funds | |||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||
Target asset allocation | 41.00% | ||||||
Maximum | Foreign Pension and Postretirement Benefit Plan, Defined Benefit | United Kingdom | Equity Funds | |||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||
Target asset allocation | 41.00% | ||||||
Maximum | Foreign Pension and Postretirement Benefit Plan, Defined Benefit | United Kingdom | Fixed Income Funds | |||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||
Target asset allocation | 65.00% | ||||||
Adjustment | Foreign Plan | Equity Funds | |||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||
Target asset allocation | 34.00% | ||||||
Pension Plan Funded Status Guarantee | Foreign Plan | |||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||
Maximum exposure under guarantee (up to) | £ | £ 450 | ||||||
Guarantor obligation, period | 7 years |
Retirement Benefits (Components
Retirement Benefits (Components of the Net Periodic Benefit Cost) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Pension Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | $ 76 | $ 178 | $ 196 | |
Interest cost | 497 | 537 | 587 | |
Expected return on plan assets | (921) | (940) | (977) | |
Amortization of prior service (credit) cost | (2) | (1) | (1) | |
Recognized actuarial loss (gain) | 167 | 168 | 271 | |
Net periodic benefit (credit) cost | (183) | (58) | 76 | |
Curtailment (gain) loss | (1) | (4) | 5 | |
Plan termination | 0 | 0 | 0 | |
Settlement loss | 54 | 0 | 1 | |
Total (credit) cost | (130) | (62) | 82 | |
Postretirement Benefits | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 1 | 2 | 3 | |
Interest cost | 4 | 5 | 5 | |
Expected return on plan assets | 0 | 0 | 0 | |
Amortization of prior service (credit) cost | 1 | 4 | 3 | |
Recognized actuarial loss (gain) | 0 | (2) | (1) | |
Net periodic benefit (credit) cost | 6 | 9 | 10 | |
Curtailment (gain) loss | 0 | 0 | 0 | |
Plan termination | 0 | 0 | (128) | |
Settlement loss | 0 | 0 | 0 | |
Total (credit) cost | $ (125) | 6 | 9 | (118) |
Domestic Plan | Pension Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 0 | 106 | 114 | |
Interest cost | 264 | 264 | 254 | |
Expected return on plan assets | (357) | (379) | (373) | |
Amortization of prior service (credit) cost | 0 | 0 | 0 | |
Recognized actuarial loss (gain) | 37 | 74 | 146 | |
Net periodic benefit (credit) cost | (56) | 65 | 141 | |
Plan termination | 0 | 0 | 0 | |
Total (credit) cost | (56) | 65 | 141 | |
Domestic Plan | Postretirement Benefits | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 0 | 0 | 1 | |
Interest cost | 2 | 2 | 2 | |
Expected return on plan assets | 0 | 0 | 0 | |
Amortization of prior service (credit) cost | 3 | 4 | 3 | |
Recognized actuarial loss (gain) | (1) | (2) | (2) | |
Net periodic benefit (credit) cost | 4 | 4 | 4 | |
Plan termination | 0 | 0 | (128) | |
Total (credit) cost | 4 | 4 | (124) | |
Foreign Plan | Pension Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 76 | 72 | 82 | |
Interest cost | 233 | 273 | 333 | |
Expected return on plan assets | (564) | (561) | (604) | |
Amortization of prior service (credit) cost | (2) | (1) | (1) | |
Recognized actuarial loss (gain) | 130 | 94 | 125 | |
Net periodic benefit (credit) cost | (127) | (123) | (65) | |
Curtailment (gain) loss | (1) | (4) | 5 | |
Settlement loss | 54 | 0 | 1 | |
Total (credit) cost | (74) | (127) | (59) | |
Foreign Plan | Postretirement Benefits | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 1 | 2 | 2 | |
Interest cost | 2 | 3 | 3 | |
Expected return on plan assets | 0 | 0 | 0 | |
Amortization of prior service (credit) cost | (2) | 0 | 0 | |
Recognized actuarial loss (gain) | 1 | 0 | 1 | |
Net periodic benefit (credit) cost | 2 | 5 | 6 | |
Curtailment (gain) loss | 0 | 0 | 0 | |
Settlement loss | 0 | 0 | 0 | |
Total (credit) cost | $ 2 | $ 5 | $ 6 |
Retirement Benefits (Schedules
Retirement Benefits (Schedules Providing Information Concerning MMC's Defined Benefit Pension Plans and Postretirement Benefit Plans) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Defined Benefit Plan, Amounts for Asset (Liability) Recognized in Statement of Financial Position [Abstract] | |||
Noncurrent assets | $ 1,693 | $ 776 | |
Noncurrent liabilities | (1,888) | (2,076) | |
Pension Plan | |||
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | |||
Service cost | 76 | 178 | $ 196 |
Interest cost | 497 | 537 | 587 |
Postretirement Benefits | |||
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | |||
Service cost | 1 | 2 | 3 |
Interest cost | 4 | 5 | 5 |
Domestic Plan | Pension Plan | |||
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | |||
Benefit obligation at beginning of year | 5,894 | 5,685 | |
Service cost | 0 | 106 | 114 |
Interest cost | 264 | 264 | 254 |
Employee contributions | 0 | 0 | |
Effect of curtailment | 0 | (98) | |
Actuarial loss (gain) | 538 | 160 | |
Benefits paid | (475) | (223) | |
Benefit obligation at end of year | 6,221 | 5,894 | 5,685 |
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Fair value of plan assets at beginning of year | 4,365 | 4,160 | |
Actual return on plan assets | 812 | 401 | |
Employer/Company contributions | 85 | 27 | |
Employee contributions | 0 | 0 | |
Benefits paid | (475) | (223) | |
Other | 0 | 0 | |
Fair value of plan assets at end of year | 4,787 | 4,365 | 4,160 |
Funded status | (1,434) | (1,529) | |
Defined Benefit Plan, Amounts for Asset (Liability) Recognized in Statement of Financial Position [Abstract] | |||
Current liabilities | (27) | (27) | |
Noncurrent liabilities | (1,407) | (1,502) | |
Net asset (liability) recognized in consolidated balance sheet, December 31 | (1,434) | (1,529) | |
Defined Benefit Plan, Accumulated Other Comprehensive Income (Loss), after Tax [Abstract] | |||
Prior service credit | 0 | 0 | |
Net actuarial (loss) gain | (1,766) | (1,720) | |
Total recognized accumulated other comprehensive (loss) income, December 31 | (1,766) | (1,720) | |
Cumulative employer contributions in excess (less than) net periodic cost | 332 | 191 | |
Net asset (liability) recognized in consolidated balance sheet, December 31 | (1,434) | (1,529) | |
Accumulated benefit obligation at December 31 | 6,221 | 5,894 | |
Domestic Plan | Postretirement Benefits | |||
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | |||
Benefit obligation at beginning of year | 37 | 40 | |
Service cost | 0 | 0 | 1 |
Interest cost | 2 | 2 | 2 |
Employee contributions | 3 | 3 | |
Effect of curtailment | 0 | 0 | |
Actuarial loss (gain) | 3 | 0 | |
Benefits paid | (9) | (8) | |
Benefit obligation at end of year | 36 | 37 | 40 |
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Fair value of plan assets at beginning of year | 2 | 3 | |
Actual return on plan assets | 0 | 0 | |
Employer/Company contributions | 6 | 5 | |
Employee contributions | 3 | 3 | |
Benefits paid | (9) | (8) | |
Other | 0 | 1 | |
Fair value of plan assets at end of year | 2 | 2 | 3 |
Funded status | (34) | (35) | |
Defined Benefit Plan, Amounts for Asset (Liability) Recognized in Statement of Financial Position [Abstract] | |||
Current liabilities | (2) | (2) | |
Noncurrent liabilities | (32) | (33) | |
Net asset (liability) recognized in consolidated balance sheet, December 31 | (34) | (35) | |
Defined Benefit Plan, Accumulated Other Comprehensive Income (Loss), after Tax [Abstract] | |||
Prior service credit | 0 | (3) | |
Net actuarial (loss) gain | 6 | 11 | |
Total recognized accumulated other comprehensive (loss) income, December 31 | 6 | 8 | |
Cumulative employer contributions in excess (less than) net periodic cost | (40) | (43) | |
Net asset (liability) recognized in consolidated balance sheet, December 31 | (34) | (35) | |
Accumulated benefit obligation at December 31 | 0 | 0 | |
Foreign Plan | Pension Plan | |||
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | |||
Benefit obligation at beginning of year | 9,670 | 9,076 | |
Service cost | 76 | 72 | 82 |
Interest cost | 233 | 273 | 333 |
Employee contributions | 7 | 7 | |
Effect of curtailment | (1) | (7) | |
Plan amendments | 0 | (49) | |
Actuarial loss (gain) | (149) | 1,966 | |
Effect of settlement | (211) | (27) | |
Benefits paid | (291) | (352) | |
Foreign currency charges | 703 | (1,290) | |
Other | 16 | 1 | |
Benefit obligation at end of year | 10,053 | 9,670 | 9,076 |
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Fair value of plan assets at beginning of year | 10,017 | 9,826 | |
Actual return on plan assets | 875 | 1,815 | |
Effect of settlement | (211) | (27) | |
Employer/Company contributions | 229 | 187 | |
Employee contributions | 7 | 7 | |
Foreign currency changes | 749 | (1,439) | |
Benefits paid | (291) | (352) | |
Other | (13) | 0 | |
Fair value of plan assets at end of year | 11,388 | 10,017 | 9,826 |
Funded status | 1,335 | 347 | |
Defined Benefit Plan, Amounts for Asset (Liability) Recognized in Statement of Financial Position [Abstract] | |||
Noncurrent assets | 1,684 | 766 | |
Current liabilities | (6) | (5) | |
Noncurrent liabilities | (343) | (414) | |
Net asset (liability) recognized in consolidated balance sheet, December 31 | 1,335 | 347 | |
Defined Benefit Plan, Accumulated Other Comprehensive Income (Loss), after Tax [Abstract] | |||
Prior service credit | 43 | 43 | |
Net actuarial (loss) gain | (2,646) | (3,081) | |
Total recognized accumulated other comprehensive (loss) income, December 31 | (2,603) | (3,038) | |
Cumulative employer contributions in excess (less than) net periodic cost | 3,938 | 3,385 | |
Net asset (liability) recognized in consolidated balance sheet, December 31 | 1,335 | 347 | |
Accumulated benefit obligation at December 31 | 9,783 | 9,397 | |
Foreign Plan | Postretirement Benefits | |||
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | |||
Benefit obligation at beginning of year | 81 | 79 | |
Service cost | 1 | 2 | 2 |
Interest cost | 2 | 3 | 3 |
Employee contributions | 0 | 0 | |
Effect of curtailment | 0 | 0 | |
Plan amendments | (17) | 0 | |
Actuarial loss (gain) | 0 | 5 | |
Effect of settlement | 0 | 0 | |
Benefits paid | (3) | (3) | |
Foreign currency charges | 4 | (5) | |
Other | 0 | 0 | |
Benefit obligation at end of year | 68 | 81 | 79 |
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Fair value of plan assets at beginning of year | 0 | 0 | |
Actual return on plan assets | 0 | 0 | |
Effect of settlement | 0 | 0 | |
Employer/Company contributions | 3 | 3 | |
Employee contributions | 0 | 0 | |
Foreign currency changes | 0 | 0 | |
Benefits paid | (3) | (3) | |
Other | 0 | 0 | |
Fair value of plan assets at end of year | 0 | 0 | $ 0 |
Funded status | (68) | (81) | |
Defined Benefit Plan, Amounts for Asset (Liability) Recognized in Statement of Financial Position [Abstract] | |||
Noncurrent assets | 0 | 0 | |
Current liabilities | (4) | (3) | |
Noncurrent liabilities | (64) | (78) | |
Net asset (liability) recognized in consolidated balance sheet, December 31 | (68) | (81) | |
Defined Benefit Plan, Accumulated Other Comprehensive Income (Loss), after Tax [Abstract] | |||
Prior service credit | 15 | 0 | |
Net actuarial (loss) gain | (10) | (11) | |
Total recognized accumulated other comprehensive (loss) income, December 31 | 5 | (11) | |
Cumulative employer contributions in excess (less than) net periodic cost | (73) | (70) | |
Net asset (liability) recognized in consolidated balance sheet, December 31 | (68) | (81) | |
Accumulated benefit obligation at December 31 | $ 0 | $ 0 |
Retirement Benefits (Reconcilia
Retirement Benefits (Reconciliation of Prior Service Credit) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||||
Effect of curtailment | $ 1 | [1] | $ (102) | $ 3 | |
Pension Plan | |||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||||
Plan termination | 0 | 0 | 0 | ||
Total recognized as component of net periodic benefit credit | (130) | (62) | 82 | ||
Postretirement Benefits | |||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||||
Plan termination | 0 | 0 | (128) | ||
Total recognized as component of net periodic benefit credit | $ (125) | 6 | 9 | (118) | |
Domestic Plan | Pension Plan | |||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||||
Plan termination | 0 | 0 | 0 | ||
Total recognized as component of net periodic benefit credit | (56) | 65 | 141 | ||
Domestic Plan | Postretirement Benefits | |||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||||
Plan termination | 0 | 0 | (128) | ||
Total recognized as component of net periodic benefit credit | 4 | 4 | (124) | ||
Domestic Plan | Accumulated Defined Benefit Plans Adjustment, Net Prior Service Cost (Credit) | Pension Plan | |||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||||
Beginning balance | 0 | 0 | |||
Amortization of net loss | 0 | 0 | |||
Ending balance, December 31 | 0 | 0 | 0 | ||
Domestic Plan | Accumulated Defined Benefit Plans Adjustment, Net Prior Service Cost (Credit) | Postretirement Benefits | |||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||||
Beginning balance | (3) | (7) | |||
Amortization of net loss | 3 | 4 | |||
Ending balance, December 31 | 0 | (3) | (7) | ||
Foreign Plan | Pension Plan | |||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||||
Total recognized as component of net periodic benefit credit | (74) | (127) | (59) | ||
Foreign Plan | Postretirement Benefits | |||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||||
Total recognized as component of net periodic benefit credit | 2 | 5 | 6 | ||
Foreign Plan | Accumulated Defined Benefit Plans Adjustment, Net Prior Service Cost (Credit) | Pension Plan | |||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||||
Beginning balance | 43 | (3) | |||
Amortization of net loss | (2) | (1) | |||
Effect of curtailment | (1) | 0 | |||
Total recognized as component of net periodic benefit credit | (3) | (1) | |||
Plan amendments | 0 | 49 | |||
Exchange rate adjustments | 3 | (2) | |||
Ending balance, December 31 | 43 | 43 | (3) | ||
Foreign Plan | Accumulated Defined Benefit Plans Adjustment, Net Prior Service Cost (Credit) | Postretirement Benefits | |||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||||
Beginning balance | 0 | 0 | |||
Amortization of net loss | 2 | 0 | |||
Effect of curtailment | 0 | 0 | |||
Total recognized as component of net periodic benefit credit | (2) | 0 | |||
Plan amendments | 17 | 0 | |||
Exchange rate adjustments | 0 | 0 | |||
Ending balance, December 31 | $ 15 | $ 0 | $ 0 | ||
[1] | (a) Components of net periodic pension cost are included in compensation and benefits in the Consolidated Statements of Income. Tax on prior service gains and net actuarial losses is included in income tax expense. |
Retirement Benefits (Reconcil68
Retirement Benefits (Reconciliation of Net Actuarial Loss) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Pension Plan | ||||
Reconciliation of unrecognized net actuarial gain loss [Roll Forward] | ||||
Total recognized as component of net periodic benefit credit | $ (130) | $ (62) | $ 82 | |
Postretirement Benefits | ||||
Reconciliation of unrecognized net actuarial gain loss [Roll Forward] | ||||
Total recognized as component of net periodic benefit credit | $ (125) | 6 | 9 | (118) |
Domestic Plan | Pension Plan | ||||
Reconciliation of unrecognized net actuarial gain loss [Roll Forward] | ||||
Effect of curtailment | 0 | (98) | ||
Total recognized as component of net periodic benefit credit | (56) | 65 | 141 | |
Other | 0 | 0 | ||
Domestic Plan | Postretirement Benefits | ||||
Reconciliation of unrecognized net actuarial gain loss [Roll Forward] | ||||
Effect of curtailment | 0 | 0 | ||
Total recognized as component of net periodic benefit credit | 4 | 4 | (124) | |
Other | 0 | (1) | ||
Domestic Plan | Accumulated Defined Benefit Plans Adjustment, Net Gain (Loss) Attributable to Parent | Pension Plan | ||||
Reconciliation of unrecognized net actuarial gain loss [Roll Forward] | ||||
Beginning balance | (1,720) | (1,754) | ||
Amortization of net loss | 37 | 74 | ||
Effect of curtailment | 0 | (98) | ||
Other | 0 | 0 | ||
Liability experience | (538) | (160) | ||
Asset experience | 455 | 22 | ||
Total amount recognized as change in plan assets and benefit obligations | (83) | (40) | ||
Ending balance, December 31 | (1,766) | (1,720) | (1,754) | |
Domestic Plan | Accumulated Defined Benefit Plans Adjustment, Net Gain (Loss) Attributable to Parent | Postretirement Benefits | ||||
Reconciliation of unrecognized net actuarial gain loss [Roll Forward] | ||||
Beginning balance | 11 | 13 | ||
Amortization of net loss | (1) | (2) | ||
Effect of curtailment | 0 | 0 | ||
Other | 1 | 0 | ||
Liability experience | (3) | 0 | ||
Asset experience | 0 | 0 | ||
Total amount recognized as change in plan assets and benefit obligations | (4) | 0 | ||
Ending balance, December 31 | 6 | 11 | 13 | |
Foreign Plan | Pension Plan | ||||
Reconciliation of unrecognized net actuarial gain loss [Roll Forward] | ||||
Effect of curtailment | (1) | (7) | ||
Total recognized as component of net periodic benefit credit | (74) | (127) | (59) | |
Other | 13 | 0 | ||
Foreign Plan | Postretirement Benefits | ||||
Reconciliation of unrecognized net actuarial gain loss [Roll Forward] | ||||
Effect of curtailment | 0 | 0 | ||
Total recognized as component of net periodic benefit credit | 2 | 5 | 6 | |
Other | 0 | 0 | ||
Foreign Plan | Accumulated Defined Benefit Plans Adjustment, Net Gain (Loss) Attributable to Parent | Pension Plan | ||||
Reconciliation of unrecognized net actuarial gain loss [Roll Forward] | ||||
Beginning balance | (3,081) | (2,887) | ||
Amortization of net loss | 130 | 94 | ||
Effect of settlement | 54 | 0 | ||
Total recognized as component of net periodic benefit credit | 184 | 94 | ||
Liability experience | 149 | (1,966) | ||
Asset experience | 311 | 1,254 | ||
Plan amendments | (5) | 0 | ||
Effect of curtailment | 1 | 3 | ||
Total amount recognized as change in plan assets and benefit obligations | 456 | (709) | ||
Exchange rate adjustments | (205) | 421 | ||
Ending balance, December 31 | (2,646) | (3,081) | (2,887) | |
Foreign Plan | Accumulated Defined Benefit Plans Adjustment, Net Gain (Loss) Attributable to Parent | Postretirement Benefits | ||||
Reconciliation of unrecognized net actuarial gain loss [Roll Forward] | ||||
Beginning balance | (11) | (6) | ||
Amortization of net loss | 1 | 0 | ||
Effect of settlement | 0 | 0 | ||
Total recognized as component of net periodic benefit credit | 1 | 0 | ||
Liability experience | 0 | (5) | ||
Asset experience | 0 | 0 | ||
Plan amendments | 0 | 0 | ||
Effect of curtailment | 0 | 0 | ||
Total amount recognized as change in plan assets and benefit obligations | 0 | (5) | ||
Exchange rate adjustments | 0 | 0 | ||
Ending balance, December 31 | $ (10) | $ (11) | $ (6) |
Retirement Benefits (Schedule o
Retirement Benefits (Schedule of Total Recognized in Net Periodic Benefit Cost and Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Domestic Plan | Pension Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total recognized in net periodic benefit cost and other comprehensive loss (income) | $ (10) | $ 31 | $ 146 |
Domestic Plan | Postretirement Benefits | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total recognized in net periodic benefit cost and other comprehensive loss (income) | 5 | 2 | (138) |
Foreign Plan | Pension Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total recognized in net periodic benefit cost and other comprehensive loss (income) | (513) | 21 | (407) |
Foreign Plan | Postretirement Benefits | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total recognized in net periodic benefit cost and other comprehensive loss (income) | $ (14) | $ 10 | $ (2) |
Retirement Benefits (Schedule70
Retirement Benefits (Schedule of Estimated Amounts That Will Be Amortized from Accumulated Other Comprehensive in the Next Fiscal Year) (Details) $ in Millions | Dec. 31, 2017USD ($) |
Domestic Plan | Pension Plan | |
Defined Benefit Plan Disclosure [Line Items] | |
Net actuarial loss | $ 54 |
Domestic Plan | Postretirement Benefits | |
Defined Benefit Plan Disclosure [Line Items] | |
Net actuarial loss | 1 |
Foreign Plan | Pension Plan | |
Defined Benefit Plan Disclosure [Line Items] | |
Prior service credit | (2) |
Net actuarial loss | 90 |
Projected cost (credit) | 88 |
Foreign Plan | Postretirement Benefits | |
Defined Benefit Plan Disclosure [Line Items] | |
Prior service credit | (2) |
Net actuarial loss | 0 |
Projected cost (credit) | $ (2) |
Retirement Benefits (Effects of
Retirement Benefits (Effects of One Percentage Point Change in Assumed Health Care Cost Trend Rates) (Details) - Foreign Plan - Pension and Postretirement Benefit Plan $ in Millions | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Defined Benefit Plan Disclosure [Line Items] | |
Effect on total of service and interest cost components 1 Percentage Point Increase | $ 0 |
Effect on total of service and interest cost components 1 Percentage Point Decrease | 0 |
Effect on postretirement benefit obligation 1 Percentage Point Increase | 7 |
Effect on postretirement benefit obligation 1 Percentage Point Decrease | $ (6) |
Retirement Benefits (Schedule72
Retirement Benefits (Schedule of Estimated Future Benefit Payments for Pension and Postretirement Benefits) (Details) $ in Millions | Dec. 31, 2017USD ($) |
Domestic Plan | Pension Plan | |
Defined Benefit Plan Disclosure [Line Items] | |
2,018 | $ 254 |
2,019 | 268 |
2,020 | 285 |
2,021 | 294 |
2,022 | 303 |
2023-2027 | 1,642 |
Domestic Plan | Postretirement Benefits | |
Defined Benefit Plan Disclosure [Line Items] | |
2,018 | 4 |
2,019 | 4 |
2,020 | 4 |
2,021 | 4 |
2,022 | 3 |
2023-2027 | 14 |
Foreign Plan | Pension Plan | |
Defined Benefit Plan Disclosure [Line Items] | |
2,018 | 279 |
2,019 | 297 |
2,020 | 305 |
2,021 | 316 |
2,022 | 326 |
2023-2027 | 1,837 |
Foreign Plan | Postretirement Benefits | |
Defined Benefit Plan Disclosure [Line Items] | |
2,018 | 3 |
2,019 | 4 |
2,020 | 4 |
2,021 | 3 |
2,022 | 3 |
2023-2027 | $ 17 |
Retirement Benefits (Summary of
Retirement Benefits (Summary of the U.S. and Non-U.S. Plan Investments Measured At Fair Value on a Recurring Basis) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Defined Benefit Plan Disclosure [Line Items] | ||
Investments measured at NAV | $ 8,980 | $ 7,939 |
Total investments | 16,176 | 14,332 |
Identical Assets (Level 1) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total investments | 2,586 | 2,618 |
Observable Inputs (Level 2) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total investments | 4,238 | 3,452 |
Unobservable Inputs (Level 3) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total investments | 372 | 323 |
Common/Collective trusts | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 7,986 | 6,821 |
Investments measured at NAV | 7,611 | 6,805 |
Common/Collective trusts | Identical Assets (Level 1) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 375 | 16 |
Common/Collective trusts | Observable Inputs (Level 2) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | 0 |
Common/Collective trusts | Unobservable Inputs (Level 3) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | 0 |
Corporate Obligations | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 3,640 | 3,033 |
Investments measured at NAV | 0 | 0 |
Corporate Obligations | Identical Assets (Level 1) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | 0 |
Corporate Obligations | Observable Inputs (Level 2) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 3,620 | 3,024 |
Corporate Obligations | Unobservable Inputs (Level 3) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 20 | 9 |
Corporate stocks | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 1,503 | 2,014 |
Investments measured at NAV | 0 | 0 |
Corporate stocks | Identical Assets (Level 1) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 1,467 | 2,009 |
Corporate stocks | Observable Inputs (Level 2) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 34 | 3 |
Corporate stocks | Unobservable Inputs (Level 3) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 2 | 2 |
Private equity/partnerships | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 803 | 722 |
Investments measured at NAV | 803 | 722 |
Private equity/partnerships | Identical Assets (Level 1) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | 0 |
Private equity/partnerships | Observable Inputs (Level 2) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | 0 |
Private equity/partnerships | Unobservable Inputs (Level 3) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | 0 |
Government Securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 571 | 391 |
Investments measured at NAV | 0 | 0 |
Government Securities | Identical Assets (Level 1) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 15 | 11 |
Government Securities | Observable Inputs (Level 2) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 556 | 380 |
Government Securities | Unobservable Inputs (Level 3) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | 0 |
Real Estate | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 566 | 412 |
Investments measured at NAV | 566 | 412 |
Real Estate | Identical Assets (Level 1) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | 0 |
Real Estate | Observable Inputs (Level 2) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | 0 |
Real Estate | Unobservable Inputs (Level 3) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | 0 |
Short-term investment funds | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 407 | 319 |
Investments measured at NAV | 0 | 0 |
Short-term investment funds | Identical Assets (Level 1) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 391 | 297 |
Short-term investment funds | Observable Inputs (Level 2) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 16 | 22 |
Short-term investment funds | Unobservable Inputs (Level 3) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | 0 |
Company common stock | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 326 | 270 |
Investments measured at NAV | 0 | 0 |
Company common stock | Identical Assets (Level 1) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 326 | 270 |
Company common stock | Observable Inputs (Level 2) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | 0 |
Company common stock | Unobservable Inputs (Level 3) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | 0 |
Other Investments | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 374 | 350 |
Investments measured at NAV | 0 | 0 |
Other Investments | Identical Assets (Level 1) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 12 | 15 |
Other Investments | Observable Inputs (Level 2) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 12 | 23 |
Other Investments | Unobservable Inputs (Level 3) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | $ 350 | $ 312 |
Retirement Benefits (Summary 74
Retirement Benefits (Summary of changes in the fair value of the plans’ Level 3 assets) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Fair Value, Asset Value, Beginning | $ 323 | $ 260 |
Purchases | 29 | 35 |
Sales | (16) | (28) |
Unrealized Gain/(Loss) | 2 | 68 |
Realized Gain/(Loss) | 0 | 1 |
Exchange Rate Impact | 41 | (13) |
Transfers in/(out) and Other | (7) | 0 |
Fair Value, Asset Value, Ending | 372 | 323 |
Other Investments | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Fair Value, Asset Value, Beginning | 312 | 257 |
Purchases | 20 | 27 |
Sales | (15) | (28) |
Unrealized Gain/(Loss) | (7) | 67 |
Realized Gain/(Loss) | 0 | 1 |
Exchange Rate Impact | 40 | (12) |
Transfers in/(out) and Other | 0 | 0 |
Fair Value, Asset Value, Ending | 350 | 312 |
Corporate stocks | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Fair Value, Asset Value, Beginning | 2 | 2 |
Purchases | 0 | 0 |
Sales | 0 | 0 |
Unrealized Gain/(Loss) | 0 | 0 |
Realized Gain/(Loss) | 0 | 0 |
Exchange Rate Impact | 0 | 0 |
Transfers in/(out) and Other | 0 | 0 |
Fair Value, Asset Value, Ending | 2 | 2 |
Corporate Obligations | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Fair Value, Asset Value, Beginning | 9 | 1 |
Purchases | 9 | 8 |
Sales | (1) | 0 |
Unrealized Gain/(Loss) | 9 | 1 |
Realized Gain/(Loss) | 0 | 0 |
Exchange Rate Impact | 1 | (1) |
Transfers in/(out) and Other | (7) | 0 |
Fair Value, Asset Value, Ending | $ 20 | $ 9 |
Stock Benefit Plans (Narrative)
Stock Benefit Plans (Narrative) (Details) $ / shares in Units, $ in Millions | 1 Months Ended | 12 Months Ended | ||||
May 31, 2007shares | Jul. 31, 2002shares | Dec. 31, 2017USD ($)purchase$ / sharesshares | Dec. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2015USD ($)$ / shares | May 19, 2011equity_incentive_plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Average volatility periods ending on fifteen anniversaries prior to valuation date | 15 years | |||||
Options, weighted-average grant-date fair value (in dollars per share) | $ / shares | $ 15.01 | $ 11.57 | $ 11.34 | |||
Total intrinsic value of options exercised | $ | $ 195.3 | $ 137.7 | $ 124.6 | |||
Cash received from the exercise of stock options | $ | $ 126.7 | 105.4 | 134.7 | |||
Restricted Stock | Certain grants in 2005 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting period, years | 3 years | |||||
Restricted Stock Units And Performance Stock Units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting period, years | 3 years | |||||
Total fair value of deferred stock units | $ | $ 117.1 | $ 91.4 | $ 114.3 | |||
Restricted Stock Units (RSUs) | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Weighted-average grant-date fair value (in dollars per share) | $ / shares | $ 73.23 | $ 57.54 | $ 56.81 | |||
Stock Options | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Daily closing price observation period | 10 years | |||||
Average volatility periods ending on fifteen anniversaries prior to valuation date | 10 years | |||||
Unrecognized compensation cost related to option awards | $ | $ 14.9 | |||||
Weighted-average period over which that cost is expected to be recognized, years | 1 year 3 months 40 days | |||||
Restricted Stock Units, Restricted Stock and Performance Units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Weighted-average period over which that cost is expected to be recognized, years | 1 year 28 days | |||||
Unrecognized compensation cost | $ | $ 197.4 | |||||
Performance Shares | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Performance-based restricted stock unit payable range minimum | 0.00% | |||||
Performance-based restricted stock unit payable range maximum | 200.00% | |||||
Performance period | 3 years | |||||
Weighted-average grant-date fair value (in dollars per share) | $ / shares | $ 73.20 | $ 57.47 | $ 57.33 | |||
Shares distributable in period (in shares) | 254,455 | |||||
Performance Shares | PSUs Awarded in 2012 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Target payout percentage | 120.00% | |||||
Performance Shares | PSUs Awarded in 2013 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Target payout percentage | 137.00% | |||||
Performance Shares | PSUs Awarded in 2014 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Target payout percentage | 167.00% | |||||
Award Plans 2000 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of previous equity plans replaced | equity_incentive_plan | 2 | |||||
Incentive and Stock Award Plan 2011 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Awards authorized (not more than 23.2 million shares for the 2011 Plan and 35.6 million shares for the 1999 Plan) (in shares) | 23,200,000 | |||||
Incentive and Stock Award Plan 2011 | Stock Options | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock options vesting percentage | 25.00% | |||||
Contractual term of stock option awards | 10 years | |||||
Employee Stock Purchase Plan 1999 | Employee Stock | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Awards authorized (not more than 23.2 million shares for the 2011 Plan and 35.6 million shares for the 1999 Plan) (in shares) | 35,600,000 | |||||
Number of share purchase times per plan year | purchase | 4 | |||||
Stock option price percent | 95.00% | |||||
Reduction in the shares available (in shares) | 10,000,000 | |||||
Shares purchased by employees (in shares) | 428,244 | |||||
Shares available for issuance under the plan (in shares) | 1,353,166 | |||||
International Plan | Employee Stock | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Awards authorized (not more than 23.2 million shares for the 2011 Plan and 35.6 million shares for the 1999 Plan) (in shares) | 12,000,000 | |||||
Shares purchased by employees (in shares) | 121,292 | |||||
Shares available for issuance under the plan (in shares) | 2,491,910 | |||||
Shares due to shareholder action (in shares) | 4,000,000 | 5,000,000 |
Stock Benefit Plans (Black-Scho
Stock Benefit Plans (Black-Scholes Option Pricing Valuation Model For Options) (Details) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Risk-free interest rate | 2.09% | 1.39% | 1.78% |
Expected life (in years) | 6 years | 6 years | 6 years |
Expected volatility | 23.23% | 25.55% | 23.75% |
Expected dividend yield | 1.86% | 2.15% | 1.97% |
Stock Benefit Plans (The Status
Stock Benefit Plans (The Status Of Stock Option Awards) (Details) $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($)$ / sharesshares | |
Options, Outstanding [Roll Forward] | |
Number of options outstanding at January 1, 2017 (in shares) | shares | 13,242,529 |
Number of options Granted (in shares) | shares | 1,710,853 |
Number of options Exercised (in shares) | shares | (4,258,027) |
Number of options Forfeited (in shares) | shares | (494,653) |
Number of options outstanding at December, 31 2017 (in shares) | shares | 10,200,702 |
Options vested or expected to vest at December 31, 2017 (in shares) | shares | 10,052,720 |
Options exercisable at December 31, 2017 (in shares) | shares | 6,247,224 |
Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | |
Weighted Average Exercise Price per option at January 1, 2017 | $ / shares | $ 39.15 |
Weighted Average Exercise Price per option Granted | $ / shares | 73.20 |
Weighted Average Exercise Price per option Exercised | $ / shares | 30.42 |
Weighted Average Exercise Price per Option Forfeited | $ / shares | 62 |
Weighted Average Exercise Price per option at December 31, 2017 | $ / shares | 47.39 |
Weighted Average Exercise Price per option expected to vest | $ / shares | 47.17 |
Weighted Average Exercise Price per option exercisable at closing | $ / shares | $ 37.75 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | |
Weighted Average Remaining Contractual Term at closing, years | 5 years 11 months |
Weighted Average Remaining Contractual Term expected to vest, years | 5 years 11 months |
Weighted Average Remaining Contractual Term exercisable at closing, years | 4 years 7 months |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Aggregate Intrinsic Value [Abstract] | |
Aggregate Intrinsic Value at closing | $ | $ 351,317 |
Aggregate Intrinsic Value expected to vest | $ | 348,494 |
Aggregate Intrinsic Value exercisable at closing | $ | $ 275,398 |
Stock Benefit Plans (Summary Of
Stock Benefit Plans (Summary Of The Status Of Restricted Stock Unit And Performance Unit Awards) (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Restricted Stock Units (RSUs) | |||
Restricted Stock Units and Performance Stock Units [Roll Forward] | |||
Non-vested balance at January 1, 2017 (in shares) | 3,044,029 | ||
Granted (in shares) | 2,610,599 | ||
Vested (in shares) | (1,307,825) | ||
Forfeited (in shares) | (294,056) | ||
Non-vested balance at December 31, 2017 (in shares) | 4,052,747 | 3,044,029 | |
Weighted Average Grant Date Fair Value [Roll Forward] | |||
Non-vested balance at January 1, 2017 (in dollars per share) | $ 56.40 | ||
Granted (in dollars per share) | 73.23 | $ 57.54 | $ 56.81 |
Vested (in dollars per share) | 55.31 | ||
Forfeited (in dollars per share) | 65.06 | ||
Non-vested balance at December 31, 2017 (in dollars per share) | $ 66.97 | $ 56.40 | |
Performance Shares | |||
Restricted Stock Units and Performance Stock Units [Roll Forward] | |||
Non-vested balance at January 1, 2017 (in shares) | 722,017 | ||
Granted (in shares) | 260,387 | ||
Vested (in shares) | (212,458) | ||
Forfeited (in shares) | (79,345) | ||
Non-vested balance at December 31, 2017 (in shares) | 690,601 | 722,017 | |
Weighted Average Grant Date Fair Value [Roll Forward] | |||
Non-vested balance at January 1, 2017 (in dollars per share) | $ 54.68 | ||
Granted (in dollars per share) | 73.20 | $ 57.47 | $ 57.33 |
Vested (in dollars per share) | 48.19 | ||
Forfeited (in dollars per share) | 61.92 | ||
Non-vested balance at December 31, 2017 (in dollars per share) | $ 62.82 | $ 54.68 |
Fair Value Measurements (Narrat
Fair Value Measurements (Narrative) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets transferred between Level 1 and Level 2 | $ 0 | |
Adjustments to acquisition related contingent consideration liability | 3,000,000 | |
Increase in fair value of contingent consideration due to 5% increase in projections | 18,000,000 | |
Decrease in fair value of contingent consideration due to 5% decrease in projections | 19,000,000 | |
Equity method investments | $ 405,000,000 | $ 389,000,000 |
Minimum | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Revenue target period (in years) | 2 years | |
Maximum | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Revenue target period (in years) | 4 years | |
Private Equity Funds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Equity method investments | $ 76,000,000 | $ 79,000,000 |
Money Market Funds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Share price (Rand) | $ 1 |
Fair Value Measurements (Assets
Fair Value Measurements (Assets And Liabilities Measured At Fair Value On A Recurring Basis) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | |
Financial instruments owned: | |||
Exchange traded equity securities | $ 81 | $ 89 | |
Total assets measured at fair value | 16,176 | 14,332 | |
Fair Value, Measurements, Recurring | |||
Financial instruments owned: | |||
Total assets measured at fair value | 382 | 252 | |
Fiduciary Assets: | |||
Fiduciary assets | 111 | 90 | |
Liabilities: | |||
Total liabilities measured at fair value | 189 | 241 | |
Identical Assets (Level 1) | |||
Financial instruments owned: | |||
Exchange traded equity securities | 81 | 89 | |
Total assets measured at fair value | 2,586 | 2,618 | |
Identical Assets (Level 1) | Fair Value, Measurements, Recurring | |||
Financial instruments owned: | |||
Total assets measured at fair value | 382 | 252 | |
Fiduciary Assets: | |||
Fiduciary assets | 111 | 90 | |
Liabilities: | |||
Total liabilities measured at fair value | 0 | 0 | |
Observable Inputs (Level 2) | |||
Financial instruments owned: | |||
Exchange traded equity securities | 0 | 0 | |
Total assets measured at fair value | 4,238 | 3,452 | |
Observable Inputs (Level 2) | Fair Value, Measurements, Recurring | |||
Financial instruments owned: | |||
Total assets measured at fair value | 0 | 0 | |
Fiduciary Assets: | |||
Fiduciary assets | 0 | 0 | |
Liabilities: | |||
Total liabilities measured at fair value | 0 | 0 | |
Unobservable Inputs (Level 3) | |||
Financial instruments owned: | |||
Exchange traded equity securities | 0 | 0 | |
Total assets measured at fair value | 372 | 323 | |
Unobservable Inputs (Level 3) | Fair Value, Measurements, Recurring | |||
Financial instruments owned: | |||
Total assets measured at fair value | 0 | 0 | |
Fiduciary Assets: | |||
Fiduciary assets | 0 | 0 | |
Liabilities: | |||
Total liabilities measured at fair value | 189 | 241 | |
Other Assets | Fair Value, Measurements, Recurring | |||
Financial instruments owned: | |||
Mutual funds | [1] | 158 | 141 |
Other Assets | Identical Assets (Level 1) | Fair Value, Measurements, Recurring | |||
Financial instruments owned: | |||
Mutual funds | [1] | 158 | 141 |
Other Assets | Observable Inputs (Level 2) | Fair Value, Measurements, Recurring | |||
Financial instruments owned: | |||
Mutual funds | 0 | 0 | |
Other Assets | Unobservable Inputs (Level 3) | Fair Value, Measurements, Recurring | |||
Financial instruments owned: | |||
Mutual funds | 0 | 0 | |
Cash and Cash Equivalents | Fair Value, Measurements, Recurring | |||
Financial instruments owned: | |||
Money market funds | [2] | 143 | 22 |
Cash and Cash Equivalents | Identical Assets (Level 1) | Fair Value, Measurements, Recurring | |||
Financial instruments owned: | |||
Money market funds | [2] | 143 | 22 |
Cash and Cash Equivalents | Observable Inputs (Level 2) | Fair Value, Measurements, Recurring | |||
Financial instruments owned: | |||
Money market funds | 0 | 0 | |
Cash and Cash Equivalents | Unobservable Inputs (Level 3) | Fair Value, Measurements, Recurring | |||
Financial instruments owned: | |||
Money market funds | 0 | 0 | |
Accounts Payable and Accrued Liabilities and Other Liabilities | Fair Value, Measurements, Recurring | |||
Liabilities: | |||
Contingent purchase consideration liability | [3] | 189 | 241 |
Accounts Payable and Accrued Liabilities and Other Liabilities | Identical Assets (Level 1) | Fair Value, Measurements, Recurring | |||
Liabilities: | |||
Contingent purchase consideration liability | 0 | 0 | |
Accounts Payable and Accrued Liabilities and Other Liabilities | Observable Inputs (Level 2) | Fair Value, Measurements, Recurring | |||
Liabilities: | |||
Contingent purchase consideration liability | 0 | 0 | |
Accounts Payable and Accrued Liabilities and Other Liabilities | Unobservable Inputs (Level 3) | Fair Value, Measurements, Recurring | |||
Liabilities: | |||
Contingent purchase consideration liability | [3] | 189 | 241 |
Money Market Funds | Fair Value, Measurements, Recurring | |||
Fiduciary Assets: | |||
Fiduciary assets | 111 | 90 | |
Money Market Funds | Identical Assets (Level 1) | Fair Value, Measurements, Recurring | |||
Fiduciary Assets: | |||
Fiduciary assets | 111 | 90 | |
Money Market Funds | Observable Inputs (Level 2) | Fair Value, Measurements, Recurring | |||
Fiduciary Assets: | |||
Fiduciary assets | 0 | 0 | |
Money Market Funds | Unobservable Inputs (Level 3) | Fair Value, Measurements, Recurring | |||
Fiduciary Assets: | |||
Fiduciary assets | $ 0 | $ 0 | |
[1] | Included in other assets in the consolidated balance sheets. | ||
[2] | Included in cash and cash equivalents in the consolidated balance sheets. | ||
[3] | ncluded in accounts payable and accrued liabilities and other liabilities in the consolidated balance sheets. |
Fair Value Measurements (Change
Fair Value Measurements (Changes In Fair Value Of Level 3 Liabilities Representing Acquisition Related Contingent Consideration) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Revaluation Impact | $ 3 | $ 9 | $ 45 |
Contingent Consideration | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Balance at January 1, | 241 | 309 | |
Additions | 51 | 17 | |
Payments | (108) | (86) | |
Other | 2 | (8) | |
Balance at December 31, | $ 189 | $ 241 | $ 309 |
Fair Value Measurements (Equity
Fair Value Measurements (Equity Method Investments, Summarized Financial Information) (Details) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | ||||
Dec. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2017ZAR / shares | Dec. 31, 2016USD ($) | Dec. 31, 2015ZAR / shares | Feb. 24, 2015USD ($) | |
Schedule of Equity Method Investments [Line Items] | |||||
Carrying value of equity method investments | $ 405 | $ 389 | |||
Gain from deconsolidation of subsidiary | 11 | ||||
Alexander Forbes Group Holdings Limited | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Carrying value of equity method investments | $ 266 | ||||
Equity investment shares owned by the Company (in shares) | shares | 443 | ||||
Market value of equity method investment | $ 239 | ||||
Share price | (per share) | $ 7.50 | ZAR 6.87 | |||
Alexander Forbes Group Holdings Limited | Mercer Consulting Group | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Percentage of interest acquired | 33.00% | ||||
Share price | ZAR / shares | ZAR 7.50 | ||||
Benefitfocus | Mercer Consulting Group | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Percentage of interest acquired | 9.90% | ||||
Business acquisition, consideration to be transferred, planned acquisition | $ 75 | ||||
Common stock, value, outstanding | $ 76 | ||||
Marsh India Insurance Brokers Limited | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Percentage of ownership in equity method investment | 26.00% | ||||
Local shareholders, ownership percentage | 74.00% | ||||
Minimum | Alexander Forbes Group Holdings Limited | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Share price | $ / shares | $ 5.26 | ||||
Maximum | Alexander Forbes Group Holdings Limited | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Share price | $ / shares | $ 7.95 |
Fair Value Measurements (Schedu
Fair Value Measurements (Schedule of Equity Method Investments) (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2015 | ||
Schedule of Equity Method Investments [Line Items] | ||||
Revenue | $ 628 | $ 843 | $ 1,018 | |
Net investment income | [1] | 1,834 | 1,824 | 1,620 |
Net income | 476 | 91 | 196 | |
Total assets | 24,739 | 22,997 | ||
Total liabilities | 22,817 | 21,087 | ||
Non-controlling interests | 19 | 12 | ||
Alexander Forbes Group Holdings Limited | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Net investment income | $ 1,500 | $ 1,900 | $ 1,500 | |
[1] | (a) Net investment income in 2017, 2016 and 2015 includes approximately $1.5 billion, $1.9 billion and $1.5 billion, respectively, related to Alexander Forbes, substantially all of which is credited to policy holders. |
Long-Term Commitments (Narrativ
Long-Term Commitments (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Concentration Risk [Line Items] | |||
Net rental costs | $ 354 | $ 367 | $ 381 |
Rentals from subleases | $ 8 | $ 9 | $ 14 |
Office Building | Lease Concentration Risk | Lease Obligations | |||
Concentration Risk [Line Items] | |||
Lease obligations for office space | 99.00% |
Long-term Commitments (Operatin
Long-term Commitments (Operating Lease Agreements) (Details) $ in Millions | Dec. 31, 2017USD ($) |
Gross Rental Commitments | |
2018, Gross Rental Commitments | $ 355 |
2019, Gross Rental Commitments | 316 |
2020, Gross Rental Commitments | 291 |
2021, Gross Rental Commitments | 226 |
2022, Gross Rental Commitments | 207 |
Subsequent years, Gross Rental Commitments | 773 |
Rental from Subleases | |
2018, Rentals from Subleases | 41 |
2019, Rentals from Subleases | 34 |
2020, Rentals from Subleases | 31 |
2021, Rentals from Subleases | 3 |
2022, Rentals from Subleases | 1 |
Subsequent years, Rentals from Subleases | 1 |
Net Rental Commitments | |
2018, Net Rental Commitments | 314 |
2019, Net Rental Commitments | 282 |
2020, Net Rental Commitments | 260 |
2021, Net Rental Commitments | 223 |
2022, Net Rental Commitments | 206 |
Subsequent years, Net Rental Commitments | $ 772 |
Long-term Commitments (Future M
Long-term Commitments (Future Minimum Commitments) (Details) $ in Millions | Dec. 31, 2017USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,018 | $ 228 |
2,019 | 106 |
2,020 | 28 |
Subsequent years | 25 |
Total | $ 387 |
Debt (Schedule Of Outstanding D
Debt (Schedule Of Outstanding Debt) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Mar. 31, 2016 |
Debt Instrument [Line Items] | |||
Commercial paper outstanding | $ 0 | $ 50 | |
Current portion of long-term debt | 262 | 262 | |
Short-term debt | 262 | 312 | |
Long-term debt, current and noncurrent | 5,487 | 4,757 | |
Long-term debt and capital lease obligations | 5,225 | 4,495 | |
2.30% Senior Debt Obligations Due 2017 | |||
Debt Instrument [Line Items] | |||
Long-term debt, current and noncurrent | $ 0 | 250 | |
Interest rate | 2.30% | ||
2.55% Senior Debt Obligations Due 2018 | |||
Debt Instrument [Line Items] | |||
Long-term debt, current and noncurrent | $ 250 | 249 | |
Interest rate | 2.55% | ||
2.35% Senior Debt Obligations Due 2019 | |||
Debt Instrument [Line Items] | |||
Long-term debt, current and noncurrent | $ 299 | 299 | |
Interest rate | 2.35% | ||
2.35% Senior Debt Obligations Due 2020 | |||
Debt Instrument [Line Items] | |||
Long-term debt, current and noncurrent | $ 498 | 497 | |
Interest rate | 2.35% | ||
4.80% Senior Debt Obligations Due 2021 | |||
Debt Instrument [Line Items] | |||
Long-term debt, current and noncurrent | $ 498 | 498 | |
Interest rate | 4.80% | ||
2.75% Senior Debt Obligations Due 2022 | |||
Debt Instrument [Line Items] | |||
Long-term debt, current and noncurrent | $ 496 | 0 | |
Interest rate | 2.75% | ||
3.30% Senior Debt Obligations Due 2023 | |||
Debt Instrument [Line Items] | |||
Long-term debt, current and noncurrent | $ 348 | 347 | |
Interest rate | 3.30% | 3.30% | |
4.05% Senior Debt Obligations Due 2023 | |||
Debt Instrument [Line Items] | |||
Long-term debt, current and noncurrent | $ 248 | 248 | |
Interest rate | 4.05% | ||
3.50% Senior Debt Obligations Due 2024 | |||
Debt Instrument [Line Items] | |||
Long-term debt, current and noncurrent | $ 596 | 596 | |
Interest rate | 3.50% | ||
3.50% Senior Debt Obligations Due 2025 | |||
Debt Instrument [Line Items] | |||
Long-term debt, current and noncurrent | $ 496 | 495 | |
Interest rate | 3.50% | ||
3.75% Senior Debt Obligations Due 2026 | |||
Debt Instrument [Line Items] | |||
Long-term debt, current and noncurrent | $ 596 | 596 | |
Interest rate | 3.75% | ||
5.875% Senior Debt Obligations Due 2033 | |||
Debt Instrument [Line Items] | |||
Long-term debt, current and noncurrent | $ 297 | 297 | |
Interest rate | 5.875% | ||
4.35% Senior Debt Obligation Due 2047 | |||
Debt Instrument [Line Items] | |||
Long-term debt, current and noncurrent | $ 492 | 0 | |
Interest rate | 4.35% | ||
Mortgage Due 2035 | |||
Debt Instrument [Line Items] | |||
Long-term debt, current and noncurrent | $ 370 | 382 | |
Interest rate | 5.70% | ||
Other Debt Instruments | |||
Debt Instrument [Line Items] | |||
Long-term debt, current and noncurrent | $ 3 | $ 3 |
Debt (Narrative) (Details)
Debt (Narrative) (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |||
Apr. 30, 2017 | Mar. 31, 2016 | Dec. 31, 2017 | Jan. 31, 2017 | Dec. 31, 2016 | |
Debt Instrument [Line Items] | |||||
Commercial paper outstanding | $ 0 | $ 50,000,000 | |||
Debt maturity | $ 250,000,000 | ||||
3.30% Senior Debt Obligations Due 2023 | |||||
Debt Instrument [Line Items] | |||||
Interest rate | 3.30% | 3.30% | |||
Debt instrument, amount | $ 350,000,000 | ||||
Debt instrument, term | 7 years | ||||
3.75% Senior Debt Obligations Due 2026 | |||||
Debt Instrument [Line Items] | |||||
Interest rate | 3.75% | ||||
Amended Revolving Credit Facility November 24, 2015 | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, term | 5 years | ||||
Revolving credit facility, borrowing capacity | $ 1,500,000,000 | ||||
Revolving credit facility, amount outstanding | 0 | ||||
Other Debt Facilities | |||||
Debt Instrument [Line Items] | |||||
Revolving credit facility, amount outstanding | 0 | 1,600,000 | |||
Debt instrument, unused borrowing capacity | 624,000,000 | $ 376,000,000 | |||
Commercial Paper | |||||
Debt Instrument [Line Items] | |||||
Short-term debt | $ 1,500,000,000 | ||||
Senior Notes | 2.75% Senior Debt Obligations Due 2022 | |||||
Debt Instrument [Line Items] | |||||
Interest rate | 2.75% | ||||
Debt instrument, amount | $ 500,000,000 | ||||
Senior Notes | 4.35% Senior Debt Obligations Due 2047 | |||||
Debt Instrument [Line Items] | |||||
Interest rate | 4.35% | ||||
Debt instrument, amount | $ 500,000,000 |
Debt (Scheduled Repayments) (De
Debt (Scheduled Repayments) (Details) $ in Millions | Dec. 31, 2017USD ($) |
Maturities of Long-term Debt [Abstract] | |
Repayments of principal in 2018 | $ 262 |
Repayments of principal in 2019 | 316 |
Repayments of principal in 2020 | 514 |
Repayments of principal in 2021 | 515 |
Repayments of principal in 2022 | $ 515 |
Debt (Estimated Fair Value Of S
Debt (Estimated Fair Value Of Significant Financial Instruments) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Estimate of Fair Value Measurement | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Short-term debt | $ 264 | $ 313 |
Long-term debt | 5,444 | 4,625 |
Reported Value Measurement | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Short-term debt | 262 | 312 |
Long-term debt | $ 5,225 | $ 4,495 |
Integration and Restructuring91
Integration and Restructuring Costs (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring actions costs | $ 40 | $ 44 | $ 28 | |
Liability balance | 65 | 93 | 93 | $ 92 |
Payments for restructuring | 71 | $ 39 | $ 27 | |
Operating Segments | Risk and Insurance Services Segment | Acquisition Related | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring actions costs | 11 | |||
Operating Segments | Consulting Segment | Acquisition Related | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring actions costs | 19 | |||
Corporate, Non-Segment | Acquisition Related | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring actions costs | $ 10 |
Integration and Restructuring92
Integration and Restructuring Costs (Restructuring Activities) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Restructuring Reserve [Roll Forward] | |||
Liability at beginning of period | $ 93 | $ 93 | $ 92 |
Expense Incurred | 40 | 44 | 28 |
Cash Paid | (71) | (39) | (27) |
Other | 3 | (5) | |
Liability at end of period | 65 | 93 | 93 |
Severance | |||
Restructuring Reserve [Roll Forward] | |||
Liability at beginning of period | 32 | 15 | |
Expense Incurred | 31 | 40 | |
Cash Paid | (49) | (22) | |
Other | 1 | (1) | |
Liability at end of period | 15 | 32 | 15 |
Future rent under non-cancelable leases and other costs | |||
Restructuring Reserve [Roll Forward] | |||
Liability at beginning of period | 61 | 78 | |
Expense Incurred | 9 | 4 | |
Cash Paid | (22) | (17) | |
Other | 2 | (4) | |
Liability at end of period | $ 50 | $ 61 | $ 78 |
Common Stock (Details)
Common Stock (Details) - USD ($) shares in Millions | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Nov. 30, 2016 | |
Equity, Class of Treasury Stock [Line Items] | ||||
Payments for repurchase of common stock | $ 900,000,000 | $ 800,000,000 | $ 1,400,000,000 | |
Shares issued in period | 5.8 | 5.3 | ||
Common Stock | ||||
Equity, Class of Treasury Stock [Line Items] | ||||
Common stock repurchased (in shares) | 11.5 | 12.7 | ||
Stock repurchase program, authorized amount | $ 2,500,000,000 | |||
Stock repurchase program, remaining authorized repurchase amount | $ 1,500,000,000 |
Claims, Lawsuits And Other Co94
Claims, Lawsuits And Other Contingencies (Details) £ in Millions | Dec. 31, 2017GBP (£) |
Other Contingencies-Guarantees | |
Loss Contingencies [Line Items] | |
Amount reinsured by third party | £ 40 |
Segment Information (Details Fo
Segment Information (Details For MMC's Operating Segments) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Segment Reporting Information [Line Items] | ||||||||||||
Revenue | $ 3,685 | $ 3,341 | $ 3,495 | $ 3,503 | $ 3,364 | $ 3,135 | $ 3,376 | $ 3,336 | $ 14,024 | $ 13,211 | $ 12,893 | |
Operating income | 686 | $ 597 | $ 764 | $ 809 | 633 | $ 572 | $ 726 | $ 733 | 2,856 | 2,664 | 2,419 | |
Total Assets | 20,429 | 18,190 | 20,429 | 18,190 | 18,216 | |||||||
Depreciation and Amortization | 481 | 438 | 423 | |||||||||
Capital Expenditures | 302 | 253 | 325 | |||||||||
Risk and Insurance Services Segment | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Interest income, fiduciary assets | 39 | 26 | 21 | |||||||||
Consulting Segment | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Interest income, fiduciary assets | 4 | 3 | 4 | |||||||||
Operating Segments | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Revenue | 14,074 | 13,255 | 12,933 | |||||||||
Operating income | 3,045 | 2,856 | 2,614 | |||||||||
Total Assets | 24,690 | 21,498 | 24,690 | 21,498 | 19,775 | |||||||
Depreciation and Amortization | 411 | 369 | 360 | |||||||||
Capital Expenditures | 227 | 196 | 244 | |||||||||
Operating Segments | Risk and Insurance Services Segment | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Revenue | [1] | 7,630 | 7,143 | 6,869 | ||||||||
Operating income | 1,871 | 1,753 | 1,539 | |||||||||
Total Assets | 16,490 | 14,728 | 16,490 | 14,728 | 13,290 | |||||||
Depreciation and Amortization | 282 | 248 | 240 | |||||||||
Capital Expenditures | 139 | 128 | 136 | |||||||||
Interest income, fiduciary assets | 39 | 26 | 21 | |||||||||
Equity method income | 14 | 12 | 6 | |||||||||
Operating Segments | Consulting Segment | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Revenue | [2] | 6,444 | 6,112 | 6,064 | ||||||||
Operating income | 1,174 | 1,103 | 1,075 | |||||||||
Total Assets | 8,200 | 6,770 | 8,200 | 6,770 | 6,485 | |||||||
Depreciation and Amortization | 129 | 121 | 120 | |||||||||
Capital Expenditures | 88 | 68 | 108 | |||||||||
Interest income, fiduciary assets | 4 | 3 | 4 | |||||||||
Equity method income | 17 | 19 | 21 | |||||||||
Corporate and Elimination | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Revenue | (50) | (44) | (40) | |||||||||
Operating income | (189) | (192) | (195) | |||||||||
Total Assets | [3] | $ (4,261) | $ (3,308) | (4,261) | (3,308) | (1,559) | ||||||
Depreciation and Amortization | 70 | 69 | 63 | |||||||||
Capital Expenditures | 75 | 57 | 81 | |||||||||
Intersegment Eliminations | Risk and Insurance Services Segment | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Revenue | 5 | 6 | 6 | |||||||||
Intersegment Eliminations | Consulting Segment | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Revenue | $ 45 | $ 38 | $ 34 | |||||||||
[1] | Includes inter-segment revenue of $5 million in 2017 and $6 million in both 2016 and 2015, interest income on fiduciary funds of $39 million, $26 million and $21 million in 2017, 2016 and 2015, respectively, and equity method income of $14 million, $12 million and $6 million in 2017, 2016 and 2015, respectively. | |||||||||||
[2] | Includes inter-segment revenue of $45 million, $38 million and $34 million in 2017, 2016 and 2015, respectively, interest income on fiduciary funds of $4 million, $3 million and $4 million in 2017, 2016 and 2015, respectively and equity method income of $17 million, $19 million and $21 million in 2017, 2016 and 2015, respectively. | |||||||||||
[3] | Corporate assets primarily include insurance recoverables, pension related assets, the owned portion of the Company headquarters building and intercompany eliminations. |
Segment Information (Selected I
Segment Information (Selected Information and Details Of Operating Segment Revenue) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Segment Reporting Information [Line Items] | ||||||||||||
Revenue | $ 3,685 | $ 3,341 | $ 3,495 | $ 3,503 | $ 3,364 | $ 3,135 | $ 3,376 | $ 3,336 | $ 14,024 | $ 13,211 | $ 12,893 | |
Fixed assets, net | 712 | 725 | 712 | 725 | 773 | |||||||
United States | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Revenue | 6,870 | 6,573 | 6,316 | |||||||||
Fixed assets, net | 399 | 412 | 399 | 412 | 460 | |||||||
United Kingdom | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Revenue | 2,112 | 2,019 | 2,036 | |||||||||
Fixed assets, net | 91 | 94 | 91 | 94 | 115 | |||||||
Europe | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Revenue | 2,197 | 2,022 | 1,902 | |||||||||
Fixed assets, net | 57 | 53 | 57 | 53 | 57 | |||||||
Asia Pacific | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Revenue | 1,517 | 1,363 | 1,333 | |||||||||
Fixed assets, net | 78 | 76 | 78 | 76 | 49 | |||||||
Other Geographic Areas | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Revenue | 1,378 | 1,278 | 1,346 | |||||||||
Fixed assets, net | $ 87 | $ 90 | 87 | 90 | 92 | |||||||
Operating Segments | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Revenue | 14,074 | 13,255 | 12,933 | |||||||||
Operating Segments | Risk and Insurance Services Segment | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Revenue | [1] | 7,630 | 7,143 | 6,869 | ||||||||
Operating Segments | Consulting Segment | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Revenue | [2] | 6,444 | 6,112 | 6,064 | ||||||||
Corporate and Elimination | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Revenue | (50) | (44) | (40) | |||||||||
Marsh Insurance Group | Operating Segments | Risk and Insurance Services Segment | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Revenue | 6,433 | 5,997 | 5,745 | |||||||||
Guy Carpenter Reinsurance Group | Operating Segments | Risk and Insurance Services Segment | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Revenue | 1,197 | 1,146 | 1,124 | |||||||||
Mercer Consulting Group | Operating Segments | Consulting Segment | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Revenue | 4,528 | 4,323 | 4,313 | |||||||||
Oliver Wyman Group Consulting Group | Operating Segments | Consulting Segment | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Revenue | $ 1,916 | $ 1,789 | $ 1,751 | |||||||||
[1] | Includes inter-segment revenue of $5 million in 2017 and $6 million in both 2016 and 2015, interest income on fiduciary funds of $39 million, $26 million and $21 million in 2017, 2016 and 2015, respectively, and equity method income of $14 million, $12 million and $6 million in 2017, 2016 and 2015, respectively. | |||||||||||
[2] | Includes inter-segment revenue of $45 million, $38 million and $34 million in 2017, 2016 and 2015, respectively, interest income on fiduciary funds of $4 million, $3 million and $4 million in 2017, 2016 and 2015, respectively and equity method income of $17 million, $19 million and $21 million in 2017, 2016 and 2015, respectively. |
Selected Quarterly Financial 97
Selected Quarterly Financial Data and Supplemental Information (Details) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2017USD ($)$ / shares | Sep. 30, 2017USD ($)$ / shares | Jun. 30, 2017USD ($)$ / shares | Mar. 31, 2017USD ($)$ / shares | Dec. 31, 2016USD ($)$ / shares | Sep. 30, 2016USD ($)$ / shares | Jun. 30, 2016USD ($)$ / shares | Mar. 31, 2016USD ($)$ / shares | Dec. 31, 2017USD ($)$ / shares | Dec. 31, 2016USD ($)$ / shares | Dec. 31, 2015USD ($)$ / shares | Feb. 19, 2018stockholder | |
Subsequent Event [Line Items] | ||||||||||||
Revenue | $ | $ 3,685 | $ 3,341 | $ 3,495 | $ 3,503 | $ 3,364 | $ 3,135 | $ 3,376 | $ 3,336 | $ 14,024 | $ 13,211 | $ 12,893 | |
Operating income | $ | 686 | 597 | 764 | 809 | 633 | 572 | 726 | 733 | 2,856 | 2,664 | 2,419 | |
Income from continuing operations | $ | 28 | 397 | 507 | 578 | 441 | 384 | 480 | 490 | 1,510 | 1,795 | 1,636 | |
Discontinued operations, net of tax | $ | 2 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 2 | 0 | 0 | |
Net income attributable to the Company | $ | $ 29 | $ 393 | $ 501 | $ 569 | $ 436 | $ 379 | $ 472 | $ 481 | $ 1,492 | $ 1,768 | $ 1,599 | |
Basic Per Share Data: | ||||||||||||
Continuing operations (in dollars per share) | $ 0.05 | $ 0.77 | $ 0.98 | $ 1.10 | $ 0.85 | $ 0.73 | $ 0.91 | $ 0.92 | $ 2.91 | $ 3.41 | $ 3.01 | |
Discontinued operations, net of tax (in dollars per share) | 0.01 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||
Net income attributable to the Company (in dollars per share) | 0.06 | 0.77 | 0.98 | 1.10 | 0.85 | 0.73 | 0.91 | 0.92 | 2.91 | 3.41 | 3.01 | |
Diluted Per Share Data: | ||||||||||||
Continuing operations (in dollars per share) | 0.05 | 0.76 | 0.96 | 1.09 | 0.84 | 0.73 | 0.90 | 0.91 | 2.87 | 3.38 | 2.98 | |
Discontinued operations, net of tax (in dollars per share) | 0.01 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||
Net income attributable to the Company (in dollars per share) | 0.06 | 0.76 | 0.96 | 1.09 | 0.84 | 0.73 | 0.90 | 0.91 | $ 2.87 | $ 3.38 | $ 2.98 | |
Dividends Paid Per Share | $ 0.375 | $ 0.375 | $ 0.34 | $ 0.34 | $ 0.34 | $ 0.34 | $ 0.31 | $ 0.31 | ||||
Provisional charge | $ | $ 460 | |||||||||||
Subsequent Event | ||||||||||||
Diluted Per Share Data: | ||||||||||||
Stockholders of record | stockholder | 5,346 |