| Statement Of Income Alternative (USD $) | ||||
| In Millions, except Per Share data | 3 Months Ended
Jun. 30, 2009 | 3 Months Ended
Jun. 30, 2008 | 6 Months Ended
Jun. 30, 2009 | 6 Months Ended
Jun. 30, 2008 |
| Revenue | $2,629 | $3,033 | $5,238 | $6,057 |
| Expense: | ||||
| Compensation and benefits | 1,604 | 1,879 | 3,175 | 3,701 |
| Other operating expenses | 731 | 859 | 1,445 | 1,726 |
| Goodwill impairment charge | 315 | 115 | 315 | 540 |
| Operating expenses | 2,650 | 2,853 | 4,935 | 5,967 |
| Operating income (loss) | (21) | 180 | 303 | 90 |
| Interest income | 4 | 12 | 10 | 30 |
| Interest expense | (65) | (55) | (121) | (111) |
| Investment loss | (31) | (16) | (46) | (8) |
| Income (loss) before income taxes | (113) | 121 | 146 | 1 |
| Income taxes | 49 | 66 | 129 | 159 |
| Income (loss) from continuing operations | (162) | 55 | 17 | (158) |
| Discontinued operations, net of tax | (26) | 12 | (25) | 18 |
| Net income (loss) | (188) | 67 | (8) | (140) |
| Less: Net income attributable to non-controlling interests | 5 | 2 | 9 | 5 |
| Net income (loss) attributable to MMC | ($193) | $65 | ($17) | ($145) |
| Basic net income (loss) per share | ||||
| - Continuing operations | -0.31 | 0.1 | 0.01 | -0.3 |
| - Net income (loss) attributable to MMC | -0.36 | 0.12 | -0.03 | -0.27 |
| Diluted net income (loss) per share | ||||
| - Continuing operations | -0.32 | 0.1 | 0.01 | -0.32 |
| - Net income (loss) attributable to MMC | -0.37 | 0.12 | -0.03 | -0.28 |
| Weighted average number of shares outstanding | ||||
| - Basic | 522 | 512 | 519 | 515 |
| - Diluted | 522 | 512 | 519 | 515 |
| Shares outstanding at June 30, | 523 | 512 | ||
| Dividends declared per share | 0.2 | 0.2 | 0.6 | 0.6 |
| Statement Of Financial Position Classified (USD $) | ||
| In Millions | 6 Months Ended
Jun. 30, 2009 | 6 Months Ended
Dec. 31, 2008 |
| Current assets: | ||
| Cash and cash equivalents | $1,291 | $1,685 |
| Receivables | ||
| Commissions and fees | 2,575 | 2,418 |
| Advanced premiums and claims | 87 | 86 |
| Other | 310 | 354 |
| Commissions, Fees, Advanced Premiums and Claims, and other Receivables, Gross, Total | 2,972 | 2,858 |
| Less-allowance for doubtful accounts and cancellations | (118) | (103) |
| Net receivables | 2,854 | 2,755 |
| Other current assets | 345 | 344 |
| Total current assets | 4,490 | 4,784 |
| Goodwill and intangible assets | 6,983 | 7,163 |
| Fixed assets (net of accumulated depreciation and amortization of $1,411 at June 30, 2009 and $1,301 at December 31, 2008) | 970 | 969 |
| Pension related assets | 397 | 150 |
| Deferred tax assets | 1,182 | 1,146 |
| Other assets | 899 | 994 |
| Assets, Total | 14,921 | 15,206 |
| Current liabilities: | ||
| Short-term debt | 9 | 408 |
| Accounts payable and accrued liabilities | 1,712 | 1,688 |
| Accrued compensation and employee benefits | 820 | 1,224 |
| Accrued income taxes | 24 | 66 |
| Dividends payable | 105 | 0 |
| Total current liabilities | 2,670 | 3,386 |
| Fiduciary liabilities | 3,647 | 3,297 |
| Less - cash and investments held in a fiduciary capacity | (3,647) | (3,297) |
| Fiduciary liabilities net of cash and investments held in a fiduciary capacity, Total | 0 | 0 |
| Long-term debt | 3,588 | 3,194 |
| Retirement and postemployment benefits | 1,168 | 1,217 |
| Liabilities for errors and omissions | 515 | 512 |
| Other liabilities | 1,220 | 1,137 |
| Commitments and contingencies | - | - |
| 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 June 30, 2009 and December 31, 2008 | 561 | 561 |
| Additional paid-in capital | 1,182 | 1,245 |
| Retained earnings | 6,900 | 7,237 |
| Accumulated other comprehensive loss | (1,924) | (2,098) |
| Non-controlling interests | 33 | 38 |
| Stockholders Equity Subtotal Before Treasury Stock, Total | 6,752 | 6,983 |
| Less - treasury shares, at cost, 37,921,377 shares at June 30, 2009 and 46,375,622 shares at December 31, 2008 | (992) | (1,223) |
| Total equity | 5,760 | 5,760 |
| Liabilities and Stockholders' Equity, Total | $14,921 | $15,206 |
| Statement Of Financial Position Classified (Parenthetical) (USD $) | ||
| In Millions, except Share data | Jun. 30, 2009
| Dec. 31, 2008
|
| Fixed assets, accumulated depreciation and amortization | $1,411 | $1,301 |
| Preferred stock, par value | $1 | $1 |
| Preferred stock, authorized | 6,000,000 | 6,000,000 |
| Preferred stock, issued | 0 | 0 |
| Common stock, par value | $1 | $1 |
| Common stock, authorized | 1,600,000,000 | 1,600,000,000 |
| Common stock, issued | 560,641,640 | 560,641,640 |
| Treasury shares, shares | 37,921,377 | 46,375,622 |
| Statement Of Cash Flows Indirect (USD $) | ||
| In Millions | 6 Months Ended
Jun. 30, 2009 | 6 Months Ended
Jun. 30, 2008 |
| Operating cash flows: | ||
| Net loss | ($8) | ($140) |
| Adjustments to reconcile net loss to cash used for operations: | ||
| Goodwill impairment charge | 315 | 540 |
| Depreciation and amortization of fixed assets and capitalized software | 151 | 168 |
| Amortization of intangible assets | 32 | 36 |
| Provision for deferred income taxes | 16 | 72 |
| Loss on investments | 50 | 12 |
| (Gain) loss on disposition of assets | 39 | (2) |
| Stock option expense | 4 | 22 |
| Changes in assets and liabilities: | ||
| Net receivables | (98) | (271) |
| Other current assets | 0 | (34) |
| Other assets | (227) | (95) |
| Accounts payable and accrued liabilities | 15 | (51) |
| Accrued compensation and employee benefits | (404) | (369) |
| Accrued income taxes | (70) | (104) |
| Other liabilities | 39 | (53) |
| Effect of exchange rate changes | (90) | (48) |
| Net cash used for operations | (236) | (317) |
| Financing cash flows: | ||
| Proceeds from issuance of debt | 398 | 0 |
| Repayments of debt | (404) | (256) |
| Purchase of non-controlling interests | (24) | 0 |
| Purchase of treasury shares | (21) | (24) |
| Issuance of common stock | 20 | 25 |
| Dividends paid | (207) | (206) |
| Net cash used for financing activities | (238) | (461) |
| Investing cash flows: | ||
| Capital expenditures | (143) | (224) |
| Net sales of long-term investments | 8 | 27 |
| Proceeds from sales related to fixed assets | 4 | 2 |
| Dispositions | 70 | 50 |
| Acquisitions | (6) | (86) |
| Other, net | 7 | (4) |
| Net cash used for investing activities | (60) | (235) |
| Effect of exchange rate changes on cash and cash equivalents | 140 | 45 |
| Decrease in cash and cash equivalents | (394) | (968) |
| Cash and cash equivalents at beginning of period | 1,685 | 2,133 |
| Cash and cash equivalents at end of period | $1,291 | $1,165 |
| Statement Of Shareholders Equity And Other Comprehensive Income (USD $) | |||||||
| In Millions | Common Stock
| Additional Paid-In Capital
| Retained Earnings
| Accumulated Other Comprehensive Loss
| Non-Controlling Interests
| Total
| |
| Beginning Balance at Dec. 31, 2007 | $561 | $1,242 | $7,732 | ($351) | ($1,362) | $33 | |
| Change in accrued stock compensation costs | 11 | ||||||
| Net income (loss) (a) | (145) | 5 | (140) | ||||
| Foreign currency translation adjustments (b) | 109 | ||||||
| Issuance of shares under stock compensation plans and employee stock purchase plans | (15) | 74 | |||||
| Unrealized investment holding (losses) gains, net of reclassification adjustments (c) | 0 | ||||||
| Dividend equivalents paid | (6) | ||||||
| Net changes under SFAS 158, net of tax (d) | (10) | ||||||
| Dividends declared - (per share amounts: $.60) | (308) | ||||||
| Purchase of subsidiary shares from non-controlling interests | 0 | 0 | |||||
| Issuance of shares for acquisitions | 0 | 0 | |||||
| Other changes | (7) | ||||||
| Ending Balance at Jun. 30, 2008 | 561 | 1,238 | 7,273 | (252) | (1,288) | 31 | 7,563 |
| Beginning Balance at Mar. 31, 2008 | 561 | ||||||
| Ending Balance at Jun. 30, 2008 | 561 | ||||||
| Beginning Balance at Dec. 31, 2008 | 561 | 1,245 | 7,237 | (2,098) | (1,223) | 38 | 5,760 |
| Change in accrued stock compensation costs | 9 | ||||||
| Net income (loss) (a) | (17) | 9 | (8) | ||||
| Foreign currency translation adjustments (b) | 304 | ||||||
| Issuance of shares under stock compensation plans and employee stock purchase plans | 1 | 88 | |||||
| Unrealized investment holding (losses) gains, net of reclassification adjustments (c) | (1) | ||||||
| Dividend equivalents paid | (8) | ||||||
| Net changes under SFAS 158, net of tax (d) | (129) | ||||||
| Dividends declared - (per share amounts: $.60) | (312) | ||||||
| Purchase of subsidiary shares from non-controlling interests | (38) | (8) | |||||
| Issuance of shares for acquisitions | (35) | 143 | |||||
| Other changes | (6) | ||||||
| Ending Balance at Jun. 30, 2009 | 561 | 1,182 | 6,900 | (1,924) | (992) | 33 | 5,760 |
| Beginning Balance at Mar. 31, 2009 | 561 | ||||||
| Ending Balance at Jun. 30, 2009 | $561 |
| Statement Of Shareholders Equity And Other Comprehensive Income (Parenthetical) (USD $) | ||
| Retained Earnings
| Total
| |
| Dividends declared, per share | 0.6 | 0.6 |
| Dividends declared, per share | 0.6 | 0.6 |
| Notes to Financial Statements | |
| 6 Months Ended
Jun. 30, 2009 USD / shares | |
| Notes to Financial Statements [Abstract] | |
| 1. Nature of Operations | 1. Nature of Operations Marsh McLennan Companies, Inc. (MMC), a global professional services firm, is organized based on the different services that it offers. Under this organizational structure, MMCs three business segments are: Risk and Insurance Services; Consulting; and Risk Consulting Technology. The Risk and Insurance Services segment provides risk management and insurance broking, reinsurance broking and insurance program management services for businesses, public entities, insurance companies, associations, professional services organizations, and private clients. MMC conducts business in this segment through Marsh and Guy Carpenter. In April 2009, Guy Carpenter completed the acquisition of John B. Collins Associates, Inc., previously the fifth-largest reinsurance intermediary in the U.S. and seventh-largest in the world. The acquisition of Collins further strengthens Guy Carpenters capabilities in medical professional liability, agriculture, Florida property, Program, and regional specialty lines of business. The Consulting segment provides advice and services to the managements of organizations in the area of human resource consulting, comprising retirement and investments, health and benefits, outsourcing and talent; and strategy and risk management consulting, comprising management, economic and brand consulting. MMC conducts business in this segment through Mercer and Oliver Wyman Group. The Risk Consulting Technology segment provides various risk consulting and related risk mitigation services to corporate, government, institutional and individual clients, including consulting services and security services; and technology-enabled services. MMC conducts business in this segment through Kroll. During the second quarter of 2009, Kroll sold Kroll Government Services (KGS), which has been classified as a discontinued operation. In the fourth quarter of 2008, the principal operations within the corporate advisory and restructuring business were divested. Additionally, two small residual businesses were exited in the first quarter of 2009. Based on the terms and conditions of the divestitures, MMC determined it has continuing involvement in the divested businesses, as that term is used in SEC Staff Accounting Bulletin Topic 5e. Therefore, classification of the corporate advisory and restructuring businesses as discontinued operations is not appropriate and the financial results in the current and prior periods are included in operating income. |
| 2. Principles of Consolidation | 2. Principles of Consolidation The consolidated financial statements included herein have been prepared by MMC pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America, have been omitted pursuant to such rules and regulations, although MMC believes that the information and disclosures presented are adequate to make such information and disclosure not misleading. These consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in MMCs Annual Report on Form 10-K for the year ended December31, 2008 (the 2008 10-K). The financial information contained herein reflects all adjustments consisting only of normal recurring adjustments which are, in the opinion of management, necessary for a fair presentation of MMCs results of operations for the three and six-month periods ended June30, 2009 and 2008. Management has evaluated subsequent events through August 7, 2009, the date financial statements were issued. Effective January1, 2009, the Company adopted retrospectively the new standards issued by the Financial Accounting Standards Board (FASB) affecting the calculation of earnings per share, and the presentation of non-controlling interests (previously referred to as minority interests), which are described more fully in Notes 4 and 18 to the Consolidated Financial Statements. Also, see Note 5 with respect to a correction in our Statement of Cash Flows. The caption Investment loss in the consolidated statements of income comprises realized and unrealized gains and losses from investments recognized in current earnings. It includes, when applicable, other than temporary declines in the value of available for sale securities and the change in value of MMCs holdings in certain private equity funds. MMCs investments may include direct investments in insurance or consulting companies and investments in private equity funds. Equity method losses of $34 million and $18 million are included in this line for the three month periods ended June30, 2009 and 2008, respectively. Equity method losses of $51 million and $12 million are included in this line for the six month periods ended June30, 2009 and 2008, respectively. |
| 3. Fiduciary Assets and Liabilities | 3. Fiduciary Assets and Liabilities In its capacity as an insurance broker or agent, MMC collects premiums from insureds and, after deducting its commissions, remits the premiums to the respective insurance underwriters. MMC also collects claims or refunds from underwriters on behalf of insureds. Unremitted insurance premiums and claims proceeds are held by MMC in a fiduciary capacity. Interest income on these fiduciary funds, included in risk and insurance services revenue, amounted to $28 million and $76 million for six-month periods ended June30, 2009 and 2008, respectively. The consulting segment recorded fiduciary interest income of $2 million and $6 million for the comparable periods in 2009 and 2008, respectively. Since fiduciary assets are not available for corporate use, they are shown in the consolidated balance sheets as an offset to fiduciary liabilities. Fiduciary assets include approximately $752 million of fixed income securities classified as available for sale. Unrealized gains or losses from available for sale securities are recorded in other comprehensive income until the securities are disposed of, or mature. Unrealized gains, net of tax, at June30, 2009 were $16 million. Net uncollected premiums and claims and the related payables amounted to $10 billion at June30, 2009 and $8.6 billion at December31, 2008. MMC is not a principal to the contracts under which the right to receive premiums or the right to receive reimbursement of insured losses arises. Net uncollected premiums and claims and the related payables are, therefore, not assets and liabilities of MMC and are not included in the accompanying consolidated balance sheets. In certain instances, MMC 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. |
| 4. Per Share Data | 4. Per Share Data In June 2008, the FASB issued new guidance for Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities. This guidance applies to the calculation of earnings per share (EPS) for share-based payment awards with rights to dividends or dividend equivalents. The guidance indicates that unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and should be included in the computation of basic and dilutive EPS using the two-class method. The adoption of this new guidance did not have an impact on the fiscal year 2008 for EPS from continuing operations, discontinued operations and net income because the treasury stock method was more dilutive. The impact of the adoption was a decrease in EPS of $.02, $.05, and $.07 for the fiscal year 2007, for EPS from continuing operations, discontinued operations, and net income, respectively, and a decrease in EPS of $.02, $.01, and $.03 for the fiscal year 2006, for EPS from continuing operations, discontinued operations and net income, respectively. Basic net income attributable to MMC per share 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 MMCs common stock. Diluted net income attributable to MMC per share 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 MMCs common stock, which have been adjusted for the dilutive effect of potentially issuable common shares (excluding those that are considered participating securities). The diluted earnings per share calculation reflects the more dilutive effect of either (a)the two-class method that assumes that the participating securities have not been exercised or (b)the treasury stock method. Reconciliation of the applicable income components used for diluted earnings per share and basic weighted average common shares outstanding to diluted weighted average common shares outstanding is presented below. Prior period information has been adjusted to conform with the current year presentation in accordance with the retrospective adoption requirements of EITF 03-6-1. Basic EPS Calculation Continuing Operations ThreeMonthsEnded June30, SixMonthsEnded June30, (In millions, except per share figures) 2009 2008 2009 2008 Income (loss) from continuing operations * $ (162 ) $ 55 $ 17 $ (158 ) Less: Non-controlling interests 5 2 9 5 Income (loss) from continuing operations attributable to MMC (167 ) 53 8 (163 ) Less: Portion attributable to participating securities (4 ) 2 1 (7 ) Income (loss) attributable to common shares for basic earnings per share $ (163 ) $ 51 $ 7 $ (156 ) |
| 5. Supplemental Disclosures to the Consolidated Statements of Cash Flows | 5. Supplemental Disclosures to the Consolidated Statements of Cash Flows The following schedule provides additional information concerning acquisitions, interest and income taxes paid for the six-month periods ended June30, 2009 and 2008. (In millions of dollars) 2009 2008 Assets acquired, excluding cash acquired 194 199 Liabilities assumed (10 ) (74 ) Shares issued (5.4 million shares) (108 ) Issuance of debt and other liabilities (70 ) (39 ) Net cash outflow for acquisitions 6 86 (In millions of dollars) 2009 2008 Interest paid $ 107 $ 98 Income taxes paid $ 56 $ 179 MMC had non-cash issuances of common stock under its share-based payment plan of $82 million and $62 million for the six months ended June30, 2009 and 2008, respectively. The consolidated statements of cash flows include the cash flow impact of discontinued operations in each cash flow category. Discontinued operations provided cash from operations of $5 million and $11 million for the six months ended June30, 2009 and 2008, respectively. Discontinued operations had no impact on cash flows from investing or financing activities for 2009 and 2008. The cash flows information for discontinued operations excludes the cash flow impacts of the actual disposal transaction related to discontinued operations because MMC believes the disposal transaction to be cash flows attributable to the parent company, arising from its decision to dispose of the discontinued operation. In the first quarter of 2009, MMC changed the presentation in its statement of cash flows for the issuance of certain equity shares related to employee stock compensation plans. Previously, such issuances were shown in the statements of cash flows as a reduction of cash from operating activities and a source of cash from financing activities. In 2009, MMC determined that these issuances should be presented as non-cash items and that the presentation in the prior periods was not correct. The presentation in the statements of cash flows for the second quarter of 2008 has been corrected to conform with the current presentation, resulting in a decrease in cash used for operations and an increase in cash used for financing activities of $62 million. With respect to the periods previously reported, but not contained herein, the corresponding correction in the statements of cash flows results in an increase in cash generated from operations (or a decrease in cash used by operations in periods where there is a net cash use) and a decrease in cash used for financing activities compared with the information presented previously as follows: nine months ended September30, 2008- $103 million; year ended December31, 2008- $103 million; year ended December31, 2007- $82 million; and year ended December31, 2006- $59 million. |
| 6. Comprehensive Income (Loss) | 6. Comprehensive Income (Loss) The components of comprehensive (loss) income for the six-month periods ended June30, 2009 and 2008 are as follows: (In millions of dollars) 2009 2008 Foreign currency translation adjustments $ 304 $ 109 Unrealized investment holding losses, net of income taxes (1 ) Adjustments related to pension/retiree plans (129 ) (10 ) Other comprehensive income 174 99 Net loss before non-controlling interests (8 ) (140 ) Comprehensive income (loss) 166 (41 ) Less: Comprehensive income attributable to non-controlling interests (9 ) (5 ) Comprehensive income (loss) attributable to MMC $ 157 $ (46 ) |
| 7. Acquisitions | 7. Acquisitions During the six months ended June30, 2009, MMC made one acquisition for total purchase consideration of $195 million. The allocation of purchase consideration resulted in acquired goodwill and other intangible assets, amounting to $127 million and $52 million, respectively. MMC also paid $3 million of contingent consideration in 2009 related to prior acquisitions. In the first quarter of 2009, MMC acquired the remaining minority interest of a previously majority owned entity for total purchase consideration of $47 million. MMC adopted the new FASB guidance related to Non-controlling interests in Consolidated Financial Statements which is discussed further in Note 18. This guidance requires that changes in a parents ownership interest while retaining financial controlling interest in a subsidiary be accounted for as an equity transaction. Stepping up the acquired assets to fair value or the recording of goodwill is no longer permitted. Therefore, MMC recorded a decrease to additional paid in capital in 2009 of $38 million related to this transaction. The aforementioned acquisitions relate to the Risk Insurance Services segment. |
| 8. Discontinued Operations | 8. Discontinued Operations In the second quarter of 2009, Kroll completed the sale of Kroll Government Services (KGS). The after tax loss on the disposal of KGS and its financial results for 2009 and 2008 are included in discontinued operations. Discontinued operations in the second quarter of 2009 and 2008 also includes the accretion of interest related to an indemnity for uncertain tax positions provided as part of the Putnam transaction. Discontinued operations in the second quarter of 2008 includes the gain on the sale of a claims administration operation in Brazil (Mediservice). The operating results of Mediservice were immaterial to MMCs results, therefore, its operating results for 2008 were not reclassified to discontinued operations. Summarized Statements of Income data for discontinued operations is as follows: ThreeMonthsEnded June30, SixMonthsEnded June30, (In millions of dollars) 2009 2008 2009 2008 Revenue $ 12 $ 15 $ 32 $ 30 Income before provision for income tax 5 2 11 4 Provision for income tax 1 3 1 Income from discontinued operations 4 2 8 3 (Loss) gain on disposal of discontinued operations (9 ) 8 (9 ) 32 Provision (credit) for income tax 21 (2 ) 24 17 (Loss) gain on disposal of discontinued operations, net of tax (30 ) 10 (33 ) 15 Discontinued operations, net of tax $ (26 ) $ 12 $ (25 ) $ 18 The balance sheet data for KGS has not been reclassified and is included in MMCs consolidated balance sheet at December31, 2008 in the following categories: (In millions of dollars) Assets of discontinued operations: Current assets $ 18 Fixed assets, net 2 Goodwill and intangible assets 62 Total assets of discontinued operations $ 82 Liabilities of discontinued operations: Accounts payable and accrued liabilities $ 7 Total liabilities of discontinued operations $ 7 |
| 9. Goodwill and Other Intangibles | 9. Goodwill and Other Intangibles MMC is required to assess goodwill and any indefinite-lived intangible assets for impairment annually, or more frequently if circumstances indicate impairment may have occurred. MMC performs the annual impairment test for each of its reporting units during the third quarter of each year. Fair values of the reporting units are estimated using 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. In the second quarter of 2009, Kroll completed the sale of Kroll Government Services (KGS), its U.S. government security clearance screening business. KGS was part of the Kroll reporting unit. As a result of the sale, MMC allocated goodwill between KGS (the portion of the reporting unit sold) and Kroll (the portion of the reporting unit retained), based on the relative fair value of the two units. In addition, as required under GAAP, MMC evaluated the portion of the reporting unit retained for potential impairment. Fair value was estimated using a market approach, based on managements latest projections and outlook for the businesses in the current environment. This fair value determination was categorized as level 3 in the fair value hierarchy. On the basis of the step one impairment test, MMC concluded that goodwill in the reporting unit was impaired. Due to the timing of the trigger event and subsequent completion of the step one test, MMC was unable to fully complete the required step two portion of the impairment assessment prior to the issuance of its second quarter 2009 financial statements. A step two impairment test, which under SFAS 142 is required to be completed after an impairment is indicated in a step one test, requires a complete re-valuation of all assets and liabilities of the reporting units in the same manner as a business combination. MMC will finalize the second step of the goodwill impairment assessment in the third quarter of 2009. However, a preliminary estimate of the step two assessment has been made. The non-cash charge of $315 million recorded by MMC represents managements best estimate of the goodwill impairment at June30, 2009 and comprises the excess of the carrying value over the fair value in the step one test, and an estimate of an incremental impairment amount which may result from the completion of the step two test. The ultimate amount of impairment may be greater or less than the estimate recorded in the second quarter of 2009. As noted above, MMC will conduct its annual goodwill impairment assessment, including the reporting units in risk consulting and technology, during the third quarter. In March 2008, MMC announced a management reorganization within the risk consulting and technology segment, whereby two separate units were formed, each reporting directly to MMCs chief executive officer. These units are: (i)Kroll, which includes litigation support and data recovery, background screening, and risk mitigation and response; and (ii)Corp |
| 10. Fair Value Measurements | 10. Fair Value Measurements Fair Value Hierarchy MMC 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, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement in its entirety falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety. Assets and liabilities recorded in the consolidated balance sheets at fair value are categorized based on the inputs in the valuation techniques as follows: Level1. 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, listed derivatives, most U.S.Government and agency securities, money market mutual funds and certain other sovereign government obligations). Level2. Assets and liabilities whose values are based on the following: a) Quoted prices for similar assets or liabilities in active markets (for example, restricted stock); 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). Level3. 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 managements own assumptions about the assumptions a market participant would use in pricing the asset or liability (examples include private equity investments, certain commercial mortgage whole loans, and long-dated or complex derivatives including certain foreign exchange options and long-dated options on gas and power). Valuation Techniques Equity Securities Mutual Funds Investments for which market quotations are readily available are valued at the sale price on their principal exchange, or official closing bid price for certain markets. If no sales are reported, the security is valued at its last reported bid price. Other Sovereign Government Obligations, Municipal Bonds and Corporate Bonds These investments are valued on the basis of valuations furnished by an independent pricing service approved by the Trustees or dealers selected by P |
| 11. Retirement Benefits | 11. Retirement Benefits MMC maintains qualified and non-qualified defined benefit pension plans for its U.S. and non-U.S. eligible employees. MMCs 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 MMC offers defined benefit plans. The target asset allocation for the U.S. Plan is 65% equities and 35% fixed income. At the end of the second quarter, the actual allocation for the U.S. Plan was 66% equities and 34% fixed income. The target asset allocation for the U.K. Plan, which comprises approximately 79% of non-U.S. Plan assets, is 58% equities and 42% fixed income. At the end of the second quarter, the actual allocation of assets for the U.K. Plan was 54% equities and 46% fixed income. 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 For the Three Months Ended June30, Pension Benefits Postretirement Benefits (In millions of dollars) 2009 2008 2009 2008 Service cost $ 45 $ 54 $ 2 $ 1 Interest cost 138 150 4 4 Expected return on plan assets (194 ) (217 ) Amortization of prior service credit (13 ) (14 ) (4 ) (4 ) Recognized actuarial loss 17 19 1 1 Net periodic benefit (credit) cost $ (7 ) $ (8 ) $ 3 $ 2 Combined U.S. and significant non-U.S. Plans For the Six Months Ended June30, Pension Benefits Postretirement Benefits (In millions of dollars) 2009 2008 2009 2008 Service cost $ 91 $ 108 $ 3 $ 3 Interest cost 268 299 8 8 Expected return on plan assets (381 ) (434 ) Amortization of prior service credit (25 ) (28 ) (7 ) (7 ) Recognized actuarial loss 34 37 1 1 Net periodic benefit (credit) cost $ (13 ) $ (18 ) $ 5 $ 5 U.S. Plans only For the Three Months Ended June30, Pension Benefits Postretirement Benefits (In millions of dollars) 2009 2008 2009 2008 Service cost $ 18 $ 18 $ 1 $ 1 Interest cost 56 53 3 3 Expected return on plan assets (73 ) (73 ) Amortization of prior service credit (12 ) (13 ) (4 ) (4 ) Recognized actuarial loss 13 6 1 Net periodic benefit cost (credit) $ 2 $ (9 ) $ 1 $ U.S. Plans only For the Six Months Ended June30, Pension Benefits Postretirement Benefits (In millions of dollars) 2009 2008 2009 2008 Service cost $ 38 $ 37 $ 2 $ 2 Interest cost |
| 12. Debt | 12. Debt MMCs outstanding debt is as follows: (In millions of dollars) June30, 2009 December31, 2008 Short-term: Current portion of long-term debt $ 9 $ 408 Long-term: Senior notes 7.125% due 2009 $ $ 400 Senior notes 6.25% due 2012 (5.1% effective interest rate) 256 257 Senior notes 4.850% due 2013 249 249 Senior notes 5.875% due 2033 296 296 Senior notes 5.375% due 2014 648 648 Senior notes 5.15% due 2010 549 549 Senior notes 5.75% due 2015 747 747 Senior notes 9.25% due 2019 397 Mortgage 5.70% due 2035 451 454 Other 4 2 $ 3,597 $ 3,602 Less current portion 9 408 $ 3,588 $ 3,194 During the second quarter of 2009, MMCs 7.125% ten-year $400 million senior notes matured. MMC used cash on hand as well as the proceeds from the issuance of 9.25% ten-year $400 million senior notes in the first quarter to manage liquidity, including the funding of the maturing notes. There were no commercial paper borrowings outstanding at June30, 2009. MMC and certain of its foreign subsidiaries maintain a $1.2 billion multi-currency revolving credit facility. Subsidiary borrowings under the facility are unconditionally guaranteed by MMC. The facility expires in December 2010. The interest rate on this facility varies based upon the level of usage of the facility and MMCs credit ratings. The facility requires MMC to maintain certain coverage and leverage ratios which are tested quarterly. There were no borrowings outstanding under this facility at June30, 2009. |
| 13. Restructuring Costs | 13. Restructuring Costs Actions Initiated in 2009 In the second quarter of 2009, MMC implemented restructuring activities resulting in charges totaling $67 million, primarily related to severance and related benefits as follows: Marsh $47 million, Guy Carpenter $7 million, Mercer $8 million and Risk Consulting and Technology $6 million. These activities resulted in the elimination of approximately 550 positions at Marsh, 75 positions at Guy Carpenter, 230 positions at Mercer and 200 positions at Kroll. For the first six months of 2009, MMC implemented restructuring actions which resulted in costs totaling $92 million, primarily related to severance and benefits. These costs were incurred as follows: Marsh $71 million, Guy Carpenter $7 million, Mercer $8 million and Kroll $6 million. These activities resulted in the elimination of approximately 875 positions at Marsh, 75 positions at Guy Carpenter, 230 positions at Mercer and 200 positions at Kroll. Actions Initiated Prior to 2009 Prior to 2009, MMC implemented several restructuring and cost-saving initiatives related to firm-wide infrastructure, organization structure and operating company business processes. These initiatives resulted in staff reductions and consolidations of facilities. MMC incurred restructuring costs of $17 million for the six months ended June30, 2009 in connection with actions initiated in prior years, primarily due to adjustments to the estimated future rent and real estate costs related to previously vacated space in MMCs New York headquarters building. As of June30, 2009, the remaining liability for these initiatives was $243 million, primarily related to future severance and benefit payments and future lease agreements. 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, Other liabilities, or Accrued compensation, depending on the nature of the items. |
| 14. Financial Instruments | 14. Financial Instruments The estimated fair value of MMCs significant financial instruments 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 MMC would realize upon disposition, nor do they indicate MMCs intent or need to dispose of the financial instrument. June30, 2009 December31,2008 (In millions of dollars) Carrying Amount Fair Value Carrying Amount Fair Value Cash and cash equivalents $ 1,291 $ 1,291 $ 1,685 $ 1,685 Long-term investments $ 151 $ 151 $ 137 $ 137 Short-term debt $ 9 $ 9 $ 408 $ 407 Long-term debt $ 3,588 $ 3,503 $ 3,194 $ 2,959 Cash and Cash Equivalents: The estimated fair value of MMCs cash and cash equivalents approximates their carrying value. Long-term Investments: Long-term investments include available for sale securities recorded at quoted market prices as discussed below. MMC also has certain additional long-term investments, for which there are no readily available market prices, amounting to $93 million and $101 million at June30, 2009 and 2008, respectively, which are carried on a cost basis. These investments are included in Other assets in the consolidated balance sheets. MMC monitors these investments for impairment and makes appropriate reductions in carrying values when necessary. MMC had available for sale securities with an aggregate fair value of $35 million and $65 million at June30, 2009 and 2008, respectively, which are carried at market value under SFAS 115. The following provides activity related to available for sale securities: ThreeMonthsEnded June30, SixMonthsEnded June30, (In millions of dollars) 2009 2008 2009 2008 Unrealized gains (pre-tax) $ 3 $ $ 3 $ 1 Unrealized losses (pre-tax) $ $ (2 ) $ (2 ) $ (7 ) These amounts have been excluded from earnings and reported, net of deferred income taxes, in accumulated other comprehensive loss, which is a component of stockholders equity. For the three and six months ended June30, 2009 unrealized losses of $1 million and $2 million, respectively, relate to the portion of insurance fiduciary funds which MMC holds described in Note1 to satisfy fiduciary obligations that are invested in high quality debt securities that are classified as available for sale. Proceeds from the sale of available for sale investments were as follows. ThreeMonthsEnded June30, SixMonthsEnded June30, (In millions of dollars) 2009 2008 2009 2008 Proceeds from the sale of available for sale securities $ 4 $ $ 6 $ The cost of securities sold is determined using the average cost method for equity securities. There were no realized gains or losses recorded on the sale of available for sale securities during 2009 and 2008. MMC also holds investments in certain private equity fund partnerships which are accounted for using the equity method and other investments that |
| 15. Common Stock | 15. Common Stock In August 2007, MMC entered into an $800 million accelerated share repurchase agreement with a financial institution counterparty. Under the terms of the agreement, MMC paid the full $800 million purchase price and took delivery from the counterparty of an initial tranche of 21,320,530 shares of MMC common stock. This number of shares was the quotient of the $800 million purchase price divided by a contractual cap price of $37.5225 per share. Based on the market price of MMCs common stock over the subsequent settlement period, in March 2008 the counterparty delivered to MMC an additional 10,751,100 shares for no additional payment and the transaction was concluded. MMC thus repurchased a total of 32,071,630 shares at average price per share to MMC of $24.9442. The repurchased shares were reflected as an increase to Treasury Shares (a decrease in shares outstanding) on the respective delivery dates. This transaction was effected under a $1.5 billion share repurchase authorization granted by MMCs Board of Directors in August 2007. MMC remains authorized to repurchase additional shares of its common stock up to a value of $700 million. There is no time limit on this authorization. |
| 16. Claims, Lawsuits and Other Contingencies | 16. Claims, Lawsuits and Other Contingencies Brokerage Compensation Practices Settlement and Related Matters In January 2005, MMC and its subsidiary Marsh Inc. entered into an agreement with the New York State Attorney General (NYAG) and the New York State Insurance Department to settle a civil complaint filed in New York State court by NYAG in October 2004 (the NYAG Lawsuit) and a related citation issued by the Insurance Department. Among other things, the NYAG Lawsuit and the citation alleged that Marshs use of market service agreements with various insurance companies entailed fraudulent business practices, bid-rigging, illegal restraint of trade and other statutory violations. Following the filing of the NYAG Lawsuit, various state regulators and attorneys general initiated investigations relating to the conduct alleged in the NYAG Lawsuit. Over the past year, MMC and Marsh entered into settlements with attorneys general or state regulators in ten states. One action filed by the Attorney General of the State of Ohio against MMC, Marsh and certain Marsh subsidiaries remains pending. Numerous private party lawsuits were also commenced against MMC, one or more of its subsidiaries, and their current and former directors and officers, relating to matters alleged in the NYAG Lawsuit. These lawsuits include the following: Policyholder Claims Various putative class actions that were consolidated into two actions in the U.S. District Court for the District of New Jersey (one on behalf of a purported class of commercial policyholders and the second on behalf of a purported class of employee benefit policyholders) included claims against MMC, Marsh and certain Marsh subsidiaries. In February 2009, the trial court approved a settlement of the claims against MMC, Marsh and certain Marsh subsidiaries in both actions. The courts approval of the settlement has been appealed. Fifteen actions instituted by individual policyholders and others are pending in federal and state courts relating to matters alleged in the NYAG Lawsuit. Two putative class or representative actions on behalf of policyholders are pending in state courts, and one putative class action is pending in Canada. Shareholder Claims Following the announcement of the NYAG Lawsuit and related actions taken by MMC, MMCs stock price dropped from approximately $45 per share to a low of approximately $22.75 per share. The number of shares outstanding at the time was approximately 526 million. The plaintiffs in the securities claims described below have asserted damages in the billions of dollars. A purported securities class action against MMC, Marsh and certain of their former officers is pending in the U.S. District Court for the Southern District of New York. Plaintiffs make factual allegations similar to those asserted in the NYAG Lawsuit, including that MMC artificially inflated its share price by making misrepresentations and omissions relating to Marshs market service agreements and business practices. Plaintiffs also allege that MMC failed to disclose alleged anti-competitive and illegal practices at Marsh, such as bid-rigging and solicitin |
| 17. Segment Information | 17. Segment Information MMC is organized based on the types of services provided. Under this organizational structure, MMCs business segments are: Risk and Insurance Services, comprising insurance services (Marsh) and reinsurance services (Guy Carpenter); Consulting, comprising Mercer and Oliver Wyman Group; and Risk Consulting and Technology, comprising Kroll and Corporate Advisory and Restructuring. The accounting policies of the segments are the same as those used for the consolidated financial statements described in Note 1 to the 2008 10-K. Revenues are attributed to geographic areas on the basis of where the services are performed. Segment performance is evaluated based on segment operating income, which includes directly related expense and charges or credits related to integration and restructuring but not MMC corporate-level expenses. Selected information about MMCs operating segments for the six-month period ended June30, 2009 and 2008 follows: (In millions of dollars) Revenue Operating Income(Loss) 2009 Risk and Insurance Services $ 2,715 (a) $ 542 Consulting 2,226 (b) 169 Risk Consulting Technology 328 (c) (312 )(d) Total Operating Segments 5,269 399 Corporate / Eliminations (31 ) (96 ) Total Consolidated $ 5,238 $ 303 2008 Risk and Insurance Services $ 2,915 (a) $ 384 Consulting 2,669 (b) 316 Risk Consulting Technology 508 (c) (502 )(d) Total Operating Segments 6,092 198 Corporate / Eliminations (35 ) (108 ) Total Consolidated $ 6,057 $ 90 (a) Includes inter-segment revenue of $7 million and $5 million in 2009 and 2008, respectively, interest income on fiduciary funds of $28 million and $76 million in 2009 and 2008, respectively, and equity method income of $8 million in both 2009 and 2008. (b) Includes inter-segment revenue of $22 million and $26 million in 2009 and 2008, respectively, and interest income on fiduciary funds of $2 million and $6 million in 2009 and 2008, respectively. (c) Includes inter-segment revenue of $2 million in 2009 and $4 million in 2008. (d) Includes goodwill impairment charges of $315 million and $540 million in 2009 and 2008, respectively. In the second quarter of 2009, MMC recorded a $315 million goodwill impairment charge related to the Risk Consulting Technology segment. Details of operating segment revenue for the six-month periods ended June30, 2009 and 2008 is as follows: (In millions of dollars) 2009 2008 Risk and Insurance Services Marsh $ 2,202 $ 2,438 Guy Carpenter 513 477 Total Risk and Insurance Services 2,715 2,915 Consulting Mercer 1,635 1,884 Oliver Wyman Group 591 785 Total Consulting 2,226 2,669 |
| 18. New Accounting Pronouncements | 18. New Accounting Pronouncements On December4, 2007, the FASB issued guidance on Business Combinations and Non-controlling Interests in Consolidated Financial Statements. Effective January1, 2009, the Company adopted the new guidance for Business Combinations. The guidance requires entities in a business combination to recognize all (and only) the assets acquired and liabilities assumed in the transaction; establishes the acquisition-date fair value as the measurement objective for all assets acquired and liabilities assumed; and requires the acquirer to disclose all information needed by investors and other users to evaluate and understand the nature and financial effect of the business combination. MMC made one acquisition in the second quarter of 2009 that was accounted for under the new Business Combination guidance. Effective January1, 2009, the Company adopted the new guidance for non-controlling Interests, which did not have a material impact on our financial condition, results of operations or cash flows. However, it did impact the presentation and disclosure of non-controlling (minority) interests in our consolidated financial statements. As a result of the retrospective presentation and disclosure requirements, the Company will be required to reflect the change in presentation and disclosure for all periods presented in future filings. The principal effect on the prior year balance sheets related to the adoption of the new guidance related to Non-controlling Interests is summarized as follows: December31, (In millions of dollars) 2008 2007 Balance Sheets Equity, as previously reported $ 5,722 $ 7,822 Increase for reclassification of non-controlling interests 38 31 Equity, as adjusted $ 5,760 $ 7,853 The new guidance also requires that net income is adjusted to include the net income attributable to the non-controlling interests and a new separate caption for net income attributable to common shareholders to be presented in the consolidated statement of earnings. The adoption of this new guidance increases net income by $11 million, $14 million, and $8 million for the fiscal years 2008, 2007, and 2006, respectively. Net income attributable to common shareholders equals net income as previously reported prior to the adoption of the new guidance. In February 2008, the FASB issued guidance related to fair value measurements that was delayed until the second quarter of 2009 for non-financial assets and non-financial liabilities, except for items that are recognized or disclosed at fair value in the financial statements on a recurring basis. The Company has applied the provision of this new guidance to its financial statement disclosures beginning in the second quarter of 2009. On April1, 2009 the FASB issued guidance for Accounting for Assets Acquired and Liabilities Assumed in a Business Combination That Arise from Contingencies to address application issues raised by preparers, auditors and attorneys. The guidance requires recognition of contingent assets or liabilities (arising from a business combination contingency) |
| Document Information | |
| 6 Months Ended
Jun. 30, 2009 USD / shares | |
| Document Information [Text Block] | |
| Document Type | 10-Q |
| Amendment Flag | false |
| Amendment Description | N.A. |
| Document Period End Date | 2009-06-30 |
| Entity Information (USD $) | |||
| 6 Months Ended
Jun. 30, 2009 | Jul. 31, 2009
| Jun. 30, 2008
| |
| Entity [Text Block] | |||
| Trading Symbol | MMC | ||
| Entity Registrant Name | MARSH & MCLENNAN COMPANIES, INC. | ||
| Entity Central Index Key | 0000062709 | ||
| Current Fiscal Year End Date | --12-31 | ||
| Entity Well-known Seasoned Issuer | Yes | ||
| Entity Current Reporting Status | Yes | ||
| Entity Voluntary Filers | No | ||
| Entity Filer Category | Large Accelerated Filer | ||
| Entity Common Stock, Shares Outstanding | 523,825,031 | ||
| Entity Public Float | $13,534,370,893 |
