10-KPeriod: FY2012

MARSH & MCLENNAN COMPANIES, INC. Annual Report, Year Ended Dec 31, 2012

Filed February 27, 2013For Securities:MRSHMMC

Summary

Marsh & McLennan Companies, Inc. (MRSH) demonstrated solid performance in its 2012 fiscal year, with consolidated revenue reaching $11.92 billion, a 3% increase over 2011. The company's two primary segments, Risk and Insurance Services, and Consulting, both contributed to this growth. The Risk and Insurance Services segment, driven by Marsh and Guy Carpenter, saw a 4% revenue increase, while the Consulting segment, led by Mercer and Oliver Wyman Group, experienced a 2% revenue increase. Net income attributable to the company grew to $1.18 billion, an 18% increase from the prior year, reflecting improved operating efficiency and expense management. The company also continued its strategic acquisition activity, further expanding its capabilities and market reach. Despite economic uncertainties, Marsh & McLennan Companies maintained a strong financial position with robust operating income and a stable outlook for its senior debt ratings, positioning it well for continued growth and value creation for shareholders.

Financial Highlights

52 data points
Beta

Revenue

$11.92B

Net Income

$1.18B

9.9% Net Margin

EPS (Diluted)

$2.13

Total Assets

$16.29B

Cash & Equivalents

$2.30B

Free Cash Flow

$1.00B

Financial Statements
Beta
Revenue$11.92B
Operating Expenses$10.10B
Operating Income$1.83B
Interest Expense$181.00M
Net Income$1.18B
EPS (Basic)$2.16
EPS (Diluted)$2.13
Shares Outstanding (Basic)544.00M
Shares Outstanding (Diluted)552.00M

Key Highlights

  • 1Consolidated revenue increased by 3% to $11.92 billion in 2012.
  • 2Net income attributable to the company grew by 18% to $1.18 billion.
  • 3Risk and Insurance Services segment revenue increased by 4% to $6.58 billion.
  • 4Consulting segment revenue increased by 2% to $5.38 billion.
  • 5Marsh's underlying revenue grew by 5%, driven by new business and acquisitions.
  • 6Mercer's underlying revenue grew by 4%, with notable strength in Health and Benefits and Investments.
  • 7The company repurchased approximately 6.9 million shares of common stock in 2012.

Frequently Asked Questions

Marsh & McLennan's revenue growth in 2012 was primarily driven by increases in both its Risk and Insurance Services segment (Marsh and Guy Carpenter) and its Consulting segment (Mercer and Oliver Wyman Group). Growth was fueled by new business development, strategic acquisitions, and improved underlying revenue across key business lines.

The company focused on expense management, with consolidated operating expenses increasing by only 2% in 2012, a lower rate than revenue growth. This was achieved through ongoing expense control measures across its operations, despite some increases in incentive compensation and benefits costs.

Acquisitions remain a key part of Marsh & McLennan's business strategy. In 2012, the company completed twelve acquisitions, primarily through the Marsh & McLennan Agency (MMA) to expand its presence in the U.S. middle-market. Mercer also completed three strategic acquisitions to enhance its consulting capabilities.

The company demonstrated strong financial health in 2012, with significant revenue and net income growth, as well as a healthy operating income. It maintained a stable outlook for its senior debt ratings and managed its debt effectively, suggesting a solid foundation for future operations and shareholder returns.