01—Abstract
Summary
Summary of the 10-K filed February 27, 2013. Cited figures are marked; the original filing is the authoritative source.
Marsh & McLennan Companies, Inc. (MRSH) demonstrated solid performance in its 2012 fiscal year, with consolidated revenue reaching $11.92 billiona, 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 billionb, 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.
02—Key points
Key Highlights
- Consolidated revenue increased by 3% to $11.92 billion in 2012.
- Net income attributable to the company grew by 18% to $1.18 billion.
- Risk and Insurance Services segment revenue increased by 4% to $6.58 billion.
- Consulting segment revenue increased by 2% to $5.38 billion.
- Marsh's underlying revenue grew by 5%, driven by new business and acquisitions.
- Mercer's underlying revenue grew by 4%, with notable strength in Health and Benefits and Investments.
- The company repurchased approximately 6.9 million shares of common stock in 2012.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2012filed February 27, 2013Financial Statements
FY2012 against FY2011
| Line item | FY2012FY2011 | Change |
|---|---|---|
| Revenue | $11.92B$11.53B | +3.5% |
| Operating Expenses | $10.10B$9.89B | +2.1% |
| Operating Income | $1.83B$1.64B | +11.7% |
| Interest Expense | $181.00M$199.00M | −9.0% |
| Net Income | $1.18B$993.00M | +18.4% |
| EPS (Basic) | $2.16$1.82 | +18.7% |
| EPS (Diluted) | $2.13$1.79 | +19.0% |
| Shares Outstanding (Basic) | 544.00M542.00M | +0.4% |
| Shares Outstanding (Diluted) | 552.00M551.00M | +0.2% |
05—Questions
Frequently Asked Questions
What were the main drivers of Marsh & McLennan's revenue growth in 2012?
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.
How did the company manage its expenses in 2012?
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.
What is the company's strategy regarding acquisitions?
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.
What is the company's financial health and outlook based on this filing?
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.
06—Continue