What is the primary driver of revenue growth for Marsh & McLennan?

The primary driver of revenue growth is the Risk and Insurance Services segment, which experienced a 17% increase in the second quarter of 2003 compared to the prior year. This growth is attributed to strong client demand for risk management and insurance broking services, coupled with stable to increasing premium rates in many areas.

How is the Investment Management segment performing, and what is impacting its revenue?

The Investment Management segment, primarily Putnam Investments, saw a 15% decrease in revenue for the second quarter. This decline is primarily due to a 14% reduction in average assets under management, which directly impacts the fees earned by the segment. Net redemptions in retail mutual funds, despite positive flows in institutional business, contributed to this decrease.

What has MMC done to manage its debt and improve its financial flexibility?

MMC has actively managed its debt by issuing new long-term senior notes and using the proceeds to pay down commercial paper borrowings. For instance, in February 2003, they issued $500 million in senior notes. This strategy aims to extend the average maturity of their debt and improve overall financial flexibility.

Are there any significant restructuring or integration costs impacting the results?

The filing mentions ongoing utilization of accruals from prior integration and restructuring plans, such as the 1999 Sedgwick Plan, 1999 MMC Plan, and the 2001 Plan. However, the remaining balances related to these plans are relatively small, and management does not expect them to have a material adverse impact on the current financial position or results of operations. The acquisition of Oliver, Wyman & Company in April 2003 involved a portion of the consideration recorded as compensation expense over four years, which will impact future expenses.

MRSH/MMC 10-Q Quarterly Report Q2 FY2003 — Revenue, Net Income, EPS

Summary

Marsh & McLennan Companies, Inc. (MMC) reported solid financial performance for the quarter and six months ended June 30, 2003. Revenue increased by 10% year-over-year for the quarter, driven by strong growth in the Risk and Insurance Services segment, which benefited from continued client demand and stable to increasing premium rates in various lines of business. The Consulting segment also showed robust growth, partly fueled by acquisitions. However, the Investment Management segment experienced a revenue decline due to a decrease in assets under management. Profitability remained strong, with operating income increasing for both the quarter and the year-to-date period. The company also demonstrated effective cost management, with operating expenses growing at a slower pace than revenue on a constant currency basis. MMC has continued to strengthen its financial position by issuing new long-term debt and using the proceeds to reduce commercial paper borrowings, alongside share repurchases. The company also announced an increase in its quarterly dividend.

Key Highlights

1Total revenue for the quarter ended June 30, 2003, increased by 10% to $2.865 billion compared to $2.612 billion in the prior year period.
2Operating income for the quarter rose to $599 million from $565 million in the same period last year.
3The Risk and Insurance Services segment showed significant revenue growth of 17% year-over-year in the second quarter, driven by strong demand and premium rates.
4The Investment Management segment experienced a revenue decline of 15% due to a 14% decrease in average assets under management.
5MMC generated $1.056 billion in cash from operations for the first six months of 2003, a significant increase from $519 million in the prior year period.
6The company repurchased 11.5 million shares of its common stock for $503 million during the first six months of 2003.
7MMC increased its quarterly dividend by 11% to $0.31 per share, effective with the August 2003 payment.

MARSH & MCLENNAN COMPANIES, INC. Quarterly Report for Q2 Ended Jun 30, 2003

Summary

Key Highlights

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