10-QPeriod: Q3 FY2011

MARSH & MCLENNAN COMPANIES, INC. Quarterly Report for Q3 Ended Sep 30, 2011

Filed November 4, 2011For Securities:MRSHMMC

Summary

Marsh & McLennan Companies (MMC) reported a strong third quarter for 2011, with consolidated revenue up 11% year-over-year to $2.8 billion, driven by robust underlying revenue growth of 5% across its Risk & Insurance Services and Consulting segments. Operating income saw a significant increase of 30% to $310 million, reflecting improved profitability in both segments. The company also highlighted a substantial increase in operating cash flow to $995 million for the first nine months of 2011, up from $50 million in the prior year period. Key financial actions during the quarter included the repurchase of common stock and the early extinguishment of a portion of its outstanding debt, demonstrating active capital management. The company also continued its strategy of targeted acquisitions within both its Risk and Insurance Services and Consulting segments to enhance its market position and service offerings. Overall, the results indicate a positive trajectory for MMC, with strong revenue growth and enhanced operational efficiency.

Financial Highlights

50 data points
Beta

Revenue

$2.81B

Net Income

$130.00M

4.6% Net Margin

EPS (Diluted)

$0.24

Total Assets

$15.12B

Cash & Equivalents

$1.71B

Free Cash Flow

$602.00M

Financial Statements
Beta
Revenue$2.81B
Operating Expenses$2.50B
Operating Income$310.00M
Interest Expense$49.00M
Net Income$130.00M
EPS (Basic)$0.24
EPS (Diluted)$0.24
Shares Outstanding (Basic)540.00M
Shares Outstanding (Diluted)549.00M

Key Highlights

  • 1Consolidated revenue increased 11% to $2.8 billion in Q3 2011, with underlying revenue growth of 5%.
  • 2Operating income rose 30% to $310 million in Q3 2011, indicating improved profitability.
  • 3Risk and Insurance Services revenue grew 11% (5% underlying), led by Marsh's strong performance in Latin America and Asia Pacific.
  • 4Consulting segment revenue also increased 11% (6% underlying), with solid contributions from both Mercer and Oliver Wyman.
  • 5Operating cash flow for the first nine months of 2011 was $995 million, a significant improvement from $50 million in the prior year.
  • 6The company actively managed its capital structure by repurchasing $12.2 million shares of common stock for $361 million year-to-date and completing debt extinguishment activities.
  • 7Acquisition activity remained consistent, with several strategic acquisitions made in both the Risk and Insurance Services and Consulting segments.

Frequently Asked Questions

Marsh & McLennan Companies reported consolidated revenue of $2.8 billion for the third quarter of 2011, an increase of 11% compared to the same period in the prior year. Underlying revenue, which excludes currency impacts and acquisitions/dispositions, increased by 5%.

The company's operating income saw a significant improvement, increasing by 30% to $310 million in the third quarter of 2011, compared to $239 million in the prior year. This growth was driven by increases in both the Risk and Insurance Services and Consulting segments.

During the first nine months of 2011, Marsh & McLennan Companies repurchased approximately 12.2 million shares of its common stock for $361 million. Additionally, in July 2011, the company purchased $600 million of its outstanding notes to extinguish debt, incurring a charge of approximately $72 million.

The company is subject to various legal proceedings and contingent liabilities in the ordinary course of business, primarily related to alleged errors and omissions in professional services. While management establishes liabilities when losses are probable and estimable, the ultimate outcome of these matters is uncertain and could materially impact future results of operations, financial condition, or cash flows. Specific details are provided in Note 16 of the financial statements.