MARSH & MCLENNAN COMPANIES, INC. Quarterly Report for Q2 Ended May 8, 2012

Summary

Marsh & McLennan Companies, Inc. (MRSH) reported solid financial results for the first quarter ended March 31, 2012. Revenue grew 6% to $3.1 billion, driven by broad-based growth across both the Risk and Insurance Services and Consulting segments. Operating income saw a healthy increase of 12% to $527 million. The company's strategic acquisitions in both segments are contributing to growth, with particular strength noted in Marsh's international operations and Mercer's various service lines. The company's financial position remains strong, with significant cash and cash equivalents. While operating cash flows were negative in the quarter, this is attributed to typical first-quarter compensation payouts. Marsh & McLennan continues to manage its debt effectively, including refinancing its maturing senior notes. The company also actively manages its portfolio through strategic acquisitions, demonstrating a commitment to expanding its market reach and service offerings.

Key Highlights

• 1Consolidated revenue increased by 6% to $3.1 billion for the first quarter of 2012 compared to the prior year.
• 2Operating income grew by 12% to $527 million, indicating improved profitability.
• 3Risk and Insurance Services segment revenue grew 7% to $1.7 billion, with Marsh showing strong performance across all geographies.
• 4Consulting segment revenue increased by 4% to $1.3 billion, with contributions from both Mercer and Oliver Wyman.
• 5The company completed multiple strategic acquisitions in both the Risk and Insurance Services and Consulting segments during the quarter.
• 6Operating expenses increased by 5%, largely due to higher compensation and benefits, but were partly offset by foreign exchange impacts.
• 7The company repaid maturing senior notes and issued new notes, managing its debt structure effectively.

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