10-QPeriod: Q3 FY2012

MARSH & MCLENNAN COMPANIES, INC. Quarterly Report for Q3 Ended Sep 30, 2012

Filed November 8, 2012For Securities:MRSHMMC

Summary

Marsh & McLennan Companies, Inc. (MRSH) reported solid financial results for the nine months ended September 30, 2012. Revenue increased to $8.92 billion from $8.62 billion in the prior year period, demonstrating the company's ability to grow in a challenging economic environment. Net income attributable to the company rose to $917 million from $737 million, indicating improved profitability. This growth was driven by strong performance in both the Risk and Insurance Services and Consulting segments. Key financial strengths include a healthy operating income of $1.42 billion for the nine-month period. The company also actively managed its capital through share repurchases, utilizing $180 million for buybacks in the first nine months of 2012. While the company experienced some fluctuations in its effective tax rate due to various tax benefits and adjustments, overall financial health appears robust, supported by consistent revenue growth and improved earnings.

Financial Highlights

50 data points
Beta

Revenue

$2.85B

Net Income

$241.00M

8.5% Net Margin

EPS (Diluted)

$0.44

Total Assets

$15.74B

Cash & Equivalents

$2.04B

Free Cash Flow

$584.00M

Financial Statements
Beta
Revenue$2.85B
Operating Expenses$2.47B
Operating Income$378.00M
Interest Expense$44.00M
Net Income$241.00M
EPS (Basic)$0.44
EPS (Diluted)$0.44
Shares Outstanding (Basic)544.00M
Shares Outstanding (Diluted)552.00M

Key Highlights

  • 1Consolidated revenue increased by 3.7% to $8.92 billion for the nine months ended September 30, 2012, compared to $8.62 billion in the prior year.
  • 2Net income attributable to the Company grew by 24.4% to $917 million for the nine months ended September 30, 2012, up from $737 million in the same period of 2011.
  • 3Operating income for the nine months ended September 30, 2012, was $1.42 billion, a significant increase from $1.25 billion in the prior year.
  • 4The company actively repurchased shares, spending $180 million on share buybacks during the first nine months of 2012.
  • 5Acquisitions in both the Risk and Insurance Services and Consulting segments contributed to revenue growth, with seven and three acquisitions completed respectively in the first nine months of 2012.
  • 6The effective tax rate decreased to 29.2% for the first nine months of 2012 from 30.4% in the prior year, benefiting from tax credits and expiring statutes of limitations.
  • 7The company reported healthy underlying revenue growth of 5% for the nine-month period, indicating consistent business expansion beyond currency and acquisition impacts.

Frequently Asked Questions

For the nine months ended September 30, 2012, Marsh & McLennan Companies demonstrated strong financial performance. Consolidated revenue increased by 3.7% to $8.92 billion, and net income attributable to the company grew significantly by 24.4% to $917 million. Operating income also saw a substantial increase to $1.42 billion, reflecting improved profitability across its business segments.

Both segments contributed positively to the company's performance. The Risk and Insurance Services segment saw its revenue increase by 5% to $4.96 billion, with operating income rising to $1.05 billion. The Consulting segment's revenue grew by 2% to $4.00 billion, and its operating income increased to $524 million. The company also actively pursued strategic acquisitions within both segments.

Marsh & McLennan Companies actively managed its capital during this period. The company repurchased approximately $180 million of its common stock in the first nine months of 2012. The company also continued to pay dividends to its shareholders, with $369 million paid during the first nine months of 2012.

The filing includes a section on forward-looking statements highlighting various risks and uncertainties. These include potential liabilities from errors and omissions claims, challenges in integrating strategic acquisitions, the impact of global economic and regulatory conditions (like the European debt crisis), foreign currency fluctuations, competition, and compliance with international laws and regulations. Investors should carefully review the 'Risk Factors' section in the company's most recent 10-K for a comprehensive understanding of these risks.