10-QPeriod: Q2 FY2014

MARSH & MCLENNAN COMPANIES, INC. Quarterly Report for Q2 Ended Jun 30, 2014

Filed August 4, 2014For Securities:MRSHMMC

Summary

Marsh & McLennan Companies, Inc. (MRSH) reported solid financial performance for the second quarter and first half of 2014. Revenue grew year-over-year, driven by a combination of organic growth and strategic acquisitions across both the Risk and Insurance Services and Consulting segments. The company demonstrated improved operating income and income from continuing operations, signaling effective cost management and operational efficiencies. Key financial highlights include strong revenue growth in the Consulting segment, particularly in Oliver Wyman, and steady performance in Risk and Insurance Services. The company continued its strategic acquisition strategy, integrating several businesses to enhance its market position. While facing some foreign currency headwinds, the underlying business demonstrated resilience. Management remains focused on driving profitable growth, managing expenses, and returning capital to shareholders through share repurchases and dividends.

Financial Highlights

51 data points
Beta

Revenue

$3.30B

Net Income

$431.00M

13.1% Net Margin

EPS (Diluted)

$0.77

Total Assets

$17.59B

Cash & Equivalents

$2.00B

Free Cash Flow

$535.00M

Financial Statements
Beta
Revenue$3.30B
Operating Expenses$2.65B
Operating Income$647.00M
Interest Expense$42.00M
Net Income$431.00M
EPS (Basic)$0.78
EPS (Diluted)$0.77
Shares Outstanding (Basic)549.00M
Shares Outstanding (Diluted)556.00M

Key Highlights

  • 1Consolidated revenue increased by 7% to $3.3 billion for the second quarter of 2014 compared to the prior year, with underlying revenue growth of 5%.
  • 2Operating income for the second quarter rose by 12% to $647 million, reflecting revenue growth and expense management.
  • 3Income from continuing operations increased by 10% to $440 million in the second quarter, leading to a diluted EPS of $0.78.
  • 4The Consulting segment showed robust growth, with revenue increasing by 8% (6% underlying) in the second quarter, driven significantly by a 17% underlying revenue increase at Oliver Wyman.
  • 5The Risk and Insurance Services segment reported a 6% revenue increase (4% underlying) in the second quarter, with solid performance across Marsh's global operations.
  • 6The company completed nine acquisitions in the first six months of 2014, investing $534 million to expand its capabilities and market reach.
  • 7Marsh & McLennan continued its capital return program, repurchasing approximately 5 million shares for $250 million in the second quarter of 2014.

Frequently Asked Questions

Marsh & McLennan Companies reported a strong second quarter in 2014, with consolidated revenue increasing by 7% to $3.3 billion and operating income rising by 12% to $647 million compared to the same period in 2013. Income from continuing operations also saw a healthy increase of 10%.

Both segments showed growth, but the Consulting segment was a particular highlight, with an 8% revenue increase (6% on an underlying basis). This was largely driven by Oliver Wyman, which experienced a significant 17% underlying revenue growth. The Risk and Insurance Services segment also contributed positively with a 6% revenue increase (4% underlying).

Marsh & McLennan actively returned capital to shareholders through share repurchases and dividends. In the second quarter of 2014, the company repurchased approximately 5 million shares for $250 million, and its Board of Directors authorized an additional $2 billion for future repurchases. Dividends paid in the first six months of 2014 amounted to $275 million.

The company continued its active acquisition strategy, completing nine acquisitions in the first six months of 2014, totaling $534 million in purchase consideration. These acquisitions, primarily within the Marsh & McLennan Agency (MMA) division, aim to expand Marsh's presence in the U.S. middle-market and enhance its service offerings across both segments.