Marsh & McLennan Companies Reports First Qu...

Operating Income Increases 15%
Adjusted Operating Income Grows 16%
GAAP EPS Rises 17% to $.74
Adjusted EPS Increases 16% to $.73

Marsh & McLennan Companies Reports First Quarter 2013 Results

Marsh & McLennan Companies, Inc.

Marsh & McLennan Companies, Inc. (NYSE: MMC), a global professional services firm offering advice and solutions in risk, strategy, and human capital, today reported financial results for the first quarter ended March 31, 2013.

Dan Glaser, President and CEO, said: "Our quarterly results represent an excellent start to the year, continuing the strong earnings momentum the Company has achieved over the past several years. Marsh delivered underlying revenue growth across all major geographies, led by strong performance in the International division as well as sequential improvement in the U.S./Canada division. Guy Carpenter's underlying revenue growth in the quarter was driven by strong growth in its International and Global Specialty operations. The Consulting segment produced significant growth in profitability and margin expansion, led by Mercer.

"Marsh & McLennan's adjusted operating income grew 16% in the first quarter, reflecting mid-teens growth and exceptional margin expansion in both the Risk & Insurance Services and Consulting segments," concluded Mr. Glaser.

Consolidated Results

Consolidated revenue in the first quarter of 2013 was $3.1 billion, an increase of 2% on both a reported and underlying basis compared with the first quarter of 2012. Underlying revenue measures the change in revenue using consistent currency exchange rates, excluding the impact of certain items, such as acquisitions, dispositions, and transfers among businesses. Operating income rose 15% to $607 million, compared with $527 million in the prior year period. Adjusted operating income, which excludes noteworthy items as presented in the attached supplemental schedules, rose 16% in the first quarter to $615 million.

Net income attributable to the Company was $413 million, or $.74 per share in the first quarter. This compares with $347 million, or $.63 per share, in the prior year. Adjusted earnings per share grew to $.73, an increase of 16% from $.63 last year.

Risk and Insurance Services

Risk and Insurance Services revenue increased 5% to $1.8 billion in the first quarter of 2013. Operating income increased 13% to $468 million, compared with $412 million in the prior year. Adjusted operating income in the quarter increased 14% to $471 million.

Marsh's revenue in the first quarter of 2013 was $1.4 billion, an increase of 5%, or 4% on an underlying basis. International operations had underlying revenue growth of 5%, reflecting growth of 13% in Latin America; 6% in Asia Pacific; and 3% in EMEA. In the U.S./Canada division, underlying revenue grew 2%. Guy Carpenter's first quarter revenue was $375 million, an increase of 5% from the prior year, or 4% on an underlying basis.

Consulting

Consulting segment revenue was $1.4 billion in the first quarter, a decrease of 1% from the first quarter of 2012, or flat on an underlying basis. Operating income was $187 million, compared with $164 million in the prior year, and adjusted operating income was $189 million, an increase of 15%.

Mercer's revenue was $1 billion in the first quarter of 2013, an increase of 3% on both a reported and underlying basis. Health, with revenue of $381 million, grew 6% on an underlying basis; Retirement, with revenue of $343 million, declined 1%; Talent, with revenue of $123 million, declined 4%; and Investments, with revenue of $194 million, rose 9%. Oliver Wyman's revenue was $321 million in the first quarter of 2013, a decrease of 9% on an underlying basis.

Other Items

In the first quarter of 2013, the Company had investment income of $21 million related to the winding up of Trident II, a private equity fund investment which we initiated in 1999. This compared with $20 million in the prior year. At March 31, 2013, cash and cash equivalents was $1.3 billion. Net debt, which is total debt less cash and cash equivalents, was $1.5 billion at the end of the first quarter. In the first quarter of 2013, the Company repurchased 2.7 million shares of its common stock for $100 million.

As previously indicated, beginning in the first quarter of this year, Mercer has reoriented its operations around four core lines of business: Health, Retirement, Talent, and Investments. Also in the first quarter, a substantial portion of Marsh's U.S. Consumer operations was transferred to Mercer. This business represented revenue of $231 million for the full year 2012. Quarterly financial information that reflects these reclassifications for the past three years is provided in the attached supplemental schedules.

Conference Call

A conference call to discuss first quarter 2013 results will be held today at 8:30 a.m. Eastern time. To participate in the teleconference, please dial +1 888 505 4378. Callers from outside the United States should dial +1 719 785 9446. The access code for both numbers is 8686796. The live audio webcast may be accessed at www.mmc.com. A replay of the webcast will be available approximately two hours after the event.

About Marsh & McLennan Companies

MARSH & McLENNAN COMPANIES (NYSE: MMC) is a global professional services firm offering clients advice and solutions in the areas of risk, strategy, and human capital. Marsh is a global leader in insurance broking and risk management; Guy Carpenter is a global leader in providing risk and reinsurance intermediary services; Mercer is a global leader in talent, health, retirement, and investment consulting; and Oliver Wyman is a global leader in management consulting. Marsh & McLennan Companies' approximately 54,000 colleagues worldwide provide analysis, advice, and transactional capabilities to clients in more than 100 countries. The Company prides itself on being a responsible corporate citizen and making a positive impact in the communities in which it operates. Visit www.mmc.com for more information.

INFORMATION CONCERNING FORWARD-LOOKING STATEMENTS

This press release contains “forward-looking statements,” as defined in the Private Securities Litigation Reform Act of 1995. These statements, which express management's current views concerning future events or results, use words like “anticipate,” “assume,” “believe,” “continue,” “estimate,” “expect,” “future,” “intend,” “plan,” “project” and similar terms, and future or conditional tense verbs like “could,” “may,” “might,” “should,” “will” and “would.” For example, we may use forward-looking statements when addressing topics such as: the outcome of contingencies; the expected impact of acquisitions and dispositions; pension obligations; market and industry conditions; the impact of foreign currency exchange rates; our effective tax rates; the impact of competition; changes in our business strategies and methods of generating revenue; the development and performance of our services and products; changes in the composition or level of our revenues; our cost structure, dividend policy, cash flow and liquidity; future actions by regulators; and the impact of changes in accounting rules.

Forward-looking statements are subject to inherent risks and uncertainties. Factors that could cause actual results to differ materially from those expressed or implied in our forward-looking statements include, among other things:

  • our exposure to potential liabilities arising from errors and omissions claims against us, particularly in our Marsh and Mercer businesses;
  • our ability to make strategic acquisitions and dispositions and to integrate, and realize expected synergies, savings or strategic benefits from the businesses we acquire;
  • the impact of any regional, national or global political, economic, regulatory or market conditions on our results of operations and financial condition;
  • changes in the funded status of our global defined benefit pension plans and the impact of any increased pension funding resulting from those changes;
  • the impact of competition, including with respect to our geographic reach, the sophistication and quality of our services, our pricing relative to competitors, our customers' option to self-insure or utilize internal resources instead of consultants, and our corporate tax rates relative to a number of our competitors;
  • the extent to which we retain existing clients and attract new business, and our ability to incentivize and retain key employees;
  • our exposure to potential criminal sanctions or civil remedies if we fail to comply with foreign and U.S. laws and regulations that are applicable to our international operations, including trade sanctions laws such as the Iran Threat Reduction and Syria Human Rights Act of 2012, anti-corruption laws such as the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act 2010, local laws prohibiting corrupt payments to government officials, as well as import and export restrictions;
  • our ability to maintain adequate physical, technical and administrative safeguards to protect the security of data;
  • the impact of changes in interest rates and deterioration of counterparty credit quality on our results related to our cash balances and investment portfolios, including corporate and fiduciary funds;
  • the impact on our net income or cash flows and our effective tax rate in a particular period caused by settled tax audits and expired statutes of limitation;
  • the impact on our net income caused by fluctuations in foreign currency exchange rates;
  • the potential impact of rating agency actions on our cost of financing and ability to borrow, as well as on our operating costs and competitive position;
  • our ability to successfully recover should we experience a disaster or other business continuity problem;
  • changes in applicable tax or accounting requirements; and
  • potential income statement effects from the application of FASB's ASC Topic No. 740 (“Income Taxes”) regarding accounting treatment of uncertain tax benefits and valuation allowances, including the effect of any subsequent adjustments to the estimates we use in applying this accounting standard.

The factors identified above are not exhaustive. Marsh & McLennan Companies and its subsidiaries operate in a dynamic business environment in which new risks may emerge frequently. Accordingly, we caution readers not to place undue reliance on the above forward-looking statements, which speak only as of the dates on which they are made. The Company undertakes no obligation to update or revise any forward-looking statement to reflect events or circumstances arising after the date on which it is made. Further information concerning the Company and its businesses, including information about factors that could materially affect our results of operations and financial condition, is contained in the Company's filings with the Securities and Exchange Commission, including the “Risk Factors” section of our most recently filed Annual Report on Form 10-K.

     

Marsh & McLennan Companies, Inc.
Consolidated Statements of Income
(In millions, except per share figures)
(Unaudited)
 

Three Months Ended
March 31,

2013   2012
Revenue $   3,126   $   3,051  
Expense:
Compensation and Benefits 1,803 1,796
Other Operating Expenses 716   728  
Operating Expenses 2,519   2,524  
Operating Income 607 527
Interest Income 4 6
Interest Expense (44 ) (46 )
Investment Income 21   20  
Income Before Income Taxes 588 507
Income Tax Expense 176   153  
Income from Continuing Operations 412 354
Discontinued Operations, Net of Tax 12   —  
Net Income Before Non-Controlling Interests $   424 $   354
Less: Net Income Attributable to Non-Controlling Interests 11   7  
Net Income Attributable to the Company $   413   $   347  
Basic Net Income Per Share
- Continuing Operations $   0.73   $   0.64  
- Net Income Attributable to the Company $   0.75   $   0.64  
Diluted Net Income Per Share
- Continuing Operations $   0.72   $   0.63  
- Net Income Attributable to the Company $   0.74   $   0.63  
Average Number of Shares Outstanding
- Basic 548   542  
- Diluted 557   551  
Shares Outstanding at 3/31 550   546  
 
           

Marsh & McLennan Companies, Inc.
Supplemental Information - Revenue Analysis
Three Months Ended
(Millions) (Unaudited)

 
Components of Revenue Change*  

Three Months Ended
March 31,

% Change
GAAP
Revenue

Currency
Impact

 

Acquisitions/
Dispositions
Impact

 

Underlying
Revenue

2013   2012
Risk and Insurance Services
Marsh $   1,388 $   1,321 5 % — 2 % 4 %
Guy Carpenter 375   357   5 % 1 % — 4 %
Subtotal 1,763 1,678 5 % — 2 % 4 %
Fiduciary Interest Income 8   11  
Total Risk and Insurance Services 1,771   1,689   5 % — 2 % 3 %
Consulting
Mercer 1,041 1,015 3 % — — 3 %
Oliver Wyman Group 321   356   (10 )% — (2 )% (9 )%
Total Consulting 1,362   1,371   (1 )% — — —
Corporate / Eliminations (7 ) (9 )
Total Revenue $   3,126   $   3,051   2 % — 1 % 2 %
 

Revenue Details

The following table provides more detailed revenue information for certain of the components presented above:

           
Components of Revenue Change*  

Three Months Ended
March 31,

% Change
GAAP
Revenue

Currency
Impact

 

Acquisitions/
Dispositions
Impact

 

Underlying
Revenue

2013   2012
Marsh:
EMEA $   594 $   577 3 % 1 % (1 )% 3 %
Asia Pacific 147 142 4 % (2 )% — 6 %
Latin America 78   74   5 % (8 )% — 13 %

Total International                             

819 793 3 % (1 )% — 5 %
U.S. / Canada 569   528   8 % — 6 % 2 %
Total Marsh $   1,388   $   1,321   5 % — 2 % 4 %
 
Mercer:
Health $ 381 $ 351 9 % — 2 % 6 %
Retirement 343 360 (5 )% — (3 )% (1 )%
Talent 123 125 (1 )% (1 )% 4 % (4 )%
Investments 194   179   8 % (1 )% 1 % 9 %
Total Mercer $   1,041   $   1,015   3 % — — 3 %
 
Notes
 
Underlying revenue measures the change in revenue using consistent currency exchange rates, excluding the impact of certain items such as: acquisitions, dispositions and transfers among businesses.
 
* Components of revenue change may not add due to rounding.
 
 

Marsh & McLennan Companies, Inc.
Non-GAAP Measures
Three Months Ended March 31
(Millions) (Unaudited)

 
The Company presents below certain additional financial measures that are "non-GAAP measures," within the meaning of Regulation G under the Securities Exchange Act of 1934. These measures are: adjusted operating income (loss); adjusted operating margin; and adjusted income, net of tax.
 
The Company presents these non-GAAP measures to provide investors with additional information to analyze the Company's performance from period to period. Management also uses these measures to assess performance for incentive compensation purposes and to allocate resources in managing the Company's businesses. However, investors should not consider these non-GAAP measures in isolation from, or as a substitute for, the financial information that the Company reports in accordance with GAAP. The Company's non-GAAP measures reflect subjective determinations by management, and may differ from similarly titled non-GAAP measures presented by other companies.
 
Adjusted Operating Income (Loss) and Adjusted Operating Margin
Adjusted operating income (loss) is calculated by excluding the impact of certain noteworthy items from the Company's GAAP operating income or loss. The following tables identify these noteworthy items and reconcile adjusted operating income (loss) to GAAP operating income or (loss), on a consolidated and segment basis, for the three months ended March 31, 2013 and 2012. The following tables also present adjusted operating margin, which is calculated by dividing adjusted operating income by consolidated or segment GAAP revenue.
       

Risk &
Insurance
Services

Consulting

Corporate/
Eliminations

    Total    

Three Months Ended March 31, 2013
Operating income (loss) $   468   $   187   $   (48 ) $   607  
Add (Deduct) impact of Noteworthy Items:
Restructuring charges (a) 2 2 3 7
Adjustments to acquisition related accounts (b) 1   —   —   1  
Operating income adjustments $   3   $   2   $   3   $   8  
Adjusted operating income (loss) $   471   $   189   $   (45 ) $   615  
Operating margin 26.4 % 13.7 % N/A 19.4 %
Adjusted operating margin 26.6 % 13.9 % N/A 19.7 %
 
Three Months Ended March 31, 2012
Operating income (loss) $   412   $   164   $   (49 ) $   527  
Add (Deduct) impact of Noteworthy Items:
Restructuring charges (a) (1 ) 3 2 4
Adjustments to acquisition related accounts (b) 3 (2 ) — 1
Other —   —   (1 ) (1 )
Operating income adjustments 2   1   1   4  
Adjusted operating income (loss) $   414   $   165   $   (48 ) $   531  
Operating margin 24.4 % 12.0 % N/A 17.3 %
Adjusted operating margin 24.5 % 12.0 % N/A 17.4 %
 

(a)

 

Primarily severance, reserve for future rent, and integration costs related to cost reduction activities for recent acquisitions.

 

(b)

Reflects the change from the re-measurement to fair value each quarter of contingent consideration related to acquisitions.

 
 

Marsh & McLennan Companies, Inc.
Non-GAAP Measures
Three Months Ended March 31
(Millions) (Unaudited)

 
Adjusted income, net of tax
 
Adjusted income, net of tax is calculated as: the Company's GAAP income from continuing operations, adjusted to reflect the after-tax impact of the operating income adjustments set forth in the preceding table; divided by MMC's average number of shares outstanding-diluted for the period.
     
Reconciliation of the Impact of Non-GAAP Measures on diluted earnings per share -
     
Three Months Ended March 31, 2013 Three Months Ended March 31, 2012
Amount   Diluted EPS Amount Diluted EPS
Income from continuing operations   $   412 $   354
Less: Non-controlling interest, net of tax 11   7  
Subtotal $ 401 $   0.72 $ 347 $   0.63
Add operating loss adjustments

$  

  8

$  

  4
Deduct impact of income taxes (3 ) (2 )
   

5

     

0.01

     

2

     

—

Adjusted income, net of tax $   406   $   0.73   $   349   $   0.63
 
     

Marsh & McLennan Companies, Inc.
Supplemental Information
(Millions) (Unaudited)
 
Three Months Ended
March 31,
2013  

   2012   

Depreciation and amortization expense $   70 $   66
Identified intangible amortization expense $ 18 $ 17
Stock option expense $ 7 $ 11
Capital expenditures $ 126 $ 51
 
 

Marsh & McLennan Companies, Inc.
Supplemental Information - Risk and Insurance Services Segment
Quarterly Revenue and Operating Income Reclassification Analysis

 

(Millions) (Unaudited)

 
Effective January 1, 2013, the Corporate Benefits and Association businesses, which were previously part of Marsh's US Consumer operations, were transferred to Mercer. The following schedule summarizes the quarterly impact on the revenue, operating income and operating margin of the Risk & Insurance Services segment resulting from this transfer for each of the three years ended December 31, 2010, 2011 and 2012. The businesses transferred to Mercer are referred to below as "US Consumer".

 

    2010   2011   2012
Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY
Risk and Insurance Services
Revenue
Originally Reported $   1,492 $   1,459 $   1,327 $   1,486 $   5,764 $   1,634 $   1,620 $   1,475 $   1,572 $   6,301 $   1,747 $   1,698 $   1,510 $   1,626 $   6,581
US Consumer (49 ) (51 ) (52 ) (55 ) (207 ) (53 ) (57 ) (55 ) (57 ) (222 ) (58 ) (57 ) (59 ) (57 ) (231 )
As Reclassified $   1,443   $   1,408   $   1,275   $   1,431   $   5,557   $   1,581   $   1,563   $   1,420   $   1,515   $   6,079   $   1,689   $   1,641   $   1,451   $   1,569   $   6,350  
 
Revenue, As Reclassified
Marsh $ 1,117 $ 1,154 $ 1,031 $ 1,235 $ 4,537 $ 1,229 $ 1,296 $ 1,155 $ 1,311 $ 4,991 $ 1,321 $ 1,356 $ 1,192 $ 1,363 $ 5,232
Guy Carpenter 315   243   233   184   975   340   257   251   193   1,041   357   275   249   198   1,079  
Subtotal 1,432 1,397 1,264 1,419 5,512 1,569 1,553 1,406 1,504 6,032 1,678 1,631 1,441 1,561 6,311
Fiduciary Interest Income 11   11   11   12   45   12   10   14   11   47   11   10   10   8   39  
Total Risk and Insurance Services $   1,443   $   1,408   $   1,275   $   1,431   $   5,557   $   1,581   $   1,563   $   1,420   $   1,515   $   6,079   $   1,689   $   1,641   $   1,451   $   1,569   $   6,350  
 
Revenue Details:
Marsh:
EMEA $ 527 $ 397 $ 332 $ 418 $ 1,674 $ 551 $ 445 $ 367 $ 433 $ 1,796 $ 577 $ 455 $ 376 $ 452 $ 1,860
Asia Pacific 99 139 125 140 503 125 169 158 160 612 142 181 165 168 656
Latin America 52   66   73   107   298   61   83   84   106   334   74   87   81   111   353  
Total International 678 602 530 665 2,475 737 697 609 699 2,742 793 723 622 731 2,869
U.S./Canada 439   552   501   570   2,062   492   599   546   612   2,249   528   633   570   632   2,363  
Total Marsh $   1,117   $   1,154   $   1,031   $   1,235   $   4,537   $   1,229   $   1,296   $   1,155   $   1,311   $   4,991   $   1,321   $   1,356   $   1,192   $   1,363   $   5,232  
 
Risk and Insurance Services
GAAP Operating Income
Originally Reported $ 347 $ 258 $ 142 $ 225 $ 972 $ 383 $ 356 $ 186 $ 304 $ 1,229 $ 417 $ 401 $ 234 $ 322 $ 1,374
US Consumer —   (3 ) (5 ) (7 ) (15 ) (3 ) (7 ) (10 ) (9 ) (29 ) (5 ) (11 ) (12 ) (12 ) (40 )
As Reclassified $   347   $   255   $   137   $   218   $   957   $   380   $   349   $   176   $   295   $   1,200   $   412   $   390   $   222   $   310   $   1,334  
 
GAAP Operating Margin
Originally Reported 23.3 % 17.7 % 10.7 % 15.1 % 16.9 % 23.4 % 22.0 % 12.6 % 19.3 % 19.5 % 23.9 % 23.6 % 15.5 % 19.8 % 20.9 %
As Reclassified 24.0 % 18.1 % 10.7 % 15.2 % 17.2 % 24.0 % 22.3 % 12.4 % 19.5 % 19.7 % 24.4 % 23.8 % 15.3 % 19.8 % 21.0 %
 
Adjusted Operating Income
Originally Reported $ 358 $ 305 $ 165 $ 261 $ 1,089 $ 377 $ 352 $ 189 $ 290 $ 1,208 $ 419 $ 404 $ 213 $ 312 $ 1,348
US Consumer —   (3 ) (5 ) (7 ) (15 ) (3 ) (7 ) (10 ) (9 ) (29 ) (5 ) (11 ) (12 ) (12 ) (40 )
As Reclassified $   358   $   302   $   160   $   254   $   1,074   $   374   $   345   $   179   $   281   $   1,179   $   414   $   393   $   201   $   300   $   1,308  
 
Adjusted Operating Margin
Originally Reported 24.0 % 20.9 % 12.4 % 17.6 % 18.9 % 23.1 % 21.7 % 12.8 % 18.4 % 19.2 % 24.0 % 23.8 % 14.1 % 19.2 % 20.5 %
As Reclassified 24.8 % 21.4 % 12.5 % 17.7 % 19.3 % 23.7 % 22.1 % 12.6 % 18.5 % 19.4 % 24.5 % 23.9 % 13.9 % 19.1 % 20.6 %
 
 

Marsh & McLennan Companies, Inc.
Supplemental Information - Consulting Segment
Quarterly Revenue and Operating Income Reclassification Analysis

 

(Millions) (Unaudited)

 
Effective January 1, 2013, the Corporate Benefits and Association businesses, which were previously part of Marsh's US Consumer operations, were transferred to Mercer. In addition, also effective January 1, 2013, Mercer realigned management responsibility for its Outsourcing business within its other lines of business. The following schedule summarizes the quarterly impact on the revenue, operating income and operating margin of the Consulting segment resulting from this transfer and realignment for each of the three years ended December 31, 2010, 2011 and 2012. The businesses transferred to Mercer from Marsh are referred to below as "US Consumer".

 

    2010   2011   2012
Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY
Consulting
Revenue
Originally Reported $   1,155 $   1,168 $   1,203 $   1,309 $   4,835 $   1,261 $   1,319 $   1,339 $   1,346 $   5,265 $   1,313 $   1,341 $   1,346 $   1,382 $   5,382
US Consumer 49   51   52   55   207   53   57   55   57   222   58   57   59   57   231  
As Reclassified $   1,204   $   1,219   $   1,255   $   1,364   $   5,042   $   1,314   $   1,376   $   1,394   $   1,403   $   5,487   $   1,371   $   1,398   $   1,405   $   1,439   $   5,613  
 
Revenue, As Reclassified
Mercer $ 898 $ 889 $ 933 $ 965 $ 3,685 $ 975 $ 1,002 $ 1,030 $ 997 $ 4,004 $ 1,015 $ 1,017 $ 1,054 $ 1,061 $ 4,147
Oliver Wyman Group 306   330   322   399   1,357   339   374   364   406   1,483   356   381   351   378   1,466  
Total Consulting $   1,204   $   1,219   $   1,255   $   1,364   $   5,042   $   1,314   $   1,376   $   1,394   $   1,403   $   5,487   $   1,371   $   1,398   $   1,405   $   1,439   $   5,613  
 
Revenue Details:
Mercer:
Health $ 306 $ 311 $ 310 $ 316 $ 1,243 $ 329 $ 337 $ 334 $ 320 $ 1,320 $ 351 $ 353 $ 354 $ 354 $ 1,412
Retirement 369 344 344 351 1,408 367 362 348 346 1,423 360 350 334 352 1,396
Talent 93 102 142 151 488 117 127 173 159 576 125 132 179 168 604
Investments 130   132   137   147   546   162   176   175   172   685   179   182   187   187   735  
Total Mercer $   898   $   889   $   933   $   965   $   3,685   $   975   $   1,002   $   1,030   $   997   $   4,004   $   1,015   $   1,017   $   1,054   $   1,061   $   4,147  
 
Consulting
GAAP Operating Income
Originally Reported $ 116 $ (275 ) $ 138 $ 150 $ 129 $ 128 $ 152 $ 161 $ 147 $ 588 $ 159 $ 172 $ 193 $ 128 $ 652
US Consumer —   3   5   7   15   3   7   10   9   29   5   11   12   12   40  
As Reclassified $   116   $   (272 ) $   143   $   157   $   144   $   131   $   159   $   171   $   156   $   617   $   164   $   183   $   205   $   140   $   692  
 
GAAP Operating Margin
Originally Reported 10.0 % N/A 11.5 % 11.5 % 2.7 % 10.2 % 11.5 % 12.0 % 10.9 % 11.2 % 12.1 % 12.8 % 14.3 % 9.3 % 12.1 %
As Reclassified 9.6 % N/A 11.4 % 11.5 % 2.9 % 10.0 % 11.6 % 12.3 % 11.1 % 11.2 % 12.0 % 13.1 % 14.6 % 9.7 % 12.3 %
 
Adjusted Operating Income
Originally Reported $ 116 $ 127 $ 144 $ 166 $ 553 $ 131 $ 154 $ 168 $ 166 $ 619 $ 160 $ 176 $ 192 $ 179 $ 707
US Consumer —   3   5   7   15   3   7   10   9   29   5   11   12   12   40  
As Reclassified $   116   $   130   $   149   $   173   $   568   $   134   $   161   $   178   $   175   $   648   $   165   $   187   $   204   $   191   $   747  
 
Adjusted Operating Margin
Originally Reported 10.0 % 10.9 % 12.0 % 12.7 % 11.4 % 10.4 % 11.7 % 12.5 % 12.3 % 11.8 % 12.2 % 13.1 % 14.3 % 13.0 % 13.2 %
As Reclassified 9.6 % 10.7 % 11.9 % 12.7 % 11.3 % 10.2 % 11.7 % 12.8 % 12.5 % 11.8 % 12.0 % 13.4 % 14.5 % 13.3 % 13.3 %
 
       

Marsh & McLennan Companies, Inc.
Consolidated Balance Sheets
(Millions) (Unaudited)
 

March 31,
2013

December 31,
2012
ASSETS
 
Current assets:
Cash and cash equivalents $         1,263 $   2,301
Net receivables 3,176 3,058
Other current assets 658   604  
Total current assets 5,097 5,963
 
Goodwill and intangible assets 7,199 7,261
Fixed assets, net 793 809
Pension related assets 580 260
Deferred tax assets 1,129 1,223
Other assets 739   772  
TOTAL ASSETS $         15,537   $   16,288  
 
LIABILITIES AND EQUITY
 
Current liabilities:
Short-term debt $ 10 $ 260
Accounts payable and accrued liabilities 1,808 1,721
Accrued compensation and employee benefits 746 1,473
Accrued income taxes 148 110
Dividends payable 128   —  
Total current liabilities 2,840 3,564
 
Fiduciary liabilities 3,964 3,992
Less - cash and investments held in a fiduciary capacity (3,964 ) (3,992 )
— —
Long-term debt 2,705 2,658
Pension, post-retirement and post-employment benefits 1,993 2,094
Liabilities for errors and omissions 433 460
Other liabilities 853 906
 
Total equity 6,713   6,606  
TOTAL LIABILITIES AND EQUITY $         15,537   $   16,288  
 

Media:
Marsh & McLennan Companies
Laura Cora, +1-212-345-2731
laura.cora@mmc.com
or
Investors:
Marsh & McLennan Companies
Keith Walsh, +1-212-345-0057
keith.walsh@mmc.com

Companies

Marsh & Mclennan Cos Inc. (MHM)
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