3rd Quarter Results
Marsh & McLennan Co Inc
01 November 2006
News Release
Media Contact: John Dillard Investor Contact:
Robin Liebowitz Edelman for MMC Mike Bischoff
MMC (212) 704-8174 MMC
(212) 345-3963 (212) 345-5470
MMC REPORTS THIRD QUARTER 2006 RESULTS
NEW YORK, NEW YORK, November 1, 2006-Marsh & McLennan Companies, Inc. (MMC)
today reported financial results for the third quarter and nine months ended
September 30, 2006. Consolidated revenues for the quarter were $2.9 billion, an
increase of 4 percent from the 2005 third quarter. Consolidated net income more
than doubled to $176 million from $69 million last year, and earnings per share
grew to $.31 from $.12. Earnings per share from continuing operations increased
to $.32 in the third quarter from $.11 last year.
For the first nine months of 2006, consolidated revenues were $8.9 billion,
compared with $8.8 billion for the same period of 2005. Consolidated net income
was $764 million, or $1.36 per share, compared with $369 million, or $.68 per
share, in 2005. Results from discontinued operations, net of tax, were $173
million, or $.31 per share, resulting primarily from MMC's sale of its
investment in Sedgwick Claims Management in January 2006. Results from
discontinued operations in 2005 were $17 million, or $.03 per share. Income from
continuing operations was $591 million, or $1.05 per share, compared with $352
million, or $.65 per share, in 2005. Stock option expense in the first nine
months of 2006 was $93 million. Stock option expense in the first nine months of
2005 was $31 million, and related only to the third quarter, since MMC adopted
SFAS No. 123(R), 'Share-Based Payment,' on July 1, 2005.
A number of noteworthy items affected financial results, including restructuring
and related costs; legal and regulatory costs primarily related to market
service agreements; and other items indicated in the attached supplemental
schedules. In the third quarter and first nine months of 2006, noteworthy items
totaled $57 million, or $.06 per share, and $166 million, or $.19 per share,
respectively. In the third quarter and first nine months of 2005, noteworthy
items reduced earnings per share from continuing operations by $.19 and $.58,
respectively.
'MMC had a good third quarter,' said Michael G. Cherkasky, president and chief
executive officer of MMC. 'Consolidated revenue growth was the highest we have
achieved in two years. Our efforts to become more efficient across MMC produced
substantially improved year-over-year profitability and margin, a continuation
of the positive trends begun earlier this year.
'Marsh continued its recovery. Improvement in new business was even stronger
this quarter, following growth in the second quarter. Client retention rates in
the quarter increased over the prior year. European operating performance
improved, with increased new business and higher client retention levels and
profitability. These revenue trends allowed Marsh to report flat quarterly
underlying revenues for the first time in two years, as well as substantially
improved profitability. Guy Carpenter, despite a challenging market environment,
exhibited revenue growth as a result of continued new business development.
Kroll continued the successful implementation of its business strategy,
resulting in growth in key businesses. Mercer Human Resource Consulting reported
underlying revenue growth in all of its businesses, and Mercer Specialty
Consulting continued its double-digit revenue growth. Putnam performed as
expected, with positive institutional flows contributing to improved net flows.
We are optimistic about our future prospects,' Mr. Cherkasky concluded.
Risk and Insurance Services
Risk and insurance services revenues of $1.3 billion in the third quarter were
similar to last year's third quarter, and flat on an underlying basis. Operating
income increased markedly in the quarter to $143 million, compared with $20
million last year, reflecting restructuring efforts, improved efficiencies, and
cost discipline. The operating margin for the first nine months of 2006 improved
to 13.5 percent from 5.7 percent last year. Adjusting for the impact of
noteworthy items and stock option expense, segment operating margin was 17.3
percent in the first nine months of 2006, compared with 14.2 percent in the same
period of 2005. Please see the attached supplemental schedules for a
reconciliation of these non-GAAP financial measures to reported GAAP results.
Marsh revenues were $1 billion in the third quarter, a decline of 2 percent, and
flat on an underlying basis. Growth in new business continued, increasing 11
percent globally. Guy Carpenter also experienced double-digit growth in new
business, resulting in revenues increasing 3 percent in the third quarter to
$214 million. Although U.S. property catastrophe rates increased, rates on most
other lines of business were flat to down, and the market environment for
property catastrophe reinsurance continued to be affected by limited reinsurer
capacity and higher risk retention by clients.
Risk Capital Holdings revenues of $45 million in the third quarter were
unchanged from the 2005 third quarter. More than half of the quarter's revenues
were unrealized mark-to-market gains. Revenues of $119 million through the first
nine months of 2006 declined from $162 million for the same period of 2005.
Risk Consulting and Technology
Kroll revenues increased 4 percent to $251 million, and operating income rose to
$37 million in the third quarter. The technology services group, Kroll's largest
business unit, sustained its solid performance, led by the background screening
business, which reported double-digit growth. The unit's electronic discovery
business responded successfully to market conditions and continued its
improvement from the first quarter of this year. Consulting services reported
double-digit underlying revenue growth. Corporate advisory and restructuring
performed well, but its results were affected by the anticipated absence of
success fees from major restructuring assignments such as those recorded in the
second quarter of the year. Results for the security group reflected the orderly
exit from high-risk international assignments that had limited profitability and
no longer fit Kroll's business strategy.
Consulting
Consulting revenues increased 13 percent to $1.1 billion in the third quarter,
or 10 percent on an underlying basis. Year-to-date revenues increased 10 percent
to $3.1 billion, or 9 percent on an underlying basis. Mercer Human Resource
Consulting increased revenues 10 percent to $762 million in the third quarter,
or 7 percent on an underlying basis. Year-to-date revenues increased 7 percent
to $2.3 billion. All of the Mercer HR businesses exhibited underlying revenue
growth, driven by Europe and Asia. The health and benefits business increased
underlying revenues by 5 percent, a notable improvement over previous quarters.
Mercer Specialty Consulting revenues grew 22 percent to $304 million in the
third quarter, or 16 percent on an underlying basis. This exceptional
performance was led by Mercer Oliver Wyman and the strategy and operations
business, which increased underlying revenues 21 percent and 19 percent,
respectively. Year-to-date revenues increased 18 percent to $863 million, or 17
percent on an underlying basis.
Investment Management
Putnam revenues declined 8 percent to $342 million in the quarter. Ending assets
on September 30, 2006 were $182 billion, comprising $118 billion in mutual fund
assets and $64 billion in institutional assets. Average assets under management
were $179 billion, compared with $195 billion in the third quarter of 2005.
Institutional flows were positive for the first time since the third quarter of
2003. Net outflows were approximately $3 billion in the quarter.
Other Items
MMC's net debt position, which is total debt less cash and cash equivalents, was
$3.4 billion at the end of the 2006 third quarter, a decrease of over $450
million from the end of the second quarter.
Conference Call
A conference call to discuss third quarter 2006 results will be held today at
10:00 a.m. Eastern Time. To participate in the teleconference, please dial 866
564 7444 or 719 234 0008 (international). The access code for both numbers is
7646511. The audio webcast may be accessed at www.mmc.com. A replay of the
webcast will be available approximately two hours after the event at the same
web address.
MMC is a global professional services firm with annual revenues of approximately
$12 billion. It is the parent company of Marsh, the world's leading risk and
insurance services firm; Guy Carpenter, the world's leading risk and reinsurance
specialist; Kroll, the world's leading risk consulting company; Mercer, a major
global provider of human resource and specialty consulting services; and Putnam
Investments, one of the largest investment management companies in the United
States. Approximately 55,000 employees provide analysis, advice, and
transactional capabilities to clients in over 100 countries. Its stock (ticker
symbol: MMC) is listed on the New York, Chicago, Pacific, and London stock
exchanges. MMC's website address is www.mmc.com.
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,'
'intend,' 'plan,' 'project' and similar terms, and future or conditional tense
verbs like 'could,' 'should,' 'will' and 'would.' For example, we may use
forward-looking statements when addressing topics such as: future actions by our
management or regulators; the outcome of contingencies; changes in our business
strategy; changes in our business practices and methods of generating revenue;
the development and performance of our services and products; market and
industry conditions, including competitive and pricing trends; changes in the
composition or level of MMC's revenues; our cost structure; the impact of
acquisitions and dispositions; and MMC's cash flow and liquidity.
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:
• the economic and reputational impact of: litigation and regulatory
proceedings brought by federal and state regulators and law enforcement
authorities concerning our insurance and reinsurance brokerage and
investment management operations (including the complaints relating to
market service agreements and other matters filed by, respectively, the New
York Attorney General's office in October 2004, the Connecticut Attorney
General's office in January 2005 and the Florida Attorney General's office
and Department of Financial Services in March 2006, and proceedings relating
to market-timing matters at Putnam); and class actions, derivative actions
and individual suits filed by policyholders and shareholders in connection
with the foregoing;
• in light of Marsh's elimination of contingent commission arrangements in
late 2004, our ability to achieve profitable revenue growth in our risk and
insurance services segment by providing both traditional insurance brokerage
services and additional risk advisory services;
• our ability to retain existing clients and attract new business,
particularly in our risk and insurance services segment, and our ability to
retain key employees;
• period-to-period revenue fluctuations in risk and insurance services
relating to the net effect of new and lost business production and the
timing of policy inception dates;
• the impact on risk and insurance services commission revenues of changes
in the availability of, and the premiums insurance carriers charge for,
insurance and reinsurance products, including the impact on premium rates
and market capacity attributable to catastrophic events such as hurricanes;
• the impact on renewals in our risk and insurance services segment of
pricing trends in particular insurance markets, fluctuations in the general
level of economic activity and decisions by insureds with respect to the
level of risk they will self-insure;
• the impact on our consulting segment of pricing trends and utilization
rates;
• the actual and relative investment performance of Putnam's mutual funds
and institutional and other advisory accounts, and the extent to which
Putnam reverses its recent net redemption experience, increases assets under
management and maintains management and administrative fees at historical
levels;
• our ability to implement our restructuring initiatives and otherwise
reduce or control expenses and achieve operating efficiencies;
• the impact of competition, including with respect to pricing and the
emergence of new competitors;
• the impact of increasing focus by regulators, clients and others on
potential conflicts of interest, particularly in connection with the
provision of consulting and investment advisory services;
• fluctuations in the value of Risk Capital Holdings' investments in
individual companies and investment funds;
• our ability to make strategic acquisitions and dispositions and to
integrate, and realize expected synergies, savings or strategic benefits
from, the businesses we acquire;
• our exposure to potential liabilities arising from errors and omissions
claims against us;
• our ability to meet our financing needs by generating cash from
operations and accessing external financing sources, including the potential
impact of rating agency actions on our cost of financing or ability to
borrow;
• the impact on our operating results of foreign exchange fluctuations;
and
• changes in the tax or accounting treatment of our operations, and the
impact of other legislation and regulation in the jurisdictions in which we
operate, particularly given the global scope of our businesses.
The factors identified above are not exhaustive. MMC and its subsidiaries
operate in a dynamic business environment in which new risks may emerge
frequently. Accordingly, MMC cautions readers not to place undue reliance on its
forward-looking statements, which speak only as of the dates on which they are
made.
MMC 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 MMC and its businesses, including information
about factors that could materially affect our results of operations and
financial condition, is contained in MMC's filings with the Securities and
Exchange Commission.
MMC and its operating companies use their websites to convey meaningful
information about their businesses, including the anticipated release of
quarterly financial results and the posting of updates of assets under
management at Putnam. Monthly updates of total assets under management at Putnam
will be posted to the MMC website the first business day following the end of
each month. Putnam posts mutual fund and performance data to its website
regularly. Assets for most Putnam retail mutual funds are posted approximately
two weeks after each month-end. Mutual fund net asset value (NAV) is posted
daily. Historical performance and Lipper rankings are also provided. Investors
can link to MMC and its operating company websites through www.mmc.com.
Marsh & McLennan Companies, Inc.
Consolidated Statements of Income
(In millions, except per share figures)
(Unaudited)
------------- ----------------
Three Months Ended Nine Months Ended
September 30, September 30,
------------- ----------------
2006 2005 2006 2005
------- ------- --------- --------
Revenue:
Service Revenue $2,827 $2,731 $8,748 $8,670
Investment Income (Loss) 57 48 141 156
------- ------- --------- --------
Total Revenue 2,884 2,779 8,889 8,826
------- ------- --------- --------
Expense:
Compensation and Benefits 1,742 1,731 5,293 5,348
Other Operating Expenses 822 861 2,541 2,737
------- ------- --------- --------
Total Expenses 2,564 2,592 7,834 8,085
------- ------- --------- --------
Operating Income 320 187 1,055 741
Interest Income 16 13 45 33
Interest Expense (75) (111) (231) (253)
------- ------- --------- --------
Income Before Income Taxes
and Minority Interest Expense 261 89 869 521
Income Taxes 77 24 269 163
Minority Interest Expense,
Net of Tax 4 2 9 6
------- ------- --------- --------
Income from Continuing
Operations 180 63 591 352
Discontinued Operations, Net
of Tax (4) 6 173 17
------- ------- -------- --------
Net Income $ 176 $ 69 $ 764 $ 369
======= ======= ========= ========
Basic Net Income Per Share -
Continuing Operations $ 0.33 $ 0.12 $ 1.08 $ 0.66
======= ======= ========= ========
- Net Income $ 0.32 $ 0.13 $ 1.39 $ 0.69
======= ======= ========= ========
Diluted Net Income Per Share
- Continuing Operations $ 0.32 $ 0.11 $ 1.05 $ 0.65
======= ======= ========= ========
- Net Income $ 0.31 $ 0.12 $ 1.36 $ 0.68
======= ======= ========= ========
Average Number of Shares
Outstanding - Basic 550 539 549 535
======= ======= ========= ========
- Diluted 554 544 555 539
======= ======= ========= ========
Shares Outstanding at 9/30 551 544 551 544
======= ======= ========= ========
Marsh & McLennan Companies, Inc.
Supplemental Information - Revenue Analysis
Three Months Ended
(Millions) (Unaudited)
Components of Revenue Change
Three Months Ended % Change Acquisitions/
September 30, GAAP Currency Dispositions Underlying
2006 2005 Revenue Impact Impact Revenue
------ ------ ------- ------- ------- --------
Risk and Insurance
Services
Insurance
Services $ 1,009 $ 1,028 (2)% 1% (3)% -
Reinsurance
Services 214 207 3% - - 3%
Risk Capital
Holdings 45 45 - - - -
------ ------
Total Risk and
Insurance
Services 1,268 1,280 (1)% 1% (2)% -
------ ------
Risk Consulting
& Technology 251 242 4% 1% 5% (2)%
------ ------
Consulting
Human Resource
Consulting 762 691 10% 3% - 7%
Specialty
Consulting 304 249 22% 2% 4% 16%
------ ------
Total Consulting 1,066 940 13% 2% 1% 10%
------ ------
Investment
Management 342 371 (8)% - - (8)%
------ ------
Total Operating
Segments 2,927 2,833 3% 1% - 2%
Corporate
Eliminations (43) (54)
------ ------
Total Revenue $2,884 $2,779 4% 1% - 3%
====== ======
Notes
Underlying revenue measures the change in revenue, before the impact of
acquisitions and dispositions, using consistent currency exchange rates.
Interest income on fiduciary funds amounted to $50 million and $43 million for
the three months ended September 30, 2006 and 2005, respectively.
Revenue includes net investment income of $46 million and $45 million for Risk
and Insurance Services and $11 and $3 million for Investment Management for the
three months ended September 30, 2006 and 2005, respectively.
Risk Capital Holdings owns MMC's investments in insurance and financial services
firms, as well as MMC's investments in the Trident Funds.
Marsh & McLennan Companies, Inc.
Supplemental Information - Revenue Analysis
Nine Months Ended
(Millions) (Unaudited)
Components of Revenue Change
Nine Months Ended % Change Acquisitions/
September 30, GAAP Currency Dispositions Underlying
2006 2005 Revenue Impact Impact Revenue
------ ------- ------- ------- -------- -------
Risk and
Insurance
Services
Insurance
Services $ 3,261 $3,432 (5)% (1)% (2)% (2)%
Reinsurance
Services 709 681 4% (1)% - 5%
Risk Capital
Holdings 119 162 (27)% - (6)% (21)%
------ -------
Total Risk and
Insurance
Services 4,089 4,275 (4)% - (2)% (2)%
------ -------
Risk Consulting
& Technology 769 716 7% - 2% 5%
------ -------
Consulting
Human Resource
Consulting 2,252 2,104 7% - - 7%
Specialty
Consulting 863 732 18% - 1% 17%
------ -------
Total 3,115 2,836 10% - 1% 9%
Consulting ------ -------
Investment
Management 1,026 1,146 (10)% - - (10)%
------ -------
Total Operating
Segments 8,999 8,973 - - (1)% 1%
Corporate
Eliminations (110) (147)
------ -------
Total Revenue $8,889 $8,826 1% - (1)% 2%
====== =======
Notes
Underlying revenue measures the change in revenue, before the impact of
acquisitions and dispositions, using consistent currency exchange rates.
Interest income on fiduciary funds amounted to $135 million and $114 million for
the nine months ended September 30, 2006 and 2005, respectively.
Revenue includes net investment income of $124 million and $151 million for Risk
and Insurance Services and $1 and $0 million for Consulting and $16 and $5
million for Investment Management for the nine months ended September 30, 2006
and 2005, respectively.
Risk Capital Holdings owns MMC's investments in insurance and financial services
firms, as well as MMC's investments in the Trident Funds.
Marsh & McLennan Companies, Inc.
Supplemental Information
(Millions) (Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2006 2005 2006 2005
------- -------- ------- -------
Revenue:
Risk and Insurance Services $1,268 $1,280 $4,089 $4,275
Risk Consulting & Technology 251 242 769 716
Consulting 1,066 940 3,115 2,836
Investment Management 342 371 1,026 1,146
------- -------- ------- -------
2,927 2,833 8,999 8,973
Eliminations (43) (54) (110) (147)
------- -------- ------- -------
$2,884 $2,779 $8,889 $8,826
------- -------- ------- -------
Operating Income (Loss):
Risk and Insurance Services $ 143 $ 20 $ 550 $ 243
Risk Consulting & Technology 37 36 98 109
Consulting 112 117 349 357
Investment Management 77 83 217 204
Corporate (49) (69) (159) (172)
------- -------- ------- -------
$ 320 $ 187 $ 1,055 $ 741
------- -------- ------- -------
Segment Operating Margins:
Risk and Insurance Services 11.3% 1.6% 13.5% 5.7%
Risk Consulting & Technology 14.7% 14.9% 12.7% 15.2%
Consulting 10.5% 12.4% 11.2% 12.6%
Investment Management 22.5% 22.4% 21.2% 17.8%
Consolidated Operating Margin 11.1% 6.7% 11.9% 8.4%
Pretax Margin 9.0% 3.2% 9.8% 5.9%
Effective Tax Rate 29.5% 27.0% 31.0% 31.3%
Potential Minority Interest
Associated with the Putnam
Equity Partnership Plan Net of
Dividend Equivalent
Expense Related to MMC Common
Stock Equivalents $ 4 $ 1 $ 9 $ 2
Marsh & McLennan Companies, Inc.
Supplemental Information- Continuing Operations
(Millions) (Unaudited)
Significant Items Impacting the Comparability of Financial Results:
The year-over-year comparability of MMC's third quarter and nine-month financial
results is affected by a number of noteworthy items, stock option expense and
interest expense. The following table identifies the impact of noteworthy items
on operating income for the periods indicated.
Risk & Risk
Insurance Consulting Investment
Services & Technology Consulting Management Corporate Total
Three Months Ended --------- ----------- ---------- ---------- --------- -----
September 30, 2006
Restructuring
Charges (a) $ 18 $ 1 $ 18 $ - $ 4 $ 41
Accelerated
Amortization/D
epreciation 2 - - - 3 5
Settlement,
Legal and
Regulatory (b) 11 - - - - 11
----- ----- ------ ----- ----- -----
Total Impact in 2006 $ 31 $ 1 $ 18 $ - $ 7 $ 57
----- ----- ------ ----- ----- -----
Three Months Ended
September 30, 2005
Restructuring Charges (a) $ 51 $ - $ - $ - $ 1 $ 52
Employee Retention
Awards 50 - 10 - - 60
Settlement, Legal and
Regulatory (b) 16 - - (12) (5) (1)
Estimated Mutual Fund
Reimbursement (c) - - - 1 - 1
Other 1 - - 4 1 6
----- ----- ------ ----- ----- -----
Total Impact in 2005 $ 118 $ - $ 10 $ (7) $ (3) $118
----- ----- ------ ----- ----- -----
Nine Months Ended
September 30, 2006
Restructuring Charges (a) $ 63 $ 1 $ 17 $ - $ 31 $ 112
Accelerated Amortization/
Depreciation 23 - - - 6 29
Settlement, Legal and
Regulatory (b) 32 - - (7) - 25
----- ----- ------ ----- ----- -----
Total Impact in 2006 $ 118 $ 1 $ 17 $ (7) $ 37 $166
----- ----- ------ ----- ----- -----
Nine Months Ended
September 30, 2005
Restructuring Charges (a) $ 195 $ - $ - $ - $ 55 $250
Employee Retention
Awards 88 - 30 - - 118
Settlement, Legal and
Regulatory (b) 69 - - (12) (24) 33
Estimated Mutual Fund
Reimbursement (c) - - - 35 - 35
Other 11 - - 4 (2) 13
----- ----- ------ ----- ----- -----
Total Impact in 2005 $ 363 $ - $ 30 $ 27 $ 29 $449
----- ----- ------ ----- ----- -----
Notes:
(a) Primarily includes severance and related charges and costs for future rent
and other costs for real estate resulting from previously announced cost
reduction initiatives (see MMC's Form 10-Q for the period ended March 31, 2005
and Form 8-K dated September 20, 2006 for more information).
(b) Reflects costs of certain legal and regulatory matters, including legal fees
and settlement costs arising out of: the civil complaint relating to market
service agreements and other issues filed against MMC and Marsh by the New York
State Attorney General in October 2004 and settled in January 2005; and
market-timing and other issues at Putnam. Regulatory expenses in Risk and
Insurance Services include fees for professional services provided by other MMC
companies; the resulting inter-company balances are eliminated in Corporate. The
negative amounts for Investment Management represent insurance recoveries
relating to previously expensed legal fees.
(c) Reflects costs to address issues relating to the calculation of certain
amounts paid by the Putnam mutual funds in previous years. The previous payments
were cost reimbursements by the Putnam mutual funds to Putnam for transfer
agency services related to defined contribution operations.
Stock-Option Expense. The year-over-year comparability of MMC's third quarter
and nine-month financial results is affected by MMC's adoption, effective July
1, 2005, of SFAS 123(R) ('Share Based Payment'). Stock option expense for the
three months ended September 30, 2006 was $26 million: Risk and Insurance
Services - $11 million, Risk Consulting & Technology - $0 million, Consulting -
$9 million, Investment Management - $4 million, Corporate - $2 million. Stock
option expense for the nine months ended September 30, 2006 was $93 million:
Risk and Insurance Services - $38 million, Risk Consulting & Technology $2
million, Consulting - $32 million, Investment Management - $11 million,
Corporate - $10 million. A charge of $31 million for the quarter and nine months
ended September 30, 2005 is reflected in Corporate results. For comparison
purposes, an approximate allocation of the 2005 expense follows: Risk and
Insurance Services - $15 million, Consulting - $10 million, Investment
Management - $3 million, Corporate - $3 million.
Impact on Operating Margins in Risk and Insurance Services. In Risk and
Insurance Services, noteworthy items and stock option expense together totaled
$156 million for the first nine months of 2006, affecting segment operating
margin by 3.8 percentage points. Noteworthy items totaled $363 million for nine
months of 2005, affecting segment operating margin by 8.5 percentage points.
Adjusting for these impacts, segment operating margin for the first nine months
of 2006 was 17.3 percent, compared to 14.2 percent for the first nine months of
2005. This adjusted segment operating margin is a non-GAAP financial measure
within the meaning of Regulation G promulgated by the Securities and Exchange
Commission. MMC believes that presenting this measure may help investors and
others understand aspects of Risk and Insurance Services operating performance
that may not be apparent from MMC's reported GAAP results. However, this
non-GAAP financial measure is not a substitute for MMC's reported GAAP
information, and may not be comparable to similar information provided by
industry peers.
Interest Expense. 2005 interest expense includes a $34 million prepayment
penalty related to a mortgage refinancing of MMC's headquarters building in New
York.
Marsh & McLennan Companies, Inc.
Supplemental Information - Putnam Assets Under Management
(Billions) (Unaudited)
Sept. 30, June 30, March 31, Dec. 31, Sept.
2006 2006 2006 2005 2005
-------- -------- -------- -------- -------
Mutual Funds:
Growth Equity $ 26 $ 27 $ 31 $ 31 $ 32
Value Equity 36 36 37 37 38
Blend Equity 26 26 27 26 26
Fixed Income 30 30 31 32 33
-------- -------- -------- -------- -------
Total Mutual
Fund Assets 118 119 126 126 129
-------- -------- -------- -------- -------
Institutional:
Equity 34 32 34 34 33
Fixed Income 30 29 29 29 30
-------- -------- -------- -------- -------
Total
Institutional
Assets 64 61 63 63 63
-------- -------- -------- -------- -------
Total Ending
Assets $182 $180 $189 $189 $192
======== ======== ======== ======== =======
Assets from
Non-US
Investors $ 34 $ 31 $ 32 $ 32 $ 33
======== ======== ======== ======== =======
Average Assets
Under Management:
Quarter $179 $185 $190 $188 $195
======== ======== ======== ======== =======
Year-to-Date $185 $188 $190 $196 $198
======== ======== ======== ======== =======
Net Redemptions
including
Dividends
Reinvested:
Quarter $ (3.1) $ (6.0) * $ (6.6) $ (6.4) $ (8.5)
======== ======== ======== ======== =======
Year-to-Date $(15.7) $ (12.6) $ (6.6) $(31.7) $(25.3)
======== ======== ======== ======== =======
Impact of Market/
Performance on
Ending
Assets Under
Management $ 5.5 $ (3.5) $ 7.0 $ 2.8 $ 5.6
======== ======== ======== ======== =======
* Net redemptions in the quarter include $2.8 billion of redemptions in
institutional equity resulting from ending Putnam's alliance with an Australian
partner.
Categories of mutual fund assets reflect style designations aligned with
Putnam's various prospectuses. All quarter-end assets conform with the current
investment mandate for each product.
Marsh & McLennan Companies, Inc.
Consolidated Balance Sheets
(Millions) (Unaudited)
----------- ----------
September 30, December 31,
2006 2005
----------- ----------
ASSETS
Current assets:
Cash and cash equivalents $1,682 $2,020
Net receivables 2,800 2,730
Assets of discontinued operations - 153
Other current assets 367 359
----------- ----------
Total current assets 4,849 5,262
Goodwill and intangible assets 7,845 7,773
Fixed assets, net 1,098 1,178
Long-term investments 511 277
Prepaid pension 1,684 1,596
Other assets 1,828 1,806
----------- ----------
TOTAL ASSETS $17,815 $17,892
=========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term debt $1,219 $498
Accounts payable and accrued liabilities 1,881 1,733
Regulatory settlements-current portion 236 333
Accrued compensation and employee benefits 1,188 1,413
Liabilities of discontinued operations 39 89
Accrued income taxes 64 192
Dividends payable 94 93
----------- ----------
Total current liabilities 4,721 4,351
Fiduciary liabilities 4,026 3,795
Less - cash and investments held in a fiduciary
capacity (4,026) (3,795)
----------- ----------
- -
Long-term debt 3,864 5,044
Regulatory settlements 173 348
Pension, postretirement and postemployment
benefits 1,220 1,180
Other liabilities 1,633 1,609
Total stockholders' equity 6,204 5,360
----------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $17,815 $17,892
=========== ==========
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- 1 day ago IntegraFin Holding
- 1 day ago Spirent Communications
- 1 day ago CRH (CDI)
- 1 day ago Bezant Resources
- 1 day ago EJF Investments Ltd NPV