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Share Name | Share Symbol | Market | Type |
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Bank of America Corp. Market Index Target Securities Linked TO The S&P 500 Index | AMEX:MHM | AMEX | Ordinary Share |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
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0.00 | 0.00% | 14.82 | 0.00 | 00:00:00 |
RNS Number:1271R Marsh & McLennan Co Inc 21 October 2003 News Release Media Contacts: Investor Contact: Barbara Perlmutter Jim Fingeroth Mike Bischoff MMC Kekst and Company MMC (212) 345-5585 (212) 521-4819 (212) 345-5470 MMC REPORTS INCREASED THIRD QUARTER AND NINE MONTHS RESULTS Quarterly Revenues Increase 11 Percent, Net Income Rises 19 Percent NEW YORK, NEW YORK, October 21, 2003-Marsh & McLennan Companies, Inc. (MMC) today reported financial results for the quarter and nine months ended September 30, 2003. Consolidated revenues for the quarter increased 11 percent to $2.8 billion. Net income rose 19 percent to $357 million, the largest increase since 2000, and earnings per share grew 18 percent to $0.65 from $0.55. For the nine months, consolidated revenues rose 10 percent to $8.6 billion. Net income grew 11 percent to $1.2 billion, and earnings per share increased 13 percent to $2.12 from $1.88. Jeffrey W. Greenberg, chairman, commented: "MMC performed well in the third quarter, with improvement in each of our businesses. Marsh produced excellent results. Secular changes are having a lasting effect on the business of advice and risk transfer. Clients face risks that have grown in number, complexity, and severity. Heightened awareness of these risks creates a great need for expertise, and Marsh is uniquely qualified to address these needs around the world. Marsh also brings to clients a distinctive strength through collaboration with other MMC companies. For example, Marsh and MMC Capital worked together to form AXIS Capital to bring much needed new capacity to the insurance markets in a time of stress. And the addition of Mercer Oliver Wyman to MMC significantly strengthens our risk management capabilities in financial services." Mr. Greenberg continued: "We're pleased that both Mercer and Putnam showed improved results in the current environment. Over the last decade, MMC's activities in retirement and benefits have alternated with risk and insurance services as our major business. Putnam and Mercer are dedicated to responding to retirement needs around the world. Demographic trends in the developed world and the need for a private sector response to retirement issues will provide important opportunities for growth. Putnam and Mercer will be well positioned to take advantage of these growing markets." Risk and insurance services revenues rose 15 percent in the third quarter to $1.6 billion. On a constant currency basis, which excludes changes in foreign exchange and acquisitions, revenues grew 13 percent. Operating income increased 16 percent to $388 million. Risk management and insurance broking, representing approximately 75 percent of Marsh's revenues, grew 12 percent on a constant currency basis, with double-digit growth throughout the world. Reinsurance broking and services revenues increased 20 percent. Related insurance services revenues grew 9 percent, with strong growth in claims management and underwriting management, a modest increase at MMC Capital, and a slight decline in affinity business. During the quarter, AXIS Capital Holdings Limited successfully completed its public offering. AXIS was formed through the collaboration of Marsh and MMC Capital in November 2001 with $1.6 billion of capital. As a founding shareholder, MMC invested $100 million directly in AXIS and an additional $60 million through its holding in Trident II. Risk and insurance services revenues for the nine months reached $5.1 billion, an increase of 17 percent, 14 percent on a constant currency basis. Operating income increased 20 percent to $1.4 billion. Marsh's operating margin expanded for the nine months to 26.5 percent. This indicates the strength of Marsh's performance, particularly as it reflects investments in operating efficiencies to drive future profitability. Putnam has benefited from more favorable equity markets. It has posted stronger financial results, has higher assets under management, and has made a number of important changes in its business operations. Putnam's revenues in the third quarter were $507 million, compared with $522 million last year. Operating income grew 17 percent to $136 million. Putnam's total assets under management on September 30, 2003 were $272 billion, 14 percent higher than assets under management at the end of last year's third quarter. Average assets under management during the third quarter were $270 billion, 5 percent higher than average assets in the third quarter last year. At the end of the quarter, mutual fund assets were $171 billion, up 6 percent, and institutional assets were $101 billion, an increase of 31 percent. This includes international assets of $39 billion, which were 44 percent higher than at the end of last year's third quarter. Mercer's revenues in the third quarter increased 15 percent to $690 million from $600 million, and operating income rose 12 percent to $96 million. On a constant currency basis, revenues grew 3 percent. In the quarter, Mercer's human resource practices reported strong revenue growth in Europe and Asia, partially offset by modest declines in North America. Mercer's economic consulting practice performed well. Management consulting results reflect the strong new business growth of recently acquired Mercer Oliver Wyman. For the nine months, retirement services revenues on a constant currency basis grew 3 percent, health care and group benefits increased 7 percent, and economic consulting grew 9 percent. Year-to-date, MMC has paid $452 million in dividends to shareholders, including an 11 percent increase in the quarterly dividend effective in the third quarter. MMC also repurchased 8.2 million shares of common stock in the third quarter, bringing its total repurchases for the year to 19.6 million shares for $910 million. MMC is a global professional services firm with annual revenues exceeding $10 billion. It is the parent company of Marsh Inc., the world's leading risk and insurance services firm; Putnam Investments, one of the largest investment management companies in the United States; and Mercer Inc., a major global provider of consulting services. Approximately 60,000 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 certain statements relating to future results, which are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Such statements may include, without limitation, discussions concerning revenues, expenses, earnings, cash flow, capital structure, pension funding, financial losses and expected insurance recoveries resulting from the September 11, 2001 attack on the World Trade Center in New York City, as well as market and industry conditions, premium rates, financial markets, interest rates, foreign exchange rates, contingencies and matters relating to MMC's operations and income taxes. Such forward-looking statements are based on available current market and industry materials, experts' reports and opinions and long-term trends, as well as management's expectations concerning future events impacting MMC. Forward-looking statements by their very nature involve risks and uncertainties. Factors that may cause actual results to differ materially from those contemplated by any forward-looking statements contained herein include, in the case of MMC's risk and insurance services and consulting businesses, the amount of actual insurance recoveries and financial losses from the September 11 attack on the World Trade Center, or other adverse consequences from that incident. Other factors that should be considered in the case of MMC's risk and insurance services business are changes in competitive conditions, movements in premium rate levels, the continuation of difficult conditions for the transfer of commercial risk and other changes in the global property and casualty insurance markets, natural catastrophes, mergers between client organizations, and insurance or reinsurance company insolvencies. Factors to be considered in the case of MMC's investment management business include changes in worldwide and national equity and fixed income markets, actual and relative investment performance, the level of sales and redemptions, and the ability to maintain investment management and administrative fees at appropriate levels; and with respect to all of MMC's activities, changes in general worldwide and national economic conditions, the impact of terrorist attacks, changes in the value of investments made in individual companies and investment funds, fluctuations in foreign currencies, actions of competitors or regulators, changes in interest rates or in the ability to access financial markets, developments relating to claims, lawsuits and contingencies, prospective and retrospective changes in the tax or accounting treatment of MMC's operations, and the impact of tax and other legislation and regulation in the jurisdictions in which MMC operates. Forward-looking statements speak only as of the date on which they are made, and MMC undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which it is made or to reflect the occurrence of unanticipated events. Please refer to Marsh & McLennan Companies' 2002 Annual Report on Form 10-K for "Information Concerning Forward-Looking Statements," its reports on Form 8-K, and quarterly reports on Form 10-Q. MMC is committed to providing timely and materially accurate information to the investing public, consistent with our legal and regulatory obligations. To that end, 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, except at the end of March, June, September, and December, when such information will be released with MMC's quarterly earnings announcement. 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, ------------- -------------- 2003 2002 2003 2002 ------- ------- -------- ------- Revenue: Risk and $1,640 $1,431 $5,093 $4,343 Insurance Services Investment 507 522 1,447 1,697 Management Consulting 690 600 2,014 1,760 ---------- ---------- ----------- --------- Total Revenue 2,837 2,553 8,554 7,800 --------- --------- ----------- --------- Expense: Compensation 1,486 1,299 4,339 3,829 and Benefits Other Operating 758 742 2,306 2,207 Expenses ---------- ---------- ----------- --------- Total Expense 2,244 2,041 6,645 6,036 --------- --------- ----------- --------- Operating 593 512 1,909 1,764 Income Interest 6 5 19 14 Income Interest (48) (43) (137) (118) Expense ------------ ------------ ------------ ----------- Income Before 551 474 1,791 1,660 Income Taxes and Minority Interest Expense Income Taxes 188 168 609 589 Minority 6 7 17 18 Interest ------------ ------------ ------------- ----------- Expense, Net of Tax Net Income $ 357 $ 299 $1,165 $1,053 ========= ========= ========== ======== Basic Net $0.67 $0.56 $2.18 $1.94 Income Per ========= ========= =========== ========= Share Diluted Net $0.65 $0.55 $2.12 $1.88 Income Per ========= ========= =========== ========= Share Average Number of Shares 531 535 534 542 Outstanding - ========== ========== ============ ========== Basic Average Number of Shares 550 548 550 559 Outstanding - ========== ========== ============ ========== Diluted Marsh & McLennan Companies, Inc. Supplemental Information - Revenue Analysis Third Quarter (Millions) (Unaudited) Three Months Ended % Change Currency/ September 30, GAAP Constant Acquisitions 2003 2002 Revenue Currency Impact ------- ------- -------- -------- --------- Risk and Insurance Services Risk $1,207 $1,052 15% 12% 3% Management and Insurance Broking Reinsurance 204 168 21% 20% 1% Broking and Services Related 229 211 9% 9% - Insurance -------- -------- Services Total Risk and 1,640 1,431 15% 13% 2% Insurance -------- -------- Services Investment 507 522 (3)% (3)% - Management -------- -------- Consulting Retirement 300 283 6% 1% 5% Services Health Care 99 93 7% 3% 4% and Group Benefits Human 100 92 8% (1)% 9% Capital Management and 117 65 76% 3% 73% Organizational Change Economic 38 33 18% 16% 2% -------- -------- 654 566 15% 2% 13% Reimbursed 36 34 7% 7% - Expenses -------- -------- Total 690 600 15% 3% 12% Consulting -------- -------- Total $2,837 $2,553 11% 7% 4% Revenue ======== ======== Revenue from Investment Income (Loss) Included Above $ 28 $ 15 Notes to Consolidated Income Statement and Supplemental Information: Constant currency measures the change in revenue, before the impact of acquisitions and dispositions, using consistent currency exchange rates. Related insurance services includes U.S. affinity, claims management, underwriting management and MMC Capital businesses. Interest income on fiduciary funds amounted to $30 million and $91 million for the three months and nine months ended September 30, 2003, respectively, compared with $34 million and $90 million for the same periods of 2002. Investment income (loss) includes realized and unrealized gains and losses from investments recognized in the income statement, as well as other than temporary declines in the value of available for sale securities. MMC's investments may include seed shares for mutual funds, direct investments in insurance, consulting or investment management companies and investments in private equity funds. MMC's direct investment in AXIS is classified as an available for sale security. As restrictions on the sale of AXIS shares expire, changes in fair value are reflected on the Balance Sheet until realized. Trident II's investments are carried at fair value, in accordance with investment company accounting. MMC's proportionate share of the change in value of its investment in Trident II is recorded as part of investment income (loss) in the Consolidated Income Statement. Marsh & McLennan Companies, Inc. Supplemental Information - Revenue Analysis Year-to-Date (Millions) (Unaudited) Nine Months Ended % Change Currency/ September 30, GAAP Constant Acquisitions 2003 2002 Revenue Currency Impact ------- ------- -------- -------- --------- Risk and Insurance Services Risk $3,800 $3,210 18% 14% 4% Management and Insurance Broking Reinsurance 627 502 25% 23% 2% Broking and Services Related 666 631 6% 5% 1% Insurance -------- -------- Services Total Risk and 5,093 4,343 17% 14% 3% Insurance -------- -------- Services Investment 1,447 1,697 (15)% (15)% - Management -------- -------- Consulting Retirement 912 832 10% 3% 7% Services Health Care 300 269 12% 7% 5% and Group Benefits Human 275 255 8% 2% 6% Capital Management and 315 204 54% (1)% 55% Organizational Change Economic 109 98 12% 9% 3% -------- -------- 1,911 1,658 15% 3% 12% Reimbursed 103 102 1% 1% - Expenses -------- -------- Total 2,014 1,760 14% 3% 11% Consulting -------- -------- Total $8,554 $7,800 10% 5% 5% Revenue ======== ======== Revenue from Investment Income (Loss) Included Above $ 64 $ 52 Marsh & McLennan Companies, Inc. Supplemental Information (Millions) (Unaudited) ------------- -------------- Three Months Ended Nine Months Ended September 30, September 30, ------------- -------------- 2003 2002 2003 2002 ------- ------- -------- ------- Operating Income Including Minority Interest Expense: Risk and $ 388 $ 334 $1,351 $1,125 Insurance Services Investment 136 116 364 460 Management Consulting 96 86 278 250 Corporate (33) (31) (101) (89) ---------- -------- --------- --------- 587 505 1,892 1,746 ---------- -------- --------- --------- Minority Interest Expense, Net of Tax, Included Above: Risk and 3 4 9 7 Insurance Services Investment 3 3 8 11 Management -------- -------- -------- -------- 6 7 17 18 --------- -------- -------- -------- Operating $ 593 $ 512 $1,909 $1,764 Income ========= ========= ======== ======== Segment Operating Margins: Risk and 23.7% 23.3% 26.5% 25.9% Insurance Services Investment 26.8% 22.2% 25.2% 27.1% Management Consulting 13.9% 14.3% 13.8% 14.2% Consolidated 20.9% 20.1% 22.3% 22.6% Operating Margin Pretax Margin 19.4% 18.6% 20.9% 21.3% Effective Tax 34.0% 35.5% 34.0% 35.5% Rate Shares 533 537 Outstanding at End of Period Potential Minority Interest Associated with the Putnam Equity Partnership Plan Net of Dividend Equivalent Expense Related $- $- $- $1 to MMC Common Stock Equivalents Included in operating results in the third quarter of 2002 was a write down of Putnam's investment related to Thomas H. Lee Equity Fund IV, partially offset by a contractual payment received from Putnam's Italian joint venture partner. The net impact of these items reduced operating income by approximately $20 million. The remaining intangible asset related to Fund IV was written off in the third quarter of 2003 and had a net impact of approximately $10 million. Marsh & McLennan Companies, Inc. Supplemental Information - Putnam Assets Under Management (Billions) (Unaudited) Sept. 30, June 30, March 31, Dec. 31, Sept. 30, 2003 2003 2003 2002 2002 -------- ------- -------- ------- ------- Mutual Funds: Growth Equity $ 48 $ 48 $ 43 $ 45 $ 45 Value Equity 42 42 36 40 38 Blend Equity 36 35 30 33 32 Fixed Income 45 46 46 46 46 ------- -------- -------- -------- -------- Total Mutual Fund 171 171 155 164 161 Assets ------- -------- -------- -------- ------- Institutional: Equity 76 72 64 66 59 Fixed Income 25 24 22 21 18 -------- -------- -------- -------- -------- Total 101 96 86 87 77 Institutional -------- -------- -------- -------- -------- Assets Total Ending $272 $267 $241 $251 $238 Assets ======== ======== ======== ======= ======== Assets from Non-US $ 39 $ 37 $ 33 $ 33 $ 27 Investors ======== ======== ======== ======= ======== Average Assets Under Management: Quarter-to-Date $270 $260 $244 $249 $257 ======== ======== ======== ======== ======== Year-to-Date $258 $252 $244 $279 $289 ======== ======== ======== ======== ======== Net New Sales/ (Redemptions) including Dividends Reinvested: Quarter-to-Date $(2.7) $(3.0) $(1.3) $ 0.4 $ (7.1) ======== ======== ======== ======== ======== Year-to-Date $(7.0) $(4.3) $(1.3) $(10.3) $(10.7) ======== ======== ======== ======== ======== 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. This information is provided by RNS The company news service from the London Stock Exchange END QRTBBBDGIXDGGXB
1 Year Bank of America Corp. Market Index Target Securities Linked TO The S&P 500 Index Chart |
1 Month Bank of America Corp. Market Index Target Securities Linked TO The S&P 500 Index Chart |
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