-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OVcwNGzU3VXM5ySqcFKXaYLkp4kPngnTiAUdF5qXlEGeT3pufOnaqcLOID/eVl9W B16IXJOUV7xZuLE5GgjM3w== 0000062709-98-000001.txt : 19980515 0000062709-98-000001.hdr.sgml : 19980515 ACCESSION NUMBER: 0000062709-98-000001 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980331 FILED AS OF DATE: 19980514 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MARSH & MCLENNAN COMPANIES INC CENTRAL INDEX KEY: 0000062709 STANDARD INDUSTRIAL CLASSIFICATION: INSURANCE AGENTS BROKERS & SERVICES [6411] IRS NUMBER: 362668272 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-05998 FILM NUMBER: 98620401 BUSINESS ADDRESS: STREET 1: 1166 AVE OF THE AMERICAS CITY: NEW YORK STATE: NY ZIP: 10036 BUSINESS PHONE: 2123455000 MAIL ADDRESS: STREET 1: 1166 AVE OF THE AMERICAS STREET 2: 27TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10036 FORMER COMPANY: FORMER CONFORMED NAME: MARLENNAN CORP DATE OF NAME CHANGE: 19760505 10-Q 1 MMC 1998 1ST 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For quarter ended March 31, 1998 Marsh & McLennan Companies, Inc. 1166 Avenue of the Americas New York, New York 10036 (212) 345-5000 Commission file number 1-5998 State of Incorporation: Delaware I.R.S. Employer Identification No. 36-2668272 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X . NO . As of April 30, 1998, there were outstanding 171,092,684 shares of common stock, par value $1.00 per share, of the registrant. INFORMATION CONCERNING FORWARD-LOOKING STATEMENTS This report contains 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 revenue and expense growth, cost savings and efficiencies expected from the integration of Johnson & Higgins, market and industry conditions, interest rates, foreign exchange rates, contingencies and matters relating to the operations and income taxes of Marsh & McLennan Companies, Inc. and subsidiaries (the "Company"). Such forward-looking statements are based on available current market and industry materials, experts' reports and opinions, as well as management's expectations concerning future events impacting the Company. 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 the Company's risk and insurance services business, the failure to successfully integrate the recently acquired insurance services and employee benefit consulting business of Johnson & Higgins (including the achievement of synergies and cost reductions), changes in competitive conditions, a decrease in the premium rate levels in the global property and casualty insurance markets, the impact of changes in insurance markets and natural catastrophes; in the case of the Company's investment management business, changes in worldwide and national securities and fixed income markets and; with respect to all of the Company's activities, changes in general worldwide and national economic conditions, fluctuations in foreign currencies, actions of competitors or regulators, changes in interest rates, developments relating to claims and lawsuits, changes in the tax or accounting treatment of the Company's operations and the impact of tax and other legislation and regulation in the jurisdictions in which the Company operates. PART I, FINANCIAL INFORMATION MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (In millions, except per share figures) (Unaudited) Three Months Ended March 31, 1998 1997 Revenue $1,776 $1,295 Expense 1,372 1,018 Operating Income 404 277 Interest Income 5 3 Interest Expense (28) (17) Income Before Income Taxes 381 263 Income Taxes 150 99 Net Income $ 231 $ 164 Basic Net Income Per Share $1.35 $1.13 Diluted Net Income Per Share $1.31 $1.10 Average Number of Shares Outstanding - Basic 171 146 Average Number of Shares Outstanding - Diluted 176 149 Dividends Declared $.50 $.45 MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In millions of dollars) (Unaudited) March 31, December 31, 1998 1997 ASSETS Current assets: Cash and cash equivalents (including interest-bearing amounts of $518 at March 31, 1998 and $378 at December 31, 1997) $ 567 $ 424 Receivables- Commissions and fees 1,373 1,296 Advanced premiums and claims 118 95 Other receivables 169 160 1,660 1,551 Less-allowance for doubtful accounts (54) (53) Net receivables 1,606 1,498 Other current assets 606 647 Total current assets 2,779 2,569 Long-term securities 869 720 Fixed assets, net 940 957 (net of accumulated depreciation and amortization of $808 at March 31, 1998 and $798 at December 31, 1997) Intangible assets 2,514 2,417 Other assets 1,242 1,251 $8,344 $7,914 MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In millions of dollars) (Unaudited) March 31, December 31, 1998 1997 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Short-term debt $ 503 $ 237 Accrued compensation and employee benefits 352 564 Accounts payable and accrued liabilities 1,269 1,276 Accrued income taxes 326 218 Dividends payable 86 85 Total current liabilities 2,536 2,380 Fiduciary liabilities 2,599 2,282 Less - cash and investments held in a fiduciary capacity (2,599) (2,282) - - Long-term debt 1,163 1,240 Other liabilities 1,138 1,096 Commitments and contingencies - - Stockholders' equity: Preferred stock, $1 par value, authorized 6,000,000 shares, none issued - - Common stock, $1 par value, authorized 400,000,000 shares, issued 172,427,758 shares at March 31, 1998 and 172,391,177 at December 31, 1997 172 172 Additional paid-in capital 1,007 994 Retained earnings 2,121 1,975 Accumulated other comprehensive income 268 167 3,568 3,308 Less - treasury shares, at cost, 1,237,951 shares at March 31, 1998 and 2,440,837 shares at December 31, 1997 (61) (110) Total stockholders' equity 3,507 3,198 $8,344 $7,914 MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions of dollars) (Unaudited) Three Months Ended March 31, 1998 1997 Operating cash flows: Net income $231 $164 Depreciation and amortization 56 37 Deferred income taxes (5) 1 Other liabilities 41 (7) Prepaid dealer commissions (29) (61) Other, net (7) 3 Net changes in operating working capital other than cash and cash equivalents - Receivables (108) (20) Other current assets 39 (2) Accrued compensation and employee benefits (211) (174) Accounts payable and accrued liabilities (6) 16 Accrued income taxes 119 (14) Effect of exchange rate changes 27 (7) Net cash generated from (used for) operations 147 (64) Financing cash flows: Net increase in commercial paper 272 505 Other borrowings 9 400 Other repayments (81) (121) Purchase of treasury shares (2) - Issuance of common stock 45 55 Dividends paid (85) (65) Net cash provided by financing activities 158 774 Investing cash flows: Additions to fixed assets (60) (51) Acquisitions (112) (375) Other, net 13 13 Net cash used for investing activities (159) (413) Effect of exchange rate changes on cash and cash equivalents (3) (5) Increase in cash & cash equivalents 143 292 Cash & cash equivalents at beginning of period 424 300 Cash & cash equivalents at end of period $567 $592 MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. The consolidated financial statements included herein have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. These consolidated financial statements should be read in conjunction with the financial statements and the notes thereto included in the Company's latest annual report on Form 10-K. The financial information contained herein reflects all adjustments which are, in the opinion of management, necessary for a fair presentation of the results of operations for the three month periods ended March 31, 1998 and 1997. 2. Fiduciary Cash and Liabilities In its capacity as an insurance broker or agent, the Company collects premiums from insureds and, after deducting its commissions, remits the premiums to the respective insurance underwriters; the Company also collects claims or refunds from underwriters on behalf of insureds. Unremitted insurance premiums and claims are held in a fiduciary capacity. Interest income on these fiduciary funds, included in revenue, amounted to $30 million and $23 million for the three months ended March 31, 1998 and 1997, respectively. Net uncollected premiums and claims and the related payables amounting to $5.9 billion at March 31, 1998 and $5.2 billion at December 31, 1997, are not included in the accompanying Consolidated Balance Sheets. 3. Per Share Data In 1997, the Company adopted Statement of Financial Accounting Standards No. 128, "Earnings Per Share" which requires the Company to include basic and diluted per share figures on the face of the income statement. Basic net income per share is calculated by dividing net income by the average number of shares of the Company's common stock outstanding while diluted net income per share is calculated by adjusting the average common shares outstanding for the dilutive effect of potential common shares. The following reconciles basic weighted average common shares outstanding to diluted weighted average common shares outstanding for the three-month periods ended March 31, 1998 and 1997. (In millions of shares) 1998 1997 Basic weighted average common shares outstanding 171 146 Stock options 5 3 Diluted weighted average common shares outstanding 176 149 4. Comprehensive Income Effective January 1, 1998, the Company adopted Statement of Financial Accounting Standards No. 130 ("SFAS 130"), "Reporting Comprehensive Income." SFAS 130 establishes standards for reporting and displaying comprehensive income and its components. Comprehensive income, which is made up of net income, unrealized securities holding gains and foreign currency translation adjustments amounted to $332 million and $115 million for the three months ended March 31, 1998 and 1997. The difference between net income and comprehensive income for the quarter ended March 31, 1998 was primarily due to unrealized securities holding gains while the difference for the period ended March 31, 1997 was primarily due to foreign currency translation adjustments. 5. Supplemental Disclosure to the Consolidated Statements of Cash Flows The following schedule provides additional information concerning acquisitions: Three Months Ended March 31, (In millions of dollars) 1998 1997 Purchase acquisitions: Assets acquired, excluding cash $112 $ 2,536 Liabilities assumed - (1,156) Shares issued - (1,005) Net cash outflow for acquisitions $112 $ 375 Interest paid during the three months ended March 31, 1998 and 1997 was $33 million and $16 million, respectively. Income taxes paid during the three months ended March 31, 1998 and 1997 were $41 million and $98 million, respectively. 6. Income Taxes The Company has received a Notice of Proposed Adjustment from a field office of the Internal Revenue Service ("IRS") challenging its tax treatment related to 12b-1 fees paid by the Putnam Mutual Funds. The Company believes its tax treatment of these fees is consistent with current industry practice and applicable requirements of the Internal Revenue Code and previously issued IRS technical advice. The field office has referred the Notice to the national office of the IRS for technical advice. Taxing authorities periodically challenge positions taken by the Company on its tax returns. On the basis of present information and advice received from counsel, it is the opinion of the Company's management that any assessments resulting from current tax audits will not have a material adverse effect on the Company's consolidated results of operations or its consolidated financial position. 7. Acquisitions On March 24, 1998, the Company purchased Brockman y Schuh Group, a risk and insurance services and employee benefit consulting firm in Mexico, for approximately $100 million. On March 27, 1997, the Company consummated a business combination with Johnson & Higgins ("J&H"), a privately-held risk and insurance services and employee benefit consulting firm. The Company agreed to pay total consideration of approximately $1.8 billion consisting of $600 million in cash and approximately 19.6 million shares (adjusted to reflect the stock split) of the Company's common stock. Approximately $1.3 billion was paid at closing or shortly thereafter and approximately $500 million will be paid in annual installments over the four years following the closing. The business combination is being accounted for using the purchase method of accounting. Accordingly, the goodwill of approximately $1.7 billion which results from the purchase price allocation will be amortized over 40 years. An agreed number of shares issued in connection with this transaction carry restrictions and, consequently, cannot be sold in the first and second years following the closing. In addition, approximately 1.6 million shares of common stock (adjusted to reflect the stock split) were placed in escrow for a period of up to two years in order to secure certain indemnification obligations with respect to representations and warranties. The following unaudited pro forma summary presents the consolidated results of operations of the Company as if the J&H business combination had occurred on January 1, 1997. The pro forma results are shown for illustrative purposes only and do not purport to be indicative of the results which would have been reported if the business combination had occurred on the date indicated or which may occur in the future. (In millions of dollars, except per share figures) Three Months Ended March 31, 1997 Revenue $1,609 Net Income 179 Basic Net Income per share 1.08 Diluted Net Income per share 1.06 8. Claims, Lawsuits and Other Contingencies The Company and its subsidiaries are subject to various claims and lawsuits consisting principally of alleged errors and omissions in connection with the placement of insurance or reinsurance and in rendering investment and consulting services. Some of these claims and lawsuits seek damages, including punitive damages, in amounts which could, if assessed, be significant. On November 24, 1997, an action captioned "Aiena et al. vs. Olsen et al" was brought in the United States District Court for the Southern District of New York by certain former directors of J&H, which was acquired by the Company in March 1997, against twenty-four selling shareholders of J&H, as well as J&H itself and the Company. The action essentially challenges the allocation of the consideration paid in connection with the Company's combination with J&H as between the defendants who were directors and shareholders of J&H at the time of the transaction and the plaintiffs who were former directors and shareholders of J&H. The Complaint asserts, among others, claims for breach of fiduciary duty, federal securities law violations, breach of contract, and ERISA violations. Plaintiffs seek compensatory and punitive damages. On or about April 14, 1998, an action captioned "Sempier v. Olsen, et al" was brought in the United States District Court for the District of New Jersey by another former director of J&H against the same defendants named in the Aiena action, including J&H and the Company, in connection with the same transaction. The allegations and claims in the Sempier case are substantially similar to those in the Aiena action. Plaintiff seeks, among other relief, an unspecified amount of compensatory and punitive damages. On the basis of present information, available insurance coverage and advice received from counsel, it is the opinion of the Company's management that the disposition or ultimate determination of these claims and lawsuits will not have a material adverse effect on the Company's consolidated results of operations or its consolidated financial position. 9. Common Stock On May 21, 1997, the Board of Directors approved a two-for-one stock split of the Company's common stock in the form of a 100% stock distribution which was issued on June 27, 1997. All references to per share amounts have been restated for this stock distribution. 10. New Accounting Pronouncements In June 1997, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards No. 131, "Disclosures about Segments of an Enterprise and Related Information," and in February 1998, the FASB issued Statement of Financial Accounting Standards No. 132, "Employers' Disclosure about Pensions and Other Postretirement Benefits." Both statements are effective for fiscal years beginning after December 15, 1997. The Company will adopt the provisions of these standards in conjunction with the preparation of the 1998 Annual Report. 11. Reclassifications In accordance with industry practice, the investment management segment has restated both revenue and expense for 1997 by identical amounts to reclassify certain commission expenses. Marsh & McLennan Companies, Inc. and Subsidiaries Management's Discussion and Analysis of Financial Condition and Results of Operations First Quarter Ended March 31, 1998 General Marsh & McLennan Companies, Inc. and Subsidiaries (the "Company") is a professional services firm providing risk and insurance services, investment management and consulting. More than 36,000 employees worldwide provide analysis, advice and transactional capabilities to clients in over 100 countries. This management's discussion and analysis of financial condition and results of operations 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. See "Information Concerning Forward-Looking Statements" on page one of this filing. This Form 10-Q should be read in conjunction with the Company's latest annual report on Form 10-K. The consolidated results of operations follow: (In millions of dollars) 1998 1997 Revenue: Risk and Insurance Services $ 870 $ 563 Investment Management 558 427 Consulting 348 305 1,776 1,295 Expense: Compensation and Benefits 851 627 Other Operating Expenses 521 391 1,372 1,018 Operating Income $ 404 $ 277 Operating Income Margin 22.7% 21.4% Revenue, derived mainly from commissions and fees, rose 37% from the first quarter of 1997. This increase is partly attributable to the Company's business combination with Johnson & Higgins ("J&H") which closed on March 27, 1997 and, accordingly, was not reflected in the consolidated results of operations for the first quarter of 1997. Excluding acquisitions and dispositions, revenue grew approximately 13% for the first quarter of 1998 driven principally by increased revenue from the investment management segment, which was largely attributable to higher assets under management. Operating expenses rose 35% in the first quarter of 1998 primarily due to the combination with J&H. Excluding acquisitions and dispositions, expenses grew 9% for the first quarter due, in large measure, to costs associated with staff growth and higher incentive compensation levels in the investment management segment commensurate with strong operating performance. Service related costs in this segment also increased due to the higher level of business activity. The translated values of revenue and expense from the Company's international operations are affected by fluctuations in currency exchange rates. However, the net impact of these fluctuations on the Company's results of operations has not been material. Risk and Insurance Services (In millions of dollars) 1998 1997 Revenue $870 $563 Expense 637 405 Operating Income $233 $158 Operating Income Margin 26.8% 28.0% Revenue Revenue for the Risk and Insurance Services segment increased 55% from the first quarter of 1997 primarily due to the J&H business combination. Excluding acquisitions and dispositions, revenue increased approximately 5%. Insurance broking revenue, which represented 76% of Risk and Insurance Services, grew 5% in the first quarter of 1998 as net new business development was partially offset by continued declines in commercial property and casualty premium rates. Revenue for reinsurance broking grew 7% over the first quarter of 1997 and program management rose 4% while fiduciary interest income declined 2%. Expense Risk and Insurance Services expenses increased 57% from the first quarter of 1997 primarily due to the impact of acquisitions. Excluding acquisitions and dispositions, expenses increased approximately 2% from the first quarter of 1997. During the quarter, the Company realized integration savings associated with the elimination of redundant personnel and the consolidation of offices, primarily in the United States. Investment Management (In millions of dollars) 1998 1997 Revenue $558 $427 Expense 406 323 Operating Income $152 $104 Operating Income Margin 27.2% 24.3% Revenue Putnam's revenue increased 31% compared with the first quarter of 1997 reflecting exceptional growth in the level of assets under management on which management fees are earned. Net new sales of mutual funds and additional investments by institutional accounts contributed $33 billion of the growth in the level of assets under management since March 1997, while market performance represented the remaining $54 billion of the increase. Expense Putnam's expenses rose 26% in the first quarter of 1998 reflecting the effect of staff growth to support new business and incentive compensation levels commensurate with strong operating performance along with increased service related costs resulting from the higher level of business activity. Quarter-end and average assets under management for the first quarter are presented below: (In billions of dollars) 1998 1997 Mutual Funds: Domestic Equity $138 $ 84 Taxable Bond 38 31 Tax-Free Income 16 16 International Equity 13 9 205 140 Institutional Accounts: Fixed Income 23 19 Domestic Equity 26 14 International Equity 13 7 62 40 Quarter-end Assets $267 $180 Average Assets $249 $182 Assets under management are affected by fluctuations in domestic and international bond and stock market prices and by the level of investments and withdrawals for current and new fund shareholders and clients. They are also affected by investment performance, service to clients, the development and marketing of new investment products, the relative attractiveness of the investment style under prevailing market conditions and changes in the investment patterns of clients. Revenue levels are sensitive to all of the factors above, but in particular, to significant changes in bond and stock market valuations. Putnam provides individual and institutional investors with a broad range of equity and fixed income investment products and services designed to meet varying investment objectives and which affords its clients the opportunity to allocate their investment resources among various alternative investment products as changing worldwide economic and market conditions warrant. At the end of the first quarter, assets held in equity securities represented 71% of assets under management, compared with 64% in 1997, while investments in fixed income products represented 29%, compared with 36% last year. Consulting (In millions of dollars) 1998 1997 Revenue $348 $305 Expense 315 277 Operating Income $ 33 $ 28 Operating Income Margin 9.6% 9.3% Revenue Consulting revenue increased 14% in 1998 compared with the first quarter of 1997 reflecting net new business as well as some business acquired as part of the J&H transaction partially offset by the transfer of certain business lines as part of a strategic alliance with Automatic Data Processing. Adjusting for the impact of acquisitions and dispositions, revenue increased approximately 10% in the first quarter of 1998. Retirement consulting revenue, which represented 43% of the consulting segment, grew 10% in the first quarter while revenue rose 22% in the global compensation practice and 9% in general management consulting due to a higher volume of business in these practice lines during the first quarter of 1998. Economic consulting and health care consulting grew 9% and 2%, respectively. Expense Consulting expenses increased 14% for the first quarter of 1998. Excluding acquisitions and dispositions, expenses increased 9% for the first quarter reflecting normal salary and related benefit expense increases. Interest Interest income earned on corporate funds increased to $5 million in the first quarter of 1998 compared with $3 million in 1997 primarily due to the J&H combination. Interest expense increased to $28 million in the first quarter of 1998 from $17 million in 1997 as a result of increased bank borrowings used to finance a portion of the acquisition of J&H as well as the assumption of J&H's long-term debt. Income Taxes The Company's consolidated tax rate was 39.5% of income before income taxes in the first quarter of 1998 compared with 37.5% for the first quarter of 1997. The increase in the 1998 tax rate is largely attributable to the nondeductibility of the goodwill amortization associated with the J&H acquisition. The overall tax rates are higher than the U.S. statutory rates primarily because of state and local income taxes. Liquidity and Capital Resources The Company's cash and cash equivalents aggregated $567 million on March 31, 1998, compared with $424 million on December 31, 1997. Cash flow from operations includes the net cash requirements of Putnam's prepaid dealer commissions, which amounted to $29 million for the three months ended March 31, 1998 compared with $61 million during the same period of 1997. The Company's capital expenditures, which amounted to $60 million in the first three months of 1998 and $51 million in the first quarter of 1997, were primarily related to computer equipment purchases and the refurbishing and modernizing of office facilities. The Company is continuing to update its computer systems in preparation for the year 2000 and expects that its critical systems will be year 2000 compliant on a timely basis. The costs associated with addressing this issue are not expected to have a material adverse impact on the Company's financial position or results of operations. However, if the Company's clients or vendors are unable to resolve such year 2000 processing issues in a timely manner, a material operating and financial risk could result. Effective January 1, 1998, the Company adopted Statement of Financial Accounting Standards No. 130 ("SFAS 130"), "Reporting Comprehensive Income." SFAS 130 establishes standards for reporting and displaying comprehensive income and its components. Comprehensive income, which is made up of net income, unrealized securities holding gains and foreign currency translation adjustments amounted to $332 million and $115 million for the three months ended March 31, 1998 and 1997. The difference between net income and comprehensive income for the quarter ended March 31, 1998 was primarily due to unrealized securities holding gains while the difference for the period ended March 31, 1997 was primarily due to foreign currency translation adjustments. In June 1997, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards No. 131, "Disclosures about Segments of an Enterprise and Related Information," and in February 1998, the FASB issued Statement of Financial Accounting Standards No. 132, "Employers' Disclosure about Pensions and Other Postretirement Benefits." Both statements are effective for fiscal years beginning after December 15, 1997. The Company will adopt the provisions of these standards in conjunction with the preparation of the 1998 Annual Report. The other liabilities in the Consolidated Balance Sheets, which totaled $1.1 billion on March 31, 1998 and December 31, 1997, include the Company's long-term pension liability, reserves related to the Company's professional liability insurance program, and the postretirement liability for certain health care and life insurance benefits. PART II, OTHER INFORMATION MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES INFORMATION REQUIRED FOR FORM 10-Q QUARTERLY REPORT MARCH 31, 1998 Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits. 27. Financial Data Schedule (b) Reports on Form 8-K. None. MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed this 14th day of May, 1998 on its behalf by the undersigned, thereunto duly authorized and in the capacity indicated. MARSH & McLENNAN COMPANIES, INC. /s/ Frank J. Borelli Senior Vice President and Chief Financial Officer EX-27 2 ARTICLE 5
5 This schedule contains summary financial information extracted from the consolidated Marsh & McLennan Companies, Inc. and subsidiaries March 31, 1998 financial statements and is qualified in its entirety by reference to such financial statements. 3-MOS DEC-31-1998 MAR-31-1998 567,000,000 0 1,660,000,000 54,000,000 0 2,779,000,000 1,748,000,000 808,000,000 8,344,000,000 2,536,000,000 1,163,000,000 172,000,000 0 0 3,335,000,000 8,344,000,000 0 1,776,000,000 0 1,372,000,000 0 4,000,000 28,000,000 381,000,000 150,000,000 231,000,000 0 0 0 231,000,000 1.35 1.31
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