GAAP Revenue Increases 16%; Underlying
Revenue Rises 13% Growth in GAAP Operating Income of 37% and
Adjusted Operating Income of 19% Third Quarter EPS Rises to
$1.05 from $0.62 and Adjusted EPS Increases 32% to $1.08
Nine Months EPS Rises to $4.56 from $3.21 and Adjusted EPS
Increases 28% to $4.82
Marsh McLennan (NYSE: MMC), the world’s leading professional
services firm in the areas of risk, strategy and people, today
reported financial results for the third quarter ended September
30, 2021.
Dan Glaser, President and CEO, said: "We delivered another
quarter of excellent results. For the second consecutive quarter,
underlying growth was at the highest level in over two decades. We
grew underlying revenue by 13%, adjusted operating income by 19%,
and adjusted EPS by 32%. For the first nine months of 2021, we
achieved 10% underlying revenue growth, 21% adjusted operating
income growth, and 28% adjusted EPS growth."
"Given the outstanding quarter and year-to-date performance, we
are on track for a terrific year."
Consolidated Results
Consolidated revenue in the third quarter of 2021 was $4.6
billion, an increase of 16% compared with the third quarter of
2020. On an underlying basis, revenue increased 13%. Operating
income was $740 million, an increase of 37% from the prior year.
Adjusted operating income, which excludes noteworthy items as
presented in the attached supplemental schedules, rose 19% to $759
million. Net income attributable to the Company was $537 million,
or $1.05 per diluted share, compared with $0.62 in the third
quarter of 2020. Adjusted earnings per share rose 32% to $1.08 per
diluted share compared with $0.82 for the prior year period.
For the nine months ended September 30, 2021, consolidated
revenue was $14.7 billion, an increase of 15%, or 10% on an
underlying basis compared to the prior period. Operating income was
$3.3 billion, an increase of 33% from the prior year period.
Adjusted operating income rose 21% to $3.4 billion. Net income
attributable to the Company was $2.3 billion. Fully diluted
earnings per share was $4.56 compared with $3.21 in the first nine
months of 2020. Adjusted earnings per share increased 28% to $4.82
compared with $3.77 for the comparable period in 2020.
Risk & Insurance Services
Risk & Insurance Services revenue was $2.7 billion in the
third quarter of 2021, an increase of 17%, or 13% on an underlying
basis. Operating income rose 21% to $403 million, and adjusted
operating income was $469 million, an increase of 21% from the
prior year period. For the nine months ended September 30, 2021,
revenue was $9.0 billion, an increase of 16%, or 11% on an
underlying basis. Operating income rose 28% to $2.4 billion, and
adjusted operating income was $2.5 billion, an increase of 20% from
the prior year period.
Marsh's revenue in the third quarter was $2.4 billion, an
increase of 13% on an underlying basis. In U.S./Canada, underlying
revenue rose 16%. International operations produced underlying
revenue growth of 9%, reflecting 12% growth in Latin America, 9%
growth in Asia Pacific, and 8% growth in EMEA. For the nine months
ended September 30, 2021, Marsh’s underlying revenue growth was 12%
compared to the prior period a year ago.
Guy Carpenter's revenue in the third quarter was $314 million,
an increase of 15% on an underlying basis. For the nine months
ended September 30, 2021, Guy Carpenter’s underlying revenue growth
was 10%.
Consulting
Consulting revenue in the third quarter was $1.9 billion, an
increase of 13% or 12% on an underlying basis compared to the same
period a year ago. Operating income increased 45% to $404 million,
and adjusted operating income increased 15% to $350 million. For
the first nine months of 2021, revenue was $5.7 billion, an
increase of 12%, or an increase of 9% on an underlying basis.
Operating income of $1.1 billion increased 36% and adjusted
operating income increased 25% to $1.1 billion.
Mercer's revenue was $1.3 billion in the third quarter, an
increase of 7% on an underlying basis. Career revenue of $253
million was up 13% on an underlying basis. Wealth revenue of $613
million increased 6% on an underlying basis, and Health revenue of
$449 million increased 4% on an underlying basis. For the nine
months ended September 30, 2021, Mercer’s revenue was $3.9 billion,
an increase of 4% on an underlying basis compared to the same
period a year ago.
Oliver Wyman’s revenue was $610 million in the third quarter, an
increase of 25% on an underlying basis. For the first nine months
ended September 30, 2021, Oliver Wyman’s revenue was $1.8 billion,
an increase of 21% on an underlying basis.
Other Items
The Company repurchased 1.9 million shares of stock for $300
million in the third quarter. Through nine months, the Company has
repurchased 5.3 million shares for $734 million.
Conference Call
A conference call to discuss third quarter 2021 results will be
held today at 8:30 a.m. Eastern time. To participate in the
teleconference, please dial +1 866 437 7574. Callers from outside
the United States should dial +1 409 220 9376. The access code for
both numbers is 4336169. The live audio webcast may be accessed at
marshmclennan.com. A replay of the webcast will be available
approximately two hours after the event.
About Marsh McLennan
Marsh McLennan (NYSE: MMC) is the world’s leading
professional services firm in the areas of risk, strategy and
people. The Company’s 81,000 colleagues advise clients in 130
countries. With annual revenue over $19 billion, Marsh McLennan
helps clients navigate an increasingly dynamic and complex
environment through four market-leading businesses. Marsh
provides data-driven risk advisory services and insurance solutions
to commercial and consumer clients. Guy Carpenter develops
advanced risk, reinsurance and capital strategies that help clients
grow profitably and pursue emerging opportunities. Mercer
delivers advice and technology-driven solutions that help
organizations redefine the world of work, reshape retirement and
investment outcomes, and unlock health and well being for a
changing workforce. Oliver Wyman serves as a critical
strategic, economic and brand advisor to private sector and
governmental clients. For more information, visit
marshmclennan.com, follow us on LinkedIn and
Twitter or subscribe to BRINK.
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," "intend,"
"plan," "project" and similar terms, and future or conditional
tense verbs like "could," "may," "might," "should," "will" and
"would".
Forward-looking statements are subject to inherent risks and
uncertainties that could cause actual results to differ materially
from those expressed or implied in our forward-looking statements.
Factors that could materially affect our future results include,
among other things:
- the increasing prevalence of ransomware, supply chain and other
forms of cyber attacks, and their potential to disrupt our
operations and result in the disclosure of confidential client or
company information;
- the impact from lawsuits or investigations arising from errors
and omissions, breaches of fiduciary duty or other claims against
us in our capacity as a broker or investment advisor;
- increased regulatory activity and scrutiny by regulatory or law
enforcement authorities;
- the financial and operational impact of complying with laws and
regulations where we operate and the risks of noncompliance with
such laws by us or third-party providers, including anti-corruption
laws such as the U.S. Foreign Corrupt Practices Act, U.K.
Anti-Bribery Act and cybersecurity and data privacy regulations
such as the E.U.’s General Data Protection Regulation;
- the impact of COVID-19, including emerging vaccine mandates, on
our business operations, results of operations, cash flows and
financial position;
- our ability to compete effectively and adapt to changes in the
competitive environment, including to respond to technological
change, disintermediation, digital disruption and other types of
innovation;
- our ability to manage risks associated with our investment
management and related services business, particularly in the
context of uncertain equity markets, including our ability to
execute timely trades in light of increased trading volume and to
manage potential conflicts of interest;
- our ability to attract and retain industry leading talent;
- the impact of changes in tax laws, guidance and
interpretations, or disagreements with tax authorities; and
- the regulatory, contractual and reputational risks that arise
based on insurance placement activities and insurer revenue
streams.
The factors identified above are not exhaustive. Marsh McLennan
and its subsidiaries operate in a dynamic business environment in
which new risks emerge frequently. Accordingly, we caution readers
not to place undue reliance on any forward-looking statements,
which are based only on information currently available to us and
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 Marsh McLennan 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 and the "Management’s Discussion and Analysis of Financial
Condition and Results of Operations" 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 data) (Unaudited)
Three Months Ended September
30,
Nine Months Ended September
30,
2021
2020
2021
2020
Revenue
$
4,583
$
3,968
$
14,683
$
12,808
Expense:
Compensation and benefits
2,853
2,495
8,520
7,479
Other operating expenses
990
933
2,837
2,834
Operating expenses
3,843
3,428
11,357
10,313
Operating income
740
540
3,326
2,495
Other net benefit credits
69
60
211
187
Interest income
1
1
2
5
Interest expense
(107
)
(128
)
(335
)
(387
)
Investment income (loss)
13
(14
)
43
(47
)
Income before income taxes
716
459
3,247
2,253
Income tax expense
174
139
880
586
Net income before non-controlling
interests
542
320
2,367
1,667
Less: Net income attributable to
non-controlling interests
5
4
27
25
Net income attributable to the
Company
$
537
$
316
$
2,340
$
1,642
Net income per share attributable to
the Company:
- Basic
$
1.06
$
0.62
$
4.61
$
3.25
- Diluted
$
1.05
$
0.62
$
4.56
$
3.21
Average number of shares
outstanding
- Basic
506
507
508
506
- Diluted
513
512
513
511
Shares outstanding at September
30
505
507
505
507
Marsh & McLennan Companies, Inc.
Supplemental Information - Revenue Analysis Three Months Ended
September 30 (Millions) (Unaudited)
The Company conducts business in 130 countries. As a result,
foreign exchange rate movements may impact period-to-period
comparisons of revenue. Similarly, certain other items such as
acquisitions and dispositions, including transfers among
businesses, may impact period-to-period comparisons of revenue.
Underlying revenue measures the change in revenue from one period
to the next by isolating these impacts.
Components of Revenue
Change*
Three Months Ended September
30,
% Change GAAP Revenue
Currency Impact
Acquisitions/ Dispositions/
Other Impact
Underlying Revenue
2021
2020
Risk and Insurance Services
Marsh
$
2,352
$
2,009
17
%
2
%
3
%
13
%
Guy Carpenter
314
274
15
%
—
—
15
%
Subtotal
2,666
2,283
17
%
1
%
2
%
13
%
Fiduciary interest income
4
8
Total Risk and Insurance Services
2,670
2,291
17
%
1
%
2
%
13
%
Consulting
Mercer
1,315
1,216
8
%
2
%
(1
)%
7
%
Oliver Wyman Group
610
480
27
%
1
%
—
25
%
Total Consulting
1,925
1,696
13
%
2
%
—
12
%
Corporate Eliminations
(12
)
(19
)
Total Revenue
$
4,583
$
3,968
16
%
2
%
1
%
13
%
Revenue Details
The following table provides more detailed revenue information
for certain of the components presented above:
Components of Revenue
Change*
Three Months Ended September
30,
% Change GAAP Revenue
Currency Impact
Acquisitions/ Dispositions/
Other Impact
Underlying Revenue
2021
2020
Marsh:
EMEA
$
600
$
536
12
%
4
%
—
8
%
Asia Pacific
281
254
10
%
2
%
—
9
%
Latin America
105
93
13
%
1
%
—
12
%
Total International
986
883
12
%
3
%
—
9
%
U.S./Canada
1,366
1,126
21
%
—
4
%
16
%
Total Marsh
$
2,352
$
2,009
17
%
2
%
3
%
13
%
Mercer:
Wealth
$
613
$
566
9
%
3
%
(1)
%
6
%
Health
449
430
4
%
1
%
(1)
%
4
%
Career
253
220
15
%
1
%
—
13
%
Total Mercer
$
1,315
$
1,216
8
%
2
%
(1)
%
7
%
* Components of revenue change may not add
due to rounding.
Marsh & McLennan Companies, Inc.
Supplemental Information - Revenue Analysis Nine Months Ended
September 30 (Millions) (Unaudited)
The Company conducts business in 130 countries. As a result,
foreign exchange rate movements may impact period-to-period
comparisons of revenue. Similarly, certain other items such as
acquisitions and dispositions, including transfers among
businesses, may impact period-to-period comparisons of revenue.
Underlying revenue measures the change in revenue from one period
to the next by isolating these impacts.
Components of Revenue
Change*
Nine Months Ended September
30,
% Change GAAP Revenue
Currency Impact
Acquisitions/ Dispositions/
Other Impact
Underlying Revenue
2021
2020
Risk and Insurance Services
Marsh
$
7,327
$
6,231
18
%
3
%
3
%
12
%
Guy Carpenter
1,697
1,534
11
%
1
%
—
10
%
Subtotal
9,024
7,765
16
%
3
%
2
%
11
%
Fiduciary interest income
12
40
Total Risk and Insurance Services
9,036
7,805
16
%
3
%
2
%
11
%
Consulting
Mercer
3,877
3,616
7
%
4
%
(1
)%
4
%
Oliver Wyman Group
1,813
1,458
24
%
3
%
—
21
%
Total Consulting
5,690
5,074
12
%
4
%
(1
)%
9
%
Corporate Eliminations
(43
)
(71
)
Total Revenue
$
14,683
$
12,808
15
%
3
%
1
%
10
%
Revenue Details
The following table provides more detailed revenue information
for certain of the components presented above:
Components of Revenue
Change*
Nine Months Ended September
30,
% Change GAAP Revenue
Currency Impact
Acquisitions/ Dispositions/
Other Impact
Underlying Revenue
2021
2020
Marsh:
EMEA
$
2,233
$
1,887
18
%
6
%
2
%
10
%
Asia Pacific
902
790
14
%
6
%
—
9
%
Latin America
298
283
5
%
(1)
%
—
6
%
Total International
3,433
2,960
16
%
5
%
1
%
9
%
U.S./Canada
3,894
3,271
19
%
1
%
5
%
14
%
Total Marsh
$
7,327
$
6,231
18
%
3
%
3
%
12
%
Mercer:
Wealth
$
1,861
$
1,719
8
%
6
%
(1)
%
4
%
Health
1,398
1,348
4
%
2
%
(1)
%
3
%
Career
618
549
13
%
3
%
—
10
%
Total Mercer
$
3,877
$
3,616
7
%
4
%
(1)
%
4
%
* Components of revenue change may not add
due to rounding.
Marsh & McLennan Companies, Inc.
Reconciliation of Non-GAAP Measures Three Months Ended September 30
(Millions) (Unaudited)
Overview
The Company reports its financial results
in accordance with accounting principles generally accepted in the
United States (referred to in this release as in accordance with
"GAAP" or "reported" results). The Company also refers to and
presents certain additional non-GAAP financial measures, within the
meaning of Regulation G under the Securities Exchange Act of 1934.
These measures are: adjusted operating income (loss), adjusted
operating margin, adjusted income, net of tax and adjusted earnings
per share (EPS). The Company has included reconciliations of these
non-GAAP financial measures to the most directly comparable
financial measure calculated in accordance with GAAP in the
following tables.
The Company believes these non-GAAP
financial measures provide useful supplemental information that
enables investors to better compare the Company’s performance
across periods. Management also uses these measures internally to
assess the operating performance of its businesses, to assess
performance for employee compensation purposes, and to decide how
to allocate resources. 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 include adjustments that
reflect how management views its businesses, 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 (loss). The following tables
identify these noteworthy items and reconcile adjusted operating
income (loss) to GAAP operating income (loss), on a consolidated
and reportable segment basis, for the three and nine months ended
September 30, 2021 and 2020. The following tables also present
adjusted operating margin. For the three and nine months ended
September 30, 2021 and 2020, adjusted operating margin is
calculated by dividing the sum of adjusted operating income and
identified intangible asset amortization by consolidated or segment
adjusted revenue.
Risk & Insurance
Services
Consulting
Corporate/
Eliminations
Total
Three Months Ended September 30,
2021
Operating income (loss)
$
403
$
404
$
(67
)
$
740
Operating margin
15.1
%
21.0
%
N/A
16.1
%
Add (deduct) impact of noteworthy
items:
Restructuring, excluding JLT (a)
7
—
5
12
Changes in contingent consideration
(b)
17
1
—
18
JLT integration and restructuring costs
(c)
11
9
(1
)
19
JLT acquisition-related costs (d)
10
—
1
11
JLT legacy E&O provision (e)
—
(63
)
—
(63
)
Legal claims and other (f)
21
(1
)
2
22
Operating income adjustments
66
(54
)
7
19
Adjusted operating income (loss)
$
469
$
350
$
(60
)
$
759
Total identified intangible amortization
expense
$
75
$
14
$
—
$
89
Adjusted operating margin
20.4
%
18.9
%
N/A
18.5
%
Three Months Ended September 30,
2020
Operating income (loss)
$
333
$
278
$
(71
)
$
540
Operating margin
14.5
%
16.4
%
N/A
13.6
%
Add (deduct) impact of noteworthy
items:
Restructuring, excluding JLT (a)
—
11
12
23
Changes in contingent consideration
(b)
15
1
—
16
JLT integration and restructuring costs
(c)
25
14
5
44
JLT acquisition-related costs (d)
15
1
(1
)
15
Other
—
1
(1
)
—
Operating income adjustments
55
28
15
98
Adjusted operating income (loss)
$
388
$
306
$
(56
)
$
638
Total identified intangible amortization
expense
$
75
$
16
$
—
$
91
Adjusted operating margin
20.2
%
18.9
%
N/A
18.4
%
(a) Primarily includes restructuring
expenses associated with the Company's global information
technology and HR functions and adjustments to restructuring
liabilities for future rent under non-cancellable leases.
(b) Primarily includes the change in fair
value of contingent consideration related to acquisitions and
dispositions measured each quarter.
(c) Includes costs incurred for staff
reductions, lease related exit costs, technology and consulting
costs related to the Jardine Lloyd Thompson ("JLT")
integration.
(d) Reflects retention costs related to
the closing of the acquisition of JLT.
(e) Reflects a reduction in the liability
for a legacy JLT E&O relating to suitability of advice provided
to individuals for defined benefit pension transfers in the U.K.,
as well as recoveries under indemnities and insurance.
(f) Primarily reflects settlement charges
and legal costs related to strategic recruiting.
Marsh & McLennan
Companies, Inc. Reconciliation of Non-GAAP Measures Nine Months
Ended September 30 (Millions) (Unaudited)
Risk & Insurance
Services
Consulting
Corporate/
Eliminations
Total
Nine Months Ended September 30,
2021
Operating income (loss)
$
2,413
$
1,109
$
(196)
$
3,326
Operating margin
26.7
%
19.5
%
N/A
22.7
%
Add (deduct) impact of noteworthy
items:
Restructuring, excluding JLT (a)
12
8
15
35
Changes in contingent consideration
(b)
18
(4)
(3)
11
JLT integration and restructuring costs
(c)
38
21
2
61
JLT acquisition-related costs (d)
32
2
1
35
JLT legacy E&O provision (e)
—
(63)
—
(63)
Legal claims and other (f)
27
—
2
29
Disposal of businesses (g)
(52)
3
—
(49)
Operating income adjustments
75
(33)
17
59
Adjusted operating income (loss)
$
2,488
$
1,076
$
(179)
$
3,385
Total identified intangible amortization
expense
$
236
$
42
$
—
$
278
Adjusted operating margin
30.3
%
19.6
%
N/A
25.0
%
Nine Months Ended September 30,
2020
Operating income (loss)
$
1,883
$
815
$
(203)
$
2,495
Operating margin
24.1
%
16.1
%
N/A
19.5
%
Add (deduct) impact of noteworthy
items:
Restructuring, excluding JLT (a)
2
17
24
43
Changes in contingent consideration
(b)
22
(2)
2
22
JLT integration and restructuring costs
(c)
125
31
25
181
JLT acquisition-related costs (d)
39
2
—
41
Disposal of business (g)
6
(4)
—
2
Other
5
1
(1)
5
Operating income adjustments
199
45
50
294
Adjusted operating income (loss)
$
2,082
$
860
$
(153)
$
2,789
Total identified intangible amortization
expense
$
222
$
43
$
—
$
265
Adjusted operating margin
29.5
%
17.8
%
N/A
23.8
%
(a) Primarily includes restructuring
expenses associated with the Company's global information
technology and HR functions and adjustments to restructuring
liabilities for future rent under non-cancellable leases.
Consulting charges in 2020 reflect severance and real estate exit
costs related to the Mercer restructuring program completed in
2020.
(b) Primarily includes the change in fair
value of contingent consideration related to acquisitions and
dispositions as measured each quarter.
(c) Includes costs incurred for staff
reductions, lease related exit costs, technology and consulting
costs related to the JLT integration.
(d) Reflects retention costs related to
the closing of the acquisition of JLT.
(e) Reflects a reduction in the liability
for a legacy JLT E&O relating to suitability of advice provided
to individuals for defined benefit pension transfers in the U.K.,
as well as recoveries under indemnities and insurance.
(f) Primarily reflects settlement charges
and legal costs related to strategic recruiting.
(g) Primarily reflects a gain on the sale
of the U.K. commercial networks business that provided broking and
back-office solutions for small independent brokers during the
second quarter of 2021. 2020 reflects net loss on disposal of
specialty businesses sold in the U.S., U.K. and Canada, previously
acquired as part of the JLT Transaction. These amounts are
reflected as an increase or decrease of other revenue, which is
reflected as part of revenue in the consolidated statements of
income. These items are removed from GAAP revenue in the
calculation of adjusted operating margin.
Marsh & McLennan Companies, Inc.
Reconciliation of Non-GAAP Measures Three and Nine Months Ended
September 30 (Millions) (Unaudited)
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
in the preceding tables and the additional items listed below.
Adjusted EPS is calculated by dividing the Company’s adjusted
income, net of tax, by average number of shares outstanding-diluted
for the relevant period. The following tables reconcile adjusted
income, net of tax to GAAP income from continuing operations and
adjusted EPS to GAAP EPS for the three and nine month periods ended
September 30, 2021 and 2020.
Three Months Ended September
30, 2021
Three Months Ended September 30,
2020
Amount
Adjusted EPS
Amount
Adjusted EPS
Net income before non-controlling
interests, as reported
$
542
$
320
Less: Non-controlling interest, net of
tax
5
4
Subtotal
$
537
$
1.05
$
316
$
0.62
Operating income adjustments
$
19
$
98
Investments adjustment (a)
(1
)
16
Pension settlement adjustment
2
—
Income tax effect of adjustments (b)
(10
)
(12
)
Impact of U.K. tax rate change (c)
5
—
15
0.03
102
0.20
Adjusted income, net of tax
$
552
$
1.08
$
418
$
0.82
Nine Months Ended September
30, 2021
Nine Months Ended September 30,
2020
Amount
Adjusted EPS
Amount
Adjusted EPS
Net income before non-controlling
interests, as
reported
$
2,367
$
1,667
Less: Non-controlling interest, net of
tax
27
25
Subtotal
$
2,340
$
4.56
$
1,642
$
3.21
Operating income adjustments
$
59
$
294
Investments adjustment (a)
(2
)
42
Pension settlement adjustment
2
—
Income tax effect of adjustments (b)
(31
)
(50
)
Impact of U.K. tax rate change (c)
105
—
133
0.26
286
0.56
Adjusted income, net of tax
$
2,473
$
4.82
$
1,928
$
3.77
(a) Represents mark-to-market gains in
2021 and losses in 2020, primarily related to the Company’s
investment in Alexander Forbes ("AF").
(b) For items with an income tax impact,
the tax effect was calculated using an effective tax rate based on
the tax jurisdiction for each item.
(c) Reflects the re-measurement of the
Company's U.K. deferred tax assets and liabilities upon enactment
of legislation that increased the corporate income tax rate
applicable to U.K. based entities from 19% to 25%, effective April
1, 2023.
Marsh & McLennan
Companies, Inc.
Supplemental
Information
Three and Nine Months Ended
September 30
(Millions) (Unaudited)
Three Months Ended September
30,
Nine Months Ended September
30,
2021
2020
2021
2020
Consolidated
Compensation and benefits
$
2,853
$
2,495
$
8,520
$
7,479
Other operating expenses
990
933
2,837
2,834
Total expenses
$
3,843
$
3,428
$
11,357
$
10,313
Depreciation and amortization expense
$
90
$
94
$
291
$
282
Identified intangible amortization
expense
89
91
278
265
Total
$
179
$
185
$
569
$
547
Stock option expense
$
4
$
4
$
29
$
25
Risk and Insurance Services
Compensation and benefits
$
1,634
$
1,400
$
4,876
$
4,234
Other operating expenses
633
558
1,747
1,688
Total expenses
$
2,267
$
1,958
$
6,623
$
5,922
Depreciation and amortization expense
$
44
$
49
$
152
$
146
Identified intangible amortization
expense
75
75
236
222
Total
$
119
$
124
$
388
$
368
Consulting
Compensation and benefits
$
1,103
$
980
$
3,287
$
2,911
Other operating expenses
418
438
1,294
1,348
Total expenses
$
1,521
$
1,418
$
4,581
$
4,259
Depreciation and amortization expense
$
29
$
29
$
87
$
86
Identified intangible amortization
expense
14
16
42
43
Total
$
43
$
45
$
129
$
129
Marsh & McLennan
Companies, Inc.
Consolidated Balance
Sheets
(Millions)
(Unaudited) September
30, 2021
December 31, 2020
ASSETS
Current assets:
Cash and cash equivalents
$
1,398
$
2,089
Net receivables
5,624
5,326
Other current assets
855
740
Total current assets
7,877
8,155
Goodwill and intangible assets
18,235
18,216
Fixed assets, net
824
856
Pension related assets
1,935
1,768
Right of use assets
1,899
1,894
Deferred tax assets
692
702
Other assets
1,520
1,458
TOTAL ASSETS
$
32,982
$
33,049
LIABILITIES AND EQUITY
Current liabilities:
Short-term debt
$
516
$
517
Accounts payable and accrued
liabilities
2,833
3,050
Accrued compensation and employee
benefits
2,365
2,400
Current lease liabilities
339
342
Accrued income taxes
333
247
Dividends payable
273
—
Total current liabilities
6,659
6,556
Fiduciary liabilities
10,408
8,585
Less - cash and investments held in a
fiduciary capacity
(10,408
)
(8,585
)
—
—
Long-term debt
10,228
10,796
Pension, post-retirement and
post-employment benefits
2,387
2,662
Long-term lease liabilities
1,900
1,924
Liabilities for errors and omissions
356
366
Other liabilities
1,564
1,485
Total equity
9,888
9,260
TOTAL LIABILITIES AND EQUITY
$
32,982
$
33,049
Marsh & McLennan
Companies, Inc.
Consolidated Statements of
Cash Flows
(Millions) (Unaudited)
Nine Months Ended
September 30,
2021
2020
Operating cash flows:
Net income before non-controlling
interests
$
2,367
$
1,667
Adjustments to reconcile net income to
cash used for operations:
Depreciation and amortization
569
547
Non cash lease expense
241
241
Share-based compensation expense
263
219
Net (gain) loss on investments,
disposition of assets and other
(89
)
48
Changes in Assets and Liabilities:
Accrued compensation and employee
benefits
(53
)
(431
)
Net receivables
(336
)
77
Other changes to assets and
liabilities
(299
)
135
Contributions to pension and other benefit
plans in excess of current year credit
(282
)
(240
)
Operating lease liabilities
(262
)
(254
)
Effect of exchange rate changes
(45
)
(10
)
Net cash provided by operations
2,074
1,999
Financing cash flows:
Purchase of treasury shares
(734
)
—
Borrowings from term-loan and credit
facilities
—
1,000
Proceeds from issuance of debt
—
737
Repayments of debt
(512
)
(1,011
)
Net issuance of common stock from treasury
shares
16
(33
)
Net distributions of non-controlling
interests and deferred/contingent consideration
(66
)
(154
)
Dividends paid
(750
)
(702
)
Net cash used for financing
activities
(2,046
)
(163
)
Investing cash flows:
Capital expenditures
(268
)
(278
)
Net (purchase) sale of long-term
investments and other
(4
)
98
Dispositions
84
93
Acquisitions
(401
)
(559
)
Net cash used for investing
activities
(589
)
(646
)
Effect of exchange rate changes on cash
and cash equivalents
(130
)
43
(Decrease) increase in cash and cash
equivalents
(691
)
1,233
Cash and cash equivalents at beginning of
period
2,089
1,155
Cash and cash equivalents at end of
period
$
1,398
$
2,388
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211021005533/en/
Media Contact: Erick R. Gustafson Marsh McLennan +1 202
263 7788 erick.gustafson@mmc.com
Investor Contact: Sarah DeWitt Marsh McLennan +1 212 345
6750 sarah.dewitt@mmc.com
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