Marsh McLennan 1166 Avenue of the Americas New York, New York 10036-2774 212 345 5000 www.marshmclennan.com |
NEWS RELEASE | Exhibit 99.1 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||
Revenue | $ | 4,770 | $ | 4,583 | $ | 15,698 | $ | 14,683 | ||||||||||||||||||
Expense: | ||||||||||||||||||||||||||
Compensation and benefits | 2,923 | 2,853 | 9,033 | 8,520 | ||||||||||||||||||||||
Other operating expenses | 1,056 | 990 | 3,065 | 2,837 | ||||||||||||||||||||||
Operating expenses | 3,979 | 3,843 | 12,098 | 11,357 | ||||||||||||||||||||||
Operating income | 791 | 740 | 3,600 | 3,326 | ||||||||||||||||||||||
Other net benefit credits | 57 | 69 | 178 | 211 | ||||||||||||||||||||||
Interest income | 4 | 1 | 6 | 2 | ||||||||||||||||||||||
Interest expense | (118) | (107) | (342) | (335) | ||||||||||||||||||||||
Investment (loss) income | (1) | 13 | 27 | 43 | ||||||||||||||||||||||
Income before income taxes | 733 | 716 | 3,469 | 3,247 | ||||||||||||||||||||||
Income tax expense | 181 | 174 | 853 | 880 | ||||||||||||||||||||||
Net income before non-controlling interests | 552 | 542 | 2,616 | 2,367 | ||||||||||||||||||||||
Less: Net income attributable to non-controlling interests | 6 | 5 | 32 | 27 | ||||||||||||||||||||||
Net income attributable to the Company | $ | 546 | $ | 537 | $ | 2,584 | $ | 2,340 | ||||||||||||||||||
Net income per share attributable to the Company: | ||||||||||||||||||||||||||
- Basic | $ | 1.10 | $ | 1.06 | $ | 5.16 | $ | 4.61 | ||||||||||||||||||
- Diluted | $ | 1.08 | $ | 1.05 | $ | 5.11 | $ | 4.56 | ||||||||||||||||||
Average number of shares outstanding: | ||||||||||||||||||||||||||
- Basic | 498 | 506 | 501 | 508 | ||||||||||||||||||||||
- Diluted | 503 | 513 | 506 | 513 | ||||||||||||||||||||||
Shares outstanding at September 30 | 497 | 505 | 497 | 505 |
Components of Revenue Change* | ||||||||||||||||||||||||||||||||||||||
Three Months Ended September 30, | % Change GAAP Revenue | Currency Impact | Acquisitions/ Dispositions/ Other Impact | Underlying Revenue | ||||||||||||||||||||||||||||||||||
2022 | 2021 | |||||||||||||||||||||||||||||||||||||
Risk and Insurance Services | ||||||||||||||||||||||||||||||||||||||
Marsh | $ | 2,470 | $ | 2,352 | 5 | % | (4) | % | 1 | % | 8 | % | ||||||||||||||||||||||||||
Guy Carpenter | 328 | 314 | 4 | % | (3) | % | — | 7 | % | |||||||||||||||||||||||||||||
Subtotal | 2,798 | 2,666 | 5 | % | (4) | % | 1 | % | 8 | % | ||||||||||||||||||||||||||||
Fiduciary interest income | 40 | 4 | ||||||||||||||||||||||||||||||||||||
Total Risk and Insurance Services | 2,838 | 2,670 | 6 | % | (4) | % | 1 | % | 9 | % | ||||||||||||||||||||||||||||
Consulting | ||||||||||||||||||||||||||||||||||||||
Mercer | 1,284 | 1,315 | (2) | % | (6) | % | (2) | % | 5 | % | ||||||||||||||||||||||||||||
Oliver Wyman Group | 667 | 610 | 9 | % | (5) | % | 1 | % | 13 | % | ||||||||||||||||||||||||||||
Total Consulting | 1,951 | 1,925 | 1 | % | (6) | % | (1) | % | 8 | % | ||||||||||||||||||||||||||||
Corporate Eliminations | (19) | (12) | ||||||||||||||||||||||||||||||||||||
Total Revenue | $ | 4,770 | $ | 4,583 | 4 | % | (5) | % | — | 8 | % | |||||||||||||||||||||||||||
Components of Revenue Change* | ||||||||||||||||||||||||||||||||||||||
Three Months Ended September 30, | % Change GAAP Revenue | Currency Impact | Acquisitions/ Dispositions/ Other Impact | Underlying Revenue | ||||||||||||||||||||||||||||||||||
2022 | 2021 | |||||||||||||||||||||||||||||||||||||
Marsh: | ||||||||||||||||||||||||||||||||||||||
EMEA | $ | 589 | $ | 600 | (2) | % | (11) | % | (1) | % | 9 | % | ||||||||||||||||||||||||||
Asia Pacific | 312 | 281 | 11 | % | (9) | % | 7 | % | 14 | % | ||||||||||||||||||||||||||||
Latin America | 118 | 105 | 12 | % | (3) | % | — | 15 | % | |||||||||||||||||||||||||||||
Total International | 1,019 | 986 | 3 | % | (9) | % | 2 | % | 11 | % | ||||||||||||||||||||||||||||
U.S./Canada | 1,451 | 1,366 | 6 | % | — | 1 | % | 5 | % | |||||||||||||||||||||||||||||
Total Marsh | $ | 2,470 | $ | 2,352 | 5 | % | (4) | % | 1 | % | 8 | % | ||||||||||||||||||||||||||
Mercer: | ||||||||||||||||||||||||||||||||||||||
Wealth | $ | 561 | $ | 613 | (9) | % | (7) | % | — | (1) | % | |||||||||||||||||||||||||||
Health | 451 | 449 | 1 | % | (4) | % | (5) | % | 10 | % | ||||||||||||||||||||||||||||
Career | 272 | 253 | 8 | % | (7) | % | — | 15 | % | |||||||||||||||||||||||||||||
Total Mercer | $ | 1,284 | $ | 1,315 | (2) | % | (6) | % | (2) | % | 5 | % |
* Components of revenue change may not add due to rounding. |
Components of Revenue Change* | ||||||||||||||||||||||||||||||||||||||
Nine Months Ended September 30, | % Change GAAP Revenue | Currency Impact | Acquisitions/ Dispositions/ Other Impact | Underlying Revenue | ||||||||||||||||||||||||||||||||||
2022 | 2021 | |||||||||||||||||||||||||||||||||||||
Risk and Insurance Services | ||||||||||||||||||||||||||||||||||||||
Marsh | $ | 7,794 | $ | 7,327 | 6 | % | (3) | % | — | 9 | % | |||||||||||||||||||||||||||
Guy Carpenter | 1,849 | 1,697 | 9 | % | (2) | % | 1 | % | 10 | % | ||||||||||||||||||||||||||||
Subtotal | 9,643 | 9,024 | 7 | % | (3) | % | 1 | % | 9 | % | ||||||||||||||||||||||||||||
Fiduciary interest income | 57 | 12 | ||||||||||||||||||||||||||||||||||||
Total Risk and Insurance Services | 9,700 | 9,036 | 7 | % | (3) | % | 1 | % | 10 | % | ||||||||||||||||||||||||||||
Consulting | ||||||||||||||||||||||||||||||||||||||
Mercer | 4,016 | 3,877 | 4 | % | (4) | % | 2 | % | 6 | % | ||||||||||||||||||||||||||||
Oliver Wyman Group | 2,029 | 1,813 | 12 | % | (4) | % | 1 | % | 15 | % | ||||||||||||||||||||||||||||
Total Consulting | 6,045 | 5,690 | 6 | % | (4) | % | 1 | % | 9 | % | ||||||||||||||||||||||||||||
Corporate Eliminations | (47) | (43) | ||||||||||||||||||||||||||||||||||||
Total Revenue | $ | 15,698 | $ | 14,683 | 7 | % | (3) | % | 1 | % | 9 | % | ||||||||||||||||||||||||||
Components of Revenue Change* | ||||||||||||||||||||||||||||||||||||||
Nine Months Ended September 30, | % Change GAAP Revenue | Currency Impact | Acquisitions/ Dispositions/ Other Impact | Underlying Revenue | ||||||||||||||||||||||||||||||||||
2022 | 2021 | |||||||||||||||||||||||||||||||||||||
Marsh: | ||||||||||||||||||||||||||||||||||||||
EMEA | $ | 2,176 | $ | 2,233 | (3) | % | (7) | % | (4) | % | 8 | % | ||||||||||||||||||||||||||
Asia Pacific | 1,015 | 902 | 13 | % | (7) | % | 6 | % | 14 | % | ||||||||||||||||||||||||||||
Latin America | 340 | 298 | 14 | % | (1) | % | — | 15 | % | |||||||||||||||||||||||||||||
Total International | 3,531 | 3,433 | 3 | % | (6) | % | (1) | % | 10 | % | ||||||||||||||||||||||||||||
U.S./Canada | 4,263 | 3,894 | 9 | % | — | 1 | % | 8 | % | |||||||||||||||||||||||||||||
Total Marsh | $ | 7,794 | $ | 7,327 | 6 | % | (3) | % | — | 9 | % | |||||||||||||||||||||||||||
Mercer: | ||||||||||||||||||||||||||||||||||||||
Wealth | $ | 1,775 | $ | 1,861 | (5) | % | (5) | % | — | 1 | % | |||||||||||||||||||||||||||
Health | 1,562 | 1,398 | 12 | % | (3) | % | 5 | % | 10 | % | ||||||||||||||||||||||||||||
Career | 679 | 618 | 10 | % | (5) | % | — | 15 | % | |||||||||||||||||||||||||||||
Total Mercer | $ | 4,016 | $ | 3,877 | 4 | % | (4) | % | 2 | % | 6 | % |
* Components of revenue change may not add due to rounding. |
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 in accordance with 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, 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, 2022 and 2021. The following tables also present adjusted operating margin. For the three and nine months ended September 30, 2022 and 2021, 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, 2022 | ||||||||||||||||||||||||||
Operating income (loss) | $ | 529 | $ | 350 | $ | (88) | $ | 791 | ||||||||||||||||||
Operating margin | 18.7 | % | 17.9 | % | N/A | 16.6 | % | |||||||||||||||||||
Add (deduct) impact of noteworthy items: | ||||||||||||||||||||||||||
Restructuring (a) | 18 | 5 | 15 | 38 | ||||||||||||||||||||||
Changes in contingent consideration (b) | 11 | — | — | 11 | ||||||||||||||||||||||
JLT acquisition-related costs (c) | 4 | — | — | 4 | ||||||||||||||||||||||
Other | — | 7 | — | 7 | ||||||||||||||||||||||
Operating income adjustments | 33 | 12 | 15 | 60 | ||||||||||||||||||||||
Adjusted operating income (loss) | $ | 562 | $ | 362 | $ | (73) | $ | 851 | ||||||||||||||||||
Total identified intangible amortization expense | $ | 74 | $ | 10 | $ | — | $ | 84 | ||||||||||||||||||
Adjusted operating margin | 22.4 | % | 19.1 | % | N/A | 19.6 | % | |||||||||||||||||||
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 (a) | 18 | 9 | 4 | 31 | ||||||||||||||||||||||
Changes in contingent consideration (b) | 17 | 1 | — | 18 | ||||||||||||||||||||||
JLT acquisition-related costs (c) | 10 | — | 1 | 11 | ||||||||||||||||||||||
JLT legacy legal charges (d) | — | (63) | — | (63) | ||||||||||||||||||||||
Legal claims and other (e) | 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 | % | |||||||||||||||||||
(a)Restructuring activities reflect costs primarily related to the Company's global information technology and HR functions, JLT integration costs, Marsh operational excellence 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 retention costs related to the acquisition of JLT. (d)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. (e)Primarily reflects settlement charges and legal costs related to strategic recruiting. | ||||||||||||||||||||||||||
Risk & Insurance Services | Consulting | Corporate/ Eliminations | Total | |||||||||||||||||||||||
Nine Months Ended September 30, 2022 | ||||||||||||||||||||||||||
Operating income (loss) | $ | 2,617 | $ | 1,217 | $ | (234) | $ | 3,600 | ||||||||||||||||||
Operating margin | 27.0 | % | 20.1 | % | N/A | 22.9 | % | |||||||||||||||||||
Add (deduct) impact of noteworthy items: | ||||||||||||||||||||||||||
Restructuring (a) | 44 | 16 | 36 | 96 | ||||||||||||||||||||||
Changes in contingent consideration (b) | 33 | 5 | — | 38 | ||||||||||||||||||||||
JLT acquisition-related costs (c) | 24 | 1 | 3 | 28 | ||||||||||||||||||||||
JLT legacy legal charges (d) | 14 | (11) | — | 3 | ||||||||||||||||||||||
Disposal of businesses (e) | — | (114) | — | (114) | ||||||||||||||||||||||
Deconsolidation of Russian businesses and other related charges (f) | 42 | 10 | — | 52 | ||||||||||||||||||||||
Legal claims and other (g) | 30 | 9 | — | 39 | ||||||||||||||||||||||
Operating income adjustments | 187 | (84) | 39 | 142 | ||||||||||||||||||||||
Adjusted operating income (loss) | $ | 2,804 | $ | 1,133 | $ | (195) | $ | 3,742 | ||||||||||||||||||
Total identified intangible amortization expense | $ | 223 | $ | 35 | $ | — | $ | 258 | ||||||||||||||||||
Adjusted operating margin | 31.1 | % | 19.6 | % | N/A | 25.6 | % | |||||||||||||||||||
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 (a) | 50 | 29 | 17 | 96 | ||||||||||||||||||||||
Changes in contingent consideration (b) | 18 | (4) | (3) | 11 | ||||||||||||||||||||||
JLT acquisition-related costs (c) | 32 | 2 | 1 | 35 | ||||||||||||||||||||||
JLT legacy legal charges (d) | — | (63) | — | (63) | ||||||||||||||||||||||
Disposal of businesses (e) | (52) | 3 | — | (49) | ||||||||||||||||||||||
Legal claims and other (g) | 27 | — | 2 | 29 | ||||||||||||||||||||||
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 | % | |||||||||||||||||||
(a)Restructuring activities reflect costs primarily related to the Company's global information technology and HR functions, JLT integration costs, Marsh operational excellence 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 retention costs related to the acquisition of JLT. (d)Reflects charges and recoveries related to legacy JLT legal matters. 2021 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. (e)Reflects primarily a gain of $112 million during the second quarter of 2022 on the sale of the Mercer U.S. affinity business. In 2021, the amount reflects a gain of $49 million primarily related to the sale of the U.K. commercial networks business. These amounts are included in revenue in the consolidated statements of income and excluded from underlying revenue and adjusted revenue in the calculation of adjusted operating margin. (f)Loss on deconsolidation of Russian businesses and other related charges. The loss on deconsolidation of $39 million is included in revenue in the consolidated statements of income and excluded from underlying revenue and adjusted revenue used in the calculation of adjusted operating margin. (g)Primarily reflects settlement charges and legal costs related to strategic recruiting. |
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 the 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 months ended September 30, 2022 and 2021. |
Three Months Ended September 30, 2022 | Three Months Ended September 30, 2021 | ||||||||||||||||||||||||||||||||||
Amount | Adjusted EPS | Amount | Adjusted EPS | ||||||||||||||||||||||||||||||||
Net income before non-controlling interests, as reported | $ | 552 | $ | 542 | |||||||||||||||||||||||||||||||
Less: Non-controlling interest, net of tax | 6 | 5 | |||||||||||||||||||||||||||||||||
Subtotal | $ | 546 | $ | 1.08 | $ | 537 | $ | 1.05 | |||||||||||||||||||||||||||
Operating income adjustments | $ | 60 | $ | 19 | |||||||||||||||||||||||||||||||
Investments adjustment (a) | 4 | (1) | |||||||||||||||||||||||||||||||||
Pension settlement adjustment (b) | — | 2 | |||||||||||||||||||||||||||||||||
Income tax effect of adjustments (c) | (16) | (10) | |||||||||||||||||||||||||||||||||
Impact of U.K. tax rate change (d) | — | 5 | |||||||||||||||||||||||||||||||||
48 | 0.10 | 15 | 0.03 | ||||||||||||||||||||||||||||||||
Adjusted income, net of tax | $ | 594 | $ | 1.18 | $ | 552 | $ | 1.08 | |||||||||||||||||||||||||||
Nine Months Ended September 30, 2022 | Nine Months Ended September 30, 2021 | ||||||||||||||||||||||||||||||||||
Amount | Adjusted EPS | Amount | Adjusted EPS | ||||||||||||||||||||||||||||||||
Net income before non-controlling interests, as reported | $ | 2,616 | $ | 2,367 | |||||||||||||||||||||||||||||||
Less: Non-controlling interest, net of tax | 32 | 27 | |||||||||||||||||||||||||||||||||
Subtotal | $ | 2,584 | $ | 5.11 | $ | 2,340 | $ | 4.56 | |||||||||||||||||||||||||||
Operating income adjustments | $ | 142 | $ | 59 | |||||||||||||||||||||||||||||||
Investments adjustment (a) | (4) | (2) | |||||||||||||||||||||||||||||||||
Pension settlement adjustment (b) | 1 | 2 | |||||||||||||||||||||||||||||||||
Income tax effect of adjustments (c) | (1) | (31) | |||||||||||||||||||||||||||||||||
Impact of U.K. tax rate change (d) | — | 105 | |||||||||||||||||||||||||||||||||
138 | 0.27 | 133 | 0.26 | ||||||||||||||||||||||||||||||||
Adjusted income, net of tax | $ | 2,722 | $ | 5.38 | $ | 2,473 | $ | 4.82 | |||||||||||||||||||||||||||
(a) In the third quarter of 2022, amount represents a net loss from the sale of investments, including the Company's remaining investment in Alexander Forbes ("AF"). Amounts for the other periods presented reflect mark to market gains. | |||||||||||||||||||||||||||||||||||
(b) Charges resulting from lump sum pension settlements elected by participants. | |||||||||||||||||||||||||||||||||||
(c) 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. | |||||||||||||||||||||||||||||||||||
(d) 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. | |||||||||||||||||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||
Consolidated | ||||||||||||||||||||||||||
Compensation and benefits | $ | 2,923 | $ | 2,853 | $ | 9,033 | $ | 8,520 | ||||||||||||||||||
Other operating expenses | 1,056 | 990 | 3,065 | 2,837 | ||||||||||||||||||||||
Total expenses | $ | 3,979 | $ | 3,843 | $ | 12,098 | $ | 11,357 | ||||||||||||||||||
Depreciation and amortization expense | $ | 85 | $ | 90 | $ | 259 | $ | 291 | ||||||||||||||||||
Identified intangible amortization expense | 84 | 89 | 258 | 278 | ||||||||||||||||||||||
Total | $ | 169 | $ | 179 | $ | 517 | $ | 569 | ||||||||||||||||||
Risk and Insurance Services | ||||||||||||||||||||||||||
Compensation and benefits | $ | 1,688 | $ | 1,634 | $ | 5,239 | $ | 4,876 | ||||||||||||||||||
Other operating expenses | 621 | 633 | 1,844 | 1,747 | ||||||||||||||||||||||
Total expenses | $ | 2,309 | $ | 2,267 | $ | 7,083 | $ | 6,623 | ||||||||||||||||||
Depreciation and amortization expense | $ | 40 | $ | 44 | $ | 123 | $ | 152 | ||||||||||||||||||
Identified intangible amortization expense | 74 | 75 | 223 | 236 | ||||||||||||||||||||||
Total | $ | 114 | $ | 119 | $ | 346 | $ | 388 | ||||||||||||||||||
Consulting | ||||||||||||||||||||||||||
Compensation and benefits | $ | 1,107 | $ | 1,103 | $ | 3,416 | $ | 3,287 | ||||||||||||||||||
Other operating expenses | 494 | 418 | 1,412 | 1,294 | ||||||||||||||||||||||
Total expenses | $ | 1,601 | $ | 1,521 | $ | 4,828 | $ | 4,581 | ||||||||||||||||||
Depreciation and amortization expense | $ | 26 | $ | 29 | $ | 79 | $ | 87 | ||||||||||||||||||
Identified intangible amortization expense | 10 | 14 | 35 | 42 | ||||||||||||||||||||||
Total | $ | 36 | $ | 43 | $ | 114 | $ | 129 | ||||||||||||||||||
(Unaudited) September 30, 2022 | December 31, 2021 | |||||||||||||
ASSETS | ||||||||||||||
Current assets: | ||||||||||||||
Cash and cash equivalents | $ | 802 | $ | 1,752 | ||||||||||
Net receivables | 5,819 | 5,586 | ||||||||||||
Other current assets | 953 | 926 | ||||||||||||
Total current assets | 7,574 | 8,264 | ||||||||||||
Goodwill and intangible assets | 17,979 | 19,127 | ||||||||||||
Fixed assets, net | 865 | 847 | ||||||||||||
Pension related assets | 2,074 | 2,270 | ||||||||||||
Right of use assets | 1,615 | 1,868 | ||||||||||||
Deferred tax assets | 533 | 551 | ||||||||||||
Other assets | 1,383 | 1,461 | ||||||||||||
TOTAL ASSETS | $ | 32,023 | $ | 34,388 | ||||||||||
LIABILITIES AND EQUITY | ||||||||||||||
Current liabilities: | ||||||||||||||
Short-term debt | $ | 967 | $ | 17 | ||||||||||
Accounts payable and accrued liabilities | 2,903 | 3,165 | ||||||||||||
Accrued compensation and employee benefits | 2,396 | 2,942 | ||||||||||||
Current lease liabilities | 298 | 332 | ||||||||||||
Accrued income taxes | 432 | 198 | ||||||||||||
Dividends payable | 296 | — | ||||||||||||
Total current liabilities | 7,292 | 6,654 | ||||||||||||
Fiduciary liabilities | 10,608 | 9,622 | ||||||||||||
Less - cash and cash equivalents held in a fiduciary capacity | (10,608) | (9,622) | ||||||||||||
— | — | |||||||||||||
Long-term debt | 10,399 | 10,933 | ||||||||||||
Pension, post-retirement and post-employment benefits | 1,309 | 1,632 | ||||||||||||
Long-term lease liabilities | 1,620 | 1,880 | ||||||||||||
Liabilities for errors and omissions | 331 | 355 | ||||||||||||
Other liabilities | 1,281 | 1,712 | ||||||||||||
Total equity | 9,791 | 11,222 | ||||||||||||
TOTAL LIABILITIES AND EQUITY | $ | 32,023 | $ | 34,388 |
Nine Months Ended | |||||||||||
September 30, | |||||||||||
2022 | 2021 | ||||||||||
Operating cash flows: | |||||||||||
Net income before non-controlling interests | $ | 2,616 | $ | 2,367 | |||||||
Adjustments to reconcile net income to cash provided by operations: | |||||||||||
Depreciation and amortization | 517 | 569 | |||||||||
Non-cash lease expense | 223 | 241 | |||||||||
Deconsolidation of Russian businesses | 39 | — | |||||||||
Share-based compensation expense | 283 | 263 | |||||||||
Net gain on investments, disposition of assets and other | (139) | (96) | |||||||||
Changes in assets and liabilities: | |||||||||||
Accrued compensation and employee benefits | (451) | (20) | |||||||||
Provision for taxes, net of payments and refunds | 156 | 196 | |||||||||
Net receivables | (745) | (604) | |||||||||
Other changes to assets and liabilities | 14 | (298) | |||||||||
Contributions to pension and other benefit plans in excess of current year credit | (306) | (282) | |||||||||
Operating lease liabilities | (244) | (262) | |||||||||
Net cash provided by operations | 1,963 | 2,074 | |||||||||
Financing cash flows: | |||||||||||
Purchase of treasury shares | (1,600) | (734) | |||||||||
Net proceeds from issuance of commercial paper | 600 | — | |||||||||
Repayments of debt | (14) | (512) | |||||||||
Net issuance of common stock from treasury shares | (105) | 16 | |||||||||
Net distributions of non-controlling interests and deferred/contingent consideration | (161) | (66) | |||||||||
Dividends paid | (840) | (750) | |||||||||
Increase in fiduciary liabilities | 2,148 | 1,919 | |||||||||
Net cash provided by (used for) financing activities | 28 | (127) | |||||||||
Investing cash flows: | |||||||||||
Capital expenditures | (367) | (268) | |||||||||
Purchases of long term investments and other | (5) | (34) | |||||||||
Sales of long term investments | 84 | 30 | |||||||||
Dispositions | 138 | 84 | |||||||||
Acquisitions, net of cash and cash held in a fiduciary capacity acquired | (213) | (384) | |||||||||
Net cash used for investing activities | (363) | (572) | |||||||||
Effect of exchange rate changes on cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity | (1,592) | (243) | |||||||||
Increase in cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity | 36 | 1,132 | |||||||||
Cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity at beginning of period | 11,374 | 10,674 | |||||||||
Cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity at end of period | $ | 11,410 | $ | 11,806 | |||||||
Reconciliation of cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity to the Consolidated Balance Sheets | |||||||||||
Nine Months Ended September 30, | 2022 | 2021 | |||||||||
(In millions) | |||||||||||
Cash and cash equivalents | $ | 802 | $ | 1,398 | |||||||
Cash and cash equivalents held in a fiduciary capacity | 10,608 | 10,408 | |||||||||
Total cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity | $ | 11,410 | $ | 11,806 |