Try our mobile app

Published: 2022-01-27 00:00:00 ET
<<<  go to MMC company page
HTTP/1.1 200 OK HTTP/1.1 200 OK X-Crawlera-Slave: 108.62.70.170:8800 X-Crawlera-Version: 1.60.1 accept-ranges: bytes content-type: text/html last-modified: Thu, 27 Jan 2022 12:09:26 GMT server: AmazonS3 x-amz-id-2: irdyywqcio7NS4o8s2YMSUXG3u5EMWtTisvgeTKAljuS1sHgLU81y3lnXKbFgcylKiMERU0UNGk= x-amz-meta-mode: 33188 x-amz-meta-s3cmd-attrs: uid:504/gname:fitrprnt/uname:fitrprnt/gid:504/mode:33184/mtime:1643285363/atime:1643285363/md5:9ac765f50b5fb776e1f3a3b550c85227/ctime:1643285364 x-amz-replication-status: COMPLETED x-amz-request-id: DAR8M6E69RHFCHN0 x-amz-version-id: dObAXmGyBr0HcKJjtY1GIGAy7WrGAjwx x-content-type-options: nosniff x-frame-options: SAMEORIGIN x-xss-protection: 1; mode=block x-akamai-transformed: 9 27223 0 pmb=mTOE,2 expires: Thu, 06 Apr 2023 18:58:43 GMT cache-control: max-age=0, no-cache, no-store pragma: no-cache date: Thu, 06 Apr 2023 18:58:43 GMT vary: Accept-Encoding akamai-x-true-ttl: -1 strict-transport-security: max-age=31536000 ; includeSubDomains ; preload set-cookie: ak_bmsc=D05C9C4BDA526E40062D518C5C67127F~000000000000000000000000000000~YAAQT6g8F/xYRTKHAQAAdHbvVxNSZWg66TqDMUaTgN4ZtS26ykOGyh5v33yI1TTUAAHsaP+DST8IOMUartqV7waZ291DkzZUEGAxAJlw/FPfj0XFNiK/LqaIwuVwvZGJziL8EZuyigbQH1TCTJHK/8OC2fAIpVxJ8Jmc37KdV+dwJjfCthCGozreY39V+QNEFRBA+LrhEpOqvGUaTe375FhwizesDcuzNtQDmk8c0vRw9lqmUaCUJMHNX0fgHCvte2NnJWX7PuElXhxWp3PYSx2O2rBuGVk1d/aKVCkHtiJtVHWa6R0YBk4t1x2VQGcbT2Az/ThttNsLcbg9ReuUCkE/FLKJs175DqWWS6PNV8/ZYGJqrtRkK03+nPTPA43Q7uzZPSPFGQ==; Domain=.sec.gov; Path=/; Expires=Thu, 06 Apr 2023 20:58:43 GMT; Max-Age=7200; HttpOnly set-cookie: bm_mi=291D914E600EE75624781927BD24F5CD~YAAQT6g8F/1YRTKHAQAAdHbvVxOmr5EE0+MgX97aNuKdmQKOlIcVkO/eFXu+4omPT0y5zPnruWVS0d1RadOcHh0zHYNZxmiVV58iy0ec4DOtEkx6wmPchw57iuvtpjS8XkhFmBGgm0HYAAdexGq/ty/tpJH1Yw3aokfXMWDMnQuM9Ym02lI5roFltNHDtrHopYcyu3qwcSK4eAv+O0ZUMy/HCZhkOKettPJu2JWvYa5uZai3zmKVWhMDGL2geWOYOo7QXXwd1gS6qwoNFCH1/F4Gv/3AV5SIn0OIEAyzLd72nn0te6esV9/Fn5RkOvxPahsfYn3xTJmDSgysS+f+WCMVUz/bwMPbDzAbHTTaxHbo1aDXBmairyE/PtguBNa9LE/04A4qN97qqKr6C5kZNy4=~1; Domain=.sec.gov; Path=/; Expires=Thu, 06 Apr 2023 18:58:43 GMT; Max-Age=0; Secure Transfer-Encoding: chunked Proxy-Connection: close Connection: close EX-99.1 2 a4q21ex991newsrelease.htm PRESS RELEASE DECEMBER 31, 2021 Document



marshmclennanlogoa.jpg
Marsh McLennan
1166 Avenue of the Americas
New York, New York 10036-2774
212 345 5000
www.marshmclennan.com
NEWS RELEASE
Exhibit 99.1
MARSH McLENNAN REPORTS FOURTH QUARTER AND FULL-YEAR 2021 RESULTS
Full-Year Revenue Growth of 15%; Underlying Revenue Growth of 10%
Full-Year GAAP Operating Income Rises 41%; Adjusted Operating Income Increases 18%
Full-Year GAAP EPS Increases 56% to $6.13; Adjusted EPS Increases 24% to $6.17
Fourth Quarter GAAP EPS of $1.57; Adjusted EPS Increases 14% to $1.36

NEW YORK, January 27, 2022 – 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 fourth quarter and year ended December 31, 2021.
Dan Glaser, President and CEO, said: “In our 150th year, we produced one of the finest results in our Company's history. We generated underlying revenue growth of 10% and adjusted EPS growth of 24%, both the highest in over two decades. We also grew our adjusted operating income by 18% and expanded adjusted margins for the 14th consecutive year. I am proud of our colleagues' hard work, dedication and unwavering focus in achieving these results. With this outstanding year, we enter 2022 well positioned for continued growth."
Consolidated Results
Consolidated revenue in the fourth quarter of 2021 was $5.1 billion, an increase of 16% compared with the fourth quarter of 2020, or 10% on an underlying basis. Operating income was $986 million compared with $571 million in the prior year period. Adjusted operating income, which excludes noteworthy items as presented in the attached supplemental schedules, was $905 million, compared with $855 million in the prior year period. Net income attributable to the Company was $803 million, or $1.57 per diluted share, compared with $0.73 in the fourth quarter of 2020. Adjusted earnings per share was $1.36, compared with $1.19 for the prior year period.

1

For the year 2021, revenue was $19.8 billion, an increase of 15% compared with 2020, or 10% on an underlying basis. Operating income was $4.3 billion, and adjusted operating income rose 18% to $4.3 billion. Net income attributable to the Company was $3.1 billion. Earnings per share increased 56% to $6.13. Adjusted earnings per share increased 24% to $6.17 compared with $4.97 in 2020.
Risk & Insurance Services
Risk & Insurance Services revenue was $3.0 billion in the fourth quarter of 2021, an increase of 20%, or 9% on an underlying basis. Operating income was $667 million, compared with $463 million in the fourth quarter of 2020. Adjusted operating income increased 6% to $557 million. For the year 2021, revenue was $12.1 billion, an increase of 17%, or 10% on an underlying basis. Operating income was $3.1 billion, compared to $2.3 billion in 2020. Adjusted operating income rose 17% to $3.0 billion.
Marsh's revenue in the fourth quarter of 2021 was $2.9 billion, an increase of 22%, or 9% on an underlying basis. In U.S./Canada, underlying revenue rose 11%. International operations underlying revenue increased 7% compared to the prior year period, reflecting underlying growth of 14% in Latin America, 10% in Asia Pacific and 5% in EMEA. For the year 2021, Marsh’s revenue growth was 19%, or 11% on an underlying basis.
Guy Carpenter's fourth quarter revenue was $170 million, an increase of 4%, or 5% on an underlying basis. For the year 2021, Guy Carpenter’s revenue grew 10% compared to a year ago, or 9% on an underlying basis.
Consulting
Consulting revenue was $2.1 billion in the fourth quarter of 2021, an increase of 10%, or 11% on an underlying basis. Operating income increased 120% to $395 million, compared with $179 million in the fourth quarter of 2020. Adjusted operating income was $410 million, an increase of 6% compared with $387 million in the fourth quarter of 2020. For the year 2021, revenue was $7.8 billion, an increase of 12%, or 10% on an underlying basis. Operating income was $1.5 billion, compared with $1.0 billion in 2020. Adjusted operating income increased 19% to $1.5 billion.
Mercer’s revenue was $1.4 billion in the fourth quarter of 2021, an increase of 5%, or 6% on an underlying basis. Wealth, with revenue of $648 million, increased 4% on an underlying basis. Health, with revenue of $457 million, increased 4% on an underlying basis. Career revenue of $272 million increased 15% on an underlying basis. For the year 2021, Mercer’s revenue increased 7%, or 5% on an underlying basis.
Oliver Wyman’s revenue was $722 million in the fourth quarter of 2021, an increase of 22% on an underlying basis. For the year 2021, Oliver Wyman’s revenue was $2.5 billion, an increase of 21% on an underlying basis.
2

Other Items
For the year 2021, Marsh McLennan Agency (MMA) completed 11 transactions with approximately $170 million of combined revenue, including the acquisition of PayneWest, one of the largest independent agencies in the U.S.
Marsh announced in December that it increased its stake in Marsh India Insurance Brokers Pvt. Ltd. from 49% to 92%.
The Company repurchased 2.6 million shares of stock for $425 million in the fourth quarter. For the year 2021, the Company repurchased 7.9 million shares for $1.2 billion.
In the fourth quarter of 2021, the Company raised $750 million of senior notes and repaid $500 million of senior notes due in January 2022.
Conference Call
A conference call to discuss fourth 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 8019728. 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 83,000 colleagues advise clients in 130 countries. With annual revenue of nearly $20 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.
3

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 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;
•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 financial and operational impact of complying with laws and regulations, including anti-corruption laws such as the U.S. Foreign Corrupt Practices Act, U.K. Anti-Bribery Act and cybersecurity and data privacy regulations, in an environment of increased regulatory activity and enforcement;
•our ability to attract, retain and fully develop industry leading talent;
•the impact of and uncertainty around COVID-19;
•the impact of macroeconomic, political or market conditions on us, our clients and the industries in which we operate, including from inflation, foreign exchange and interest rate fluctuations;
•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;
•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.

4

Marsh & McLennan Companies, Inc.
Consolidated Statements of Income
(In millions, except per share data)
(Unaudited)
 Three Months Ended
December 31,		Twelve Months Ended
December 31,
 2021 2020 2021 2020 
Revenue$5,137 $4,416 $19,820 $17,224 
Expense:
Compensation and benefits2,905 2,650 11,425 10,129 
Other operating expenses1,246 1,195 4,083 4,029 
Operating expenses4,151 3,845 15,508 14,158 
Operating income986 571 4,312 3,066 
Other net benefit credits 66 70 277 257 
Interest income— 2 2 7 
Interest expense(109)(128)(444)(515)
Investment income (loss)18 25 61 (22)
Income before income taxes961 540 4,208 2,793 
Income tax expense154 161 1,034 747 
Net income before non-controlling interests807 379 3,174 2,046 
Less: net income attributable to non-controlling interests4 5 31 30 
Net income attributable to the Company$803 $374 $3,143 $2,016 
Net income per share attributable to the Company
- Basic
$1.59 $0.74 $6.20 $3.98 
- Diluted
$1.57 $0.73 $6.13 $3.94 
Average number of shares outstanding
- Basic
504 507 507 506 
- Diluted
511 513 513 512 
Shares outstanding at December 31504 508 504 508 

5

Marsh & McLennan Companies, Inc.
Supplemental Information - Revenue Analysis
Three Months Ended December 31
(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 December 31,% Change GAAP RevenueCurrency ImpactAcquisitions/
Dispositions/ Other Impact		Underlying Revenue
 20212020
Risk and Insurance Services    
Marsh$2,876 $2,364 22 %— 13 %9 %
Guy Carpenter170 162 4 %(1)%— 5 %
Subtotal3,046 2,526 21 %— 12 %9 %
Fiduciary Interest Income3 6 
Total Risk and Insurance Services3,049 2,532 20 %— 12 %9 %
Consulting 
Mercer1,377 1,312 5 %— (1)%6 %
Oliver Wyman Group722 590 22 %(1)%1 %22 %
Total Consulting2,099 1,902 10 %— — 11 %
Corporate Eliminations(11)(18)
Total Revenue$5,137 $4,416 16 %— 7 %10 %

Revenue Details
The following table provides more detailed revenue information for certain of the components presented above:
  Components of Revenue Change*
 Three Months Ended December 31,% Change GAAP RevenueCurrency ImpactAcquisitions/
Dispositions/ Other Impact		Underlying Revenue
 20212020
Marsh:    
EMEA$713 $688 4 %(1)%(1)%5 %
Asia Pacific560 269 109 %(1)%100 %10 %
Latin America155 141 10 %(4)%— 14 %
Total International1,428 1,098 30 %(1)%24 %7 %
U.S./Canada1,448 1,266 14 %— 3 %11 %
Total Marsh$2,876 $2,364 22 %— 13 %9 %
Mercer:
Wealth$648 $629 3 %— (1)%4 %
Health457 445 3 %(1)%(1)%4 %
Career272 238 14 %(1)%— 15 %
Total Mercer$1,377 $1,312 5 %— (1)%6 %

* Components of revenue change may not add due to rounding.

6

Marsh & McLennan Companies, Inc.
Supplemental Information - Revenue Analysis
Twelve Months Ended December 31
(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*
 Twelve Months Ended
December 31,		% Change GAAP RevenueCurrency ImpactAcquisitions/
Dispositions/ Other Impact		Underlying Revenue
 20212020
Risk and Insurance Services     
Marsh$10,203 $8,595 19 %2 %6 %11 %
Guy Carpenter1,867 1,696 10 %1 %— 9 %
Subtotal12,070 10,291 17 %2 %5 %11 %
Fiduciary Interest Income15 46 
Total Risk and Insurance Services12,085 10,337 17 %2 %5 %10 %
Consulting 
Mercer5,254 4,928 7 %3 %(1)%5 %
Oliver Wyman Group2,535 2,048 24 %2 %— 21 %
Total Consulting7,789 6,976 12 %3 %— 10 %
Corporate Eliminations(54)(89)
Total Revenue$19,820 $17,224 15 %2 %3 %10 %

Revenue Details
The following table provides more detailed revenue information for certain of the components presented above:
   Components of Revenue Change*
 Twelve Months Ended
December 31,		% Change
GAAP Revenue		Currency ImpactAcquisitions/
Dispositions/ Other Impact		Underlying Revenue
 20212020
Marsh:     
EMEA$2,946 $2,575 14 %4 %1 %9 %
Asia Pacific1,462 1,059 38 %4 %25 %9 %
Latin America453 424 7 %(2)%— 9 %
Total International4,861 4,058 20 %4 %7 %9 %
U.S./Canada5,342 4,537 18 %1 %4 %13 %
Total Marsh$10,203 $8,595 19 %2 %6 %11 %
Mercer: 
Wealth$2,509 $2,348 7 %4 %(1)%4 %
Health1,855 1,793 3 %1 %(1)%3 %
Career890 787 13 %2 %— 12 %
Total Mercer$5,254 $4,928 7 %3 %(1)%5 %
 
* Components of revenue change may not add due to rounding.
7

Marsh & McLennan Companies, Inc.
Reconciliation of Non-GAAP Measures
Three Months Ended December 31
(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 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 twelve month periods ended December 31, 2021 and 2020. The following tables also present adjusted operating margin. For the three and twelve months ended December 31, 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 ServicesConsultingCorporate/
Eliminations		Total
Three Months Ended December 31, 2021    
Operating income (loss)$667 $395 $(76)$986 
Operating margin21.9 %18.8 %N/A19.2 %
Add (deduct) impact of noteworthy items:
Restructuring, excluding JLT (a)19 412 35
Changes in contingent consideration (b)45 1— 46
JLT integration and restructuring costs (c)15 152 32
JLT acquisition-related costs and other (d)45 1— 46
JLT legacy E&O provision (e)— (6)— (6)
Legal claims (f)33 —— 33
Gain on consolidation of business (g)(267)—— (267)
Operating income adjustments(110)1514 (81)
Adjusted operating income (loss)$557 $410$(62)$905
Total identified intangible amortization expense$73 $14$— $87
Adjusted operating margin22.7 %20.2 %N/A20.4 %
    
Three Months Ended December 31, 2020
Operating income (loss)$463 $179 $(71)$571 
Operating margin18.3 %9.4 %N/A12.9 %
Add (deduct) impact of noteworthy items:
Restructuring, excluding JLT (a)1 378 46 
Changes in contingent consideration (b)3 1— 4 
JLT integration and restructuring costs (c)46 204 70 
JLT acquisition-related costs and other (d)11 11 13 
JLT legacy E&O provision (e)— 161— 161 
Disposal of businesses (h)1 (11)— (10)
Other— (1)1 — 
Operating income adjustments62 20814 284 
Adjusted operating income (loss)$525 $387$(57)$855 
Total identified intangible amortization expense$70 $16$— $86 
Adjusted operating margin23.5 %21.4 %N/A21.3 %
(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. RIS in 2021 also includes costs related to a Marsh operational excellence program to improve efficiencies and client service. 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) Includes retention and legal charges related to the acquisition of JLT.
(e) Reflects recoveries under indemnities for a legacy JLT E&O matter relating to suitability of advice provided to individuals for defined benefit pension transfers in the U.K. For the year-ended 2021, there was a reduction of $69 million in the liability including recoveries, following an increase of $161 million in the recorded liability related to this matter in 2020.
(f) Settlement charges and legal costs related to strategic recruiting.
(g) Reflects a gain from the fair value re-measurement of the Company’s previously held equity method investment in Marsh India upon the Company increasing its ownership interest from 49% to 92%. The gain is reflected in revenue and excluded from underlying revenue calculations and adjusted operating margin.
(h) Consulting in 2020 includes a contingent gain adjustment, included in revenue from Mercer's U.S. large market health and defined benefit administration business sold in 2019. This amount is removed from GAAP revenue in the calculation of adjusted operating margin.
8

Marsh & McLennan Companies, Inc.
Reconciliation of Non-GAAP Measures
Twelve Months Ended December 31
(Millions) (Unaudited)
Risk & Insurance ServicesConsultingCorporate/
Eliminations		Total
Twelve Months Ended December 31, 2021    
Operating income (loss)$3,080 $1,504 $(272)$4,312 
Operating margin 25.5 %19.3 %N/A21.8 %
Add (deduct) impact of noteworthy items:
Restructuring, excluding JLT (a)31 12 27 70 
Changes in contingent consideration (b)63 (3)(3)57 
JLT integration and restructuring costs (c)53 36 4 93 
JLT acquisition-related costs and other (d)77 3 1 81 
JLT legacy E&O provision (e)— (69)— (69)
Legal claims (f)60 — 2 62 
Gain on consolidation of business (g)(267)— — (267)
Disposal of businesses (h)(52)3 — (49)
Operating income adjustments(35)(18)31 (22)
Adjusted operating income (loss)$3,045 $1,486 $(241)$4,290 
Total identified intangible amortization expense$309 $56 $— $365 
Adjusted operating margin28.5 %19.8 %N/A23.9 %
Twelve Months Ended December 31, 2020    
Operating income (loss)$2,346 $994 $(274)$3,066 
Operating margin 22.7 %14.3 %N/A17.8 %
Add (deduct) impact of noteworthy items:
Restructuring, excluding JLT (a)3 54 32 89 
Changes in contingent consideration (b)25 (1)2 26 
JLT integration and restructuring costs (c)171 51 29 251 
JLT acquisition-related costs and other (d)50 3 1 54 
JLT legacy E&O provision (e)— 161 — 161 
Disposal of businesses (h)7 (15)— (8)
Other5 — — 5 
Operating income adjustments261 253 64 578 
Adjusted operating income (loss)$2,607 $1,247 $(210)$3,644 
Total identified intangible amortization expense$292 $59 $— $351 
Adjusted operating margin28.0 %18.8 %N/A23.2 %
(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. RIS in 2021 also includes costs related to a Marsh operational excellence program to improve efficiencies and client service. 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) Includes retention and legal charges related to the acquisition of JLT.
(e) For the year-ended 2021, there was a reduction of $69 million in the liability including recoveries under indemnities for a legacy JLT E&O matter relating to suitability of advice provided to individuals for defined benefit pension transfers in the U.K. The Company increased the recorded liability by $161 million related to this matter in 2020.
(f) Settlement charges and legal costs related to strategic recruiting.
(g) Reflects a gain from the fair value re-measurement of the Company’s previously held equity method investment in Marsh India upon the Company increasing its ownership interest from 49% to 92%. The gain is reflected in revenue and excluded from underlying revenue calculations and adjusted operating margin.
(h) 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 a net loss on disposal of specialty businesses sold in the U.S., U.K. and Canada. Consulting in 2020 includes a contingent gain adjustment from Mercer's U.S. large market health and defined benefit administration business sold in 2019. 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.
9

Marsh & McLennan Companies, Inc.
Reconciliation of Non-GAAP Measures
Three and Twelve Months Ended December 31
(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 twelve month periods ended December 31, 2021 and 2020.
Three Months Ended December 31, 2021Three Months Ended December 31, 2020
(In millions, except per share data)AmountAdjusted EPSAmountAdjusted EPS
Net income before non-controlling interests, as reported$807 $379 
Less: Non-controlling interest, net of tax4 5 
Subtotal$803 $1.57 $374 $0.73 
Operating income adjustments$(81)$284 
Investments adjustment (a)(4)(14)
Pension settlement charges (b)3 3 
Income tax effect of adjustments (c)(33)(35)
Impact of U.K. tax rate change (d)5 — 
(110)(0.21)238 0.46 
Adjusted income, net of tax$693 $1.36 $612 $1.19 
Twelve Months Ended December 31, 2021Twelve Months Ended December 31, 2020
(In millions, except per share data)AmountAdjusted EPSAmountAdjusted EPS
Net income before non-controlling interests, as reported$3,174 $2,046 
Less: Non-controlling interest, net of tax31 30 
Subtotal$3,143 $6.13 $2,016 $3.94 
Operating income adjustments$(22)$578 
Investments adjustment (a)(6)28 
Pension settlement charges (b)5 3 
Income tax effect of adjustments (c)(64)(85)
Impact of U.K. tax rate change (d)110 — 
23 0.04 524 1.03 
Adjusted income, net of tax$3,166 $6.17 $2,540 $4.97 
(a) Represents mark-to-market (gains) losses primarily related to the Company’s investment in Alexander Forbes ("AF").
(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.



10

Marsh & McLennan Companies, Inc.
Supplemental Information
Three and Twelve Months Ended December 31
(Millions) (Unaudited)
Three Months Ended December 31,Twelve Months Ended December 31,
 2021202020212020
Consolidated
Compensation and benefits$2,905 $2,650 $11,425 $10,129 
Other operating expenses1,246 1,195 4,083 4,029 
Total expenses$4,151 $3,845 $15,508 $14,158 
Depreciation and amortization expense$91 $108 $382 $390 
Identified intangible amortization expense87 86 365 351 
Total $178 $194 $747 $741 
Stock option expense $3 $3 $32 $28 
Risk and Insurance Services
Compensation and benefits$1,630 $1,456 $6,506 $5,690 
Other operating expenses752 613 2,499 2,301 
Total expenses$2,382 $2,069 $9,005 $7,991 
Depreciation and amortization expense$44 $62 $196 $208 
Identified intangible amortization expense73 70 309 292 
Total$117 $132 $505 $500 
 
Consulting
Compensation and benefits$1,148 $1,084 $4,435 $3,995 
Other operating expenses556 639 1,850 1,987 
Total expenses$1,704 $1,723 $6,285 $5,982 
Depreciation and amortization expense$28 $29 $115 $115 
Identified intangible amortization expense14 16 56 59 
Total$42 $45 $171 $174 


11

Marsh & McLennan Companies, Inc.
Consolidated Balance Sheets
(Millions) (Unaudited)

 December 31, 2021December 31, 2020
ASSETS  
Current assets:  
Cash and cash equivalents$1,752 $2,089 
Net receivables5,586 5,326 
Other current assets926 740 
Total current assets8,264 8,155 
Goodwill and intangible assets19,127 18,216 
Fixed assets, net847 856 
Pension related assets2,270 1,768 
Right of use assets1,868 1,894 
Deferred tax assets551 702 
Other assets1,461 1,458 
TOTAL ASSETS$34,388 $33,049 
LIABILITIES AND EQUITY
Current liabilities:
Short-term debt$17 $517 
Accounts payable and accrued liabilities3,165 3,050 
Accrued compensation and employee benefits2,942 2,400 
Current lease liabilities332 342 
Accrued income taxes198 247 
Total current liabilities6,654 6,556 
Fiduciary liabilities9,622 8,585 
Less - cash and cash equivalents held in a fiduciary capacity(9,622)(8,585)
 — — 
Long-term debt10,933 10,796 
Pension, post-retirement and post-employment benefits1,632 2,662 
Long-term lease liabilities1,880 1,924 
Liabilities for errors and omissions355 366 
Other liabilities1,712 1,485 
Total equity11,222 9,260 
TOTAL LIABILITIES AND EQUITY$34,388 $33,049 
12

Marsh & McLennan Companies, Inc.
Consolidated Statements of Cash Flows (a)
(Millions) (Unaudited)
For the Years Ended
December 31,
2021 2020 
Operating cash flows:
Net income before non-controlling interests$3,174 $2,046 
Adjustments to reconcile net income to cash provided by operations:
Depreciation and amortization747 741 
Non cash lease expense327 355 
Gain on consolidation of entity(267)— 
Share-based compensation expense348 290 
Net (gain) loss on investments, disposition of assets and other(130)64 
Changes in assets and liabilities:
Accrued compensation and employee benefits527 207 
Net receivables(252)(75)
Other changes to assets and liabilities(199)429 
Contributions to pension and other benefit plans in excess of current year credit(372)(356)
Operating lease liabilities(349)(351)
Effect of exchange rate changes(38)32 
Net cash provided by operations3,516 3,382 
Financing cash flows:
Purchase of treasury shares(1,159)— 
Borrowings from term-loan and credit facilities— 1,000 
Proceeds from issuance of debt743 737 
Repayments of debt(1,016)(2,515)
Net issuance of common stock from treasury shares60 — 
Net distributions from non-controlling interests and deferred/contingent consideration(82)(159)
Dividends paid(1,026)(943)
Increase in fiduciary liabilities 1,183 955 
Net cash used for financing activities(1,297)(925)
Investing cash flows:
Capital expenditures(406)(348)
Net sales of long-term investments and other17 104 
Dispositions84 98 
Acquisitions, net of cash and cash held in a fiduciary capacity acquired
(859)(647)
Net cash used for investing activities(1,164)(793)
Effect of exchange rate changes on cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity(355)511 
Increase in cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity700 2,175 
Cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity at beginning of period10,674 8,499 
Cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity at end of period$11,374 $10,674 

Reconciliation of cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity to the Consolidated Balance Sheets
For the Years Ended December 31,2021 2020 
(In millions of dollars)
Cash and cash equivalents$1,752 $2,089 
Cash and cash equivalents held in a fiduciary capacity 9,622 8,585 
Total cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity$11,374 $10,674 
(a) The Company revised the Statements of Cash Flows presentation to include cash and cash equivalents held in a fiduciary capacity as a component of total cash, presented as cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity. The Company revised the 2020 presentation for comparable purposes.

13