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 Companies, Inc. Consolidated Statements of Income (In millions, except per share data) (Unaudited) | ||||||||||||||||||||||||||
Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||
Revenue | $ | 5,022 | $ | 5,137 | $ | 20,720 | $ | 19,820 | ||||||||||||||||||
Expense: | ||||||||||||||||||||||||||
Compensation and benefits | 3,038 | 2,905 | 12,071 | 11,425 | ||||||||||||||||||||||
Other operating expenses | 1,304 | 1,246 | 4,369 | 4,083 | ||||||||||||||||||||||
Operating expenses | 4,342 | 4,151 | 16,440 | 15,508 | ||||||||||||||||||||||
Operating income | 680 | 986 | 4,280 | 4,312 | ||||||||||||||||||||||
Other net benefit credits | 57 | 66 | 235 | 277 | ||||||||||||||||||||||
Interest income | 9 | — | 15 | 2 | ||||||||||||||||||||||
Interest expense | (127) | (109) | (469) | (444) | ||||||||||||||||||||||
Investment (loss) income | (6) | 18 | 21 | 61 | ||||||||||||||||||||||
Income before income taxes | 613 | 961 | 4,082 | 4,208 | ||||||||||||||||||||||
Income tax expense | 142 | 154 | 995 | 1,034 | ||||||||||||||||||||||
Net income before non-controlling interests | 471 | 807 | 3,087 | 3,174 | ||||||||||||||||||||||
Less: Net income attributable to non-controlling interests | 5 | 4 | 37 | 31 | ||||||||||||||||||||||
Net income attributable to the Company | $ | 466 | $ | 803 | $ | 3,050 | $ | 3,143 | ||||||||||||||||||
Net income per share attributable to the Company | ||||||||||||||||||||||||||
- Basic | $ | 0.94 | $ | 1.59 | $ | 6.11 | $ | 6.20 | ||||||||||||||||||
- Diluted | $ | 0.93 | $ | 1.57 | $ | 6.04 | $ | 6.13 | ||||||||||||||||||
Average number of shares outstanding | ||||||||||||||||||||||||||
- Basic | 496 | 504 | 499 | 507 | ||||||||||||||||||||||
- Diluted | 501 | 511 | 505 | 513 | ||||||||||||||||||||||
Shares outstanding at December 31 | 495 | 504 | 495 | 504 |
Components of Revenue Change** | ||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended December 31, | % Change GAAP Revenue | % Change Revenue excl. Marsh India Gain* | Currency Impact | Acquisitions/ Dispositions/ Other Impact | Underlying Revenue | |||||||||||||||||||||||||||||||||||||||
2022 | 2021 | |||||||||||||||||||||||||||||||||||||||||||
Risk and Insurance Services | ||||||||||||||||||||||||||||||||||||||||||||
Marsh | $ | 2,711 | $ | 2,876 | (6) | % | 4 | % | (4) | % | 2 | % | 6 | % | ||||||||||||||||||||||||||||||
Guy Carpenter | 171 | 170 | 1 | % | (4) | % | — | 5 | % | |||||||||||||||||||||||||||||||||||
Subtotal | 2,882 | 3,046 | (5) | % | 4 | % | (4) | % | 2 | % | 6 | % | ||||||||||||||||||||||||||||||||
Fiduciary Interest Income | 63 | 3 | ||||||||||||||||||||||||||||||||||||||||||
Total Risk and Insurance Services | 2,945 | 3,049 | (3) | % | 6 | % | (4) | % | 2 | % | 8 | % | ||||||||||||||||||||||||||||||||
Consulting | ||||||||||||||||||||||||||||||||||||||||||||
Mercer | 1,329 | 1,377 | (3) | % | (6) | % | (2) | % | 5 | % | ||||||||||||||||||||||||||||||||||
Oliver Wyman Group | 765 | 722 | 6 | % | (5) | % | 3 | % | 8 | % | ||||||||||||||||||||||||||||||||||
Total Consulting | 2,094 | 2,099 | — | (6) | % | — | 6 | % | ||||||||||||||||||||||||||||||||||||
Corporate Eliminations | (17) | (11) | ||||||||||||||||||||||||||||||||||||||||||
Total Revenue | $ | 5,022 | $ | 5,137 | (2) | % | 3 | % | (5) | % | 1 | % | 7 | % |
Components of Revenue Change** | ||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended December 31, | % Change GAAP Revenue | % Change Revenue excl. Marsh India Gain* | Currency Impact | Acquisitions/ Dispositions/ Other Impact | Underlying Revenue | |||||||||||||||||||||||||||||||||||||||
2022 | 2021 | |||||||||||||||||||||||||||||||||||||||||||
Marsh: | ||||||||||||||||||||||||||||||||||||||||||||
EMEA | $ | 703 | $ | 713 | (1) | % | (9) | % | — | 7 | % | |||||||||||||||||||||||||||||||||
Asia Pacific | 318 | 560 | (43) | % | 8 | % | (11) | % | 7 | % | 12 | % | ||||||||||||||||||||||||||||||||
Latin America | 162 | 155 | 4 | % | — | — | 4 | % | ||||||||||||||||||||||||||||||||||||
Total International | 1,183 | 1,428 | (17) | % | 2 | % | (8) | % | 2 | % | 8 | % | ||||||||||||||||||||||||||||||||
U.S./Canada | 1,528 | 1,448 | 5 | % | (1) | % | 1 | % | 5 | % | ||||||||||||||||||||||||||||||||||
Total Marsh | $ | 2,711 | $ | 2,876 | (6) | % | 4 | % | (4) | % | 2 | % | 6 | % | ||||||||||||||||||||||||||||||
Mercer: | ||||||||||||||||||||||||||||||||||||||||||||
Wealth | $ | 591 | $ | 648 | (9) | % | (8) | % | (1) | % | — | |||||||||||||||||||||||||||||||||
Health | 455 | 457 | (1) | % | (4) | % | (4) | % | 8 | % | ||||||||||||||||||||||||||||||||||
Career | 283 | 272 | 4 | % | (8) | % | — | 12 | % | |||||||||||||||||||||||||||||||||||
Total Mercer | $ | 1,329 | $ | 1,377 | (3) | % | (6) | % | (2) | % | 5 | % |
* Percentage change excludes the gain from the consolidation of Marsh India of $267 million from prior year’s GAAP revenue. | ||
** Components of revenue change may not add due to rounding. |
Components of Revenue Change** | ||||||||||||||||||||||||||||||||||||||||||||
Twelve Months Ended December 31, | % Change GAAP Revenue | % Change Revenue excl. Marsh India Gain* | Currency Impact | Acquisitions/ Dispositions/ Other Impact | Underlying Revenue | |||||||||||||||||||||||||||||||||||||||
2022 | 2021 | |||||||||||||||||||||||||||||||||||||||||||
Risk and Insurance Services | ||||||||||||||||||||||||||||||||||||||||||||
Marsh | $ | 10,505 | $ | 10,203 | 3 | % | 6 | % | (3) | % | 1 | % | 8 | % | ||||||||||||||||||||||||||||||
Guy Carpenter | 2,020 | 1,867 | 8 | % | (2) | % | 1 | % | 9 | % | ||||||||||||||||||||||||||||||||||
Subtotal | 12,525 | 12,070 | 4 | % | 6 | % | (3) | % | 1 | % | 8 | % | ||||||||||||||||||||||||||||||||
Fiduciary Interest Income | 120 | 15 | ||||||||||||||||||||||||||||||||||||||||||
Total Risk and Insurance Services | 12,645 | 12,085 | 5 | % | 7 | % | (3) | % | 1 | % | 9 | % | ||||||||||||||||||||||||||||||||
Consulting | ||||||||||||||||||||||||||||||||||||||||||||
Mercer | 5,345 | 5,254 | 2 | % | (5) | % | 1 | % | 6 | % | ||||||||||||||||||||||||||||||||||
Oliver Wyman Group | 2,794 | 2,535 | 10 | % | (4) | % | 1 | % | 13 | % | ||||||||||||||||||||||||||||||||||
Total Consulting | 8,139 | 7,789 | 5 | % | (5) | % | 1 | % | 8 | % | ||||||||||||||||||||||||||||||||||
Corporate Eliminations | (64) | (54) | ||||||||||||||||||||||||||||||||||||||||||
Total Revenue | $ | 20,720 | $ | 19,820 | 5 | % | 6 | % | (4) | % | 1 | % | 9 | % |
Components of Revenue Change** | ||||||||||||||||||||||||||||||||||||||||||||
Twelve Months Ended December 31, | % Change GAAP Revenue | % Change Revenue excl. Marsh India Gain* | Currency Impact | Acquisitions/ Dispositions/ Other Impact | Underlying Revenue | |||||||||||||||||||||||||||||||||||||||
2022 | 2021 | |||||||||||||||||||||||||||||||||||||||||||
Marsh: | ||||||||||||||||||||||||||||||||||||||||||||
EMEA | $ | 2,879 | $ | 2,946 | (2) | % | (7) | % | (3) | % | 8 | % | ||||||||||||||||||||||||||||||||
Asia Pacific | 1,333 | 1,462 | (9) | % | 12 | % | (8) | % | 6 | % | 13 | % | ||||||||||||||||||||||||||||||||
Latin America | 502 | 453 | 11 | % | (1) | % | — | 11 | % | |||||||||||||||||||||||||||||||||||
Total International | 4,714 | 4,861 | (3) | % | 3 | % | (7) | % | — | 10 | % | |||||||||||||||||||||||||||||||||
U.S./Canada | 5,791 | 5,342 | 8 | % | — | 1 | % | 7 | % | |||||||||||||||||||||||||||||||||||
Total Marsh | $ | 10,505 | $ | 10,203 | 3 | % | 6 | % | (3) | % | 1 | % | 8 | % | ||||||||||||||||||||||||||||||
Mercer: | ||||||||||||||||||||||||||||||||||||||||||||
Wealth | $ | 2,366 | $ | 2,509 | (6) | % | (6) | % | — | — | ||||||||||||||||||||||||||||||||||
Health | 2,017 | 1,855 | 9 | % | (3) | % | 3 | % | 9 | % | ||||||||||||||||||||||||||||||||||
Career | 962 | 890 | 8 | % | (6) | % | — | 14 | % | |||||||||||||||||||||||||||||||||||
Total Mercer | $ | 5,345 | $ | 5,254 | 2 | % | (5) | % | 1 | % | 6 | % |
* Percentage change excludes the gain from the consolidation of Marsh India of $267 million from prior year’s GAAP revenue. | ||
** 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 twelve months ended December 31, 2022 and 2021. The following tables also present adjusted operating margin. For the three and twelve months ended December 31, 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 December 31, 2022 | ||||||||||||||||||||||||||
Operating income (loss) | $ | 472 | $ | 336 | $ | (128) | $ | 680 | ||||||||||||||||||
Operating margin | 16.0 | % | 16.0 | % | N/A | 13.5 | % | |||||||||||||||||||
Add (deduct) impact of noteworthy items: | ||||||||||||||||||||||||||
Restructuring, excluding JLT (a) | 119 | 54 | 60 | 233 | ||||||||||||||||||||||
Changes in contingent consideration (b) | 11 | — | — | 11 | ||||||||||||||||||||||
JLT integration and restructuring costs (c) | 91 | 6 | — | 97 | ||||||||||||||||||||||
Pre-acquisition related costs (d) | — | 13 | — | 13 | ||||||||||||||||||||||
JLT legacy legal charges | — | (2) | — | (2) | ||||||||||||||||||||||
Disposal of businesses | (8) | — | — | (8) | ||||||||||||||||||||||
Operating income adjustments | 213 | 71 | 60 | 344 | ||||||||||||||||||||||
Adjusted operating income (loss) | $ | 685 | $ | 407 | $ | (68) | $ | 1,024 | ||||||||||||||||||
Total identified intangible amortization expense | $ | 68 | $ | 12 | $ | — | $ | 80 | ||||||||||||||||||
Adjusted operating margin | 25.6 | % | 20.0 | % | N/A | 22.0 | % | |||||||||||||||||||
Three Months Ended December 31, 2021 | ||||||||||||||||||||||||||
Operating income (loss) | $ | 667 | $ | 395 | $ | (76) | $ | 986 | ||||||||||||||||||
Operating margin | 21.9 | % | 18.8 | % | N/A | 19.2 | % | |||||||||||||||||||
Add (deduct) impact of noteworthy items: | ||||||||||||||||||||||||||
Restructuring, excluding JLT (a) | 19 | 4 | 12 | 35 | ||||||||||||||||||||||
Changes in contingent consideration (b) | 45 | 1 | — | 46 | ||||||||||||||||||||||
JLT integration and restructuring costs (c) | 15 | 15 | 2 | 32 | ||||||||||||||||||||||
JLT acquisition related costs and other (e) | 45 | 1 | — | 46 | ||||||||||||||||||||||
Legal claims (f) | 33 | — | — | 33 | ||||||||||||||||||||||
Gain on consolidation of business (g) | (267) | — | — | (267) | ||||||||||||||||||||||
JLT legacy legal charges | — | (6) | — | (6) | ||||||||||||||||||||||
Operating income adjustments | (110) | 15 | 14 | (81) | ||||||||||||||||||||||
Adjusted operating income (loss) | $ | 557 | $ | 410 | $ | (62) | $ | 905 | ||||||||||||||||||
Total identified intangible amortization expense | $ | 73 | $ | 14 | $ | — | $ | 87 | ||||||||||||||||||
Adjusted operating margin | 22.7 | % | 20.2 | % | N/A | 20.4 | % | |||||||||||||||||||
(a)Primarily includes severance and lease exit charges for activities focused on workforce actions, rationalization of technology and functional resources, and reductions in real estate. Costs also reflect charges for Marsh's operational excellence program. (b)Change in fair value of contingent consideration related to acquisitions and dispositions measured each quarter. (c)Primarily reflects lease exit charges for a legacy JLT U.K. location. In 2021, costs incurred include severance, lease exit charges, technology costs, and consulting services related to the integration of JLT. (d)Integration costs for the Westpac superannuation fund transaction in Australia, which is expected to close in the first half of 2023. (e)Retention costs and legal charges related to the acquisition of JLT. (f)Settlement charges and legal costs related to strategic recruiting. (g)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%. This amount is included in revenue in the consolidated statements of income and excluded from underlying revenue and adjusted revenue in the calculation of adjusted operating margin. |
Risk & Insurance Services | Consulting | Corporate/ Eliminations | Total | |||||||||||||||||||||||
Twelve Months Ended December 31, 2022 | ||||||||||||||||||||||||||
Operating income (loss) | $ | 3,089 | $ | 1,553 | $ | (362) | $ | 4,280 | ||||||||||||||||||
Operating margin | 24.4 | % | 19.1 | % | N/A | 20.7 | % | |||||||||||||||||||
Add (deduct) impact of noteworthy items: | ||||||||||||||||||||||||||
Restructuring, excluding JLT (a) | 157 | 61 | 94 | 312 | ||||||||||||||||||||||
Changes in contingent consideration (b) | 44 | 5 | — | 49 | ||||||||||||||||||||||
JLT integration and restructuring costs (c) | 97 | 16 | 2 | 115 | ||||||||||||||||||||||
JLT acquisition-related costs (d) | 24 | 1 | 3 | 28 | ||||||||||||||||||||||
JLT legacy legal charges (e) | 14 | (13) | — | 1 | ||||||||||||||||||||||
Legal claims (f) | 30 | — | — | 30 | ||||||||||||||||||||||
Disposal of businesses (g) | (8) | (114) | — | (122) | ||||||||||||||||||||||
Pre-acquisition related costs (h) | — | 21 | — | 21 | ||||||||||||||||||||||
Deconsolidation of Russian businesses and other related charges (i) | 42 | 10 | — | 52 | ||||||||||||||||||||||
Operating income adjustments | 400 | (13) | 99 | 486 | ||||||||||||||||||||||
Adjusted operating income (loss) | $ | 3,489 | $ | 1,540 | $ | (263) | $ | 4,766 | ||||||||||||||||||
Total identified intangible amortization expense | $ | 291 | $ | 47 | $ | — | $ | 338 | ||||||||||||||||||
Adjusted operating margin | 29.8 | % | 19.7 | % | N/A | 24.7 | % | |||||||||||||||||||
Twelve Months Ended December 31, 2021 | ||||||||||||||||||||||||||
Operating income (loss) | $ | 3,080 | $ | 1,504 | $ | (272) | $ | 4,312 | ||||||||||||||||||
Operating margin | 25.5 | % | 19.3 | % | N/A | 21.8 | % | |||||||||||||||||||
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 legal charges (e) | — | (69) | — | (69) | ||||||||||||||||||||||
Legal claims (f) | 60 | — | 2 | 62 | ||||||||||||||||||||||
Disposal of businesses (g) | (52) | 3 | — | (49) | ||||||||||||||||||||||
Gain on consolidation of business (j) | (267) | — | — | (267) | ||||||||||||||||||||||
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 margin | 28.5 | % | 19.8 | % | N/A | 23.9 | % | |||||||||||||||||||
(a)Primarily includes severance and lease exit charges for activities focused on workforce actions, rationalization of technology and functional resources, and reductions in real estate. Costs also reflect charges for Marsh's operational excellence program. (b)Change in fair value of contingent consideration related to acquisitions and dispositions measured each quarter. (c)Primarily reflects lease exit charges for a legacy JLT U.K. location. In 2021, costs incurred include severance, lease exit charges, technology costs, and consulting services related to the integration of JLT. (d)Retention costs and legal charges related to the acquisition of JLT. (e)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. (f)Settlement charges and legal costs related to strategic recruiting. (g)Primarily reflects 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 includes a gain of $49 million 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. (h)Integration costs for the Westpac superannuation fund transaction in Australia, which is expected to close in the first half of 2023. (i)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. (j)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 amount is reflected in revenue in the consolidated statements of income and excluded from underlying revenue and adjusted revenue in the calculation of adjusted operating margin. |
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, 2022 and 2021. |
Three Months Ended December 31, 2022 | Three Months Ended December 31, 2021 | ||||||||||||||||||||||||||||||||||
(In millions, except per share data) | Amount | Adjusted EPS | Amount | Adjusted EPS | |||||||||||||||||||||||||||||||
Net income before non-controlling interests, as reported | $ | 471 | $ | 807 | |||||||||||||||||||||||||||||||
Less: Non-controlling interest, net of tax | 5 | 4 | |||||||||||||||||||||||||||||||||
Subtotal | $ | 466 | $ | 0.93 | $ | 803 | $ | 1.57 | |||||||||||||||||||||||||||
Operating income adjustments | $ | 344 | $ | (81) | |||||||||||||||||||||||||||||||
Investments adjustment (a) | 1 | (4) | |||||||||||||||||||||||||||||||||
Pension settlement adjustment (b) | 1 | 3 | |||||||||||||||||||||||||||||||||
Income tax effect of adjustments (c) | (77) | (33) | |||||||||||||||||||||||||||||||||
Impact of U.K. tax rate change (d) | — | 5 | |||||||||||||||||||||||||||||||||
269 | 0.54 | (110) | (0.21) | ||||||||||||||||||||||||||||||||
Adjusted income, net of tax | $ | 735 | $ | 1.47 | $ | 693 | $ | 1.36 | |||||||||||||||||||||||||||
Twelve Months Ended December 31, 2022 | Twelve Months Ended December 31, 2021 | ||||||||||||||||||||||||||||||||||
(In millions, except per share data) | Amount | Adjusted EPS | Amount | Adjusted EPS | |||||||||||||||||||||||||||||||
Net income before non-controlling interests, as reported | $ | 3,087 | $ | 3,174 | |||||||||||||||||||||||||||||||
Less: Non-controlling interest, net of tax | 37 | 31 | |||||||||||||||||||||||||||||||||
Subtotal | $ | 3,050 | $ | 6.04 | $ | 3,143 | $ | 6.13 | |||||||||||||||||||||||||||
Operating income adjustments | $ | 486 | $ | (22) | |||||||||||||||||||||||||||||||
Investments adjustment (a) | (3) | (6) | |||||||||||||||||||||||||||||||||
Pension settlement adjustment (b) | 2 | 5 | |||||||||||||||||||||||||||||||||
Income tax effect of adjustments (c) | (78) | (64) | |||||||||||||||||||||||||||||||||
Impact of U.K. tax rate change (d) | — | 110 | |||||||||||||||||||||||||||||||||
407 | 0.81 | 23 | 0.04 | ||||||||||||||||||||||||||||||||
Adjusted income, net of tax | $ | 3,457 | $ | 6.85 | $ | 3,166 | $ | 6.17 | |||||||||||||||||||||||||||
(a) Represents mark-to-market losses and gains related to the Company's investments. | |||||||||||||||||||||||||||||||||||
(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 December 31, | Twelve Months Ended December 31, | |||||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||
Consolidated | ||||||||||||||||||||||||||
Compensation and benefits | $ | 3,038 | $ | 2,905 | $ | 12,071 | $ | 11,425 | ||||||||||||||||||
Other operating expenses | 1,304 | 1,246 | 4,369 | 4,083 | ||||||||||||||||||||||
Total expenses | $ | 4,342 | $ | 4,151 | $ | 16,440 | $ | 15,508 | ||||||||||||||||||
Depreciation and amortization expense | $ | 122 | $ | 91 | $ | 381 | $ | 382 | ||||||||||||||||||
Identified intangible amortization expense | 80 | 87 | 338 | 365 | ||||||||||||||||||||||
Total | $ | 202 | $ | 178 | $ | 719 | $ | 747 | ||||||||||||||||||
Risk and Insurance Services | ||||||||||||||||||||||||||
Compensation and benefits | $ | 1,699 | $ | 1,630 | $ | 6,938 | $ | 6,506 | ||||||||||||||||||
Other operating expenses | 774 | 752 | 2,618 | 2,499 | ||||||||||||||||||||||
Total expenses | $ | 2,473 | $ | 2,382 | $ | 9,556 | $ | 9,005 | ||||||||||||||||||
Depreciation and amortization expense | $ | 55 | $ | 44 | $ | 178 | $ | 196 | ||||||||||||||||||
Identified intangible amortization expense | 68 | 73 | 291 | 309 | ||||||||||||||||||||||
Total | $ | 123 | $ | 117 | $ | 469 | $ | 505 | ||||||||||||||||||
Consulting | ||||||||||||||||||||||||||
Compensation and benefits | $ | 1,210 | $ | 1,148 | $ | 4,626 | $ | 4,435 | ||||||||||||||||||
Other operating expenses | 548 | 556 | 1,960 | 1,850 | ||||||||||||||||||||||
Total expenses | $ | 1,758 | $ | 1,704 | $ | 6,586 | $ | 6,285 | ||||||||||||||||||
Depreciation and amortization expense | $ | 32 | $ | 28 | $ | 111 | $ | 115 | ||||||||||||||||||
Identified intangible amortization expense | 12 | 14 | 47 | 56 | ||||||||||||||||||||||
Total | $ | 44 | $ | 42 | $ | 158 | $ | 171 | ||||||||||||||||||
Marsh & McLennan Companies, Inc. Consolidated Balance Sheets (Millions) (Unaudited) | ||||||||||||||
December 31, 2022 | December 31, 2021 | |||||||||||||
ASSETS | ||||||||||||||
Current assets: | ||||||||||||||
Cash and cash equivalents | $ | 1,442 | $ | 1,752 | ||||||||||
Net receivables | 5,852 | 5,586 | ||||||||||||
Other current assets | 1,005 | 926 | ||||||||||||
Total current assets | 8,299 | 8,264 | ||||||||||||
Goodwill and intangible assets | 18,788 | 19,127 | ||||||||||||
Fixed assets, net | 871 | 847 | ||||||||||||
Pension related assets | 2,127 | 2,270 | ||||||||||||
Right of use assets | 1,562 | 1,868 | ||||||||||||
Deferred tax assets | 358 | 551 | ||||||||||||
Other assets | 1,449 | 1,461 | ||||||||||||
TOTAL ASSETS | $ | 33,454 | $ | 34,388 | ||||||||||
LIABILITIES AND EQUITY | ||||||||||||||
Current liabilities: | ||||||||||||||
Short-term debt | $ | 268 | $ | 17 | ||||||||||
Accounts payable and accrued liabilities | 3,278 | 3,165 | ||||||||||||
Accrued compensation and employee benefits | 3,095 | 2,942 | ||||||||||||
Current lease liabilities | 310 | 332 | ||||||||||||
Accrued income taxes | 221 | 198 | ||||||||||||
Total current liabilities | 7,172 | 6,654 | ||||||||||||
Fiduciary liabilities | 10,660 | 9,622 | ||||||||||||
Less - cash and cash equivalents held in a fiduciary capacity | (10,660) | (9,622) | ||||||||||||
— | — | |||||||||||||
Long-term debt | 11,227 | 10,933 | ||||||||||||
Pension, post-retirement and post-employment benefits | 921 | 1,632 | ||||||||||||
Long-term lease liabilities | 1,667 | 1,880 | ||||||||||||
Liabilities for errors and omissions | 355 | 355 | ||||||||||||
Other liabilities | 1,363 | 1,712 | ||||||||||||
Total equity | 10,749 | 11,222 | ||||||||||||
TOTAL LIABILITIES AND EQUITY | $ | 33,454 | $ | 34,388 |
For the Years Ended December 31, | |||||||||||
2022 | 2021 | ||||||||||
Operating cash flows: | |||||||||||
Net income before non-controlling interests | $ | 3,087 | $ | 3,174 | |||||||
Adjustments to reconcile net income to cash provided by operations: | |||||||||||
Depreciation and amortization | 719 | 747 | |||||||||
Non-cash lease expense | 404 | 327 | |||||||||
Deconsolidation of Russian businesses | 39 | — | |||||||||
Gain on consolidation of entity | (2) | (267) | |||||||||
Share-based compensation expense | 367 | 348 | |||||||||
Net gain on investments, disposition of assets and other | (137) | (67) | |||||||||
Changes in assets and liabilities: | |||||||||||
Accrued compensation and employee benefits | 171 | 574 | |||||||||
Provision for taxes, net of payments and refunds | (54) | (33) | |||||||||
Net receivables | (492) | (570) | |||||||||
Other changes to assets and liabilities | 71 | 4 | |||||||||
Contributions to pension and other benefit plans in excess of current year credit | (385) | (372) | |||||||||
Operating lease liabilities | (323) | (349) | |||||||||
Net cash provided by operations | 3,465 | 3,516 | |||||||||
Financing cash flows: | |||||||||||
Purchase of treasury shares | (1,950) | (1,159) | |||||||||
Proceeds from issuance of debt | 984 | 743 | |||||||||
Repayments of debt | (365) | (1,016) | |||||||||
Net issuance of common stock from treasury shares | (72) | 60 | |||||||||
Net distributions from non-controlling interests and deferred/contingent consideration | (189) | (82) | |||||||||
Dividends paid | (1,138) | (1,026) | |||||||||
Increase in fiduciary liabilities | 1,684 | 1,183 | |||||||||
Net cash used for financing activities | (1,046) | (1,297) | |||||||||
Investing cash flows: | |||||||||||
Capital expenditures | (470) | (406) | |||||||||
Purchase of long-term investments and other | (13) | (29) | |||||||||
Sales of long-term investments | 86 | 46 | |||||||||
Dispositions | 119 | 84 | |||||||||
Acquisitions, net of cash and cash held in a fiduciary capacity acquired | (572) | (859) | |||||||||
Net cash used for investing activities | (850) | (1,164) | |||||||||
Effect of exchange rate changes on cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity | (841) | (355) | |||||||||
Increase in cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity | 728 | 700 | |||||||||
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 | $ | 12,102 | $ | 11,374 | |||||||
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, | 2022 | 2021 | ||||||
(In millions of dollars) | ||||||||
Cash and cash equivalents | $ | 1,442 | $ | 1,752 | ||||
Cash and cash equivalents held in a fiduciary capacity | 10,660 | 9,622 | ||||||
Total cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity | $ | 12,102 | $ | 11,374 |