Marsh McLennan Reports Second Quarter 2024 Results

GAAP Revenue Increases 6%; Underlying Revenue Rises 6%

Growth in GAAP Operating Income of 13% and Adjusted Operating Income of 11%

Second Quarter GAAP EPS Rises 10% to $2.27 and Adjusted EPS Increases 10% to $2.41

Six Months GAAP EPS Rises 12% to $5.08 and Adjusted EPS Increases 12% to $5.30

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 second quarter ended June 30, 2024.

John Doyle, President and CEO, said: "We generated strong results in the second quarter with 6% underlying revenue growth, 10% adjusted EPS growth, and 130 basis points of margin expansion."

"We continued to invest in our talent and capabilities to deliver for clients. We also deployed capital into high quality acquisitions and recently announced a 15% increase in our dividend. Our first half results leave us well positioned for another great year in 2024."

Consolidated Results

Consolidated revenue in the second quarter of 2024 was $6.2 billion, an increase of 6% compared with the second quarter of 2023. On an underlying basis, revenue increased 6%. Operating income rose 13% to $1.6 billion. Adjusted operating income, which excludes noteworthy items as presented in the attached supplemental schedules, rose 11% to $1.7 billion. Net income attributable to the Company was $1.1 billion. Earnings per share increased 10% to $2.27. Adjusted earnings per share increased 10% to $2.41.

For the six months ended June 30, 2024, consolidated revenue was $12.7 billion, an increase of 8% on both a GAAP and underlying basis compared to the prior period. Operating income was $3.6 billion, an increase of 12% from the prior year period. Adjusted operating income rose 11% to $3.7 billion. Net income attributable to the Company was $2.5 billion, or $5.08 per diluted share, compared with $4.55 in the first six months of 2023. Adjusted earnings per share increased 12% to $5.30.

Risk & Insurance Services

Risk & Insurance Services revenue was $4.0 billion in the second quarter of 2024, an increase of 8%, or 7% on an underlying basis. Operating income increased 12% to $1.3 billion, while adjusted operating income increased 12% to $1.3 billion. For the six months ended June 30, 2024, revenue was $8.3 billion, an increase of 9%, or 8% on an underlying basis. Operating income rose 12% to $2.9 billion, and adjusted operating income increased 12% to $2.9 billion.

Marsh's revenue in the second quarter of 2024 was $3.3 billion, an increase of 8%, or 7% on an underlying basis. In U.S./Canada, underlying revenue rose 6%. International operations produced underlying revenue growth of 7%, reflecting 8% growth in Latin America, 7% growth in EMEA, and 7% growth in Asia Pacific. For the six months ended June 30, 2024, Marsh’s underlying revenue growth was 7%.

Guy Carpenter's revenue in the second quarter was $632 million, an increase of 10%, or 11% on an underlying basis. For the six months ended June 30, 2024, Guy Carpenter’s underlying revenue growth was 9%.

Consulting

Consulting revenue was $2.2 billion in the second quarter of 2024, an increase of 2%, or 4% on an underlying basis. Operating income increased 5% to $410 million, while adjusted operating income increased 6% to $426 million. For the first six months ended June 30, 2024, revenue was $4.4 billion, an increase of 5%, or 6% on an underlying basis. Operating income rose 5% to $842 million, and adjusted operating income increased 7% to $870 million.

Mercer's revenue in the second quarter was $1.4 billion, flat on a GAAP basis, or an increase of 5% on an underlying basis. Health revenue of $547 million increased 9% on an underlying basis. Wealth revenue of $612 million increased 3% on an underlying basis. Career revenue of $220 million increased 2% on an underlying basis. For the six months ended June 30, 2024, Mercer’s revenue was $2.8 billion, an increase of 6% on an underlying basis.

Oliver Wyman’s revenue in the second quarter of 2024 was $837 million, an increase of 3% on an underlying basis. For the six months ended June 30, 2024, Oliver Wyman’s revenue was $1.6 billion, an increase of 8% on an underlying basis.

Other Items

The Company repurchased 1.5 million shares of stock for $300 million in the second quarter of 2024. Through six months ended June 30, 2024, the Company has repurchased 3.0 million shares of stock for $600 million.

In the second quarter of 2024, the Company repaid $600 million of senior notes that matured.

Last week, the Board of Directors increased the quarterly dividend 15% to $0.815 per share, with the third quarter dividend payable on August 15, 2024.

In June, Marsh McLennan Agency (MMA) completed the acquisition of Fisher Brown Bottrell Insurance, Inc., one of the largest bank-affiliated insurance agencies in the U.S.

Conference Call

A conference call to discuss second quarter 2024 results will be held today at 8:30 a.m. Eastern time. The live audio webcast may be accessed at marshmclennan.com. A replay of the webcast will be available approximately two hours after the event. The webcast is listen-only. Those interested in participating in the question-and-answer session may register here to receive the dial-in numbers and unique PIN to access the call.

About Marsh McLennan

Marsh McLennan (NYSE: MMC) is a global leader in risk, strategy and people, advising clients in 130 countries across four businesses: Marsh, Guy Carpenter, Mercer and Oliver Wyman. With annual revenue of $23 billion and more than 85,000 colleagues, Marsh McLennan helps build the confidence to thrive through the power of perspective. For more information, visit marshmclennan.com, or follow us on LinkedIn and X.

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 of geopolitical or macroeconomic conditions on us, our clients and the countries and industries in which we operate, including from multiple major wars, escalating conflict throughout the Middle East and rising tension in the South China Sea, slower GDP growth or recession, lower interest rates, capital markets volatility, inflation and changes in insurance premium rates;
• 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, including claims related to our investment business’ ability to execute timely trades;
• the increasing prevalence of ransomware, supply chain and other forms of cyber attacks, and their potential to disrupt our operations, or the operations of our third party vendors, and result in the disclosure of confidential client or company information;
• the financial and operational impact of complying with laws and regulations, including domestic and international sanctions regimes, anti-corruption laws such as the U.S. Foreign Corrupt Practices Act, U.K. Anti Bribery Act and cybersecurity, data privacy and artificial intelligence regulations;
• our ability to attract, retain and develop industry leading talent;
• our ability to compete effectively and adapt to competitive pressures in each of our businesses, including from disintermediation as well as technological change, digital disruption and other types of innovation such as artificial intelligence;
• our ability to manage potential conflicts of interest, including where our services to a client conflict, or are perceived to conflict, with the interests of another client or our own interests;
• the impact of changes in tax laws, guidance and interpretations, such as the implementation of the Organization for Economic Cooperation and Development international tax framework, or the increasing number of challenges from tax authorities in the current global tax environment; 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 (collectively, the "Company") 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 the Company, 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

June 30,

 

Six Months Ended

June 30,

 

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Revenue

 

$

6,221

 

 

$

5,876

 

 

$

12,694

 

 

$

11,800

 

Expense:

 

 

 

 

 

 

 

 

Compensation and benefits

 

 

3,454

 

 

 

3,337

 

 

 

6,924

 

 

 

6,544

 

Other operating expenses

 

 

1,125

 

 

 

1,082

 

 

 

2,203

 

 

 

2,073

 

Operating expenses

 

 

4,579

 

 

 

4,419

 

 

 

9,127

 

 

 

8,617

 

Operating income

 

 

1,642

 

 

 

1,457

 

 

 

3,567

 

 

 

3,183

 

Other net benefit credits

 

 

66

 

 

 

60

 

 

 

133

 

 

 

118

 

Interest income

 

 

12

 

 

 

10

 

 

 

49

 

 

 

24

 

Interest expense

 

 

(156

)

 

 

(146

)

 

 

(315

)

 

 

(282

)

Investment income

 

 

1

 

 

 

3

 

 

 

2

 

 

 

5

 

Income before income taxes

 

 

1,565

 

 

 

1,384

 

 

 

3,436

 

 

 

3,048

 

Income tax expense

 

 

425

 

 

 

337

 

 

 

872

 

 

 

749

 

Net income before non-controlling interests

 

 

1,140

 

 

 

1,047

 

 

 

2,564

 

 

 

2,299

 

Less: Net income attributable to non-controlling interests

 

 

15

 

 

 

12

 

 

 

39

 

 

 

29

 

Net income attributable to the Company

 

$

1,125

 

 

$

1,035

 

 

$

2,525

 

 

$

2,270

 

Net income per share attributable to the Company:

 

 

 

 

 

 

 

 

- Basic

 

$

2.28

 

 

$

2.09

 

 

$

5.13

 

 

$

4.59

 

- Diluted

 

$

2.27

 

 

$

2.07

 

 

$

5.08

 

 

$

4.55

 

Average number of shares outstanding:

 

 

 

 

 

 

 

 

- Basic

 

 

492

 

 

 

495

 

 

 

492

 

 

 

495

 

- Diluted

 

 

496

 

 

 

499

 

 

 

497

 

 

 

499

 

Shares outstanding at June 30

 

 

492

 

 

 

494

 

 

 

492

 

 

 

494

 

Marsh & McLennan Companies, Inc. Supplemental Information - Revenue Analysis Three Months Ended June 30 (Millions) (Unaudited)

The Company advises clients in 130 countries. As a result, foreign exchange rate movements may impact period over period comparisons of revenue. Similarly, certain other items such as acquisitions and dispositions, including transfers among businesses, may impact period over period comparisons of revenue. Non-GAAP underlying revenue measures the change in revenue from one period to the next by isolating these impacts.

 

 

 

 

 

 

Components of Revenue Change*

 

 

Three Months Ended

June 30,

 

% Change

GAAP Revenue*

 

Currency Impact

 

Acquisitions/

Dispositions/ Other Impact**

 

Non-GAAP

Underlying Revenue

 

 

 

2024

 

 

 

2023

 

 

Risk and Insurance Services

 

 

 

 

 

 

 

 

 

 

 

 

Marsh

 

$

3,265

 

 

$

3,038

 

 

8

%

 

(1

)%

 

2

%

 

7

%

Guy Carpenter

 

 

632

 

 

 

576

 

 

10

%

 

(1

)%

 

—

 

 

11

%

Subtotal

 

 

3,897

 

 

 

3,614

 

 

8

%

 

(1

)%

 

2

%

 

7

%

Fiduciary interest income

 

 

125

 

 

 

108

 

 

 

 

 

 

 

 

 

Total Risk and Insurance Services

 

 

4,022

 

 

 

3,722

 

 

8

%

 

(1

)%

 

2

%

 

7

%

Consulting

 

 

 

 

 

 

 

 

 

 

 

 

Mercer

 

 

1,379

 

 

 

1,374

 

 

—

 

 

(1

)%

 

(3

)%

 

5

%

Oliver Wyman Group

 

 

837

 

 

 

798

 

 

5

%

 

—

 

 

2

%

 

3

%

Total Consulting

 

 

2,216

 

 

 

2,172

 

 

2

%

 

(1

)%

 

(1

)%

 

4

%

Corporate Eliminations

 

 

(17

)

 

 

(18

)

 

 

 

 

 

 

 

 

Total Revenue

 

$

6,221

 

 

$

5,876

 

 

6

%

 

(1

)%

 

1

%

 

6

%

Revenue Details

The following table provides more detailed revenue information for certain of the components presented above:

 

 

 

 

 

 

Components of Revenue Change*

 

 

Three Months Ended

June 30,

 

% Change

GAAP Revenue*

 

Currency Impact

 

Acquisitions/

Dispositions/ Other Impact**

 

Non-GAAP

Underlying Revenue

 

 

 

2024

 

 

2023

 

Marsh:

 

 

 

 

 

 

 

 

 

 

 

 

EMEA

 

$

912

 

$

858

 

6

%

 

—

 

 

—

 

 

7

%

Asia Pacific

 

 

391

 

 

357

 

9

%

 

(4

)%

 

6

%

 

7

%

Latin America

 

 

137

 

 

137

 

1

%

 

(10

)%

 

3

%

 

8

%

Total International

 

 

1,440

 

 

1,352

 

7

%

 

(2

)%

 

2

%

 

7

%

U.S./Canada

 

 

1,825

 

 

1,686

 

8

%

 

—

 

 

2

%

 

6

%

Total Marsh

 

$

3,265

 

$

3,038

 

8

%

 

(1

)%

 

2

%

 

7

%

Mercer:

 

 

 

 

 

 

 

 

 

 

 

 

Wealth

 

$

612

 

$

637

 

(4

)%

 

(1

)%

 

(6

)%

 

3

%

Health

 

 

547

 

 

518

 

6

%

 

(1

)%

 

(2

)%

 

9

%

Career

 

 

220

 

 

219

 

1

%

 

(3

)%

 

1

%

 

2

%

Total Mercer

 

$

1,379

 

$

1,374

 

—

 

 

(1

)%

 

(3

)%

 

5

%

*

Rounded to whole percentages. Components of revenue may not add due to rounding.

**

Acquisitions, dispositions, and other includes the impact of current and prior year items excluded from the calculation of non-GAAP underlying revenue for comparability purposes. Details on these items are provided in the reconciliation of non-GAAP revenue to GAAP revenue tables included in this release.

Marsh & McLennan Companies, Inc. Supplemental Information - Revenue Analysis Six Months Ended June 30 (Millions) (Unaudited)

The Company advises clients in 130 countries. As a result, foreign exchange rate movements may impact period over period comparisons of revenue. Similarly, certain other items such as acquisitions and dispositions, including transfers among businesses, may impact period over period comparisons of revenue. Non-GAAP underlying revenue measures the change in revenue from one period to the next by isolating these impacts.

 

 

 

 

 

 

Components of Revenue Change*

 

 

Six Months Ended

June 30,

 

% Change

GAAP Revenue*

 

Currency Impact

 

Acquisitions/

Dispositions/ Other Impact**

 

Non-GAAP

Underlying Revenue

 

 

 

2024

 

 

 

2023

 

 

Risk and Insurance Services

 

 

 

 

 

 

 

 

 

 

 

 

Marsh

 

$

6,268

 

 

$

5,782

 

 

8

%

 

(1

)%

 

2

%

 

7

%

Guy Carpenter

 

 

1,780

 

 

 

1,647

 

 

8

%

 

—

 

 

(1

)%

 

9

%

Subtotal

 

 

8,048

 

 

 

7,429

 

 

8

%

 

(1

)%

 

1

%

 

8

%

Fiduciary interest income

 

 

247

 

 

 

199

 

 

 

 

 

 

 

 

 

Total Risk and Insurance Services

 

 

8,295

 

 

 

7,628

 

 

9

%

 

(1

)%

 

1

%

 

8

%

Consulting

 

 

 

 

 

 

 

 

 

 

 

 

Mercer (a)

 

 

2,804

 

 

 

2,718

 

 

3

%

 

(1

)%

 

(1

)%

 

6

%

Oliver Wyman Group

 

 

1,626

 

 

 

1,485

 

 

9

%

 

—

 

 

2

%

 

8

%

Total Consulting

 

 

4,430

 

 

 

4,203

 

 

5

%

 

(1

)%

 

—

 

 

6

%

Corporate Eliminations

 

 

(31

)

 

 

(31

)

 

 

 

 

 

 

 

 

Total Revenue

 

$

12,694

 

 

$

11,800

 

 

8

%

 

(1

)%

 

1

%

 

8

%

Revenue Details

The following table provides more detailed revenue information for certain of the components presented above:

 

 

 

 

 

 

Components of Revenue Change*

 

 

Six Months Ended

June 30,

 

% Change

GAAP Revenue*

 

Currency Impact

 

Acquisitions/

Dispositions/ Other Impact**

 

Non-GAAP

Underlying Revenue

 

 

 

2024

 

 

2023

 

Marsh:

 

 

 

 

 

 

 

 

 

 

 

 

EMEA

 

$

1,937

 

$

1,790

 

8

%

 

—

 

 

—

 

 

8

%

Asia Pacific

 

 

727

 

 

669

 

9

%

 

(4

)%

 

6

%

 

7

%

Latin America

 

 

262

 

 

252

 

4

%

 

(7

)%

 

3

%

 

8

%

Total International

 

 

2,926

 

 

2,711

 

8

%

 

(1

)%

 

2

%

 

8

%

U.S./Canada

 

 

3,342

 

 

3,071

 

9

%

 

—

 

 

2

%

 

7

%

Total Marsh

 

$

6,268

 

$

5,782

 

8

%

 

(1

)%

 

2

%

 

7

%

Mercer:

 

 

 

 

 

 

 

 

 

 

 

 

Wealth (a)

 

$

1,284

 

$

1,218

 

5

%

 

—

 

 

2

%

 

4

%

Health (a)

 

 

1,085

 

 

1,063

 

2

%

 

(1

)%

 

(6

)%

 

10

%

Career

 

 

435

 

 

437

 

—

 

 

(2

)%

 

—

 

 

2

%

Total Mercer

 

$

2,804

 

$

2,718

 

3

%

 

(1

)%

 

(1

)%

 

6

%

(a)

Acquisitions, dispositions and other in 2024 includes a net gain of $21 million from the sale of the U.K. pension administration and U.S. health and benefits administration businesses, that comprised of a $66 million gain in Wealth, offset by a $45 million loss in Health.

 

*

Rounded to whole percentages. Components of revenue may not add due to rounding.

**

Acquisitions, dispositions, and other includes the impact of current and prior year items excluded from the calculation of non-GAAP underlying revenue for comparability purposes. Details on these items are provided in the reconciliation of non-GAAP revenue to GAAP revenue tables included in this release.

Marsh & McLennan Companies, Inc. Reconciliation of Non-GAAP Measures Three Months Ended June 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 and item 10(e) Regulation S-K in accordance with the Securities Exchange Act of 1934. These measures are: non-GAAP revenue, 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 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 six months ended June 30, 2024 and 2023. The following tables also present adjusted operating margin. For the three and six months ended June 30, 2024 and 2023, adjusted operating margin is calculated by dividing the sum of adjusted operating income and identified intangible asset amortization by consolidated or segment adjusted revenue. The Company's adjusted revenue used in the determination of adjusted operating margin is calculated by excluding the impact of certain noteworthy items from the Company's GAAP revenue.

 

 

Risk & Insurance Services

 

Consulting

 

Corporate/

Eliminations

 

Total

Three Months Ended June 30, 2024

 

 

 

 

 

 

 

 

Operating income (loss)

 

$

1,297

 

 

$

410

 

 

$

(65

)

 

$

1,642

 

Operating margin

 

 

32.2

%

 

 

18.5

%

 

 

N/A

 

 

 

26.4

%

Add (deduct) impact of noteworthy items:

 

 

 

 

 

 

 

 

Restructuring (a)

 

 

29

 

 

 

5

 

 

 

10

 

 

 

44

 

Changes in fair value of contingent consideration

 

 

7

 

 

 

2

 

 

 

—

 

 

 

9

 

Acquisition related costs (b)

 

 

11

 

 

 

9

 

 

 

—

 

 

 

20

 

Operating income adjustments

 

 

47

 

 

 

16

 

 

 

10

 

 

 

73

 

Adjusted operating income (loss)

 

$

1,344

 

 

$

426

 

 

$

(55

)

 

$

1,715

 

Total identified intangible amortization expense

 

$

77

 

 

$

12

 

 

$

—

 

 

$

89

 

Adjusted operating margin

 

 

35.3

%

 

 

19.8

%

 

 

N/A

 

 

 

29.0

%

 

 

 

 

 

 

 

 

 

Three Months Ended June 30, 2023

 

 

 

 

 

 

 

 

Operating income (loss)

 

$

1,157

 

 

$

388

 

 

$

(88

)

 

$

1,457

 

Operating margin

 

 

31.1

%

 

 

17.9

%

 

 

N/A

 

 

 

24.8

%

Add (deduct) impact of noteworthy items:

 

 

 

 

 

 

 

 

Restructuring (a)

 

 

31

 

 

 

7

 

 

 

27

 

 

 

65

 

Changes in fair value of contingent consideration

 

 

10

 

 

 

—

 

 

 

—

 

 

 

10

 

Acquisition related costs (b)

 

 

—

 

 

 

10

 

 

 

—

 

 

 

10

 

Disposal of businesses

 

 

—

 

 

 

(2

)

 

 

—

 

 

 

(2

)

Operating income adjustments

 

 

41

 

 

 

15

 

 

 

27

 

 

 

83

 

Adjusted operating income (loss)

 

$

1,198

 

 

$

403

 

 

$

(61

)

 

$

1,540

 

Total identified intangible amortization expense

 

$

73

 

 

$

14

 

 

$

—

 

 

$

87

 

Adjusted operating margin

 

 

34.2

%

 

 

19.2

%

 

 

N/A

 

 

 

27.7

%

 

 

 

 

 

 

 

 

 

(a)

Costs primarily include severance and lease exit charges for activities focused on workforce actions, rationalization of technology and functional resources, and reductions in real estate.

(b)

Primarily reflects one-time acquisition related costs.

Marsh & McLennan Companies, Inc.

Reconciliation of Non-GAAP Measures

Six Months Ended June 30

(Millions) (Unaudited)

 

 

Risk & Insurance Services

 

Consulting

 

Corporate/

Eliminations

 

Total

Six Months Ended June 30, 2024

 

 

 

 

 

 

 

 

Operating income (loss)

 

$

2,862

 

 

$

842

 

 

$

(137

)

 

$

3,567

 

Operating margin

 

 

34.5

%

 

 

19.0

%

 

 

N/A

 

 

 

28.1

%

Add (deduct) impact of noteworthy items:

 

 

 

 

 

 

 

 

Restructuring (a)

 

 

51

 

 

 

16

 

 

 

19

 

 

 

86

 

Changes in contingent consideration

 

 

12

 

 

 

3

 

 

 

—

 

 

 

15

 

Acquisition and disposition related costs (b)

 

 

12

 

 

 

30

 

 

 

—

 

 

 

42

 

Disposal of businesses (c)

 

 

—

 

 

 

(21

)

 

 

—

 

 

 

(21

)

Operating income adjustments

 

 

75

 

 

 

28

 

 

 

19

 

 

 

122

 

Adjusted operating income (loss)

 

$

2,937

 

 

$

870

 

 

$

(118

)

 

$

3,689

 

Total identified intangible amortization expense

 

$

156

 

 

$

23

 

 

$

—

 

 

$

179

 

Adjusted operating margin

 

 

37.3

%

 

 

20.3

%

 

 

N/A

 

 

 

30.5

%

 

 

 

 

 

 

 

 

 

Six Months Ended June 30, 2023

 

 

 

 

 

 

 

 

Operating income (loss)

 

$

2,552

 

 

$

799

 

 

$

(168

)

 

$

3,183

 

Operating margin

 

 

33.5

%

 

 

19.0

%

 

 

N/A

 

 

 

27.0

%

Add (deduct) impact of noteworthy items:

 

 

 

 

 

 

 

 

Restructuring (a)

 

 

63

 

 

 

16

 

 

 

39

 

 

 

118

 

Changes in contingent consideration

 

 

16

 

 

 

1

 

 

 

—

 

 

 

17

 

Acquisition related costs (b)

 

 

—

 

 

 

27

 

 

 

—

 

 

 

27

 

Disposal of businesses (c)

 

 

—

 

 

 

17

 

 

 

—

 

 

 

17

 

JLT legacy legal charges (d)

 

 

—

 

 

 

(51

)

 

 

—

 

 

 

(51

)

Operating income adjustments

 

 

79

 

 

 

10

 

 

 

39

 

 

 

128

 

Adjusted operating income (loss)

 

$

2,631

 

 

$

809

 

 

$

(129

)

 

$

3,311

 

Total identified intangible amortization expense

 

$

147

 

 

$

25

 

 

$

—

 

 

$

172

 

Adjusted operating margin

 

 

36.4

%

 

 

19.8

%

 

 

N/A

 

 

 

29.5

%

 

(a)

Costs primarily include severance and lease exit charges for activities focused on workforce actions, rationalization of technology and functional resources, and reductions in real estate.

(b)

Primarily reflects exit costs for the disposition of the Mercer U.K. pension administration and U.S. health and benefits administration businesses and one-time acquisition related costs. 2023 includes integration costs related to the Westpac superannuation fund transaction.

(c)

Net gain on sale of the Mercer U.K. pension administration and U.S. health and benefits administration businesses. In 2023, the amount reflects a loss on sale of a small individual financial advisory business in Canada. These amounts are included in revenue in the consolidated statements of income and excluded from non-GAAP revenue and adjusted revenue used in the calculation of adjusted operating margin.

(d)

Insurance and indemnity recoveries for a legacy JLT E&O matter relating to suitability of advice provided to individuals for defined benefit pension transfers in the U.K.

Marsh & McLennan Companies, Inc. Reconciliation of Non-GAAP Measures Three and Six Months Ended June 30 (In millions, except per share data) (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 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 six months ended June 30, 2024 and 2023.

 

Three Months Ended

June 30, 2024

 

Three Months Ended

June 30, 2023

 

Amount

 

Adjusted EPS

 

Amount

 

Adjusted EPS

Net income before non-controlling interests, as reported

 

 

$

1,140

 

 

 

 

 

$

1,047

 

 

Less: Non-controlling interest, net of tax

 

 

 

15

 

 

 

 

 

 

12

 

 

Subtotal

 

 

$

1,125

 

$

2.27

 

 

 

$

1,035

 

$

2.07

Operating income adjustments

$

73

 

 

 

 

 

 

$

83

 

 

 

 

 

Investments adjustment

 

(1

)

 

 

 

 

 

 

(1

)

 

 

 

 

Pension settlement

 

1

 

 

 

 

 

 

 

—

 

 

 

 

 

Income tax effect of adjustments (a)

 

(4

)

 

 

 

 

 

 

(17

)

 

 

 

 

 

 

 

 

69

 

 

0.14

 

 

 

 

65

 

 

0.13

Adjusted income, net of tax

 

 

$

1,194

 

$

2.41

 

 

 

$

1,100

 

$

2.20

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended

June 30, 2024

 

Six Months Ended

June 30, 2023

 

Amount

 

Adjusted EPS

 

Amount

 

Adjusted EPS

Net income before non-controlling interests, as reported

 

 

$

2,564

 

 

 

 

 

$

2,299

 

 

Less: Non-controlling interest, net of tax

 

 

 

39

 

 

 

 

 

 

29

 

 

Subtotal

 

 

$

2,525

 

$

5.08

 

 

 

$

2,270

 

$

4.55

Operating income adjustments

$

122

 

 

 

 

 

 

$

128

 

 

 

 

 

Investments adjustment

 

(2

)

 

 

 

 

 

 

1

 

 

 

 

 

Pension settlement adjustment

 

2

 

 

 

 

 

 

 

—

 

 

 

 

 

Income tax effect of adjustments (a)

 

(15

)

 

 

 

 

 

 

(33

)

 

 

 

 

 

 

 

 

107

 

 

0.22

 

 

 

 

96

 

 

0.19

Adjusted income, net of tax

 

 

$

2,632

 

$

5.30

 

 

 

$

2,366

 

$

4.74

 

 

 

 

 

 

 

 

 

 

 

 

(a)

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.

Marsh & McLennan Companies, Inc.

Supplemental Information

Three and Six Months Ended June 30

(Millions) (Unaudited)

 

 

Three Months Ended

June 30,

 

Six Months Ended

June 30,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

Consolidated

 

 

 

 

 

 

 

 

Compensation and benefits

 

$

3,454

 

$

3,337

 

$

6,924

 

$

6,544

Other operating expenses

 

 

1,125

 

 

1,082

 

 

2,203

 

 

2,073

Total expenses

 

$

4,579

 

$

4,419

 

$

9,127

 

$

8,617

 

 

 

 

 

 

 

 

 

Depreciation and amortization expense

 

$

87

 

$

91

 

$

186

 

$

175

Identified intangible amortization expense

 

 

89

 

 

87

 

 

179

 

 

172

Total

 

$

176

 

$

178

 

$

365

 

$

347

 

 

 

 

 

 

 

 

 

Risk and Insurance Services

 

 

 

 

 

 

 

 

Compensation and benefits (a)

 

$

2,108

 

$

1,965

 

$

4,226

 

$

3,896

Other operating expenses (a)

 

 

617

 

 

600

 

 

1,207

 

 

1,180

Total expenses

 

$

2,725

 

$

2,565

 

$

5,433

 

$

5,076

 

 

 

 

 

 

 

 

 

Depreciation and amortization expense

 

$

46

 

$

49

 

$

92

 

$

86

Identified intangible amortization expense

 

 

77

 

 

73

 

 

156

 

 

147

Total

 

$

123

 

$

122

 

$

248

 

$

233

 

 

 

 

 

 

 

 

 

Consulting

 

 

 

 

 

 

 

 

Compensation and benefits (a)

 

$

1,314

 

$

1,336

 

$

2,628

 

$

2,571

Other operating expenses (a)

 

 

492

 

 

448

 

 

960

 

 

833

Total expenses

 

$

1,806

 

$

1,784

 

$

3,588

 

$

3,404

 

 

 

 

 

 

 

 

 

Depreciation and amortization expense

 

$

26

 

$

27

 

$

63

 

$

48

Identified intangible amortization expense

 

 

12

 

 

14

 

 

23

 

 

25

Total

 

$

38

 

$

41

 

$

86

 

$

73

(a)

The Company reclassified certain prior period amounts between Compensation and benefits and Other operating expenses for each reporting segment for comparability purposes. The reclassification had no impact on consolidated or reporting segment total expenses.

Marsh & McLennan Companies, Inc.

Consolidated Balance Sheets

(Millions)

 

 

(Unaudited)

June 30,

2024

 

December 31, 2023

ASSETS

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

1,653

 

$

3,358

Cash and cash equivalents held in a fiduciary capacity

 

 

11,497

 

 

10,794

Net receivables

 

 

7,739

 

 

6,418

Other current assets

 

 

1,133

 

 

1,178

Total current assets

 

 

22,022

 

 

21,748

 

 

 

 

 

Goodwill and intangible assets

 

 

20,154

 

 

19,861

Fixed assets, net

 

 

879

 

 

882

Pension related assets

 

 

2,187

 

 

2,051

Right of use assets

 

 

1,468

 

 

1,541

Deferred tax assets

 

 

285

 

 

357

Other assets

 

 

1,596

 

 

1,590

TOTAL ASSETS

 

$

48,591

 

$

48,030

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

Current liabilities:

 

 

 

 

Short-term debt

 

$

1,267

 

$

1,619

Accounts payable and accrued liabilities

 

 

3,205

 

 

3,403

Accrued compensation and employee benefits

 

 

2,086

 

 

3,346

Current lease liabilities

 

 

304

 

 

312

Accrued income taxes

 

 

505

 

 

321

Fiduciary liabilities

 

 

11,497

 

 

10,794

Total current liabilities

 

 

18,864

 

 

19,795

 

 

 

 

 

Long-term debt

 

 

12,278

 

 

11,844

Pension, post-retirement and post-employment benefits

 

 

715

 

 

779

Long-term lease liabilities

 

 

1,586

 

 

1,661

Liabilities for errors and omissions

 

 

322

 

 

314

Other liabilities

 

 

1,261

 

 

1,267

 

 

 

 

 

Total equity

 

 

13,565

 

 

12,370

TOTAL LIABILITIES AND EQUITY

 

$

48,591

 

$

48,030

Marsh & McLennan Companies, Inc.

Consolidated Statements of Cash Flows

(Millions) (Unaudited)

 

 

Six Months Ended

June 30,

 

 

 

2024

 

 

 

2023

 

Operating cash flows:

 

 

 

 

Net income before non-controlling interests

 

$

2,564

 

 

$

2,299

 

Adjustments to reconcile net income to cash provided by operations:

 

 

 

 

Depreciation and amortization

 

 

365

 

 

 

347

 

Non-cash lease expense

 

 

132

 

 

 

143

 

Share-based compensation expense

 

 

193

 

 

 

191

 

Net gain on investments, disposition of assets and other

 

 

(97

)

 

 

(9

)

 

 

 

 

 

Changes in assets and liabilities:

 

 

 

 

Accrued compensation and employee benefits

 

 

(1,226

)

 

 

(1,101

)

Provision for taxes, net of payments and refunds

 

 

214

 

 

 

245

 

Net receivables

 

 

(1,287

)

 

 

(1,029

)

Other changes to assets and liabilities

 

 

(92

)

 

 

(98

)

Contributions to pension and other benefit plans in excess of current year credit

 

 

(182

)

 

 

(164

)

Operating lease liabilities

 

 

(150

)

 

 

(159

)

Net cash provided by operations

 

 

434

 

 

 

665

 

Financing cash flows:

 

 

 

 

Purchase of treasury shares

 

 

(600

)

 

 

(600

)

Borrowings from term-loan and credit facilities

 

 

—

 

 

 

200

 

Net proceeds from issuance of commercial paper

 

 

749

 

 

 

308

 

Proceeds from issuance of debt

 

 

988

 

 

 

589

 

Repayments of debt

 

 

(1,609

)

 

 

(8

)

Net issuance of common stock from treasury shares

 

 

(6

)

 

 

(21

)

Net distributions of non-controlling interests and deferred/contingent consideration

 

 

(101

)

 

 

(332

)

Dividends paid

 

 

(706

)

 

 

(591

)

Change in fiduciary liabilities

 

 

901

 

 

 

682

 

Net cash (used for) provided by financing activities

 

 

(384

)

 

 

227

 

Investing cash flows:

 

 

 

 

Capital expenditures

 

 

(167

)

 

 

(185

)

Purchases of long term investments and other

 

 

(13

)

 

 

(23

)

Sales of long term investments

 

 

14

 

 

 

16

 

Dispositions

 

 

27

 

 

 

(17

)

Acquisitions, net of cash and cash held in a fiduciary capacity acquired

 

 

(644

)

 

 

(292

)

Net cash used for investing activities

 

 

(783

)

 

 

(501

)

Effect of exchange rate changes on cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity

 

 

(269

)

 

 

242

 

(Decrease)/increase in cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity

 

 

(1,002

)

 

 

633

 

Cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity at beginning of period

 

 

14,152

 

 

 

12,102

 

Cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity at end of period

 

$

13,150

 

 

$

12,735

 

Reconciliation of cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity to the Consolidated Balance Sheets

Balance at June 30,

 

 

2024

 

 

2023

(In millions)

 

 

 

 

Cash and cash equivalents

 

$

1,653

 

$

1,171

Cash and cash equivalents held in a fiduciary capacity

 

 

11,497

 

 

11,564

Total cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity

 

$

13,150

 

$

12,735

Marsh & McLennan Companies, Inc. Reconciliation of Non-GAAP Measures Three Months Ended June 30 (Millions) (Unaudited)

Non-GAAP revenue isolates the impact of foreign exchange rate movements and certain transaction-related items from the current period GAAP revenue. The non-GAAP revenue measure is presented on a constant currency basis, excluding the impact of foreign currency fluctuations. The Company isolates the impact of foreign exchange rate movements period over period, by translating the current period foreign currency GAAP revenue into U.S. Dollars based on the difference in the current and corresponding prior period exchange rates. Similarly, certain other items such as acquisitions and dispositions, including transfers among businesses, may impact period over period comparisons of revenue and are consistently excluded from current and prior period GAAP revenues for comparability purposes. Percentage changes, referred to as non-GAAP underlying revenue, are calculated by dividing the period over period change in non-GAAP revenue by the prior period non-GAAP revenue.

The following table provides the reconciliation of GAAP revenue to non-GAAP revenue:

 

 

2024

 

 

2023

 

Three Months Ended June 30,

 

GAAP Revenue

 

Currency Impact

 

Acquisitions/ Dispositions/ Other Impact

 

Non-GAAP Revenue

 

GAAP Revenue

 

Acquisitions/ Dispositions/ Other Impact

 

Non-GAAP Revenue

Risk and Insurance Services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Marsh

 

$

3,265

 

 

$

33

 

$

(64

)

 

$

3,234

 

 

$

3,038

 

 

$

(1

)

 

$

3,037

 

Guy Carpenter

 

 

632

 

 

 

6

 

 

—

 

 

 

638

 

 

 

576

 

 

 

—

 

 

 

576

 

Subtotal

 

 

3,897

 

 

 

39

 

 

(64

)

 

 

3,872

 

 

 

3,614

 

 

 

(1

)

 

 

3,613

 

Fiduciary interest income

 

 

125

 

 

 

1

 

 

—

 

 

 

126

 

 

 

108

 

 

 

—

 

 

 

108

 

Total Risk and Insurance Services

 

 

4,022

 

 

 

40

 

 

(64

)

 

 

3,998

 

 

 

3,722

 

 

 

(1

)

 

 

3,721

 

Consulting

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mercer

 

 

1,379

 

 

 

17

 

 

(26

)

 

 

1,370

 

 

 

1,374

 

 

 

(68

)

 

 

1,306

 

Oliver Wyman Group

 

 

837

 

 

 

3

 

 

(19

)

 

 

821

 

 

 

798

 

 

 

—

 

 

 

798

 

Total Consulting

 

 

2,216

 

 

 

20

 

 

(45

)

 

 

2,191

 

 

 

2,172

 

 

 

(68

)

 

 

2,104

 

Corporate Eliminations

 

 

(17

)

 

 

—

 

 

—

 

 

 

(17

)

 

 

(18

)

 

 

—

 

 

 

(18

)

Total Revenue

 

$

6,221

 

 

$

60

 

$

(109

)

 

$

6,172

 

 

$

5,876

 

 

$

(69

)

 

$

5,807

 

Revenue Details

The following table provides more detailed revenue information for certain of the components presented above:

 

 

2024

 

2023

Three Months Ended June 30,

 

GAAP Revenue

 

Currency Impact

 

Acquisitions/ Dispositions/ Other Impact

 

Non-GAAP Revenue

 

GAAP Revenue

 

Acquisitions/

Dispositions/

Other Impact

 

Non-GAAP Revenue

Marsh:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EMEA

 

$

912

 

$

5

 

$

(1

)

 

$

916

 

$

858

 

$

(1

)

 

$

857

Asia Pacific

 

 

391

 

 

12

 

 

(20

)

 

 

383

 

 

357

 

 

—

 

 

 

357

Latin America

 

 

137

 

 

14

 

 

(4

)

 

 

147

 

 

137

 

 

—

 

 

 

137

Total International

 

 

1,440

 

 

31

 

 

(25

)

 

 

1,446

 

 

1,352

 

 

(1

)

 

 

1,351

U.S./Canada

 

 

1,825

 

 

2

 

 

(39

)

 

 

1,788

 

 

1,686

 

 

—

 

 

 

1,686

Total Marsh

 

$

3,265

 

$

33

 

$

(64

)

 

$

3,234

 

$

3,038

 

$

(1

)

 

$

3,037

Mercer:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Wealth

 

$

612

 

$

4

 

$

(12

)

 

$

604

 

$

637

 

$

(49

)

 

$

588

Health

 

 

547

 

 

7

 

 

(10

)

 

 

544

 

 

518

 

 

(19

)

 

 

499

Career

 

 

220

 

 

6

 

 

(4

)

 

 

222

 

 

219

 

 

—

 

 

 

219

Total Mercer

 

$

1,379

 

$

17

 

$

(26

)

 

$

1,370

 

$

1,374

 

$

(68

)

 

$

1,306

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Note: Amounts in the tables above are rounded to whole numbers.

Marsh & McLennan Companies, Inc. Reconciliation of Non-GAAP Measures Six Months Ended June 30 (Millions) (Unaudited)

The following table provides the reconciliation of GAAP revenue to non-GAAP revenue:

 

 

2024

 

 

2023

 

Six Months Ended June 30,

 

GAAP Revenue

 

Currency Impact

 

Acquisitions/ Dispositions/ Other Impact

 

Non-GAAP Revenue

 

GAAP Revenue

 

Acquisitions/ Dispositions/ Other Impact

 

Non-GAAP Revenue

Risk and Insurance Services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Marsh

 

$

6,268

 

 

$

39

 

 

$

(103

)

 

$

6,204

 

 

$

5,782

 

 

$

(1

)

 

$

5,781

 

Guy Carpenter

 

 

1,780

 

 

 

4

 

 

 

(3

)

 

 

1,781

 

 

 

1,647

 

 

 

(12

)

 

 

1,635

 

Subtotal

 

 

8,048

 

 

 

43

 

 

 

(106

)

 

 

7,985

 

 

 

7,429

 

 

 

(13

)

 

 

7,416

 

Fiduciary interest income

 

 

247

 

 

 

1

 

 

 

(1

)

 

 

247

 

 

 

199

 

 

 

—

 

 

 

199

 

Total Risk and Insurance Services

 

 

8,295

 

 

 

44

 

 

 

(107

)

 

 

8,232

 

 

 

7,628

 

 

 

(13

)

 

 

7,615

 

Consulting

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mercer (a)

 

 

2,804

 

 

 

25

 

 

 

(54

)

 

 

2,775

 

 

 

2,718

 

 

 

(92

)

 

 

2,626

 

Oliver Wyman Group

 

 

1,626

 

 

 

(1

)

 

 

(29

)

 

 

1,596

 

 

 

1,485

 

 

 

(1

)

 

 

1,484

 

Total Consulting

 

 

4,430

 

 

 

24

 

 

 

(83

)

 

 

4,371

 

 

 

4,203

 

 

 

(93

)

 

 

4,110

 

Corporate Eliminations

 

 

(31

)

 

 

—

 

 

 

—

 

 

 

(31

)

 

 

(31

)

 

 

—

 

 

 

(31

)

Total Revenue

 

$

12,694

 

 

$

68

 

 

$

(190

)

 

$

12,572

 

 

$

11,800

 

 

$

(106

)

 

$

11,694

 

Revenue Details

The following table provides more detailed revenue information for certain of the components presented above:

 

 

2024

 

2023

Six Months Ended June 30,

 

GAAP Revenue

 

Currency Impact

 

Acquisitions/ Dispositions/ Other Impact

 

Non-GAAP Revenue

 

GAAP Revenue

 

Acquisitions/ Dispositions/ Other Impact

 

Non-GAAP Revenue

Marsh:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EMEA

 

$

1,937

 

$

(5

)

 

$

(2

)

 

$

1,930

 

$

1,790

 

$

(1

)

 

$

1,789

Asia Pacific

 

 

727

 

 

25

 

 

 

(39

)

 

 

713

 

 

669

 

 

—

 

 

 

669

Latin America

 

 

262

 

 

17

 

 

 

(8

)

 

 

271

 

 

252

 

 

—

 

 

 

252

Total International

 

 

2,926

 

 

37

 

 

 

(49

)

 

 

2,914

 

 

2,711

 

 

(1

)

 

 

2,710

U.S./Canada

 

 

3,342

 

 

2

 

 

 

(54

)

 

 

3,290

 

 

3,071

 

 

—

 

 

 

3,071

Total Marsh

 

$

6,268

 

$

39

 

 

$

(103

)

 

$

6,204

 

$

5,782

 

$

(1

)

 

$

5,781

Mercer:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Wealth (a)

 

$

1,284

 

$

6

 

 

$

(74

)

 

$

1,216

 

$

1,218

 

$

(48

)

 

$

1,170

Health (a)

 

 

1,085

 

 

9

 

 

 

22

 

 

 

1,116

 

 

1,063

 

 

(44

)

 

 

1,019

Career

 

 

435

 

 

10

 

 

 

(2

)

 

 

443

 

 

437

 

 

—

 

 

 

437

Total Mercer

 

$

2,804

 

$

25

 

 

$

(54

)

 

$

2,775

 

$

2,718

 

$

(92

)

 

$

2,626

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a)

Acquisitions, dispositions and other in 2024 includes a net gain of $21 million from the sale of the U.K. pension administration and U.S. health and benefits administration businesses, that comprised of a $66 million gain in Wealth, offset by a $45 million loss in Health.

 

Note: Amounts in the tables above are rounded to whole numbers.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240717145202/en/

Media: Erick R. Gustafson Marsh McLennan [phone] [e-mail]

Investor: Sarah DeWitt Marsh McLennan [phone] [e-mail]