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MHM Marsh & Mclennan Cos. Inc

81.00
0.00 (0.00%)
Last Updated: 00:00:00
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Marsh & Mclennan Cos. Inc LSE:MHM London Ordinary Share COM US$1
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.00% 81.00 0.00 00:00:00
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
Ins Agents,brokers & Service 22.74B 3.76B 7.6395 26.91 101.09B

MARSH & MCLENNAN: Marsh McLennan Reports Second Quarter 2021 Results

22/07/2021 12:00pm

UK Regulatory


Marsh & Mclennan Cos (LSE:MHM)
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TIDMMHM 
 
 

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, 2021.

 

Dan Glaser, President and CEO, said: "Our performance this quarter was outstanding. The company achieved the strongest underlying growth in two decades, and experienced an acceleration in growth across all of our businesses. We grew underlying revenue by 13%, adjusted operating income by 24%, and adjusted EPS by 33%.

 

"These results are a direct reflection of the hard work and dedication of our colleagues around the world. We look forward to carrying this momentum into the second half of the year."

 

Consolidated Results

 

Consolidated revenue in the second quarter of 2021 was $5.0 billion, an increase of 20% compared with the second quarter of 2020. On an underlying basis, revenue increased 13%. Operating income was $1.2 billion, an increase of 39% from the prior year. Adjusted operating income, which excludes noteworthy items as presented in the attached supplemental schedules, rose 24% to $1.2 billion. Net income attributable to the Company was $820 million, or $1.60 per diluted share, compared with $1.12 in the second quarter of 2020. Adjusted earnings per share rose 33% to $1.75 per diluted share compared with $1.32 for the prior year period.

 

For the six months ended June 30, 2021, consolidated revenue was $10.1 billion, an increase of 14%, or 9% on an underlying basis compared to the prior period. Operating income was $2.6 billion, an increase of 32% from the prior year period. Adjusted operating income rose 22% to $2.6 billion. Net income attributable to the Company was $1.8 billion. Fully diluted earnings per share was $3.51 compared with $2.60 in the first six months of 2020. Adjusted earnings per share increased 26% to $3.74 compared with $2.96 for the comparable period in 2020.

 

Risk & Insurance Services

 

Risk & Insurance Services revenue was $3.1 billion in the second quarter of 2021, an increase of 21%, or 13% on an underlying basis. Operating income rose 37% to $950 million, and adjusted operating income was $927 million, an increase of 22% from the prior year period. For the six months ended June 30, 2021, revenue was $6.4 billion, an increase of 15%, or 10% on an underlying basis. Operating income rose 30% to $2.0 billion, and adjusted operating income was $2.0 billion, an increase of 19% from the prior year period.

 

Marsh's revenue in the second quarter was $2.7 billion, an increase of 14% on an underlying basis. In US/Canada, underlying revenue rose 15%. International operations produced underlying revenue growth of 13%, reflecting 16% growth in EMEA, 10% growth in Asia Pacific, and 2% in Latin America. For the six months ended June 30, 2021, Marsh's underlying revenue growth was 11% compared to the prior period a year ago.

 

Guy Carpenter's revenue in the second quarter was $488 million, an increase of 12% on an underlying basis. For the six months ended June 30, 2021, Guy Carpenter's underlying revenue growth was 8%.

 

Consulting

 

Consulting revenue in the second quarter was $1.9 billion, an increase of 17% or 12% on an underlying basis compared to the same period a year ago. Operating income increased 35% to $344 million, and adjusted operating income increased 34% to $356 million. For the first six months of 2021, revenue was $3.8 billion, an increase of 11%, or an increase of 8% on an underlying basis. Operating income of $705 million increased 31% and adjusted operating income increased 31% to $726 million.

 

Mercer's revenue was $1.3 billion in the second quarter, an increase of 6% on an underlying basis. Career with revenue of $187 million, was up 15% on an underlying basis. Wealth revenue of $625 million increased 4% on an underlying basis, and Health revenue of $462 million increased 4% on an underlying basis. For the six months ended June 30, 2021, Mercer's revenue was $2.6 billion, an increase of 3% on an underlying basis compared to the same period a year ago.

 

Oliver Wyman's revenue was $618 million in the second quarter, an increase of 28% on an underlying basis. For the first six months ended June 30, 2021, Oliver Wyman's revenue was $1.2 billion, an increase of 19% on an underlying basis.

 

Other Items

 

The Company repurchased 2.4 million shares of stock for $322 million in the second quarter. Through six months, the Company has repurchased 3.4 million shares for $434 million.

 

Last week, the Board of Directors increased the quarterly dividend 15% to $0.535 per share, with the third quarter dividend payable on August 13, 2021.

 

Conference Call

 

A conference call to discuss second 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 5668714. The live audio webcast may be accessed at mmc.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 78,000 colleagues advise clients in 130 countries. With annual revenue of over $18 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 mmc.com, follow us on LinkedIn and Twitter or subscribe to BRINK.

 

INFORMATION CONCERNING FORWARD-LOOKING STATEMENTS

 

This press release contains "forward-looking statements," as defined in the Private Securities Litigation Reform Act of 1995. These statements, which express management's current views concerning future events or results, use words like "anticipate," "assume," "believe," "continue," "estimate," "expect," "intend," "plan," "project" and similar terms, and future or conditional tense verbs like "could," "may," "might," "should, " "will" and "would".

 

Forward-looking statements are subject to inherent risks and uncertainties that could cause actual results to differ materially from those expressed or implied in our forward-looking statements. Factors that could materially affect our future results include, among other things:

   -- our ability to maintain adequate safeguards to protect the security of 
      our information systems and confidential, personal or proprietary 
      information, particularly given the increased risk of cybersecurity 
      attacks, including hacking, viruses, malware, ransomware and other types 
      of data security breaches, as well as the heightened risk caused by 
      remote work arrangements; 
 
   -- the impact from lawsuits or investigations arising from errors and 
      omissions, breaches of fiduciary duty or other claims against us in our 
      capacity as a broker or investment advisor; 
 
   -- increased regulatory activity and scrutiny by regulatory or law 
      enforcement authorities in the financial services industry; 
 
   -- the financial and operational impact of complying with laws and 
      regulations where we operate and the risks of noncompliance with such 
      laws by us or third-party providers, including anti-corruption laws such 
      as the U.S. Foreign Corrupt Practices Act, U.K. Anti-Bribery Act and 
      cybersecurity and data privacy regulations such as the E.U.'s General 
      Data Protection Regulation; 
 
   -- the impact of COVID-19 on our business operations, results of operations, 
      cash flows and financial position; 
 
   -- our ability to compete effectively and adapt to changes in the 
      competitive environment, including to respond to technological change, 
      disintermediation, digital disruption and other types of innovation; 
 
   -- our ability to manage risks associated with our investment management and 
      related services business, particularly in the context of uncertain 
      equity markets, including our ability to execute timely trades in light 
      of increased trading volume and to manage potential conflicts of 
      interest; 
 
   -- our ability to attract and retain industry leading talent; 
 
   -- the impact of changes in tax laws, guidance and interpretations, 
      particularly due to recently enacted legislation in the U.K. and 
      proposals from the U.S. government or from the Organization for Economic 
      Development and Cooperation, or disagreements with tax authorities; 
 
   -- our ability to successfully recover if we experience a business 
      continuity problem due to cyberattack, natural disaster, government 
      unrest or otherwise; and 
 
   -- the regulatory, contractual and reputational risks that arise based on 
      insurance placement activities and growing insurer revenue streams. 
 

The factors identified above are not exhaustive. Marsh McLennan and its subsidiaries operate in a dynamic business environment in which new risks emerge frequently. Accordingly, we caution readers not to place undue reliance on any forward-looking statements, which are based only on information currently available to us and speak only as of the dates on which they are made. The Company undertakes no obligation to update or revise any forward-looking statement to reflect events or circumstances arising after the date on which it is made.

 

Further information concerning Marsh McLennan and its businesses, including information about factors that could materially affect our results of operations and financial condition, is contained in the Company's filings with the Securities and Exchange Commission, including the "Risk Factors" section and the "Management's Discussion and Analysis of Financial Condition and Results of Operations" section of our most recently filed Annual Report on Form 10-K.

 
 
Marsh & McLennan Companies, Inc. 
 Consolidated Statements of Income 
 (In millions, except per share figures) 
 (Unaudited) 
 
 
                   Three Months Ended  Six Months Ended 
                    June 30,            June 30, 
                   2021       2020     2021        2020 
Revenue            $   5,017  $4,189   $   10,100  $8,840 
Expense: 
Compensation and 
 benefits          2,860      2,429    5,667       4,984 
Other operating 
 expenses          929        875      1,847       1,901 
Operating 
 expenses          3,789      3,304    7,514       6,885 
Operating income   1,228      885      2,586       1,955 
Other net benefit 
 credits           71         63       142         127 
Interest income    1          2        1           4 
Interest expense   (110)      (132)    (228)       (259) 
Investment income 
 (loss)            19         (31)     30          (33) 
Income before 
 income taxes      1,209      787      2,531       1,794 
Income tax 
 expense           382        207      706         447 
Net income before 
 non-controlling 
 interests         827        580      1,825       1,347 
Less: Net income 
 attributable to 
 non-controlling 
 interests         7          8        22          21 
Net income 
 attributable to 
 the Company       $   820    $572     $   1,803   $1,326 
Net income per 
share 
attributable to 
the Company: 
- Basic            $   1.61   $1.13    $   3.55    $2.62 
- Diluted          $   1.60   $1.12    $   3.51    $2.60 
Average number 
of shares 
outstanding 
- Basic            508        506      508         505 
- Diluted          513        511      514         510 
Shares 
 outstanding at 
 June 30           507        506      507         506 
 
 

Marsh & McLennan Companies, Inc.

Supplemental Information - Revenue Analysis

Three Months Ended June 30

 

(Millions) (Unaudited)

 

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

 
                                         Components of Revenue Change* 
                                % 
                Three Months    Change             Acquisitions/ 
                Ended June      GAAP     Currency  Dispositions/  Underlying 
                30,             Revenue   Impact   Other Impact    Revenue 
                2021    2020 
Risk and 
Insurance 
Services 
Marsh           $2,650  $2,161  23%      4%        5%             14% 
Guy Carpenter   488     433     13%      1%        --             12% 
Subtotal        3,138   2,594   21%      4%        4%             14% 
Fiduciary 
 Interest 
 Income         3       9 
Total Risk and 
 Insurance 
 Services       3,141   2,603   21%      4%        4%             13% 
Consulting 
Mercer          1,274   1,149   11%      6%        (1)%           6% 
Oliver Wyman 
 Group          618     467     33%      5%        --             28% 
Total 
 Consulting     1,892   1,616   17%      5%        --             12% 
Corporate 
 Eliminations   (16)    (30) 
Total Revenue   $5,017  $4,189  20%      4%        2%             13% 
 
 
 

Revenue Details

 

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

 
                                             Components of Revenue Change* 
                 Three Months    % Change               Acquisitions/ 
                 Ended June       GAAP       Currency    Dispositions/   Underlying 
                 30,              Revenue     Impact     Other Impact     Revenue 
                 2021    2020 
Marsh: 
EMEA             $796    $597    33 %        9%         9    %           16 % 
Asia Pacific     347     298     16 %        8%         (1)  %           10 % 
Latin America    103     99      4  %        2%         --               2  % 
Total 
 International   1,246   994     25 %        8%         5    %           13 % 
U.S./Canada      1,404   1,167   20 %        1%         5    %           15 % 
Total Marsh      $2,650  $2,161  23 %        4%         5    %           14 % 
Mercer: 
Wealth           625     561     11 %        8%         (1)  %           4  % 
Health           462     432     7  %        3%         --               4  % 
Career           187     156     20 %        5%         --               15 % 
Total Mercer     $1,274  $1,149  11 %        6%         (1)  %           6  % 
 
 
* Components of revenue change may not add due to rounding. 
 
 

Marsh & McLennan Companies, Inc.

Supplemental Information - Revenue Analysis

Six Months Ended June 30

 

(Millions) (Unaudited)

 

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

 
                                             Components of Revenue Change* 
                                 % Change               Acquisitions/ 
                Six Months        GAAP       Currency    Dispositions/   Underlying 
                Ended June 30,    Revenue     Impact     Other Impact     Revenue 
                2021     2020 
Risk and 
Insurance 
Services 
Marsh           $4,975   $4,222  18 %        4%         3    %           11 % 
Guy Carpenter   1,383    1,260   10 %        2%         --               8  % 
Subtotal        6,358    5,482   16 %        3%         3    %           10 % 
Fiduciary 
 Interest 
 Income         8        32 
Total Risk and 
 Insurance 
 Services       6,366    5,514   15 %        3%         3    %           10 % 
Consulting 
Mercer          2,562    2,400   7  %        5%         (1)  %           3  % 
Oliver Wyman 
 Group          1,203    978     23 %        4%         --               19 % 
Total 
 Consulting     3,765    3,378   11 %        5%         (1)  %           8  % 
Corporate 
 Eliminations   (31)     (52) 
Total Revenue   $10,100  $8,840  14 %        4%         1    %           9  % 
 
 
 

Revenue Details

 

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

 
                                             Components of Revenue Change* 
                 Six Months      % Change                  Acquisitions/ 
                 Ended June       GAAP       Currency       Dispositions/   Underlying 
                 30,              Revenue     Impact        Other Impact     Revenue 
                 2021    2020 
Marsh: 
EMEA             $1,633  $1,351  21 %        7 %           3   %            11 % 
Asia Pacific     621     536     16 %        7 %           --               9  % 
Latin America    193     190     2  %        (2)%          --               4  % 
Total 
 International   2,447   2,077   18 %        7 %           2   %            9  % 
U.S./Canada      2,528   2,145   18 %        1 %           5   %            12 % 
Total Marsh      $4,975  $4,222  18 %        4 %           3   %            11 % 
Mercer: 
Wealth           1,248   1,153   8  %        7 %           (1  )%           2  % 
Health           949     918     3  %        2 %           (1  )%           2  % 
Career           365     329     11 %        4 %           --               8  % 
Total Mercer     $2,562  $2,400  7  %        5 %           (1  )%           3  % 
 
 
* Components of revenue change may not add due to rounding. 
 
 

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 below certain additional non-GAAP financial measures, 
within the meaning of Regulation G under the Securities Exchange Act of 1934. 
These measures are: adjusted operating income (loss), adjusted operating 
margin, adjusted income, net of tax and adjusted earnings per share (EPS). The 
Company has included reconciliations of these non-GAAP financial measures to 
the most directly comparable financial measure calculated in accordance with 
GAAP in the following tables. 
 
The Company believes these non-GAAP financial measures provide useful 
supplemental information that enables investors to better compare the 
Company's performance across periods. Management also uses these measures 
internally to assess the operating performance of its businesses, to assess 
performance for employee compensation purposes, and to decide how to allocate 
resources. However, investors should not consider these non-GAAP measures in 
isolation from, or as a substitute for, the financial information that the 
Company reports in accordance with GAAP. The Company's non-GAAP measures 
include adjustments that reflect how management views its businesses, and may 
differ from similarly titled non-GAAP measures presented by other companies. 
 
Adjusted Operating Income (Loss) and Adjusted Operating Margin 
 
Adjusted operating income (loss) is calculated by excluding the impact of 
certain noteworthy items from the Company's GAAP operating income or (loss). 
The following tables identify these noteworthy items and reconcile adjusted 
operating income (loss) to GAAP operating income or loss, on a consolidated 
and reportable segment basis, for the three and six months ended June 30, 2021 
and 2020. The following tables also present adjusted operating margin. For the 
three and six months ended June 30, 2021 and 2020, adjusted operating margin 
is calculated by dividing the sum of adjusted operating income and identified 
intangible asset amortization by consolidated or segment adjusted revenue. 
 
 
 
                       Risk & 
                       Insurance                    Corporate/ 
                       Services     Consulting       Eliminations   Total 
Three Months Ended 
June 30, 2021 
Operating income 
 (loss)                $950         $   344         $     (66)      $1,228 
Operating margin       30.2%        18.1    %       N/A             24.5  % 
Add (deduct) impact 
of noteworthy 
Items: 
Restructuring, 
 excluding JLT (a)     4            3               5               12 
Changes in contingent 
 consideration (b)     (5)          1               (3)             (7) 
JLT integration and 
 restructuring costs 
 (c)                   11           6               2               19 
JLT 
 acquisition-related 
 costs (d)             11           1               --              12 
Disposal of 
 businesses (e)        (51)         1               --              (50) 
Other                  7            --              --              7 
Operating income 
 adjustments           (23)         12              4               (7) 
Adjusted operating 
 income (loss)         $927         $   356         $     (62)      $1,221 
Total identified 
 intangible 
 amortization 
 expense               $75          $   14          $     --        $89 
Adjusted operating 
 margin                32.4%        19.5    %       N/A             26.4  % 
 
 
Three Months Ended 
June 30, 2020 
Operating income 
 (loss), as reported   $696         $   255         $     (66)      $885 
Operating margin       26.7%        15.8    %       N/A             21.1  % 
Add (deduct) impact 
of noteworthy 
Items: 
Restructuring, 
 excluding JLT (a)     --           2               9               11 
Changes in contingent 
 consideration (b)     4            1               2               7 
JLT integration and 
 restructuring costs 
 (c)                   39           7               11              57 
JLT 
 acquisition-related 
 costs (d)             12           --              1               13 
Disposal of 
 businesses (e)        6            --              --              6 
Other                  5            --              --              5 
Operating income 
 adjustments           66           10              23              99 
Adjusted operating 
 income (loss)         $762         $   265         $     (43)      $984 
Total identified 
 intangible 
 amortization 
 expense               $75          $   13          $     --        $88 
Adjusted operating 
 margin                32.1%        17.3    %       N/A             25.5  % 
 
 
 
(a) Primarily includes restructuring expenses associated with the Company's 
global information technology and HR functions and adjustments to 
restructuring liabilities for future rent under non-cancellable leases. 
(b) Primarily includes the change in fair value of contingent consideration 
related to acquisitions and dispositions measured each quarter. 
(c) Includes costs incurred for staff reductions, lease related exit costs, 
technology and consulting costs related to the JLT integration. 
(d) Reflects retention costs related to the closing of the JLT Transaction. 
(e) Primarily reflects a gain on the sale of the U.K. commercial networks 
business that provided broking and back-office solutions for small independent 
brokers during the second quarter of 2021. 2020 reflects net loss on disposal 
of specialty businesses sold in the U.S., U.K. and Canada, previously acquired 
as part of the JLT Transaction. These amounts are reflected as an increase or 
decrease of other revenue, which is reflected as part of revenue in the 
consolidated statements of income. These items are removed from GAAP revenue 
in the calculation of adjusted operating margin. 
 
 
 
 
Marsh & McLennan Companies, Inc. 
 Reconciliation of Non-GAAP Measures 
 Six Months Ended June 30 
 (Millions) (Unaudited) 
 
 
                       Risk & 
                       Insurance                     Corporate/ 
                       Services      Consulting       Eliminations   Total 
Six Months Ended 
June 30, 2021 
Operating income 
 (loss)                $2,010        $   705         $     (129)     $2,586 
Operating margin       31.6  %       18.7    %       N/A             25.6  % 
Add (deduct) impact 
of noteworthy 
items: 
Restructuring, 
 excluding JLT (a)     5             8               10              23 
Changes in contingent 
 consideration (b)     1             (5)             (3)             (7) 
JLT integration and 
 restructuring costs 
 (c)                   27            12              3               42 
JLT 
 acquisition-related 
 costs (d)             22            2               --              24 
Disposal of business 
 (e)                   (53)          4               --              (49) 
Other                  7             --              --              7 
Operating income 
 adjustments           9             21              10              40 
Adjusted operating 
 income (loss)         $2,019        $   726         $     (119)     $2,626 
Total identified 
 intangible 
 amortization 
 expense               $161          $   28          $     --        $189 
Adjusted operating 
 margin                34.5  %       20.0    %       N/A             28.0  % 
 
Six Months Ended 
June 30, 2020 
Operating income 
 (loss)                $1,550        $   537         $     (132)     $1,955 
Operating margin       28.1  %       15.9    %       N/A             22.1  % 
Add (deduct) impact 
of noteworthy 
items: 
Restructuring, 
 excluding JLT (a)     2             6               12              20 
Changes in contingent 
 consideration (b)     7             (3)             2               6 
JLT integration and 
 restructuring costs 
 (c)                   100           17              20              137 
JLT 
 acquisition-related 
 costs (d)             24            1               1               26 
Disposal of business 
 (e)                   6             (4)             --              2 
Other                  5             --              --              5 
Operating income 
 adjustments           144           17              35              196 
Adjusted operating 
 income (loss)         $1,694        $   554         $     (97)      $2,151 
Total identified 
 intangible 
 amortization 
 expense               $147          $   27          $     --        $174 
Adjusted operating 
 margin                33.4  %       17.2    %       N/A             26.3  % 
 
 
(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. 
Consulting charges in 2020 reflect severance and real estate exit costs 
related to the Mercer restructuring program completed in 2020. 
(b) Primarily includes the change in fair value of contingent consideration 
related to acquisitions and dispositions as measured each quarter. 
(c) Includes costs incurred for staff reductions, lease related exit costs, 
technology and consulting costs related to the JLT integration. 
(d) Reflects retention costs related to the closing of the JLT Transaction. 
(e) Primarily reflects a gain on the sale of the U.K. commercial networks 
business that provided broking and back-office solutions for small independent 
brokers during the second quarter of 2021. 2020 reflects net loss on disposal 
of specialty businesses sold in the U.S., U.K. and Canada, previously acquired 
as part of the JLT Transaction. These amounts are reflected as an increase or 
decrease of other revenue, which is reflected as part of revenue in the 
consolidated statements of income. These items are removed from GAAP revenue 
in the calculation of adjusted operating margin. 
 
 

Marsh & McLennan Companies, Inc.

Reconciliation of Non-GAAP Measures

Three and Six Months Ended June 30

 

(Millions) (Unaudited)

 
 
Adjusted income, net of tax is calculated as the Company's GAAP income from 
continuing operations, adjusted to reflect the after tax impact of the 
operating income adjustments in the preceding tables and investments gains or 
losses related to the impact of mark-to-market adjustments on certain equity 
securities. 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 six month periods ended June 30, 2021 and 2020. 
 
 
 
                   Three Months Ended June   Three Months Ended June 
                   30, 2021                  30, 2020 
                                 Adjusted                  Adjusted 
                   Amount         EPS        Amount         EPS 
Net income before 
 non-controlling 
 interests, as 
 reported                $827                      $580 
Less: 
 Non-controlling 
 interest, net of 
 tax                     7                         8 
Subtotal                 $820    $   1.60          $572    $   1.12 
Operating income 
 adjustments       $(7)                      $99 
Investments 
 adjustment (a)    (1)                       25 
Income tax effect 
 of adjustments 
 (b)               (12)                      (21) 
Impact of U.K. 
tax rate change 
(c)                100                       -- 
                         80      0.15              103     0.20 
Adjusted income, 
 net of tax              $900    $   1.75          $675    $   1.32 
 
                   Six Months Ended June     Six Months Ended June 30, 
                   30, 2021                  2020 
                                 Adjusted                  Adjusted 
                   Amount         EPS        Amount         EPS 
Net income before 
 non-controlling 
 interests, as 
 reported                $1,825                    $1,347 
Less: 
 Non-controlling 
 interest, net of 
 tax                     22                        21 
Subtotal                 $1,803  $   3.51          $1,326  $   2.60 
Operating income 
 adjustments       $40                       $196 
Investments 
 adjustment (a)    (1)                       26 
Income tax effect 
 of adjustments 
 (b)               (21)                      (38) 
Impact of U.K. 
tax rate change 
(c)                100                       -- 
                         118     0.23              184     0.36 
Adjusted income, 
 net of tax              $1,921  $   3.74          $1,510  $   2.96 
 
 
 
(a) Represents mark-to-market gains in 2021 and losses in 2020, primarily 
related to the Company's investment in Alexander Forbes ("AF"). 
(b) For items with an income tax impact, the tax effect was calculated using 
an effective tax rate based on the tax jurisdiction for each item. 
(c) Reflects the re-measurement of the Company's U.K. deferred tax assets and 
liabilities upon enactment of legislation that increased the corporate income 
tax rate applicable to U.K. based entities from 19% to 25%, effective April 1, 
2023. 
 
 
 
 
Marsh & McLennan Companies, Inc. 
 Supplemental Information 
 Three and Six Months Ended June 30 
 (Millions) (Unaudited) 
 
 
                Three Months Ended    Six Months Ended 
                 June 30,              June 30, 
                2021        2020      2021         2020 
Consolidated 
Compensation 
 and benefits   $   2,860   $2,429    $   5,667    $4,984 
Other 
 operating 
 expenses       929         875       1,847        1,901 
Total expenses  $   3,789   $3,304    $   7,514    $6,885 
 
Depreciation 
 and 
 amortization 
 expense        $   104     $91       $   201      $188 
Identified 
 intangible 
 amortization 
 expense        89          88        189          174 
Total           $   193     $179      $   390      $362 
 
Stock option 
 expense        $   4       $5        $   25       $21 
 
Risk and 
Insurance 
Services 
Compensation 
 and benefits   $   1,632   $1,382    $   3,242    $2,834 
Other 
 operating 
 expenses       559         525       1,114        1,130 
Total expenses  $   2,191   $1,907    $   4,356    $3,964 
 
Depreciation 
 and 
 amortization 
 expense        $   58      $45       $   108      $97 
Identified 
 intangible 
 amortization 
 expense        75          75        161          147 
Total           $   133     $120      $   269      $244 
 
Consulting 
Compensation 
 and benefits   $   1,110   $940      $   2,184    $1,931 
Other 
 operating 
 expenses       438         421       876          910 
Total expenses  $   1,548   $1,361    $   3,060    $2,841 
 
Depreciation 
 and 
 amortization 
 expense        $   29      $29       $   58       $57 
Identified 
 intangible 
 amortization 
 expense        14          13        28           27 
Total           $   43      $42       $   86       $84 
 
 
 
 
Marsh & McLennan Companies, Inc. 
 Consolidated Balance Sheets 
 (Millions) 
 
 
                                         (Unaudited) 
                                          June 30,      December 31, 
                                          2021           2020 
ASSETS 
Current assets: 
Cash and cash equivalents                $   888        $   2,089 
Net receivables                          5,839          5,326 
Other current assets                     846            740 
Total current assets                     7,573          8,155 
 
Goodwill and intangible assets           18,492         18,216 
Fixed assets, net                        816            856 
Pension related assets                   1,911          1,768 
Right of use assets                      1,983          1,894 
Deferred tax assets                      669            702 
Other assets                             1,509          1,458 
TOTAL ASSETS                             $   32,953     $   33,049 
 
LIABILITIES AND EQUITY 
Current liabilities: 
Short-term debt                          $   516        $   517 
Accounts payable and accrued 
 liabilities                             2,830          3,050 
Accrued compensation and employee 
 benefits                                1,775          2,400 
Current lease liabilities                342            342 
Accrued income taxes                     353            247 
Total current liabilities                5,816          6,556 
 
Fiduciary liabilities                    9,936          8,585 
Less - cash and investments held in a 
 fiduciary capacity                      (9,936)        (8,585) 
                                         --             -- 
Long-term debt                           10,257         10,796 
Pension, post-retirement and 
 post-employment benefits                2,539          2,662 
Long-term lease liabilities              1,992          1,924 
Liabilities for errors and omissions     365            366 
Other liabilities                        1,720          1,485 
 
Total equity                             10,264         9,260 
TOTAL LIABILITIES AND EQUITY             $   32,953     $   33,049 
 
 
 
 
Marsh & McLennan Companies, Inc. 
 Consolidated Statements of Cash Flows 
 (Millions) (Unaudited) 
 
 
                                       Six Months Ended June 30, 
                                       2021              2020 
Operating cash flows: 
Net income before non-controlling 
 interests                             $     1,825       $   1,347 
Adjustments to reconcile net income 
to cash used for operations: 
Depreciation and amortization          390               362 
Non cash lease expense                 158               165 
Share-based compensation expense       176               147 
Change in fair value of 
 acquisition-related derivative 
 contracts and other                   53                15 
 
Changes in Assets and Liabilities: 
Accrued compensation and employee 
 benefits                              (642)             (848) 
Net receivables                        (551)             (389) 
Other changes to assets and 
 liabilities                           (205)             114 
Contributions to pension & other 
 benefit plans in excess of current 
 year credit                           (187)             (165) 
Operating lease liabilities            (172)             (164) 
Effect of exchange rate changes        (95)              (6) 
Net cash provided by operations        750               578 
Financing cash flows: 
Purchase of treasury shares            (434)             -- 
Borrowings from term-loan and credit 
 facilities                            --                1,000 
Proceeds from issuance of debt         --                737 
Repayments of debt                     (509)             (507) 
Net issuance of common stock from 
 treasury shares                       (23)              (49) 
Net distributions of non-controlling 
 interests and deferred/contingent 
 consideration                         (47)              (94) 
Dividends paid                         (478)             (466) 
Net cash (used for) provided by 
 financing activities                  (1,491)           621 
Investing cash flows: 
Capital expenditures                   (151)             (200) 
Net (purchase) sale of long-term 
 investments and other                 (4)               105 
Dispositions                           81                93 
Acquisitions                           (363)             (562) 
Net cash used for investing 
 activities                            (437)             (564) 
Effect of exchange rate changes on 
 cash and cash equivalents             (23)              (79) 
(Decrease) increase in cash and cash 
 equivalents                           (1,201)           556 
Cash and cash equivalents at 
 beginning of period                   2,089             1,155 
Cash and cash equivalents at end of 
 period                                $     888         $   1,711 
 

Media Contact:

Erick R. Gustafson

Marsh McLennan

+1 202 263 7788

erick.gustafson@mmc.com

 

Investor Contact:

Sarah DeWitt

Marsh McLennan

+1 212 345 6750

 

sarah.dewitt@mmc.com

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20210722005510/en/

 
    CONTACT: 

Marsh & McLennan Companies, Inc.

 
    SOURCE: Marsh & McLennan 
Copyright Business Wire 2021 
 

(END) Dow Jones Newswires

July 22, 2021 07:00 ET (11:00 GMT)

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