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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 0.0% 81.00 407 01:00:00
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Nonlife Insurance 14,950.0 2,244.0 326.0 24.8 43,821

MARSH & MCLENNAN: Marsh McLennan Reports Third Quarter 2021 Results

21/10/2021 12:00pm

UK Regulatory (RNS & others)


Marsh & Mclennan Cos (LSE:MHM)
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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 third quarter ended September 30, 2021.

 

Dan Glaser, President and CEO, said: "We delivered another quarter of excellent results. For the second consecutive quarter, underlying growth was at the highest level in over two decades. We grew underlying revenue by 13%, adjusted operating income by 19%, and adjusted EPS by 32%. For the first nine months of 2021, we achieved 10% underlying revenue growth, 21% adjusted operating income growth, and 28% adjusted EPS growth."

 

"Given the outstanding quarter and year-to-date performance, we are on track for a terrific year."

 

Consolidated Results

 

Consolidated revenue in the third quarter of 2021 was $4.6 billion, an increase of 16% compared with the third quarter of 2020. On an underlying basis, revenue increased 13%. Operating income was $740 million, an increase of 37% from the prior year. Adjusted operating income, which excludes noteworthy items as presented in the attached supplemental schedules, rose 19% to $759 million. Net income attributable to the Company was $537 million, or $1.05 per diluted share, compared with $0.62 in the third quarter of 2020. Adjusted earnings per share rose 32% to $1.08 per diluted share compared with $0.82 for the prior year period.

 

For the nine months ended September 30, 2021, consolidated revenue was $14.7 billion, an increase of 15%, or 10% on an underlying basis compared to the prior period. Operating income was $3.3 billion, an increase of 33% from the prior year period. Adjusted operating income rose 21% to $3.4 billion. Net income attributable to the Company was $2.3 billion. Fully diluted earnings per share was $4.56 compared with $3.21 in the first nine months of 2020. Adjusted earnings per share increased 28% to $4.82 compared with $3.77 for the comparable period in 2020.

 

Risk & Insurance Services

 

Risk & Insurance Services revenue was $2.7 billion in the third quarter of 2021, an increase of 17%, or 13% on an underlying basis. Operating income rose 21% to $403 million, and adjusted operating income was $469 million, an increase of 21% from the prior year period. For the nine months ended September 30, 2021, revenue was $9.0 billion, an increase of 16%, or 11% on an underlying basis. Operating income rose 28% to $2.4 billion, and adjusted operating income was $2.5 billion, an increase of 20% from the prior year period.

 

Marsh's revenue in the third quarter was $2.4 billion, an increase of 13% on an underlying basis. In U.S./Canada, underlying revenue rose 16%. International operations produced underlying revenue growth of 9%, reflecting 12% growth in Latin America, 9% growth in Asia Pacific, and 8% growth in EMEA. For the nine months ended September 30, 2021, Marsh's underlying revenue growth was 12% compared to the prior period a year ago.

 

Guy Carpenter's revenue in the third quarter was $314 million, an increase of 15% on an underlying basis. For the nine months ended September 30, 2021, Guy Carpenter's underlying revenue growth was 10%.

 

Consulting

 

Consulting revenue in the third quarter was $1.9 billion, an increase of 13% or 12% on an underlying basis compared to the same period a year ago. Operating income increased 45% to $404 million, and adjusted operating income increased 15% to $350 million. For the first nine months of 2021, revenue was $5.7 billion, an increase of 12%, or an increase of 9% on an underlying basis. Operating income of $1.1 billion increased 36% and adjusted operating income increased 25% to $1.1 billion.

 

Mercer's revenue was $1.3 billion in the third quarter, an increase of 7% on an underlying basis. Career revenue of $253 million was up 13% on an underlying basis. Wealth revenue of $613 million increased 6% on an underlying basis, and Health revenue of $449 million increased 4% on an underlying basis. For the nine months ended September 30, 2021, Mercer's revenue was $3.9 billion, an increase of 4% on an underlying basis compared to the same period a year ago.

 

Oliver Wyman's revenue was $610 million in the third quarter, an increase of 25% on an underlying basis. For the first nine months ended September 30, 2021, Oliver Wyman's revenue was $1.8 billion, an increase of 21% on an underlying basis.

 

Other Items

 

The Company repurchased 1.9 million shares of stock for $300 million in the third quarter. Through nine months, the Company has repurchased 5.3 million shares for $734 million.

 

Conference Call

 

A conference call to discuss third 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 4336169. The live audio webcast may be accessed at marshmclennan.com. A replay of the webcast will be available approximately two hours after the event.

 

About Marsh McLennan

 

Marsh McLennan (NYSE: MMC) is the world's leading professional services firm in the areas of risk, strategy and people. The Company's 81,000 colleagues advise clients in 130 countries. With annual revenue over $19 billion, Marsh McLennan helps clients navigate an increasingly dynamic and complex environment through four market-leading businesses. Marsh provides data-driven risk advisory services and insurance solutions to commercial and consumer clients. Guy Carpenter develops advanced risk, reinsurance and capital strategies that help clients grow profitably and pursue emerging opportunities. Mercer delivers advice and technology-driven solutions that help organizations redefine the world of work, reshape retirement and investment outcomes, and unlock health and well being for a changing workforce. Oliver Wyman serves as a critical strategic, economic and brand advisor to private sector and governmental clients. For more information, visit marshmclennan.com, follow us on LinkedIn and Twitter or subscribe to BRINK.

 

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 increasing prevalence of ransomware, supply chain and other forms of 
      cyber attacks, and their potential to disrupt our operations and result 
      in the disclosure of confidential client or company information; 
 
   -- the 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; 
 
   -- 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, including emerging vaccine mandates, 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, or 
      disagreements with tax authorities; and 
 
   -- the regulatory, contractual and reputational risks that arise based on 
      insurance placement activities and insurer revenue streams. 
 

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

 

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

 
Marsh & McLennan Companies, Inc. 
 Consolidated Statements of Income 
 (In millions, except per share data) 
 (Unaudited) 
 
                   Three Months 
                   Ended September   Nine Months Ended 
                   30,                September 30, 
                   2021     2020     2021      2020 
Revenue            $4,583   $3,968   $14,683   $12,808 
Expense: 
Compensation and 
 benefits          2,853    2,495    8,520     7,479 
Other operating 
 expenses          990      933      2,837     2,834 
Operating 
 expenses          3,843    3,428    11,357    10,313 
Operating income   740      540      3,326     2,495 
Other net benefit 
 credits           69       60       211       187 
Interest income    1        1        2         5 
Interest expense   (107  )  (128  )  (335   )  (387   ) 
Investment income 
 (loss)            13       (14   )  43        (47    ) 
Income before 
 income taxes      716      459      3,247     2,253 
Income tax 
 expense           174      139      880       586 
Net income before 
 non-controlling 
 interests         542      320      2,367     1,667 
Less: Net income 
 attributable to 
 non-controlling 
 interests         5        4        27        25 
Net income 
 attributable to 
 the Company       $537     $316     $2,340    $1,642 
Net income per 
share 
attributable to 
the Company: 
- Basic            $1.06    $0.62    $4.61     $3.25 
- Diluted          $1.05    $0.62    $4.56     $3.21 
Average number 
of shares 
outstanding 
- Basic            506      507      508       506 
- Diluted          513      512      513       511 
Shares 
 outstanding at 
 September 30      505      507      505       507 
 
 

Marsh & McLennan Companies, Inc.

Supplemental Information - Revenue Analysis

Three Months Ended September 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 September    GAAP       Currency       Dispositions/   Underlying 
                30,                Revenue     Impact        Other Impact     Revenue 
                2021     2020 
Risk and 
Insurance 
Services 
Marsh           $2,352   $2,009   17 %        2 %           3       %        13 % 
Guy Carpenter   314      274      15 %        --            --               15 % 
Subtotal        2,666    2,283    17 %        1 %           2       %        13 % 
Fiduciary 
 interest 
 income         4        8 
Total Risk and 
 Insurance 
 Services       2,670    2,291    17 %        1 %           2       %        13 % 
Consulting 
Mercer          1,315    1,216    8  %        2 %           (1      )%       7  % 
Oliver Wyman 
 Group          610      480      27 %        1 %           --               25 % 
Total 
 Consulting     1,925    1,696    13 %        2 %           --               12 % 
Corporate 
 Eliminations   (12   )  (19   ) 
Total Revenue   $4,583   $3,968   16 %        2 %           1       %        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           GAAP        Currency      Dispositions/   Underlying 
                 September 30,   Revenue      Impact       Other Impact     Revenue 
                 2021    2020 
Marsh: 
EMEA             $600    $536    12%         4 %          --               8  % 
Asia Pacific     281     254     10%         2 %          --               9  % 
Latin America    105     93      13%         1 %          --               12 % 
Total 
 International   986     883     12%         3 %          --               9  % 
U.S./Canada      1,366   1,126   21%         --           4     %          16 % 
Total Marsh      $2,352  $2,009  17%         2 %          3     %          13 % 
Mercer: 
Wealth           $613    $566    9 %         3 %          (1)   %          6  % 
Health           449     430     4 %         1 %          (1)   %          4  % 
Career           253     220     15%         1 %          --               13 % 
Total Mercer     $1,315  $1,216  8 %         2 %          (1)   %          7  % 
 
 
* Components of revenue change may not add due to rounding. 
 
 

Marsh & McLennan Companies, Inc.

Supplemental Information - Revenue Analysis

Nine Months Ended September 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/ 
                Nine Months Ended   GAAP        Currency    Dispositions/   Underlying 
                 September 30,      Revenue      Impact     Other Impact     Revenue 
                2021      2020 
Risk and 
Insurance 
Services 
Marsh           $7,327    $6,231    18%         3%         3       %        12 % 
Guy Carpenter   1,697     1,534     11%         1%         --               10 % 
Subtotal        9,024     7,765     16%         3%         2       %        11 % 
Fiduciary 
 interest 
 income         12        40 
Total Risk and 
 Insurance 
 Services       9,036     7,805     16%         3%         2       %        11 % 
Consulting 
Mercer          3,877     3,616     7 %         4%         (1      )%       4  % 
Oliver Wyman 
 Group          1,813     1,458     24%         3%         --               21 % 
Total 
 Consulting     5,690     5,074     12%         4%         (1      )%       9  % 
Corporate 
 Eliminations   (43    )  (71    ) 
Total Revenue   $14,683   $12,808   15%         3%         1       %        10 % 
 
 
 
 

Revenue Details

 

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

 
                                             Components of Revenue Change* 
                 Nine Months     % Change                 Acquisitions/ 
                 Ended            GAAP       Currency      Dispositions/   Underlying 
                 September 30,    Revenue     Impact       Other Impact     Revenue 
                 2021    2020 
Marsh: 
EMEA             $2,233  $1,887  18 %        6  %         2    %           10 % 
Asia Pacific     902     790     14 %        6  %         --               9  % 
Latin America    298     283     5  %        (1)%         --               6  % 
Total 
 International   3,433   2,960   16 %        5  %         1    %           9  % 
U.S./Canada      3,894   3,271   19 %        1  %         5    %           14 % 
Total Marsh      $7,327  $6,231  18 %        3  %         3    %           12 % 
Mercer: 
Wealth           $1,861  $1,719  8  %        6  %         (1)  %           4  % 
Health           1,398   1,348   4  %        2  %         (1)  %           3  % 
Career           618     549     13 %        3  %         --               10 % 
Total Mercer     $3,877  $3,616  7  %        4  %         (1)  %           4  % 
 
 
* Components of revenue change may not add due to rounding. 
 

Marsh & McLennan Companies, Inc.

Reconciliation of Non-GAAP Measures

Three Months Ended September 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 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 (loss). The 
following tables identify these noteworthy items and reconcile adjusted 
operating income (loss) to GAAP operating income (loss), on a consolidated and 
reportable segment basis, for the three and nine months ended September 30, 
2021 and 2020. The following tables also present adjusted operating margin. 
For the three and nine months ended September 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 
September 30, 2021 
Operating income 
 (loss)                $403         $   404         $    (67  )       $740 
Operating margin       15.1%        21.0      %     N/A               16.1  % 
Add (deduct) impact 
of noteworthy 
items: 
Restructuring, 
 excluding JLT (a)     7            --              5                 12 
Changes in contingent 
 consideration (b)     17           1               --                18 
JLT integration and 
 restructuring costs 
 (c)                   11           9               (1        )       19 
JLT 
 acquisition-related 
 costs (d)             10           --              1                 11 
JLT legacy E&O 
 provision (e)         --           (63     )       --                (63 ) 
Legal claims and 
 other (f)             21           (1      )       2                 22 
Operating income 
 adjustments           66           (54     )       7                 19 
Adjusted operating 
 income (loss)         $469         $   350         $    (60  )       $759 
Total identified 
 intangible 
 amortization 
 expense               $75          $   14          $    --           $89 
Adjusted operating 
 margin                20.4%        18.9      %     N/A               18.5  % 
 
 
Three Months Ended 
September 30, 2020 
Operating income 
 (loss)                $333         $   278         $    (71  )       $540 
Operating margin       14.5%        16.4      %     N/A               13.6  % 
Add (deduct) impact 
of noteworthy 
items: 
Restructuring, 
 excluding JLT (a)     --           11              12                23 
Changes in contingent 
 consideration (b)     15           1               --                16 
JLT integration and 
 restructuring costs 
 (c)                   25           14              5                 44 
JLT 
 acquisition-related 
 costs (d)             15           1               (1        )       15 
Other                  --           1               (1        )       -- 
Operating income 
 adjustments           55           28              15                98 
Adjusted operating 
 income (loss)         $388         $   306         $    (56  )       $638 
Total identified 
 intangible 
 amortization 
 expense               $75          $   16          $    --           $91 
Adjusted operating 
 margin                20.2%        18.9      %     N/A               18.4  % 
 
 
 
(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 Jardine Lloyd Thompson ("JLT") 
integration. 
(d) Reflects retention costs related to the closing of the acquisition of JLT. 
(e) 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) Primarily reflects settlement charges and legal costs related to strategic 
recruiting. 
 
 
 
 
Marsh & McLennan Companies, Inc. 
 Reconciliation of Non-GAAP Measures 
 Nine Months Ended September 30 
 (Millions) (Unaudited) 
 
                       Risk & 
                       Insurance                     Corporate/ 
                       Services      Consulting       Eliminations   Total 
Nine Months Ended 
September 30, 2021 
Operating income 
 (loss)                $2,413        $   1,109       $     (196)     $3,326 
Operating margin       26.7  %       19.5      %     N/A             22.7  % 
Add (deduct) impact 
of noteworthy 
items: 
Restructuring, 
 excluding JLT (a)     12            8               15              35 
Changes in contingent 
 consideration (b)     18            (4)             (3)             11 
JLT integration and 
 restructuring costs 
 (c)                   38            21              2               61 
JLT 
 acquisition-related 
 costs (d)             32            2               1               35 
JLT legacy E&O 
 provision (e)         --            (63)            --              (63) 
Legal claims and 
 other (f)             27            --              2               29 
Disposal of 
 businesses (g)        (52)          3               --              (49) 
Operating income 
 adjustments           75            (33)            17              59 
Adjusted operating 
 income (loss)         $2,488        $   1,076       $     (179)     $3,385 
Total identified 
 intangible 
 amortization 
 expense               $236          $   42          $     --        $278 
Adjusted operating 
 margin                30.3  %       19.6      %     N/A             25.0  % 
 
Nine Months Ended 
September 30, 2020 
Operating income 
 (loss)                $1,883        $   815         $     (203)     $2,495 
Operating margin       24.1  %       16.1      %     N/A             19.5  % 
Add (deduct) impact 
of noteworthy 
items: 
Restructuring, 
 excluding JLT (a)     2             17              24              43 
Changes in contingent 
 consideration (b)     22            (2)             2               22 
JLT integration and 
 restructuring costs 
 (c)                   125           31              25              181 
JLT 
 acquisition-related 
 costs (d)             39            2               --              41 
Disposal of business 
 (g)                   6             (4)             --              2 
Other                  5             1               (1)             5 
Operating income 
 adjustments           199           45              50              294 
Adjusted operating 
 income (loss)         $2,082        $   860         $     (153)     $2,789 
Total identified 
 intangible 
 amortization 
 expense               $222          $   43          $     --        $265 
Adjusted operating 
 margin                29.5  %       17.8      %     N/A             23.8  % 
 
 
(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 acquisition of JLT. 
(e) 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) Primarily reflects settlement charges and legal costs related to strategic 
recruiting. 
(g) 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 Nine Months Ended September 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 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 nine month periods ended September 30, 2021 and 2020. 
 
 
 
                  Three Months Ended        Three Months Ended 
                   September 30, 2021        September 30, 2020 
                                Adjusted                   Adjusted 
                  Amount         EPS        Amount          EPS 
Net income 
 before 
 non-controlling 
 interests, as 
 reported               $542                       $320 
Less: 
 Non-controlling 
 interest, net 
 of tax                 5                          4 
Subtotal                $537    $   1.05           $316    $   0.62 
Operating income 
 adjustments      $19                       $98 
Investments 
 adjustment (a)   (1 )                      16 
Pension 
settlement 
adjustment        2                         -- 
Income tax 
 effect of 
 adjustments 
 (b)              (10)                      (12 ) 
Impact of U.K. 
tax rate change 
(c)               5                         -- 
                        15      0.03               102     0.20 
Adjusted income, 
 net of tax             $552    $   1.08           $418    $   0.82 
 
                  Nine Months Ended         Nine Months Ended September 
                  September 30, 2021        30, 2020 
                                Adjusted                   Adjusted 
                  Amount         EPS        Amount          EPS 
Net income 
 before 
 non-controlling 
 interests, as 
 reported               $2,367                     $1,667 
Less: 
 Non-controlling 
 interest, net 
 of tax                 27                         25 
Subtotal                $2,340  $   4.56           $1,642  $   3.21 
Operating income 
 adjustments      $59                       $294 
Investments 
 adjustment (a)   (2 )                      42 
Pension 
settlement 
adjustment        2                         -- 
Income tax 
 effect of 
 adjustments 
 (b)              (31)                      (50 ) 
Impact of U.K. 
tax rate change 
(c)               105                       -- 
                        133     0.26               286     0.56 
Adjusted income, 
 net of tax             $2,473  $   4.82           $1,928  $   3.77 
 
 
 
(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 Nine Months Ended September 30 
 (Millions) (Unaudited) 
 
                Three Months Ended   Nine Months Ended 
                 September 30,        September 30, 
                2021        2020     2021         2020 
Consolidated 
Compensation 
 and benefits   $   2,853   $2,495   $   8,520    $7,479 
Other 
 operating 
 expenses       990         933      2,837        2,834 
Total expenses  $   3,843   $3,428   $   11,357   $10,313 
 
Depreciation 
 and 
 amortization 
 expense        $   90      $94      $   291      $282 
Identified 
 intangible 
 amortization 
 expense        89          91       278          265 
Total           $   179     $185     $   569      $547 
 
Stock option 
 expense        $   4       $4       $   29       $25 
 
Risk and 
Insurance 
Services 
Compensation 
 and benefits   $   1,634   $1,400   $   4,876    $4,234 
Other 
 operating 
 expenses       633         558      1,747        1,688 
Total expenses  $   2,267   $1,958   $   6,623    $5,922 
 
Depreciation 
 and 
 amortization 
 expense        $   44      $49      $   152      $146 
Identified 
 intangible 
 amortization 
 expense        75          75       236          222 
Total           $   119     $124     $   388      $368 
 
Consulting 
Compensation 
 and benefits   $   1,103   $980     $   3,287    $2,911 
Other 
 operating 
 expenses       418         438      1,294        1,348 
Total expenses  $   1,521   $1,418   $   4,581    $4,259 
 
Depreciation 
 and 
 amortization 
 expense        $   29      $29      $   87       $86 
Identified 
 intangible 
 amortization 
 expense        14          16       42           43 
Total           $   43      $45      $   129      $129 
 
 
Marsh & McLennan Companies, Inc. 
 Consolidated Balance Sheets 
 (Millions) 
 
                            (Unaudited) 
                             September 30, 
                             2021              December 31, 2020 
ASSETS 
Current assets: 
Cash and cash equivalents   $   1,398          $    2,089 
Net receivables             5,624              5,326 
Other current assets        855                740 
Total current assets        7,877              8,155 
 
Goodwill and intangible 
 assets                     18,235             18,216 
Fixed assets, net           824                856 
Pension related assets      1,935              1,768 
Right of use assets         1,899              1,894 
Deferred tax assets         692                702 
Other assets                1,520              1,458 
TOTAL ASSETS                $   32,982         $    33,049 
 
LIABILITIES AND EQUITY 
Current liabilities: 
Short-term debt             $   516            $    517 
Accounts payable and 
 accrued liabilities        2,833              3,050 
Accrued compensation and 
 employee benefits          2,365              2,400 
Current lease liabilities   339                342 
Accrued income taxes        333                247 
Dividends payable           273                -- 
Total current liabilities   6,659              6,556 
 
Fiduciary liabilities       10,408             8,585 
Less - cash and 
 investments held in a 
 fiduciary capacity         (10,408         )  (8,585           ) 
                            --                 -- 
Long-term debt              10,228             10,796 
Pension, post-retirement 
 and post-employment 
 benefits                   2,387              2,662 
Long-term lease 
 liabilities                1,900              1,924 
Liabilities for errors and 
 omissions                  356                366 
Other liabilities           1,564              1,485 
 
Total equity                9,888              9,260 
TOTAL LIABILITIES AND 
 EQUITY                     $   32,982         $    33,049 
 
 
 
 
Marsh & McLennan Companies, Inc. 
 Consolidated Statements of Cash Flows 
 (Millions) (Unaudited) 
 
                                            Nine Months Ended 
                                             September 30, 
                                            2021          2020 
Operating cash flows: 
Net income before non-controlling 
 interests                                  $   2,367     $1,667 
Adjustments to reconcile net income to 
cash used for operations: 
Depreciation and amortization               569           547 
Non cash lease expense                      241           241 
Share-based compensation expense            263           219 
Net (gain) loss on investments, 
 disposition of assets and other            (89        )  48 
 
Changes in Assets and Liabilities: 
Accrued compensation and employee benefits  (53        )  (431   ) 
Net receivables                             (336       )  77 
Other changes to assets and liabilities     (299       )  135 
Contributions to pension and other benefit 
 plans in excess of current year credit     (282       )  (240   ) 
Operating lease liabilities                 (262       )  (254   ) 
Effect of exchange rate changes             (45        )  (10    ) 
Net cash provided by operations             2,074         1,999 
Financing cash flows: 
Purchase of treasury shares                 (734       )  -- 
Borrowings from term-loan and credit 
 facilities                                 --            1,000 
Proceeds from issuance of debt              --            737 
Repayments of debt                          (512       )  (1,011 ) 
Net issuance of common stock from treasury 
 shares                                     16            (33    ) 
Net distributions of non-controlling 
 interests and deferred/contingent 
 consideration                              (66        )  (154   ) 
Dividends paid                              (750       )  (702   ) 
Net cash used for financing activities      (2,046     )  (163   ) 
Investing cash flows: 
Capital expenditures                        (268       )  (278   ) 
Net (purchase) sale of long-term 
 investments and other                      (4         )  98 
Dispositions                                84            93 
Acquisitions                                (401       )  (559   ) 
Net cash used for investing activities      (589       )  (646   ) 
Effect of exchange rate changes on cash 
 and cash equivalents                       (130       )  43 
(Decrease) increase in cash and cash 
 equivalents                                (691       )  1,233 
Cash and cash equivalents at beginning of 
 period                                     2,089         1,155 
Cash and cash equivalents at end of period  $   1,398     $2,388 
 

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/20211021005542/en/

 
    CONTACT: 

Marsh & McLennan

 
    SOURCE: Marsh & McLennan 
Copyright Business Wire 2021 
 

(END) Dow Jones Newswires

October 21, 2021 07:00 ET (11:00 GMT)

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