MARSH & MCLENNAN COMPANIES, INC. - Quarter Report: 2023 June (Form 10-Q)

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_____________________________________________

FORM 10-Q

_____________________________________________

(Mark One)


☒			Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2023


☐			Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to

____________________________________________

Marsh & McLennan Companies, Inc.

1166 Avenue of the Americas

New York, New York 10036

(212) 345-5000

_____________________________________________

Commission file number 1-5998

State of Incorporation: Delaware

I.R.S. Employer Identification No. 36-2668272

_____________________________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading symbol(s)

Name of exchange on which registered

Common Stock, par value $1.00 per share

MMC

New York Stock Exchange

Chicago Stock Exchange

London Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer

☒

Accelerated Filer

☐

Non-Accelerated Filer

☐(Do not check if a smaller reporting company)

Smaller Reporting Company

☐

Emerging Growth Company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ý

As of July 17, 2023, there were outstanding 493,953,729 shares of common stock, par value $1.00 per share, of the registrant.

INFORMATION CONCERNING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q 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 conflicts such as the war in Ukraine, slower GDP growth or recession, capital markets volatility, instability in the banking sector and inflation;

•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 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 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 and data privacy 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;

•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 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 Companies, Inc., and its consolidated subsidiaries (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 this Quarterly Report on Form 10-Q and our most recently filed Annual Report on Form 10-K.

TABLE OF CONTENTS


PART I. FINANCIAL INFORMATION		4

ITEM 1.	FINANCIAL STATEMENTS (UNAUDITED)	4

	CONSOLIDATED STATEMENTS OF INCOME	4

	CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME	5

	CONSOLIDATED BALANCE SHEETS	6

	CONSOLIDATED STATEMENTS OF CASH FLOWS	8

	CONSOLIDATED STATEMENTS OF EQUITY	9

	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS	10

ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS	37
	OF OPERATIONS
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	56

ITEM 4.	CONTROLS & PROCEDURES	57

PART II. OTHER INFORMATION		58

ITEM 1.	LEGAL PROCEEDINGS	58

ITEM 1A.	RISK FACTORS	58

ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	58

ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	58

ITEM 4.	MINE SAFETY DISCLOSURE	58

ITEM 5.	OTHER INFORMATION	58

ITEM 6.	EXHIBITS	58

PART I. FINANCIAL INFORMATION

Item 1.Financial Statements.

MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
(In millions, except per share data)	2023		2022		2023		2022
Revenue	$	5,876	$	5,379	$	11,800	$	10,928
Expense:
Compensation and benefits	3,337		3,010		6,544		6,110
Other operating expenses	1,082		1,005		2,073		2,009
Operating expenses	4,419		4,015		8,617		8,119
Operating income	1,457		1,364		3,183		2,809
Other net benefit credits	60		59		118		121
Interest income	10		1		24		2
Interest expense	(146)		(114)		(282)		(224)

Investment income	3		2		5		28

Income before income taxes	1,384		1,312		3,048		2,736
Income tax expense	337		334		749		672


Net income before non-controlling interests	1,047		978		2,299		2,064
Less: Net income attributable to non-controlling interests	12		11		29		26
Net income attributable to the Company	$	1,035	$	967	$	2,270	$	2,038
Net income per share attributable to the Company:
– Basic	$	2.09	$	1.93	$	4.59	$	4.06

– Diluted	$	2.07	$	1.91	$	4.55	$	4.01

Average number of shares outstanding:
– Basic	495		501		495		502
– Diluted	499		506		499		508
Shares outstanding at June 30,	494		499		494		499

The accompanying notes are an integral part of these unaudited consolidated statements.

MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
(In millions)	2023		2022		2023		2022
Net income before non-controlling interests	$	1,047	$	978	$	2,299	$	2,064
Other comprehensive income (loss), before tax:
Foreign currency translation adjustments	223		(864)		342		(1,033)

(Loss) gain related to pension/post-retirement plans	(62)		236		(120)		322
Other comprehensive income (loss) before tax	161		(628)		222		(711)
Income tax (credit) expense on other comprehensive loss	(18)		56		(37)		77
Other comprehensive income (loss), net of tax	179		(684)		259		(788)
Comprehensive income	1,226		294		2,558		1,276
Less: comprehensive income attributable to non-controlling interest	12		11		29		26
Comprehensive income attributable to the Company	$	1,214	$	283	$	2,529	$	1,250

The accompanying notes are an integral part of these unaudited consolidated statements.

MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS


(In millions, except share data)	(Unaudited) June 30, 2023		December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents	$	1,171	$	1,442
Cash and cash equivalents held in a fiduciary capacity	11,564		10,660
Receivables
Commissions and fees	6,406		5,293
Advanced premiums and claims	97		103

Other	637		616
	7,140		6,012
Less-allowance for credit losses	(154)		(160)
Net receivables	6,986		5,852


Other current assets	1,081		1,005
Total current assets	20,802		18,959

Goodwill	16,621		16,251
Other intangible assets	2,508		2,537
Fixed assets (net of accumulated depreciation and amortization of $1,611 at June 30, 2023 and $1,531 at December 31, 2022)	870		871
Pension related assets	2,331		2,127
Right of use assets	1,569		1,562
Deferred tax assets	365		358
Other assets	1,500		1,449
	$	46,566	$	44,114

The accompanying notes are an integral part of these unaudited consolidated statements.

MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (Continued)


(In millions, except share data)	(Unaudited) June 30, 2023		December 31, 2022
LIABILITIES AND EQUITY
Current liabilities:
Short-term debt	$	2,375	$	268
Accounts payable and accrued liabilities	3,137		3,278
Accrued compensation and employee benefits	2,021		3,095

Current lease liabilities	309		310
Accrued income taxes	407		221

Fiduciary liabilities	11,564		10,660
Total current liabilities	19,813		17,832




Long-term debt	10,247		11,227
Pension, post-retirement and post-employment benefits	866		921
Long-term lease liabilities	1,699		1,667
Liabilities for errors and omissions	364		355
Other liabilities	1,438		1,363
Commitments and contingencies	—		—

Equity:
Preferred stock, $1 par value, authorized 6,000,000 shares, none issued	—		—
Common stock, $1 par value, authorized 1,600,000,000 shares, issued 560,641,640 shares at June 30, 2023 and December 31, 2022	561		561
Additional paid-in capital	1,074		1,179
Retained earnings	21,980		20,301
Accumulated other comprehensive loss	(5,055)		(5,314)
Non-controlling interests	178		229
	18,738		16,956
Less – treasury shares, at cost, 66,590,930 shares at June 30, 2023 and 65,855,914 shares at December 31, 2022	(6,599)		(6,207)
Total equity	12,139		10,749
	$	46,566	$	44,114

The accompanying notes are an integral part of these unaudited consolidated statements.

MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


For the Six Months Ended June 30,
(In millions)	2023		2022
Operating cash flows:
Net income before non-controlling interests	$	2,299	$	2,064
Adjustments to reconcile net income provided by operations:
Depreciation and amortization of fixed assets and capitalized software	175		174
Amortization of intangible assets	172		174

Non-cash lease expense	143		152
Adjustments and payments related to contingent consideration assets and liabilities	(23)		9
Deconsolidation of Russian businesses	—		39


Net gain on investments	(5)		(28)
Net loss (gain) on disposition of assets	19		(111)
Share-based compensation expense	191		194

Changes in assets and liabilities:
Net receivables	(1,029)		(978)

Other assets	(108)		(65)

Accrued compensation and employee benefits	(1,101)		(992)
Provision for taxes, net of payments and refunds	245		235
Contributions to pension and other benefit plans in excess of current year credit	(164)		(226)
Other liabilities	10		105
Operating lease liabilities	(159)		(166)

Net cash provided by operations	665		580
Financing cash flows:
Purchase of treasury shares	(600)		(1,100)
Net proceeds from issuance of commercial paper	308		944
Borrowings from term-loan and credit facilities	200		—
Proceeds from issuance of debt	589		—
Repayments of debt	(8)		(8)


Purchase of non-controlling interests	(139)		—

Shares withheld for taxes on vested units – treasury shares	(141)		(180)
Issuance of common stock from treasury shares	120		65
Payments of deferred and contingent consideration for acquisitions	(185)		(92)
Receipts of contingent consideration for dispositions	2		3
Distributions of non-controlling interests	(10)		(15)
Dividends paid	(591)		(547)
Change in fiduciary liabilities	682		1,428
Net cash provided by financing activities	227		498
Investing cash flows:
Capital expenditures	(185)		(239)
Purchases of long term investments	(30)		(16)
Sales of long term investments	16		5


Dispositions	(17)		135
Acquisitions, net of cash and cash held in a fiduciary capacity acquired	(292)		(151)

Other, net	7		8
Net cash used for investing activities	(501)		(258)
Effect of exchange rate changes on cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity	242		(755)
Increase in cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity	633		65
Cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity at beginning of period	12,102		11,374
Cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity at end of period	$	12,735	$	11,439


Reconciliation of cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity to the Consolidated Balance Sheets
Balance at June 30,	2023		2022
(In millions)
Cash and cash equivalents	$	1,171	$	909
Cash and cash equivalents held in a fiduciary capacity	11,564		10,530
Total cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity	$	12,735	$	11,439

The accompanying notes are an integral part of these unaudited consolidated statements.

MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
(In millions, except per share data)	2023		2022		2023		2022
COMMON STOCK
Balance, beginning and end of period	$	561	$	561	$	561	$	561
ADDITIONAL PAID-IN CAPITAL
Balance, beginning of period	$	1,064	$	1,026	$	1,179	$	1,112
Change in accrued stock compensation costs	89		5		(101)		(140)
Issuance of shares under stock compensation plans and employee stock purchase plans	(9)		13		66		72
Purchase of non-controlling interest	(70)		—		(70)		—

Balance, end of period	$	1,074	$	1,044	$	1,074	$	1,044
RETAINED EARNINGS
Balance, beginning of period	$	20,949	$	18,916	$	20,301	$	18,389


Net income attributable to the Company	1,035		967		2,270		2,038
Dividend equivalents declared	(4)		(3)		(8)		(7)
Dividends declared	—		—		(583)		(540)
Balance, end of period	$	21,980	$	19,880	$	21,980	$	19,880
ACCUMULATED OTHER COMPREHENSIVE LOSS
Balance, beginning of period	$	(5,234)	$	(4,679)	$	(5,314)	$	(4,575)




Other comprehensive income (loss), net of tax	179		(684)		259		(788)
Balance, end of period	$	(5,055)	$	(5,363)	$	(5,055)	$	(5,363)
TREASURY SHARES
Balance, beginning of period	$	(6,387)	$	(4,887)	$	(6,207)	$	(4,478)
Issuance of shares under stock compensation plans and employee stock purchase plans	88		58		208		149

Purchase of treasury shares	(300)		(600)		(600)		(1,100)
Balance, end of period	$	(6,599)	$	(5,429)	$	(6,599)	$	(5,429)
NON-CONTROLLING INTERESTS
Balance, beginning of period	$	243	$	219	$	229	$	213
Net income attributable to non-controlling interests	12		11		29		26

Net non-controlling interests acquired	(69)		—		(69)		—
Distributions and other changes	(8)		(6)		(11)		(15)

Balance, end of period	$	178	$	224	$	178	$	224
TOTAL EQUITY	$	12,139	$	10,917	$	12,139	$	10,917
Dividends declared per share	$	—	$	0.535	$	1.18	$	1.07

The accompanying notes are an integral part of these unaudited consolidated statements.

MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Nature of Operations

Marsh & McLennan Companies, Inc., and its consolidated subsidiaries (the "Company"), a global professional services firm, is organized based on the different services that it offers. Under this structure, the Company’s two business segments are Risk and Insurance Services and Consulting.

The Risk and Insurance Services segment ("RIS") includes risk management activities (risk advice, risk transfer, and risk control and mitigation solutions) as well as insurance and reinsurance broking and services for businesses, public entities, insurance companies, associations, professional services organizations, and private clients. The Company conducts business in this segment through Marsh and Guy Carpenter. 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 identify and capitalize on emerging opportunities.

The Consulting segment includes health, wealth and career solutions and products, and specialized management, strategic, economic and brand consulting services. The Company conducts business in this segment through Mercer and Oliver Wyman Group. Mercer delivers advice and technology-driven solutions that help organizations redefine the future of work, shape retirement and investment outcomes, and advance health and well-being for a changing workforce. Oliver Wyman Group serves as critical strategic, economic and brand advisor to private sector and governmental clients.

2. Principles of Consolidation and Other Matters

The Company prepared the consolidated financial statements included herein pursuant to the rules and regulations of the Securities and Exchange Commission. For interim filings, certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (U.S.) have been omitted pursuant to such rules and regulations. The Company believes that the information and disclosures presented are adequate to make such information and disclosures not misleading. These consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 (the "2022 Form 10-K").

The accompanying consolidated financial statements include all wholly-owned and majority owned subsidiaries. All significant inter-company transactions and balances have been eliminated.

The financial information contained herein reflects all normal recurring adjustments which are, in the opinion of management, necessary for a fair presentation of the Company’s consolidated financial statements as of and for the six months ended June 30, 2023 and 2022.

Estimates: The preparation of the consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expense during the reporting period.

On an ongoing basis, the Company evaluates its estimates, judgments and methodologies. The estimates are based on historical experience and on various other assumptions that the Company believes are reasonable.

Such matters include:

•estimates of revenue;

•impairment assessments and charges;

•recoverability of long-lived assets;

•liabilities for errors and omissions;

•deferred tax assets, uncertain tax positions and income tax expense;

•share-based and incentive compensation expense;

•the allowance for current expected credit losses on receivables;

•useful lives assigned to long-lived assets, and depreciation and amortization; and

•fair value estimates of contingent consideration receivable or payable related to acquisitions or dispositions.

The Company believes these estimates are reasonable based on information currently available at the time they are made. The Company also considered the potential impact of macroeconomic factors including inflation, volatility in interest rates, and the war in Ukraine to its customer base in various industries and geographies. Insurance exposures subject to variable factors are subject to mid-term and end-of-term adjustments, as well as policy audits, which may reduce premiums and corresponding commissions. Estimates were updated based on internal and industry specific economic data. Actual results may differ from these estimates.

Cash and Cash Equivalents

Cash and cash equivalents primarily consist of certificates of deposit and time deposits, with original maturities of three months or less, and money market funds. The estimated fair value of the Company's cash and cash equivalents approximates their carrying value. The Company is required to maintain operating funds primarily related to regulatory requirements outside of the U.S. or as collateral under captive insurance arrangements. At June 30, 2023, the Company maintained $464 million compared to $348 million at December 31, 2022 related to these regulatory requirements.

Allowance for Credit Losses on Accounts Receivable

The Company’s policy for providing an allowance for credit losses on its accounts receivable is based on a combination of factors, including historical write-offs, aging of balances, and other qualitative and quantitative analyses. The charge related to expected credit losses was not material to the consolidated statements of income for the three and six months ended June 30, 2023 and 2022, respectively.

Investments

The caption "Investment income" in the consolidated statements of income comprises realized and unrealized gains and losses from investments recognized in earnings. It includes, when applicable, other than temporary declines in the value of securities, mark-to-market increases or decreases in equity investments with readily determinable fair values and equity method gains or losses on the Company's investments in private equity funds.

The Company holds investments in certain private equity funds. Investments in private equity funds are accounted for in accordance with the equity method of accounting using a consistently applied three-month lag period adjusted for any known significant changes from the lag period to the reporting date of the Company. The underlying private equity funds follow investment company accounting, where investments within the fund are carried at fair value. Investment gains or losses for its proportionate share of the change in fair value of the funds are recorded in earnings. Investments accounted for in accordance with the equity method of accounting are included in other assets in the consolidated balance sheets.

Income Taxes

The Company's effective tax rate for the three months ended June 30, 2023 was 24.4%, compared with 25.5% for the corresponding quarter of 2022. The effective tax rate for the six months ended June 30, 2023 and 2022 was 24.6% for both periods.

The tax rate in each period reflects the impact of discrete tax items such as excess tax benefits related to share-based compensation, enacted tax legislation, changes in uncertain tax positions, deferred tax adjustments, nontaxable adjustments related to contingent consideration for acquisitions, and valuation allowances for certain tax credits and, or losses. The tax rate for the three and six months ended June 30, 2023 reflects the previously enacted change in the United Kingdom (U.K.) corporate income tax rate from 19% to 25%, effective April 1, 2023. The blended U.K. statutory tax rate for 2023 is 23.5%.

The excess tax benefit related to share-based payments is the most significant discrete item in both periods, reducing the effective tax rate by 1.2% and 0.8% for the three months ended June 30, 2023 and 2022, and by 1.3% for the six months periods ended June 30, 2023 and 2022.

The Company's tax rate reflects its income, statutory tax rates, and tax planning in the various jurisdictions in which it operates. Significant judgment is required in determining the annual effective tax rate and in evaluating uncertain tax positions.

Losses in one jurisdiction, generally, cannot offset earnings in another, and within certain jurisdictions profits and losses may not offset between entities. Consequently, losses in certain jurisdictions may require valuation allowances affecting the effective tax rate, depending on estimates of the realizability of associated deferred tax assets. The tax rate is also sensitive to changes in unrecognized tax benefits, including the impact of settled tax audits and expired statutes of limitations.

The Company reports a liability for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in tax returns. The Company's gross unrecognized tax benefits were $107 million at June 30, 2023, and $97 million at December 31, 2022. It is reasonably possible that the total amount of unrecognized tax benefits could decrease up to approximately $52 million within the next twelve months due to settlement of audits and expirations of statutes of limitations.

Changes in tax laws, rulings, policies, or related legal and regulatory interpretations occur frequently and may have significant favorable or adverse impacts on our effective tax rate. In July 2023, the U.K. enacted legislation to implement the Organization for Economic Cooperation and Development's ("OECD") framework, effective from January 1, 2024. This minimum tax will be treated as a period cost in future years and will not impact operating results for 2023. The Company is continuing to monitor legislative developments, especially in the European Union (E.U.) countries, and is in the process of evaluating the potential impact of the U.K. and other legislation on its results of future operations. On August 16, 2022, the Inflation Reduction Act of 2022 ("IRA") was enacted into law. The Company evaluated the provisions of the new legislation, the most significant of which are the corporate alternative minimum tax and the share repurchase tax. The IRA was effective as of January 1, 2023 and does not have a significant impact on the Company's financial results of operations for the current year.

Restructuring Costs

Charges associated with restructuring activities are recognized in accordance with applicable accounting guidance which includes accounting for disposal or exit activities, guidance related to impairment of Right-of-use ("ROU") assets related to real estate leases, as well as other costs resulting from accelerated depreciation or amortization of leasehold improvements and other property and equipment.

Severance and related costs are recognized based on amounts due under established severance plans or estimates of one-time benefits that will be provided. Typically, severance benefits are recognized when the impacted colleagues are notified of their expected termination and such termination is expected to occur within the legally required notification period. These costs are included in compensation and benefits in the consolidated statements of income.

Costs for real estate consolidation are recognized based on the type of cost, and the expected future use of the facility. For locations where the Company does not expect to sub-lease the property, the amortization of any ROU asset is accelerated from the decision date to the cease use date. For locations where the Company expects to sub-lease the properties subsequent to its vacating the property, the ROU asset is reviewed for potential impairment at the earlier of the cease use date or the date a sub-lease is signed. To determine the amount of impairment, the fair value of the ROU asset is determined based on the present value of the estimated net cash flows related to the property. Contractual costs outside of the ROU asset are recognized based on the net present value of expected future cash outflows for which the Company will not receive any benefit. Such amounts are reliant on estimates of future sub-lease income to be received and future contractual costs to be incurred. These costs are included in other operating expenses in the consolidated statements of income.

Other costs related to restructuring, such as moving, legal or consulting costs are recognized as incurred. These costs are included in other operating expenses in the consolidated statements of income.

Foreign Currency

The financial statements of our international subsidiaries are translated from functional currency to U.S. dollars using month-end exchange rates for assets and liabilities, and average monthly exchange rates during the period for revenues and expenses. Translation adjustments are recorded in accumulated other comprehensive income (loss) ("AOCI") within the consolidated statements of equity. Foreign exchange transaction gains and losses resulting from the conversion of the transaction currency to functional currency are included in operating income in the consolidated statements of income.

3. Revenue

The core principle of the revenue recognition guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

To achieve this principle, the entity applies the following steps: identify the contract(s) with the customer, identify the performance obligations in the contract(s), determine the transaction price, allocate the transaction price to the performance obligations in the contract, and recognize revenue when (or as) the entity satisfies a performance obligation. In accordance with the accounting guidance, a performance obligation is satisfied either at a "point in time" or "over time", depending on the nature of the product or service provided, and the specific terms of the contract with customers.

Other revenue included in the consolidated statements of income that is not from contracts with customers is less than 2% of total revenue and is not presented as a separate line item.

The Company's revenue policies are provided in more detail in Note 2, Revenue, in the Form 2022 10-K.

The following table disaggregates components of the Company's revenue:


	Three Months Ended June 30,				Six Months Ended June 30,
(In millions)	2023		2022		2023		2022
Marsh:
EMEA (a) (b)	$	858	$	780	$	1,790	$	1,649
Asia Pacific (a)	357		347		669		641
Latin America	137		118		252		222
Total International	1,352		1,245		2,711		2,512
U.S./Canada	1,686		1,533		3,071		2,812
Total Marsh	3,038		2,778		5,782		5,324
Guy Carpenter	576		522		1,647		1,521
Subtotal	3,614		3,300		7,429		6,845
Fiduciary interest income	108		13		199		17
Total Risk and Insurance Services	$	3,722	$	3,313	$	7,628	$	6,862

Mercer:


Wealth (c)	$	637	$	597	$	1,218	$	1,214
Health (d)	518		587		1,063		1,111
Career	219		205		437		407
Total Mercer	1,374		1,389		2,718		2,732
Oliver Wyman Group (b)	798		695		1,485		1,362
Total Consulting	$	2,172	$	2,084	$	4,203	$	4,094

(a) In the first quarter of 2023, the Company began reporting the Marsh India operations in EMEA. Prior year results for India have been reclassified from Asia Pacific to EMEA for comparative purposes.

(b) Revenue for the six months ended June 30, 2022, includes the loss on deconsolidation of the Company's Russian businesses at Marsh and Oliver Wyman Group of $27 million and $12 million, respectively.

(c) Revenue for the six months ended June 30, 2023, includes the loss on sale of an individual financial advisory business in Canada of $17 million.

(d) Revenue for the three and six months ended June 30, 2022, includes a gain from the sale of the Mercer U.S. affinity business of $112 million.

The following table provides contract assets and contract liabilities information from contracts with customers:


(In millions)	June 30, 2023		December 31, 2022
Contract assets	$	378	$	335
Contract liabilities	$	906	$	837

The Company records accounts receivable when the right to consideration is unconditional, subject only to the passage of time. Contract assets primarily relate to quota share reinsurance brokerage and contingent insurer revenue. The Company does not have the right to bill and collect revenue for quota share brokerage until the underlying policies written by the ceding insurer attach to the treaty. Estimated revenue related to the achievement of volume or loss ratio metrics cannot be billed or collected until all related policy placements are completed and the contingency is resolved.

Contract assets are included in other current assets in the Company's consolidated balance sheets. Contract liabilities primarily relate to the advance consideration received from customers. Contract liabilities are included in current liabilities in the Company's consolidated balance sheets. Revenue recognized for the three and six months ended June 30, 2023 that was included in the contract liability balance at the beginning of each of those periods was $218 million and $511 million, respectively, compared to revenue recognized of $174 million and $454 million, respectively, for the corresponding periods in the prior year.

The amount of revenue recognized for the three and six months ended June 30, 2023 from performance obligations satisfied in previous periods, mainly due to variable consideration from contracts with insurers, quota share business and consulting contracts previously considered constrained was $27 million and $44 million, respectively, and $37 million and $61 million, respectively, for the corresponding periods in the prior year.

The Company applies the practical expedient and does not disclose the value of unsatisfied performance obligations for (1) contracts with original contract terms of one year or less and (2) contracts where the Company has the right to invoice for services performed. The revenue expected to be recognized in future periods during the non-cancellable term of existing contracts greater than one year that is related to performance obligations that are unsatisfied or partially satisfied at the end of the reporting period is approximately $240 million, primarily related to Mercer. The Company expects revenue in 2023, 2024, 2025, 2026, and 2027 and beyond of $92 million, $67 million, $43 million, $24 million and $14 million, respectively, related to these performance obligations.

4. Fiduciary Assets and Liabilities

The Company, in its capacity as an insurance broker or agent, generally collects premiums from insureds and after deducting its commissions, remits the premiums to the respective insurance underwriters. The Company also collects claims or refunds from underwriters on behalf of insureds. Unremitted insurance premiums and claims proceeds are held by the Company in a fiduciary capacity. The Company's fiduciary assets primarily include bank or short-term time deposits and liquid money market funds, classified as cash and cash equivalents. Since fiduciary assets are not available for corporate use, they are shown separately in the consolidated balance sheets as cash and cash equivalents held in a fiduciary capacity, with a corresponding amount in current liabilities.

Risk and Insurance Services revenue includes interest on fiduciary funds of $108 million and $199 million for the three and six months ended June 30, 2023, respectively, and $13 million and $17 million for the three and six months ended June 30, 2022, respectively.

Net uncollected premiums and claims and the related payables were $16.7 billion at June 30, 2023, and $13.0 billion at December 31, 2022. The Company is not a principal to the contracts under which the right to receive premiums or the right to receive reimbursement of insured losses arises. Accordingly, net uncollected premiums and claims and the related payables are not assets and liabilities of the Company and are not included in the accompanying consolidated balance sheets.

In certain instances, the Company advances premiums, refunds or claims to insurance underwriters or insureds prior to collection. These advances are made from corporate funds and are reflected in the accompanying consolidated balance sheets as receivables.

The Company, through its Mercer subsidiary, manages assets in trusts or funds for which Mercer’s management or trustee fee is not considered a variable interest, since the fees are commensurate with the level of effort

required to provide those services. Mercer is not the primary beneficiary of these trusts or funds. Mercer’s maximum exposure to loss of its interests is, therefore, limited to collection of its fees.

Reclassification of Fiduciary Assets and Liabilities

In the second quarter of 2023, the Company changed the presentation of fiduciary assets and liabilities on the consolidated balance sheets. Cash and cash equivalents held in a fiduciary capacity was reclassified from an offset to fiduciary liabilities to current assets, with the corresponding fiduciary liabilities reclassified to current liabilities. The reclassification had no impact on the Company’s total equity at December 31, 2022. The presentation in the December 31, 2022 consolidated balance sheet was conformed to the current presentation as follows:


(In millions)	As Reported		As Reclassified
Total current assets	$	8,299	$	18,959
Total assets	$	33,454	$	44,114
Total current liabilities	$	7,172	$	17,832

As a result of reclassifying cash and cash equivalents held in a fiduciary capacity, total RIS assets and total Consulting assets at December 31, 2022 increased to $33,022 million and $10,446 million, respectively.

5. Per Share Data

Basic net income per share attributable to the Company is calculated by dividing the after-tax income attributable to the Company by the weighted average number of outstanding shares of the Company’s common stock.

Diluted net income per share attributable to the Company is calculated by dividing the after-tax income attributable to the Company by the weighted average number of outstanding shares of the Company’s common stock, which have been adjusted for the dilutive effect of potentially issuable common shares.


Basic and Diluted EPS Calculation	Three Months Ended June 30,				Six Months Ended June 30,
(In millions, except per share data)	2023		2022		2023		2022
Net income before non-controlling interests	$	1,047	$	978	$	2,299	$	2,064
Less: Net income attributable to non-controlling interests	12		11		29		26
Net income attributable to the Company	$	1,035	$	967	$	2,270	$	2,038
Basic weighted average common shares outstanding	495		501		495		502
Dilutive effect of potentially issuable common shares	4		5		4		6
Diluted weighted average common shares outstanding	499		506		499		508
Average stock price used to calculate common stock equivalents	$	177.33	$	160.43	$	172.13	$	158.96

6. Supplemental Disclosures to the Consolidated Statements of Cash Flows

The following table provides additional information concerning acquisitions, interest and income taxes paid for the six months ended June 30, 2023 and 2022:


(In millions)	2023		2022
Assets acquired, excluding cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity	$	364	$	164
Acquisition-related deposit	—		24
Fiduciary liabilities assumed	(1)		(2)
Liabilities assumed	(63)		(24)


Contingent/deferred purchase consideration	(8)		(11)
Net cash outflow for acquisitions	$	292	$	151


(In millions)	2023		2022
Interest paid	$	245	$	215
Income taxes paid, net of refunds	$	504	$	437

The classification of contingent consideration in the consolidated statements of cash flows is dependent upon whether the receipt or payment was part of the initial liability established on the acquisition date (financing) or an adjustment to the acquisition date liability (operating).

The following amounts are included in the consolidated statements of cash flows as operating and financing activities:


For the Six Months Ended June 30,
(In millions)	2023		2022
Operating:
Contingent consideration payments for prior year acquisitions	$	(41)	$	(18)
Receipt of contingent consideration for dispositions	1		—
Acquisition/disposition related net charges for adjustments	17		27


Adjustments and payments related to contingent consideration	$	(23)	$	9
Financing:
Contingent consideration for prior year acquisitions	$	(134)	$	(16)
Deferred consideration related to prior year acquisitions	(51)		(76)
Payments of deferred and contingent consideration for acquisitions	$	(185)	$	(92)

Receipts of contingent consideration for dispositions	$	2	$	3

The Company had non-cash issuances of common stock under its share-based payment plan of $296 million and $337 million for the six months ended June 30, 2023 and 2022, respectively.

The Company recorded share-based compensation expense related to restricted stock units, performance stock units and stock options of $92 million and $191 million for the three and six months ended June 30, 2023, respectively, and $89 million and $194 million for the three and six months ended June 30, 2022, respectively.

7. Other Comprehensive (Loss) Income

The changes, net of tax, in the balances of each component of AOCI for the three and six months ended June 30, 2023 and 2022, including amounts reclassified out of AOCI, are as follows:


(In millions)	Pension/Post-Retirement Plans Gains (Losses)		Foreign Currency Translation Adjustments		Total
Balance as of April 1, 2023	$	(2,766)	$	(2,468)	$	(5,234)
Other comprehensive (loss) income before reclassifications	(48)		224		176
Amounts reclassified from accumulated other comprehensive income	3		—		3
Net current period other comprehensive (loss) income	(45)		224		179
Balance as of June 30, 2023 (a)	$	(2,811)	$	(2,244)	$	(5,055)


(In millions)	Pension/Post-Retirement Plans Gains (Losses)		Foreign Currency Translation Adjustments		Total
Balance as of April 1, 2022	$	(3,137)	$	(1,542)	$	(4,679)
Other comprehensive income (loss) before reclassifications	154		(864)		(710)
Amounts reclassified from accumulated other comprehensive income	26		—		26
Net current period other comprehensive income (loss)	180		(864)		(684)
Balance as of June 30, 2022 (a)	$	(2,957)	$	(2,406)	$	(5,363)

(a) At June 30, 2023 and 2022, balances are net of deferred tax assets in pension and post-retirement plans gains (losses) of $1,370 million and $1,424 million, respectively, and net of deferred tax liability of $1 million and deferred tax assets of $13 million in foreign currency translation adjustments, respectively.



(In millions)	Pension/Post-Retirement Plans Gains (Losses)		Foreign Currency Translation Adjustments		Total
Balance as of January 1, 2023	$	(2,721)	$	(2,593)	$	(5,314)

Other comprehensive (loss) income before reclassifications	(96)		349		253
Amounts reclassified from accumulated other comprehensive loss	6		—		6
Net current period other comprehensive (loss) income	(90)		349		259
Balance as of June 30, 2023 (a)	$	(2,811)	$	(2,244)	$	(5,055)



(In millions)	Pension/Post-Retirement Plans Gains (Losses)		Foreign Currency Translation Adjustments		Total
Balance as of January 1, 2022	$	(3,202)	$	(1,373)	$	(4,575)

Other comprehensive income (loss) before reclassifications	189		(1,033)		(844)
Amounts reclassified from accumulated other comprehensive loss	56		—		56
Net current period other comprehensive income (loss)	245		(1,033)		(788)
Balance as of June 30, 2022 (a)	$	(2,957)	$	(2,406)	$	(5,363)

The components of other comprehensive (loss) income for the three and six months ended June 30, 2023 and 2022 are as follows:


Three Months Ended June 30,	2023						2022
(In millions)	Pre-Tax		Tax (Credit)		Net of Tax		Pre-Tax		Tax (Credit)		Net of Tax
Foreign currency translation adjustments	$	223	$	(1)	$	224	$	(864)	$	—	$	(864)

Pension and post-retirement plans:
Amortization of (gains) losses included in net benefit (credit) cost:
Prior service credits (a)	(1)		—		(1)		(1)		—		(1)
Net actuarial losses (a)	5		1		4		38		11		27
Subtotal	4		1		3		37		11		26
Foreign currency translation adjustments	(59)		(16)		(43)		187		44		143
Effect of remeasurement	—		—		—		10		1		9

Effect of settlement	—		—		—		2		—		2

Other adjustments	(7)		(2)		(5)		—		—		—
Pension/post-retirement plans (losses) gains	(62)		(17)		(45)		236		56		180
Other comprehensive income (loss)	$	161	$	(18)	$	179	$	(628)	$	56	$	(684)

(a) Included in other net benefit credits in the consolidated statements of income. Income tax expense on net actuarial losses are included in income tax expense.


Six Months Ended June 30,	2023						2022
(In millions)	Pre-Tax		Tax (Credit)		Net of Tax		Pre-Tax		Tax (Credit)		Net of Tax
Foreign currency translation adjustments	$	342	$	(7)	$	349	$	(1,033)	$	—	$	(1,033)

Pension/post-retirement plans:
Amortization of (gains) losses included in net benefit (credit) cost:
Prior service credits (a)	(1)		—		(1)		(1)		—		(1)
Net actuarial losses (a)	10		3		7		77		20		57
Subtotal	9		3		6		76		20		56
Foreign currency translation adjustments	(122)		(31)		(91)		252		60		192

Effect of remeasurement	—		—		—		10		1		9

Effect of settlement	—		—		—		2		—		2

Other adjustments	(7)		(2)		(5)		(18)		(4)		(14)
Pension/post-retirement plans (losses) gains	(120)		(30)		(90)		322		77		245
Other comprehensive income (loss)	$	222	$	(37)	$	259	$	(711)	$	77	$	(788)

(a) Included in other net benefit credits in the consolidated statements of income. Income tax expense on net actuarial losses are included in income tax expense.

8. Acquisitions and Dispositions

The Company’s acquisitions have been accounted for as business combinations. Net assets and results of operations are included in the Company’s consolidated financial statements commencing at the respective purchase closing dates. In connection with acquisitions, the Company records the estimated values of the net tangible assets and the identifiable intangible assets purchased, which typically consist of customer relationships, developed technology, trademarks and non-compete agreements. The valuation of purchased intangible assets involves significant estimates and assumptions. The Company estimates the fair value of purchased intangible assets, primarily using the income approach, by determining the present value of future cash flows over the remaining economic life of the respective assets. The significant estimates and assumptions used in this approach include the determination of the discount rate, economic life, future revenue growth rates, expected account attrition rates and earnings margins. Refinement and completion of final valuation of net assets acquired could affect the carrying value of tangible assets, goodwill and identifiable intangible assets.

The Risk and Insurance Services segment completed three acquisitions during the six months ended June 30, 2023:

•May – Marsh acquired Austral Insurance Brokers Pty Ltd, an Australia-based insurance broker that provides risk advice services and business insurance solutions in the labor hire, mining services, transport, manufacturing, agribusiness, retail and professional services sectors.

•June – Guy Carpenter acquired Re Solutions, an Israel-based reinsurance broker with actuarial and analytics capabilities and solutions, including an extensive facultative reinsurance offering, and Marsh & McLennan Agency ("MMA") acquired SOLV Risk Solutions, LLC, a Texas-based risk management advisory services firm.

The Consulting segment completed three acquisitions for the six months ended June 30, 2023:

•March – Mercer acquired Leapgen LLC, a Minnesota-based human resources consulting technology advisory firm focused on digital strategy and transformation, workforce solutions, and improving employee experience.

•April – Mercer acquired Westpac Banking Corporation’s ("Westpac") financial advisory business, Advance Asset Management, and completed the transfer from Westpac of BT Financial Group's personal and corporate pension funds to the Mercer Super Trust managed by Mercer Australia (referred to collectively, as the "Westpac Transaction"). Oliver Wyman Group acquired the business of Gorman Actuarial, Inc., a U.S.-based life and health actuarial consultant business.

Total purchase consideration for acquisitions made during the six months ended June 30, 2023 was $340 million, which consisted of cash paid of $332 million and deferred purchase and estimated contingent consideration of $8 million. Contingent consideration arrangements are generally based on earnings before interest, tax, depreciation and amortization ("EBITDA") or revenue targets over a period of 2 to 4 years. During the six months ended June 30, 2023, the Company also paid $51 million of deferred purchase consideration and $175 million of contingent consideration related to acquisitions made in prior years. Estimated fair values of assets acquired and liabilities assumed are subject to adjustment until purchase accounting is finalized.

The following table presents the preliminary allocation of purchase consideration to the assets acquired and liabilities assumed in 2023, based on the estimated fair values for the acquisitions as of their respective acquisition dates. Amounts in the table primarily reflect the impact of the Westpac Transaction.


Acquisitions through June 30, 2023
(In millions)
Cash	$	332
Estimated fair value of deferred/contingent consideration	8

Total consideration	$	340
Allocation of purchase price:
Cash and cash equivalents	$	15
Cash and cash equivalents held in a fiduciary capacity	1
Net receivables	15

Goodwill	236
Other intangible assets	137





Total assets acquired	404
Current liabilities	29
Fiduciary liabilities	1





Other liabilities	34
Total liabilities assumed	64

Net assets acquired	$	340

The purchase price allocation for assets acquired and liabilities assumed is based on estimates that are preliminary in nature and subject to adjustments, which could be material. Any necessary adjustments must be finalized during the measurement period, which for a particular asset, liability, or non-controlling interest ends once the acquirer determines that either (1) the necessary information has been obtained or (2) the information is not available. However, the measurement period for all items is limited to one year from the acquisition date.

Items subject to change include:

•amounts of intangible assets, fixed assets, capitalized software assets and right-of-use assets, subject to finalization of valuation efforts;

•amounts for contingencies, pending the finalization of the Company’s assessment of the portfolio of contingencies;

•amounts for deferred tax assets and liabilities, pending the finalization of valuations of the assets acquired, liabilities assumed and associated goodwill discussed below; and

•amounts for income tax assets, receivables and liabilities, pending the filing of the acquired companies' pre-acquisition income tax returns and receipt of information from taxing authorities which may change certain estimates and assumptions used.

The estimation of fair value requires numerous judgments, assumptions and estimates about future events and uncertainties, which could materially impact these values, and the related amortization, where applicable, in the Company’s results of operations.

The following table provides information about other intangible assets acquired in 2023:


Other intangible assets through June 30, 2023 (In millions)	Amount		Weighted Average Amortization Period
Client relationships	$	137	10.2 years

Total other intangible assets	$	137

The consolidated statements of income include the results of operations of acquired companies since their respective acquisition dates. The consolidated statements of income for both the three and six months ended June 30, 2023, include revenue of approximately $41 million and operating income of $9 million for acquisitions made in 2023. The consolidated statements of income for both the three and six months ended June 30, 2022 include revenue of approximately $6 million and operating loss of $1 million for acquisitions made in 2022.

In relation to the Westpac Transaction, the Company incurred approximately $10 million and $27 million of integration expenses for the three and six months ended June 30, 2023, respectively, primarily for technology,

consulting, legal and people related costs. These costs are included in other operating expenses in the Company's consolidated statements of income.

Dispositions

In January 2023, the Company entered into an agreement for the sale of an individual financial advisory business in Canada which was completed in May 2023. As a result, the Company recorded a loss of $17 million for the six months ended June 30, 2023, primarily related to the write-down of the customer relationship intangible assets. The loss is included in revenue in the consolidated statements of income.

In connection with the disposition of the Mercer U.S. affinity business in 2022, the Company transferred to the buyer an additional $20 million of cash and cash equivalents held in a fiduciary capacity in the first quarter of 2023.

Prior year acquisitions

The Risk and Insurance Services segment completed sixteen acquisitions in 2022:

•January – MMA acquired Heil & Kay Insurance Agency Inc., an Illinois-based full-service broker providing business insurance, employee health benefits services and personal lines insurance.

•April – Marsh acquired the business of Regional Treaty Services Corporation, a Rhode Island-based managing general underwriter, which manages reinsurance facilities for small to midsize U.S.-based insurers primarily writing personal lines, small agriculture, and main street commercial business.

•June – MMA acquired Clark Insurance, a Maine-based full-service broker providing business insurance, employee health and benefits and private client services to businesses and individuals across the region.

•July – MMA acquired CS Insurance Strategies, Inc., an Illinois-based full-service broker providing employee health and benefits, business insurance, and risk management consulting services to organizations of all sizes across the U.S. and Suchanek Partners LLC, an Ohio-based employee benefits insurance broker.

•August – Marsh acquired Best Insurance Co. Ltd, a Japan-based insurance broker that provides affinity type schemes, general and personal lines insurance.

•September – MMA acquired Steinberg & Associates, Inc., a South Carolina-based insurance broker that primarily offers employee health benefit services to group clients and Leykell, Inc., a Texas-based full-service broker that provides specialty insurance focused on trade credit.

•October – MMA acquired Galbraith Group, a Texas-based employee health and benefits insurance broker.

•November – MMA acquired Focus Insurance and Financial Services, a Texas-based personal insurance broker and Bradley Insurance Agency, a commercial insurance broker in Knoxville, Tennessee, with expertise serving the hospitality and construction industries. Marsh increased its ownership interest in Beassur SARL, a Morocco-based multi-line insurance broker, from 35% to 70%.

•December – MMA acquired McDonald-Zaring Insurance, Inc., a Washington-based full-service broker focused on agri-business, wineries, crops and contractors, Chartwell Insurance Brokers, Inc., a Massachusetts-based full-service broker that specializes in commercial Property & Casualty insurance in the technology, financial services and non-profit space, and HMS Insurance Associates, Inc., a Maryland-based full-service broker providing commercial, surety, employee benefits, and personal lines insurance. Marsh acquired BHM Consultores S.A., d/b/a Grupo Mesos, a leading auto affinity insurance broker specialist in Chile that has extensive distribution partnerships with car dealerships, original equipment manufacturers and auto finance companies.

The Consulting segment completed four acquisitions in 2022:

•February – Oliver Wyman acquired Azure Consulting, an Australia-based management consulting firm with expertise in strategy development, organizational design and operations in the industrials, energy and natural resources sectors.

•March – Mercer acquired GeFi Assurances, a France-based brokerage and consulting firm specializing in collective corporate social protection.

•September – Oliver Wyman acquired Booz Allen Hamilton's strategy consulting business serving the Middle East and North Africa.

•November – Oliver Wyman acquired the Avascent Group Ltd, an aerospace and defense management consulting firm focused on the corporate and private equity sectors based in the U.S., U.K., Canada and France.

Total purchase consideration for acquisitions made for the six months ended June 30, 2022 was approximately $158 million, which consisted of cash paid of $147 million and deferred purchase and estimated contingent consideration of $11 million. Contingent consideration arrangements are based primarily on EBITDA or revenue targets over a period of two to four years. For the first six months of 2022, the Company also paid $76 million of deferred purchase consideration and $34 million of contingent consideration related to acquisitions made in prior years. Estimated fair values of assets acquired and liabilities assumed are subject to adjustment when purchase accounting is finalized.

Prior year dispositions

In April 2022, Mercer sold its U.S. affinity business that provided insurance marketing, brokerage and administration to association and affinity groups for cash proceeds of approximately $140 million and recorded a gain of $112 million which is included in revenue in the consolidated statements of income.

In addition, during the first six months of 2022, the Company made certain other dispositions, the most significant of which was Mercer's sale of its retirement plan administration and call center operations in Brazil for cash proceeds of approximately $3 million.

Deconsolidation of Russia

In the first quarter of 2022, the Company concluded that it did not meet the accounting criteria for control over its wholly-owned Russian subsidiaries due to the evolving trade and economic sanctions against Russia and the related Russian counter sanctions. These sanctions included restrictions on payments to and from Russian companies and reduced currency access through official exchange markets that have significantly impacted the Company's ability to effectively manage and operate its Russian businesses.

As a result, the Company deconsolidated its Russian businesses effective as of the end of the first quarter of 2022, and recorded a loss of $39 million included in revenue in the consolidated statements of income. The loss consisted of the reclassification of cumulative translation losses from AOCI and a charge for the write-off of the Russian businesses' net assets.

In June 2022, the Company entered into a definitive agreement to exit its businesses in Russia and transfer ownership to local management pending regulatory approvals.

Purchase of remaining non-controlling interest

In the second quarter of 2023, the Company purchased the remaining interest in a subsidiary for $139 million.

Pro-Forma Information

The following unaudited pro-forma financial data gives effect to the acquisitions made by the Company in 2023 and 2022. In accordance with accounting guidance related to pro-forma disclosures, the information presented for acquisitions made in 2023 is as if they occurred on January 1, 2022, and reflects acquisitions made in 2022, as if they occurred on January 1, 2021.

The unaudited pro-forma information includes the effects of amortization of acquired intangibles in all years. The unaudited pro-forma financial data is presented for illustrative purposes only and is not necessarily indicative of the operating results that would have been achieved if such acquisitions had occurred on the dates indicated, nor is it necessarily indicative of future consolidated results.


	Three Months Ended June 30,				Six Months Ended June 30,
(In millions, except per share data)	2023		2022		2023		2022
Revenue	$	5,878	$	5,478	$	11,855	$	11,145

Net income attributable to the Company	$	1,043	$	970	$	2,294	$	2,032

Basic net income per share attributable to the Company	$	2.11	$	1.94	$	4.64	$	4.05


Diluted net income per share attributable to the Company	$	2.09	$	1.92	$	4.59	$	4.00

9. Goodwill and Other Intangibles

The Company is required to assess goodwill and any indefinite-lived intangible assets for impairment annually, or more frequently if circumstances indicate impairment may have occurred. The Company performs the annual impairment assessment for each of its reporting units during the third quarter of each year. In accordance with applicable accounting guidance, a company can assess qualitative factors to determine whether it is necessary to perform a quantitative goodwill impairment test. Alternatively, the Company may elect to proceed directly to the quantitative goodwill impairment test. In the third quarter of 2022, the Company completed a qualitative impairment assessment and concluded that goodwill was not impaired. As part of its assessment, the Company considered numerous factors, including:

•that the fair value of each reporting unit exceeds its carrying value by a substantial margin based on its most recent quantitative assessment in 2019;

•whether significant acquisitions or dispositions occurred which might alter the fair value of its reporting units;

•macroeconomic conditions and their potential impact on reporting unit fair values;

•actual performance compared with budget and prior projections used in its estimation of reporting unit fair values;

•industry and market conditions; and

•the year-over-year change in the Company’s share price.

Other intangible assets that are not deemed to have an indefinite life are amortized over their estimated lives and assessed for impairment upon the occurrence of certain triggering events in accordance with applicable accounting literature. Based on its assessment, the Company concluded that other intangible assets were not impaired. The Company had no indefinite lived intangible assets at June 30, 2023 and December 31, 2022.

Changes in the carrying amount of goodwill are as follows:



(In millions)	2023		2022
Balance as of January 1,	$	16,251	$	16,317
Goodwill acquired	236		104
Other adjustments (a)	134		(458)
Balance at June 30,	$	16,621	$	15,963

(a) Primarily reflects the impact of foreign exchange.

The goodwill arising from acquisitions in 2023 and 2022 consists largely of the synergies and economies of scale expected from combining the operations of the Company and the acquired entities and the trained and assembled workforce acquired.

The goodwill acquired in 2023 included approximately $2.6 million and $11.3 million in the Risk and Insurance Services and Consulting segments, respectively, which is deductible for tax purposes.

Goodwill allocable to the Company’s reportable segments at June 30, 2023, is $12.6 billion for Risk and Insurance Services and $4.0 billion for Consulting.

The gross cost and accumulated amortization of other identified intangible assets at June 30, 2023 and December 31, 2022 are as follows:


	June 30, 2023						December 31, 2022
(In millions)	Gross Cost		Accumulated Amortization		Net Carrying Amount		Gross Cost		Accumulated Amortization		Net Carrying Amount
Client relationships	$	4,096	$	1,631	$	2,465	$	3,993	$	1,508	$	2,485
Other (a)	370		327		43		360		308		52
Other intangible assets	$	4,466	$	1,958	$	2,508	$	4,353	$	1,816	$	2,537

(a) Primarily reflects non-compete agreements, trade names and developed technology.

Aggregate amortization expense for the three and six months ended June 30, 2023, was $87 million and $172 million, respectively, compared to $83 million and $174 million, respectively, for the corresponding periods in the prior year. The estimated future aggregate amortization expense is as follows:


For the Years Ending December 31,
(In millions)	Estimated Expense
2023 (excludes amortization through June 30, 2023)	$	174
2024	324
2025	289
2026	270
2027	266
Subsequent years	1,185
Total future amortization	$	2,508

10. Fair Value Measurements

Fair Value Hierarchy

The Company has categorized its assets and liabilities that are valued at fair value on a recurring basis into a three-level fair value hierarchy as defined by the FASB. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets and liabilities (Level 1) and lowest priority to unobservable inputs (Level 3). In some cases, the inputs used to measure fair value might fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy, for disclosure purposes, is determined based on the lowest level input that is significant to the fair value measurement. Assets and liabilities recorded in the consolidated balance sheets at fair value are categorized based on the inputs in the valuation techniques as follows:

Level 1.Assets and liabilities whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market (examples include active exchange-traded equity securities and exchange-traded money market mutual funds).

Assets and liabilities measured using Level 1 inputs include exchange-traded equity securities, exchange-traded mutual funds and money market funds.

Level 2.Assets and liabilities whose values are based on the following:

a)quoted prices for similar assets or liabilities in active markets;

b)quoted prices for identical or similar assets or liabilities in non-active markets (examples include corporate and municipal bonds, which trade infrequently);

c)pricing models whose inputs are observable for substantially the full term of the asset or liability (examples include most over-the-counter derivatives, including interest rate and currency swaps); and

d)pricing models whose inputs are derived principally from or corroborated by observable market data through correlation or other means for substantially the full asset or liability (for example, certain mortgage loans).

Assets and liabilities using Level 2 inputs are related to an equity security.

Level 3.Assets and liabilities whose values are based on prices, or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs reflect management’s own assumptions about the assumptions a market participant would use in pricing the asset or liability.

Assets and liabilities measured using Level 3 inputs relate to assets and liabilities for contingent purchase consideration.

Valuation Techniques

Equity Securities, Money Market Funds and Mutual Funds – Level 1

Investments for which market quotations are readily available are valued at the sale price on their principal exchange or, for certain markets, official closing bid price. Money market funds are valued at a readily determinable price.

Contingent Purchase Consideration Assets and Liabilities – Level 3

Purchase consideration for some acquisitions and dispositions made by the Company include contingent consideration arrangements. Contingent consideration arrangements are based primarily on EBITDA or revenue targets over a period of two to four years. The fair value of the contingent purchase consideration asset and liability is estimated as the present value of future cash flows to be paid, based on projections of revenue and earnings and related targets of the acquired and disposed entities.

The following fair value hierarchy table presents information about the Company’s assets and liabilities measured at fair value on a recurring basis as of June 30, 2023 and December 31, 2022:


	Identical Assets (Level 1)				Observable Inputs (Level 2)				Unobservable Inputs (Level 3)				Total
(In millions)	06/30/23		12/31/22		06/30/23		12/31/22		06/30/23		12/31/22		06/30/23		12/31/22
Assets:
Financial instruments owned:
Exchange traded equity securities (a)	$	6	$	6	$	—	$	—	$	—	$	—	$	6	$	6
Mutual funds (a)	170		162		—		—		—		—		170		162
Money market funds (b)	158		146		—		—		—		—		158		146
Other equity investment (a)	—		—		—		13		—		—		—		13
Contingent purchase consideration assets (c)	—		—		—		—		1		3		1		3
Total assets measured at fair value	$	334	$	314	$	—	$	13	$	1	$	3	$	335	$	330
Fiduciary Assets:



Money market funds	221		201		—		—		—		—		221		201
Total fiduciary assets measured at fair value	$	221	$	201	$	—	$	—	$	—	$	—	$	221	$	201
Liabilities:
Contingent purchase consideration liabilities (d)	$	—	$	—	$	—	$	—	$	223	$	377	$	223	$	377

Total liabilities measured at fair value	$	—	$	—	$	—	$	—	$	223	$	377	$	223	$	377

(a) Included in other assets in the consolidated balance sheets.

(b) Included in cash and cash equivalents in the consolidated balance sheets.

(d) Included in accounts payable and accrued liabilities and other liabilities in the consolidated balance sheets.

The Level 3 assets in the table reflect contingent purchase consideration from the sale of businesses. The change in the contingent purchase consideration assets from December 31, 2022 is driven primarily by cash receipts of approximately $3 million.

During the six months ended June 30, 2023 and 2022, there were no assets or liabilities that were transferred between levels.

The following table sets forth a summary of the changes in fair value of the Company’s Level 3 liabilities for the three and six months ended June 30, 2023 and 2022:


	Three Months Ended June 30,				Six Months Ended June 30,
(In millions)	2023		2022		2023		2022
Balance at beginning of period	$	383	$	358	$	377	$	352
Net additions	4		—		4		—
Payments	(174)		(30)		(175)		(34)
Revaluation impact	10		17		17		27


Balance at June 30,	$	223	$	345	$	223	$	345

Long-Term Investments

The Company holds investments in public and private companies as well as certain private equity investments that are accounted for using the equity method of accounting. The carrying value of these investments was $249 million and $215 million at June 30, 2023 and December 31, 2022, respectively.

Investments in Public and Private Companies

The Company has investments in private insurance and consulting companies with a carrying value of $59 million and $56 million at June 30, 2023 and December 31, 2022, respectively. These investments are accounted for using the equity method of accounting, the results of which are included in revenue in the consolidated statements of income and the carrying value of which is included in other assets in the consolidated balance sheets. The Company records its share of income or loss on its equity method investments, some of which are on a one quarter lag basis.

Private Equity Investments

The Company's investments in private equity funds were $190 million and $159 million at June 30, 2023 and December 31, 2022, respectively. The carrying values of these private equity investments approximate fair value. The underlying private equity funds follow investment company accounting, where investments within the fund are carried at fair value. The Company records in earnings its proportionate share of the change in fair value of the funds on the investment income line in the consolidated statements of income. These investments are included in other assets in the consolidated balance sheets. The Company recorded net investment income from these investments of $3 million and $6 million for the three and six months ended June 30, 2023, respectively, and net investment gains of $2 million and $19 million, respectively, from these investments for the corresponding periods in 2022.

As of June 30, 2023, the Company has commitments of potential future investments of approximately $132 million in private equity funds that invest primarily in financial services companies.

Other Investments

At June 30, 2023 and December 31, 2022, the Company held equity investments with readily determinable market values of $16 million and $17 million, respectively. The Company recorded mark-to-market investment losses on these investments of $1 million for the six months ended June 30, 2023. During the first six months of 2022, the Company recorded mark-to-market investment gains of $9 million relating to its investment in Alexander Forbes, which was sold later in 2022.

The Company also held investments without readily determinable market values of $34 million and $42 million at June 30, 2023 and December 31, 2022, respectively.

11. Derivatives

Net Investment Hedge

The Company has investments in various subsidiaries with Euro functional currencies. As a result, the Company is exposed to the risk of fluctuations between the Euro and U.S. dollar exchange rates. The Company designated its €1.1 billion senior note debt instruments ("Euro notes") as a net investment hedge (the "hedge") of its Euro denominated subsidiaries. The hedge effectiveness is re-assessed each quarter to confirm that the designated equity balance at the beginning of each period continues to equal or exceed 80% of the outstanding balance of the Euro debt instrument and that all the critical terms of the hedging instrument and the hedged net investment continue to match. If the hedge is highly effective, the change in the debt balance related to foreign exchange fluctuations is recorded in accumulated other comprehensive loss in the consolidated balance sheets.

The U.S. dollar value of the Euro notes increased by $33 million through June 30, 2023, related to the change in foreign exchange rates. The Company concluded that the hedge was highly effective and recorded an increase to accumulated other comprehensive loss for the six months ended June 30, 2023.

12. Leases

The Company leases office facilities under non-cancelable operating leases with terms generally ranging between 10 and 25 years. The Company utilizes these leased office facilities for use by its employees in countries in which the Company conducts its business. The Company’s leases have no restrictions on the payment of dividends, the acquisition of debt or additional lease obligations, or entering into additional lease obligations. The leases also do not contain significant purchase options.

Operating leases are recognized on the consolidated balance sheets as ROU assets and operating lease liabilities based on the present value of the remaining future minimum payments over the lease term at commencement date of the lease.

For the three and six months ended June 30, 2023, the Company determined that $5 million and $13 million of its ROU assets, respectively, were impaired and recorded a charge to the consolidated statements of income with an offsetting reduction to ROU assets.

The following table provides additional information about the Company’s property leases:


	Three Months Ended June 30,				Six Months Ended June 30,
(In millions)	2023		2022		2023		2022
Lease Cost:
Operating lease cost (a)	$	81	$	88	$	161	$	178
Short-term lease cost	2		1		3		2
Variable lease cost	26		30		63		64
Sublease income	(2)		(4)		(6)		(9)
Net lease cost	$	107	$	115	$	221	$	235
Other information:
Operating cash outflows from operating leases					$	189	$	194
Right of use assets obtained in exchange for new operating lease liabilities					$	121	$	114
Weighted-average remaining lease term – real estate					8.3 years		8.6 years

Weighted-average discount rate – real estate leases					3.21%		2.75%

(a) Excludes ROU asset impairment charges.

Future minimum lease payments for the Company’s operating leases as of June 30, 2023 are as follows:


(In millions)	Real Estate Leases
Remainder of 2023	$	186
2024	347
2025	317
2026	295
2027	259
2028	186
Subsequent years	690
Total future lease payments	2,280
Less: Imputed interest	(272)
Total	$	2,008
Current lease liabilities	$	309
Long-term lease liabilities	1,699
Total lease liabilities	$	2,008

Note: The above table excludes obligations for leases with original terms of twelve months or less which have not been recognized as a ROU asset or liability in the consolidated balance sheets.

As of June 30, 2023, the Company had additional operating real estate leases that had not yet commenced of $55 million. These operating leases will commence over the next 12 months.

13. Retirement Benefits

The Company maintains qualified and non-qualified defined benefit pension plans for its U.S. and non-U.S. eligible employees. The Company’s policy for funding its tax-qualified defined benefit retirement plans is to contribute amounts at least sufficient to meet the funding requirements set forth by U.S. law and the laws of the non-U.S. jurisdictions in which the Company offers defined benefit plans.

The weighted average actuarial assumptions utilized to calculate the net periodic benefit costs for the U.S. and significant non-U.S. defined benefit plans are as follows:


Combined U.S. and significant non-U.S. Plans	Pension Benefits
June 30,	2023		2022
Weighted average assumptions:
Expected return on plan assets	5.31	%	4.56	%
Discount rate	5.16	%	2.28	%
Rate of compensation increase	3.16	%	2.16	%

The target asset allocation for the U.S. plans is 50% equities and equity alternatives and 50% fixed income. At June 30, 2023, the actual allocation for the U.S. plans was 50% equities and equity alternatives and 50% fixed income. The target allocation for the U.K. plans at June 30, 2023 is 14% equities and equity alternatives and 86% fixed income. At June 30, 2023, the actual allocation for the U.K. plans was 13% equities and equity alternatives and 87% fixed income. The Company's U.K. plans comprised approximately 79% of non-U.S. plan assets at December 31, 2022. The assets of the Company's defined benefit plans are diversified and are managed in accordance with applicable laws and with the goal of maximizing the plans' real return within acceptable risk parameters. The Company generally uses threshold-based portfolio re-balancing to ensure the actual portfolio remains consistent with target asset allocation ranges.

The net benefit cost or credit of the Company's defined benefit plans is measured on an actuarial basis using various methods and assumptions. The components of the net benefit credit for defined benefit plans are as follows:


Combined U.S. and significant non-U.S. Plans
For the Three Months Ended June 30,	Pension Benefits
(In millions)	2023		2022
Service cost	$	5	$	7
Interest cost	150		99
Expected return on plan assets	(215)		(197)

Recognized actuarial loss	5		37
Net periodic benefit credit	$	(55)	$	(54)


Settlement loss	—		2
Net benefit credit	$	(55)	$	(52)


Combined U.S. and significant non-U.S. Plans
For the Six Months Ended June 30,	Pension Benefits
(In millions)	2023		2022
Service cost	$	11	$	15
Interest cost	298		199
Expected return on plan assets	(427)		(399)

Recognized actuarial loss	11		76
Net periodic benefit credit	$	(107)	$	(109)

Settlement loss	—		2

Net benefit credit	$	(107)	$	(107)


Amounts recorded in the Consolidated Statements of Income
Combined U.S. and significant non-U.S. Plans
For the Three Months Ended June 30,	Pension Benefits
(In millions)	2023		2022
Compensation and benefits expense	$	5	$	7
Other net benefit credits	(60)		(59)
Net benefit credit	$	(55)	$	(52)


Amounts Recorded in the Consolidated Statement of Income
Combined U.S. and significant non-U.S. Plans
For the Six Months Ended June 30,	Pension Benefits
(In millions)	2023		2022
Compensation and benefits expense	$	11	$	15
Other net benefit credits	(118)		(122)
Net benefit credit	$	(107)	$	(107)



U.S. Plans only
For the Three Months Ended June 30,	Pension Benefits
(In millions)	2023		2022

Interest cost	$	65	$	49
Expected return on plan assets	(77)		(84)

Recognized actuarial loss	4		18
Net benefit credit	$	(8)	$	(17)


U.S. Plans only
For the Six Months Ended June 30,	Pension Benefits
(In millions)	2023		2022

Interest cost	$	130	$	97
Expected return on plan assets	(155)		(168)

Recognized actuarial loss	9		37
Net benefit credit	$	(16)	$	(34)


Significant non-U.S. Plans only
For the Three Months Ended June 30,	Pension Benefits
(In millions)	2023		2022
Service cost	$	5	$	7
Interest cost	85		50
Expected return on plan assets	(138)		(113)

Recognized actuarial loss	1		19
Net periodic benefit credit	$	(47)	$	(37)
Settlement loss	—		2
Net benefit credit	$	(47)	$	(35)


Significant non-U.S. Plans only
For the Six Months Ended June 30,	Pension Benefits
(In millions)	2023		2022
Service cost	$	11	$	15
Interest cost	168		102
Expected return on plan assets	(272)		(231)

Recognized actuarial loss	2		39
Net periodic benefit credit	$	(91)	$	(75)

Settlement loss	—		2
Net benefit credit	$	(91)	$	(73)

The Company made contributions to its U.S. and non-U.S. defined benefit pension plans for the three and six months ended June 30, 2023 of approximately $26 million and $47 million, respectively, compared to contributions of $45 million and $113 million, respectively, for the corresponding periods in the prior year. The Company expects to contribute approximately $59 million to its U.S. and non-U.S. defined benefit pension plans during the remainder of 2023.

Defined Contribution Plans

The Company maintains certain defined contribution plans ("DC Plans") for its employees, the most significant being in the U.S. and the U.K. The cost of the U.S. DC Plans for the three and six months ended June 30, 2023 was $44 million and $88 million, respectively, and $40 million and $83 million, respectively, for the corresponding periods in the prior year. The cost of the U.K. DC Plans for the three and six months ended June 30, 2023, was $38 million and $81 million, respectively, and $33 million and $77 million, respectively, for the corresponding periods in the prior year.

14. Debt

The Company’s outstanding debt is as follows:


(In millions)	June 30, 2023		December 31, 2022
Short-term:
Commercial paper	$	308	$	—

Revolving credit facility	200		—
Current portion of long-term debt	1,867		268
	$	2,375	$	268
Long-term:

Senior notes – 4.05% due 2023	$	250	$	250
Senior notes – 3.50% due 2024	600		599
Senior notes – 3.875% due 2024	999		998
Senior notes – 3.50% due 2025	499		499
Senior notes – 1.349% due 2026	604		587
Senior notes – 3.75% due 2026	599		598
Senior notes – 4.375% due 2029	1,499		1,499
Senior notes – 1.979% due 2030	593		576
Senior notes – 2.25% due 2030	740		739
Senior notes – 2.375% due 2031	397		397
Senior notes – 5.750% due 2032	492		493
Senior notes – 5.875% due 2033	298		298
Senior notes – 4.75% due 2039	495		495
Senior notes – 4.35% due 2047	493		493
Senior notes – 4.20% due 2048	593		593
Senior notes – 4.90% due 2049	1,238		1,238
Senior notes – 2.90% due 2051	346		346
Senior notes – 6.25% due 2052	491		492
Senior notes – 5.45% due 2053	591		—
Mortgage – 5.70% due 2035	293		301

Other	4		4
	$	12,114	$	11,495
Less: current portion	1,867		268
	$	10,247	$	11,227

The senior notes in the table are registered by the Company with the Securities and Exchange Commission and are not guaranteed.

The Company has a short-term commercial paper financing program of $2.8 billion. The program was increased from $2.0 billion in October 2022. The Company had $308 million of commercial paper outstanding at June 30, 2023, at an average effective interest rate of 5.33%.

Credit Facilities

The Company has a multi-currency unsecured $2.8 billion five-year revolving credit facility (the "Credit Facility") entered into on April 1, 2021. The interest rate on the Credit Facility was initially based on LIBOR plus a fixed margin which varied with the Company's credit rating. In the second quarter of 2023, the Credit Facility was amended so that borrowings under the Credit Facility bear interest at a rate per annum equal, at the borrower's option, either at (a) SOFR benchmark rate for U.S. dollar borrowings, or (b) a currency specific benchmark rate, plus an applicable margin which varies with the Company's credit ratings. The Credit Facility expires in April 2026 and requires the Company to maintain certain coverage and leverage ratios which are tested quarterly.

The Credit Facility includes provisions for determining a benchmark replacement rate in the event existing benchmark rates are no longer available or in certain other circumstances in which an alternative rate may be required. As of June 30, 2023 and December 31, 2022, the Company had no borrowings under this facility.

In connection with the Credit Facility, the Company terminated its previous multi-currency unsecured $1.8 billion five-year and its unsecured $1 billion 364-day revolving credit facilities.

In May 2022, the Company secured a one-year $250 million uncommitted revolving credit facility with similar coverage and leverage ratios as the Credit Facility. In May 2023, the Company extended the facility until May 2024, at a reduced capacity of $200 million. At June 30, 2023, the Company had $200 million borrowings outstanding under this facility with a weighted average interest rate of 5.50%. There were no borrowings outstanding under this facility at December 31, 2022.

The Company also maintains other credit and overdraft facilities with various financial institutions aggregating $112 million at June 30, 2023. There were no outstanding borrowings under these facilities at June 30, 2023 and December 31, 2022. The Company also has outstanding guarantees and letters of credit with various banks aggregating $118 million at June 30, 2023.

Senior Notes

In March 2023, the Company issued $600 million of 5.45% senior notes due 2053. The Company used the net proceeds from this issuance for general corporate purposes.

In October 2022, the Company issued $500 million of 5.75% senior notes due 2032 and $500 million of 6.25% senior notes due 2052. The Company used the net proceeds from these issuances for general corporate purposes and repaid $350 million of 3.30% senior notes in November 2022, with an original maturity date of March 2023.

Fair Value of Short-term and Long-term Debt

The estimated fair value of the Company's short-term and long-term debt is provided below. Certain estimates and judgments were required to develop the fair value amounts. The fair value amounts shown below are not necessarily indicative of the amounts that the Company would realize upon disposition, nor do they indicate the Company’s intent or need to dispose of the financial instrument.


	June 30, 2023				December 31, 2022
(In millions)	Carrying Amount		Fair Value		Carrying Amount		Fair Value


Short-term debt	$	2,375	$	2,350	$	268	$	265
Long-term debt	$	10,247	$	9,673	$	11,227	$	10,544

The fair value of the Company's short-term debt consists of commercial paper, borrowings under the uncommitted credit facility, and term debt maturing within the next year and its fair value approximates its carrying value. The estimated fair value of a primary portion of the Company's long-term debt is based on discounted future cash flows using current interest rates available for debt with similar terms and remaining maturities. Short-term and long-term debt would be classified as Level 2 in the fair value hierarchy.

15. Restructuring Costs

In the fourth quarter of 2022, the Company initiated activities focused on workforce actions, rationalization of technology and functional services, and reductions in real estate. Based on current estimates, the Company continues to anticipate total charges related to these activities to be between $375 million and $400 million. The Company has incurred approximately $300 million of restructuring costs through June 30, 2023, primarily severance and lease exit charges, of which $48 million and $72 million were for the three and six months ended June 30, 2023, respectively. The majority of the remaining costs are expected to be incurred in the remainder of 2023. The Company's plans are still being finalized, which may change the expected timing and estimates of expected costs, as the Company continues to refine its detailed plans for each business and location.

Restructuring activities also include charges related to improving the Company's global information technology function and improving efficiencies and client services related to the Marsh operational excellence program. In 2022, costs primarily related to remaining JLT integration.

The Company incurred costs related to these initiatives as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
(In millions)	2023		2022		2023		2022
Risk and Insurance Services	$	31	$	11	$	63	$	26
Consulting	7		4		16		11
Corporate	27		13		39		21
Total	$	65	$	28	$	118	$	58

Details of the restructuring activity from January 1, 2022 through June 30, 2023, are as follows:


(In millions)	Severance		Real Estate Related Costs (a)		Information Technology		Consulting and Other Outside Services		Total
Liability at 1/1/22	$	35	$	34	$	—	$	—	$	69
2022 charges	111		195		15		106		427
Cash payments	(58)		(25)		(6)		(104)		(193)
Non-cash charges	—		(148)		(9)		—		(157)

Liability at 12/31/22	$	88	$	56	$	—	$	2	$	146
2023 charges	46		36		6		30		118
Cash payments	(79)		(37)		(5)		(30)		(151)
Non-cash charges	—		(15)		(1)		—		(16)
Liability at 6/30/23	$	55	$	40	$	—	$	2	$	97

(a) Includes ROU and fixed asset impairments and other real estate related costs.

The expenses associated with these initiatives are included in compensation and benefits and other operating expenses in the consolidated statements of income. The liabilities associated with these initiatives are classified on the consolidated balance sheets as accounts payable and accrued liabilities, other liabilities or accrued compensation and employee benefits, depending on the nature of the items.

16. Common Stock

During the first six months of 2023, the Company repurchased 3.5 million shares of its common stock for $600 million. As of June 30, 2023, the Company remained authorized to repurchase up to approximately $3.7 billion in shares of its common stock. There is no time limit on the authorization. During the first six months of 2022, the Company repurchased 7.0 million shares of its common stock for $1.1 billion.

The Company issued approximately 2.8 million and 2.7 million shares related to stock compensation and employee stock purchase plans during the first six months of 2023 and 2022, respectively.

In January and March of 2023, the Board of Directors of the Company declared quarterly dividends of $0.59 per share on outstanding common stock, which were paid in February and May 2023, respectively. In July 2023, the Board of Directors of the Company declared a quarterly dividend of $0.71 per share on outstanding common stock, payable in August, 2023.

17. Claims, Lawsuits and Other Contingencies

Nature of Contingencies

The Company and its subsidiaries are subject to a significant number of claims, lawsuits and proceedings in the course of our business. Such claims and lawsuits consist principally of alleged errors and omissions in connection with the performance of professional services, including the placement of insurance, the provision of actuarial services for corporate and public sector clients, the provision of investment advice and investment management services to pension plans, the provision of advice relating to pension buy-out transactions and the provision of consulting services relating to the drafting and interpretation of trust deeds and other documentation governing pension plans. These claims often seek damages, including punitive and treble damages, in amounts that could be significant. In establishing liabilities for errors and omissions claims in accordance with FASB guidance on Contingencies - Loss Contingencies, the Company uses case level reviews by inside and outside counsel, and

internal actuarial analysis by Oliver Wyman, a subsidiary of the Company, and other methods to estimate potential losses. A liability is established when a loss is both probable and reasonably estimable. The liability is reviewed quarterly and adjusted as developments warrant. In many cases, the Company has not recorded a liability, other than for legal fees to defend the claim, because we are unable, at the present time, to make a determination that a loss is both probable and reasonably estimable. To the extent that expected losses exceed our deductible in any policy year, the Company also records an asset for the amount that we expect to recover under any available third-party insurance programs. The Company has varying levels of third-party insurance coverage, with policy limits and coverage terms varying significantly by policy year.

Our activities are regulated under the laws of the U.S. and its various states, the U.K., the E.U. and its member states, and the many other jurisdictions in which the Company operates. The Company also receives subpoenas in the ordinary course of business, and, from time to time, requests for information in connection with government investigations.

Current Matters

Risk and Insurance Services Segment

•In January 2019, the Company received a notice that the Administrative Council for Economic Defense anti-trust agency in Brazil had commenced an administrative proceeding against a number of insurance brokers, including both Marsh and JLT, and insurers "to investigate an alleged sharing of sensitive commercial and competitive confidential information" in the aviation insurance and reinsurance sector.

•From 2014, Marsh Ltd. was engaged by Greensill Capital (UK) Limited as its insurance broker. Marsh Ltd. placed a number of trade credit insurance policies for Greensill. On March 1, 2021, Greensill filed an action against certain of its trade credit insurers in Australia seeking a mandatory injunction compelling these insurers to renew coverage under expiring policies. Later that day, the Australian court denied Greensill’s application. Since then, a number of Greensill entities have filed for, or been subject to, insolvency proceedings, and several litigations and investigations have been commenced in the U.K., Australia, Germany, Switzerland and the U.S., including claims brought by Greensill's administrators and loss payees under Greensill's trade credit insurance policies. In June 2023, White Oak, one such loss payee, filed a claim in the High Court of Justice in London against Marsh Ltd., related to White Oak’s purchase of accounts receivable from Greensill. The claim alleges that Marsh Ltd., which was not the insurance broker for White Oak, failed to take required steps to ensure accurate representations to White Oak in its capacity as a loss payee.

At this time, we are unable to predict the likely timing, outcome or ultimate impact of the foregoing matters. Adverse determinations in one or more of these matters could have a material impact on the Company's consolidated results of operations, financial condition or cash flows in a future period.

Other Contingencies-Guarantees

In connection with its acquisition of U.K.-based Sedgwick Group in 1998, the Company acquired several insurance underwriting businesses that were already in run-off, including River Thames Insurance Company Limited ("River Thames"), which the Company sold in 2001. Sedgwick guaranteed payment of claims on certain policies underwritten through the Institute of London Underwriters (the "ILU") by River Thames. The policies covered by this guarantee are partly reinsured by a related party of River Thames. Payment of claims under the reinsurance agreement is collateralized by funds withheld by River Thames from the reinsurer. To the extent River Thames or the reinsurer is unable to meet its obligations under those policies, a claimant may seek to recover from the Company under the guarantee.

From 1980 to 1983, the Company owned indirectly the English & American Insurance Company ("E&A"), which was a member of the ILU. The ILU required the Company to guarantee a portion of E&A's obligations. After E&A became insolvent in 1993, the ILU agreed to discharge the guarantee in exchange for the Company's agreement to post an evergreen letter of credit that is available to pay claims by policyholders on certain E&A policies issued through the ILU and incepting between July 3, 1980 and October 6, 1983. Certain claims have been paid under the letter of credit and the Company anticipates that additional claimants may seek to recover against the letter of credit.

* * * *

The pending proceedings described above and other matters not explicitly described in this Note 17 on Claims, Lawsuits and Other Contingencies may expose the Company or its subsidiaries to liability for significant monetary damages, fines, penalties or other forms of relief. Where a loss is both probable and reasonably estimable, the Company establishes liabilities in accordance with FASB guidance on Contingencies - Loss Contingencies.

The Company is not able at this time to provide a reasonable estimate of the range of possible loss attributable to these matters or the impact they may have on the Company's consolidated results of operations, financial position or cash flows. This is primarily because these matters are still developing and involve complex issues subject to inherent uncertainty. Adverse determinations in one or more of these matters could have a material impact on the Company's consolidated results of operations, financial condition or cash flows in a future period.

18. Segment Information

The Company is organized based on the types of services provided. Under this structure, the Company’s segments are:

•Risk and Insurance Services, comprising insurance services (Marsh) and reinsurance services (Guy Carpenter); and

•Consulting, comprising Mercer and Oliver Wyman Group.

The accounting policies of the segments are the same as those used for the consolidated financial statements described in Note 1, Summary of Significant Accounting Policies, in the Company’s 2022 Form 10-K. Segment performance is evaluated based on segment operating income, which includes directly related expenses, and charges or credits related to restructuring but not the Company’s corporate-level expenses. Revenues are attributed to geographic areas on the basis of where the services are performed.

Selected information about the Company’s segments for the three and six months ended June 30, 2023 and 2022 is as follows:


	Three Months Ended June 30,					Six Months Ended June 30,
(In millions)	Revenue			Operating Income (Loss)		Revenue			Operating Income (Loss)
2023 –
Risk and Insurance Services	$	3,722	(a)	$	1,157	$	7,628	(c)	$	2,552
Consulting	2,172		(b)	388		4,203		(d)	799
Total Operating Segments	5,894			1,545		11,831			3,351
Corporate/Eliminations	(18)			(88)		(31)			(168)
Total Consolidated	$	5,876		$	1,457	$	11,800		$	3,183
2022 –
Risk and Insurance Services	$	3,313	(a)	$	967	$	6,862	(c)	$	2,088
Consulting	2,084		(b)	475		4,094		(d)	867
Total Operating Segments	5,397			1,442		10,956			2,955
Corporate/Eliminations	(18)			(78)		(28)			(146)
Total Consolidated	$	5,379		$	1,364	$	10,928		$	2,809

(a) Includes inter-segment revenue of $5 million in both 2023 and 2022, interest income on fiduciary funds of $108 million and $13 million in 2023 and 2022, respectively; and equity method income of $12 million and $7 million in 2023 and 2022, respectively.

(b) Includes inter-segment revenue of $13 million in both 2023 and 2022. Revenue for 2022 also includes a gain on the sale of the Mercer U.S. affinity business of $112 million.

(c) Includes inter-segment revenue of $5 million in both 2023 and 2022, interest income on fiduciary funds of $199 million and $17 million in 2023 and 2022, respectively, and equity method income of $11 million and $8 million in 2023 and 2022, respectively. Revenue for 2022 also includes the loss on deconsolidation of the Russian businesses at Marsh of $27 million.

(d) Includes inter-segment revenue of $26 million and $23 million in 2023 and 2022, respectively. Revenue for 2023 also includes the loss on sale of an individual financial advisory business in Canada of $17 million. Revenue for 2022 also includes a gain on the sale of the Mercer U.S. affinity business of $112 million, partially offset by the loss on deconsolidation of the Russian businesses at Oliver Wyman Group of $12 million.

Details of operating segment revenue for the three and six months ended June 30, 2023 and 2022 are as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
(In millions)	2023		2022		2023		2022
Risk and Insurance Services
Marsh	$	3,103	$	2,787	$	5,903	$	5,336
Guy Carpenter	619		526		1,725		1,526
Total Risk and Insurance Services	3,722		3,313		7,628		6,862
Consulting
Mercer	1,374		1,389		2,718		2,732
Oliver Wyman Group	798		695		1,485		1,362
Total Consulting	2,172		2,084		4,203		4,094
Total Operating Segments	5,894		5,397		11,831		10,956
Corporate Eliminations	(18)		(18)		(31)		(28)
Total	$	5,876	$	5,379	$	11,800	$	10,928

19. New Accounting Guidance

New Accounting Pronouncement Adopted Effective January 1, 2022:

In October 2021, the FASB issued new guidance for measuring contract assets and contract liabilities acquired in a business combination. In accordance with the new guidance, contract assets and contract liabilities should be measured in accordance with the guidance for revenue from contracts with customers as opposed to the guidance for business combinations. The guidance must be applied on a prospective basis, and is effective for fiscal years beginning after December 15, 2022, including interim periods therein. Early adoption is permitted. The Company elected to adopt this new standard effective January 1, 2022. Adoption of this guidance did not have a material impact on the Company's financial position or results of operations.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

General

Marsh & McLennan Companies, Inc., and its consolidated subsidiaries (the "Company") is a global professional services firm offering clients advice in the areas of risk, strategy and people. The Company’s more than 85,000 colleagues advise clients in over 130 countries. With annual revenue of over $20 billion, the Company 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 identify and capitalize on emerging opportunities. Mercer delivers advice and technology-driven solutions that help organizations redefine the future of work, shape retirement and investment outcomes, and advance health and well-being for a changing workforce. Oliver Wyman Group serves as a critical strategic, economic and brand advisor to private sector and governmental clients.

The Company conducts business through two segments:

•Risk and Insurance Services includes risk management activities (risk advice, risk transfer and risk control and mitigation solutions) as well as insurance and reinsurance broking and services. The Company conducts business in this segment through Marsh and Guy Carpenter.

•Consulting includes health, wealth and career solutions and products, and specialized management, strategic, economic and brand consulting services. The Company conducts business in this segment through Mercer and Oliver Wyman Group.

The results of operations in the Management Discussion & Analysis ("MD&A") include an overview of the Company's consolidated results for the three and six months ended June 30, 2023, compared to the corresponding periods in 2022, and should be read in conjunction with the consolidated financial statements and notes. This section also includes a discussion of the key drivers impacting the Company's financial results of operations both on a consolidated basis and by reportable segments.

We describe the primary sources of revenue and categories of expense for each segment in the discussion of segment financial results. A reconciliation of segment operating income to total operating income is included in Note 18, Segment Information, in the notes to the consolidated financial statements included in Part I, Item 1, of this report.

For information and comparability of the Company's results of operations and liquidity and capital resources for the three and six months ended June 30, 2022, refer to "Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations" of the Company's Form 10-Q for the quarter ended June 30, 2022.

This MD&A contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Refer to "Information Concerning Forward-Looking Statements" at the outset of this report.

Non-GAAP measures

The Company reports its financial results in accordance with accounting principles generally accepted in the United States (U.S.), referred to as in accordance with "GAAP" or "reported" results. The Company also refers to and presents a non-GAAP financial measure in non-GAAP revenue, within the meaning of Regulation G and Item 10(e) of Regulation S-K in accordance with the Securities Exchange Act of 1934. The Company has included a reconciliation of this non-GAAP financial measure to the most directly comparable financial measure calculated in accordance with GAAP as part of the consolidated revenue and expense discussion. 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 Company believes this non-GAAP financial measure provides useful supplemental information that enables investors to better compare the Company’s performance across periods. Management also uses this measure internally to assess the operating performance of its businesses and to decide how to allocate resources. However, investors should not consider this non-GAAP measure in isolation from, or as a substitute for, the financial information that the Company reports in accordance with GAAP. The Company's non-GAAP measure includes adjustments that reflect how management views its businesses and may differ from similarly titled non-GAAP measures presented by other companies.

Financial Highlights

•Consolidated revenue for the three months ended June 30, 2023 was $5.9 billion, an increase of 9%, or 11% on an underlying basis. For the six months ended June 30, 2023, consolidated revenue was $11.8 billion, an increase of 8%, or 10% on an underlying basis compared to the corresponding period in the prior year.

•Consolidated operating income increased $93 million, or 7%, to $1.5 billion for the three months ended June 30, 2023, compared to the corresponding quarter in the prior year. Net income attributable to the Company was $1.0 billion. Earnings per share on a diluted basis increased to $2.07 from $1.91, or 8%, compared to the corresponding quarter in the prior year. For the six months ended June 30, 2023, consolidated operating income increased $374 million, or 13% to $3.2 billion, compared to the corresponding period in the prior year. Net income attributable to the Company was $2.3 billion. Earnings per share on a diluted basis increased to $4.55 from $4.01, or 13%, compared to the corresponding period in the prior year.

•Risk and Insurance Services revenue for the three months ended June 30, 2023 was $3.7 billion, an increase of 12%, or 13% on an underlying basis. Operating income was $1.2 billion, compared with $967 million in the corresponding quarter in the prior year. For the six months ended June 30, 2023, Risk and Insurance Services revenue was $7.6 billion, an increase of 11%, or 12% on an underlying basis.

Operating income was $2.6 billion, compared with $2.1 billion for the corresponding period in the prior year.

•Consulting revenue for the three months ended June 30, 2023 was $2.2 billion, an increase of 4%, or 8% on an underlying basis. Operating income was $388 million, compared with $475 million in the corresponding quarter in the prior year. For the six months ended June 30, 2023, Consulting revenue was $4.2 billion, an increase of 3%, or 6% on an underlying basis. Operating income was $799 million, compared with $867 million for the corresponding period in the prior year.

•In April 2023, the Company completed the acquisition of Westpac Banking Corporation’s ("Westpac") financial advisory business, Advance Asset Management, and the transfer from Westpac of BT Financial Group's personal and corporate pension funds to the Mercer Super Trust managed by Mercer Australia (referred to collectively, as the "Westpac Transaction").

•The Company repurchased 1.7 million shares of stock for $300 million in the second quarter of 2023. During the six months ended June 30, 2023, the Company repurchased 3.5 million shares for $600 million.

•In March 2023, the Company issued $600 million of 5.45% senior notes due 2053.

•In July 2023, the Board of Directors of the Company declared a dividend of $0.71 per share on outstanding common stock, payable in August 2023.

For additional details, refer to the Consolidated Results of Operations and Liquidity and Capital Resources sections in this MD&A.

Acquisitions and dispositions impacting the Risk and Insurance Services and Consulting segments are discussed in Note 8, Acquisitions and Dispositions, in the notes to the consolidated financial statements.

Consolidated Results of Operations


	Three Months Ended June 30,				Six Months Ended June 30,
(In millions, except per share data)	2023		2022		2023		2022
Revenue	$	5,876	$	5,379	$	11,800	$	10,928
Expense:
Compensation and benefits	3,337		3,010		6,544		6,110
Other operating expenses	1,082		1,005		2,073		2,009
Operating expenses	4,419		4,015		8,617		8,119
Operating income	$	1,457	$	1,364	$	3,183	$	2,809






Income before income taxes	$	1,384	$	1,312	$	3,048	$	2,736
Net income before non-controlling interests	$	1,047	$	978	$	2,299	$	2,064



Net income attributable to the Company	$	1,035	$	967	$	2,270	$	2,038
Net income per share attributable to the Company:
– Basic	$	2.09	$	1.93	$	4.59	$	4.06
– Diluted	$	2.07	$	1.91	$	4.55	$	4.01



Average number of shares outstanding:
– Basic	495		501		495		502
– Diluted	499		506		499		508
Shares outstanding at June 30,	494		499		494		499

Consolidated operating income increased $93 million, or 7% to $1.5 billion for the three months ended June 30, 2023, compared to $1.4 billion in the corresponding quarter in the prior year, reflecting a 9% increase in revenue and a 10% increase in expenses. Revenue growth was driven by increases in the Risk and Insurance Services and Consulting segments of 12% and 4%, respectively.

Consolidated operating income increased $374 million, or 13% to $3.2 billion for the six months ended June 30, 2023, compared to $2.8 billion in the corresponding period in the prior year, reflecting an 8% increase in revenue and a 6% increase in expenses. Revenue growth was driven by increases in the Risk and Insurance Services and Consulting segments of 11% and 3%, respectively.

Revenue growth for both the three and six months ended June 30, 2023 was primarily driven by continued demand for our advice and services, new business and renewal growth, and solid client retention, as well as higher insurance and reinsurance rates. Results also benefited from investments in talent and increased fiduciary income due to higher interest rates. Revenue growth was partially offset by a gain from the sale of the Mercer U.S. affinity business in 2022 of $112 million.

The increase in expenses for both the three and six months ended June 30, 2023 is primarily due to increased headcount and higher incentive compensation. Expenses for the six months ended June 30, 2023 also reflect higher travel and entertainment costs, compared to the corresponding period in the prior year.

For the six months ended June 30, 2023, operating income was also impacted by foreign exchange movements across both segments due to the strengthening of the U.S. dollar.

Diluted earnings per share increased to $2.07 from $1.91, or 8% for the three months ended June 30, 2023, and to $4.55 from $4.01, or 13% for the six months ended June 30, 2023, compared to corresponding periods in the prior year. The increase for the three and six months ended June 30, 2023 is primarily the result of higher operating income compared to the corresponding periods in the prior year.

Results for the six months ended June 30, 2022 also include a charge of approximately $52 million for the deconsolidation of the Company's Russian businesses and other related charges in Marsh and Oliver Wyman Group recorded in the first quarter of 2022.

For the three and six months ended June 30, 2023 and 2022, the Company's results of operations and earnings per share were impacted by the following items:


	Three Months Ended June 30,				Six Months Ended June 30,
(In millions)	2023		2022		2023		2022
Restructuring, excluding JLT	$	62	$	28	$	102	$	46
Changes in contingent consideration	10		17		17		27
JLT integration and restructuring costs	3		—		16		12
JLT legacy legal charges	—		10		(51)		3
Disposal of business	(2)		(112)		17		(112)
Acquisition related costs	10		—		27		—
JLT acquisition-related costs and other	—		14		—		24
Legal claims	—		—		—		30






Deconsolidation of Russian businesses and other related charges	—		—		—		52

Impact on income before taxes	$	83	$	(43)	$	128	$	82

•Restructuring, excluding JLT: In 2023, 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. Costs also reflect charges for Marsh's operational excellence program. These costs are discussed in more detail in Note 15, Restructuring Costs, in the notes to the consolidated financial statements.

•Changes in contingent consideration: Includes the change in fair value of contingent consideration related to acquisitions and dispositions measured each quarter.

•JLT integration and restructuring: Reflects adjustments to restructuring liabilities for future rent under non-cancelable leases for a legacy JLT U.K. location.

•JLT legacy legal charges: Reflects insurance and indemnity recoveries for a legacy JLT Errors and Omissions ("E&O") matter relating to suitability of advice provided to individuals for defined benefit pension transfers in the U.K.

•Disposal of Business: Loss on sale of an individual financial advisory business in Canada in 2023. The second quarter of 2022 reflects a gain of $112 million on the sale of the Mercer U.S. affinity business. These amounts are reflected as a component of revenue in the consolidated statements of income and excluded from non-GAAP revenue.

•Acquisition related costs: Includes integration costs for the Westpac Transaction in Australia, which closed on April 1, 2023. Refer to Note 8, Acquisitions and Dispositions, in the notes to the consolidated financial statements for additional detail.

•JLT acquisition-related costs and other: Retention costs related to the acquisition of JLT.

•Legal claims: The Company recorded settlement and legal costs related to strategic recruiting.

•Deconsolidation of Russian businesses and other related charges: The loss on deconsolidation of the Company's Russian businesses of $39 million is reflected as a component of revenue in the consolidated statements of income and excluded from non-GAAP revenue. The remaining expenses of $13 million are included in other operating expenses in the consolidated statements of income.

Consolidated Revenue and Expense

Revenue – Non-GAAP Revenue and Components of Change

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 over period comparisons of revenue. Non-GAAP revenue measures the change in revenue from one period to the next by isolating these impacts on an underlying revenue basis. 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 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.

The percentage change for 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.

The following tables present the Company's non-GAAP revenue for the three and six months ended June 30, 2023 and 2022 and the related non-GAAP underlying revenue change:


Three Months Ended June 30, (In millions, except percentages)	GAAP Revenue				% Change GAAP Revenue*		Non-GAAP Revenue				Non-GAAP Underlying Revenue*
	2023		2022				2023		2022
Risk and Insurance Services
Marsh	$	3,038	$	2,778	9	%	$	3,040	$	2,773	10	%
Guy Carpenter	576		522		10	%	580		522		11	%
Subtotal	3,614		3,300		9	%	3,620		3,295		10	%
Fiduciary interest income	108		13				108		13
Total Risk and Insurance Services	3,722		3,313		12	%	3,728		3,308		13	%
Consulting
Mercer	1,374		1,389		(1)	%	1,381		1,303		6	%
Oliver Wyman Group	798		695		15	%	770		695		11	%
Total Consulting	2,172		2,084		4	%	2,151		1,998		8	%
Corporate Eliminations	(18)		(18)				(18)		(18)
Total Revenue	$	5,876	$	5,379	9	%	$	5,861	$	5,288	11	%

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


Three Months Ended June 30, (In millions, except percentages)	GAAP Revenue				% Change GAAP Revenue*		Non-GAAP Revenue				Non-GAAP Underlying Revenue*
	2023		2022				2023		2022
Marsh:
EMEA (a)	$	858	$	780	10	%	$	862	$	775	11	%
Asia Pacific (a)	357		347		3	%	369		347		6	%
Latin America	137		118		15	%	138		118		17	%
Total International	1,352		1,245		9	%	1,369		1,240		10	%
U.S./Canada	1,686		1,533		10	%	1,671		1,533		9	%
Total Marsh	$	3,038	$	2,778	9	%	$	3,040	$	2,773	10	%
Mercer:
Wealth	$	637	$	597	7	%	$	643	$	623	3	%
Health	518		587		(12)	%	520		475		10	%
Career	219		205		6	%	218		205		6	%
Total Mercer	$	1,374	$	1,389	(1)	%	$	1,381	$	1,303	6	%


Six Months Ended June 30, (In millions, except percentages)	GAAP Revenue				% Change GAAP Revenue*		Non-GAAP Revenue				Non-GAAP Underlying Revenue*
	2023		2022				2023		2022
Risk and Insurance Services
Marsh	$	5,782	$	5,324	9	%	$	5,831	$	5,341	9	%
Guy Carpenter	1,647		1,521		8	%	1,655		1,502		10	%
Subtotal	7,429		6,845		9	%	7,486		6,843		9	%
Fiduciary interest income	199		17				201		17
Total Risk and Insurance Services	7,628		6,862		11	%	7,687		6,860		12	%
Consulting
Mercer	2,718		2,732		(1)	%	2,794		2,619		7	%
Oliver Wyman Group	1,485		1,362		9	%	1,449		1,373		6	%
Total Consulting	4,203		4,094		3	%	4,243		3,992		6	%
Corporate Eliminations	(31)		(28)				(31)		(28)
Total Revenue	$	11,800	$	10,928	8	%	$	11,899	$	10,824	10	%

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


Six Months Ended June 30, (In millions, except percentages)	GAAP Revenue				% Change GAAP Revenue*		Non-GAAP Revenue				Non-GAAP Underlying Revenue*
	2023		2022				2023		2022
Marsh:
EMEA (a)	$	1,790	$	1,649	9	%	$	1,841	$	1,666	10	%
Asia Pacific (a)	669		641		4	%	695		641		8	%
Latin America	252		222		13	%	253		222		14	%
Total International	2,711		2,512		8	%	2,789		2,529		10	%
U.S./Canada	3,071		2,812		9	%	3,042		2,812		8	%
Total Marsh	$	5,782	$	5,324	9	%	$	5,831	$	5,341	9	%
Mercer:
Wealth	$	1,218	$	1,214	—		$	1,273	$	1,238	3	%
Health	1,063		1,111		(4)	%	1,078		974		11	%
Career	437		407		7	%	443		407		9	%
Total Mercer	$	2,718	$	2,732	(1)	%	$	2,794	$	2,619	7	%

* Rounded to whole percentages.

Revenue – Reconciliation of Non-GAAP Measures

The following tables provide the reconciliation of GAAP revenue to Non-GAAP revenue for the three and six months ended June 30, 2023 and 2022 :


	2023								2022
Three Months Ended June 30, (In millions)	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	$	3,038	$	26	$	(24)	$	3,040	$	2,778	$	(5)	$	2,773
Guy Carpenter	576		5		(1)		580		522		—		522
Subtotal	3,614		31		(25)		3,620		3,300		(5)		3,295
Fiduciary interest income	108		—		—		108		13		—		13
Total Risk and Insurance Services	3,722		31		(25)		3,728		3,313		(5)		3,308
Consulting
Mercer (a)	1,374		11		(4)		1,381		1,389		(86)		1,303
Oliver Wyman Group	798		(2)		(26)		770		695		—		695
Total Consulting	2,172		9		(30)		2,151		2,084		(86)		1,998
Corporate Eliminations	(18)		—		—		(18)		(18)		—		(18)
Total Revenue	$	5,876	$	40	$	(55)	$	5,861	$	5,379	$	(91)	$	5,288

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


	2023								2022
Three Months Ended June 30, (In millions)	GAAP Revenue		Currency Impact		Acquisitions/ Dispositions/ Other Impact		Non-GAAP Revenue		GAAP Revenue		Acquisitions/ Dispositions/ Other Impact		Non-GAAP Revenue
Marsh:
EMEA (b)	$	858	$	5	$	(1)	$	862	$	780	$	(5)	$	775
Asia Pacific (b)	357		14		(2)		369		347		—		347
Latin America	137		1		—		138		118		—		118
Total International	1,352		20		(3)		1,369		1,245		(5)		1,240
U.S./Canada	1,686		6		(21)		1,671		1,533		—		1,533
Total Marsh	$	3,038	$	26	$	(24)	$	3,040	$	2,778	$	(5)	$	2,773
Mercer:
Wealth (a)	$	637	$	7	$	(1)	$	643	$	597	$	26	$	623
Health (a)	518		2		—		520		587		(112)		475
Career	219		2		(3)		218		205		—		205
Total Mercer	$	1,374	$	11	$	(4)	$	1,381	$	1,389	$	(86)	$	1,303

(a)Acquisitions, dispositions, and other in 2022 includes revenue from the Westpac Transaction in Wealth and a gain from the sale of the Mercer U.S. affinity business of $112 million in Health.

(b)In the first quarter of 2023, the Company began reporting the Marsh India operations in EMEA. Prior year results for India have been reclassified from Asia Pacific to EMEA for comparative purposes.


	2023								2022
Six Months Ended June 30, (In millions)	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 (a)	$	5,782	$	97	$	(48)	$	5,831	$	5,324	$	17	$	5,341
Guy Carpenter	1,647		23		(15)		1,655		1,521		(19)		1,502
Subtotal	7,429		120		(63)		7,486		6,845		(2)		6,843
Fiduciary interest income	199		2		—		201		17		—		17
Total Risk and Insurance Services	7,628		122		(63)		7,687		6,862		(2)		6,860
Consulting
Mercer (b)	2,718		61		15		2,794		2,732		(113)		2,619
Oliver Wyman Group (a)	1,485		14		(50)		1,449		1,362		11		1,373
Total Consulting	4,203		75		(35)		4,243		4,094		(102)		3,992
Corporate Eliminations	(31)		—		—		(31)		(28)		—		(28)
Total Revenue	$	11,800	$	197	$	(98)	$	11,899	$	10,928	$	(104)	$	10,824

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


	2023								2022
Six Months Ended June 30, (In millions)	GAAP Revenue		Currency Impact		Acquisitions/ Dispositions/ Other Impact		Non-GAAP Revenue		GAAP Revenue		Acquisitions/ Dispositions/ Other Impact		Non-GAAP Revenue
Marsh:
EMEA (a) (c)	$	1,790	$	55	$	(4)	$	1,841	$	1,649	$	17	$	1,666
Asia Pacific (a)	669		29		(3)		695		641		—		641
Latin America	252		1		—		253		222		—		222
Total International	2,711		85		(7)		2,789		2,512		17		2,529
U.S./Canada	3,071		12		(41)		3,042		2,812		—		2,812
Total Marsh	$	5,782	$	97	$	(48)	$	5,831	$	5,324	$	17	$	5,341
Mercer:
Wealth (b)	$	1,218	$	35	$	20	$	1,273	$	1,214	$	24	$	1,238
Health (b)	1,063		16		(1)		1,078		1,111		(137)		974
Career	437		10		(4)		443		407		—		407
Total Mercer	$	2,718	$	61	$	15	$	2,794	$	2,732	$	(113)	$	2,619

(a)Acquisitions, dispositions, and other in 2022 includes the loss on deconsolidation of the Company's Russian businesses of $27 million and Oliver Wyman Group of $12 million.

(b)Acquisitions, dispositions, and other in 2022 includes revenue from the Westpac Transaction in Wealth and a gain from the sale of the Mercer U.S. affinity business of $112 million in Health. Results for 2023 in Wealth include the loss on sale of an individual financial advisory business in Canada of $17 million.

(c)In the first quarter of 2023, the Company began reporting the Marsh India operations in EMEA. Prior year results for India have been reclassified from Asia Pacific to EMEA for comparative purposes.

Consolidated Revenue

Consolidated revenue increased $497 million, or 9% to $5.9 billion for the three months ended June 30, 2023, compared to $5.4 billion for the three months ended June 30, 2022. Consolidated revenue increased 11% on an underlying basis, partially offset by decreases of 1% each from dispositions and the impact of foreign currency translation. On an underlying basis, revenue increased 13% and 8% for the three months ended June 30, 2023 in the Risk and Insurance Services and Consulting segments, respectively.

Consolidated revenue increased $872 million, or 8% to $11.8 billion for the six months ended June 30, 2023, compared to $10.9 billion for the six months ended June 30, 2022. Consolidated revenue increased 10% on an underlying basis, partially offset by a decrease of 2% from the impact of foreign currency translation. On an underlying basis, revenue increased 12% and 6% for the six months ended June 30, 2023 in the Risk and Insurance Services and Consulting segments, respectively.

Underlying revenue growth in the Risk and Insurance Services and Consulting segments for the three and six months ended June 30, 2023 was driven by the continued demand for our advice and services, as well as growth in renewal and new business. Renewal growth was driven by client retention, exposure growth and higher insurance and reinsurance rates. Revenue growth also benefited from investments in talent and increased fiduciary income due to higher interest rates. Revenue in Consulting reflected underlying growth at both Mercer and Oliver Wyman Group. Mercer's results included growth in Health from new business, higher retention, increased enrolled lives from a strong labor market, and medical inflation across all segments. Career growth was driven by continued demand for rewards, talent strategy, and workforce transformation advice and solutions. Wealth also grew due to continued demand in defined benefit consulting and modest growth in investment management. Growth at Oliver Wyman Group was broad-based across practice groups.

Consolidated Operating Expenses

Consolidated operating expenses increased $404 million, or 10% to $4.4 billion for the three months ended June 30, 2023, compared to $4.0 billion for the three months ended June 30, 2022. Expenses reflect a 2% increase from acquisitions and a decrease of 1% from the impact of foreign currency translation. Expenses, excluding the impact from acquisitions and foreign currency translation, increased 9% for the three months ended June 30, 2023, with increases of 9% and 8% in the Risk and Insurance Services and Consulting segments, respectively.

Consolidated operating expenses increased $498 million, or 6% to $8.6 billion for the six months ended June 30, 2023, compared to $8.1 billion for the six months ended June 30, 2022. Expenses reflect a 1% increase from acquisitions and a decrease of 2% from the impact of foreign currency translation. Expenses, excluding the impact from acquisitions and foreign currency translation, increased 7% for the six months ended June 30, 2023, with increases of 8% and 5% in the Risk and Insurance Services and Consulting segments, respectively.

The increase in expenses for the three and six months ended June 30, 2023 is primarily due to increased headcount and higher incentive compensation. Expenses for the six months ended June 30, 2023 also reflect higher travel and entertainment costs, primarily in the Risk and Insurance Services segment, compared to the corresponding period in the prior year.

In the fourth quarter of 2022, the Company initiated activities focused on workforce actions, rationalization of technology and functional services, and reductions in real estate. Based on current estimates, the Company continues to anticipate total charges related to these activities to be between $375 million and $400 million. The Company has incurred approximately $300 million of restructuring costs through June 30, 2023, primarily severance and lease exit charges, of which $48 million and $72 million were incurred for the three and six months ended June 30, 2023, respectively. The majority of the remaining costs are expected to be incurred in the remainder of 2023. Related estimated savings are expected to be approximately $300 million by 2024, with $200 million expected to be realized in 2023. The Company's plans are still being finalized, which may change the expected timing, estimates of expected costs and related savings, as the Company continues to refine its detailed plans for each business and location.

Risk and Insurance Services

In the Risk and Insurance Services segment, the Company’s subsidiaries and other affiliated entities act as brokers, agents or consultants for insureds, insurance underwriters and other brokers in the areas of risk management, insurance broking, insurance program management, risk consulting, analytical modeling and alternative risk financing services, primarily under the brand of Marsh, and engage in specialized reinsurance broking, strategic advisory services and analytics solutions, primarily under the brand of Guy Carpenter.

The results of operations for the Risk and Insurance Services segment are as follows:


	Three Months Ended June 30,						Six Months Ended June 30,
(In millions, except percentages)	2023			2022			2023			2022
Revenue	$	3,722		$	3,313		$	7,628		$	6,862
Compensation and benefits	1,923			1,750			3,803			3,551
Other operating expenses	642			596			1,273			1,223
Operating expenses	2,565			2,346			5,076			4,774
Operating income	$	1,157		$	967		$	2,552		$	2,088
Operating income margin	31.1		%	29.2		%	33.5		%	30.4		%

Revenue

Revenue in the Risk and Insurance Services segment increased $409 million, or 12% to $3.7 billion for the three months ended June 30, 2023, compared to $3.3 billion for the three months ended June 30, 2022. Revenue increased 13% on an underlying basis and 1% from acquisitions, partially offset by a decrease of 1% related to the impact of foreign currency translation. Interest earned on fiduciary funds increased $95 million to $108 million for the three months ended June 30, 2023, compared to $13 million for the corresponding quarter in the prior year.

Revenue in the Risk and Insurance Services segment increased $766 million, or 11% to $7.6 billion for the six months ended June 30, 2023, compared to $6.9 billion for the six months ended June 30, 2022. Revenue increased 12% on an underlying basis and 1% from acquisitions, partially offset by a decrease of 2% from the impact of foreign currency translation. Interest earned on fiduciary funds increased by $182 million to $199 million for the six months ended June 30, 2023, compared to $17 million for the corresponding period in the prior year.

The increase in revenue on an underlying basis in the Risk and Insurance Services segment for the three and six months ended June 30, 2023 was primarily due to strong growth in renewals and new business. Renewal growth was driven by solid client retention, as well as higher property casualty pricing. Results also benefited from increased fiduciary income, driven by higher interest rates compared to the corresponding periods in the prior year.

Marsh's revenue increased $260 million, or 9% to $3.0 billion for the three months ended June 30, 2023, compared to $2.8 billion for the three months ended June 30, 2022. This reflects increases of 10% on an underlying basis and 1% from acquisitions, partially offset by a decrease of 1% from the impact of foreign currency translation. On an underlying basis, U.S./Canada rose 9%. Total International operations produced underlying revenue growth of 10%, reflecting growth of 17% in Latin America, 11% in EMEA, and 6% in Asia Pacific.

Marsh's revenue increased $458 million, or 9% to $5.8 billion for the six months ended June 30, 2023, compared to $5.3 billion for the six months ended June 30, 2022. This reflects increases of 9% on an underlying basis and 1% from acquisitions, partially offset by a decrease of 2% from the impact of foreign currency translation. On an underlying basis, U.S./Canada rose 8%. Total International operations produced underlying revenue growth of 10%, reflecting growth of 14% in Latin America, 10% in EMEA, and 8% in Asia Pacific.

Results for the six months ended June 30, 2022, also included a charge of approximately $27 million related to the loss on deconsolidation of the Company's Russian businesses.

Guy Carpenter's revenue increased $54 million, or 10% to $576 million for the three months ended June 30, 2023, compared to $522 million for the three months ended June 30, 2022. This reflects an increase of 11% on an underlying basis, partially offset by a decrease of 1% from the impact of foreign currency translation.

Guy Carpenter's revenue increased $126 million, or 8% to $1.6 billion for the six months ended June 30, 2023, compared to $1.5 billion for the six months ended June 30, 2022. This reflects an increase of 10% on an underlying basis, partially offset by a decrease of 1% from the impact of foreign currency translation.

The Risk and Insurance Services segment completed three acquisitions during the six months ended June 30, 2023. Information regarding these acquisitions is included in Note 8, Acquisitions and Dispositions, in the notes to the consolidated financial statements.

Operating Expenses

Expenses in the Risk and Insurance Services segment increased $219 million, or 9% to $2.6 billion for the three months ended June 30, 2023, compared to $2.3 billion for the three months ended June 30, 2022. Expenses reflect a 1% increase from acquisitions offset by a decrease of 1% from the impact of foreign currency translation.

Expenses in the Risk and Insurance Services segment increased $302 million, or 6% to $5.1 billion for the six months ended June 30, 2023, compared to $4.8 billion for the six months ended June 30, 2022. Expenses reflect a 1% increase from acquisitions offset by a decrease of 2% from the impact of foreign currency translation.

The increase in expenses excluding the impact from acquisitions and foreign currency translation for the three and six months ended June 30, 2023 is primarily due to increased headcount and higher incentive compensation. Expenses for the six months ended June 30, 2023 also reflect higher travel and entertainment costs, compared to the corresponding period in the prior year.

For the three and six months ended June 30, 2023, the Company incurred $31 million and $63 million of restructuring costs in the Risk and Insurance Services segment, respectively, of which $22 million and $33 million, respectively, were primarily for severance and lease exit charges, related to the Company's activities focused on workforce actions, rationalization of technology and functional services, and reductions in real estate.

Consulting

The Company conducts business in its Consulting segment through Mercer and Oliver Wyman Group. Mercer delivers advice and technology-driven solutions that help organizations redefine the future of work, shape retirement and investment outcomes, and advance health and well-being for a changing workforce. Oliver Wyman Group serves as critical strategic, economic and brand advisor to private sector and governmental clients.

The results of operations for the Consulting segment are as follows:


	Three Months Ended June 30,					Six Months Ended June 30,
(In millions, except percentages)	2023			2022		2023			2022
Revenue	$	2,172		$	2,084	$	4,203		$	4,094
Compensation and benefits	1,271			1,145		2,439			2,309
Other operating expenses	513			464		965			918
Operating expenses	1,784			1,609		3,404			3,227
Operating income	$	388		$	475	$	799		$	867
Operating income margin	17.9		%	22.8%		19.0		%	21.2		%

Revenue

Consulting revenue increased $88 million, or 4% to $2.2 billion for the three months ended June 30, 2023, compared to $2.1 billion for the three months ended June 30, 2022. This reflects an increase of 8% on an underlying basis, partially offset by a decrease of 3% primarily from the disposition of businesses.

Consulting revenue increased $109 million, or 3% to $4.2 billion for the six months ended June 30, 2023, compared to $4.1 billion for the six months ended June 30, 2022. This reflects an increase of 6% on an underlying basis, partially offset by decreases of 2% from both the disposition of businesses and the impact of foreign currency translation.

Mercer's revenue decreased $15 million, or 1% to $1.4 billion for the three months ended June 30, 2023, compared to the corresponding quarter in the prior year. This reflects an increase of 6% on an underlying basis, offset by decreases of 6% primarily from the disposition of businesses and 1% from the impact of foreign currency

translation. On an underlying basis, revenue for Health, Career, and Wealth increased 10%, 6% and 3% respectively, as compared to the corresponding quarter in the prior year.

Mercer's revenue decreased $14 million, or 1% to $2.7 billion for the six months ended June 30, 2023, compared to the corresponding period in the prior year. This reflects an increase of 7% on an underlying basis, offset by decreases of 5% primarily from the disposition of businesses and 2% from the impact of foreign currency translation. On an underlying basis, revenue for Health, Career and Wealth increased 11%, 9%, and 3%, respectively, as compared to the corresponding period in the prior year.

The increase in revenue on an underlying basis at Mercer for the three and six months ended June 30, 2023 was primarily due to the continued demand for our advice and services. Health continued to benefit from growth in new business, higher retention, increased enrolled lives from a strong labor market, and medical inflation. The increase in Career products and services was due to continued demand in rewards, talent strategy, and workforce transformation advice and solutions. Revenue in Wealth on an underlying basis grew in defined benefit consulting and investment management fees due to a modest rebound in capital markets and positive net flows.

Results for the six months ended June 30, 2023 included a loss of $17 million related to the sale of an individual financial advisory business in Canada. Results for the three and six months ended June 30, 2022 also included a gain of $112 million from the sale of the Mercer U.S. affinity business.

Oliver Wyman Group's revenue increased $103 million, or 15% to $798 million for the three months ended June 30, 2023, compared to $695 million for the three months ended June 30, 2022. This reflects an increase of 11% on an underlying basis and 4% from acquisitions.

Oliver Wyman Group's revenue increased $123 million, or 9% to $1.5 billion for the six months ended June 30, 2023, compared to $1.4 billion for the six months ended June 30, 2022. This reflects an increase of 6% on an underlying basis and 4% from acquisitions, partially offset by a decrease of 1% related to the impact of foreign currency translation.

The increase in underlying revenue at Oliver Wyman Group for the three and six months ended June 30, 2023 was driven by growth across all practice groups. Results for the six months ended June 30, 2022, also included a charge of approximately $12 million related to the loss on the deconsolidation of the Company's Russian businesses.

The Consulting segment completed three acquisitions during the six months ended June 30, 2023. Information regarding these acquisitions are included in Note 8, Acquisitions and Dispositions, in the notes to the consolidated financial statements.

Operating Expenses

Expenses in the Consulting segment increased $175 million, or 11% to $1.8 billion for the three months ended June 30, 2023, compared to $1.6 billion for the three months ended June 30, 2022. Expenses reflect an increase of 4% from acquisitions and a decrease of 1% from the impact of foreign currency translation.

Expenses in the Consulting segment increased $177 million, or 5% to $3.4 billion for the six months ended June 30, 2023, compared to $3.2 billion for the six months ended June 30, 2022. Expenses reflect an increase 2% from acquisitions offset by a decrease of 2% from the impact of foreign currency translation.

The increase in expenses excluding the impact from acquisitions and foreign currency translation for the three and six months ended June 30, 2023 is primarily due to increased headcount. The increase in expenses for the six months ended June 30, 2023 is partially offset by $51 million of insurance 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.

For the three and six months ended June 30, 2023, the Company incurred $7 million and $16 million of restructuring costs in the Consulting segment, respectively, of which $6 million and $12 million, respectively, were primarily for severance and lease exit charges, related to the Company's activities focused on workforce actions, rationalization of technology and functional services, and reductions in real estate. The remaining restructuring costs relate primarily to adjustments to restructuring liabilities for future rent under non-cancellable leases.

Corporate and Other

Corporate expenses increased $10 million, or 14% to $88 million for the three months ended June 30, 2023, compared to $78 million for the three months ended June 30, 2022. Expenses decreased 1% from the impact of foreign currency translation.

Corporate expenses increased $22 million, or 16% to $168 million for the six months ended June 30, 2023, compared to $146 million for the six months ended June 30, 2022. Expenses decreased 1% from the impact of foreign currency translation.

The increase in expenses for the three and six months ended June 30, 2023, excluding the impact of foreign currency translation, is primarily due to restructuring costs for improving and streamlining the Company's global information technology function.

Interest

Interest expense was $146 million for the three months ended June 30, 2023, compared to $114 million for the three months ended June 30, 2022. Interest expense was $282 million for the six months ended June 30, 2023, compared to $224 million for the six months ended June 30, 2022.

Interest expense for the three and six months ended June 30, 2023, increased $32 million and $58 million, respectively, due to new debt issuances in October 2022 and March 2023, and higher interest rates on the Company's short term borrowings in 2023, compared to the corresponding periods in the prior year.

Investment Income

The caption "Investment income" in the consolidated statements of income comprises realized and unrealized gains and losses from investments. It includes, when applicable, other than temporary declines in the value of securities, mark-to-market increases or decreases in equity investments with readily determinable fair values and equity method gains or losses on its investments in private equity funds. The Company's investments may include direct investments in insurance, consulting or other strategically linked companies and investments in private equity funds.

The Company recorded net investment income of $3 million and $5 million for the three and six months ended June 30, 2023, respectively, compared to net investment income of $2 million and $28 million, respectively, for the corresponding periods in the prior year. The decrease in the six months ended results in 2023 is primarily driven by lower mark-to-market gains from the Company's private equity investments compared to the corresponding period in the prior year.

Income and Other Taxes

The tax rate in each period reflects the impact of discrete tax items such as excess tax benefits related to share-based compensation, enacted tax legislation, changes in uncertain tax positions, deferred tax adjustments and non-taxable adjustments related to contingent consideration for acquisitions, and valuation allowances for certain tax credits and, or losses. The rate for the three and six months ended June 30, 2023 reflects the previously enacted change in the U.K. corporate income tax rate from 19% to 25%, effective April 1, 2023. The blended U.K. statutory tax rate for 2023 is 23.5%.

The effective tax rate may vary significantly from period to period. The effective tax rate is sensitive to the geographic mix and repatriation of the Company's earnings, which may result in higher or lower effective tax rates. Therefore, a shift in the mix of profits among jurisdictions, or changes in the Company's repatriation strategy to access offshore cash, can affect the effective tax rate.

In addition, losses in certain jurisdictions cannot be offset by earnings from other operations and may require valuation allowances that affect the rate in a particular period, depending on estimates of the value of associated deferred tax assets which can be realized. A valuation allowance was recorded to reduce deferred tax assets to the amount that the Company believes is more likely than not to be realized. The effective tax rate is also

sensitive to changes in unrecognized tax benefits, including the impact of settled tax audits and expired statutes of limitations.

The Company has established liabilities for uncertain tax positions in relation to potential assessments in the jurisdictions in which it operates. The Company believes the resolution of tax matters will not have a material effect on the consolidated financial position of the Company, although a resolution of tax matters could have a material impact on the Company's net income or cash flows and on its effective tax rate in a particular future period. It is reasonably possible that the total amount of unrecognized tax benefits could decrease up to approximately $52 million within the next 12 months due to settlement of audits and expiration of statutes of limitations.

Changes in tax laws, rulings, policies, or related legal and regulatory interpretations occur frequently and may have significant favorable or adverse impacts on our effective tax rate.

As a U.S. domiciled parent holding company, the Company is the issuer of essentially all the Company's external indebtedness, and incurs the related interest expense in the U.S. The Company’s interest expense deductions are not currently limited. Further, most senior executive and oversight functions are conducted in the U.S. and the associated costs are incurred primarily in the U.S. Some of these expenses may not be deductible in the U.S., which may impact the effective tax rate.

Changes to the U.S. tax law in recent years have allowed the Company to repatriate foreign earnings without incurring additional U.S. federal income tax costs as foreign income is generally already taxed in the U.S. However, permanent reinvestment continues to be a component of the Company's global capital strategy. The Company continues to evaluate its global investment and repatriation strategy in light of our capital requirements and potential costs of repatriation, which are generally limited to local country withholding taxes.

In addition to U.S. tax law changes, the Company's global operations make the tax rate sensitive to significant foreign tax law changes. A number of countries have begun to enact legislation to implement the Organization for Economic Cooperation and Development's ("OECD") international tax framework, including the Pillar II minimum tax regime with effect from January 1, 2024.

In July 2023, the U.K. enacted legislation to implement the OECD framework, effective from January 1, 2024. The implementation of the OECD framework in the U.K. will impose additional reporting and compliance obligations. This minimum tax will be treated as a period cost in future years and will not impact operating results for 2023. The Company is continuing to monitor legislative developments, especially in the European Union (E.U.) countries, and is in the process of evaluating the potential impact of the U.K. and other legislation on its results of future operations.

On August 16, 2022, the Inflation Reduction Act of 2022 ("IRA") was enacted into law. The Company evaluated the provisions of the new legislation, the most significant of which are the corporate alternative minimum tax and the share repurchase tax. The IRA was effective as of January 1, 2023, and does not have a significant impact on the Company's financial results of operations for the current year.

Liquidity and Capital Resources

The Company is organized as a legal entity separate and distinct from its operating subsidiaries. As the Company does not have significant operations of its own, the Company is dependent upon dividends and other payments from its operating subsidiaries to pay principal and interest on its outstanding debt obligations, pay dividends to stockholders, repurchase its shares and pay corporate expenses. The Company can also provide financial support to its operating subsidiaries for acquisitions, investments and certain parts of their business that require liquidity, such as the capital markets business of Guy Carpenter. Other sources of liquidity include borrowing facilities discussed in financing cash flows.

The Company derives a significant portion of its revenue and operating profit from operating subsidiaries located outside of the U.S. Funds from those operating subsidiaries are regularly repatriated to the U.S. out of annual earnings. At June 30, 2023, the Company had approximately $1.1 billion of cash and cash equivalents in its foreign operations, which includes $441 million of operating funds required to be maintained for regulatory requirements or as collateral under certain captive insurance arrangements. The Company expects to continue its practice of repatriating available funds from its non-U.S. operating subsidiaries out of current annual earnings. Where appropriate, a portion of the current year earnings will continue to be permanently reinvested.

For the six months ended June 30, 2023, the Company recorded foreign currency translation adjustments which increased net equity by $258 million. Continued weakening of the U.S. dollar against foreign currencies would further increase the translated U.S. dollar value of the Company’s net investments in its non-U.S. subsidiaries, as well as the translated U.S. dollar value of cash repatriations from those subsidiaries.

Cash and cash equivalents on our consolidated balance sheets includes funds available for general corporate purposes. Fiduciary assets are shown separately in the consolidated balance sheets as cash and cash equivalents held in a fiduciary capacity, with a corresponding amount in current liabilities. Fiduciary assets cannot be used for general corporate purposes, and should not be considered as a source of liquidity for the Company.

Operating Cash Flows

The Company provided $665 million of cash from operations for the six months ended June 30, 2023, compared to $580 million provided by operations in the first six months of 2022. These amounts reflect the net income of the Company during those periods, excluding gains or losses from investments, adjusted for non-cash charges and changes in working capital which relate primarily to the timing of payments of accrued liabilities, including incentive compensation, or receipts of receivables and pension plan contributions. The Company used cash of $151 million and $80 million related to its restructuring activities for the six months ended June 30, 2023 and 2022, respectively.

Pension Related Items

Contributions

The Company's policy for funding its tax-qualified defined benefit plans is to contribute amounts at least sufficient to meet the funding requirements set forth in accordance with applicable law. For the three and six months ended June 30, 2023, the Company contributed $7 million and $15 million, respectively, to its U.S. defined benefit pension plans and $19 million and $32 million to its non-U.S. defined benefit pension plans, respectively. For the three and six months ended June 30, 2022, the Company contributed $7 million and $15 million to its U.S. defined benefit pension plans, respectively, $38 million and $98 million to its non-U.S. defined benefit pension plans, respectively.

In the U.S., contributions to the tax-qualified defined benefit plans are based on Employee Retirement Income Security Act ("ERISA") guidelines and the Company generally expects to maintain a funded status of 80% or more of the liability determined in accordance with the ERISA guidelines. During the three and six months ended June 30, 2023, the Company made $7 million and $15 million, respectively, of contributions to its non-qualified plans and expects to fund approximately an additional $15 million over the remainder of 2023. The Company is not required to make any contributions to its U.S. qualified plans in 2023.

Outside the U.S., the Company has a large number of non-U.S. defined benefit pension plans, the largest of which are in the U.K., which comprise approximately 79% of non-U.S. plan assets at December 31, 2022. Contribution rates for non-U.S. plans are generally based on local funding practices and statutory requirements, which may differ significantly from measurements in accordance with U.S. GAAP.

In the U.K., the assumptions used to determine pension contributions are the result of legally-prescribed negotiations between the Company and the plans' trustee that typically occur every 3 years in conjunction with the actuarial valuation of the plans. Currently, this results in a lower funded status compared to U.S. GAAP and may result in contributions irrespective of the U.S. GAAP funded status.

In 2021, the JLT Pension Scheme was merged into the MMC U.K. Pension Fund with a new segregated JLT section created. During the first six months of 2023, the Company made deficit contributions of $20 million to its U.K. plans, all in respect of the JLT section, and is expected to make $20 million of contributions in the remainder of 2023.

For the Marsh McLennan U.K. Pension Fund, excluding the JLT section, an agreement was reached with the trustee in the fourth quarter of 2022 based on the surplus funding position at December 31, 2021. In accordance with the agreement, no deficit funding is required until 2026. The funding level will be re-assessed during 2025 as part of the December 31, 2024 actuarial valuation to determine if contributions are required in 2026. As part of a long term strategy which depends on having greater influence over asset allocation and overall investment decisions, in December 2022, the Company renewed its agreement to support annual deficit contributions by the U.K. operating companies under certain circumstances, up to £450 million (or $569 million) over a seven-year period.

The Company expects to fund an additional $44 million to its non-U.S. defined benefit plans over the remainder of 2023, comprising approximately $20 million to the U.K. plans and $24 million to plans outside of the U.K.

Financing Cash Flows

Net cash provided by financing activities was $227 million for the six months ended June 30, 2023, compared with $498 million provided by financing activities for the corresponding period in 2022.

Credit Facilities

The Company has a multi-currency unsecured $2.8 billion five-year revolving credit facility (the "Credit Facility"), entered into on April 1, 2021. The interest rate on the Credit Facility was initially based on LIBOR plus a fixed margin which varies with the Company’s credit ratings. In the second quarter of 2023, the Credit Facility was amended so that borrowings under the Credit Facility bear interest at a rate per annum equal, at the borrower's option, either at (a) SOFR benchmark rate for U.S. dollar borrowings, or (b) a currency specific benchmark rate, plus an applicable margin which varies with the Company's credit ratings. The Credit Facility expires in April 2026, and requires the Company to maintain certain coverage and leverage ratios which are tested quarterly. The Credit Facility includes provisions for determining a benchmark replacement rate in the event existing benchmark rates are no longer available or in certain other circumstances in which an alternative rate may be required. As of June 30, 2023 and December 31, 2022 the Company had no borrowings under this facility.

In connection with the Credit Facility, the Company terminated its previous multi-currency unsecured $1.8 billion five-year and its unsecured $1 billion 364-day revolving credit facilities.

In May 2022, the Company secured a one-year $250 million uncommitted revolving credit facility with similar coverage and leverage ratios as the Credit Facility. In May 2023, the Company extended the facility until May 2024, at a reduced capacity of $200 million effective June 2023. At June 30, 2023, the Company had $200 million borrowings outstanding under this facility with a weighted average interest rate of 5.50%. There were no borrowings outstanding under this facility at December 31, 2022.

Debt

In March 2023, the Company issued $600 million of 5.45% senior notes due 2053. The Company used the net proceeds from this issuance for general corporate purposes.

In October 2022, the Company issued $500 million of 5.75% senior notes due 2032 and $500 million of 6.25% senior notes due 2052. The Company used the net proceeds from these issuances for general corporate purposes, and repaid $350 million of 3.30% senior notes in November 2022, with an original maturity date of March 2023.

The Company's senior debt is currently rated A- by Standard & Poor's ("S&P"), Baa1 by Moody's and A- by Fitch. The Company's short-term debt is currently rated A-2 by S&P, P-2 by Moody's and F-2 by Fitch. The Company carries a Positive outlook with Moody's and a Stable outlook with both S&P and Fitch.

Share Repurchases

During the first six months of 2022, the Company repurchased 7.0 million shares of its common stock for $1.1 billion.

Dividends

The Company paid dividends on its common stock shares of $591 million ($1.18 per share) during the first six months of 2023, as compared with $547 million ($1.07 per share) during the first six months of 2022. In July 2023, the Board of Directors of the Company declared a quarterly dividend of $0.71 per share on outstanding common stock, payable in August 2023.

Contingent and Deferred Payments Related to Acquisitions

The classification of contingent consideration in the consolidated statements of cash flows is dependent upon whether the receipt, payment, or adjustment was part of the initial liability established on the acquisition date (financing) or an adjustment to the acquisition date liability (operating).

The following amounts are included in the consolidated statements of cash flows as operating and financing activities:


For the Six Months Ended June 30,
(In millions)	2023		2022
Operating:
Contingent consideration payments for prior year acquisitions	$	(41)	$	(18)
Receipt of contingent consideration for dispositions	1		—
Acquisition/disposition related net charges for adjustments	17		27


Adjustments and payments related to contingent consideration	$	(23)	$	9
Financing:
Contingent consideration for prior year acquisitions	$	(134)	$	(16)
Deferred consideration related to prior year acquisitions	(51)		(76)
Payments of deferred and contingent consideration for acquisitions	$	(185)	$	(92)

Receipt of contingent consideration for dispositions	$	2	$	3

For acquisitions completed during the first six months of 2023 and in prior years, remaining estimated future contingent payments of $223 million and deferred consideration payments of $92 million, are recorded in accounts payable and accrued liabilities or other liabilities in the consolidated balance sheet at June 30, 2023.

Derivatives - Net Investment Hedge

The Company has investments in various subsidiaries with Euro functional currencies. As a result, the Company is exposed to the risk of fluctuations between the Euro and U.S. dollar exchange rates. As part of its risk management program, the Company issued €1.1 billion Senior Notes, and designated the debt instruments as a net investment hedge of its Euro denominated subsidiaries. The hedge is re-assessed each quarter to confirm that the designated equity balance at the beginning of each period continues to equal or exceed 80% of the outstanding balance of the Euro debt instrument and that all the critical terms of the hedging instrument and the hedged net investment continue to match. If the hedge is highly effective, the change in the debt balance related

to foreign exchange fluctuations is recorded in accumulated other comprehensive loss in the consolidated balance sheets.

The U.S. dollar value of the Euro notes increased by $33 million through June 30, 2023, related to the change in foreign exchange rates. The Company concluded that the hedge was highly effective and recorded as an increase to accumulated other comprehensive loss for the six months ended June 30, 2023.

Purchase of remaining non-controlling interest

In the second quarter of 2023, the Company purchased the remaining interest in a subsidiary for $139 million.

Fiduciary Liabilities

Since fiduciary assets are not available for corporate use, they are shown separately in the consolidated balance sheets as cash and cash equivalents held in a fiduciary capacity, with a corresponding amount in current liabilities. Financing cash flows reflect an increase of $682 million and $1.4 billion for the six months ended June 30, 2023 and 2022, respectively, related to fiduciary liabilities.

Investing Cash Flows

Net cash used for investing activities amounted to $501 million for the first six months of 2023, compared with $258 million used for investing activities for the corresponding period in 2022.

The Company paid $292 million and $151 million, net of cash, cash equivalents and cash and cash equivalents held in a fiduciary capacity acquired, for acquisitions it made during the first six months of 2023 and 2022, respectively. The outflow of funds in 2023 primarily relates to the completion of the Westpac Transaction for $233 million.

In connection with the disposition of Mercer's U.S. affinity business in 2022, the Company transferred to the buyer an additional $20 million of cash and cash equivalents held in a fiduciary capacity during the first quarter of 2023.

During the first six months of 2022, the Company sold certain businesses, primarily Mercer's U.S. affinity business, for cash proceeds of approximately $143 million.

The Company's additions to fixed assets and capitalized software, which amounted to $185 million during the first six months of 2023, and $239 million during the first six months of 2022, related primarily to computer equipment purchases, the refurbishing and modernizing of office facilities, and software development costs.

Cash used for long term investments in the first six months of 2023 is due to investments in private equity funds. As of June 30, 2023, the Company has commitments for potential future investments of approximately $132 million in private equity funds that invest primarily in financial services companies, including a $80 million commitment to invest in a private equity fund entered into on April 1, 2022.

Commitments and Obligations

The following sets forth the Company’s future contractual obligations by the type as of June 30, 2023:


	Payment due by Period
(In millions)	Total		Within 1 Year		1-3 Years		4-5 Years		After 5 Years
Commercial paper	$	310	$	310	$	—	$	—	$	—
Term loan facility	200		200		—		—		—

Current portion of long-term debt	1,869		1,869		—		—		—
Long-term debt	10,328		—		1,139		641		8,548
Interest on long-term debt	6,775		486		821		746		4,722
Net operating leases	2,280		365		636		504		775
Service agreements	381		184		167		30		—
Other long-term obligations (a)	378		78		249		43		8


Total	$	22,521	$	3,492	$	3,012	$	1,964	$	14,053

(a)Primarily reflects the future payments of deferred and contingent purchase consideration.

The table does not include the liability for unrecognized tax benefits of $107 million as the Company is unable to reasonably predict the timing of settlement of these liabilities, other than approximately $44 million that may become payable within one year. The table also does not include the remaining transitional tax payments related to the Tax Cuts and Jobs Act ("the TCJA") of $58 million, which will be paid in installments from 2024 through 2026.

Management’s Discussion of Critical Accounting Policies and Estimates

The Company’s discussion of critical accounting policies and estimates that place the most significant demands on management’s judgment and requires management to make significant estimates about matters that are inherently uncertain are discussed in the MD&A in the 2022 Form 10-K.

New Accounting Guidance

Note 19, New Accounting Guidance, in the notes to the consolidated financial statements in this report, contains a discussion of recently issued accounting guidance and their impact or potential future impact on the Company’s financial results, if determinable.

Item 3.Quantitative and Qualitative Disclosures About Market Risk.

Market Risk and Credit Risk

Certain of the Company’s revenues, expenses, assets and liabilities are exposed to the impact of interest rate changes and fluctuations in foreign currency exchange rates and equity markets.

Interest Rate Risk and Credit Risk

Interest income generated from the Company's cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity will vary with the general level of interest rates.

The Company had the following investments subject to variable interest rates:


(In millions)	June 30, 2023		December 31, 2022
Cash and cash equivalents	$	1,171	$	1,442
Cash and cash equivalents held in a fiduciary capacity	$	11,564	$	10,660

Based on the above balances at June 30, 2023, if short-term interest rates increased or decreased by 10%, or 38 basis points, over the course of the remainder of the year, annual interest income, including interest earned on cash and cash equivalents held in a fiduciary capacity, would increase or decrease by approximately $24 million. At December 31, 2022, a change in short-term interest rates of 10% or 25 basis points would have increased or decreased interest income by approximately $30 million. The change in interest rate risk at June 30, 2023 is due to higher short-term interest rates compared to the prior year.

Changes in interest rates can also affect the discount rate and assumed rate of return on plan assets, two of the assumptions among several others used to measure net periodic pension expense. The assumptions used to measure plan assets and liabilities are typically assessed at the end of each year, and determine the expense for the subsequent year. Assumptions used to determine net periodic cost for 2023 are discussed in Note 8, Retirement Benefits, in the notes to the consolidated financial statements included in our most recently filed Annual Report on Form 10-K. For a discussion on pension expense sensitivity to changes in these rates, see the "Management’s Discussion and Analysis of Financial Condition and Results of Operations - Management’s Discussion of Critical Accounting Policies and Estimates - Retirement Benefits" section of our most recently filed Annual Report on Form 10-K.

In addition to interest rate risk, our cash investments and fiduciary cash investments are subject to potential loss of value due to counter-party credit risk. To minimize this risk, the Company and its subsidiaries invest pursuant to a Board-approved investment policy. The policy mandates the preservation of principal and liquidity and requires broad diversification with counter-party limits assigned based primarily on credit rating and type of investment. The Company carefully monitors its cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity, and will further restrict the portfolio as appropriate to market conditions. The majority of cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity are invested in bank or short-term time deposits and liquid money market funds.

Foreign Currency Risk

The translated values of revenue and expense from the Company’s international operations are subject to fluctuations due to changes in currency exchange rates. The non-U.S. based revenue that is exposed to foreign exchange fluctuations is approximately 52% of total revenue. We periodically use forward contracts and options to limit foreign currency exchange rate exposure on net income and cash flows for specific, clearly defined transactions arising in the ordinary course of business. Although the Company has significant revenue generated in foreign locations which is subject to foreign exchange rate fluctuations, in most cases both the foreign currency revenue and expense are in the functional currency of the foreign location. As such, under normal circumstances, the U.S. dollar translation of both the revenue and expense, as well as the potentially offsetting movements of various currencies against the U.S. dollar, generally tend to mitigate the impact on net operating income of foreign currency risk.

However, there have been periods where the impact was not mitigated due to external market factors, and external macroeconomic events may result in greater foreign exchange rate fluctuations in the future. If foreign exchange rates of major currencies (Euro, British Pound, Australian dollar and Canadian dollar) moved 10% in the same direction against the U.S. dollar that held constant over the course of the year, the Company estimates that full year net operating income would increase or decrease by approximately $82 million. The Company has

exposure to over 80 foreign currencies. If exchange rates at June 30, 2023, hold constant for the rest of 2023, the Company estimates the year-over-year impact from the conversion of foreign currency earnings will decrease full year net operating income by approximately $40 million.

In Continental Europe, the largest amount of revenue from renewals for the Risk and Insurance Services segment occurs in the first quarter.

Equity Price Risk

The Company holds investments at June 30, 2023 in both public and private companies as well as private equity funds, including investments of approximately $16 million that are valued using readily determinable fair values and approximately $34 million of investments without readily determinable fair values. The Company also has investments of approximately $249 million that are accounted for using the equity method. The investments are subject to risk of decline in market value, which, if determined to be other than temporary for assets without readily determinable fair values, could result in realized impairment losses. The Company periodically reviews the carrying value of such investments to determine if any valuation adjustments are appropriate under the applicable accounting pronouncements.

Other

A number of lawsuits and regulatory proceedings are pending. See Note 17, Claims, Lawsuits and Other Contingencies, in the notes to the consolidated financial statements included in this report.

Item 4. Controls & Procedures.

a. Evaluation of Disclosure Controls and Procedures

Based on their evaluation, as of the end of the period covered by this report, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Securities Exchange Act of 1934) are effective.

b. Changes in Internal Control

There were no other changes in the Company’s internal control over financial reporting identified in connection with the evaluation required by Rules 13a-15(d) or 15d-15(d) under the Securities Exchange Act of 1934 that occurred during the Company’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

The Company and its subsidiaries are also party to a variety of other legal, administrative, regulatory and government proceedings, claims and inquiries arising in the normal course of business. Additional information regarding certain legal proceedings and related matters as set forth in Note 17, Claims, Lawsuits and Other Contingencies, in the notes to the consolidated financial statements provided in Part I of this report is incorporated herein by reference.

Item 1A. Risk Factors.

The Company and its subsidiaries face a number of risks and uncertainties. In addition to the other information in this report and our other filings with the SEC, readers should consider carefully the risk factors discussed in "Part I, Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2022.

If any of the risks described in our Annual Report on Form 10-K or such other risks actually occur, our business, results of operations or financial condition could be materially adversely affected.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Issuer Repurchases of Equity Securities

During the six months ended June 30, 2023, the Company repurchased 3.5 million shares of its common stock for $600 million. As of June 30, 2023, the Company remained authorized to repurchase up to approximately $3.7 billion in shares of its common stock. There is no time limit on the authorization.


Period	(a) Total Number of Shares (or Units) Purchased	(b) Average Price Paid per Share (or Unit)		(c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs	(d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs
April 1-30, 2023	583,782	$	173.3856	583,782	$	3,912,775,690
May 1-31, 2023	604,971	$	177.6924	604,971	$	3,805,276,923
June 1-30, 2023	508,877	$	179.2702	508,877	$	3,714,050,466
Total	1,697,630	$	176.6843	1,697,630	$	3,714,050,466

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosure.

Not Applicable.

Item 5. Other Information.

None.

Item 6. Exhibits.

See the Exhibit Index immediately following the signature page of this report, which is incorporated herein by reference.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


Date:	July 20, 2023	/s/ Mark C. McGivney
		Mark C. McGivney
		Chief Financial Officer

Date:	July 20, 2023	/s/ Stacy M. Mills
		Stacy M. Mills
		Vice President & Controller
		(Chief Accounting Officer)

EXHIBIT INDEX


Exhibit No.						Exhibit Name

10.1						Description of Compensation Arrangements for Independent Directors of Marsh & McLennan Companies, Inc. effective June 1, 2023

10.2						Amendment No. 1, dated as of May 22, 2023, to the Amended and Restated 5 Year Credit Agreement among Marsh & McLennan Companies, Inc., the designated subsidiaries party thereto as borrowers, Citibank, N.A., as administrative agent, and the lenders from time to time party thereto

31.1						Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer

31.2						Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer

32.1						Section 1350 Certifications

101.INS						XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH						XBRL Taxonomy Extension Schema

101.CAL						XBRL Taxonomy Extension Calculation Linkbase

101.DEF						XBRL Taxonomy Extension Definition Linkbase

101.LAB						XBRL Taxonomy Extension Label Linkbase

101.PRE						XBRL Taxonomy Extension Presentation Linkbase