REG-Marsh McLennan Marsh McLennan Reports First Quarter 2023 Results
20/04/2023 12:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230420:nBwbkk6Dpa&default-theme=true
Marsh McLennan Reports First Quarter 2023 Results
GAAP Revenue Increases 7%; Underlying Revenue Rises 9%
Growth in GAAP Operating Income of 19% and Adjusted Operating Income of 13%
First Quarter GAAP EPS Rises 18% to $2.47 and Adjusted EPS Increases 10% to
$2.53
Marsh McLennan (NYSE: MMC), the world’s leading professional services firm
in the areas of risk, strategy and people, today reported financial results
for the first quarter ended March 31, 2023.
Commenting on the results, John Doyle, President and CEO, said: "Marsh
McLennan is off to a strong start in 2023. For the first quarter, we generated
9% underlying revenue growth, grew adjusted EPS by 10%, and expanded our
margin."
"We have momentum across our business and are well positioned for another good
year, reflecting the importance of the work we do for our clients and
excellent execution on the part of our colleagues."
Consolidated Results
Consolidated revenue in the first quarter of 2023 was $5.9 billion, an
increase of 7% compared with the first quarter of 2022. On an underlying
basis, revenue increased 9%. Operating income was $1.7 billion, an increase of
19% from the prior year. Adjusted operating income, which excludes noteworthy
items as presented in the attached supplemental schedules, rose 13% to $1.8
billion. Net income attributable to the Company was $1.2 billion, or $2.47 per
diluted share, compared with $2.10 in the first quarter of 2022. Adjusted
earnings per share rose 10% to $2.53 per diluted share compared with $2.30 a
year ago.
Risk & Insurance Services
Risk & Insurance Services revenue was $3.9 billion in the first quarter of
2023, an increase of 10%, or 11% on an underlying basis. Operating income rose
24% to $1.4 billion, and adjusted operating income was $1.4 billion, an
increase of 17% versus a year ago.
Marsh's revenue in the first quarter was $2.7 billion, an increase of 9% on an
underlying basis. In U.S./Canada, underlying revenue rose 7%. International
operations produced underlying revenue growth of 10%, reflecting 11% growth in
Asia Pacific, 10% growth in EMEA, and 10% growth in Latin America.
Guy Carpenter's revenue in the first quarter was $1.1 billion, an increase of
10% on an underlying basis.
Consulting
Consulting revenue was $2.0 billion in the first quarter of 2023, an increase
of 1%, or 5% on an underlying basis. Operating income increased 5% to $411
million, while adjusted operating income increased 1% to $406 million.
Mercer's revenue in the first quarter was $1.3 billion, an increase of 7% on
an underlying basis. Health revenue of $545 million increased 12% on an
underlying basis. Wealth revenue of $581 million increased 2% on an underlying
basis. Career revenue of $218 million was up 12% on an underlying basis.
Oliver Wyman’s revenue in the first quarter was $687 million, flat on an
underlying basis.
Other Items
The Company repurchased 1.8 million shares of stock for $300 million in the
first quarter of 2023.
In the first quarter of 2023, the Company issued $600 million of 30-year
senior notes.
In April, Mercer Australia completed the merger of BT Super into the Mercer
Super Trust, as well as the acquisition of Advance Asset Management Limited.
Conference Call
A conference call to discuss first quarter 2023 results will be held today at
8:30 a.m. Eastern time. The live audio webcast may be accessed at
marshmclennan.com
(https://cts.businesswire.com/ct/CT?id=smartlink&url=https%3A%2F%2Fcts.businesswire.com%2Fct%2FCT%3Fid%3Dsmartlink%26url%3Dwww.marshmclennan.com&esheet=53384377&newsitemid=20230419006002&lan=en-US&anchor=marshmclennan.com&index=1&md5=5fda0904495d4adbf92ec950e0229b86)
. A replay of the webcast will be available approximately two hours after the
event. The webcast is listen-only. Those interested in participating in the
question-and-answer session may register here
(https://cts.businesswire.com/ct/CT?id=smartlink&url=https%3A%2F%2Fregister.vevent.com%2Fregister%2FBI59a7e8620d45489fbc3206e005835c58&esheet=53384377&newsitemid=20230419006002&lan=en-US&anchor=here&index=2&md5=de7fe0953833f3ce5a4155d576d47038)
to receive the dial-in numbers and unique PIN to access the call.
About Marsh McLennan
Marsh McLennan (NYSE: MMC) is the world’s leading professional services firm
in the areas of risk, strategy and people. The Company’s more than 85,000
colleagues advise clients in 130 countries. With annual revenue of over $20
billion, Marsh McLennan helps clients navigate an increasingly dynamic and
complex environment through four market-leading businesses. Marsh
(https://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww.marsh.com%2F&esheet=53384377&newsitemid=20230419006002&lan=en-US&anchor=Marsh&index=3&md5=0f1f1ae849dbfe2ae569955b85c268cc)
provides data-driven risk advisory services and insurance solutions to
commercial and consumer clients. Guy Carpenter
(https://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww.guycarp.com%2F&esheet=53384377&newsitemid=20230419006002&lan=en-US&anchor=Guy+Carpenter&index=4&md5=8b3eb56dfabc66d7bb1a6dcf42d8e443)
develops advanced risk, reinsurance and capital strategies that help clients
grow profitably and pursue emerging opportunities. Mercer
(https://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww.mercer.com%2F&esheet=53384377&newsitemid=20230419006002&lan=en-US&anchor=Mercer&index=5&md5=22c0d47975eca0b995f9b72848030d94)
delivers advice and technology-driven solutions that help organizations
redefine the world of work, reshape retirement and investment outcomes, and
unlock health and well being for a changing workforce. Oliver Wyman
(https://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww.oliverwyman.com%2F&esheet=53384377&newsitemid=20230419006002&lan=en-US&anchor=Oliver+Wyman&index=6&md5=c90c6b11c291a98a8aa0b381205580dc)
serves as a critical strategic, economic and brand advisor to private sector
and governmental clients. For more information, visit marshmclennan.com
(https://cts.businesswire.com/ct/CT?id=smartlink&url=https%3A%2F%2Fcts.businesswire.com%2Fct%2FCT%3Fid%3Dsmartlink%26url%3Dwww.marshmclennan.com&esheet=53384377&newsitemid=20230419006002&lan=en-US&anchor=marshmclennan.com&index=7&md5=6df14671c1b5982ad290fcd60588877e)
or follow us on LinkedIn
(https://cts.businesswire.com/ct/CT?id=smartlink&url=https%3A%2F%2Fwww.linkedin.com%2Fcompany%2Fmarshmclennan%2Fmycompany%2Fverification%2F&esheet=53384377&newsitemid=20230419006002&lan=en-US&anchor=LinkedIn&index=8&md5=8642ac0dc63a9117305df4595ee1fe96)
and Twitter
(https://cts.businesswire.com/ct/CT?id=smartlink&url=https%3A%2F%2Ftwitter.com%2FMarshMcLennan&esheet=53384377&newsitemid=20230419006002&lan=en-US&anchor=Twitter&index=9&md5=d6ad5c899cddc9145749b6dd364067ed)
.
INFORMATION CONCERNING FORWARD-LOOKING STATEMENTS
This press release contains "forward-looking statements," as defined in the
Private Securities Litigation Reform Act of 1995. These statements, which
express management's current views concerning future events or results, use
words like "anticipate," "assume," "believe," "continue," "estimate,"
"expect," "intend," "plan," "project" and similar terms, and future or
conditional tense verbs like "could," "may," "might," "should," "will" and
"would".
Forward-looking statements are subject to inherent risks and uncertainties
that could cause actual results to differ materially from those expressed or
implied in our forward-looking statements. Factors that could materially
affect our future results include, among other things:
* the impact of geopolitical or macroeconomic conditions on us, our clients and
the countries and industries in which we operate, including from 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 and its
subsidiaries (collectively, the "Company") operate in a dynamic business
environment in which new risks emerge frequently. Accordingly, we caution
readers not to place undue reliance on any forward-looking statements, which
are based only on information currently available to us and speak only as of
the dates on which they are made. The Company undertakes no obligation to
update or revise any forward-looking statement to reflect events or
circumstances arising after the date on which it is made.
Further information concerning Marsh McLennan and its businesses, including
information about factors that could materially affect our results of
operations and financial condition, is contained in the Company's filings with
the Securities and Exchange Commission, including the "Risk Factors" section
and the "Management’s Discussion and Analysis of Financial Condition and
Results of Operations" section of our most recently filed Annual Report on
Form 10-K.
Marsh & McLennan Companies, Inc.
Consolidated Statements of Income
(In millions, except per share data)
(Unaudited)
Three Months Ended
March 31,
2023 2022
Revenue $ 5,924 $ 5,549
Expense:
Compensation and benefits 3,207 3,100
Other operating expenses 991 1,004
Operating expenses 4,198 4,104
Operating income 1,726 1,445
Other net benefit credits 58 62
Interest income 14 1
Interest expense (136 ) (110 )
Investment income 2 26
Income before income taxes 1,664 1,424
Income tax expense 412 338
Net income before non-controlling interests 1,252 1,086
Less: Net income attributable to non-controlling interests 17 15
Net income attributable to the Company $ 1,235 $ 1,071
Net income per share attributable to the Company:
- Basic $ 2.50 $ 2.13
- Diluted $ 2.47 $ 2.10
Average number of shares outstanding:
- Basic 495 503
- Diluted 500 509
Shares outstanding at March 31 495 502
Marsh & McLennan Companies, Inc.
Supplemental Information - Revenue Analysis
Three Months Ended March 31
(Millions) (Unaudited)
The Company conducts business in 130 countries. As a result, foreign exchange
rate movements may impact period-to-period comparisons of revenue. Similarly,
certain other items such as acquisitions and dispositions, including transfers
among businesses, may impact period-to-period comparisons of revenue. Non-GAAP
underlying revenue measures the change in revenue from one period to the next
by isolating these impacts.
Components of Revenue Change*
Three Months Ended % Change Currency Acquisitions/ Non-GAAP
March 31,
GAAP
Impact
Dispositions/
Underlying
Revenue*
Other Impact**
Revenue
2023 2022
Risk and Insurance Services
Marsh $ 2,744 $ 2,546 8% (3)% 2% 9%
Guy Carpenter 1,071 999 7% (2)% (1)% 10%
Subtotal 3,815 3,545 8% (3)% 1% 9%
Fiduciary interest income 91 4
Total Risk and Insurance Services 3,906 3,549 10% (3)% 1% 11%
Consulting
Mercer 1,344 1,343 — (4)% (3)% 7%
Oliver Wyman Group 687 667 3% (2)% 5% —
Total Consulting 2,031 2,010 1% (3)% (1)% 5%
Corporate Eliminations (13 ) (10 )
Total Revenue $ 5,924 $ 5,549 7% (3)% 1% 9%
Revenue Details
The following table provides more detailed revenue information for certain of
the components presented above:
Components of Revenue Change*
Three Months Ended % Change Currency Acquisitions/ Non-GAAP
March 31,
GAAP
Impact
Dispositions/
Underlying
Revenue*
Other Impact**
Revenue
2023 2022
Marsh:
EMEA (a) $ 932 $ 869 7% (6)% 3% 10%
Asia Pacific (a) 312 294 6% (5)% — 11%
Latin America 115 104 11% — — 10%
Total International 1,359 1,267 7% (5)% 2% 10%
U.S./Canada 1,385 1,279 8% — 2% 7%
Total Marsh $ 2,744 $ 2,546 8% (3)% 2% 9%
Mercer:
Wealth $ 581 $ 617 (6)% (5)% (4)% 2%
Health 545 524 4% (3)% (5)% 12%
Career 218 202 8% (4)% — 12%
Total Mercer $ 1,344 $ 1,343 — (4)% (3)% 7%
(a) Starting 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.
* Rounded to whole percentages. Components of revenue may not add due to
rounding.
** Acquisitions, dispositions, and other includes the impact of current and prior
year items excluded from the calculation of non-GAAP underlying revenue for
comparability purposes. Details on these items are provided in the
reconciliation of non-GAAP revenue to GAAP revenue tables included in this
release.
Marsh & McLennan Companies, Inc.
Reconciliation of Non-GAAP Measures
Three Months Ended March 31
(Millions) (Unaudited)
Overview
The Company reports its financial results in accordance with accounting
principles generally accepted in the United States (referred to in this
release as in accordance with "GAAP" or "reported" results). The Company also
refers to and presents certain additional non-GAAP financial measures, within
the meaning of Regulation G and item 10(e) Regulation S-K in accordance with
the Securities Exchange Act of 1934. These measures are: non-GAAP revenue,
adjusted operating income (loss), adjusted operating margin, adjusted income,
net of tax and adjusted earnings per share (EPS). The Company has included
reconciliations of these non-GAAP financial measures to the most directly
comparable financial measure calculated in accordance with GAAP in the
following tables.
The Company believes these non-GAAP financial measures provide useful
supplemental information that enables investors to better compare the
Company’s performance across periods. Management also uses these measures
internally to assess the operating performance of its businesses and to decide
how to allocate resources. However, investors should not consider these
non-GAAP measures in isolation from, or as a substitute for, the financial
information that the Company reports in accordance with GAAP. The Company's
non-GAAP measures include adjustments that reflect how management views its
businesses, and may differ from similarly titled non-GAAP measures presented
by other companies.
Adjusted Operating Income (Loss) and Adjusted Operating Margin
Adjusted operating income (loss) is calculated by excluding the impact of
certain noteworthy items from the Company's GAAP operating income (loss). The
following tables identify these noteworthy items and reconcile adjusted
operating income (loss) to GAAP operating income (loss), on a consolidated and
reportable segment basis, for the three months ended March 31, 2023 and 2022.
The following tables also present adjusted operating margin. For the three
months ended March 31, 2023 and 2022, adjusted operating margin is calculated
by dividing the sum of adjusted operating income and identified intangible
asset amortization by consolidated or segment adjusted revenue. The Company's
adjusted revenue used in the determination of adjusted operating margin is
calculated by excluding the impact of certain noteworthy items from the
Company's GAAP revenue.
Risk & Insurance Consulting Corporate/ Total
Services
Eliminations
Three Months Ended March 31, 2023
Operating income (loss) $ 1,395 $ 411 $ (80 ) $ 1,726
Operating margin 35.7 % 20.2 % N/A 29.1 %
Add (deduct) impact of noteworthy items:
Restructuring, excluding JLT (a) 19 9 12 40
Changes in contingent consideration (b) 6 1 — 7
JLT integration and restructuring costs (c) 13 — — 13
JLT legacy legal charges (d) — (51 ) — (51 )
Pre-acquisition related costs (e) — 17 — 17
Disposal of business (f) — 19 — 19
Operating income adjustments 38 (5 ) 12 45
Adjusted operating income (loss) $ 1,433 $ 406 $ (68 ) $ 1,771
Total identified intangible amortization expense $ 74 $ 11 $ — $ 85
Adjusted operating margin 38.6 % 20.3 % N/A 31.2 %
Three Months Ended March 31, 2022
Operating income (loss) $ 1,121 $ 392 $ (68 ) $ 1,445
Operating margin 31.6 % 19.5 % N/A 26.0 %
Add (deduct) impact of noteworthy items:
Restructuring, excluding JLT (a) 9 2 7 18
Changes in contingent consideration (b) 10 — — 10
JLT integration and restructuring costs (c) 6 5 1 12
JLT legacy legal charges (d) — (10 ) — (10 )
JLT acquisition-related costs and other (g) 12 1 — 13
Legal claims (h) 30 — — 30
Deconsolidation of Russian businesses and other related charges (i) 40 12 — 52
Operating income adjustments 107 10 8 125
Adjusted operating income (loss) $ 1,228 $ 402 $ (60 ) $ 1,570
Total identified intangible amortization expense $ 78 $ 13 $ — $ 91
Adjusted operating margin 36.5 % 20.6 % N/A 29.7 %
(a) 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.
(b) Change in fair value of contingent consideration related to acquisitions and
dispositions measured each quarter.
(c) Reflects adjustments to restructuring liabilities for future rent under
non-cancelable leases for a legacy JLT U.K. location.
(d) Reflects insurance and indemnity recoveries for a legacy JLT E&O matter
relating to suitability of advice provided to individuals for defined benefit
pension transfers in the U.K.
(e) Integration costs for the Westpac superannuation fund transaction in
Australia, which closed on April 1, 2023.
(f) Loss on sale of a small individual financial advisory business in Canada. This
amount is included in revenue in the consolidated statements of income and
excluded from non-GAAP revenue and adjusted revenue used in the calculation of
adjusted operating margin.
(g) Retention costs and legal charges related to the acquisition of JLT.
(h) Settlement charges and legal costs related to strategic recruiting.
(i) Loss on deconsolidation of Russian businesses and other related charges. The
loss on deconsolidation of $39 million is included in revenue in the
consolidated statements of income and excluded from non-GAAP revenue and
adjusted revenue used in the calculation of adjusted operating margin. The
remaining expense charges of $13 million are included in other operating
expenses in the consolidated statements of income.
Marsh & McLennan Companies, Inc.
Reconciliation of Non-GAAP Measures
Three Months Ended March 31
(In millions, except per share data)
(Unaudited)
Adjusted income, net of tax is calculated as the Company's GAAP income from
continuing operations, adjusted to reflect the after tax impact of the
operating income adjustments in the preceding tables and the additional items
listed below. Adjusted EPS is calculated by dividing the Company’s adjusted
income, net of tax, by the average number of shares outstanding-diluted for
the relevant period. The following tables reconcile adjusted income, net of
tax to GAAP income from continuing operations and adjusted EPS to GAAP EPS for
the three months ended March 31, 2023 and 2022.
Three Months Ended Three Months Ended
March 31, 2023
March 31, 2022
Amount Adjusted Amount Adjusted
EPS
EPS
Net income before non-controlling interests, as reported $ 1,252 $ 1,086
Less: Non-controlling interest, net of tax 17 15
Subtotal $ 1,235 $ 2.47 $ 1,071 $ 2.10
Operating income adjustments $ 45 $ 125
Investments adjustment (a) 2 (9 )
Income tax effect of adjustments (b) (16 ) (18 )
31 0.06 98 0.20
Adjusted income, net of tax $ 1,266 $ 2.53 $ 1,169 $ 2.30
(a) Represents mark-to-market losses and gains.
(b) For items with an income tax impact, the tax effect was calculated using an
effective tax rate based on the tax jurisdiction for each item.
Marsh & McLennan Companies, Inc.
Supplemental Information
Three Months Ended March 31
(Millions) (Unaudited)
Three Months Ended
March 31,
2023 2022
Consolidated
Compensation and benefits $ 3,207 $ 3,100
Other operating expenses 991 1,004
Total expenses $ 4,198 $ 4,104
Depreciation and amortization expense $ 84 $ 89
Identified intangible amortization expense 85 91
Total $ 169 $ 180
Risk and Insurance Services
Compensation and benefits $ 1,880 $ 1,801
Other operating expenses 631 627
Total expenses $ 2,511 $ 2,428
Depreciation and amortization expense $ 37 $ 43
Identified intangible amortization expense 74 78
Total $ 111 $ 121
Consulting
Compensation and benefits $ 1,168 $ 1,164
Other operating expenses 452 454
Total expenses $ 1,620 $ 1,618
Depreciation and amortization expense $ 21 $ 26
Identified intangible amortization expense 11 13
Total $ 32 $ 39
Marsh & McLennan Companies, Inc.
Consolidated Balance Sheets
(Millions)
(Unaudited) December 31,
March 31,
2022
2023
ASSETS
Current assets:
Cash and cash equivalents $ 1,006 $ 1,442
Net receivables 6,700 5,852
Other current assets 1,407 1,005
Total current assets 9,113 8,299
Goodwill and intangible assets 18,752 18,788
Fixed assets, net 867 871
Pension related assets 2,200 2,127
Right of use assets 1,586 1,562
Deferred tax assets 369 358
Other assets 1,471 1,449
TOTAL ASSETS $ 34,358 $ 33,454
LIABILITIES AND EQUITY
Current liabilities:
Short-term debt $ 2,111 $ 268
Accounts payable and accrued liabilities 3,406 3,278
Accrued compensation and employee benefits 1,443 3,095
Current lease liabilities 306 310
Accrued income taxes 356 221
Dividends payable 292 —
Total current liabilities 7,914 7,172
Fiduciary liabilities 10,834 10,660
Less - cash and cash equivalents held in a fiduciary capacity (10,834 ) (10,660 )
— —
Long-term debt 10,841 11,227
Pension, post-retirement and post-employment benefits 896 921
Long-term lease liabilities 1,723 1,667
Liabilities for errors and omissions 355 355
Other liabilities 1,433 1,363
Total equity 11,196 10,749
TOTAL LIABILITIES AND EQUITY $ 34,358 $ 33,454
Marsh & McLennan Companies, Inc.
Consolidated Statements of Cash Flows
(Millions) (Unaudited)
Three Months Ended
March 31,
2023 2022
Operating cash flows:
Net income before non-controlling interests $ 1,252 $ 1,086
Adjustments to reconcile net income to cash provided by operations:
Depreciation and amortization 169 180
Non-cash lease expense 73 77
Deconsolidation of Russian businesses — 39
Share-based compensation expense 99 105
Net loss (gain) on investments, disposition of assets and other 27 (17 )
Changes in assets and liabilities:
Accrued compensation and employee benefits (1,670 ) (1,528 )
Provision for taxes, net of payments and refunds 189 144
Net receivables (775 ) (429 )
Other changes to assets and liabilities (29 ) (150 )
Contributions to pension and other benefit plans in excess of current year (75 ) (125 )
credit
Operating lease liabilities (79 ) (84 )
Net cash used for operations (819 ) (702 )
Financing cash flows:
Purchase of treasury shares (300 ) (500 )
Borrowings from term-loan and credit facilities 250 —
Net proceeds from issuance of commercial paper 594 825
Proceeds from issuance of debt 589 —
Repayments of debt (4 ) (4 )
Net issuance of common stock from treasury shares (94 ) (100 )
Net distributions of non-controlling interests and deferred/contingent (14 ) (20 )
consideration
Dividends paid (296 ) (272 )
Increase in fiduciary liabilities 48 926
Net cash provided by financing activities 773 855
Investing cash flows:
Capital expenditures (84 ) (122 )
Purchases of long term investments and other (1 ) (9 )
Dispositions (20 ) (4 )
Acquisitions, net of cash and cash held in a fiduciary capacity acquired (263 ) (24 )
Net cash used for investing activities (368 ) (159 )
Effect of exchange rate changes on cash, cash equivalents, and cash and cash 152 (136 )
equivalents held in a fiduciary capacity
Decrease in cash, cash equivalents, and cash and cash equivalents held in a (262 ) (142 )
fiduciary capacity
Cash, cash equivalents, and cash and cash equivalents held in a fiduciary 12,102 11,375
capacity at beginning of period
Cash, cash equivalents, and cash and cash equivalents held in a fiduciary $ 11,840 $ 11,233
capacity at end of period
Reconciliation of cash, cash equivalents, and cash and cash equivalents held
in a fiduciary capacity to the Consolidated Balance Sheets
Balance at March 31, 2023 2022
(In millions)
Cash and cash equivalents $ 1,006 $ 772
Cash and cash equivalents held in a fiduciary capacity 10,834 10,461
Total cash, cash equivalents, and cash and cash equivalents held in a $ 11,840 $ 11,233
fiduciary capacity
Marsh & McLennan Companies, Inc.
Reconciliation of Non-GAAP Measures
Three Months Ended March 31
(Millions) (Unaudited)
Non-GAAP revenue isolates the impact of foreign exchange rate movements and
certain transaction-related items from the current period GAAP revenue. The
non-GAAP revenue measure is presented on a constant currency basis, excluding
the impact of foreign currency fluctuations. The Company isolates the impact
of foreign exchange rate movements period over period, by translating the
current period foreign currency GAAP revenue into U.S. Dollars based on the
difference in the current and corresponding prior period exchange rates.
Similarly, certain other items such as acquisitions and dispositions,
including transfers among businesses, may impact period over period
comparisons of revenue and are consistently excluded from current and prior
period GAAP revenues for comparability purposes. Percentage changes, referred
to as non-GAAP underlying revenue, are calculated by dividing the period over
period change in non-GAAP revenue by the prior period non-GAAP revenue.
The following table provides the reconciliation of GAAP revenue to non-GAAP
revenue:
2023 2022
Three Months Ended March 31, GAAP Currency Acquisitions/ Non-GAAP GAAP Acquisitions/ Non-GAAP
Revenue
Impact
Dispositions/
Revenue
Revenue
Dispositions/
Revenue
Other Impact
Other Impact
Risk and Insurance Services
Marsh (a) $ 2,744 $ 71 $ (24 ) $ 2,791 $ 2,546 $ 22 $ 2,568
Guy Carpenter 1,071 18 (14 ) 1,075 999 (19 ) 980
Subtotal 3,815 89 (38 ) 3,866 3,545 3 3,548
Fiduciary interest income 91 2 — 93 4 — 4
Total Risk and Insurance Services 3,906 91 (38 ) 3,959 3,549 3 3,552
Consulting
Mercer (b) 1,344 50 19 1,413 1,343 (27 ) 1,316
Oliver Wyman Group (a) 687 16 (24 ) 679 667 11 678
Total Consulting 2,031 66 (5 ) 2,092 2,010 (16 ) 1,994
Corporate Eliminations (13 ) — — (13 ) (10 ) — (10 )
Total Revenue $ 5,924 $ 157 $ (43 ) $ 6,038 $ 5,549 $ (13 ) $ 5,536
(a) Acquisitions, dispositions, and other in 2022 includes the loss on
deconsolidation of the Company's Russian businesses at Marsh of $27 million
and Oliver Wyman Group of $12 million.
(b) Acquisitions, dispositions and other in 2023 includes the loss on sale of a
small individual financial advisory business in Canada of $19 million.
Revenue Details
The following table provides more detailed revenue information for certain of
the components presented above:
2023 2022
Three Months Ended March 31, GAAP Currency Acquisitions/ Non-GAAP GAAP Acquisitions/ Non-GAAP
Revenue
Impact
Dispositions/
Revenue
Revenue
Dispositions/
Revenue
Other Impact
Other Impact
Marsh:
EMEA (c) (d) $ 932 $ 50 $ (3 ) $ 979 $ 869 $ 22 $ 891
Asia Pacific (c) 312 15 (1 ) 326 294 — 294
Latin America 115 — — 115 104 — 104
Total International 1,359 65 (4 ) 1,420 1,267 22 1,289
U.S./Canada 1,385 6 (20 ) 1,371 1,279 — 1,279
Total Marsh $ 2,744 $ 71 $ (24 ) $ 2,791 $ 2,546 $ 22 $ 2,568
Mercer:
Wealth (e) $ 581 $ 28 $ 21 $ 630 $ 617 $ (2 ) $ 615
Health 545 14 (1 ) 558 524 (25 ) 499
Career 218 8 (1 ) 225 202 — 202
Total Mercer $ 1,344 $ 50 $ 19 $ 1,413 $ 1,343 $ (27 ) $ 1,316
(c) Starting 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.
(d) Acquisitions, dispositions, and other in 2022 includes the loss on
deconsolidation of the Company's Russian businesses of $27 million.
(e) Acquisitions, dispositions, and other in 2023 includes the loss on sale of a
small individual financial advisory business in Canada of $19 million.
Media Contact:
Erick R. Gustafson
Marsh McLennan
+1 202 263 7788
erick.gustafson@mmc.com
(mailto:erick.gustafson@mmc.com)
Investor Contact:
Sarah DeWitt
Marsh McLennan
+1 212 345 6750
sarah.dewitt@mmc.com (mailto:sarah.dewitt@mmc.com)
View source version on businesswire.com:
https://www.businesswire.com/news/home/20230419006002/en/
(https://www.businesswire.com/news/home/20230419006002/en/)
Marsh McLennan
Copyright Business Wire 2023Recent news on Marsh & McLennan Companies
See all newsREG-Marsh McLennan Delisting and Cancellation of Trading From the London Stock Exchange
AnnouncementREG - Official List - Removal - Marsh and McLennan
AnnouncementREG - Stock Exch Notice Marsh & McLennan. - Cancellation - MARSH & MCLENNAN COS. INC
AnnouncementREG-Marsh McLennan Notice of Intention to Delist From the London Stock Exchange
AnnouncementREG-Marsh McLennan Marsh McLennan Reports Third Quarter 2023 Results
Announcement