REG-Marsh & McLennan Marsh McLennan Reports Fourth Quarter and Full-year 2021 Results
27/01/2022 12:00
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Marsh McLennan Reports Fourth Quarter and Full-year 2021 Results
Full-Year Revenue Growth of 15%; Underlying Revenue Growth of 10%
Full-Year GAAP Operating Income Rises 41%; Adjusted Operating Income Increases
18%
Full-Year GAAP EPS Increases 56% to $6.13; Adjusted EPS Increases 24% to $6.17
Fourth Quarter GAAP EPS of $1.57; Adjusted EPS Increases 14% to $1.36
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 fourth quarter and year ended December 31, 2021.
Dan Glaser, President and CEO, said: “In our 150th year, we produced one of
the finest results in our Company's history. We generated underlying revenue
growth of 10% and adjusted EPS growth of 24%, both the highest in over two
decades. We also grew our adjusted operating income by 18% and expanded
adjusted margins for the 14th consecutive year. I am proud of our colleagues'
hard work, dedication and unwavering focus in achieving these results. With
this outstanding year, we enter 2022 well positioned for continued growth."
Consolidated Results
Consolidated revenue in the fourth quarter of 2021 was $5.1 billion, an
increase of 16% compared with the fourth quarter of 2020, or 10% on an
underlying basis. Operating income was $986 million compared with $571 million
in the prior year period. Adjusted operating income, which excludes noteworthy
items as presented in the attached supplemental schedules, was $905 million,
compared with $855 million in the prior year period. Net income attributable
to the Company was $803 million, or $1.57 per diluted share, compared with
$0.73 in the fourth quarter of 2020. Adjusted earnings per share was $1.36,
compared with $1.19 for the prior year period.
For the year 2021, revenue was $19.8 billion, an increase of 15% compared with
2020, or 10% on an underlying basis. Operating income was $4.3 billion, and
adjusted operating income rose 18% to $4.3 billion. Net income attributable to
the Company was $3.1 billion. Earnings per share increased 56% to $6.13.
Adjusted earnings per share increased 24% to $6.17 compared with $4.97 in
2020.
Risk & Insurance Services
Risk & Insurance Services revenue was $3.0 billion in the fourth quarter
of 2021, an increase of 20%, or 9% on an underlying basis. Operating income
was $667 million, compared with $463 million in the fourth quarter of 2020.
Adjusted operating income increased 6% to $557 million. For the year 2021,
revenue was $12.1 billion, an increase of 17%, or 10% on an underlying basis.
Operating income was $3.1 billion, compared to $2.3 billion in 2020. Adjusted
operating income rose 17% to $3.0 billion.
Marsh's revenue in the fourth quarter of 2021 was $2.9 billion, an increase of
22%, or 9% on an underlying basis. In U.S./Canada, underlying revenue rose
11%. International operations underlying revenue increased 7% compared to the
prior year period, reflecting underlying growth of 14% in Latin America, 10%
in Asia Pacific and 5% in EMEA. For the year 2021, Marsh’s revenue growth
was 19%, or 11% on an underlying basis.
Guy Carpenter's fourth quarter revenue was $170 million, an increase of 4%, or
5% on an underlying basis. For the year 2021, Guy Carpenter’s revenue grew
10% compared to a year ago, or 9% on an underlying basis.
Consulting
Consulting revenue was $2.1 billion in the fourth quarter of 2021, an increase
of 10%, or 11% on an underlying basis. Operating income increased 120% to $395
million, compared with $179 million in the fourth quarter of 2020. Adjusted
operating income was $410 million, an increase of 6% compared with $387
million in the fourth quarter of 2020. For the year 2021, revenue was $7.8
billion, an increase of 12%, or 10% on an underlying basis. Operating income
was $1.5 billion, compared with $1.0 billion in 2020. Adjusted operating
income increased 19% to $1.5 billion.
Mercer’s revenue was $1.4 billion in the fourth quarter of 2021, an increase
of 5%, or 6% on an underlying basis. Wealth, with revenue of $648 million,
increased 4% on an underlying basis. Health, with revenue of $457 million,
increased 4% on an underlying basis. Career revenue of $272 million increased
15% on an underlying basis. For the year 2021, Mercer’s revenue increased
7%, or 5% on an underlying basis.
Oliver Wyman’s revenue was $722 million in the fourth quarter of 2021, an
increase of 22% on an underlying basis. For the year 2021, Oliver Wyman’s
revenue was $2.5 billion, an increase of 21% on an underlying basis.
Other Items
For the year 2021, Marsh McLennan Agency (MMA) completed 11 transactions with
approximately $170 million of combined revenue, including the acquisition of
PayneWest, one of the largest independent agencies in the U.S.
Marsh announced in December that it increased its stake in Marsh India
Insurance Brokers Pvt. Ltd. from 49% to 92%.
The Company repurchased 2.6 million shares of stock for $425 million in the
fourth quarter. For the year 2021, the Company repurchased 7.9 million shares
for $1.2 billion.
In the fourth quarter of 2021, the Company raised $750 million of senior notes
and repaid $500 million of senior notes due in January 2022.
Conference Call
A conference call to discuss fourth quarter 2021 results will be held today at
8:30 a.m. Eastern time. To participate in the teleconference, please dial +1
866 437 7574. Callers from outside the United States should dial +1 409 220
9376. The access code for both numbers is 8019728. The live audio webcast may
be accessed at marshmclennan.com
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. A replay of the webcast will be available approximately two hours after the
event.
About Marsh McLennan
Marsh McLennan
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(NYSE: MMC) is the world’s leading professional services firm in the areas
of risk, strategy and people. The Company’s 83,000 colleagues advise clients
in 130 countries. With annual revenue of nearly $20 billion, Marsh McLennan
helps clients navigate an increasingly dynamic and complex environment through
four market-leading businesses. Marsh
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provides data-driven risk advisory services and insurance solutions to
commercial and consumer clients. Guy Carpenter
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develops advanced risk, reinsurance and capital strategies that help clients
grow profitably and pursue emerging opportunities. Mercer
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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
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serves as a critical strategic, economic and brand advisor to private sector
and governmental clients. For more information, visit marshmclennan.com
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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 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;
* the increasing prevalence of ransomware, supply chain and other forms of cyber
attacks, and their potential to disrupt our operations and result in the
disclosure of confidential client or company information;
* the financial and operational impact of complying with laws and regulations,
including anti-corruption laws such as the U.S. Foreign Corrupt Practices Act,
U.K. Anti-Bribery Act and cybersecurity and data privacy regulations, in an
environment of increased regulatory activity and enforcement;
* our ability to attract, retain and fully develop industry leading talent;
* the impact of and uncertainty around COVID-19;
* the impact of macroeconomic, political or market conditions on us, our clients
and the industries in which we operate, including from inflation, foreign
exchange and interest rate fluctuations;
* our ability to compete effectively and adapt to changes in the competitive
environment, including to respond to technological change, disintermediation,
digital disruption and other types of innovation;
* our ability to manage risks associated with our investment management and
related services business, particularly in the context of uncertain equity
markets, including our ability to execute timely trades in light of increased
trading volume and to manage potential conflicts of interest;
* the impact of changes in tax laws, guidance and interpretations, or
disagreements with tax authorities; and
* the regulatory, contractual and reputational risks that arise based on
insurance placement activities and insurer revenue streams.
The factors identified above are not exhaustive. Marsh McLennan and its
subsidiaries operate in a dynamic business environment in which new risks
emerge frequently. Accordingly, we caution readers not to place undue reliance
on any forward-looking statements, which are based only on information
currently available to us and speak only as of the dates on which they are
made. The Company undertakes no obligation to update or revise any
forward-looking statement to reflect events or circumstances arising after the
date on which it is made.
Further information concerning Marsh McLennan and its businesses, including
information about factors that could materially affect our results of
operations and financial condition, is contained in the Company's filings with
the Securities and Exchange Commission, including the "Risk Factors" section
and the "Management’s Discussion and Analysis of Financial Condition and
Results of Operations" section of our most recently filed Annual Report on
Form 10-K.
Marsh & McLennan Companies, Inc.
Consolidated Statements of Income
(In millions, except per share data)
(Unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
2021 2020 2021 2020
Revenue $ 5,137 $ 4,416 $ 19,820 $ 17,224
Expense:
Compensation and benefits 2,905 2,650 11,425 10,129
Other operating expenses 1,246 1,195 4,083 4,029
Operating expenses 4,151 3,845 15,508 14,158
Operating income 986 571 4,312 3,066
Other net benefit credits 66 70 277 257
Interest income — 2 2 7
Interest expense (109 ) (128 ) (444 ) (515 )
Investment income (loss) 18 25 61 (22 )
Income before income taxes 961 540 4,208 2,793
Income tax expense 154 161 1,034 747
Net income before non-controlling interests 807 379 3,174 2,046
Less: net income attributable to non-controlling interests 4 5 31 30
Net income attributable to the Company $ 803 $ 374 $ 3,143 $ 2,016
Net income per share attributable to the Company
- Basic $ 1.59 $ 0.74 $ 6.20 $ 3.98
- Diluted $ 1.57 $ 0.73 $ 6.13 $ 3.94
Average number of shares outstanding
- Basic 504 507 507 506
- Diluted 511 513 513 512
Shares outstanding at December 31 504 508 504 508
Marsh & McLennan Companies, Inc.
Supplemental Information - Revenue Analysis
Three Months Ended December 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.
Underlying revenue measures the change in revenue from one period to the next
by isolating these impacts.
Components of Revenue Change*
Three Months Ended % Currency Acquisitions/ Un
de
December 31, Change Impact Dispositions/ rl
yi
GAAP Other Impact ng
Revenue Re
ve
nu
e
2021 2020
Risk and Insurance Services
Marsh $ 2,876 $ 2,364 22 % — 13 % 9 %
Guy Carpenter 170 162 4 % (1 )% — 5 %
Subtotal 3,046 2,526 21 % — 12 % 9 %
Fiduciary Interest Income 3 6
Total Risk and Insurance Services 3,049 2,532 20 % — 12 % 9 %
Consulting
Mercer 1,377 1,312 5 % — (1 )% 6 %
Oliver Wyman Group 722 590 22 % (1 )% 1 % 22 %
Total Consulting 2,099 1,902 10 % — — 11 %
Corporate Eliminations (11 ) (18 )
Total Revenue $ 5,137 $ 4,416 16 % — 7 % 10 %
Revenue Details
The following table provides more detailed revenue information for certain of
the components presented above:
Components of Revenue Change*
Three Months Ended % Currency Acquisitions/ Un
de
December 31, Change Impact Dispositions/ rl
yi
GAAP Other Impact ng
Revenue Re
ve
nu
e
2021 2020
Marsh:
EMEA $ 713 $ 688 4 % (1 )% (1 )% 5 %
Asia Pacific 560 269 109 % (1 )% 100 % 10 %
Latin America 155 141 10 % (4 )% — 14 %
Total International 1,428 1,098 30 % (1 )% 24 % 7 %
U.S./Canada 1,448 1,266 14 % — 3 % 11 %
Total Marsh $ 2,876 $ 2,364 22 % — 13 % 9 %
Mercer:
Wealth $ 648 $ 629 3 % — (1 )% 4 %
Health 457 445 3 % (1 )% (1 )% 4 %
Career 272 238 14 % (1 )% — 15 %
Total Mercer $ 1,377 $ 1,312 5 % — (1 )% 6 %
* Components of revenue change may not add due to rounding.
Marsh & McLennan Companies, Inc.
Supplemental Information - Revenue Analysis
Twelve Months Ended December 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.
Underlying revenue measures the change in revenue from one period to the next
by isolating these impacts.
Components of Revenue Change*
Twelve Months Ended % Currency Acquisitions/ Un
de
December 31, Change Impact Dispositions/ rl
yi
GAAP Other Impact ng
Revenue Re
ve
nu
e
2021 2020
Risk and Insurance Services
Marsh $ 10,203 $ 8,595 19 % 2 % 6 % 11 %
Guy Carpenter 1,867 1,696 10 % 1 % — 9 %
Subtotal 12,070 10,291 17 % 2 % 5 % 11 %
Fiduciary Interest Income 15 46
Total Risk and Insurance Services 12,085 10,337 17 % 2 % 5 % 10 %
Consulting
Mercer 5,254 4,928 7 % 3 % (1 )% 5 %
Oliver Wyman Group 2,535 2,048 24 % 2 % — 21 %
Total Consulting 7,789 6,976 12 % 3 % — 10 %
Corporate Eliminations (54 ) (89 )
Total Revenue $ 19,820 $ 17,224 15 % 2 % 3 % 10 %
Revenue Details
The following table provides more detailed revenue information for certain of
the components presented above:
Components of Revenue Change*
Twelve Months Ended % Currency Acquisitions/ Underlying
December 31, Change Impact Dispositions/ Revenue
GAAP Other Impact
Revenue
2021 2020
Marsh:
EMEA $ 2,946 $ 2,575 14 % 4 % 1 % 9 %
Asia Pacific 1,462 1,059 38 % 4 % 25 % 9 %
Latin America 453 424 7 % (2 )% — 9 %
Total International 4,861 4,058 20 % 4 % 7 % 9 %
U.S./Canada 5,342 4,537 18 % 1 % 4 % 13 %
Total Marsh $ 10,203 $ 8,595 19 % 2 % 6 % 11 %
Mercer:
Wealth $ 2,509 $ 2,348 7 % 4 % (1 )% 4 %
Health 1,855 1,793 3 % 1 % (1 )% 3 %
Career 890 787 13 % 2 % — 12 %
Total Mercer $ 5,254 $ 4,928 7 % 3 % (1 )% 5 %
* Components of revenue change may not add due to rounding.
Marsh & McLennan Companies, Inc.
Reconciliation of Non-GAAP Measures
Three Months Ended December 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 in accordance with the Securities Exchange Act of
1934. These measures are: adjusted operating income (loss), adjusted operating
margin, adjusted income, net of tax and adjusted earnings per share (EPS). The
Company has included reconciliations of these non-GAAP financial measures to
the most directly comparable financial measure calculated in accordance with
GAAP in the following tables.
The Company believes these non-GAAP financial measures provide useful
supplemental information that enables investors to better compare the
Company’s performance across periods. Management also uses these measures
internally to assess the operating performance of its businesses, to assess
performance for employee compensation, and to decide how to allocate
resources. However, investors should not consider these non-GAAP measures in
isolation from, or as a substitute for, the financial information that the
Company reports in accordance with GAAP. The Company's non-GAAP measures
include adjustments that reflect how management views its businesses, and may
differ from similarly titled non-GAAP measures presented by other companies.
Adjusted Operating Income (Loss) and Adjusted Operating Margin
Adjusted operating income (loss) is calculated by excluding the impact of
certain noteworthy items from the Company's GAAP operating income (loss). The
following tables identify these noteworthy items and reconcile adjusted
operating income (loss) to GAAP operating income (loss), on a consolidated and
reportable segment basis, for the three and twelve month periods ended
December 31, 2021 and 2020. The following tables also present adjusted
operating margin. For the three and twelve months ended December 31, 2021 and
2020, adjusted operating margin is calculated by dividing the sum of adjusted
operating income and identified intangible asset amortization by consolidated
or segment adjusted revenue.
Risk & Insurance Consulting Corporate/ Total
Services Eliminations
Three Months Ended December 31, 2021
Operating income (loss) $ 667 $ 395 $ (76 ) $ 986
Operating margin 21.9 % 18.8 % N/A 19.2 %
Add (deduct) impact of noteworthy items:
Restructuring, excluding JLT (a) 19 4 12 35
Changes in contingent consideration (b) 45 1 — 46
JLT integration and restructuring costs (c) 15 15 2 32
JLT acquisition-related costs and other (d) 45 1 — 46
JLT legacy E&O provision (e) — (6 ) — (6 )
Legal claims (f) 33 — — 33
Gain on consolidation of business (g) (267 ) — — (267 )
Operating income adjustments (110 ) 15 14 (81 )
Adjusted operating income (loss) $ 557 $ 410 $ (62 ) $ 905
Total identified intangible amortization expense $ 73 $ 14 $ — $ 87
Adjusted operating margin 22.7 % 20.2 % N/A 20.4 %
Three Months Ended December 31, 2020
Operating income (loss) $ 463 $ 179 $ (71 ) $ 571
Operating margin 18.3 % 9.4 % N/A 12.9 %
Add (deduct) impact of noteworthy items:
Restructuring, excluding JLT (a) 1 37 8 46
Changes in contingent consideration (b) 3 1 — 4
JLT integration and restructuring costs (c) 46 20 4 70
JLT acquisition-related costs and other (d) 11 1 1 13
JLT legacy E&O provision (e) — 161 — 161
Disposal of businesses (h) 1 (11 ) — (10 )
Other — (1 ) 1 —
Operating income adjustments 62 208 14 284
Adjusted operating income (loss) $ 525 $ 387 $ (57 ) $ 855
Total identified intangible amortization expense $ 70 $ 16 $ — $ 86
Adjusted operating margin 23.5 % 21.4 % N/A 21.3 %
(a) Primarily includes restructuring expenses associated with the Company's global
information technology and HR functions and adjustments to restructuring
liabilities for future rent under non-cancellable leases. RIS in 2021 also
includes costs related to a Marsh operational excellence program to improve
efficiencies and client service. Consulting charges in 2020 reflect severance
and real estate exit costs related to the Mercer restructuring program
completed in 2020.
(b) Primarily includes the change in fair value of contingent consideration
related to acquisitions and dispositions as measured each quarter.
(c) Includes costs incurred for staff reductions, lease related exit costs,
technology and consulting costs related to the JLT integration.
(d) Includes retention and legal charges related to the acquisition of JLT.
(e) Reflects recoveries under indemnities 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 year-ended 2021, there was a reduction of $69
million in the liability including recoveries, following an increase of $161
million in the recorded liability related to this matter in 2020.
(f) Settlement charges and legal costs related to strategic recruiting.
(g) Reflects a gain from the fair value re-measurement of the Company’s
previously held equity method investment in Marsh India upon the Company
increasing its ownership interest from 49% to 92%. The gain is reflected in
revenue and excluded from underlying revenue calculations and adjusted
operating margin.
(h) Consulting in 2020 includes a contingent gain adjustment, included in revenue
from Mercer's U.S. large market health and defined benefit administration
business sold in 2019. This amount is removed from GAAP revenue in the
calculation of adjusted operating margin.
Marsh & McLennan Companies, Inc.
Reconciliation of Non-GAAP Measures
Twelve Months Ended December 31
(Millions) (Unaudited)
Risk & Insurance Consulting Corporate/ Total
Services Eliminations
Twelve Months Ended December 31, 2021
Operating income (loss) $ 3,080 $ 1,504 $ (272 ) $ 4,312
Operating margin 25.5 % 19.3 % N/A 21.8 %
Add (deduct) impact of noteworthy items:
Restructuring, excluding JLT (a) 31 12 27 70
Changes in contingent consideration (b) 63 (3 ) (3 ) 57
JLT integration and restructuring costs (c) 53 36 4 93
JLT acquisition-related costs and other (d) 77 3 1 81
JLT legacy E&O provision (e) — (69 ) — (69 )
Legal claims (f) 60 — 2 62
Gain on consolidation of business (g) (267 ) — — (267 )
Disposal of businesses (h) (52 ) 3 — (49 )
Operating income adjustments (35 ) (18 ) 31 (22 )
Adjusted operating income (loss) $ 3,045 $ 1,486 $ (241 ) $ 4,290
Total identified intangible amortization expense $ 309 $ 56 $ — $ 365
Adjusted operating margin 28.5 % 19.8 % N/A 23.9 %
Twelve Months Ended December 31, 2020
Operating income (loss) $ 2,346 $ 994 $ (274 ) $ 3,066
Operating margin 22.7 % 14.3 % N/A 17.8 %
Add (deduct) impact of noteworthy items:
Restructuring, excluding JLT (a) 3 54 32 89
Changes in contingent consideration (b) 25 (1 ) 2 26
JLT integration and restructuring costs (c) 171 51 29 251
JLT acquisition-related costs and other (d) 50 3 1 54
JLT legacy E&O provision (e) — 161 — 161
Disposal of businesses (h) 7 (15 ) — (8 )
Other 5 — — 5
Operating income adjustments 261 253 64 578
Adjusted operating income (loss) $ 2,607 $ 1,247 $ (210 ) $ 3,644
Total identified intangible amortization expense $ 292 $ 59 $ — $ 351
Adjusted operating margin 28.0 % 18.8 % N/A 23.2 %
(a) Primarily includes restructuring expenses associated with the Company's global
information technology and HR functions and adjustments to restructuring
liabilities for future rent under non-cancellable leases. RIS in 2021 also
includes costs related to a Marsh operational excellence program to improve
efficiencies and client service. Consulting charges in 2020 reflect severance
and real estate exit costs related to the Mercer restructuring program
completed in 2020.
(b) Primarily includes the change in fair value of contingent consideration
related to acquisitions and dispositions as measured each quarter.
(c) Includes costs incurred for staff reductions, lease related exit costs,
technology and consulting costs related to the JLT integration.
(d) Includes retention and legal charges related to the acquisition of JLT.
(e) For the year-ended 2021, there was a reduction of $69 million in the liability
including recoveries under indemnities for a legacy JLT E&O matter
relating to suitability of advice provided to individuals for defined benefit
pension transfers in the U.K. The Company increased the recorded liability by
$161 million related to this matter in 2020.
(f) Settlement charges and legal costs related to strategic recruiting.
(g) Reflects a gain from the fair value re-measurement of the Company’s
previously held equity method investment in Marsh India upon the Company
increasing its ownership interest from 49% to 92%. The gain is reflected in
revenue and excluded from underlying revenue calculations and adjusted
operating margin.
(h) Primarily reflects a gain on the sale of the U.K. commercial networks business
that provided broking and back-office solutions for small independent brokers
during the second quarter of 2021. 2020 reflects a net loss on disposal of
specialty businesses sold in the U.S., U.K. and Canada. Consulting in 2020
includes a contingent gain adjustment from Mercer's U.S. large market health
and defined benefit administration business sold in 2019. These amounts are
reflected as an increase or decrease of other revenue, which is reflected as
part of revenue in the consolidated statements of income. These items are
removed from GAAP revenue in the calculation of adjusted operating margin.
Marsh & McLennan Companies, Inc.
Reconciliation of Non-GAAP Measures
Three and Twelve Months Ended December 31
(Unaudited)
Adjusted income, net of tax is calculated as the Company's GAAP income from
continuing operations, adjusted to reflect the after tax impact of the
operating income adjustments in the preceding tables and the additional items
listed below. Adjusted EPS is calculated by dividing the Company’s adjusted
income, net of tax, by average number of shares outstanding-diluted for the
relevant period. The following tables reconcile adjusted income, net of tax to
GAAP income from continuing operations and adjusted EPS to GAAP EPS for the
three and twelve month periods ended December 31, 2021 and 2020.
Three Months Ended Three Months Ended
December 31, 2021 December 31, 2020
(In millions, except per share data) Amount Adjusted Amount Adjusted
EPS EPS
Net income before non-controlling interests, as reported $ 807 $ 379
Less: Non-controlling interest, net of tax 4 5
Subtotal $ 803 $ 1.57 $ 374 $ 0.73
Operating income adjustments $ (81 ) $ 284
Investments adjustment (a) (4 ) (14 )
Pension settlement charges (b) 3 3
Income tax effect of adjustments (c) (33 ) (35 )
Impact of U.K. tax rate change (d) 5 —
(110 ) (0.21 ) 238 0.46
Adjusted income, net of tax $ 693 $ 1.36 $ 612 $ 1.19
Twelve Months Ended Twelve Months Ended
December 31, 2021 December 31, 2020
(In millions, except per share data) Amount Adjusted Amount Adjusted
EPS EPS
Net income before non-controlling interests, as reported $ 3,174 $ 2,046
Less: Non-controlling interest, net of tax 31 30
Subtotal $ 3,143 $ 6.13 $ 2,016 $ 3.94
Operating income adjustments $ (22 ) $ 578
Investments adjustment (a) (6 ) 28
Pension settlement charges (b) 5 3
Income tax effect of adjustments (c) (64 ) (85 )
Impact of U.K. tax rate change (d) 110 —
23 0.04 524 1.03
Adjusted income, net of tax $ 3,166 $ 6.17 $ 2,540 $ 4.97
(a) Represents mark-to-market (gains) losses primarily related to the Company’s
investment in Alexander Forbes ("AF").
(b) Charges resulting from lump sum pension settlements elected by participants.
(c) 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.
(d) Reflects the re-measurement of the Company's U.K. deferred tax assets and
liabilities upon enactment of legislation that increased the corporate income
tax rate applicable to U.K. based entities from 19% to 25%, effective April 1,
2023.
Marsh & McLennan Companies, Inc.
Supplemental Information
Three and Twelve Months Ended December 31
(Millions) (Unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
2021 2020 2021 2020
Consolidated
Compensation and benefits $ 2,905 $ 2,650 $ 11,425 $ 10,129
Other operating expenses 1,246 1,195 4,083 4,029
Total expenses $ 4,151 $ 3,845 $ 15,508 $ 14,158
Depreciation and amortization expense $ 91 $ 108 $ 382 $ 390
Identified intangible amortization expense 87 86 365 351
Total $ 178 $ 194 $ 747 $ 741
Stock option expense $ 3 $ 3 $ 32 $ 28
Risk and Insurance Services
Compensation and benefits $ 1,630 $ 1,456 $ 6,506 $ 5,690
Other operating expenses 752 613 2,499 2,301
Total expenses $ 2,382 $ 2,069 $ 9,005 $ 7,991
Depreciation and amortization expense $ 44 $ 62 $ 196 $ 208
Identified intangible amortization expense 73 70 309 292
Total $ 117 $ 132 $ 505 $ 500
Consulting
Compensation and benefits $ 1,148 $ 1,084 $ 4,435 $ 3,995
Other operating expenses 556 639 1,850 1,987
Total expenses $ 1,704 $ 1,723 $ 6,285 $ 5,982
Depreciation and amortization expense $ 28 $ 29 $ 115 $ 115
Identified intangible amortization expense 14 16 56 59
Total $ 42 $ 45 $ 171 $ 174
Marsh & McLennan Companies, Inc.
Consolidated Balance Sheets
(Millions) (Unaudited)
December 31, December 31,
2021 2020
ASSETS
Current assets:
Cash and cash equivalents $ 1,752 $ 2,089
Net receivables 5,586 5,326
Other current assets 926 740
Total current assets 8,264 8,155
Goodwill and intangible assets 19,127 18,216
Fixed assets, net 847 856
Pension related assets 2,270 1,768
Right of use assets 1,868 1,894
Deferred tax assets 551 702
Other assets 1,461 1,458
TOTAL ASSETS $ 34,388 $ 33,049
LIABILITIES AND EQUITY
Current liabilities:
Short-term debt $ 17 $ 517
Accounts payable and accrued liabilities 3,165 3,050
Accrued compensation and employee benefits 2,942 2,400
Current lease liabilities 332 342
Accrued income taxes 198 247
Total current liabilities 6,654 6,556
Fiduciary liabilities 9,622 8,585
Less - cash and cash equivalents held in a fiduciary capacity (9,622 ) (8,585 )
— —
Long-term debt 10,933 10,796
Pension, post-retirement and post-employment benefits 1,632 2,662
Long-term lease liabilities 1,880 1,924
Liabilities for errors and omissions 355 366
Other liabilities 1,712 1,485
Total equity 11,222 9,260
TOTAL LIABILITIES AND EQUITY $ 34,388 $ 33,049
Marsh & McLennan Companies, Inc.
Consolidated Statements of Cash Flows( (a))
(Millions) (Unaudited)
For the Years Ended
December 31,
2021 2020
Operating cash flows:
Net income before non-controlling interests $ 3,174 $ 2,046
Adjustments to reconcile net income to cash provided by operations:
Depreciation and amortization 747 741
Non cash lease expense 327 355
Gain on consolidation of entity (267 ) —
Share-based compensation expense 348 290
Net (gain) loss on investments, disposition of assets and other (130 ) 64
Changes in assets and liabilities:
Accrued compensation and employee benefits 527 207
Net receivables (252 ) (75 )
Other changes to assets and liabilities (199 ) 429
Contributions to pension and other benefit plans in excess of current year (372 ) (356 )
credit
Operating lease liabilities (349 ) (351 )
Effect of exchange rate changes (38 ) 32
Net cash provided by operations 3,516 3,382
Financing cash flows:
Purchase of treasury shares (1,159 ) —
Borrowings from term-loan and credit facilities — 1,000
Proceeds from issuance of debt 743 737
Repayments of debt (1,016 ) (2,515 )
Net issuance of common stock from treasury shares 60 —
Net distributions from non-controlling interests and deferred/contingent (82 ) (159 )
consideration
Dividends paid (1,026 ) (943 )
Increase in fiduciary liabilities 1,183 955
Net cash used for financing activities (1,297 ) (925 )
Investing cash flows:
Capital expenditures (406 ) (348 )
Net sales of long-term investments and other 17 104
Dispositions 84 98
Acquisitions, net of cash and cash held in a fiduciary capacity acquired (859 ) (647 )
Net cash used for investing activities (1,164 ) (793 )
Effect of exchange rate changes on cash, cash equivalents, and cash and cash (355 ) 511
equivalents held in a fiduciary capacity
Increase in cash, cash equivalents, and cash and cash equivalents held in a 700 2,175
fiduciary capacity
Cash, cash equivalents, and cash and cash equivalents held in a fiduciary 10,674 8,499
capacity at beginning of period
Cash, cash equivalents, and cash and cash equivalents held in a fiduciary $ 11,374 $ 10,674
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
For the Years Ended December 31, 2021 2020
(In millions of dollars)
Cash and cash equivalents $ 1,752 $ 2,089
Cash and cash equivalents held in a fiduciary capacity 9,622 8,585
Total cash, cash equivalents, and cash and cash equivalents held in a $ 11,374 $ 10,674
fiduciary capacity
(a) The Company revised the Statements of Cash Flows presentation to include
cash and cash equivalents held in a fiduciary capacity as a component of total
cash, presented as cash, cash equivalents, and cash and cash equivalents held
in a fiduciary capacity. The Company revised the 2020 presentation for
comparable purposes.
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/20220126006014/en/
(https://www.businesswire.com/news/home/20220126006014/en/)
Marsh & McLennan
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