REG-Marsh & McLennan Marsh McLennan Reports Second Quarter 2021 Results
22/07/2021 12:00
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Marsh McLennan Reports Second Quarter 2021 Results
GAAP Revenue Increases 20%; Underlying Revenue Rises 13%
Growth in GAAP Operating Income of 39% and Adjusted Operating Income of 24%
Second Quarter EPS Rises to $1.60 from $1.12 and Adjusted EPS Increases 33% to
$1.75
Six Months EPS Rises to $3.51 from $2.60 and Adjusted EPS Increases 26% to
$3.74
Marsh McLennan (NYSE: MMC), the world’s leading professional services firm
in the areas of risk, strategy and people, today reported financial results
for the second quarter ended June 30, 2021.
Dan Glaser, President and CEO, said: “Our performance this quarter was
outstanding. The company achieved the strongest underlying growth in two
decades, and experienced an acceleration in growth across all of our
businesses. We grew underlying revenue by 13%, adjusted operating income by
24%, and adjusted EPS by 33%.
“These results are a direct reflection of the hard work and dedication of
our colleagues around the world. We look forward to carrying this momentum
into the second half of the year.”
Consolidated Results
Consolidated revenue in the second quarter of 2021 was $5.0 billion, an
increase of 20% compared with the second quarter of 2020. On an underlying
basis, revenue increased 13%. Operating income was $1.2 billion, an increase
of 39% from the prior year. Adjusted operating income, which excludes
noteworthy items as presented in the attached supplemental schedules, rose 24%
to $1.2 billion. Net income attributable to the Company was $820 million, or
$1.60 per diluted share, compared with $1.12 in the second quarter of 2020.
Adjusted earnings per share rose 33% to $1.75 per diluted share compared with
$1.32 for the prior year period.
For the six months ended June 30, 2021, consolidated revenue was $10.1
billion, an increase of 14%, or 9% on an underlying basis compared to the
prior period. Operating income was $2.6 billion, an increase of 32% from the
prior year period. Adjusted operating income rose 22% to $2.6 billion. Net
income attributable to the Company was $1.8 billion. Fully diluted earnings
per share was $3.51 compared with $2.60 in the first six months of 2020.
Adjusted earnings per share increased 26% to $3.74 compared with $2.96 for the
comparable period in 2020.
Risk & Insurance Services
Risk & Insurance Services revenue was $3.1 billion in the second quarter
of 2021, an increase of 21%, or 13% on an underlying basis. Operating income
rose 37% to $950 million, and adjusted operating income was $927 million, an
increase of 22% from the prior year period. For the six months ended June 30,
2021, revenue was $6.4 billion, an increase of 15%, or 10% on an underlying
basis. Operating income rose 30% to $2.0 billion, and adjusted operating
income was $2.0 billion, an increase of 19% from the prior year period.
Marsh's revenue in the second quarter was $2.7 billion, an increase of 14% on
an underlying basis. In US/Canada, underlying revenue rose 15%. International
operations produced underlying revenue growth of 13%, reflecting 16% growth in
EMEA, 10% growth in Asia Pacific, and 2% in Latin America. For the six months
ended June 30, 2021, Marsh’s underlying revenue growth was 11% compared to
the prior period a year ago.
Guy Carpenter's revenue in the second quarter was $488 million, an increase of
12% on an underlying basis. For the six months ended June 30, 2021, Guy
Carpenter’s underlying revenue growth was 8%.
Consulting
Consulting revenue in the second quarter was $1.9 billion, an increase of 17%
or 12% on an underlying basis compared to the same period a year ago.
Operating income increased 35% to $344 million, and adjusted operating income
increased 34% to $356 million. For the first six months of 2021, revenue was
$3.8 billion, an increase of 11%, or an increase of 8% on an underlying basis.
Operating income of $705 million increased 31% and adjusted operating income
increased 31% to $726 million.
Mercer's revenue was $1.3 billion in the second quarter, an increase of 6% on
an underlying basis. Career with revenue of $187 million, was up 15% on an
underlying basis. Wealth revenue of $625 million increased 4% on an underlying
basis, and Health revenue of $462 million increased 4% on an underlying basis.
For the six months ended June 30, 2021, Mercer’s revenue was $2.6 billion,
an increase of 3% on an underlying basis compared to the same period a year
ago.
Oliver Wyman’s revenue was $618 million in the second quarter, an increase
of 28% on an underlying basis. For the first six months ended June 30, 2021,
Oliver Wyman’s revenue was $1.2 billion, an increase of 19% on an underlying
basis.
Other Items
The Company repurchased 2.4 million shares of stock for $322 million in the
second quarter. Through six months, the Company has repurchased 3.4 million
shares for $434 million.
Last week, the Board of Directors increased the quarterly dividend 15% to
$0.535 per share, with the third quarter dividend payable on August 13, 2021.
Conference Call
A conference call to discuss second quarter 2021 results will be held today at
8:30 a.m. Eastern time. To participate in the teleconference, please dial +1
866 437 7574. Callers from outside the United States should dial +1 409 220
9376. The access code for both numbers is 5668714. The live audio webcast may
be accessed at mmc.com
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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 78,000 colleagues advise clients
in 130 countries. With annual revenue of over $18 billion, Marsh McLennan
helps clients navigate an increasingly dynamic and complex environment through
four market-leading businesses. Marsh
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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 mmc.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:
* our ability to maintain adequate safeguards to protect the security of our
information systems and confidential, personal or proprietary information,
particularly given the increased risk of cybersecurity attacks, including
hacking, viruses, malware, ransomware and other types of data security
breaches, as well as the heightened risk caused by remote work arrangements;
* the impact from lawsuits or investigations arising from errors and omissions,
breaches of fiduciary duty or other claims against us in our capacity as a
broker or investment advisor;
* increased regulatory activity and scrutiny by regulatory or law enforcement
authorities in the financial services industry;
* the financial and operational impact of complying with laws and regulations
where we operate and the risks of noncompliance with such laws by us or
third-party providers, including anti-corruption laws such as the U.S. Foreign
Corrupt Practices Act, U.K. Anti-Bribery Act and cybersecurity and data
privacy regulations such as the E.U.’s General Data Protection Regulation;
* the impact of COVID-19 on our business operations, results of operations, cash
flows and financial position;
* our ability to compete effectively and adapt to changes in the competitive
environment, including to respond to technological change, disintermediation,
digital disruption and other types of innovation;
* our ability to manage risks associated with our investment management and
related services business, particularly in the context of uncertain equity
markets, including our ability to execute timely trades in light of increased
trading volume and to manage potential conflicts of interest;
* our ability to attract and retain industry leading talent;
* the impact of changes in tax laws, guidance and interpretations, particularly
due to recently enacted legislation in the U.K. and proposals from the U.S.
government or from the Organization for Economic Development and Cooperation,
or disagreements with tax authorities;
* our ability to successfully recover if we experience a business continuity
problem due to cyberattack, natural disaster, government unrest or otherwise;
and
* the regulatory, contractual and reputational risks that arise based on
insurance placement activities and growing insurer revenue streams.
The factors identified above are not exhaustive. Marsh McLennan and its
subsidiaries operate in a dynamic business environment in which new risks
emerge frequently. Accordingly, we caution readers not to place undue reliance
on any forward-looking statements, which are based only on information
currently available to us and speak only as of the dates on which they are
made. The Company undertakes no obligation to update or revise any
forward-looking statement to reflect events or circumstances arising after the
date on which it is made.
Further information concerning Marsh McLennan and its businesses, including
information about factors that could materially affect our results of
operations and financial condition, is contained in the Company's filings with
the Securities and Exchange Commission, including the "Risk Factors" section
and the "Management’s Discussion and Analysis of Financial Condition and
Results of Operations" section of our most recently filed Annual Report on
Form 10-K.
Marsh & McLennan Companies, Inc.
Consolidated Statements of Income
(In millions, except per share figures)
(Unaudited)
Three Months Ended Six Months Ended
June 30,
June 30,
2021 2020 2021 2020
Revenue $ 5,017 $ 4,189 $ 10,100 $ 8,840
Expense:
Compensation and benefits 2,860 2,429 5,667 4,984
Other operating expenses 929 875 1,847 1,901
Operating expenses 3,789 3,304 7,514 6,885
Operating income 1,228 885 2,586 1,955
Other net benefit credits 71 63 142 127
Interest income 1 2 1 4
Interest expense (110) (132) (228) (259)
Investment income (loss) 19 (31) 30 (33)
Income before income taxes 1,209 787 2,531 1,794
Income tax expense 382 207 706 447
Net income before non-controlling interests 827 580 1,825 1,347
Less: Net income attributable to non-controlling interests 7 8 22 21
Net income attributable to the Company $ 820 $ 572 $ 1,803 $ 1,326
Net income per share attributable to the Company:
- Basic $ 1.61 $ 1.13 $ 3.55 $ 2.62
- Diluted $ 1.60 $ 1.12 $ 3.51 $ 2.60
Average number of shares outstanding
- Basic 508 506 508 505
- Diluted 513 511 514 510
Shares outstanding at June 30 507 506 507 506
Marsh & McLennan Companies, Inc.
Supplemental Information - Revenue Analysis
Three Months Ended June 30
(Millions) (Unaudited)
The Company conducts business in 130 countries. As a result, foreign exchange
rate movements may impact period-to-period comparisons of revenue. Similarly,
certain other items such as acquisitions and dispositions, including transfers
among businesses, may impact period-to-period comparisons of revenue.
Underlying revenue measures the change in revenue from one period to the next
by isolating these impacts.
Components of Revenue Change*
Three Months Ended % Currency Acquisitions/ Underlying
June 30,
Change
Impact
Dispositions/
Revenue
GAAP
Other Impact
Revenue
2021 2020
Risk and Insurance Services
Marsh $ 2,650 $ 2,161 23% 4% 5% 14%
Guy Carpenter 488 433 13% 1% — 12%
Subtotal 3,138 2,594 21% 4% 4% 14%
Fiduciary Interest Income 3 9
Total Risk and Insurance Services 3,141 2,603 21% 4% 4% 13%
Consulting
Mercer 1,274 1,149 11% 6% (1)% 6%
Oliver Wyman Group 618 467 33% 5% — 28%
Total Consulting 1,892 1,616 17% 5% — 12%
Corporate Eliminations (16) (30)
Total Revenue $ 5,017 $ 4,189 20% 4% 2% 13%
Revenue Details
The following table provides more detailed revenue information for certain of
the components presented above:
Components of Revenue Change*
Three Months Ended % Change Currency Acquisitions/ Underlying
June 30,
GAAP
Impact
Dispositions/
Revenue
Revenue
Other Impact
2021 2020
Marsh:
EMEA $ 796 $ 597 33 % 9 % 9 % 16 %
Asia Pacific 347 298 16 % 8 % (1) % 10 %
Latin America 103 99 4 % 2 % — 2 %
Total International 1,246 994 25 % 8 % 5 % 13 %
U.S./Canada 1,404 1,167 20 % 1 % 5 % 15 %
Total Marsh $ 2,650 $ 2,161 23 % 4 % 5 % 14 %
Mercer:
Wealth 625 561 11 % 8 % (1) % 4 %
Health 462 432 7 % 3 % — 4 %
Career 187 156 20 % 5 % — 15 %
Total Mercer $ 1,274 $ 1,149 11 % 6 % (1) % 6 %
* Components of revenue change may not add due to rounding.
Marsh & McLennan Companies, Inc.
Supplemental Information - Revenue Analysis
Six Months Ended June 30
(Millions) (Unaudited)
The Company conducts business in 130 countries. As a result, foreign exchange
rate movements may impact period-to-period comparisons of revenue. Similarly,
certain other items such as acquisitions and dispositions, including transfers
among businesses, may impact period-to-period comparisons of revenue.
Underlying revenue measures the change in revenue from one period to the next
by isolating these impacts.
Components of Revenue Change*
Six Months Ended % Change Currency Acquisitions/ Underlying
June 30,
GAAP
Impact
Dispositions/
Revenue
Revenue
Other Impact
2021 2020
Risk and Insurance Services
Marsh $ 4,975 $ 4,222 18 % 4 % 3 % 11 %
Guy Carpenter 1,383 1,260 10 % 2 % — 8 %
Subtotal 6,358 5,482 16 % 3 % 3 % 10 %
Fiduciary Interest Income 8 32
Total Risk and Insurance Services 6,366 5,514 15 % 3 % 3 % 10 %
Consulting
Mercer 2,562 2,400 7 % 5 % (1) % 3 %
Oliver Wyman Group 1,203 978 23 % 4 % — 19 %
Total Consulting 3,765 3,378 11 % 5 % (1) % 8 %
Corporate Eliminations (31) (52)
Total Revenue $ 10,100 $ 8,840 14 % 4 % 1 % 9 %
Revenue Details
The following table provides more detailed revenue information for certain of
the components presented above:
Components of Revenue Change*
Six Months Ended % Change Currency Acquisitions/ Underlying
June 30,
GAAP
Impact
Dispositions/
Revenue
Revenue
Other Impact
2021 2020
Marsh:
EMEA $ 1,633 $ 1,351 21 % 7 % 3 % 11 %
Asia Pacific 621 536 16 % 7 % — 9 %
Latin America 193 190 2 % (2 )% — 4 %
Total International 2,447 2,077 18 % 7 % 2 % 9 %
U.S./Canada 2,528 2,145 18 % 1 % 5 % 12 %
Total Marsh $ 4,975 $ 4,222 18 % 4 % 3 % 11 %
Mercer:
Wealth 1,248 1,153 8 % 7 % (1 )% 2 %
Health 949 918 3 % 2 % (1 )% 2 %
Career 365 329 11 % 4 % — 8 %
Total Mercer $ 2,562 $ 2,400 7 % 5 % (1 )% 3 %
* Components of revenue change may not add due to rounding.
Marsh & McLennan Companies, Inc.
Reconciliation of Non-GAAP Measures
Three Months Ended June 30
(Millions) (Unaudited)
Overview
The Company reports its financial results in accordance with accounting
principles generally accepted in the United States (referred to in this
release as in accordance with "GAAP" or "reported" results). The Company also
refers to and presents below certain additional non-GAAP financial measures,
within the meaning of Regulation G under the Securities Exchange Act of 1934.
These measures are: adjusted operating income (loss), adjusted operating
margin, adjusted income, net of tax and adjusted earnings per share (EPS). The
Company has included reconciliations of these non-GAAP financial measures to
the most directly comparable financial measure calculated in accordance with
GAAP in the following tables.
The Company believes these non-GAAP financial measures provide useful
supplemental information that enables investors to better compare the
Company’s performance across periods. Management also uses these measures
internally to assess the operating performance of its businesses, to assess
performance for employee compensation purposes, and to decide how to allocate
resources. However, investors should not consider these non-GAAP measures in
isolation from, or as a substitute for, the financial information that the
Company reports in accordance with GAAP. The Company's non-GAAP measures
include adjustments that reflect how management views its businesses, and may
differ from similarly titled non-GAAP measures presented by other companies.
Adjusted Operating Income (Loss) and Adjusted Operating Margin
Adjusted operating income (loss) is calculated by excluding the impact of
certain noteworthy items from the Company's GAAP operating income or (loss).
The following tables identify these noteworthy items and reconcile adjusted
operating income (loss) to GAAP operating income or loss, on a consolidated
and reportable segment basis, for the three and six months ended June 30, 2021
and 2020. The following tables also present adjusted operating margin. For the
three and six months ended June 30, 2021 and 2020, adjusted operating margin
is calculated by dividing the sum of adjusted operating income and identified
intangible asset amortization by consolidated or segment adjusted revenue.
Risk & Insurance Consulting Corporate/ Total
Services
Eliminations
Three Months Ended June 30, 2021
Operating income (loss) $ 950 $ 344 $ (66) $ 1,228
Operating margin 30.2 % 18.1 % N/A 24.5 %
Add (deduct) impact of noteworthy Items:
Restructuring, excluding JLT (a) 4 3 5 12
Changes in contingent consideration (b) (5) 1 (3) (7)
JLT integration and restructuring costs (c) 11 6 2 19
JLT acquisition-related costs (d) 11 1 — 12
Disposal of businesses (e) (51) 1 — (50)
Other 7 — — 7
Operating income adjustments (23) 12 4 (7)
Adjusted operating income (loss) $ 927 $ 356 $ (62) $ 1,221
Total identified intangible amortization expense $ 75 $ 14 $ — $ 89
Adjusted operating margin 32.4 % 19.5 % N/A 26.4 %
Three Months Ended June 30, 2020
Operating income (loss), as reported $ 696 $ 255 $ (66) $ 885
Operating margin 26.7 % 15.8 % N/A 21.1 %
Add (deduct) impact of noteworthy Items:
Restructuring, excluding JLT (a) — 2 9 11
Changes in contingent consideration (b) 4 1 2 7
JLT integration and restructuring costs (c) 39 7 11 57
JLT acquisition-related costs (d) 12 — 1 13
Disposal of businesses (e) 6 — — 6
Other 5 — — 5
Operating income adjustments 66 10 23 99
Adjusted operating income (loss) $ 762 $ 265 $ (43) $ 984
Total identified intangible amortization expense $ 75 $ 13 $ — $ 88
Adjusted operating margin 32.1 % 17.3 % N/A 25.5 %
(a) Primarily includes restructuring expenses associated with the Company's
global information technology and HR functions and adjustments to
restructuring liabilities for future rent under non-cancellable leases.
(b) Primarily includes the change in fair value of contingent consideration
related to acquisitions and dispositions measured each quarter.
(c) Includes costs incurred for staff reductions, lease related exit costs,
technology and consulting costs related to the JLT integration.
(d) Reflects retention costs related to the closing of the JLT Transaction.
(e) Primarily reflects a gain on the sale of the U.K. commercial networks
business that provided broking and back-office solutions for small independent
brokers during the second quarter of 2021. 2020 reflects net loss on disposal
of specialty businesses sold in the U.S., U.K. and Canada, previously acquired
as part of the JLT Transaction. These amounts are reflected as an increase or
decrease of other revenue, which is reflected as part of revenue in the
consolidated statements of income. These items are removed from GAAP revenue
in the calculation of adjusted operating margin.
Marsh & McLennan Companies, Inc.
Reconciliation of Non-GAAP Measures
Six Months Ended June 30
(Millions) (Unaudited)
Risk & Insurance Consulting Corporate/ Total
Services
Eliminations
Six Months Ended June 30, 2021
Operating income (loss) $ 2,010 $ 705 $ (129) $ 2,586
Operating margin 31.6 % 18.7 % N/A 25.6 %
Add (deduct) impact of noteworthy items:
Restructuring, excluding JLT (a) 5 8 10 23
Changes in contingent consideration (b) 1 (5) (3) (7)
JLT integration and restructuring costs (c) 27 12 3 42
JLT acquisition-related costs (d) 22 2 — 24
Disposal of business (e) (53) 4 — (49)
Other 7 — — 7
Operating income adjustments 9 21 10 40
Adjusted operating income (loss) $ 2,019 $ 726 $ (119) $ 2,626
Total identified intangible amortization expense $ 161 $ 28 $ — $ 189
Adjusted operating margin 34.5 % 20.0 % N/A 28.0 %
Six Months Ended June 30, 2020
Operating income (loss) $ 1,550 $ 537 $ (132) $ 1,955
Operating margin 28.1 % 15.9 % N/A 22.1 %
Add (deduct) impact of noteworthy items:
Restructuring, excluding JLT (a) 2 6 12 20
Changes in contingent consideration (b) 7 (3) 2 6
JLT integration and restructuring costs (c) 100 17 20 137
JLT acquisition-related costs (d) 24 1 1 26
Disposal of business (e) 6 (4) — 2
Other 5 — — 5
Operating income adjustments 144 17 35 196
Adjusted operating income (loss) $ 1,694 $ 554 $ (97) $ 2,151
Total identified intangible amortization expense $ 147 $ 27 $ — $ 174
Adjusted operating margin 33.4 % 17.2 % N/A 26.3 %
(a) Primarily includes restructuring expenses associated with the Company's
global information technology and HR functions and adjustments to
restructuring liabilities for future rent under non-cancellable leases.
Consulting charges in 2020 reflect severance and real estate exit costs
related to the Mercer restructuring program completed in 2020.
(b) Primarily includes the change in fair value of contingent consideration
related to acquisitions and dispositions as measured each quarter.
(c) Includes costs incurred for staff reductions, lease related exit costs,
technology and consulting costs related to the JLT integration.
(d) Reflects retention costs related to the closing of the JLT Transaction.
(e) Primarily reflects a gain on the sale of the U.K. commercial networks
business that provided broking and back-office solutions for small independent
brokers during the second quarter of 2021. 2020 reflects net loss on disposal
of specialty businesses sold in the U.S., U.K. and Canada, previously acquired
as part of the JLT Transaction. These amounts are reflected as an increase or
decrease of other revenue, which is reflected as part of revenue in the
consolidated statements of income. These items are removed from GAAP revenue
in the calculation of adjusted operating margin.
Marsh & McLennan Companies, Inc.
Reconciliation of Non-GAAP Measures
Three and Six Months Ended June 30
(Millions) (Unaudited)
Adjusted income, net of tax is calculated as the Company's GAAP income from
continuing operations, adjusted to reflect the after tax impact of the
operating income adjustments in the preceding tables and investments gains or
losses related to the impact of mark-to-market adjustments on certain equity
securities. Adjusted EPS is calculated by dividing the Company’s adjusted
income, net of tax, by average number of shares outstanding-diluted for the
relevant period. The following tables reconcile adjusted income, net of tax to
GAAP income from continuing operations and adjusted EPS to GAAP EPS for the
three and six month periods ended June 30, 2021 and 2020.
Three Months Ended June 30, 2021 Three Months Ended June 30, 2020
Amount Adjusted Amount Adjusted
EPS
EPS
Net income before non-controlling interests, as reported $ 827 $ 580
Less: Non-controlling interest, net of tax 7 8
Subtotal $ 820 $ 1.60 $ 572 $ 1.12
Operating income adjustments $ (7) $ 99
Investments adjustment (a) (1) 25
Income tax effect of adjustments (b) (12) (21)
Impact of U.K. tax rate change (c) 100 —
80 0.15 103 0.20
Adjusted income, net of tax $ 900 $ 1.75 $ 675 $ 1.32
Six Months Ended June 30, 2021 Six Months Ended June 30, 2020
Amount Adjusted Amount Adjusted
EPS
EPS
Net income before non-controlling interests, as reported $ 1,825 $ 1,347
Less: Non-controlling interest, net of tax 22 21
Subtotal $ 1,803 $ 3.51 $ 1,326 $ 2.60
Operating income adjustments $ 40 $ 196
Investments adjustment (a) (1) 26
Income tax effect of adjustments (b) (21) (38)
Impact of U.K. tax rate change (c) 100 —
118 0.23 184 0.36
Adjusted income, net of tax $ 1,921 $ 3.74 $ 1,510 $ 2.96
(a) Represents mark-to-market gains in 2021 and losses in 2020, primarily
related to the Company’s investment in Alexander Forbes (“AF”).
(b) For items with an income tax impact, the tax effect was calculated using
an effective tax rate based on the tax jurisdiction for each item.
(c) Reflects the re-measurement of the Company's U.K. deferred tax assets and
liabilities upon enactment of legislation that increased the corporate income
tax rate applicable to U.K. based entities from 19% to 25%, effective April 1,
2023.
Marsh & McLennan Companies, Inc.
Supplemental Information
Three and Six Months Ended June 30
(Millions) (Unaudited)
Three Months Ended Six Months Ended
June 30,
June 30,
2021 2020 2021 2020
Consolidated
Compensation and benefits $ 2,860 $ 2,429 $ 5,667 $ 4,984
Other operating expenses 929 875 1,847 1,901
Total expenses $ 3,789 $ 3,304 $ 7,514 $ 6,885
Depreciation and amortization expense $ 104 $ 91 $ 201 $ 188
Identified intangible amortization expense 89 88 189 174
Total $ 193 $ 179 $ 390 $ 362
Stock option expense $ 4 $ 5 $ 25 $ 21
Risk and Insurance Services
Compensation and benefits $ 1,632 $ 1,382 $ 3,242 $ 2,834
Other operating expenses 559 525 1,114 1,130
Total expenses $ 2,191 $ 1,907 $ 4,356 $ 3,964
Depreciation and amortization expense $ 58 $ 45 $ 108 $ 97
Identified intangible amortization expense 75 75 161 147
Total $ 133 $ 120 $ 269 $ 244
Consulting
Compensation and benefits $ 1,110 $ 940 $ 2,184 $ 1,931
Other operating expenses 438 421 876 910
Total expenses $ 1,548 $ 1,361 $ 3,060 $ 2,841
Depreciation and amortization expense $ 29 $ 29 $ 58 $ 57
Identified intangible amortization expense 14 13 28 27
Total $ 43 $ 42 $ 86 $ 84
Marsh & McLennan Companies, Inc.
Consolidated Balance Sheets
(Millions)
(Unaudited) December 31,
June 30,
2020
2021
ASSETS
Current assets:
Cash and cash equivalents $ 888 $ 2,089
Net receivables 5,839 5,326
Other current assets 846 740
Total current assets 7,573 8,155
Goodwill and intangible assets 18,492 18,216
Fixed assets, net 816 856
Pension related assets 1,911 1,768
Right of use assets 1,983 1,894
Deferred tax assets 669 702
Other assets 1,509 1,458
TOTAL ASSETS $ 32,953 $ 33,049
LIABILITIES AND EQUITY
Current liabilities:
Short-term debt $ 516 $ 517
Accounts payable and accrued liabilities 2,830 3,050
Accrued compensation and employee benefits 1,775 2,400
Current lease liabilities 342 342
Accrued income taxes 353 247
Total current liabilities 5,816 6,556
Fiduciary liabilities 9,936 8,585
Less - cash and investments held in a fiduciary capacity (9,936) (8,585)
— —
Long-term debt 10,257 10,796
Pension, post-retirement and post-employment benefits 2,539 2,662
Long-term lease liabilities 1,992 1,924
Liabilities for errors and omissions 365 366
Other liabilities 1,720 1,485
Total equity 10,264 9,260
TOTAL LIABILITIES AND EQUITY $ 32,953 $ 33,049
Marsh & McLennan Companies, Inc.
Consolidated Statements of Cash Flows
(Millions) (Unaudited)
Six Months Ended June 30,
2021 2020
Operating cash flows:
Net income before non-controlling interests $ 1,825 $ 1,347
Adjustments to reconcile net income to cash used for operations:
Depreciation and amortization 390 362
Non cash lease expense 158 165
Share-based compensation expense 176 147
Change in fair value of acquisition-related derivative contracts and other 53 15
Changes in Assets and Liabilities:
Accrued compensation and employee benefits (642) (848)
Net receivables (551) (389)
Other changes to assets and liabilities (205) 114
Contributions to pension & other benefit plans in excess of current year (187) (165)
credit
Operating lease liabilities (172) (164)
Effect of exchange rate changes (95) (6)
Net cash provided by operations 750 578
Financing cash flows:
Purchase of treasury shares (434) —
Borrowings from term-loan and credit facilities — 1,000
Proceeds from issuance of debt — 737
Repayments of debt (509) (507)
Net issuance of common stock from treasury shares (23) (49)
Net distributions of non-controlling interests and deferred/contingent (47) (94)
consideration
Dividends paid (478) (466)
Net cash (used for) provided by financing activities (1,491) 621
Investing cash flows:
Capital expenditures (151) (200)
Net (purchase) sale of long-term investments and other (4) 105
Dispositions 81 93
Acquisitions (363) (562)
Net cash used for investing activities (437) (564)
Effect of exchange rate changes on cash and cash equivalents (23) (79)
(Decrease) increase in cash and cash equivalents (1,201) 556
Cash and cash equivalents at beginning of period 2,089 1,155
Cash and cash equivalents at end of period $ 888 $ 1,711
Media Contact:
Erick R. Gustafson
Marsh McLennan
+1 202 263 7788
erick.gustafson@mmc.com
(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/20210722005510/en/
(https://www.businesswire.com/news/home/20210722005510/en/)
Marsh & McLennan Companies, Inc.
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