TIDMMHM
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. A replay of the webcast will be available
approximately two hours after the event.
About Marsh McLennan
Marsh McLennan (NYSE: MMC) is the world's leading professional
services firm in the areas of risk, strategy and people. The
Company's 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 provides data-driven risk
advisory services and insurance solutions to commercial and
consumer clients. Guy Carpenter develops advanced risk, reinsurance
and capital strategies that help clients grow profitably and pursue
emerging opportunities. Mercer delivers advice and
technology-driven solutions that help organizations redefine the
world of work, reshape retirement and investment outcomes, and
unlock health and well being for a changing workforce. Oliver Wyman
serves as a critical strategic, economic and brand advisor to
private sector and governmental clients. For more information,
visit marshmclennan.com, follow us on LinkedIn and Twitter or
subscribe to BRINK.
INFORMATION CONCERNING FORWARD-LOOKING STATEMENTS
This press release contains "forward-looking statements," as
defined in the Private Securities Litigation Reform Act of 1995.
These statements, which express management's current views
concerning future events or results, use words like "anticipate,"
"assume," "believe," "continue," "estimate," "expect," "intend,"
"plan," "project" and similar terms, and future or conditional
tense verbs like "could," "may," "might," "should, " "will" and
"would".
Forward-looking statements are subject to inherent risks and
uncertainties that could cause actual results to differ materially
from those expressed or implied in our forward-looking statements.
Factors that could materially affect our future results include,
among other things:
-- the 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 December Twelve Months Ended
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 Change Acquisitions/
Ended December GAAP Currency Dispositions/ Underlying
31, Revenue Impact Other Impact Revenue
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 Change Acquisitions/
Ended December GAAP Currency Dispositions/ Underlying
31, Revenue Impact Other Impact Revenue
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 Change Acquisitions/
Ended December GAAP Currency Dispositions/ Underlying
31, Revenue Impact Other Impact Revenue
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 Change Acquisitions/
Ended December GAAP Currency Dispositions/ Underlying
31, Revenue Impact 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 Corporate/
Services Consulting Eliminations Total
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 Corporate/
Services Consulting Eliminations Total
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 Adjusted Adjusted
data) Amount EPS Amount 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 Adjusted Adjusted
data) Amount EPS Amount 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 credit (372 ) (356 )
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
consideration (82 ) (159 )
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
equivalents held in a fiduciary capacity (355 ) 511
Increase in cash, cash equivalents, and
cash and cash equivalents held in a
fiduciary capacity 700 2,175
Cash, cash equivalents, and cash and cash
equivalents held in a fiduciary capacity
at beginning of period 10,674 8,499
Cash, cash equivalents, and cash and cash
equivalents held in a fiduciary capacity
at end of period $ 11,374 $10,674
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 fiduciary
capacity $ 11,374 $10,674
(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
Investor Contact:
Sarah DeWitt
Marsh McLennan
+1 212 345 6750
sarah.dewitt@mmc.com
View source version on businesswire.com:
https://www.businesswire.com/news/home/20220126006014/en/
CONTACT:
Marsh & McLennan
SOURCE: Marsh & McLennan
Copyright Business Wire 2022
(END) Dow Jones Newswires
January 27, 2022 07:00 ET (12:00 GMT)
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