MARSH & MCLENNAN COMPANIES, INC. [MMC] Filings

10-Q 1 mmc-20240630.htm 10-Q mmc-20240630

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_____________________________________________

FORM 10-Q

_____________________________________________

(Mark One)


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

For the quarterly period ended June 30, 2024


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

For the transition period from________ to________.

____________________________________________

Marsh & McLennan Companies, Inc.

1166 Avenue of the Americas

New York, New York 10036

(212) 345-5000

_____________________________________________

Commission file number 1-5998

State of Incorporation: Delaware

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

_____________________________________________

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

Title of each class

Trading symbol(s)

Name of exchange on which registered

Common Stock, par value $1.00 per share

MMC

New York Stock Exchange

Chicago Stock Exchange

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

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

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

Large Accelerated Filer

☒

Accelerated Filer

☐

Non-Accelerated Filer

☐ (Do not check if a smaller reporting company)

Smaller Reporting Company

☐

Emerging Growth Company

☐

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

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

As of July 15, 2024, there were outstanding 491,755,908 shares of common stock, par value $1.00 per share, of the registrant.

INFORMATION CONCERNING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains "forward-looking statements," as defined in the Private Securities Litigation Reform Act of 1995. These statements, which express management's current views concerning future events or results, use words like "anticipate," "assume," "believe," "continue," "estimate," "expect," "intend," "plan," "project" and similar terms, and future or conditional tense verbs like "could," "may," "might," "should," "will" and "would".

Forward-looking statements are subject to inherent risks and uncertainties that could cause actual results to differ materially from those expressed or implied in our forward-looking statements. Factors that could materially affect our future results include, among other things:

•the impact of geopolitical or macroeconomic conditions on us, our clients and the countries and industries in which we operate, including from multiple major wars, escalating conflict throughout the Middle East and rising tension in the South China Sea, slower GDP growth or recession, lower interest rates, capital markets volatility, inflation and changes in insurance premium rates;

•the impact from lawsuits or investigations arising from errors and omissions, breaches of fiduciary duty or other claims against us in our capacity as a broker or investment advisor, including claims related to our investment business’ ability to execute timely trades;

•the increasing prevalence of ransomware, supply chain and other forms of cyber attacks, and their potential to disrupt our operations, or the operations of our third party vendors, and result in the disclosure of confidential client or company information;

•the financial and operational impact of complying with laws and regulations, including domestic and international sanctions regimes, anti-corruption laws such as the U.S. Foreign Corrupt Practices Act, U.K. Anti Bribery Act and cybersecurity, data privacy and artificial intelligence regulations;

•our ability to attract, retain and develop industry leading talent;

•our ability to compete effectively and adapt to competitive pressures in each of our businesses, including from disintermediation as well as technological change, digital disruption and other types of innovation such as artificial intelligence;

•our ability to manage potential conflicts of interest, including where our services to a client conflict, or are perceived to conflict, with the interests of another client or our own interests;

•the impact of changes in tax laws, guidance and interpretations, such as the implementation of the Organization for Economic Cooperation and Development international tax framework, or the increasing number of challenges by tax authorities in the current global tax environment; and

•the regulatory, contractual and reputational risks that arise based on insurance placement activities and insurer revenue streams.

The factors identified above are not exhaustive. Marsh & McLennan Companies, Inc., and its consolidated subsidiaries (the "Company") operate in a dynamic business environment in which new risks emerge frequently. Accordingly, we caution readers not to place undue reliance on any forward-looking statements, which are based only on information currently available to us and speak only as of the dates on which they are made. The Company undertakes no obligation to update or revise any forward-looking statement to reflect events or circumstances arising after the date on which it is made.

Further information concerning the Company, including information about factors that could materially affect our results of operations and financial condition, is contained in the Company's filings with the Securities and Exchange Commission, including the "Risk Factors" section and the "Management’s Discussion and Analysis of Financial Condition and Results of Operations" section of this Quarterly Report on Form 10-Q and our most recently filed Annual Report on Form 10-K.

TABLE OF CONTENTS


PART I. FINANCIAL INFORMATION		4

ITEM 1.	FINANCIAL STATEMENTS (UNAUDITED)	4

	CONSOLIDATED STATEMENTS OF INCOME	4

	CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME	5

	CONSOLIDATED BALANCE SHEETS	6

	CONSOLIDATED STATEMENTS OF CASH FLOWS	8

	CONSOLIDATED STATEMENTS OF EQUITY	9

	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS	10

ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS	36
	OF OPERATIONS
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	53

ITEM 4.	CONTROLS & PROCEDURES	54

PART II. OTHER INFORMATION		55

ITEM 1.	LEGAL PROCEEDINGS	55

ITEM 1A.	RISK FACTORS	55

ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	55

ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	55

ITEM 4.	MINE SAFETY DISCLOSURE	55

ITEM 5.	OTHER INFORMATION	55

ITEM 6.	EXHIBITS	55

PART I. FINANCIAL INFORMATION

Item 1.Financial Statements.

MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
(In millions, except per share data)	2024		2023		2024		2023
Revenue	$	6,221	$	5,876	$	12,694	$	11,800
Expense:
Compensation and benefits	3,454		3,337		6,924		6,544
Other operating expenses	1,125		1,082		2,203		2,073
Operating expenses	4,579		4,419		9,127		8,617
Operating income	1,642		1,457		3,567		3,183
Other net benefit credits	66		60		133		118
Interest income	12		10		49		24
Interest expense	(156)		(146)		(315)		(282)

Investment income	1		3		2		5

Income before income taxes	1,565		1,384		3,436		3,048
Income tax expense	425		337		872		749


Net income before non-controlling interests	1,140		1,047		2,564		2,299
Less: Net income attributable to non-controlling interests	15		12		39		29
Net income attributable to the Company	$	1,125	$	1,035	$	2,525	$	2,270
Net income per share attributable to the Company:
– Basic	$	2.28	$	2.09	$	5.13	$	4.59

– Diluted	$	2.27	$	2.07	$	5.08	$	4.55

Average number of shares outstanding:
– Basic	492		495		492		495
– Diluted	496		499		497		499
Shares outstanding at June 30,	492		494		492		494

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

MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
(In millions)	2024		2023		2024		2023
Net income before non-controlling interests	$	1,140	$	1,047	$	2,564	$	2,299
Other comprehensive (loss) income, before tax:
Foreign currency translation adjustments	(28)		223		(272)		342

Gain (loss) related to pension/post-retirement plans	18		(62)		68		(120)
Other comprehensive (loss) income before tax	(10)		161		(204)		222
Income tax expense (benefit) on other comprehensive loss	8		(18)		28		(37)
Other comprehensive (loss) income, net of tax	(18)		179		(232)		259
Comprehensive income	1,122		1,226		2,332		2,558
Less: comprehensive income attributable to non-controlling interest	15		12		39		29
Comprehensive income attributable to the Company	$	1,107	$	1,214	$	2,293	$	2,529

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

MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS


(In millions, except share data)	(Unaudited) June 30, 2024		December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents	$	1,653	$	3,358
Cash and cash equivalents held in a fiduciary capacity	11,497		10,794
Receivables
Commissions and fees	7,031		5,806
Advanced premiums and claims	119		103

Other	749		660
	7,899		6,569
Less-allowance for credit losses	(160)		(151)
Net receivables	7,739		6,418


Other current assets	1,133		1,178
Total current assets	22,022		21,748

Goodwill	17,516		17,231
Other intangible assets	2,638		2,630
Fixed assets (net of accumulated depreciation and amortization of $1,572 at June 30, 2024 and $1,562 at December 31, 2023)	879		882
Pension related assets	2,187		2,051
Right of use assets	1,468		1,541
Deferred tax assets	285		357
Other assets	1,596		1,590
	$	48,591	$	48,030

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

MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (Continued)


(In millions, except share data)	(Unaudited) June 30, 2024		December 31, 2023
LIABILITIES AND EQUITY
Current liabilities:
Short-term debt	$	1,267	$	1,619
Accounts payable and accrued liabilities	3,205		3,403
Accrued compensation and employee benefits	2,086		3,346

Current lease liabilities	304		312
Accrued income taxes	505		321

Fiduciary liabilities	11,497		10,794
Total current liabilities	18,864		19,795




Long-term debt	12,278		11,844
Pension, post-retirement and post-employment benefits	715		779
Long-term lease liabilities	1,586		1,661
Liabilities for errors and omissions	322		314
Other liabilities	1,261		1,267
Commitments and contingencies	—		—

Equity:
Preferred stock, $1 par value, authorized 6,000,000 shares, none issued	—		—
Common stock, $1 par value, authorized 1,600,000,000 shares, issued 560,641,640 shares at June 30, 2024 and December 31, 2023	561		561
Additional paid-in capital	1,197		1,242
Retained earnings	24,578		22,759
Accumulated other comprehensive loss	(5,527)		(5,295)
Non-controlling interests	198		179
	21,007		19,446
Less – treasury shares, at cost, 68,717,711 shares at June 30, 2024 and 68,635,498 shares at December 31, 2023	(7,442)		(7,076)
Total equity	13,565		12,370
	$	48,591	$	48,030

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

MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


For the Six Months Ended June 30,
(In millions)	2024		2023
Operating cash flows:
Net income before non-controlling interests	$	2,564	$	2,299
Adjustments to reconcile net income provided by operations:
Depreciation and amortization of fixed assets and capitalized software	186		175
Amortization of intangible assets	179		172

Non-cash lease expense	132		143
Adjustments and payments related to contingent consideration assets and liabilities	(75)		(23)



Net gain on investments	(2)		(5)
Net (gain) loss on disposition of assets	(20)		19
Share-based compensation expense	193		191

Changes in assets and liabilities:
Net receivables	(1,287)		(1,029)

Other assets	(62)		(108)

Accrued compensation and employee benefits	(1,226)		(1,101)
Provision for taxes, net of payments and refunds	214		245
Contributions to pension and other benefit plans in excess of current year credit	(182)		(164)
Other liabilities	(30)		10
Operating lease liabilities	(150)		(159)

Net cash provided by operations	434		665
Financing cash flows:
Purchase of treasury shares	(600)		(600)
Net proceeds from issuance of commercial paper	749		308


Borrowings from term-loan and credit facilities	—		200
Proceeds from issuance of debt	988		589
Repayments of debt	(1,609)		(8)


Purchase of non-controlling interests	—		(139)

Shares withheld for taxes on vested units – treasury shares	(173)		(141)
Issuance of common stock from treasury shares	167		120
Payments of deferred and contingent consideration for acquisitions	(81)		(185)
Receipts of contingent consideration for dispositions	1		2
Distributions of non-controlling interests	(21)		(10)
Dividends paid	(706)		(591)
Change in fiduciary liabilities	901		682
Net cash (used for) provided by financing activities	(384)		227
Investing cash flows:
Capital expenditures	(167)		(185)
Purchases of long term investments	(14)		(30)
Sales of long term investments	14		16


Dispositions	27		(17)
Acquisitions, net of cash and cash held in a fiduciary capacity acquired	(644)		(292)

Other, net	1		7
Net cash used for investing activities	(783)		(501)
Effect of exchange rate changes on cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity	(269)		242
(Decrease)/increase in cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity	(1,002)		633
Cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity at beginning of period	14,152		12,102
Cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity at end of period	$	13,150	$	12,735


Reconciliation of cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity to the Consolidated Balance Sheets
Balance at June 30,	2024		2023
(In millions)
Cash and cash equivalents	$	1,653	$	1,171
Cash and cash equivalents held in a fiduciary capacity	11,497		11,564
Total cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity	$	13,150	$	12,735

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

MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
(In millions, except per share data)	2024		2023		2024		2023
COMMON STOCK
Balance, beginning and end of period	$	561	$	561	$	561	$	561
ADDITIONAL PAID-IN CAPITAL
Balance, beginning of period	$	1,112	$	1,064	$	1,242	$	1,179
Change in accrued stock compensation costs	80		89		(125)		(101)
Issuance of shares under stock compensation plans and employee stock purchase plans	5		(9)		80		66
Purchase of non-controlling interest	—		(70)		—		(70)

Balance, end of period	$	1,197	$	1,074	$	1,197	$	1,074
RETAINED EARNINGS
Balance, beginning of period	$	23,456	$	20,949	$	22,759	$	20,301


Net income attributable to the Company	1,125		1,035		2,525		2,270
Dividend equivalents declared	(2)		(4)		(7)		(8)
Dividends declared	(1)		—		(699)		(583)
Balance, end of period	$	24,578	$	21,980	$	24,578	$	21,980
ACCUMULATED OTHER COMPREHENSIVE LOSS
Balance, beginning of period	$	(5,509)	$	(5,234)	$	(5,295)	$	(5,314)




Other comprehensive (loss) income, net of tax	(18)		179		(232)		259
Balance, end of period	$	(5,527)	$	(5,055)	$	(5,527)	$	(5,055)
TREASURY SHARES
Balance, beginning of period	$	(7,198)	$	(6,387)	$	(7,076)	$	(6,207)
Issuance of shares under stock compensation plans and employee stock purchase plans	56		88		234		208

Purchase of treasury shares	(300)		(300)		(600)		(600)
Balance, end of period	$	(7,442)	$	(6,599)	$	(7,442)	$	(6,599)
NON-CONTROLLING INTERESTS
Balance, beginning of period	$	200	$	243	$	179	$	229
Net income attributable to non-controlling interests	15		12		39		29

Net non-controlling interests acquired	—		(69)		—		(69)
Distributions and other changes	(17)		(8)		(20)		(11)

Balance, end of period	$	198	$	178	$	198	$	178
TOTAL EQUITY	$	13,565	$	12,139	$	13,565	$	12,139
Dividends declared per share	$	—	$	—	$	1.42	$	1.18

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

MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Nature of Operations

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

The Risk and Insurance Services segment ("RIS") includes risk management activities (risk advice, risk transfer, and risk control and mitigation solutions) as well as insurance and reinsurance broking and services for businesses, public entities, insurance companies, associations, professional services organizations, and private clients. The Company conducts business in this segment through Marsh and Guy Carpenter. Marsh provides data-driven risk advisory services and insurance solutions to commercial and consumer clients. Guy Carpenter develops advanced risk, reinsurance and capital strategies that help clients grow profitably and pursue emerging opportunities.

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

2. Principles of Consolidation and Other Matters

The Company prepared the consolidated financial statements included herein pursuant to the rules and regulations of the Securities and Exchange Commission. For interim filings, certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (U.S.) have been omitted pursuant to such rules and regulations. The Company believes that the information and disclosures presented are adequate to make such information and disclosures not misleading. These consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 (the "2023 Form 10-K").

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

The financial information contained herein reflects all normal recurring adjustments which are, in the opinion of management, necessary for a fair presentation of the Company’s consolidated financial statements as of and for the six months ended June 30, 2024 and 2023.

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

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

Such matters include:

•estimates of revenue;

•impairment assessments and charges;

•recoverability of long-lived assets;

•liabilities for errors and omissions;

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

•share-based and incentive compensation expense;

•the allowance for current expected credit losses on receivables;

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

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

The Company believes these estimates are reasonable based on information currently available at the time they are made. The Company also considered the potential impact of macroeconomic factors including from the multiple major wars, escalating conflict throughout the Middle East and rising tension in the South China Sea, slower GDP growth or recession, lower interest rates, capital markets volatility, inflation and changes in insurance premium rates to its customer base in various industries and geographies. Insurance exposures subject to variable factors are subject to mid-term and end-of-term adjustments, as well as policy audits, which may reduce premiums and corresponding commissions. Estimates were updated based on internal and industry specific economic data. Actual results may differ from these estimates.

Cash and Cash Equivalents

Cash and cash equivalents primarily consist of certificates of deposit and time deposits, with original maturities of three months or less, and money market funds. The estimated fair value of the Company's cash and cash equivalents approximates their carrying value. The Company is required to maintain operating funds primarily related to regulatory requirements outside of the U.S. or as collateral under captive insurance arrangements. At June 30, 2024, the Company maintained $505 million compared to $486 million at December 31, 2023 related to these regulatory requirements.

Allowance for Credit Losses on Accounts Receivable

The Company’s policy for providing an allowance for credit losses on its accounts receivable is based on a combination of factors, including historical write-offs, aging of balances, and other qualitative and quantitative analyses. The charge related to expected credit losses was not material to the consolidated statements of income for the three and six months ended June 30, 2024 and 2023, respectively.

Investments

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

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

The Company recorded net investment income of $1 million and $2 million for the three and six months ended June 30, 2024, respectively, compared to net investment income of $3 million and $5 million, respectively, for the corresponding periods in the prior year.

Income Taxes

The Company's effective tax rate for the three months ended June 30, 2024 was 27.1%, compared with 24.4% for the corresponding quarter of 2023. The effective tax rates for the six months ended June 30, 2024 and 2023 were 25.4% and 24.6%, respectively.

The tax rate in each period reflects the impact of discrete tax items such as excess tax benefits related to share-based compensation, enacted tax legislation, changes in uncertain tax positions, deferred tax adjustments, non-taxable adjustments related to contingent consideration for acquisitions, and valuation allowances for certain tax credits and attributes. The rate for the three and six months ended June 30, 2024 reflects the previously enacted change in the United Kingdom (U.K.) corporate income tax rate from 19% to 25%, which was effective April 1, 2023. The blended U.K. statutory tax rate for 2023 was 23.5%.

The excess tax benefit related to share-based payments is the most significant discrete item in both periods, reducing the effective tax rate by 0.7% and 1.2% for the three months ended June 30, 2024 and 2023,

respectively, and by 1.6% and 1.3% for the six months periods ended June 30, 2024 and 2023, respectively.

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

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

The Company reports a liability for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in tax returns. The Company's gross unrecognized tax benefits were $119 million at June 30, 2024, and $124 million at December 31, 2023. It is reasonably possible that the total amount of unrecognized tax benefits could decrease up to approximately $66 million within the next twelve months due to settlement of audits and expirations of statutes of limitations.

Changes in tax laws, rulings, policies, or related legal and regulatory interpretations occur frequently and may have significant favorable or adverse impacts on our effective tax rate. In 2021, the Organization for Economic Cooperation and Development ("OECD") released model rules for a 15% global minimum tax, known as Pillar Two. Pillar Two has now been enacted by approximately 35 countries, including the U.K. and Ireland. This minimum tax is treated as a period cost beginning in 2024 and does not have a material impact on the Company's financial results of operations for the current period. The Company is monitoring legislative developments, as well as additional guidance from countries that have enacted legislation. We anticipate further legislative activity and administrative guidance in 2024.

Restructuring Costs

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

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

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

Foreign Currency

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

3. Revenue

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

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

Other revenue included in the consolidated statements of income that is not from contracts with customers is less than 1% of total revenue and is not presented as a separate line item.

The Company's revenue policies are provided in more detail in Note 2, Revenue, in the 2023 Form 10-K.

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


	Three Months Ended June 30,				Six Months Ended June 30,
(In millions)	2024		2023		2024		2023
Marsh:
EMEA	$	912	$	858	$	1,937	$	1,790
Asia Pacific	391		357		727		669
Latin America	137		137		262		252
Total International	1,440		1,352		2,926		2,711
U.S./Canada	1,825		1,686		3,342		3,071
Total Marsh	3,265		3,038		6,268		5,782
Guy Carpenter	632		576		1,780		1,647
Subtotal	3,897		3,614		8,048		7,429
Fiduciary interest income	125		108		247		199
Total Risk and Insurance Services	$	4,022	$	3,722	$	8,295	$	7,628

Mercer:


Wealth	$	612	$	637	$	1,284	$	1,218
Health	547		518		1,085		1,063
Career	220		219		435		437
Total Mercer	1,379		1,374		2,804		2,718
Oliver Wyman Group	837		798		1,626		1,485
Total Consulting	$	2,216	$	2,172	$	4,430	$	4,203

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


(In millions)	June 30, 2024		December 31, 2023
Contract assets	$	430	$	357
Contract liabilities	$	885	$	869

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

Contract assets are included in other current assets in the Company's consolidated balance sheets. Contract liabilities primarily relate to the advance consideration received from customers. Contract liabilities are included in current liabilities in the Company's consolidated balance sheets. Revenue recognized for the three and six months ended June 30, 2024 that was included in the contract liability balance at the beginning of each of those periods was $266 million and $581 million, respectively, compared to revenue recognized of $218 million and $511 million, respectively, for the corresponding periods in the prior year.

The amount of revenue recognized for the three and six months ended June 30, 2024 from performance obligations satisfied in previous periods, mainly due to variable consideration from contracts with insurers, quota share business and consulting contracts previously considered constrained was $29 million and $43 million, respectively, and $27 million and $44 million, respectively, for the corresponding periods in the prior year.

The Company applies the practical expedient and does not disclose the value of unsatisfied performance obligations for (1) contracts with original contract terms of one year or less and (2) contracts where the Company has the right to invoice for services performed.

4. Fiduciary Assets and Liabilities

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

Risk and Insurance Services revenue includes interest on fiduciary assets of $125 million and $247 million for the three and six months ended June 30, 2024, respectively, and $108 million and $199 million for the

three and six months ended June 30, 2023, respectively.

Net uncollected premiums and claims and the related payables were $16.9 billion at June 30, 2024, and $13.8 billion at December 31, 2023. The Company is not a principal to the contracts under which the right to receive premiums or the right to receive reimbursement of insured losses arises. Accordingly, net uncollected premiums and claims and the related payables are not assets and liabilities of the Company and are not included in the accompanying consolidated balance sheets. In certain instances, the Company advances premiums, refunds or claims to insurance underwriters or insureds prior to collection. These advances are made from corporate funds and are reflected in the accompanying consolidated balance sheets as receivables.

5. Per Share Data

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

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


Basic and Diluted EPS Calculation	Three Months Ended June 30,				Six Months Ended June 30,
(In millions, except per share data)	2024		2023		2024		2023
Net income before non-controlling interests	$	1,140	$	1,047	$	2,564	$	2,299
Less: Net income attributable to non-controlling interests	15		12		39		29
Net income attributable to the Company	$	1,125	$	1,035	$	2,525	$	2,270
Basic weighted average common shares outstanding	492		495		492		495
Dilutive effect of potentially issuable common shares	4		4		5		4
Diluted weighted average common shares outstanding	496		499		497		499
Average stock price used to calculate common stock equivalents	$	205.67	$	177.33	$	202.53	$	172.13

6. Supplemental Disclosures to the Consolidated Statements of Cash Flows

The following table provides additional information concerning acquisitions, interest and income taxes paid for the six months ended June 30, 2024 and 2023:


(In millions)	2024		2023
Assets acquired, excluding cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity	$	721	$	364

Fiduciary liabilities assumed	(5)		(1)
Liabilities assumed	(18)		(63)


Contingent/deferred purchase consideration	(54)		(8)
Net cash outflow for acquisitions	$	644	$	292


(In millions)	2024		2023
Interest paid	$	295	$	245
Income taxes paid, net of refunds	$	658	$	504

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

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


For the Six Months Ended June 30,
(In millions)	2024		2023
Operating:
Contingent consideration payments for prior year acquisitions	$	(90)	$	(41)
Receipt of contingent consideration for dispositions	—		1
Acquisition/disposition related net charges for adjustments	15		17


Adjustments and payments related to contingent consideration	$	(75)	$	(23)
Financing:
Contingent consideration for prior year acquisitions	$	(71)	$	(134)
Deferred consideration related to prior year acquisitions	(10)		(51)
Payments of deferred and contingent consideration for acquisitions	$	(81)	$	(185)

Receipts of contingent consideration for dispositions	$	1	$	2

The Company had non-cash issuances of common stock in accordance with its share-based payment plan of $321 million and $296 million for the six months ended June 30, 2024 and 2023, respectively.

The Company recorded share-based compensation expense related to restricted stock units, performance stock units and stock options of $90 million and $193 million for the three and six months ended June 30, 2024, respectively, and $92 million and $191 million for the three and six months ended June 30, 2023, respectively.

7. Other Comprehensive (Loss) Income

The changes, net of tax, in the balances of each component of AOCI for the three and six months ended June 30, 2024 and 2023, including amounts reclassified out of AOCI, are as follows:


(In millions)	Pension/Post-Retirement Plans Gains (Losses)		Foreign Currency Translation Adjustments		Total
Balance at April 1, 2024	$	(3,064)	$	(2,445)	$	(5,509)
Other comprehensive income (loss) before reclassifications	9		(32)		(23)
Amounts reclassified from accumulated other comprehensive income	5		—		5
Net current period other comprehensive income (loss)	14		(32)		(18)
Balance at June 30, 2024 (a)	$	(3,050)	$	(2,477)	$	(5,527)


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

(a)At June 30, 2024 and 2023, balances are net of deferred tax assets in pension and post-retirement plans gains (losses) of $1.5 billion and $1.4 billion, respectively.


(In millions)	Pension/Post-Retirement Plans Gains (Losses)		Foreign Currency Translation Adjustments		Total
Balance at January 1, 2024	$	(3,101)	$	(2,194)	$	(5,295)
Other comprehensive income (loss) before reclassifications	42		(283)		(241)
Amounts reclassified from accumulated other comprehensive income	9		—		9
Net current period other comprehensive income (loss)	51		(283)		(232)
Balance at June 30, 2024 (a)	$	(3,050)	$	(2,477)	$	(5,527)


(In millions)	Pension/Post-Retirement Plans Gains (Losses)		Foreign Currency Translation Adjustments		Total
Balance at January 1, 2023	$	(2,721)	$	(2,593)	$	(5,314)
Other comprehensive (loss) income before reclassifications	(96)		349		253
Amounts reclassified from accumulated other comprehensive income	6		—		6
Net current period other comprehensive (loss) income	(90)		349		259
Balance at June 30, 2023 (a)	$	(2,811)	$	(2,244)	$	(5,055)

(a)At June 30, 2024 and 2023, balances are net of deferred tax assets in pension and post-retirement plans gains (losses) of $1.5 billion and $1.4 billion, respectively.

The components of other comprehensive (loss) income for the three and six months ended June 30, 2024 and 2023 are as follows:


Three Months Ended June 30,	2024						2023
(In millions)	Pre-Tax		Tax		Net of Tax		Pre-Tax		Tax (Credit)		Net of Tax
Foreign currency translation adjustments	$	(28)	$	4	$	(32)	$	223	$	(1)	$	224

Pension/post-retirement plans:
Amortization of (gains) losses included in net benefit (credit) cost:
Prior service credits (a)	(1)		—		(1)		(1)		—		(1)
Net actuarial losses (a)	7		1		6		5		1		4
Subtotal	6		1		5		4		1		3
Foreign currency translation adjustments	12		3		9		(59)		(16)		(43)





Other adjustments	—		—		—		(7)		(2)		(5)
Pension/post-retirement plans gains (losses)	18		4		14		(62)		(17)		(45)
Other comprehensive (loss) income	$	(10)	$	8	$	(18)	$	161	$	(18)	$	179

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


Six Months Ended June 30,	2024						2023
(In millions)	Pre-Tax		Tax		Net of Tax		Pre-Tax		Tax (Credit)		Net of Tax
Foreign currency translation adjustments	$	(272)	$	11	$	(283)	$	342	$	(7)	$	349

Pension/post-retirement plans:
Amortization of (gains) losses included in net benefit (credit) cost:
Prior service credits (a)	(1)		—		(1)		(1)		—		(1)
Net actuarial losses (a)	13		3		10		10		3		7
Subtotal	12		3		9		9		3		6
Foreign currency translation adjustments	56		14		42		(122)		(31)		(91)





Other adjustments	—		—		—		(7)		(2)		(5)
Pension/post-retirement plans gains (losses)	68		17		51		(120)		(30)		(90)
Other comprehensive (loss) income	$	(204)	$	28	$	(232)	$	222	$	(37)	$	259

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

8. Acquisitions and Dispositions

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

The Risk and Insurance Services segment completed 5 acquisitions for the six months ended June 30, 2024:

•January – Marsh acquired NOSCO Insurance Service Company Ltd., a Japan-based insurance broker that provides affinity type schemes, corporate and personal lines insurance.

•March – Marsh & McLennan Agency ("MMA") acquired Louisiana-based insurance brokers, Querbes & Nelson ("Q&N") and Louisiana Companies. Q&N offers business insurance, employee benefits, and alternative risk financing consulting to a variety of businesses with specific expertise in energy services, commercial contractors, and transportation. Louisiana Companies provides business and personal lines insurance to businesses and individuals with specific expertise in the construction, manufacturing, distributor, healthcare, and hospitality industries.

•May – MMA acquired AC Risk Management, a New York-based commercial lines insurance broker primarily offering property and casualty insurance to businesses with a focus on the construction industry; Perkins Insurance Agencies LLC, a Texas-based insurance broker providing commercial property and casualty and personal lines coverage to businesses, non-profits and families with expertise in the oil and gas, trucking, farm and ranch and restaurant industries; and Fisher Brown Bottrell Insurance, Inc., a Mississippi-based insurance broker providing commercial property and casualty insurance, surety and employee benefits services to businesses and individuals.

The Consulting segment completed 4 acquisitions for the six months ended June 30, 2024:

•February – Oliver Wyman Group acquired SeaTec Consulting Inc., a Georgia-based firm that provides consulting, engineering, and digital expertise across the aviation, aerospace and defense, and transportation industries.

•March – Mercer acquired Vanguard's Institutional Advisory Services business unit ("Vanguard"), a Pennsylvania-based outsourced chief investment officer ("OCIO") business, that provides investment management services for not-for-profit organizations and other institutional investors in the U.S. Mercer also acquired The Talent Enterprise, a United Arab Emirates-based psychometric and talent assessment technology company, that provides talent assessment tools and talent capability development solutions. Oliver Wyman Group acquired Innopay NL B.V., a Netherlands-based consultancy firm that delivers strategy, scheme development, and execution in the domain of digital payments, open finance, digital identity and data sharing.

Total purchase consideration for acquisitions made for the six months ended June 30, 2024 was $716 million, which consisted of cash paid of $662 million and deferred and estimated contingent purchase consideration of $54 million. Contingent purchase consideration arrangements are generally based on earnings before interest, tax, depreciation and amortization ("EBITDA") or revenue targets over a period of 2 to 4 years. The fair value of contingent purchase consideration was based on projected revenue and earnings of the acquired entities.

For the six months ended June 30, 2024, the Company also paid $10 million of deferred purchase consideration and $161 million of contingent purchase consideration related to prior year acquisitions. Estimated fair values of assets acquired and liabilities assumed are subject to adjustment until purchase accounting is finalized.

The following table presents the preliminary allocation of purchase consideration to the assets acquired and liabilities assumed in 2024, based on the estimated fair values for the acquisitions as of their respective acquisition dates. Amounts in the table primarily reflect the impact of the Fisher Brown Bottrell Insurance, Inc. and Vanguard acquisitions.


Acquisitions through June 30, 2024
(In millions)
Cash	$	662
Estimated fair value of deferred/contingent purchase consideration	54

Total consideration	$	716
Allocation of purchase price:
Cash and cash equivalents	$	13
Cash and cash equivalents held in a fiduciary capacity	5
Net receivables	49
Other current assets	22
Goodwill	430
Other intangible assets	215
Fixed assets, net	3



Other assets	2
Total assets acquired	739
Current liabilities	9
Fiduciary liabilities	5





Other liabilities	9
Total liabilities assumed	23

Net assets acquired	$	716

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

Items subject to change include:

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

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

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

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

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

The following table provides information about other intangible assets acquired in 2024:

Other intangible assets through June 30, 2024

(In millions)

Amount

Weighted Average Amortization Period

Client relationships

205

11.8 years

Other

2.8 years

Total other intangible assets

215

The consolidated statements of income include the results of operations of acquired companies since their respective acquisition dates. The consolidated statements of income for the three and six months ended June 30, 2024 include revenue of approximately $48 million and $62 million, respectively, and operating income of $3 million and operating loss of $3 million, respectively, for acquisitions made in 2024. The consolidated statements of income for both the three and six months ended June 30, 2023 include revenue of approximately $41 million and operating income of $9 million for acquisitions made in 2023.

The Company incurred approximately $21 million and $29 million of acquisition related expenses for the three and six months ended June 30, 2024, respectively. For the three and six months ended June 30, 2023, the Company incurred integration costs of $10 million and $27 million, respectively, for the acquisition of Westpac Banking Corporation's ("Westpac") financial advisory business, Advance Asset Management, and the transfer from Westpac of BT Financial Group's personal corporate pension funds to the Mercer Super Trust managed by Mercer Australia (referred to collectively, as the "Westpac Transaction"). These expenses related primarily to technology, consulting, legal and people related costs. Acquisition and integration costs are included in other operating expenses in the Company's consolidated statements of income.

Dispositions

On January 1, 2024, the Company sold its Mercer U.K. pension administration and U.S. health and benefits administration businesses for approximately $114 million and recorded a net gain of $21 million, which is included in revenue in the consolidated statements of income.

As part of the disposition of the businesses, the Company incurred exit costs of $18 million in the first quarter of 2024. These costs are included in expenses in the Company's consolidated statements of income.

Prior year acquisitions

The Risk and Insurance Services segment completed 9 acquisitions in 2023:

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

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

•July – MMA acquired Integrity HR, Inc., a Kentucky-based human resources consulting firm and Trideo Systems, an Illinois-based risk management information systems provider for health care organizations, and Marsh acquired Asprose Corredora de Seguros, a Costa Rica-based insurance broker that provides insurance brokerage and risk advisory services to commercial organizations.

•August – MMA acquired Graham Company, a Pennsylvania-based risk management consultancy and insurance and employee benefits broker, specializing in construction, real estate, manufacturing and distribution, health and human services and professional services.

•September – MMA acquired Blue Water Insurance LLC, a Kentucky-based employee health and benefits insurance broker.

•November – Marsh acquired HIG Australia Holdco Pty Ltd ("Honan Insurance Group"), an Australia-based insurance broker in the areas of corporate risk, employee benefits, and strata and real estate insurance.

The Consulting segment completed 5 acquisitions in 2023:

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

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

•July – Oliver Wyman Group acquired the actuarial consulting business of ISC Strategies Consulting, Inc., a Florida-based life insurance and actuarial consulting firm.

•October – Mercer acquired BT Financial Group's Private Portfolio Management, an Australia-based wealth management business that provides investment solutions to not-for-profit organizations, high-net worth clients and their financial advisers.

Total purchase consideration for acquisitions made for the six months ended June 30, 2023 was $340 million, which consisted of cash paid of $332 million and deferred and estimated contingent purchase consideration of $8 million. Contingent purchase consideration arrangements are generally based primarily on EBITDA or revenue targets over a period of 2 to 4 years.

For the first six months of 2023, the Company also paid $51 million of deferred purchase consideration and $175 million of contingent purchase consideration related to acquisitions made in prior years. Estimated fair values of assets acquired and liabilities assumed are subject to adjustment when purchase accounting is finalized.

Prior year dispositions

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

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

Purchase of remaining non-controlling interest

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

Pro-Forma Information

The following unaudited pro-forma financial data gives effect to the acquisitions made by the Company in 2024 and 2023. In accordance with accounting guidance related to pro-forma disclosures, the information presented for acquisitions made in 2024 is as if they occurred on January 1, 2023, and reflects acquisitions made in 2023, as if they occurred on January 1, 2022.

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


	Three Months Ended June 30,				Six Months Ended June 30,
(In millions, except per share data)	2024		2023		2024		2023
Revenue	$	6,234	$	5,989	$	12,756	$	12,060

Net income attributable to the Company	$	1,135	$	1,065	$	2,546	$	2,317

Basic net income per share attributable to the Company	$	2.31	$	2.15	$	5.17	$	4.68


Diluted net income per share attributable to the Company	$	2.29	$	2.13	$	5.13	$	4.64

9. Goodwill and Other Intangibles

The Company is required to assess goodwill and any indefinite-lived intangible assets for impairment annually, or more frequently if circumstances indicate an impairment may have occurred. The Company performs the annual impairment assessment for each of its reporting units during the third quarter of each year. The reporting unit level is defined as the same level as the Company's operating segments. In accordance with applicable accounting guidance, a company can assess qualitative factors to determine whether it is necessary to perform a quantitative goodwill impairment test. Alternatively, the Company may elect to proceed directly to the quantitative goodwill impairment test.

In 2023, the Company performed a quantitative goodwill impairment assessment. Fair values for the reporting units were estimated using both an income and market valuation approach. The carrying values were based on balances at June 30, 2023 and included directly identified assets and liabilities, as well as an allocation of those assets and liabilities not recorded at the reporting unit level. The Company concluded that goodwill was not impaired, as the fair value of each reporting unit exceeded the carrying value.

Other intangible assets that are not deemed to have an indefinite life are amortized over their estimated lives and assessed for impairment upon the occurrence of certain triggering events in accordance with applicable accounting literature. Based on its assessment, the Company concluded that other intangible assets were not impaired. The Company had no indefinite lived intangible assets at June 30, 2024 and December 31, 2023.

Changes in the carrying amount of goodwill are as follows:



(In millions)	2024		2023
Balance at January 1,	$	17,231	$	16,251
Goodwill acquired	430		236
Other adjustments (a)	(145)		134
Balance at June 30,	$	17,516	$	16,621

(a) Primarily reflects the impact of foreign exchange.

The goodwill from acquisitions in 2024 and 2023 consists largely of the synergies and economies of scale expected from combining the operations of the Company and the acquired entities and the trained and assembled workforce acquired.

The goodwill acquired in 2024 included approximately $254 million and $81 million in the Risk and Insurance Services and Consulting segments, respectively, which is deductible for tax purposes.

Goodwill allocated to the Company’s reportable segments at June 30, 2024 is $13.4 billion for Risk and Insurance Services and $4.1 billion for Consulting.

The gross cost and accumulated amortization of other identified intangible assets at June 30, 2024 and December 31, 2023 are as follows: