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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 March 31, 2022
OR
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.
mmc-20220331_g1.jpg
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 classTrading symbol(s)Name of exchange on which registered
Common Stock, par value $1.00 per shareMMCNew York Stock Exchange
Chicago Stock Exchange
London 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 and posted on its corporate Website, if any, 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 FilerAccelerated 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 April 18, 2022, there were outstanding 501,913,724 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 conflicts such as the war in Ukraine, capital markets volatility and inflation;
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 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 in light of increased trading volume;
the financial and operational impact of complying with laws and regulations, including domestic and international sanctions regimes, anti-corruption laws such as the U.S. Foreign Corrupt Practices Act, U.K. Anti Bribery Act and cybersecurity and data privacy regulations;
our ability to attract, retain and develop industry leading talent;
our ability to compete effectively and adapt to competitive pressures in each of our businesses, including from disintermediation as well as technological change, digital disruption and other types of innovation;
our ability to manage potential conflicts of interest that may arise across our businesses given our expanding client base, the broad scope of our work and the significant volume of our engagements;
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 (collectively, the "Company") operate in a dynamic business environment in which new risks emerge frequently. Accordingly, we caution readers not to place undue reliance on any forward-looking statements, which are based only on information currently available to us and speak only as of the dates on which they are made. The Company undertakes no obligation to update or revise any forward-looking statement to reflect events or circumstances arising after the date on which it is made.
Further information concerning Marsh McLennan and its businesses, including information about factors that could materially affect our results of operations and financial condition, is contained in the Company's filings with the Securities and Exchange Commission, including the "Risk Factors" section and the "Management’s Discussion and Analysis of Financial Condition and Results of Operations" section of this Quarterly Report on Form 10-Q and our most recently filed Annual Report on Form 10-K.
2


TABLE OF CONTENTS
 

3


PART I.    FINANCIAL INFORMATION
Item 1.Financial Statements.
MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended
March 31,
(In millions, except per share data)20222021
Revenue$5,549 $5,083 
Expense:
Compensation and benefits3,100 2,807 
Other operating expenses1,004 918 
Operating expenses4,104 3,725 
Operating income1,445 1,358 
Other net benefit credits62 71 
Interest income1  
Interest expense(110)(118)
Investment income 26 11 
Income before income taxes1,424 1,322 
Income tax expense338 324 
Net income before non-controlling interests1,086 998 
Less: Net income attributable to non-controlling interests15 15 
Net income attributable to the Company$1,071 $983 
Net income per share attributable to the Company:
- Basic$2.13 $1.93 
- Diluted$2.10 $1.91 
Average number of shares outstanding:
- Basic503 509 
- Diluted509 514 
Shares outstanding at March 31,502 509 
The accompanying notes are an integral part of these unaudited consolidated statements.
4


MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
Three Months Ended
March 31,
(In millions)
20222021
Net income before non-controlling interests$1,086 $998 
Other comprehensive (loss) income, before tax:
Foreign currency translation adjustments(169)(91)
Gain related to pension/post-retirement plans86 6 
Other comprehensive loss, before tax(83)(85)
Income tax expense on other comprehensive income21 2 
Other comprehensive loss, net of tax(104)(87)
Comprehensive income 982 911 
Less: comprehensive income attributable to non-controlling interest15 15 
Comprehensive income attributable to the Company$967 $896 
The accompanying notes are an integral part of these unaudited consolidated statements.
5


MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In millions, except share data)(Unaudited)
March 31,
2022
December 31,
2021
ASSETS
Current assets:
Cash and cash equivalents$772 $1,752 
Receivables
Commissions and fees5,503 5,093 
Advanced premiums and claims139 136 
Other494 523 
6,136 5,752 
Less-allowance for credit losses(173)(166)
Net receivables5,963 5,586 
Other current assets1,053 926 
Total current assets7,788 8,264 
Goodwill16,254 16,317 
Other intangible assets2,720 2,810 
Fixed assets (net of accumulated depreciation and amortization of $1,679 at March 31, 2022 and $1,589 at December 31, 2021)
865 847 
Pension related assets2,246 2,270 
Right of use assets1,825 1,868 
Deferred tax assets530 551 
Other assets1,460 1,461 
 $33,688 $34,388 
 The accompanying notes are an integral part of these unaudited consolidated statements.
6


MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (Continued)
(In millions, except share data)(Unaudited)
March 31,
2022
December 31,
2021
LIABILITIES AND EQUITY
Current liabilities:
Short-term debt$1,191 $17 
Accounts payable and accrued liabilities3,084 3,165 
Accrued compensation and employee benefits1,400 2,942 
Current lease liabilities331 332 
Accrued income taxes308 198 
Dividends payable273  
Total current liabilities6,587 6,654 
Fiduciary liabilities10,461 9,622 
Less – cash and cash equivalents held in a fiduciary capacity(10,461)(9,622)
  
Long-term debt10,552 10,933 
Pension, post-retirement and post-employment benefits1,515 1,632 
Long-term lease liabilities1,831 1,880 
Liabilities for errors and omissions352 355 
Other liabilities1,695 1,712 
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 March 31, 2022 and December 31, 2021
561 561 
Additional paid-in capital1,026 1,112 
Retained earnings18,916 18,389 
Accumulated other comprehensive loss(4,679)(4,575)
Non-controlling interests219 213 
16,043 15,700 
Less – treasury shares, at cost, 58,524,983 shares at March 31, 2022
and 57,105,619 shares at December 31, 2021
(4,887)(4,478)
Total equity11,156 11,222 
 $33,688 $34,388 
The accompanying notes are an integral part of these unaudited consolidated statements.
7


MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES                        
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
For the Three Months Ended March 31,
(In millions)
20222021
Operating cash flows:
Net income before non-controlling interests$1,086 $998 
Adjustments to reconcile net income used for operations:
Depreciation and amortization of fixed assets and capitalized software89 97 
Amortization of intangible assets91 100 
Non cash lease expense77 79 
Adjustments and payments related to contingent consideration assets and liabilities10 (1)
Deconsolidation of Russian businesses39  
Net gain on investments(26)(11)
Net (gain) loss on disposition of assets(1)3 
Share-based compensation expense105 78 
Changes in assets and liabilities:
Net receivables(429)(404)
Other assets(117)(116)
Accrued compensation and employee benefits(1,528)(1,167)
Provision for taxes, net of payments and refunds144 198 
Contributions to pension and other benefit plans in excess of current year credit(125)(102)
Other liabilities(33)(78)
Operating lease liabilities(84)(82)
Net cash used for operations(702)(408)
Financing cash flows:
Purchase of treasury shares(500)(112)
Net proceeds from issuance of commercial paper825  
Repayments of debt(4)(4)
Shares withheld for taxes on vested units – treasury shares(134)(93)
Issuance of common stock from treasury shares34 35 
Payments of deferred and contingent consideration for acquisitions(16)(32)
Receipts of contingent consideration for dispositions3  
Distributions of non-controlling interests(7)(8)
Dividends paid(272)(237)
Change in fiduciary liabilities926 190 
Net cash provided by (used for) financing activities855 (261)
Investing cash flows:
Capital expenditures(122)(69)
Net (purchases) sale of long term investments(8)4 
Dispositions(4) 
Acquisitions(24) 
Other, net(1)(2)
Net cash used for investing activities(159)(67)
Effect of exchange rate changes on cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity(136)(36)
Decrease in cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity(142)(772)
Cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity at beginning of period11,375 10,674 
Cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity at end of period$11,233 $9,902 
Reconciliation of cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity to the Consolidated Balance Sheets
Three Months Ended March 31,20222021
(In millions)
Cash and cash equivalents$772 $1,120 
Cash and cash equivalents held in a fiduciary capacity 10,461 8,782 
Total cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity$11,233 $9,902 
The accompanying notes are an integral part of these unaudited consolidated statements.
8


MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EQUITY
(Unaudited)
Three Months Ended
March 31,
(In millions, except per share data)
20222021
COMMON STOCK
Balance, beginning and end of period$561 $561 
ADDITIONAL PAID-IN CAPITAL
Balance, beginning of period$1,112 $943 
Change in accrued stock compensation costs(145)(133)
Issuance of shares under stock compensation plans and employee stock purchase plans59 41 
Balance, end of period$1,026 $851 
RETAINED EARNINGS
Balance, beginning of period$18,389 $16,272 
Net income attributable to the Company1,071 983 
Dividend equivalents declared(4)(3)
Dividends declared (540)(472)
Balance, end of period$18,916 $16,780 
ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME
Balance, beginning of period$(4,575)$(5,110)
Other comprehensive (loss) income, net of tax(104)(87)
Balance, end of period$(4,679)$(5,197)
TREASURY SHARES
Balance, beginning of period$(4,478)$(3,562)
Issuance of shares under stock compensation plans and employee stock purchase plans91 113 
Purchase of treasury shares(500)(112)
Balance, end of period$(4,887)$(3,561)
NON-CONTROLLING INTERESTS
Balance, beginning of period$213 $156 
Net income attributable to non-controlling interests15 15 
Distributions and other changes(9)(9)
Balance, end of period$219 $162 
TOTAL EQUITY$11,156 $9,596 
Dividends declared per share$1.07 $0.93 
The accompanying notes are an integral part of these unaudited consolidated statements.
9


MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1.     Nature of Operations
Marsh & McLennan Companies, Inc. (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") provides risk management solutions (risk advice, risk transfer and risk control and mitigation) 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 solutions to commercial and consumer clients. Guy Carpenter develops advanced risk, reinsurance and capital strategies that help clients grow profitably and identify and capitalize on emerging opportunities.
The Company conducts business in its Consulting segment through Mercer and Oliver Wyman Group. Mercer delivers advice and solutions that help organizations create a dynamic world of work, shape retirement and investment outcomes, and unlock health and well being for a changing workforce. Oliver Wyman Group serves as critical strategic, economic and brand advisor to private sector and governmental clients.
Deconsolidation of Russia
On February 24, 2022, Russian forces launched a military invasion of Ukraine. In response, the United States, the European Union, United Kingdom and other governments have imposed significant economic sanctions on Russia, and Russia has responded with counter-sanctions. The war in Ukraine has disrupted international commerce and the global economy.
On March 10, 2022, the Company announced it would exit its businesses in Russia and transfer ownership of its Russian businesses to local management who will operate independently in the Russian market.
In the first quarter of 2022, the Company concluded that it does not meet the accounting criteria for control over its wholly-owned Russian businesses due to the evolving trade and economic sanctions against Russia and related Russian counter-sanctions. These sanctions include restrictions on payments to and from Russian companies and reduced currency access through official exchange markets that have significantly impacted the Company's ability to effectively manage and operate its Russian businesses. For the three months ended March 31, 2022, the Company recorded a loss of $52 million on the deconsolidation of the Russian businesses and other related charges. Refer to Note 8, Acquisitions and Dispositions, for additional information on the deconsolidation of the Russian businesses.
The Company continues to monitor the ongoing situation and its potential impact on our business, financial condition, results of operations and cash flows.
Business Update Related To COVID-19
For over two years, the COVID-19 pandemic has impacted businesses globally including in every geography in which the Company operates. Our businesses have remained resilient throughout the pandemic and demand for our advice and services remains strong.
The Company had strong revenue growth the first three months of 2022. However, uncertainty remains in the economic outlook, and the ultimate extent of the impact of COVID-19 to the Company will depend on future developments that it is unable to predict, including new "waves" of infection from emerging variants of the virus and potential renewed restrictions and mandates by various governments or agencies.
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 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, 2021 (the "2021 Form 10-K").
10


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 three months ended March 31, 2022 and 2021.
Estimates: 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 COVID-19 and the war in Ukraine 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. The ultimate extent to which COVID-19 will directly or indirectly impact the Company’s businesses, results of operations and financial condition will depend on numerous evolving factors and future developments that it is not able to predict. 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 United States or as collateral under captive insurance arrangements. At March 31, 2022, the Company maintained $304 million compared to $303 million at December 31, 2021 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 immaterial to the consolidated statements of income for the three months ended March 31, 2022 and 2021,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 using the equity method of accounting are included in "other assets" in the consolidated balance sheets.
11


The Company recorded investment income of $26 million for the three months ended March 31, 2022 compared to investment income of $11 million for the same period last year. The increase in 2022 is primarily driven by higher mark to market gains in the Company's private equity investments and its investment in Alexander Forbes ("AF").
Income Taxes
The Company's effective tax rate in the first quarter of 2022 was 23.7% compared with 24.5% in the first quarter of 2021.
The tax rates in both periods reflect the impact of discrete tax matters such as excess tax benefits related to share-based compensation, enacted tax legislation, changes in uncertain tax positions, deferred tax adjustments and nontaxable adjustments to contingent acquisition consideration.
The excess tax benefit related to share-based payments is the most significant discrete item, as it normally is in the first quarter because that is when most share-based compensation vests, reducing the effective tax rate by 1.8% and 1.1% in the first quarters of 2022 and 2021, respectively. The rate in the first quarter of 2022 also reflects tax benefits from planning implemented in the period that postponed the utilization of current year losses in the U.K. to a future year when the tax rate will be 25%.
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 limitation.
Changes in tax laws or tax rulings may have a significant impact on our effective tax rate. 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 was $94 million at March 31, 2022 and December 31, 2021. It is reasonably possible that the total amount of unrecognized tax benefits will decrease between zero and approximately $49 million within the next twelve months due to settlements of audits and expirations of statutes of limitation.
Integration and Restructuring Charges
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 Right-of-use ("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 integration and 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.
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.
12


In accordance with 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 2% of total revenue, and therefore, is not presented as a separate line item.
The Company's revenue recognition guidance is provided in more detail in Note 2, Revenue, in the Form 10-K for the year ended December 31, 2021.
The following table disaggregates components of the Company's revenue:
Three Months Ended
March 31,
(In millions)20222021
Marsh:
EMEA$842 $837 
Asia Pacific321 274 
Latin America104 90 
Total International1,267 1,201 
U.S./Canada1,279 1,124 
Total Marsh2,546 2,325 
Guy Carpenter999 895 
 Subtotal3,545 3,220 
Fiduciary interest income4 5 
Total Risk and Insurance Services$3,549 $3,225 
Mercer:
Wealth$617 $623 
Health524 487 
Career202 178 
Total Mercer1,343 1,288 
Oliver Wyman Group667 585 
Total Consulting$2,010 $1,873 
The Company recognizes commission revenue for a significant portion of its brokerage arrangements at a point in time on the effective date of the underlying policy. Commission revenue is estimated using historical information about the risks to be covered over the policy period, some of which are dependent on variable factors such as number of employees covered, covered payroll, airline passenger miles flown, shipped tonnage of marine cargo and others.
The following table provides contract assets and contract liabilities information from contracts with customers:
(In millions)March 31, 2022December 31, 2021
Contract assets$357 $290 
Contract liabilities$824 $776 
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 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 in the first three months of 2022 and 2021 that was included in the contract liability balance at the beginning of each of those years was $280 million and $238 million, respectively.
13


The amount of revenue recognized in the first three months of 2022 and 2021 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 $24 million and $34 million, respectively.
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. The revenue expected to be recognized in future periods during the non-cancellable term of existing contracts greater than one year that is related to performance obligations that are unsatisfied or partially satisfied at the end of the reporting period is approximately $187 million, primarily related to Mercer. The Company expects revenue in 2023, 2024, 2025, 2026 and 2027 and beyond of $78 million, $61 million, $28 million, $12 million and $8 million, respectively, related to these performance obligations.
4.     Fiduciary Assets and Liabilities
In its capacity as an insurance broker or agent, generally the Company 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. Un-remitted 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, and are classified as cash and cash equivalents. Risk and Insurance Services revenue includes interest on fiduciary funds of $4 million and $5 million for the three months ended March 31, 2022 and 2021, respectively. Since cash and cash equivalents held in a fiduciary capacity are not available for corporate use, they are shown in the consolidated balance sheets as an offset to fiduciary liabilities.
Net uncollected premiums and claims and the related payables amounted to $13.0 billion at March 31, 2022 and at December 31, 2021 respectively. 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.
The Company, through its Mercer subsidiary, manages assets in trusts or funds for which Mercer’s management or trustee fee is not considered a variable interest, since the fees are commensurate with the level of effort required to provide those services. Mercer is not the primary beneficiary of these trusts or funds. Mercer’s maximum exposure to loss of its interests is, therefore, limited to collection of its fees.
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 CalculationThree Months Ended
March 31,
(In millions, except per share data)20222021
Net income before non-controlling interests$1,086 $998 
Less: Net income attributable to non-controlling interests15 15 
Net income attributable to the Company$1,071 $983 
Basic weighted average common shares outstanding503 509 
Dilutive effect of potentially issuable common shares6 5 
Diluted weighted average common shares outstanding509 514 
Average stock price used to calculate common stock equivalents$157.49 $114.96 
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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 three month periods ended March 31, 2022 and 2021.
(In millions)20222021
Assets acquired, excluding cash$30 $ 
Liabilities assumed(2) 
Contingent/deferred purchase consideration(4) 
Net cash outflow for current year acquisitions$24 $ 
(In millions)20222021
Interest paid$171 $191 
Income taxes paid, net of refunds$201 $122 
The classification of contingent consideration payments in the consolidated statements of cash flows is dependent upon whether receipt, payment or adjustment was part of the initial liability established on the acquisition date (financing) or an adjustment to the acquisition date liability (operating).
The following amounts are included in the consolidated statements of cash flows as operating and financing activities:
For the Three Months Ended March 31,
(In millions)20222021
Operating:
Contingent consideration payments$ $(1)
Acquisition/disposition related net charges for adjustments10  
Adjustments and payments related to contingent consideration$10 $(1)
Financing:
Contingent purchase consideration $(4)$(10)
Deferred purchase consideration related to prior years' acquisitions (12)(27)
Payments of deferred and contingent consideration for acquisitions$(16)$(37)
Receipt of contingent consideration related to prior year dispositions$3 $5 
The Company had non-cash issuances of common stock under its share-based payment plan of $250 million and $212 million for the three months ended March 31, 2022 and 2021, respectively. The Company recorded share-based compensation expense related to restricted stock units, performance stock units and stock options of $105 million and $78 million for the three months ended March 31, 2022 and 2021, respectively.
Statement of Cash Flows Reclassifications
In the first quarter of 2022, the Company refined the statements of cash flows presentation to combine and reclassify certain line items within the operating cash flows section. The prior year's presentation was conformed to the current presentation and had no impact on operating cash flows.
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7.    Other Comprehensive Income (Loss)
The changes, net of tax, in the balances of each component of Accumulated Other Comprehensive Income ("AOCI") for the three months ended March 31, 2022 and 2021, including amounts reclassified out of AOCI, are as follows:
(In millions)
Pension/Post-Retirement Plans Gains (Losses)
Foreign Currency Translation Gains (Losses)
Total Gains (Losses)
Balance as of December 31, 2021$(3,202)$(1,373)$(4,575)
Other comprehensive income (loss) before reclassifications35 (169)(134)
Amounts reclassified from accumulated other comprehensive income
30  30 
Net current period other comprehensive income (loss) 65 (169)(104)
Balance as of March 31, 2022$(3,137)$(1,542)$(4,679)
(In millions)
Pension/Post-Retirement Plans Gains (Losses)
Foreign Currency Translation Gains (Losses)
Total Gains (Losses)
Balance as of December 31, 2020$(4,126)$(984)$(5,110)
Other comprehensive income (loss) before reclassifications
(36)(91)(127)
Amounts reclassified from accumulated other comprehensive income
40  40 
Net current period other comprehensive income (loss)4 (91)(87)
Balance as of March 31, 2021$(4,122)$(1,075)$(5,197)
The components of other comprehensive income (loss) for the three month periods ended March 31, 2022 and 2021 are as follows:
Three Months Ended March 31,20222021
(In millions)Pre-TaxTax (Credit)Net of TaxPre-TaxTax (Credit)Net of Tax
Foreign currency translation adjustments$(169)$ $(169)$(91)$ $(91)
Pension/post-retirement plans:
Amortization of gains included in net periodic pension cost:
Net actuarial losses(a)
39 9 30 52 12 40 
Subtotal39 9 30 52 12 40 
Foreign currency translation adjustments 65 16 49 (37)(8)(29)
Other adjustments(18)(4)(14)(7)(2)(5)
Effect of re-measurement    (2) (2)
Pension/post-retirement plans gains 86 21 65 6 2 4 
Other comprehensive (loss) income$(83)$21 $(104)$(85)$2 $(87)
(a) Components of net periodic pension cost are 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.

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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 one acquisition during the three months ended March 31, 2022:
January – Marsh McLennan Agency ("MMA") acquired Heil & Kay Insurance Agency Inc., an Illinois-based full-service independent insurance agency providing business insurance, employee health benefits services and personal lines insurance.
The Consulting segment completed two acquisitions during the three months ended March 31, 2022:
February – Oliver Wyman acquired Azure Consulting, an Australia-based management consulting firm with expertise in strategy development, organizational design and operations in the industrials, energy and natural resources sectors.
March – Mercer acquired GeFi Assurances, a France-based brokerage and consulting firm specializing in collective corporate social protection.
Total purchase consideration for acquisitions made during the three months ended March 31, 2022 was $28 million, which consisted of cash paid of $24 million and deferred purchase consideration and estimated contingent consideration of $4 million. Contingent consideration arrangements are based primarily on earnings before interest, tax, depreciation and amortization ("EBITDA") or revenue targets over a period of two to four years. During the three months ended March 31, 2022, the Company also paid $12 million of deferred purchase consideration and $4 million of contingent consideration related to acquisitions made in prior years. 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 during 2022 based on the estimated fair values for the acquisitions as of their respective acquisition dates:
Acquisitions through March 31, 2022
(In millions)
Cash$24 
Estimated fair value of deferred/contingent consideration4 
Total consideration$28 
Allocation of purchase price:
Net receivables1 
Other current assets2 
Goodwill17 
Other intangible assets10 
Total assets acquired30 
Current liabilities1 
Other liabilities1 
Total liabilities assumed2 
Net assets acquired$28 
17


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 discussed below; 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 intangible assets acquired during 2022:
Intangible assets through March 31, 2022
(In millions)
AmountWeighted Average Amortization Period
Client relationships$10 10.4 years
The consolidated statements of income include the results of operations of acquired companies since their respective acquisition dates. The Company had no acquisitions during the first three months of 2021.
Dispositions
During the first three months of 2022, Mercer sold its retirement plan administration and call center operations in Brazil for cash proceeds of approximately $4 million.
Prior-Year Acquisitions
The Risk and Insurance Services segment completed eight acquisitions during 2021:
April – MMA acquired PayneWest Insurance, Inc., a Montana-based full-service broker providing business insurance, surety, employee benefits and personal insurance services to companies and individuals, and The Pryor Group, LLC, a Texas-based full-service broker providing business insurance with a specialty in quick service restaurants and the personal lines of franchise owners.
September – MMA acquired Vaaler Insurance, Inc., a North Dakota-based insurance broker providing business insurance, employee health and benefits, and personal lines solutions, with specialized expertise in the construction, education, and healthcare industries.
November – MMA acquired Pelnik Insurance, a North Carolina-based full-service broker providing business insurance, employee health and benefits, and private client services to midsize businesses and individuals throughout the Mid-Atlantic, Southwest Truck Insurance Agency, Inc., a Texas-based broker providing business insurance for the trucking industry, serving clients in the U.S., and Mexico and InSource Insurance Group LLC, a Texas-based full-service broker providing business insurance, employee health and benefits, private client and surety services to the oil and gas, construction, manufacturing, and transportation industries.
December – Marsh acquired Services Assurance Monétique (SAM), a France-based affinity insurance broker specializing in bank and retail insurance markets and increased its ownership interest in Marsh India Insurance Broker Private Limited ("Marsh India") from 49% to 92%.
The Consulting segment completed one acquisition during 2021:
November – Oliver Wyman Group acquired Huron Consulting Group’s life sciences strategy consulting practice in the U.S. and the U.K., which assists clients in addressing their most important commercial strategy, marketing, pricing, market access and research and development challenges.
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Prior year dispositions
There were no dispositions during the first three months of 2021.
Deconsolidation of Russia
In the first quarter of 2022, the Company concluded that it does not meet the accounting criteria for control over its wholly-owned Russian subsidiaries, and therefore, deconsolidated the businesses effective as of the end of the first quarter.
For the three months ended March 31, 2022, the Company recorded a loss of $39 million on the deconsolidation of the Russian businesses included in revenue in the consolidated statements of income. The loss consisted of the reclassification of cumulative translation losses from accumulated other comprehensive income and a charge for the write-off of the Russia businesses' net assets.
On March 10, 2022, the Company announced it would exit its businesses in Russia and transfer ownership of its Russian entities to local management who will operate independently in the Russian market. The closing of the transaction is subject to approval from the Russian regulators.
Subsequent event
On April 1, 2022, Mercer sold its U.S. affinity business that provides insurance marketing, brokerage and administration to association and affinity groups for cash proceeds of approximately $145 million and a net gain of approximately $110 million.
Pro-Forma Information
The following unaudited pro-forma financial data gives effect to the acquisitions made by the Company during 2022 and 2021. In accordance with accounting guidance related to pro-forma disclosures, the information presented for acquisitions made in 2022 is as if they occurred on January 1, 2021 and reflects acquisitions made in 2021 as if they occurred on January 1, 2020. The unaudited pro-forma information includes the effects of amortization of acquired intangibles. 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
March 31,
(In millions, except per share data)20222021
Revenue$5,550 $5,156 
Net income attributable to the Company$1,071 $987 
Basic net income per share attributable to the Company$2.13 $1.94 
Diluted net income per share attributable to the Company$2.10 $1.92 
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 impairment may have occurred. The Company performs the annual impairment assessment for each of its reporting units during the third quarter of each year. 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 2021, the Company elected to perform a qualitative impairment assessment. As part of its assessment, the Company considered numerous factors, including:
that the fair value of each reporting unit exceeds its carrying value by a substantial margin based on its most recent quantitative assessment in 2019;
whether significant acquisitions or dispositions occurred which might alter the fair value of its reporting units;
macroeconomic conditions and their potential impact on reporting unit fair values;
actual performance compared with budget and prior projections used in its estimation of reporting unit fair values;
industry and market conditions; and
the year-over-year change in the Company’s share price.
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The Company completed its qualitative assessment in the third quarter of 2021 and concluded that goodwill was not impaired.
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 does not have any indefinite lived intangible assets.
Changes in the carrying amount of goodwill are as follows:
March 31,
(In millions)20222021
Balance as of January 1,$16,317 $15,517 
Goodwill acquired17  
Other adjustments(a)
(80)(59)
Balance at March 31,$16,254 $15,458 
(a) Primarily reflects the impact of foreign exchange.
The goodwill arising from the acquisitions in 2022 and 2021 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 2022 was $17 million, of which approximately $1.6 million is deductible for tax purposes, and is primarily related to the Risk and Insurance Services segment.
Goodwill allocable to the Company’s reportable segments at March 31, 2022 is as follows: Risk and Insurance Services, $12.5 billion and Consulting, $3.8 billion.
The gross cost and accumulated amortization of identified intangible assets at March 31, 2022 and December 31, 2021 are as follows:
March 31, 2022December 31, 2021
(In millions)Gross
Cost
Accumulated
Amortization
Net
Carrying
Amount
Gross
Cost
Accumulated
Amortization
Net
Carrying
Amount
Client relationships$4,041 $1,389 $2,652 $4,066 $1,334 $2,732 
Other (a)
362 294 68 365 287 78 
 Amortized intangibles$4,403 $1,683 $2,720 $4,431 $1,621 $2,810 
(