Business Wire | Jul 22, 2021 07:00AM EDT

Marsh McLennan Reports Second Quarter 2021 Results

Jul. 22, 2021

NEW YORK--(BUSINESS WIRE)--Jul. 22, 2021--Marsh McLennan (NYSE: MMC), the world's leading professional services firm in the areas of risk, strategy and people, today reported financial results for the second quarter ended June 30, 2021.

Dan Glaser, President and CEO, said: "Our performance this quarter was outstanding. The company achieved the strongest underlying growth in two decades, and experienced an acceleration in growth across all of our businesses. We grew underlying revenue by 13%, adjusted operating income by 24%, and adjusted EPS by 33%.

"These results are a direct reflection of the hard work and dedication of our colleagues around the world. We look forward to carrying this momentum into the second half of the year."

Consolidated Results

Consolidated revenue in the second quarter of 2021 was $5.0 billion, an increase of 20% compared with the second quarter of 2020. On an underlying basis, revenue increased 13%. Operating income was $1.2 billion, an increase of 39% from the prior year. Adjusted operating income, which excludes noteworthy items as presented in the attached supplemental schedules, rose 24% to $1.2 billion. Net income attributable to the Company was $820 million, or $1.60 per diluted share, compared with $1.12 in the second quarter of 2020. Adjusted earnings per share rose 33% to $1.75 per diluted share compared with $1.32 for the prior year period.

For the six months ended June 30, 2021, consolidated revenue was $10.1 billion, an increase of 14%, or 9% on an underlying basis compared to the prior period. Operating income was $2.6 billion, an increase of 32% from the prior year period. Adjusted operating income rose 22% to $2.6 billion. Net income attributable to the Company was $1.8 billion. Fully diluted earnings per share was $3.51 compared with $2.60 in the first six months of 2020. Adjusted earnings per share increased 26% to $3.74 compared with $2.96 for the comparable period in 2020.

Risk & Insurance Services

Risk & Insurance Services revenue was $3.1 billion in the second quarter of 2021, an increase of 21%, or 13% on an underlying basis. Operating income rose 37% to $950 million, and adjusted operating income was $927 million, an increase of 22% from the prior year period. For the six months ended June 30, 2021, revenue was $6.4 billion, an increase of 15%, or 10% on an underlying basis. Operating income rose 30% to $2.0 billion, and adjusted operating income was $2.0 billion, an increase of 19% from the prior year period.

Marsh's revenue in the second quarter was $2.7 billion, an increase of 14% on an underlying basis. In US/Canada, underlying revenue rose 15%. International operations produced underlying revenue growth of 13%, reflecting 16% growth in EMEA, 10% growth in Asia Pacific, and 2% in Latin America. For the six months ended June 30, 2021, Marsh's underlying revenue growth was 11% compared to the prior period a year ago.

Guy Carpenter's revenue in the second quarter was $488 million, an increase of 12% on an underlying basis. For the six months ended June 30, 2021, Guy Carpenter's underlying revenue growth was 8%.

Consulting

Consulting revenue in the second quarter was $1.9 billion, an increase of 17% or 12% on an underlying basis compared to the same period a year ago. Operating income increased 35% to $344 million, and adjusted operating income increased 34% to $356 million. For the first six months of 2021, revenue was $3.8 billion, an increase of 11%, or an increase of 8% on an underlying basis. Operating income of $705 million increased 31% and adjusted operating income increased 31% to $726 million.

Mercer's revenue was $1.3 billion in the second quarter, an increase of 6% on an underlying basis. Career with revenue of $187 million, was up 15% on an underlying basis. Wealth revenue of $625 million increased 4% on an underlying basis, and Health revenue of $462 million increased 4% on an underlying basis. For the six months ended June 30, 2021, Mercer's revenue was $2.6 billion, an increase of 3% on an underlying basis compared to the same period a year ago.

Oliver Wyman's revenue was $618 million in the second quarter, an increase of 28% on an underlying basis. For the first six months ended June 30, 2021, Oliver Wyman's revenue was $1.2 billion, an increase of 19% on an underlying basis.

Other Items

The Company repurchased 2.4 million shares of stock for $322 million in the second quarter. Through six months, the Company has repurchased 3.4 million shares for $434 million.

Last week, the Board of Directors increased the quarterly dividend 15% to $0.535 per share, with the third quarter dividend payable on August 13, 2021.

Conference Call

A conference call to discuss second quarter 2021 results will be held today at 8:30 a.m. Eastern time. To participate in the teleconference, please dial +1 866 437 7574. Callers from outside the United States should dial +1 409 220 9376. The access code for both numbers is 5668714. The live audio webcast may be accessed at mmc.com. A replay of the webcast will be available approximately two hours after the event.

About Marsh McLennan

Marsh McLennan (NYSE: MMC) is the world's leading professional services firm in the areas of risk, strategy and people. The Company's 78,000 colleagues advise clients in 130 countries. With annual revenue of over $18 billion, Marsh McLennan helps clients navigate an increasingly dynamic and complex environment through four market-leading businesses. Marsh provides data-driven risk advisory services and insurance solutions to commercial and consumer clients. Guy Carpenter develops advanced risk, reinsurance and capital strategies that help clients grow profitably and pursue emerging opportunities. Mercer delivers advice and technology-driven solutions that help organizations redefine the world of work, reshape retirement and investment outcomes, and unlock health and well being for a changing workforce. Oliver Wyman serves as a critical strategic, economic and brand advisor to private sector and governmental clients. For more information, visit mmc.com, follow us on LinkedIn and Twitter or subscribe to BRINK.

INFORMATION CONCERNING FORWARD-LOOKING STATEMENTS

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

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

* our ability to maintain adequate safeguards to protect the security of our information systems and confidential, personal or proprietary information, particularly given the increased risk of cybersecurity attacks, including hacking, viruses, malware, ransomware and other types of data security breaches, as well as the heightened risk caused by remote work arrangements; * the impact from lawsuits or investigations arising from errors and omissions, breaches of fiduciary duty or other claims against us in our capacity as a broker or investment advisor; * increased regulatory activity and scrutiny by regulatory or law enforcement authorities in the financial services industry; * the financial and operational impact of complying with laws and regulations where we operate and the risks of noncompliance with such laws by us or third-party providers, including anti-corruption laws such as the U.S. Foreign Corrupt Practices Act, U.K. Anti-Bribery Act and cybersecurity and data privacy regulations such as the E.U.'s General Data Protection Regulation; * the impact of COVID-19 on our business operations, results of operations, cash flows and financial position; * our ability to compete effectively and adapt to changes in the competitive environment, including to respond to technological change, disintermediation, digital disruption and other types of innovation; * our ability to manage risks associated with our investment management and related services business, particularly in the context of uncertain equity markets, including our ability to execute timely trades in light of increased trading volume and to manage potential conflicts of interest; * our ability to attract and retain industry leading talent; * the impact of changes in tax laws, guidance and interpretations, particularly due to recently enacted legislation in the U.K. and proposals from the U.S. government or from the Organization for Economic Development and Cooperation, or disagreements with tax authorities; * our ability to successfully recover if we experience a business continuity problem due to cyberattack, natural disaster, government unrest or otherwise; and * the regulatory, contractual and reputational risks that arise based on insurance placement activities and growing insurer revenue streams.

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

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

Marsh & McLennan Companies, Inc.Consolidated Statements of Income(In millions, except per share figures)(Unaudited)

Three Months Ended Six Months Ended June 30, June 30,

2021 2020 2021 2020

Revenue $ 5,017 $ 4,189 $ 10,100 $ 8,840

Expense:

Compensation and benefits 2,860 2,429 5,667 4,984

Other operating expenses 929 875 1,847 1,901

Operating expenses 3,789 3,304 7,514 6,885

Operating income 1,228 885 2,586 1,955

Other net benefit credits 71 63 142 127

Interest income 1 2 1 4

Interest expense (110) (132) (228) (259)

Investment income (loss) 19 (31) 30 (33)

Income before income taxes 1,209 787 2,531 1,794

Income tax expense 382 207 706 447

Net income before 827 580 1,825 1,347 non-controlling interests

Less: Net income attributable 7 8 22 21 to non-controlling interests

Net income attributable to the $ 820 $ 572 $ 1,803 $ 1,326 Company

Net income per share attributable to the Company:

- Basic $ 1.61 $ 1.13 $ 3.55 $ 2.62

- Diluted $ 1.60 $ 1.12 $ 3.51 $ 2.60

Average number of shares outstanding

- Basic 508 506 508 505

- Diluted 513 511 514 510

Shares outstanding at June 30 507 506 507 506

Marsh & McLennan Companies, Inc. Supplemental Information - Revenue Analysis Three Months Ended June 30(Millions) (Unaudited)

The Company conducts business in 130 countries. As a result, foreign exchange rate movements may impact period-to-period comparisons of revenue. Similarly, certain other items such as acquisitions and dispositions, including transfers among businesses, may impact period-to-period comparisons of revenue. Underlying revenue measures the change in revenue from one period to the next by isolating these impacts.

Components of Revenue Change*

Three Months Ended Acquisitions June 30, % / Change Currency Dispositions Underlying GAAP Impact / Revenue 2021 2020 Revenue Other Impact

Risk andInsurance Services

Marsh $ 2,650 $ 2,161 23% 4% 5% 14%

Guy 488 433 13% 1% - 12%Carpenter

Subtotal 3,138 2,594 21% 4% 4% 14%

FiduciaryInterest 3 9 Income

Total Riskand 3,141 2,603 21% 4% 4% 13%InsuranceServices

Consulting

Mercer 1,274 1,149 11% 6% (1)% 6%

Oliver Wyman 618 467 33% 5% - 28%Group

Total 1,892 1,616 17% 5% - 12%Consulting

Corporate (16) (30) Eliminations

Total $ 5,017 $ 4,189 20% 4% 2% 13%Revenue





Revenue Details

The following table provides more detailed revenue information for certain of the components presented above:

Components of Revenue Change*

Three Months Ended Acquisitions June 30, % / Change Currency Dispositions Underlying GAAP Impact / Revenue 2021 2020 Revenue Other Impact

Marsh:

EMEA $ 796 $ 597 33 % 9 % 9 % 16 %

Asia Pacific 347 298 16 % 8 % (1) % 10 %

Latin America 103 99 4 % 2 % - 2 %

Total 1,246 994 25 % 8 % 5 % 13 %International

U.S./Canada 1,404 1,167 20 % 1 % 5 % 15 %

Total Marsh $ 2,650 $ 2,161 23 % 4 % 5 % 14 %

Mercer:

Wealth 625 561 11 % 8 % (1) % 4 %

Health 462 432 7 % 3 % - 4 %

Career 187 156 20 % 5 % - 15 %

Total Mercer $ 1,274 $ 1,149 11 % 6 % (1) % 6 %

* Components of revenue change may not add due to rounding.

Marsh & McLennan Companies, Inc. Supplemental Information - Revenue Analysis Six Months Ended June 30(Millions) (Unaudited)

The Company conducts business in 130 countries. As a result, foreign exchange rate movements may impact period-to-period comparisons of revenue. Similarly, certain other items such as acquisitions and dispositions, including transfers among businesses, may impact period-to-period comparisons of revenue. Underlying revenue measures the change in revenue from one period to the next by isolating these impacts.

* Components of revenue change may not add due to rounding.

Marsh & McLennan Companies, Inc. Supplemental Information - Revenue Analysis Six Months Ended June 30(Millions) (Unaudited)

The Company conducts business in 130 countries. As a result, foreign exchange rate movements may impact period-to-period comparisons of revenue. Similarly, certain other items such as acquisitions and dispositions, including transfers among businesses, may impact period-to-period comparisons of revenue. Underlying revenue measures the change in revenue from one period to the next by isolating these impacts.

Components of Revenue Change*

Six Months Ended Acquisitions June 30, % / Change Currency Dispositions Underlying GAAP Impact / Revenue 2021 2020 Revenue Other Impact

Risk andInsurance Services

Marsh $ 4,975 $ 4,222 18 % 4 % 3 % 11 %

Guy 1,383 1,260 10 % 2 % - 8 %Carpenter

Subtotal 6,358 5,482 16 % 3 % 3 % 10 %

FiduciaryInterest 8 32 Income

Total Riskand 6,366 5,514 15 % 3 % 3 % 10 %InsuranceServices

Consulting

Mercer 2,562 2,400 7 % 5 % (1) % 3 %

Oliver Wyman 1,203 978 23 % 4 % - 19 %Group

Total 3,765 3,378 11 % 5 % (1) % 8 %Consulting

Corporate (31) (52) Eliminations

Total $ 10,100 $ 8,840 14 % 4 % 1 % 9 %Revenue





Revenue Details

The following table provides more detailed revenue information for certain of the components presented above:

Components of Revenue Change*

Six Months Ended % Acquisitions/ June 30, Change Currency Dispositions/ Underlying GAAP Impact Other Impact Revenue 2021 2020 Revenue

Marsh:

EMEA $ 1,633 $ 1,351 21 % 7 % 3 % 11 %

Asia Pacific 621 536 16 % 7 % - 9 %

Latin America 193 190 2 % (2 )% - 4 %

Total 2,447 2,077 18 % 7 % 2 % 9 %International

U.S./Canada 2,528 2,145 18 % 1 % 5 % 12 %

Total Marsh $ 4,975 $ 4,222 18 % 4 % 3 % 11 %

Mercer:

Wealth 1,248 1,153 8 % 7 % (1 )% 2 %

Health 949 918 3 % 2 % (1 )% 2 %

Career 365 329 11 % 4 % - 8 %

Total Mercer $ 2,562 $ 2,400 7 % 5 % (1 )% 3 %

* Components of revenue change may not add due to rounding.

Marsh & McLennan Companies, Inc. Reconciliation of Non-GAAP Measures Three Months Ended June 30(Millions) (Unaudited)

* Components of revenue change may not add due to rounding.

Marsh & McLennan Companies, Inc. Reconciliation of Non-GAAP Measures Three Months Ended June 30(Millions) (Unaudited)

Overview

The Company reports its financial results in accordance with accountingprinciples generally accepted in the United States (referred to in this releaseas in accordance with "GAAP" or "reported" results). The Company also refers toand presents below certain additional non-GAAP financial measures, within themeaning of Regulation G under the Securities Exchange Act of 1934. Thesemeasures are: adjusted operating income (loss), adjusted operating margin,adjusted income, net of tax and adjusted earnings per share (EPS). The Companyhas included reconciliations of these non-GAAP financial measures to the mostdirectly comparable financial measure calculated in accordance with GAAP in thefollowing tables.

The Company believes these non-GAAP financial measures provide usefulsupplemental information that enables investors to better compare the Company'sperformance across periods. Management also uses these measures internally toassess the operating performance of its businesses, to assess performance foremployee compensation purposes, and to decide how to allocate resources.However, investors should not consider these non-GAAP measures in isolationfrom, or as a substitute for, the financial information that the Companyreports in accordance with GAAP. The Company's non-GAAP measures includeadjustments that reflect how management views its businesses, and may differfrom similarly titled non-GAAP measures presented by other companies.

Adjusted Operating Income (Loss) and Adjusted Operating Margin

Adjusted operating income (loss) is calculated by excluding the impact ofcertain noteworthy items from the Company's GAAP operating income or (loss).The following tables identify these noteworthy items and reconcile adjustedoperating income (loss) to GAAP operating income or loss, on a consolidated andreportable segment basis, for the three and six months ended June 30, 2021 and2020. The following tables also present adjusted operating margin. For thethree and six months ended June 30, 2021 and 2020, adjusted operating margin iscalculated by dividing the sum of adjusted operating income and identifiedintangible asset amortization by consolidated or segment adjusted revenue.

Risk & Insurance Services

Consulting

Corporate/ Eliminations

Total

Three Months Ended June 30, 2021

Operating income (loss)

$

950

$

344

$

(66)

$

1,228

Operating margin

30.2

%

18.1

%

N/A

24.5

%

Add (deduct) impact of noteworthy Items:

Restructuring, excluding JLT (a)

4

3

5

12

Changes in contingent consideration (b)

(5)

1

(3)

(7)

JLT integration and restructuring costs (c)

11

6

2

19

JLT acquisition-related costs (d)

11

1

-

12

Disposal of businesses (e)

(51)

1

-

(50)

Other

7

-

-

7

Operating income adjustments

(23)

12

4

(7)

Adjusted operating income (loss)

$

927

$

356

$

(62)

$

1,221

Total identified intangible amortization expense

$

75

$

14

$

-

$

89

Adjusted operating margin

32.4

%

19.5

%

N/A

26.4

%

Three Months Ended June 30, 2020

Operating income (loss), as reported

$

696

$

255

$

(66)

$

885

Operating margin

26.7

%

15.8

%

N/A

21.1

%

Add (deduct) impact of noteworthy Items:

Restructuring, excluding JLT (a)

-

2

9

11

Changes in contingent consideration (b)

4

1

2

7

JLT integration and restructuring costs (c)

39

7

11

57

JLT acquisition-related costs (d)

12

-

1

13

Disposal of businesses (e)

6

-

-

6

Other

5

-

-

5

Operating income adjustments

66

10

23

99

Adjusted operating income (loss)

$

762

$

265

$

(43)

$

984

Total identified intangible amortization expense

$

75

$

13

$

-

$

88

Adjusted operating margin

32.1

%

17.3

%

N/A

25.5

%

Risk & Corporate/ Insurance Consulting Eliminations Total Services

Three Months Ended June 30, 2021

Operating income (loss) $ 950 $ 344 $ (66) $ 1,228

Operating margin 30.2 % 18.1 % N/A 24.5 %

Add (deduct) impact of noteworthy Items:

Restructuring, excluding JLT 4 3 5 12 (a)

Changes in contingent (5) 1 (3) (7) consideration (b)

JLT integration and 11 6 2 19 restructuring costs (c)

JLT acquisition-related costs 11 1 - 12 (d)

Disposal of businesses (e) (51) 1 - (50)

Other 7 - - 7

Operating income adjustments (23) 12 4 (7)

Adjusted operating income $ 927 $ 356 $ (62) $ 1,221 (loss)

Total identified intangible $ 75 $ 14 $ - $ 89 amortization expense

Adjusted operating margin 32.4 % 19.5 % N/A 26.4 %





Three Months Ended June 30, 2020

Operating income (loss), as $ 696 $ 255 $ (66) $ 885 reported

Operating margin 26.7 % 15.8 % N/A 21.1 %

Add (deduct) impact of noteworthy Items:

Restructuring, excluding JLT - 2 9 11 (a)

Changes in contingent 4 1 2 7 consideration (b)

JLT integration and 39 7 11 57 restructuring costs (c)

JLT acquisition-related costs 12 - 1 13 (d)

Disposal of businesses (e) 6 - - 6

Other 5 - - 5

Operating income adjustments 66 10 23 99

Adjusted operating income $ 762 $ 265 $ (43) $ 984 (loss)

Total identified intangible $ 75 $ 13 $ - $ 88 amortization expense

Adjusted operating margin 32.1 % 17.3 % N/A 25.5 %



(a) Primarily includes restructuring expenses associated with the Company's global information technology and HR functions and adjustments to restructuring liabilities for future rent under non-cancellable leases.

(b) Primarily includes the change in fair value of contingent consideration related to acquisitions and dispositions measured each quarter.

(c) Includes costs incurred for staff reductions, lease related exit costs, technology and consulting costs related to the JLT integration.

(d) Reflects retention costs related to the closing of the JLT Transaction.

(e) Primarily reflects a gain on the sale of the U.K. commercial networks business that provided broking and back-office solutions for small independent brokers during the second quarter of 2021. 2020 reflects net loss on disposal of specialty businesses sold in the U.S., U.K. and Canada, previously acquired as part of the JLT Transaction. These amounts are reflected as an increase or decrease of other revenue, which is reflected as part of revenue in the consolidated statements of income. These items are removed from GAAP revenue in the calculation of adjusted operating margin.

(a) Primarily includes restructuring expenses associated with the Company'sglobal information technology and HR functions and adjustments to restructuringliabilities for future rent under non-cancellable leases.

(b) Primarily includes the change in fair value of contingent considerationrelated to acquisitions and dispositions measured each quarter.

(c) Includes costs incurred for staff reductions, lease related exit costs,technology and consulting costs related to the JLT integration.

(d) Reflects retention costs related to the closing of the JLT Transaction.

(e) Primarily reflects a gain on the sale of the U.K. commercial networksbusiness that provided broking and back-office solutions for small independentbrokers during the second quarter of 2021. 2020 reflects net loss on disposalof specialty businesses sold in the U.S., U.K. and Canada, previously acquiredas part of the JLT Transaction. These amounts are reflected as an increase ordecrease of other revenue, which is reflected as part of revenue in theconsolidated statements of income. These items are removed from GAAP revenue inthe calculation of adjusted operating margin.

Marsh & McLennan Companies, Inc. Reconciliation of Non-GAAP Measures Six Months Ended June 30(Millions) (Unaudited)

Risk & Insurance Services

Consulting

Corporate/ Eliminations

Total

Six Months Ended June 30, 2021

Operating income (loss)

$

2,010

$

705

$

(129)

$

2,586

Operating margin

31.6

%

18.7

%

N/A

25.6

%

Add (deduct) impact of noteworthy items:

Restructuring, excluding JLT (a)

5

8

10

23

Changes in contingent consideration (b)

1

(5)

(3)

(7)

JLT integration and restructuring costs (c)

27

12

3

42

JLT acquisition-related costs (d)

22

2

-

24

Disposal of business (e)

(53)

4

-

(49)

Other

7

-

-

7

Operating income adjustments

9

21

10

40

Adjusted operating income (loss)

$

2,019

$

726

$

(119)

$

2,626

Total identified intangible amortization expense

$

161

$

28

$

-

$

189

Adjusted operating margin

34.5

%

20.0

%

N/A

28.0

%

Six Months Ended June 30, 2020

Operating income (loss)

$

1,550

$

537

$

(132)

$

1,955

Operating margin

28.1

%

15.9

%

N/A

22.1

%

Add (deduct) impact of noteworthy items:

Restructuring, excluding JLT (a)

2

6

12

20

Changes in contingent consideration (b)

7

(3)

2

6

JLT integration and restructuring costs (c)

100

17

20

137

JLT acquisition-related costs (d)

24

1

1

26

Disposal of business (e)

6

(4)

-

2

Other

5

-

-

5

Operating income adjustments

144

17

35

196

Adjusted operating income (loss)

$

1,694

$

554

$

(97)

$

2,151

Total identified intangible amortization expense

$

147

$

27

$

-

$

174

Adjusted operating margin

33.4

%

17.2

%

N/A

26.3

%

Marsh & McLennan Companies, Inc.Reconciliation of Non-GAAP MeasuresSix Months Ended June 30(Millions) (Unaudited)

Risk & Corporate/ Insurance Consulting Eliminations Total Services

Six Months Ended June 30, 2021

Operating income (loss) $ 2,010 $ 705 $ (129) $ 2,586

Operating margin 31.6 % 18.7 % N/A 25.6 %

Add (deduct) impact of noteworthy items:

Restructuring, excluding JLT 5 8 10 23 (a)

Changes in contingent 1 (5) (3) (7) consideration (b)

JLT integration and 27 12 3 42 restructuring costs (c)

JLT acquisition-related costs 22 2 - 24 (d)

Disposal of business (e) (53) 4 - (49)

Other 7 - - 7

Operating income adjustments 9 21 10 40

Adjusted operating income $ 2,019 $ 726 $ (119) $ 2,626 (loss)

Total identified intangible $ 161 $ 28 $ - $ 189 amortization expense

Adjusted operating margin 34.5 % 20.0 % N/A 28.0 %



Six Months Ended June 30, 2020

Operating income (loss) $ 1,550 $ 537 $ (132) $ 1,955

Operating margin 28.1 % 15.9 % N/A 22.1 %

Add (deduct) impact of noteworthy items:

Restructuring, excluding JLT 2 6 12 20 (a)

Changes in contingent 7 (3) 2 6 consideration (b)

JLT integration and 100 17 20 137 restructuring costs (c)

JLT acquisition-related costs 24 1 1 26 (d)

Disposal of business (e) 6 (4) - 2

Other 5 - - 5

Operating income adjustments 144 17 35 196

Adjusted operating income $ 1,694 $ 554 $ (97) $ 2,151 (loss)

Total identified intangible $ 147 $ 27 $ - $ 174 amortization expense

Adjusted operating margin 33.4 % 17.2 % N/A 26.3 %

(a) Primarily includes restructuring expenses associated with the Company's global information technology and HR functions and adjustments to restructuring liabilities for future rent under non-cancellable leases. Consulting charges in 2020 reflect severance and real estate exit costs related to the Mercer restructuring program completed in 2020.

(b) Primarily includes the change in fair value of contingent consideration related to acquisitions and dispositions as measured each quarter.

(c) Includes costs incurred for staff reductions, lease related exit costs, technology and consulting costs related to the JLT integration.

(d) Reflects retention costs related to the closing of the JLT Transaction.

(e) Primarily reflects a gain on the sale of the U.K. commercial networks business that provided broking and back-office solutions for small independent brokers during the second quarter of 2021. 2020 reflects net loss on disposal of specialty businesses sold in the U.S., U.K. and Canada, previously acquired as part of the JLT Transaction. These amounts are reflected as an increase or decrease of other revenue, which is reflected as part of revenue in the consolidated statements of income. These items are removed from GAAP revenue in the calculation of adjusted operating margin.

Marsh & McLennan Companies, Inc. Reconciliation of Non-GAAP Measures Three and Six Months Ended June 30(Millions) (Unaudited)

(a) Primarily includes restructuring expenses associated with the Company'sglobal information technology and HR functions and adjustments to restructuringliabilities for future rent under non-cancellable leases. Consulting charges in2020 reflect severance and real estate exit costs related to the Mercerrestructuring program completed in 2020.

(b) Primarily includes the change in fair value of contingent considerationrelated to acquisitions and dispositions as measured each quarter.

(c) Includes costs incurred for staff reductions, lease related exit costs,technology and consulting costs related to the JLT integration.

(d) Reflects retention costs related to the closing of the JLT Transaction.

(e) Primarily reflects a gain on the sale of the U.K. commercial networksbusiness that provided broking and back-office solutions for small independentbrokers during the second quarter of 2021. 2020 reflects net loss on disposalof specialty businesses sold in the U.S., U.K. and Canada, previously acquiredas part of the JLT Transaction. These amounts are reflected as an increase ordecrease of other revenue, which is reflected as part of revenue in theconsolidated statements of income. These items are removed from GAAP revenue inthe calculation of adjusted operating margin.

Marsh & McLennan Companies, Inc. Reconciliation of Non-GAAP Measures Three and Six Months Ended June 30(Millions) (Unaudited)

Adjusted income, net of tax is calculated as the Company's GAAP income fromcontinuing operations, adjusted to reflect the after tax impact of theoperating income adjustments in the preceding tables and investments gains orlosses related to the impact of mark-to-market adjustments on certain equitysecurities. Adjusted EPS is calculated by dividing the Company's adjustedincome, net of tax, by average number of shares outstanding-diluted for therelevant period. The following tables reconcile adjusted income, net of tax toGAAP income from continuing operations and adjusted EPS to GAAP EPS for thethree and six month periods ended June 30, 2021 and 2020.

Three Months Ended June 30, 2021

Three Months Ended June 30, 2020

Amount

Adjusted EPS

Amount

Adjusted EPS

Net income before non-controlling interests, as reported

$

827

$

580

Less: Non-controlling interest, net of tax

7

8

Subtotal

$

820

$

1.60

$

572

$

1.12

Operating income adjustments

$

(7)

$

99

Investments adjustment (a)

(1)

25

Income tax effect of adjustments (b)

(12)

(21)

Impact of U.K. tax rate change (c)

100

-

80

0.15

103

0.20

Adjusted income, net of tax

$

900

$

1.75

$

675

$

1.32

Six Months Ended June 30, 2021

Six Months Ended June 30, 2020

Amount

Adjusted EPS

Amount

Adjusted EPS

Net income before non-controlling interests, as reported

$

1,825

$

1,347

Less: Non-controlling interest, net of tax

22

21

Subtotal

$

1,803

$

3.51

$

1,326

$

2.60

Operating income adjustments

$

40

$

196

Investments adjustment (a)

(1)

26

Income tax effect of adjustments (b)

(21)

(38)

Impact of U.K. tax rate change (c)

100

-

118

0.23

184

0.36

Adjusted income, net of tax

$

1,921

$

3.74

$

1,510

$

2.96



Three Months Ended June 30, Three Months Ended June 30, 2021 2020

Amount Adjusted Amount Adjusted EPS EPS

Net incomebeforenon-controlling $ 827 $ 580 interests, asreported

Less:Non-controlling 7 8 interest, netof tax

Subtotal $ 820 $ 1.60 $ 572 $ 1.12

Operatingincome $ (7) $ 99 adjustments

Investments (1) 25 adjustment (a)

Income taxeffect of (12) (21) adjustments (b)

Impact of U.K.tax rate change 100 - (c)

80 0.15 103 0.20

Adjustedincome, net of $ 900 $ 1.75 $ 675 $ 1.32 tax



Six Months Ended June 30, 2021 Six Months Ended June 30, 2020

Amount Adjusted Amount Adjusted EPS EPS

Net incomebeforenon-controlling $ 1,825 $ 1,347 interests, asreported

Less:Non-controlling 22 21 interest, netof tax

Subtotal $ 1,803 $ 3.51 $ 1,326 $ 2.60

Operatingincome $ 40 $ 196 adjustments

Investments (1) 26 adjustment (a)

Income taxeffect of (21) (38) adjustments (b)

Impact of U.K.tax rate change 100 - (c)

118 0.23 184 0.36

Adjustedincome, net of $ 1,921 $ 3.74 $ 1,510 $ 2.96 tax



(a) Represents mark-to-market gains in 2021 and losses in 2020, primarily related to the Company's investment in Alexander Forbes ("AF").

(b) For items with an income tax impact, the tax effect was calculated using an effective tax rate based on the tax jurisdiction for each item.

(c) Reflects the re-measurement of the Company's U.K. deferred tax assets and liabilities upon enactment of legislation that increased the corporate income tax rate applicable to U.K. based entities from 19% to 25%, effective April 1, 2023.

(a) Represents mark-to-market gains in 2021 and losses in 2020, primarilyrelated to the Company's investment in Alexander Forbes ("AF").

(b) For items with an income tax impact, the tax effect was calculated using aneffective tax rate based on the tax jurisdiction for each item.

(c) Reflects the re-measurement of the Company's U.K. deferred tax assets andliabilities upon enactment of legislation that increased the corporate incometax rate applicable to U.K. based entities from 19% to 25%, effective April 1,2023.

Marsh & McLennan Companies, Inc. Supplemental Information Three and Six Months Ended June 30(Millions) (Unaudited)

Three Months Ended June 30,

Six Months Ended June 30,

2021

2020

2021

2020

Consolidated

Compensation and benefits

$

2,860

$

2,429

$

5,667

$

4,984

Other operating expenses

929

875

1,847

1,901

Total expenses

$

3,789

$

3,304

$

7,514

$

6,885

Depreciation and amortization expense

$

104

$

91

$

201

$

188

Identified intangible amortization expense

89

88

189

174

Total

$

193

$

179

$

390

$

362

Stock option expense

$

4

$

5

$

25

$

21

Risk and Insurance Services

Compensation and benefits

$

1,632

$

1,382

$

3,242

$

2,834

Other operating expenses

559

525

1,114

1,130

Total expenses

$

2,191

$

1,907

$

4,356

$

3,964

Depreciation and amortization expense

$

58

$

45

$

108

$

97

Identified intangible amortization expense

75

75

161

147

Total

$

133

$

120

$

269

$

244

Consulting

Compensation and benefits

$

1,110

$

940

$

2,184

$

1,931

Other operating expenses

438

421

876

910

Total expenses

$

1,548

$

1,361

$

3,060

$

2,841

Depreciation and amortization expense

$

29

$

29

$

58

$

57

Identified intangible amortization expense

14

13

28

27

Total

$

43

$

42

$

86

$

84

Marsh & McLennan Companies, Inc.Supplemental InformationThree and Six Months Ended June 30(Millions) (Unaudited)

Three Months Ended Six Months Ended June 30, June 30,

2021 2020 2021 2020

Consolidated

Compensation and benefits $ 2,860 $ 2,429 $ 5,667 $ 4,984

Other operating expenses 929 875 1,847 1,901

Total expenses $ 3,789 $ 3,304 $ 7,514 $ 6,885



Depreciation and amortization $ 104 $ 91 $ 201 $ 188 expense

Identified intangible amortization 89 88 189 174 expense

Total $ 193 $ 179 $ 390 $ 362



Stock option expense $ 4 $ 5 $ 25 $ 21



Risk and Insurance Services

Compensation and benefits $ 1,632 $ 1,382 $ 3,242 $ 2,834

Other operating expenses 559 525 1,114 1,130

Total expenses $ 2,191 $ 1,907 $ 4,356 $ 3,964



Depreciation and amortization $ 58 $ 45 $ 108 $ 97 expense

Identified intangible amortization 75 75 161 147 expense

Total $ 133 $ 120 $ 269 $ 244



Consulting

Compensation and benefits $ 1,110 $ 940 $ 2,184 $ 1,931

Other operating expenses 438 421 876 910

Total expenses $ 1,548 $ 1,361 $ 3,060 $ 2,841



Depreciation and amortization $ 29 $ 29 $ 58 $ 57 expense

Identified intangible amortization 14 13 28 27 expense

Total $ 43 $ 42 $ 86 $ 84

Marsh & McLennan Companies, Inc. Consolidated Balance Sheets(Millions)

(Unaudited) June 30, 2021

December 31, 2020

ASSETS

Current assets:

Cash and cash equivalents

$

888

$

2,089

Net receivables

5,839

5,326

Other current assets

846

740

Total current assets

7,573

8,155

Goodwill and intangible assets

18,492

18,216

Fixed assets, net

816

856

Pension related assets

1,911

1,768

Right of use assets

1,983

1,894

Deferred tax assets

669

702

Other assets

1,509

1,458

TOTAL ASSETS

$

32,953

$

33,049

LIABILITIES AND EQUITY

Current liabilities:

Short-term debt

$

516

$

517

Accounts payable and accrued liabilities

2,830

3,050

Accrued compensation and employee benefits

1,775

2,400

Current lease liabilities

342

342

Accrued income taxes

353

247

Total current liabilities

5,816

6,556

Fiduciary liabilities

9,936

8,585

Less - cash and investments held in a fiduciary capacity

(9,936)

(8,585)

-

-

Long-term debt

10,257

10,796

Pension, post-retirement and post-employment benefits

2,539

2,662

Long-term lease liabilities

1,992

1,924

Liabilities for errors and omissions

365

366

Other liabilities

1,720

1,485

Total equity

10,264

9,260

TOTAL LIABILITIES AND EQUITY

$

32,953

$

33,049

Marsh & McLennan Companies, Inc.Consolidated Balance Sheets(Millions)

(Unaudited) December June 30, 31, 2021 2020

ASSETS

Current assets:

Cash and cash equivalents $ 888 $ 2,089

Net receivables 5,839 5,326

Other current assets 846 740

Total current assets 7,573 8,155



Goodwill and intangible assets 18,492 18,216

Fixed assets, net 816 856

Pension related assets 1,911 1,768

Right of use assets 1,983 1,894

Deferred tax assets 669 702

Other assets 1,509 1,458

TOTAL ASSETS $ 32,953 $ 33,049



LIABILITIES AND EQUITY

Current liabilities:

Short-term debt $ 516 $ 517

Accounts payable and accrued liabilities 2,830 3,050

Accrued compensation and employee benefits 1,775 2,400

Current lease liabilities 342 342

Accrued income taxes 353 247

Total current liabilities 5,816 6,556



Fiduciary liabilities 9,936 8,585

Less - cash and investments held in a fiduciary (9,936) (8,585) capacity

- -

Long-term debt 10,257 10,796

Pension, post-retirement and post-employment 2,539 2,662 benefits

Long-term lease liabilities 1,992 1,924

Liabilities for errors and omissions 365 366

Other liabilities 1,720 1,485



Total equity 10,264 9,260

TOTAL LIABILITIES AND EQUITY $ 32,953 $ 33,049

Marsh & McLennan Companies, Inc. Consolidated Statements of Cash Flows(Millions) (Unaudited)

Six Months Ended June 30,

2021

2020

Operating cash flows:

Net income before non-controlling interests

$

1,825

$

1,347

Adjustments to reconcile net income to cash used for operations:

Depreciation and amortization

390

362

Non cash lease expense

158

165

Share-based compensation expense

176

147

Change in fair value of acquisition-related derivative contracts and other

53

15

Changes in Assets and Liabilities:

Accrued compensation and employee benefits

(642)

(848)

Net receivables

(551)

(389)

Other changes to assets and liabilities

(205)

114

Contributions to pension & other benefit plans in excess of current year credit

(187)

(165)

Operating lease liabilities

(172)

(164)

Effect of exchange rate changes

(95)

(6)

Net cash provided by operations

750

578

Financing cash flows:

Purchase of treasury shares

(434)

-

Borrowings from term-loan and credit facilities

-

1,000

Proceeds from issuance of debt

-

737

Repayments of debt

(509)

(507)

Net issuance of common stock from treasury shares

(23)

(49)

Net distributions of non-controlling interests and deferred/contingent consideration

(47)

(94)

Dividends paid

(478)

(466)

Net cash (used for) provided by financing activities

(1,491)

621

Investing cash flows:

Capital expenditures

(151)

(200)

Net (purchase) sale of long-term investments and other

(4)

105

Dispositions

81

93

Acquisitions

(363)

(562)

Net cash used for investing activities

(437)

(564)

Effect of exchange rate changes on cash and cash equivalents

(23)

(79)

(Decrease) increase in cash and cash equivalents

(1,201)

556

Cash and cash equivalents at beginning of period

2,089

1,155

Cash and cash equivalents at end of period

$

888

$

1,711

View source version on businesswire.com: https://www.businesswire.com/news/home/20210722005503/en/

CONTACT: Media Contact: Erick R. Gustafson Marsh McLennan +1 202 263 7788 erick.gustafson@mmc.com Investor Contact: Sarah DeWitt Marsh McLennan +1 212 345 6750 sarah.dewitt@mmc.com