Full-Year Revenue Growth of 10%; Underlying
Revenue Growth of 9% Full-Year GAAP Operating Income
Increases 23%; Adjusted Operating Income Increases 17%
Full-Year GAAP EPS of $7.53; Adjusted EPS Increases 17% to
$7.99 Fourth Quarter GAAP EPS of $1.52; Adjusted EPS
Increases 14% to $1.68
Marsh McLennan (NYSE: MMC), the world’s leading professional
services firm in the areas of risk, strategy and people, today
reported financial results for the fourth quarter and year ended
December 31, 2023.
John Doyle, President and CEO, said: "Our fourth quarter results
highlight a strong finish to another outstanding year for Marsh
McLennan. For the full year, we generated 9% underlying revenue
growth, 17% adjusted EPS growth and 130 basis points of margin
expansion, marking our 16th consecutive year of reported margin
expansion. In addition, we continued to make substantial organic
and inorganic investments in our business with significant
acquisition activity in 2023."
"Our results and investments have us well positioned for 2024 as
we remain focused on supporting our clients and helping them
thrive."
Consolidated Results
Consolidated revenue in the fourth quarter of 2023 was $5.6
billion, an increase of 11% compared with the fourth quarter of
2022, or an increase of 7% on an underlying basis. Operating income
was $1.1 billion. Adjusted operating income, which excludes
noteworthy items as presented in the attached supplemental
schedules, rose 16% to $1.2 billion. Net income attributable to the
Company was $756 million. Earnings per share increased 63% to
$1.52. Adjusted earnings per share increased 14% to $1.68.
For the full year 2023, revenue was $22.7 billion, an increase
of 10% compared with 2022, or 9% on an underlying basis. Operating
income was $5.3 billion, and adjusted operating income rose 17% to
$5.6 billion. Net income attributable to the Company was $3.8
billion. Earnings per share increased 25% to $7.53. Adjusted
earnings per share increased 17% to $7.99.
Risk & Insurance Services
Risk & Insurance Services revenue was $3.3 billion in the
fourth quarter of 2023, an increase of 11%, or 8% on an underlying
basis. Operating income was $753 million, compared with $472
million in the fourth quarter of 2022. Adjusted operating income
increased 15% to $791 million. For the year 2023, revenue was $14.1
billion, an increase of 11% on both a GAAP and an underlying basis.
Operating income was $3.9 billion. Adjusted operating income rose
17% to $4.1 billion.
Marsh's revenue in the fourth quarter of 2023 was $2.9 billion,
an increase of 7%, or 6% on an underlying basis. In U.S./Canada,
underlying revenue rose 5%. International operations produced
underlying revenue growth of 7%, reflecting 11% in Latin America,
10% in Asia Pacific, and 5% in EMEA. For the year 2023, Marsh’s
revenue growth was 8% on both a GAAP and underlying basis.
Guy Carpenter's fourth quarter revenue was $252 million, an
increase of 48%, or 9% on an underlying basis. For the year 2023,
Guy Carpenter’s revenue grew 12% compared to a year ago, or 10% on
an underlying basis.
Consulting
Consulting revenue was $2.3 billion in the fourth quarter of
2023, an increase of 10%, or 7% on an underlying basis. Operating
income increased 32% to $443 million, compared with $336 million in
the fourth quarter of 2022. Adjusted operating income was $480
million, an increase of 18% compared with $407 million in the
fourth quarter of 2022. For the year 2023, revenue was $8.7
billion, an increase of 7% on both a GAAP and underlying basis.
Operating income was $1.7 billion. Adjusted operating income
increased 13% to $1.7 billion.
Mercer’s revenue was $1.4 billion in the fourth quarter of 2023,
an increase of 9%, or 5% on an underlying basis. Wealth revenue of
$654 million increased 4% on an underlying basis. Health revenue of
$502 million increased 9% on an underlying basis. Career revenue of
$288 million increased 1% on an underlying basis. For the year
2023, Mercer’s revenue increased 5%, or 7% on an underlying
basis.
Oliver Wyman’s revenue was $856 million in the fourth quarter of
2023, an increase of 9% on an underlying basis. For the year 2023,
Oliver Wyman’s revenue was $3.1 billion, an increase of 8% on an
underlying basis.
Other Items
The Company repurchased 1.3 million shares of stock for $250
million in the fourth quarter. For the year 2023, the Company
repurchased 6.4 million shares for $1.15 billion.
On October 16, 2023, the Company repaid $250 million of senior
notes that matured.
In November, Marsh completed the acquisition of Honan Insurance
Group, a leading insurance broker in Australia and New Zealand.
Conference Call
A conference call to discuss fourth quarter 2023 results will be
held today at 8:30 a.m. Eastern time. The live audio webcast may be
accessed at marshmclennan.com. A replay of the webcast will be
available approximately two hours after the event. The webcast is
listen-only. Those interested in participating in the
question-and-answer session may register here to receive the
dial-in numbers and unique PIN to access the call.
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 more than 85,000 colleagues advise clients in over 130
countries. With annual revenue of $23 billion, Marsh McLennan helps
clients navigate an increasingly dynamic and complex environment
through four market-leading businesses. Marsh provides data-driven
risk advisory services and insurance solutions to commercial and
consumer clients. Guy Carpenter develops advanced risk, reinsurance
and capital strategies that help clients grow profitably and pursue
emerging opportunities. Mercer delivers advice and
technology-driven solutions that help organizations redefine the
world of work, reshape retirement and investment outcomes, and
unlock health and well being for a changing workforce. Oliver Wyman
serves as a critical strategic, economic and brand advisor to
private sector and governmental clients. For more information,
visit marshmclennan.com, or follow us on LinkedIn and X.
INFORMATION CONCERNING FORWARD-LOOKING STATEMENTS
This press release contains "forward-looking statements," as
defined in the Private Securities Litigation Reform Act of 1995.
These statements, which express management's current views
concerning future events or results, use words like "anticipate,"
"assume," "believe," "continue," "estimate," "expect," "intend,"
"plan," "project" and similar terms, and future or conditional
tense verbs like "could," "may," "might," "should," "will" and
"would".
Forward-looking statements are subject to inherent risks and
uncertainties that could cause actual results to differ materially
from those expressed or implied in our forward-looking statements.
Factors that could materially affect our future results include,
among other things:
- the impact of geopolitical or macroeconomic conditions on us,
our clients and the countries and industries in which we operate,
including from multiple major wars, escalating conflict throughout
the Middle East and rising tension in the South China Sea, slower
GDP growth or recession, lower interest rates, capital markets
volatility and inflation;
- the impact from lawsuits or investigations arising from errors
and omissions, breaches of fiduciary duty or other claims against
us in our capacity as a broker or investment advisor, including
claims related to our investment business’ ability to execute
timely trades;
- the increasing prevalence of ransomware, supply chain and other
forms of cyber attacks, and their potential to disrupt our
operations, or the operations of our third party vendors, and
result in the disclosure of confidential client or company
information;
- the financial and operational impact of complying with laws and
regulations, including domestic and international sanctions
regimes, anti-corruption laws such as the U.S. Foreign Corrupt
Practices Act, U.K. Anti Bribery Act and cybersecurity, data
privacy and artificial intelligence regulations;
- our ability to attract, retain and develop industry leading
talent;
- our ability to compete effectively and adapt to competitive
pressures in each of our businesses, including from
disintermediation as well as technological change, digital
disruption and other types of innovation such as artificial
intelligence;
- our ability to manage potential conflicts of interest,
including where our services to a client conflict, or are perceived
to conflict, with the interests of another client or our own
interests;
- the impact of changes in tax laws, guidance and
interpretations, such as the implementation of the Organization for
Economic Cooperation and Development international tax framework,
or the increasing number of disagreements with and challenges by
tax authorities in the current global tax environment; and
- the regulatory, contractual and reputational risks that arise
based on insurance placement activities and insurer revenue
streams.
The factors identified above are not exhaustive. Marsh McLennan
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 our most recently
filed Annual Report on Form 10-K.
Marsh & McLennan
Companies, Inc. Consolidated Statements of Income (In
millions, except per share data) (Unaudited)
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2023
2022
2023
2022
Revenue
$
5,554
$
5,022
$
22,736
$
20,720
Expense:
Compensation and benefits
3,268
3,038
13,099
12,071
Other operating expenses
1,183
1,304
4,355
4,369
Operating expenses
4,451
4,342
17,454
16,440
Operating income
1,103
680
5,282
4,280
Other net benefit credits
59
57
239
235
Interest income
38
9
78
15
Interest expense
(151
)
(127
)
(578
)
(469
)
Investment (loss) income
(1
)
(6
)
5
21
Income before income taxes
1,048
613
5,026
4,082
Income tax expense
283
142
1,224
995
Net income before non-controlling
interests
765
471
3,802
3,087
Less: Net income attributable to
non-controlling interests
9
5
46
37
Net income attributable to the
Company
$
756
$
466
$
3,756
$
3,050
Net income per share attributable to
the Company:
- Basic
$
1.53
$
0.94
$
7.60
$
6.11
- Diluted
$
1.52
$
0.93
$
7.53
$
6.04
Average number of shares
outstanding:
- Basic
493
496
494
499
- Diluted
498
501
499
505
Shares outstanding at December
31
492
495
492
495
Marsh & McLennan Companies, Inc.
Supplemental Information - Revenue Analysis Three Months
Ended December 31 (Millions) (Unaudited)
The Company advises clients in over 130 countries. As a result,
foreign exchange rate movements may impact period over period
comparisons of revenue. Similarly, certain other items such as
acquisitions and dispositions, including transfers among
businesses, may impact period over period comparisons of revenue.
Non-GAAP underlying revenue measures the change in revenue from one
period to the next by isolating these impacts.
Components of Revenue
Change*
Three Months Ended December
31,
% Change GAAP Revenue*
Currency Impact
Acquisitions/
Dispositions/ Other Impact**
Non-GAAP Underlying
Revenue
2023
2022
Risk and Insurance Services
Marsh
$
2,896
$
2,711
7
%
—
1
%
6
%
Guy Carpenter (a)
252
171
48
%
2
%
36
%
9
%
Subtotal
3,148
2,882
9
%
1
%
3
%
6
%
Fiduciary Interest Income
123
63
Total Risk and Insurance Services
3,271
2,945
11
%
1
%
3
%
8
%
Consulting
Mercer
1,444
1,329
9
%
2
%
2
%
5
%
Oliver Wyman Group
856
765
12
%
2
%
1
%
9
%
Total Consulting
2,300
2,094
10
%
2
%
2
%
7
%
Corporate Eliminations
(17
)
(17
)
Total Revenue
$
5,554
$
5,022
11
%
1
%
2
%
7
%
Revenue Details
The following table provides more detailed revenue information
for certain of the components presented above:
Components of Revenue
Change*
Three Months Ended December
31,
% Change GAAP Revenue*
Currency Impact
Acquisitions/
Dispositions/ Other Impact**
Non-GAAP Underlying
Revenue
2023
2022
Marsh:
EMEA (b)
$
780
$
733
6
%
3
%
(1
)%
5
%
Asia Pacific (b)
315
288
9
%
(1
)%
—
10
%
Latin America
173
162
7
%
(4
)%
—
11
%
Total International
1,268
1,183
7
%
1
%
(1
)%
7
%
U.S./Canada
1,628
1,528
7
%
—
2
%
5
%
Total Marsh
$
2,896
$
2,711
7
%
—
1
%
6
%
Mercer:
Wealth
$
654
$
591
10
%
2
%
4
%
4
%
Health
502
455
10
%
1
%
—
9
%
Career
288
283
2
%
1
%
—
1
%
Total Mercer
$
1,444
$
1,329
9
%
2
%
2
%
5
%
(a)
Acquisitions, dispositions and other in 2023 includes a gain
from a legal settlement with a competitor, excluding legal
fees.
(b)
In the first quarter of 2023, the Company began reporting the
Marsh India operations in EMEA. Prior year results for India have
been reclassified from Asia Pacific to EMEA for comparative
purposes.
*
Rounded to whole percentages. Components
of revenue may not add due to rounding.
**
Acquisitions, dispositions, and other
includes the impact of current and prior year items excluded from
the calculation of non-GAAP underlying revenue for comparability
purposes. Details on these items are provided in the reconciliation
of non-GAAP revenue to GAAP revenue tables included in this
release.
Marsh & McLennan Companies, Inc.
Supplemental Information - Revenue Analysis Twelve Months
Ended December 31 (Millions) (Unaudited)
The Company advises clients in over 130 countries. As a result,
foreign exchange rate movements may impact period over period
comparisons of revenue. Similarly, certain other items such as
acquisitions and dispositions, including transfers among
businesses, may impact period over period comparisons of revenue.
Non-GAAP underlying revenue measures the change in revenue from one
period to the next by isolating these impacts.
Components of Revenue
Change*
Twelve Months Ended
December 31,
% Change GAAP Revenue*
Currency Impact
Acquisitions/
Dispositions/ Other Impact**
Non-GAAP Underlying
Revenue
2023
2022
Risk and Insurance Services
Marsh
$
11,378
$
10,505
8
%
(1
)%
1
%
8
%
Guy Carpenter (a)
2,258
2,020
12
%
(1
)%
3
%
10
%
Subtotal
13,636
12,525
9
%
(1
)%
1
%
8
%
Fiduciary Interest Income
453
120
Total Risk and Insurance Services
14,089
12,645
11
%
(1
)%
1
%
11
%
Consulting
Mercer
5,587
5,345
5
%
—
(1
)%
7
%
Oliver Wyman Group
3,122
2,794
12
%
1
%
3
%
8
%
Total Consulting
8,709
8,139
7
%
—
—
7
%
Corporate Eliminations
(62
)
(64
)
Total Revenue
$
22,736
$
20,720
10
%
—
1
%
9
%
Revenue Details
The following table provides more detailed revenue information
for certain of the components presented above:
Components of Revenue
Change*
Twelve Months Ended
December 31,
% Change GAAP
Revenue*
Currency Impact
Acquisitions/
Dispositions/ Other Impact**
Non-GAAP Underlying
Revenue
2023
2022
Marsh:
EMEA (b)
$
3,262
$
2,997
9
%
—
—
9
%
Asia Pacific (b)
1,295
1,215
7
%
(3
)%
—
9
%
Latin America
559
502
11
%
(1
)%
—
13
%
Total International
5,116
4,714
9
%
(1
)%
—
9
%
U.S./Canada
6,262
5,791
8
%
—
2
%
7
%
Total Marsh
$
11,378
$
10,505
8
%
(1
)%
1
%
8
%
Mercer:
Wealth
$
2,507
$
2,366
6
%
—
2
%
4
%
Health
2,061
2,017
2
%
—
(7
)%
10
%
Career
1,019
962
6
%
(1
)%
1
%
6
%
Total Mercer
$
5,587
$
5,345
5
%
—
(1
)%
7
%
(a)
Acquisitions, dispositions and other in 2023 includes a gain
from a legal settlement with a competitor, excluding legal
fees.
(b)
In the first quarter of 2023, the Company began reporting the
Marsh India operations in EMEA. Prior year results for India have
been reclassified from Asia Pacific to EMEA for comparative
purposes.
*
Rounded to whole percentages. Components
of revenue may not add due to rounding.
**
Acquisitions, dispositions, and other
includes the impact of current and prior year items excluded from
the calculation of non-GAAP underlying revenue for comparability
purposes. Details on these items are provided in the reconciliation
of non-GAAP revenue to GAAP revenue tables included in this
release.
Marsh & McLennan Companies, Inc.
Reconciliation of Non-GAAP Measures Three Months Ended
December 31 (Millions) (Unaudited)
Overview
The Company reports its financial results in accordance with
accounting principles generally accepted in the United States
(referred to in this release as in accordance with "GAAP" or
"reported" results). The Company also refers to and presents
certain additional non-GAAP financial measures, within the meaning
of Regulation G and item 10(e) Regulation S-K in accordance with
the Securities Exchange Act of 1934. These measures are: non-GAAP
revenue, adjusted operating income (loss), adjusted operating
margin, adjusted income, net of tax and adjusted earnings per share
(EPS). The Company has included reconciliations of these non-GAAP
financial measures to the most directly comparable financial
measure calculated in accordance with GAAP in the following
tables.
The Company believes these non-GAAP financial measures provide
useful supplemental information that enables investors to better
compare the Company’s performance across periods. Management also
uses these measures internally to assess the operating performance
of its businesses and to decide how to allocate resources. However,
investors should not consider these non-GAAP measures in isolation
from, or as a substitute for, the financial information that the
Company reports in accordance with GAAP. The Company's non-GAAP
measures include adjustments that reflect how management views its
businesses, and may differ from similarly titled non-GAAP measures
presented by other companies.
Adjusted Operating Income (Loss) and Adjusted Operating
Margin
Adjusted operating income (loss) is calculated by excluding the
impact of certain noteworthy items from the Company's GAAP
operating income (loss). The following tables identify these
noteworthy items and reconcile adjusted operating income (loss) to
GAAP operating income (loss), on a consolidated and reportable
segment basis, for the three and twelve months ended December 31,
2023 and 2022. The following tables also present adjusted operating
margin. For the three and twelve months ended December 31, 2023 and
2022, adjusted operating margin is calculated by dividing the sum
of adjusted operating income and identified intangible asset
amortization by consolidated or segment adjusted revenue. The
Company's adjusted revenue used in the determination of adjusted
operating margin is calculated by excluding the impact of certain
noteworthy items from the Company's GAAP revenue.
Risk & Insurance
Services
Consulting
Corporate/
Eliminations
Total
Three Months Ended December 31,
2023
Operating income (loss)
$
753
$
443
$
(93
)
$
1,103
Operating margin
23.0
%
19.2
%
N/A
19.9
%
Add (deduct) impact of noteworthy
items:
Restructuring, excluding JLT (a)
79
29
14
122
Changes in fair value of contingent
consideration
7
1
—
8
JLT integration and restructuring costs
(b)
9
—
—
9
Legal settlement (c)
(58
)
—
—
(58
)
Westpac acquisition and integration
related costs
—
7
—
7
Other
1
—
1
2
Operating income adjustments
38
37
15
90
Adjusted operating income (loss)
$
791
$
480
$
(78
)
$
1,193
Total identified intangible amortization
expense
$
76
$
10
$
—
$
86
Adjusted operating margin
27.0
%
21.3
%
N/A
23.3
%
Three Months Ended December 31,
2022
Operating income (loss)
$
472
$
336
$
(128
)
$
680
Operating margin
16.0
%
16.0
%
N/A
13.5
%
Add (deduct) impact of noteworthy
items:
Restructuring, excluding JLT (a)
119
54
60
233
Changes in fair value of contingent
consideration
11
—
—
11
JLT integration and restructuring costs
(b)
91
6
—
97
Westpac acquisition and integration
related costs
—
13
—
13
JLT legacy legal charges
—
(2
)
—
(2
)
Disposal of businesses
(8
)
—
—
(8
)
Operating income adjustments
213
71
60
344
Adjusted operating income (loss)
$
685
$
407
$
(68
)
$
1,024
Total identified intangible amortization
expense
$
68
$
12
$
—
$
80
Adjusted operating margin
25.6
%
20.0
%
N/A
22.0
%
(a)
Costs primarily includes severance and
lease exit charges for activities focused on workforce actions,
rationalization of technology and functional resources, and
reductions in real estate.
(b)
Reflects adjustments to restructuring
liabilities for lease exit charges for a legacy JLT U.K.
location.
(c)
Reflects a legal settlement with a
competitor, excluding legal fees. The amount is included in revenue
in the consolidated statements of income and excluded from non-GAAP
revenue and adjusted revenue used in the calculation of adjusted
operating margin.
Marsh & McLennan
Companies, Inc. Reconciliation of Non-GAAP Measures Twelve Months
Ended December 31 (Millions) (Unaudited)
Risk & Insurance
Services
Consulting
Corporate/
Eliminations
Total
Twelve Months Ended December 31,
2023
Operating income (loss)
$
3,945
$
1,666
$
(329
)
$
5,282
Operating margin
28.0
%
19.1
%
N/A
23.2
%
Add (deduct) impact of noteworthy
items:
Restructuring, excluding JLT (a)
146
62
62
270
Changes in fair value of contingent
consideration
27
2
—
29
JLT integration and restructuring costs
(b)
31
—
—
31
JLT legacy legal charges (c)
—
(51
)
—
(51
)
Disposal of businesses (d)
—
17
—
17
Legal settlement (e)
(58
)
—
—
(58
)
Westpac acquisition and integration
related costs
—
39
—
39
Other
2
1
1
4
Operating income adjustments
148
70
63
281
Adjusted operating income (loss)
$
4,093
$
1,736
$
(266
)
$
5,563
Total identified intangible amortization
expense
$
297
$
46
$
—
$
343
Adjusted operating margin
31.3
%
20.4
%
N/A
26.0
%
Twelve Months Ended December 31,
2022
Operating income (loss)
$
3,089
$
1,553
$
(362
)
$
4,280
Operating margin
24.4
%
19.1
%
N/A
20.7
%
Add (deduct) impact of noteworthy
items:
Restructuring, excluding JLT (a)
157
61
94
312
Changes in fair value of contingent
consideration
44
5
—
49
JLT integration and restructuring costs
(b)
97
16
2
115
JLT legacy legal charges (c)
14
(13
)
—
1
JLT acquisition related costs
24
1
3
28
Disposal of businesses (d)
(8
)
(114
)
—
(122
)
Legal claims (f)
30
—
—
30
Westpac acquisition and integration
related costs
—
21
—
21
Deconsolidation of Russian businesses and
other related charges (g)
42
10
—
52
Operating income adjustments
400
(13
)
99
486
Adjusted operating income (loss)
$
3,489
$
1,540
$
(263
)
$
4,766
Total identified intangible amortization
expense
$
291
$
47
$
—
$
338
Adjusted operating margin
29.8
%
19.7
%
N/A
24.7
%
(a)
Costs primarily includes severance and
lease exit charges for activities focused on workforce actions,
rationalization of technology and functional resources, and
reductions in real estate. Costs also reflect charges for Marsh's
operational excellence program.
(b)
Reflects adjustments to restructuring
liabilities for lease exit charges for a legacy JLT U.K.
location.
(c)
Insurance and indemnity recoveries for a
legacy JLT E&O matter relating to suitability of advice
provided to individuals for defined benefit pension transfers in
the U.K.
(d)
Loss on sale of an individual financial
advisory business in Canada. In 2022, the amount reflects a gain of
$112 million on the sale of the Mercer U.S. affinity business.
These amounts are included in revenue in the consolidated
statements of income and excluded from non-GAAP revenue and
adjusted revenue used in the calculation of adjusted operating
margin.
(e)
Reflects a legal settlement with a
competitor, excluding legal fees. The amount is included in revenue
in the consolidated statements of income and excluded from non-GAAP
revenue and adjusted revenue used in the calculation of adjusted
operating margin.
(f)
Settlement charges and legal costs related
to strategic recruiting.
(g)
Loss on deconsolidation of $39 million is
included in revenue in the consolidated statements of income and
excluded from non-GAAP revenue and adjusted revenue used in the
calculation of adjusted operating margin. The remaining expenses of
$13 million are included in other operating expenses in the
consolidated statements of income.
Marsh & McLennan Companies, Inc.
Reconciliation of Non-GAAP Measures Three and Twelve
Months Ended December 31 (In millions, except per share data)
(Unaudited)
Adjusted income, net of tax is calculated as the Company's GAAP
income from continuing operations, adjusted to reflect the after
tax impact of the operating income adjustments in the preceding
tables and the additional items listed below. Adjusted EPS is
calculated by dividing the Company’s adjusted income, net of tax,
by the average number of shares outstanding-diluted for the
relevant period. The following tables reconcile adjusted income,
net of tax to GAAP income from continuing operations and adjusted
EPS to GAAP EPS for the three and twelve months ended December 31,
2023 and 2022.
Three Months Ended December
31, 2023
Three Months Ended December 31,
2022
Amount
Adjusted EPS
Amount
Adjusted EPS
Net income before non-controlling
interests, as reported
$
765
$
471
Less: Non-controlling interest, net of
tax
9
5
Subtotal
$
756
$
1.52
$
466
$
0.93
Operating income adjustments
$
90
$
344
Investments adjustment
—
1
Pension settlement adjustment
—
1
Income tax effect of adjustments (a)
(8
)
(77
)
82
0.16
269
0.54
Adjusted income, net of tax
$
838
$
1.68
$
735
$
1.47
Twelve Months Ended December
31, 2023
Twelve Months Ended December 31,
2022
Amount
Adjusted EPS
Amount
Adjusted EPS
Net income before non-controlling
interests, as reported
$
3,802
$
3,087
Less: Non-controlling interest, net of
tax
46
37
Subtotal
$
3,756
$
7.53
$
3,050
$
6.04
Operating income adjustments
$
281
$
486
Investments adjustment
2
(3
)
Pension settlement adjustment
—
2
Income tax effect of adjustments (a)
(53
)
(78
)
230
0.46
407
0.81
Adjusted income, net of tax
$
3,986
$
7.99
$
3,457
$
6.85
(a)
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.
Marsh & McLennan
Companies, Inc. Supplemental Information Three and Twelve Months
Ended December 31 (Millions) (Unaudited)
Three Months Ended December
31,
Twelve Months Ended December
31,
2023
2022
2023
2022
Consolidated
Compensation and benefits
$
3,268
$
3,038
$
13,099
$
12,071
Other operating expenses
1,183
1,304
4,355
4,369
Total expenses
$
4,451
$
4,342
$
17,454
$
16,440
Depreciation and amortization expense
$
100
$
122
$
370
$
381
Identified intangible amortization
expense
86
80
343
338
Total
$
186
$
202
$
713
$
719
Risk and Insurance Services
Compensation and benefits (a)
$
1,868
$
1,742
$
7,702
$
7,101
Other operating expenses (a)
650
731
2,442
2,455
Total expenses
$
2,518
$
2,473
$
10,144
$
9,556
Depreciation and amortization expense
$
55
$
55
$
190
$
178
Identified intangible amortization
expense
76
68
297
291
Total
$
131
$
123
$
487
$
469
Consulting
Compensation and benefits (a)
$
1,362
$
1,261
$
5,249
$
4,827
Other operating expenses (a)
495
497
1,794
1,759
Total expenses
$
1,857
$
1,758
$
7,043
$
6,586
Depreciation and amortization expense
$
28
$
32
$
106
$
111
Identified intangible amortization
expense
10
12
46
47
Total
$
38
$
44
$
152
$
158
(a)
In the fourth quarter of 2023, the Company
reclassified certain amounts between Compensation and benefits and
Other operating expenses for each reporting segment. The
reclassification had no impact on consolidated or reporting segment
total expenses. Prior period amounts were reclassified for
comparability purposes.
Marsh & McLennan
Companies, Inc. Consolidated Balance Sheets (Millions)
(Unaudited)
December 31, 2023
December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents
$
3,358
$
1,442
Cash and cash equivalents held in a
fiduciary capacity (a)
10,794
10,660
Net receivables
6,418
5,852
Other current assets
1,178
1,005
Total current assets
21,748
18,959
Goodwill and intangible assets
19,861
18,788
Fixed assets, net
882
871
Pension related assets
2,051
2,127
Right of use assets
1,541
1,562
Deferred tax assets
357
358
Other assets
1,590
1,449
TOTAL ASSETS
$
48,030
$
44,114
LIABILITIES AND EQUITY
Current liabilities:
Short-term debt
$
1,619
$
268
Accounts payable and accrued
liabilities
3,403
3,278
Accrued compensation and employee
benefits
3,346
3,095
Current lease liabilities
312
310
Accrued income taxes
321
221
Fiduciary liabilities (a)
10,794
10,660
Total current liabilities
19,795
17,832
Long-term debt
11,844
11,227
Pension, post-retirement and
post-employment benefits
779
921
Long-term lease liabilities
1,661
1,667
Liabilities for errors and omissions
314
355
Other liabilities
1,267
1,363
Total equity
12,370
10,749
TOTAL LIABILITIES AND EQUITY
$
48,030
$
44,114
(a)
In the second quarter of 2023, the Company
changed the presentation of fiduciary assets and liabilities on the
consolidated balance sheets. Cash and cash equivalents held in a
fiduciary capacity was reclassified from an offset to fiduciary
liabilities to current assets, with the corresponding fiduciary
liabilities reclassified to current liabilities. The presentation
in the December 31, 2022 consolidated balance sheet was conformed
to the current presentation.
Marsh & McLennan
Companies, Inc. Consolidated Statements of Cash Flows
(Millions) (Unaudited)
For the Years Ended
December 31,
2023
2022
Operating cash flows:
Net income before non-controlling
interests
$
3,802
$
3,087
Adjustments to reconcile net income to
cash provided by operations:
Depreciation and amortization
713
719
Non-cash lease expense
288
404
Deconsolidation of Russian businesses
—
39
Gain on consolidation of entity
—
(2
)
Share-based compensation expense
363
367
Dispositions, changes to contingent
consideration and net gain on investments
—
(137
)
Changes in assets and liabilities:
Accrued compensation and employee
benefits
195
171
Provision for taxes, net of payments and
refunds
105
(54
)
Net receivables
(467
)
(492
)
Other changes to assets and
liabilities
(90
)
71
Contributions to pension and other benefit
plans in excess of current year credit
(335
)
(385
)
Operating lease liabilities
(316
)
(323
)
Net cash provided by operations
4,258
3,465
Financing cash flows:
Purchase of treasury shares
(1,150
)
(1,950
)
Proceeds from issuance of debt
2,169
984
Repayments of debt
(266
)
(365
)
Net issuance of common stock from treasury
shares
51
(72
)
Net distributions from non-controlling
interests and deferred/contingent consideration
(370
)
(189
)
Dividends paid
(1,298
)
(1,138
)
Change in fiduciary liabilities
(255
)
1,684
Net cash used for financing
activities
(1,119
)
(1,046
)
Investing cash flows:
Capital expenditures
(416
)
(470
)
Net purchases of long term investments and
other
(46
)
(13
)
Sales of long term investments
38
86
Dispositions
(17
)
119
Acquisitions, net of cash and cash held in
a fiduciary capacity acquired
(976
)
(572
)
Net cash used for investing
activities
(1,417
)
(850
)
Effect of exchange rate changes on
cash, cash equivalents, and cash and cash equivalents held in a
fiduciary capacity
328
(841
)
Increase in cash, cash equivalents, and
cash and cash equivalents held in a fiduciary capacity
2,050
728
Cash, cash equivalents, and cash and
cash equivalents held in a fiduciary capacity at beginning of
year
12,102
11,374
Cash, cash equivalents, and cash and
cash equivalents held in a fiduciary capacity at end of
year
$
14,152
$
12,102
Reconciliation of cash, cash
equivalents, and cash and cash equivalents held in a fiduciary
capacity to the Consolidated Balance Sheets
Balance at December 31,
2023
2022
(In millions)
Cash and cash equivalents
$
3,358
$
1,442
Cash and cash equivalents held in a
fiduciary capacity
10,794
10,660
Total cash, cash equivalents, and cash and
cash equivalents held in a fiduciary capacity
$
14,152
$
12,102
Marsh & McLennan Companies, Inc.
Reconciliation of Non-GAAP Measures Three Months Ended
December 31 (Millions) (Unaudited)
Non-GAAP revenue isolates the impact of foreign exchange rate
movements and certain transaction-related items from the current
period GAAP revenue. The non-GAAP revenue measure is presented on a
constant currency basis, excluding the impact of foreign currency
fluctuations. The Company isolates the impact of foreign exchange
rate movements period over period, by translating the current
period foreign currency GAAP revenue into U.S. Dollars based on the
difference in the current and corresponding prior period exchange
rates. Similarly, certain other items such as acquisitions and
dispositions, including transfers among businesses, may impact
period over period comparisons of revenue and are consistently
excluded from current and prior period GAAP revenues for
comparability purposes. Percentage changes, referred to as non-GAAP
underlying revenue, are calculated by dividing the period over
period change in non-GAAP revenue by the prior period non-GAAP
revenue.
The following table provides the reconciliation of GAAP revenue
to non-GAAP revenue:
2023
2022
Three Months Ended December 31,
GAAP Revenue
Currency Impact
Acquisitions/
Dispositions/ Other Impact
Non-GAAP Revenue
GAAP Revenue
Acquisitions/ Dispositions/ Other
Impact
Non-GAAP Revenue
Risk and Insurance Services
Marsh
$
2,896
$
(12
)
$
(30
)
$
2,854
$
2,711
$
(10
)
$
2,701
Guy Carpenter (a)
252
(4
)
(62
)
186
171
—
171
Subtotal
3,148
(16
)
(92
)
3,040
2,882
(10
)
2,872
Fiduciary Interest Income
123
(1
)
—
122
63
—
63
Total Risk and Insurance Services
3,271
(17
)
(92
)
3,162
2,945
(10
)
2,935
Consulting
Mercer (b)
1,444
(21
)
—
1,423
1,329
24
1,353
Oliver Wyman Group
856
(14
)
(8
)
834
765
—
765
Total Consulting
2,300
(35
)
(8
)
2,257
2,094
24
2,118
Corporate Eliminations
(17
)
—
—
(17
)
(17
)
—
(17
)
Total Revenue
$
5,554
$
(52
)
$
(100
)
$
5,402
$
5,022
$
14
$
5,036
Revenue Details
The following table provides more detailed revenue information
for certain of the components presented above:
2023
2022
Three Months Ended December 31,
GAAP Revenue
Currency Impact
Acquisitions/
Dispositions/ Other Impact
Non-GAAP Revenue
GAAP Revenue
Acquisitions/
Dispositions/
Other Impact
Non-GAAP Revenue
Marsh:
EMEA (c)
$
780
$
(20
)
$
—
$
760
$
733
$
(8
)
$
725
Asia Pacific (c)
315
2
(1
)
316
288
—
288
Latin America
173
6
—
179
162
—
162
Total International
1,268
(12
)
(1
)
1,255
1,183
(8
)
1,175
U.S./Canada
1,628
—
(29
)
1,599
1,528
(2
)
1,526
Total Marsh
$
2,896
$
(12
)
$
(30
)
$
2,854
$
2,711
$
(10
)
$
2,701
Mercer:
Wealth (b)
$
654
$
(13
)
$
—
$
641
$
591
$
24
$
615
Health
502
(6
)
(1
)
495
455
—
455
Career
288
(2
)
1
287
283
—
283
Total Mercer
$
1,444
$
(21
)
$
—
$
1,423
$
1,329
$
24
$
1,353
(a)
Acquisitions, dispositions, and other in
2023 includes a gain from a legal settlement with a competitor of
$58 million, excluding legal fees.
(b)
Acquisitions, dispositions, and other in
2022 includes revenue from the Westpac superannuation fund
transaction in Wealth.
(c)
In the first quarter of 2023, the Company
began reporting the Marsh India operations in EMEA. Prior year
results for India have been reclassified from Asia Pacific to EMEA
for comparative purposes.
Marsh & McLennan Companies, Inc.
Reconciliation of Non-GAAP Measures Twelve Months Ended
December 31 (Millions) (Unaudited)
The following table provides the reconciliation of GAAP revenue
to Non-GAAP revenue:
2023
2022
Twelve Months Ended December 31,
GAAP Revenue
Currency Impact
Acquisitions/
Dispositions/ Other Impact
Non-GAAP Revenue
GAAP Revenue
Acquisitions/ Dispositions/ Other
Impact
Non-GAAP Revenue
Risk and Insurance Services
Marsh (a)
$
11,378
$
70
$
(109
)
$
11,339
$
10,505
$
5
$
10,510
Guy Carpenter (b)
2,258
16
(80
)
2,194
2,020
(19
)
2,001
Subtotal
13,636
86
(189
)
13,533
12,525
(14
)
12,511
Fiduciary Interest Income
453
1
—
454
120
—
120
Total Risk and Insurance Services
14,089
87
(189
)
13,987
12,645
(14
)
12,631
Consulting
Mercer (c)
5,587
23
11
5,621
5,345
(68
)
5,277
Oliver Wyman Group (a)
3,122
(15
)
(79
)
3,028
2,794
11
2,805
Total Consulting
8,709
8
(68
)
8,649
8,139
(57
)
8,082
Corporate Eliminations
(62
)
—
—
(62
)
(64
)
—
(64
)
Total Revenue
$
22,736
$
95
$
(257
)
$
22,574
$
20,720
$
(71
)
$
20,649
Revenue Details
The following table provides more detailed revenue information
for certain of the components presented above:
2023
2022
Twelve Months Ended December 31,
GAAP Revenue
Currency Impact
Acquisitions/
Dispositions/ Other Impact
Non-GAAP Revenue
GAAP Revenue
Acquisitions/ Dispositions/ Other
Impact
Non-GAAP Revenue
Marsh:
EMEA (a) (d)
$
3,262
$
12
$
(6
)
$
3,268
$
2,997
$
8
$
3,005
Asia Pacific (d)
1,295
37
(5
)
1,327
1,215
—
1,215
Latin America
559
6
1
566
502
—
502
Total International
5,116
55
(10
)
5,161
4,714
8
4,722
U.S./Canada
6,262
15
(99
)
6,178
5,791
(3
)
5,788
Total Marsh
$
11,378
$
70
$
(109
)
$
11,339
$
10,505
$
5
$
10,510
Mercer:
Wealth (c)
$
2,507
$
11
$
19
$
2,537
$
2,366
$
69
$
2,435
Health (c)
2,061
4
(2
)
2,063
2,017
(137
)
1,880
Career
1,019
8
(6
)
1,021
962
—
962
Total Mercer
$
5,587
$
23
$
11
$
5,621
$
5,345
$
(68
)
$
5,277
(a)
Acquisitions, dispositions, and other in
2022 includes the loss on deconsolidation of the Company's Russian
businesses at Marsh of $27 million and Oliver Wyman Group of $12
million.
(b)
Acquisitions, dispositions, and other in
2023 includes a gain from a legal settlement with a competitor of
$58 million, excluding legal fees.
(c)
Acquisitions, dispositions, and other in
2022 includes revenue from the Westpac superannuation fund
transaction in Wealth and a gain from the sale of the Mercer U.S.
affinity business of $112 million in Health. Results for 2023 in
Wealth include the loss on sale of an individual financial advisory
business in Canada of $17 million.
(d)
In the first quarter of 2023, the Company
began reporting the Marsh India operations in EMEA. Prior year
results for India have been reclassified from Asia Pacific to EMEA
for comparative purposes.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240124544980/en/
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
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