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, 2024

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.

1166 Avenue of the Americas

New York, New York 10036

(212) 345-5000

_____________________________________________ 

Commission file number 1-5998

State of Incorporation: Delaware

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

_____________________________________________ 

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

Title of each class	Trading symbol(s)	Name of exchange on which registered
Common Stock, par value $1.00 per share	MMC	New York Stock Exchange
		Chicago Stock Exchange

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

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

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

Large Accelerated Filer	☒	Accelerated Filer	☐
Non-Accelerated Filer	☐ (Do not check if a smaller reporting company)	Smaller Reporting Company	☐
		Emerging Growth Company	☐

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

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

As of April 15, 2024, there were outstanding 492,724,025 shares of common stock, par value $1.00 per share, of the registrant.

INFORMATION CONCERNING FORWARD-LOOKING STATEMENTS

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

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

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

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

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

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TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION		4
ITEM 1.	FINANCIAL STATEMENTS (UNAUDITED)	4
	CONSOLIDATED STATEMENTS OF INCOME	4
	CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME	5
	CONSOLIDATED BALANCE SHEETS	6
	CONSOLIDATED STATEMENTS OF CASH FLOWS	8
	CONSOLIDATED STATEMENTS OF EQUITY	9
	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS	10
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS	34
	OF OPERATIONS
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	49
ITEM 4.	CONTROLS & PROCEDURES	50
PART II. OTHER INFORMATION		51
ITEM 1.	LEGAL PROCEEDINGS	51
ITEM 1A.	RISK FACTORS	51
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	51
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	51
ITEM 4.	MINE SAFETY DISCLOSURE	51
ITEM 5.	OTHER INFORMATION	51
ITEM 6.	EXHIBITS	51

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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)	2024		2023
Revenue	$	6,473	$	5,924
Expense:
Compensation and benefits	3,470		3,207
Other operating expenses	1,078		991
Operating expenses	4,548		4,198
Operating income	1,925		1,726
Other net benefit credits	67		58
Interest income	37		14
Interest expense	(159)		(136)
Investment income	1		2
Income before income taxes	1,871		1,664
Income tax expense	447		412
Net income before non-controlling interests	1,424		1,252
Less: Net income attributable to non-controlling interests	24		17
Net income attributable to the Company	$	1,400	$	1,235
Net income per share attributable to the Company:
– Basic	$	2.84	$	2.50
– Diluted	$	2.82	$	2.47
Average number of shares outstanding:
– Basic	492		495
– Diluted	497		500
Shares outstanding at March 31,	493		495

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)	2024		2023
Net income before non-controlling interests	$	1,424	$	1,252
Other comprehensive (loss) income, before tax:
Foreign currency translation adjustments	(244)		119
Gain (loss) related to pension/post-retirement plans	50		(58)
Other comprehensive (loss) income before tax	(194)		61
Income tax expense (benefit) on other comprehensive loss	20		(19)
Other comprehensive (loss) income, net of tax	(214)		80
Comprehensive income	1,210		1,332
Less: comprehensive income attributable to non-controlling interest	24		17
Comprehensive income attributable to the Company	$	1,186	$	1,315

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, 2024		December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents	$	1,452	$	3,358
Cash and cash equivalents held in a fiduciary capacity	11,458		10,794
Receivables
Commissions and fees	6,509		5,806
Advanced premiums and claims	107		103
Other	757		660
	7,373		6,569
Less-allowance for credit losses	(157)		(151)
Net receivables	7,216		6,418
Other current assets	1,173		1,178
Total current assets	21,299		21,748
Goodwill	17,314		17,231
Other intangible assets	2,631		2,630
Fixed assets (net of accumulated depreciation and amortization of $1,585 at March 31, 2024 and $1,562 at December 31, 2023)	877		882
Pension related assets	2,114		2,051
Right of use assets	1,494		1,541
Deferred tax assets	276		357
Other assets	1,567		1,590
	$	47,572	$	48,030

 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, 2024		December 31, 2023
LIABILITIES AND EQUITY
Current liabilities:
Short-term debt	$	1,169	$	1,619
Accounts payable and accrued liabilities	3,379		3,403
Accrued compensation and employee benefits	1,539		3,346
Current lease liabilities	310		312
Accrued income taxes	456		321
Dividends payable	349		—
Fiduciary liabilities	11,458		10,794
Total current liabilities	18,660		19,795
Long-term debt	12,300		11,844
Pension, post-retirement and post-employment benefits	747		779
Long-term lease liabilities	1,600		1,661
Liabilities for errors and omissions	324		314
Other liabilities	1,319		1,267
Commitments and contingencies	—		—
Equity:
Preferred stock, $1 par value, authorized 6,000,000 shares, none issued	—		—
Common stock, $1 par value, authorized 1,600,000,000 shares, issued 560,641,640 shares at March 31, 2024 and December 31, 2023	561		561
Additional paid-in capital	1,112		1,242
Retained earnings	23,456		22,759
Accumulated other comprehensive loss	(5,509)		(5,295)
Non-controlling interests	200		179
	19,820		19,446
Less – treasury shares, at cost, 67,816,273 shares at March 31, 2024 and 68,635,498 shares at December 31, 2023	(7,198)		(7,076)
Total equity	12,622		12,370
	$	47,572	$	48,030

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

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MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES                        

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

For the Three Months Ended March 31,
(In millions)	2024		2023
Operating cash flows:
Net income before non-controlling interests	$	1,424	$	1,252
Adjustments to reconcile net income provided by operations:
Depreciation and amortization of fixed assets and capitalized software	99		84
Amortization of intangible assets	90		85
Non-cash lease expense	67		73
Adjustments and payments related to contingent consideration assets and liabilities	(8)		8
Net gain on investments	(1)		(2)
Net (gain) loss on disposition of assets	(19)		21
Share-based compensation expense	103		99
Changes in assets and liabilities:
Net receivables	(742)		(775)
Other assets	(70)		(163)
Accrued compensation and employee benefits	(1,779)		(1,670)
Provision for taxes, net of payments and refunds	209		189
Contributions to pension and other benefit plans in excess of current year credit	(88)		(75)
Other liabilities	11		134
Operating lease liabilities	(77)		(79)
Net cash used by operations	(781)		(819)
Financing cash flows:
Purchase of treasury shares	(300)		(300)
Net proceeds from issuance of commercial paper	50		594
Borrowings from term-loan and credit facilities	—		250
Proceeds from issuance of debt	989		589
Repayments of debt	(1,004)		(4)
Shares withheld for taxes on vested units – treasury shares	(169)		(136)
Issuance of common stock from treasury shares	113		42
Payments of deferred and contingent consideration for acquisitions	(15)		(13)
Receipts of contingent consideration for dispositions	—		2
Distributions of non-controlling interests	(4)		(3)
Dividends paid	(354)		(296)
Change in fiduciary liabilities	829		48
Net cash provided by financing activities	135		773
Investing cash flows:
Capital expenditures	(87)		(84)
Purchases of long term investments	(10)		(4)
Sales of long term investments	4		—
Dispositions	26		(20)
Acquisitions, net of cash and cash held in a fiduciary capacity acquired	(301)		(263)
Other, net	—		3
Net cash used for investing activities	(368)		(368)
Effect of exchange rate changes on cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity	(228)		152
Decrease in cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity	(1,242)		(262)
Cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity at beginning of period	14,152		12,102
Cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity at end of period	$	12,910	$	11,840

Reconciliation of cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity to the Consolidated Balance Sheets
Balance at March 31,	2024		2023
(In millions)
Cash and cash equivalents	$	1,452	$	1,006
Cash and cash equivalents held in a fiduciary capacity	11,458		10,834
Total cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity	$	12,910	$	11,840

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)	2024		2023
COMMON STOCK
Balance, beginning and end of period	$	561	$	561
ADDITIONAL PAID-IN CAPITAL
Balance, beginning of period	$	1,242	$	1,179
Change in accrued stock compensation costs	(205)		(190)
Issuance of shares under stock compensation plans and employee stock purchase plans	75		75
Balance, end of period	$	1,112	$	1,064
RETAINED EARNINGS
Balance, beginning of period	$	22,759	$	20,301
Net income attributable to the Company	1,400		1,235
Dividend equivalents declared	(5)		(4)
Dividends declared	(698)		(583)
Balance, end of period	$	23,456	$	20,949
ACCUMULATED OTHER COMPREHENSIVE LOSS
Balance, beginning of period	$	(5,295)	$	(5,314)
Other comprehensive loss (income), net of tax	(214)		80
Balance, end of period	$	(5,509)	$	(5,234)
TREASURY SHARES
Balance, beginning of period	$	(7,076)	$	(6,207)
Issuance of shares under stock compensation plans and employee stock purchase plans	178		120
Purchase of treasury shares	(300)		(300)
Balance, end of period	$	(7,198)	$	(6,387)
NON-CONTROLLING INTERESTS
Balance, beginning of period	$	179	$	229
Net income attributable to non-controlling interests	24		17
Distributions and other changes	(3)		(3)
Balance, end of period	$	200	$	243
TOTAL EQUITY	$	12,622	$	11,196
Dividends declared per share	$	1.42	$	1.18

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

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

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

2.     Principles of Consolidation and Other Matters

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

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

The financial information contained herein reflects all normal recurring adjustments which are, in the opinion of management, necessary for a fair presentation of the Company’s consolidated financial statements as of and for the three months ended March 31, 2024 and 2023.

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

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

Such matters include:

•estimates of revenue;

•impairment assessments and charges;

•recoverability of long-lived assets;

•liabilities for errors and omissions;

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

•share-based and incentive compensation expense;

•the allowance for current expected credit losses on receivables;

10

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

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

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

Cash and Cash Equivalents

Cash and cash equivalents primarily consist of certificates of deposit and time deposits, with original maturities of three months or less, and money market funds. The estimated fair value of the Company's cash and cash equivalents approximates their carrying value. The Company is required to maintain operating funds primarily related to regulatory requirements outside of the U.S. or as collateral under captive insurance arrangements. At March 31, 2024, the Company maintained $480 million compared to $486 million at December 31, 2023 related to these regulatory requirements.

Allowance for Credit Losses on Accounts Receivable

The Company’s policy for providing an allowance for credit losses on its accounts receivable is based on a combination of factors, including historical write-offs, aging of balances, and other qualitative and quantitative analyses. The charge related to expected credit losses was not material to the consolidated statements of income for the three months ended March 31, 2024 and 2023, respectively.

Investments

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

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

The Company recorded net investment income of $1 million and $2 million for the three months ended March 31, 2024 and 2023, respectively.

Income Taxes

The Company's effective tax rate for the three months ended March 31, 2024 was 23.9%, compared with 24.7% for the corresponding quarter of 2023.

The tax rate in each period reflects the impact of discrete tax items such as excess tax benefits related to share-based compensation, enacted tax legislation, changes in uncertain tax positions, deferred tax adjustments, non-taxable adjustments related to contingent consideration for acquisitions, and valuation allowances for certain tax credits and attributes. The rate for the three months ended March 31, 2024 reflects the previously enacted change in the United Kingdom (U.K.) corporate income tax rate from 19% to 25%, which was effective April 1, 2023. The blended U.K. statutory tax rate for 2023 was 23.5%.

The excess tax benefit related to share-based payments is the most significant discrete item in both periods, reducing the effective tax rate by 2.3% and 1.3% for the three months ended March 31, 2024 and 2023, respectively.

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

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

The Company reports a liability for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in tax returns. The Company's gross unrecognized tax benefits were $127 million at March 31, 2024, and $124 million at December 31, 2023. It is reasonably possible that the total amount of unrecognized tax benefits could decrease up to approximately $66 million within the next twelve months due to settlement of audits and expirations of statutes of limitations.

Changes in tax laws, rulings, policies, or related legal and regulatory interpretations occur frequently and may have significant favorable or adverse impacts on our effective tax rate. In 2021, the Organization for Economic Cooperation and Development ("OECD") released model rules for a 15% global minimum tax, known as Pillar Two. Pillar Two has now been enacted by approximately 30 countries, including the U.K. and Ireland. This minimum tax is treated as a period cost beginning in 2024 and does not have a material impact on the Company's financial results of operations for the current period. The Company is monitoring legislative developments, as well as additional guidance from countries that have enacted legislation. We anticipate further legislative activity and administrative guidance in 2024.

Restructuring Costs

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

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

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

Foreign Currency

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

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3.     Revenue

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

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

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

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

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

	Three Months Ended  March 31,
(In millions)	2024		2023
Marsh:
EMEA	$	1,025	$	932
Asia Pacific	336		312
Latin America	125		115
Total International	1,486		1,359
U.S./Canada	1,517		1,385
Total Marsh	3,003		2,744
Guy Carpenter	1,148		1,071
Subtotal	4,151		3,815
Fiduciary interest income	122		91
Total Risk and Insurance Services	$	4,273	$	3,906
Mercer:
Wealth	$	672	$	581
Health	538		545
Career	215		218
Total Mercer	1,425		1,344
Oliver Wyman Group	789		687
Total Consulting	$	2,214	$	2,031

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

(In millions)	March 31, 2024		December 31, 2023
Contract assets	$	389	$	357
Contract liabilities	$	902	$	869

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

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Contract assets are included in other current assets in the Company's consolidated balance sheets. Contract liabilities primarily relate to the advance consideration received from customers. Contract liabilities are included in current liabilities in the Company's consolidated balance sheets. Revenue recognized for the three months ended March 31, 2024 and 2023 that was included in the contract liability balance at the beginning of each of those periods was $315 million and $293 million, respectively.

The amount of revenue recognized for the three months ended March 31, 2024 and 2023 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 $14 million and $17 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.

4.     Fiduciary Assets and Liabilities

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

Risk and Insurance Services revenue includes interest on fiduciary assets of $122 million and $91 million for the three months ended March 31, 2024 and 2023, respectively.

Net uncollected premiums and claims and the related payables were $15.2 billion at March 31, 2024, and $13.8 billion at December 31, 2023. The Company is not a principal to the contracts under which the right to receive premiums or the right to receive reimbursement of insured losses arises. Accordingly, net uncollected premiums and claims and the related payables are not assets and liabilities of the Company and are not included in the accompanying consolidated balance sheets.

In certain instances, the Company advances premiums, refunds or claims to insurance underwriters or insureds prior to collection. These advances are made from corporate funds and are reflected in the accompanying consolidated balance sheets as receivables.

5.    Per Share Data

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

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

Basic and Diluted EPS Calculation	Three Months Ended  March 31,
(In millions, except per share data)	2024		2023
Net income before non-controlling interests	$	1,424	$	1,252
Less: Net income attributable to non-controlling interests	24		17
Net income attributable to the Company	$	1,400	$	1,235
Basic weighted average common shares outstanding	492		495
Dilutive effect of potentially issuable common shares	5		5
Diluted weighted average common shares outstanding	497		500
Average stock price used to calculate common stock equivalents	$	199.39	$	166.93

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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 months ended March 31, 2024 and 2023:

(In millions)	2024		2023
Assets acquired, excluding cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity	$	372	$	17
Acquisition-related deposit	—		252
Fiduciary liabilities assumed	(5)		—
Liabilities assumed	(15)		(2)
Contingent/deferred purchase consideration	(51)		(4)
Net cash outflow for acquisitions	$	301	$	263

(In millions)	2024		2023
Interest paid	$	225	$	165
Income taxes paid, net of refunds	$	239	$	223

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

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

For the Three Months Ended March 31,
(In millions)	2024		2023
Operating:
Contingent consideration payments for prior year acquisitions	$	(14)	$	—
Receipt of contingent consideration for dispositions	—		1
Acquisition/disposition related net charges for adjustments	6		7
Adjustments and payments related to contingent consideration	$	(8)	$	8
Financing:
Contingent consideration for prior year acquisitions	$	(12)	$	(1)
Deferred consideration related to prior year acquisitions	(3)		(12)
Payments of deferred and contingent consideration for acquisitions	$	(15)	$	(13)
Receipts of contingent consideration for dispositions	$	—	$	2

The Company had non-cash issuances of common stock in accordance with its share-based payment plan of $309 million and $290 million for the three months ended March 31, 2024 and 2023, respectively.

The Company recorded share-based compensation expense related to restricted stock units, performance stock units and stock options of $103 million and $99 million for the three months ended March 31, 2024 and 2023, respectively.

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7.    Other Comprehensive (Loss) Income

The changes, net of tax, in the balances of each component of AOCI for the three months ended March 31, 2024 and 2023, including amounts reclassified out of AOCI, are as follows:

(In millions)	Pension/Post-Retirement Plans Gains (Losses)		Foreign Currency Translation Adjustments		Total
Balance at January 1, 2024	$	(3,101)	$	(2,194)	$	(5,295)
Other comprehensive income (loss) before reclassifications	33		(251)		(218)
Amounts reclassified from accumulated other comprehensive income	4		—		4
Net current period other comprehensive income (loss)	37		(251)		(214)
Balance at March 31, 2024 (a)	$	(3,064)	$	(2,445)	$	(5,509)

(In millions)	Pension/Post-Retirement Plans Gains (Losses)		Foreign Currency Translation Adjustments		Total
Balance at January 1, 2023	$	(2,721)	$	(2,593)	$	(5,314)
Other comprehensive (loss) income before reclassifications	(48)		125		77
Amounts reclassified from accumulated other comprehensive income	3		—		3
Net current period other comprehensive (loss) income	(45)		125		80
Balance at March 31, 2023 (a)	$	(2,766)	$	(2,468)	$	(5,234)

(a)At March 31, 2024 and 2023, balances are net of deferred tax assets in pension and post-retirement plans gains (losses) of $1.5 billion and $1.4 billion, respectively.

The components of other comprehensive (loss) income for the three months ended March 31, 2024 and 2023 are as follows:

Three Months Ended March 31,	2024						2023
(In millions)	Pre-Tax		Tax		Net of Tax		Pre-Tax		Tax (Credit)		Net of Tax
Foreign currency translation adjustments	$	(244)	$	7	$	(251)	$	119	$	(6)	$	125
Pension/post-retirement plans:
Amortization of (gains) losses included in net benefit (credit) cost:
Net actuarial losses (a)	6		2		4		5		2		3
Subtotal	6		2		4		5		2		3
Foreign currency translation adjustments	44		11		33		(63)		(15)		(48)
Pension/post-retirement plans gains (losses)	50		13		37		(58)		(13)		(45)
Other comprehensive (loss) income	$	(194)	$	20	$	(214)	$	61	$	(19)	$	80

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

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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 2 acquisitions for the three months ended March 31, 2024:

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

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

The Consulting segment completed 4 acquisitions for the three months ended March 31, 2024:

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

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

Total purchase consideration for acquisitions made for the three months ended March 31, 2024 was $359 million, which consisted of cash paid of $308 million and deferred and estimated contingent purchase consideration of $51 million. Contingent purchase consideration arrangements are generally based on earnings before interest, tax, depreciation and amortization ("EBITDA") or revenue targets over a period of 2 to 4 years. The fair value of contingent purchase consideration was based on projected revenue and earnings of the acquired entities.

For the three months ended March 31, 2024, the Company also paid $3 million of deferred purchase consideration and $26 million of contingent purchase consideration related to acquisitions made in prior years. Estimated fair values of assets acquired and liabilities assumed are subject to adjustment until purchase accounting is finalized.

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The following table presents the preliminary allocation of purchase consideration to the assets acquired and liabilities assumed in 2024, based on the estimated fair values for the acquisitions as of their respective acquisition dates.

Acquisitions through March 31, 2024
(In millions)
Cash	$	308
Estimated fair value of deferred/contingent purchase consideration	51
Total consideration	$	359
Allocation of purchase price:
Cash and cash equivalents	$	2
Cash and cash equivalents held in a fiduciary capacity	5
Net receivables	35
Goodwill	216
Other intangible assets	115
Fixed assets, net	3
Right of use assets	1
Other assets	2
Total assets acquired	379
Current liabilities	6
Fiduciary liabilities	5
Other liabilities	9
Total liabilities assumed	20
Net assets acquired	$	359

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 1 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.

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

Other intangible assets through March 31, 2024 (In millions)	Amount		Weighted Average Amortization Period
Client relationships	$	112	10.9 years
Other	3		2.8 years
Total other intangible assets	$	115

The consolidated statements of income include the results of operations of acquired companies since their respective acquisition dates. The consolidated statements of income for the three months ended March 31, 2024, include revenue of approximately $14 million and an operating loss of $6 million for acquisitions made in 2024.

The Company incurred approximately $3 million and $17 million of integration expenses for the three months ended March 31, 2024 and 2023, respectively, for the Westpac Transaction, primarily for technology, consulting, legal and people related costs. Acquisition and integration costs are included in other operating expenses in the Company's consolidated statements of income.

Dispositions

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

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

Prior year acquisitions

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

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

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

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

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

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

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

The Consulting segment completed 5 acquisitions in 2023:

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

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

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

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

Total purchase consideration for acquisitions made for the three months ended March 31, 2023 was approximately $15 million, which consisted of cash paid of $11 million and deferred and estimated contingent purchase consideration of $4 million. Contingent purchase consideration arrangements are generally based primarily on EBITDA or revenue targets over a period of 2 to 4 years.

For the first three months of 2023, the Company also paid $12 million of deferred purchase consideration and $1 million of contingent purchase consideration related to acquisitions made in prior years. Estimated fair values of assets acquired and liabilities assumed are subject to adjustment when purchase accounting is finalized.

Prior year dispositions

In January 2023, the Company entered into an agreement for the sale of an individual financial advisory business in Canada which was completed in May 2023. As a result, the Company recorded a loss of $19 million for the three months ended March 31, 2023, primarily related to the write-down of the customer relationship intangible assets. The loss is included in revenue in the consolidated statements of income.

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

Purchase of remaining non-controlling interest

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

Pro-Forma Information

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

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

	Three Months Ended  March 31,
(In millions, except per share data)	2024		2023
Revenue	$	6,505	$	6,055
Net income attributable to the Company	$	1,409	$	1,274
Basic net income per share attributable to the Company	$	2.86	$	2.57
Diluted net income per share attributable to the Company	$	2.84	$	2.55

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9.    Goodwill and Other Intangibles

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

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

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

Changes in the carrying amount of goodwill are as follows:

(In millions)	2024		2023
Balance at January 1,	$	17,231	$	16,251
Goodwill acquired	216		11
Other adjustments (a)	(133)		38
Balance at March 31,	$	17,314	$	16,300

(a) Primarily reflects the impact of foreign exchange.

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

The goodwill acquired in 2024 included approximately $38 million and $81 million in the Risk and Insurance Services and Consulting segments, respectively, which is deductible for tax purposes.

Goodwill allocated to the Company’s reportable segments at March 31, 2024, is $13.2 billion for Risk and Insurance Services and $4.1 billion for Consulting.

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

	March 31, 2024						December 31, 2023
(In millions)	Gross Cost		Accumulated Amortization		Net Carrying Amount		Gross Cost		Accumulated Amortization		Net Carrying Amount
Client relationships	$	4,424	$	1,836	$	2,588	$	4,337	$	1,761	$	2,576
Other (a)	369		326		43		391		337		54
Other intangible assets	$	4,793	$	2,162	$	2,631	$	4,728	$	2,098	$	2,630

(a) Primarily non-compete agreements, trade names and developed technology.

Aggregate amortization expense for the three months ended March 31, 2024 and 2023, was $90 million and $85 million, respectively.

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The estimated future aggregate amortization expense is as follows:

For the Years Ending December 31,
(In millions)	Estimated Expense
2024 (excludes amortization through March 31, 2024)	$	249
2025	317
2026	294
2027	285
2028	267
Subsequent years	1,219
Total future amortization	$	2,631

10.     Fair Value Measurements

Fair Value Hierarchy

The Company has categorized its assets and liabilities that are valued at fair value on a recurring basis into a three-level fair value hierarchy. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets and liabilities (Level 1) and lowest priority to unobservable inputs (Level 3). In some cases, the inputs used to measure fair value might fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy, for disclosure purposes, is determined based on the lowest level input that is significant to the fair value measurement. Assets and liabilities recorded in the consolidated balance sheets at fair value are categorized based on the inputs in the valuation techniques as follows:

Level 1.Assets and liabilities whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market (examples include active exchange-traded equity securities and exchange-traded money market mutual funds).

Assets and liabilities measured using Level 1 inputs include exchange-traded equity securities, exchange-traded mutual funds and money market funds.

Level 2.Assets and liabilities whose values are based on the following:

a)quoted prices for similar assets or liabilities in active markets;

b)quoted prices for identical or similar assets or liabilities in non-active markets (examples include corporate and municipal bonds, which trade infrequently);

c)pricing models whose inputs are observable for substantially the full term of the asset or liability (examples include most over-the-counter derivatives, including interest rate and currency swaps); and

d)pricing models whose inputs are derived principally from or corroborated by observable market data through correlation or other means for substantially the full asset or liability (for example, certain mortgage loans).

Level 3.Assets and liabilities whose values are based on prices, or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs reflect management’s own assumptions about the assumptions a market participant would use in pricing the asset or liability.

Assets and liabilities measured using Level 3 inputs relate to assets and liabilities for contingent purchase consideration.

Valuation Techniques

Equity Securities, Money Market Funds and Mutual Funds – Level 1

Investments for which market quotations are readily available are valued at the sale price on their principal exchange or, for certain markets, official closing bid price. Money market funds are valued at a readily determinable price.

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Contingent Purchase Consideration Assets and Liabilities – Level 3

Purchase consideration for some acquisitions and dispositions made by the Company include contingent consideration arrangements. Contingent consideration arrangements are based primarily on EBITDA or revenue targets over a period of 2 to 4 years. The fair value of the contingent purchase consideration asset and liability is estimated as the present value of future cash flows to be paid, based on projections of revenue and earnings and related targets of the acquired and disposed entities.

The following fair value hierarchy table presents information about the Company’s assets and liabilities measured at fair value on a recurring basis at March 31, 2024 and December 31, 2023:

	Identical Assets (Level 1)				Observable Inputs (Level 2)				Unobservable Inputs (Level 3)				Total
(In millions)	03/31/24		12/31/23		03/31/24		12/31/23		03/31/24		12/31/23		03/31/24		12/31/23
Assets:
Financial instruments owned:
Exchange traded equity securities (a)	$	7	$	5	$	—	$	—	$	—	$	—	$	7	$	5
Mutual funds (a)	183		178		—		—		—		—		183		178
Money market funds (b)	321		606		—		—		—		—		321		606
Contingent purchase consideration assets (c)	—		—		—		—		1		1		1		1
Total assets measured at fair value	$	511	$	789	$	—	$	—	$	1	$	1	$	512	$	790
Fiduciary Assets:
Money market funds	$	76	$	180	$	—	$	—	$	—	$	—	$	76	$	180
Total fiduciary assets measured at fair value	$	76	$	180	$	—	$	—	$	—	$	—	$	76	$	180
Liabilities:
Contingent purchase consideration liabilities (d)	$	—	$	—	$	—	$	—	$	242	$	252	$	242	$	252
Total liabilities measured at fair value	$	—	$	—	$	—	$	—	$	242	$	252	$	242	$	252

(a) Included in other assets in the consolidated balance sheets.

(b) Included in cash and cash equivalents in the consolidated balance sheets.

(c) Included in other receivables in the consolidated balance sheets.

(d) Included in accounts payable and accrued liabilities and other liabilities in the consolidated balance sheets.

The Level 3 assets in the table reflect contingent purchase consideration from the sale of businesses.

For the three months ended March 31, 2024 and 2023, there were no assets or liabilities that were transferred between levels.

The following table sets forth a summary of the changes in fair value of the Company’s Level 3 liabilities for the three months ended March 31, 2024 and 2023:

	Three Months Ended  March 31,
(In millions)	2024		2023
Balance at January 1,	$	252	$	377
Net additions	13		—
Payments	(26)		(1)
Revaluation impact	6		7
Other	(3)		—
Balance at March 31,	$	242	$	383

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Long-Term Investments

The Company has investments in public and private companies as well as certain private equity investments that are accounted for using the equity method of accounting. The carrying value of these investments was $272 million and $266 million at March 31, 2024 and December 31, 2023, respectively.

Investments in Public and Private Companies

The Company has investments in private insurance and consulting companies with a carrying value of $64 million and $63 million at March 31, 2024 and December 31, 2023, respectively. These investments are accounted for using the equity method of accounting, the results of which are included in revenue in the consolidated statements of income and the carrying value of which is included in other assets in the consolidated balance sheets. The Company records its share of income or loss on its equity method investments, some of which are on a one quarter lag basis.

Private Equity Investments

The Company's investments in private equity funds were $208 million and $203 million at March 31, 2024 and December 31, 2023, respectively. The carrying values of these private equity investments approximate fair value. The underlying private equity funds follow investment company accounting, where investments within the fund are carried at fair value. The Company records in earnings its proportionate share of the change in fair value of the funds on the investment income line in the consolidated statements of income. These investments are included in other assets in the consolidated balance sheets. The Company recorded net investment losses from these investments of $1 million for the three months ended March 31, 2024 and investment gains of $3 million for the three months ended March 31, 2023.

At March 31, 2024, the Company has commitments of potential future investments of approximately $109 million in private equity funds that invest primarily in financial services companies.

Other Investments

The Company held equity investments with readily determinable market values at March 31, 2024 and December 31, 2023, of $18 million and $16 million, respectively. For the three months ended March 31, 2024, the Company recorded mark-to-market investment gains on these investments of $2 million. For the three months ended March 31, 2023, the Company recorded mark-to-market losses on these investments of $1 million.

The Company also held investments without readily determinable market values of $19 million and $20 million at March 31, 2024 and December 31, 2023, respectively.

11.    Derivatives

Net Investment Hedge

The Company has investments in various subsidiaries with Euro functional currencies. As a result, the Company is exposed to the risk of fluctuations between the Euro and U.S. dollar exchange rates. The Company designated its €1.1 billion senior note debt instruments ("Euro notes") as a net investment hedge (the "hedge") of its Euro denominated subsidiaries. The hedge effectiveness is re-assessed each quarter to confirm that the designated equity balance at the beginning of each period continues to equal or exceed 80% of the outstanding balance of the Euro debt instrument and that all the critical terms of the hedging instrument and the hedged net investment continue to match. If the hedge is highly effective, the change in the debt balance related to foreign exchange fluctuations is recorded in accumulated other comprehensive loss in the consolidated balance sheets.

The U.S. dollar value of the Euro notes decreased by $31 million through March 31, 2024, related to the change in foreign exchange rates. The Company concluded that the hedge was highly effective and recorded a decrease to accumulated other comprehensive loss for the three months ended March 31, 2024.

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12.    Leases

The Company leases office facilities under non-cancelable operating leases with terms generally ranging between 10 and 25 years. The Company utilizes these leased office facilities for use by its employees in countries in which the Company conducts its business. The Company’s leases have no restrictions on the payment of dividends, the acquisition of debt or additional lease obligations, or entering into additional lease obligations. The leases also do not contain significant purchase options.

Operating leases are recognized on the consolidated balance sheets as ROU assets and operating lease liabilities based on the present value of the remaining future minimum payments over the lease term at commencement date of the lease. The Company determined that $1 million and $8 million of its ROU assets were impaired and recorded a charge to the consolidated statements of income for the three months ended March 31, 2024 and 2023, respectively, with an offsetting reduction to ROU assets.

The following table provides additional information about the Company’s property leases:

	Three Months Ended  March 31,
(In millions)	2024			2023
Lease Cost:
Operating lease cost (a)	$	82		$	80
Short-term lease cost	1			1
Variable lease cost	26			37
Sublease income	(3)			(4)
Net lease cost	$	106		$	114
Other information:
Operating cash outflows from operating leases	$	93		$	94
Right of use assets obtained in exchange for new operating lease liabilities	$	36		$	76
Weighted average remaining lease term – real estate	7.8 years			8.4 years
Weighted average discount rate – real estate leases	3.44		%	3.12		%

(a) Excludes ROU asset impairment charges.

Future minimum lease payments for the Company’s operating leases as of March 31, 2024 are as follows:

(In millions)	Real Estate Leases
2024 (excludes payments through March 31, 2024)	$	281
2025	349
2026	321
2027	283
2028	204
2029	158
Subsequent years	574
Total future lease payments	2,170
Less: Imputed interest	(260)
Total	$	1,910
Current lease liabilities	$	310
Long-term lease liabilities	1,600
Total lease liabilities	$	1,910

Note: The above table excludes obligations for leases with original terms of 12 months or less which have not been recognized as a ROU asset or liability in the consolidated balance sheets.

At March 31, 2024, the Company had additional operating real estate leases that had not yet commenced of $55 million. These operating leases will commence over the next 12 months.

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13.    Retirement Benefits

The Company maintains qualified and non-qualified defined benefit pension plans for its U.S. and non-U.S. eligible employees. The Company’s policy for funding its tax-qualified defined benefit retirement plans is to contribute amounts at least sufficient to meet the funding requirements set forth by U.S. law and the laws of the non-U.S. jurisdictions in which the Company offers defined benefit plans.

The weighted average actuarial assumptions utilized to calculate the net periodic benefit costs for the U.S. and significant non-U.S. defined benefit plans are as follows:

Combined U.S. and significant non-U.S. Plans	Pension Benefits
March 31,	2024		2023
Weighted average assumptions:
Expected return on plan assets	5.44	%	5.31	%
Discount rate	4.95	%	5.16	%
Rate of compensation increase *	3.16	%	3.16	%

(*) There are no rate of compensation increase assumptions for the U.S. defined benefit plans since future benefit accruals were discontinued for those plans after December 31, 2016 and earned benefits are not subject to final salary level adjustments.

The target asset allocation for the U.S. plans is 50% equities and equity alternatives and 50% fixed income. At March 31, 2024, the actual allocation for the U.S. plans was 51% equities and equity alternatives, and 49% fixed income. The target allocation for the U.K. plans at March 31, 2024 is 14% equities and equity alternatives and 86% fixed income. At March 31, 2024, the actual allocation for the U.K. plans was 14% equities and equity alternatives and 86% fixed income. The Company's U.K. plans comprised approximately 79% of non-U.S. plan assets at December 31, 2023. The assets of the Company's defined benefit plans are diversified and are managed in accordance with applicable laws and with the goal of maximizing the plans' real return within acceptable risk parameters. The Company uses threshold-based portfolio re-balancing to ensure the actual portfolio remains consistent with target asset allocation ranges.

The net benefit cost or credit of the Company's defined benefit plans is measured on an actuarial basis using various methods and assumptions. The components of the net benefit credit for defined benefit plans are as follows:

Combined U.S. and significant non-U.S. Plans
For the Three Months Ended March 31,	Pension Benefits
(In millions)	2024		2023
Service cost	$	6	$	6
Interest cost	144		148
Expected return on plan assets	(219)		(212)
Recognized actuarial loss	8		6
Net benefit credit	$	(61)	$	(52)

The following table provides the amounts reported in the consolidated statements of income:

Combined U.S. and significant non-U.S. Plans
For the Three Months Ended March 31,	Pension Benefits
(In millions)	2024		2023
Compensation and benefits expense	$	6	$	6
Other net benefit credits	(67)		(58)
Net benefit credit	$	(61)	$	(52)

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U.S. Plans only
For the Three Months Ended March 31,	Pension Benefits
(In millions)	2024		2023
Interest cost	$	62	$	65
Expected return on plan assets	(76)		(78)
Recognized actuarial loss	5		5
Net benefit credit	$	(9)	$	(8)

Significant non-U.S. Plans only
For the Three Months Ended March 31,	Pension Benefits
(In millions)	2024		2023
Service cost	$	6	$	6
Interest cost	82		83
Expected return on plan assets	(143)		(134)
Recognized actuarial loss	3		1
Net benefit credit	$	(52)	$	(44)

The Company made contributions to its U.S. and non-U.S. defined benefit pension plans for the three months ended March 31, 2024 of approximately $24 million compared to contributions of $21 million for the corresponding quarter in the prior year. The Company expects to contribute approximately $69 million to its U.S. and non-U.S. defined benefit pension plans during the remainder of 2024.

Defined Contribution Plans

The Company maintains defined contribution plans ("DC Plans") for its employees, the most significant being in the U.S. and the U.K. The cost of the U.S. DC Plans was $49 million and $44 million for the three months ended March 31, 2024 and 2023, respectively. The cost of the U.K. DC Plans was $52 million and $43 million for the three months ended March 31, 2024 and 2023, respectively.

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14.    Debt

The Company’s outstanding debt is as follows:

(In millions)	March 31, 2024		December 31, 2023
Short-term:
Commercial paper	$	50	$	—
Current portion of long-term debt	1,119		1,619
	$	1,169	$	1,619
Long-term:
Senior notes – 3.50% due 2024	$	600	$	600
Senior notes – 3.875% due 2024	—		1,000
Senior notes – 3.50% due 2025	499		499
Senior notes – 1.349% due 2026	601		617
Senior notes – 3.75% due 2026	599		599
Senior notes – 4.375% due 2029	1,499		1,499
Senior notes – 1.979% due 2030	587		601
Senior notes – 2.25% due 2030	742		741
Senior notes – 2.375% due 2031	397		397
Senior notes – 5.750% due 2032	493		493
Senior notes – 5.875% due 2033	298		298
Senior notes – 5.400% due 2033	592		592
Senior notes – 5.150% due 2034	496		—
Senior notes – 4.75% due 2039	496		496
Senior notes – 4.35% due 2047	494		494
Senior notes – 4.20% due 2048	593		593
Senior notes – 4.90% due 2049	1,239		1,239
Senior notes – 2.90% due 2051	346		346
Senior notes – 6.25% due 2052	491		491
Senior notes – 5.450% due 2053	591		591
Senior notes – 5.700% due 2053	988		988
Senior notes – 5.450% due 2054	494		—
Mortgage – 5.70% due 2035	280		284
Other	4		5
	13,419