Item 8. Financial Statements and Supplementary Data.

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Item 8. Financial Statements and Supplementary Data.

MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME


For the Years Ended December 31,
(In millions, except per share data)	2023		2022		2021
Revenue	$	22,736	$	20,720	$	19,820
Expense:
Compensation and benefits	13,099		12,071		11,425
Other operating expenses	4,355		4,369		4,083
Operating expenses	17,454		16,440		15,508
Operating income	5,282		4,280		4,312
Other net benefits credits	239		235		277
Interest income	78		15		2
Interest expense	(578)		(469)		(444)

Investment income	5		21		61

Income before income taxes	5,026		4,082		4,208
Income tax expense	1,224		995		1,034


Net income before non-controlling interests	3,802		3,087		3,174
Less: Net income attributable to non-controlling interests	46		37		31
Net income attributable to the Company	$	3,756	$	3,050	$	3,143
Net income per share attributable to the Company

– Basic	$	7.60	$	6.11	$	6.20


– Diluted	$	7.53	$	6.04	$	6.13
Average number of shares outstanding
– Basic	494		499		507
– Diluted	499		505		513
Shares outstanding at December 31,	492		495		504

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

MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME


For the Years Ended December 31, (In millions)	2023		2022		2021
Net income before non-controlling interests	$	3,802	$	3,087	$	3,174
Other comprehensive (loss) income, before tax:
Foreign currency translation adjustments	389		(1,198)		(389)
(Loss) gain related to pension and post-retirement plans	(503)		641		1,229
Other comprehensive (loss) income, before tax	(114)		(557)		840
Income tax (credit) expense on other comprehensive (loss) income	(133)		182		305
Other comprehensive income (loss), net of tax	19		(739)		535
Comprehensive income	3,821		2,348		3,709
Less: Comprehensive income attributable to non-controlling interests	46		37		31
Comprehensive income attributable to the Company	$	3,775	$	2,311	$	3,678

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

MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS


December 31,
(In millions, except share data)	2023		2022
ASSETS
Current assets:
Cash and cash equivalents	$	3,358	$	1,442
Cash and cash equivalents held in a fiduciary capacity	10,794		10,660
Receivables
Commissions and fees	5,806		5,293
Advanced premiums and claims	103		103

Other	660		616
	6,569		6,012
Less – allowance for credit losses	(151)		(160)
Net receivables	6,418		5,852

Other current assets	1,178		1,005
Total current assets	21,748		18,959
Goodwill	17,231		16,251
Other intangible assets	2,630		2,537
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
	$	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	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
Liability for errors and omissions	314		355
Other liabilities	1,267		1,363
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 December 31, 2023 and 2022	561		561
Additional paid-in capital	1,242		1,179
Retained earnings	22,759		20,301
Accumulated other comprehensive loss	(5,295)		(5,314)
Non-controlling interests	179		229
	19,446		16,956
Less – treasury shares, at cost, 68,635,498 shares at December 31, 2023 and 65,855,914 shares at December 31, 2022	(7,076)		(6,207)
Total equity	12,370		10,749
	$	48,030	$	44,114

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

MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS


For the Years Ended December 31,
(In millions)	2023		2022		2021
Operating cash flows:
Net income before non-controlling interests	$	3,802	$	3,087	$	3,174
Adjustments to reconcile net income provided by operations:
Depreciation and amortization of fixed assets and capitalized software	370		381		382
Amortization of intangible assets	343		338		365

Non-cash lease expense	288		404		327
Adjustments and payments related to contingent consideration assets and liabilities	(11)		11		27
Deconsolidation of Russian businesses	—		39		—
Gain on consolidation of entity	—		(2)		(267)


Net (gain) on investments	(5)		(21)		(61)
Net loss (gain) on disposition of assets	16		(127)		(33)
Share-based compensation expense	363		367		348

Changes in assets and liabilities:
Net receivables	(467)		(492)		(570)

Other assets	(154)		(122)		(354)

Accrued compensation and employee benefits	195		171		574
Provision for taxes, net of payments and refunds	105		(54)		(33)
Contributions to pension and other benefit plans in excess of current year credit	(335)		(385)		(372)
Other liabilities	64		193		358
Operating lease liabilities	(316)		(323)		(349)

Net cash provided by operations	4,258		3,465		3,516
Financing cash flows:
Purchase of treasury shares	(1,150)		(1,950)		(1,159)


Issuance of commercial paper with maturity greater than 90 days	146		—		—
Repayment of commercial paper with maturity greater than 90 days	(146)		—		—
Proceeds from issuance of debt	2,169		984		743
Repayments of debt	(266)		(365)		(1,016)


Purchase of non-controlling interests	(139)		(7)		—

Shares withheld for taxes on vested units – treasury shares	(148)		(198)		(101)
Issuance of common stock from treasury shares	199		126		161
Payments of deferred and contingent consideration for acquisitions	(202)		(158)		(117)
Receipts of contingent consideration for dispositions	2		3		71
Distributions of non-controlling interests	(31)		(27)		(36)
Dividends paid	(1,298)		(1,138)		(1,026)
Change in fiduciary liabilities	(255)		1,684		1,183
Net cash used for financing activities	(1,119)		(1,046)		(1,297)
Investing cash flows:
Capital expenditures	(416)		(470)		(406)

Purchases of long-term investments	(57)		(22)		(28)
Sales of long-term investments	38		86		41


Dispositions	(17)		119		84
Acquisitions, net of cash and cash held in a fiduciary capacity acquired	(976)		(572)		(859)
Other, net	11		9		4
Net cash used for investing activities	(1,417)		(850)		(1,164)
Effect of exchange rate changes on cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity	328		(841)		(355)
Increase in cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity	2,050		728		700
Cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity at beginning of year	12,102		11,374		10,674
Cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity at end of year	$	14,152	$	12,102	$	11,374


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		2021
(In millions)
Cash and cash equivalents	$	3,358	$	1,442	$	1,752
Cash and cash equivalents held in a fiduciary capacity	10,794		10,660		9,622
Total cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity	$	14,152	$	12,102	$	11,374

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

MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY


For the Years Ended December 31,
(In millions, except per share data)	2023		2022		2021
COMMON STOCK
Balance, beginning and end of year	$	561	$	561	$	561
ADDITIONAL PAID-IN CAPITAL
Balance, beginning of year	$	1,179	$	1,112	$	943
Change in accrued stock compensation costs	56		(2)		124
Issuance of shares under stock compensation plans and employee stock purchase plans	75		80		45
Purchase of non-controlling interest	(68)		—		—
Other	—		(11)		—


Balance, end of year	$	1,242	$	1,179	$	1,112
RETAINED EARNINGS
Balance, beginning of year	$	20,301	$	18,389	$	16,272
Net income attributable to the Company	3,756		3,050		3,143


Dividend equivalents declared and paid – (per share amounts: $2.60 in 2023, $2.25 in 2022, and $2.00 in 2021)	(13)		(13)		(12)
Dividends declared and paid – (per share amounts: $2.60 in 2023, $2.25 in 2022, and $2.00 in 2021)	(1,285)		(1,125)		(1,014)
Balance, end of year	$	22,759	$	20,301	$	18,389
ACCUMULATED OTHER COMPREHENSIVE LOSS
Balance, beginning of year	$	(5,314)	$	(4,575)	$	(5,110)




Other comprehensive income (loss), net of tax	19		(739)		535
Balance, end of year	$	(5,295)	$	(5,314)	$	(4,575)
TREASURY SHARES
Balance, beginning of year	$	(6,207)	$	(4,478)	$	(3,562)
Issuance of shares under stock compensation plans and employee stock purchase plans	286		221		243

Purchase of treasury shares	(1,155)		(1,950)		(1,159)
Balance, end of year	$	(7,076)	$	(6,207)	$	(4,478)
NON-CONTROLLING INTERESTS
Balance, beginning of year	$	229	$	213	$	156
Net income attributable to non-controlling interests	46		37		31
Net non-controlling interests (disposed) acquired	(70)		7		64
Distributions and other changes	(26)		(28)		(38)
Balance, end of year	$	179	$	229	$	213
TOTAL EQUITY	$	12,370	$	10,749	$	11,222

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

MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Summary of Significant Accounting Policies

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.

Principles of Consolidation: The accompanied consolidated financial statements are prepared pursuant to the rules and regulations of the Securities and Exchange Commission and in accordance with accounting principles generally accepted in the United States (U.S.). The consolidated financial statements include all wholly-owned and majority-owned subsidiaries. All significant inter-company transactions and balances have been eliminated.

Revenue: The Company provides detailed discussion regarding its revenue policies in Note 2, Revenue.

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 December 31, 2023, the Company maintained $486 million compared to $348 million at December 31, 2022 related to these regulatory requirements.

Fixed Assets: Fixed assets are stated at cost less accumulated depreciation and amortization. Expenditures for improvements are capitalized. Upon sale or retirement of an asset, the cost and related accumulated depreciation and amortization are removed from the accounts and any gain or loss is reflected in income. Expenditures for maintenance and repairs are charged to operations as incurred.

Buildings, building improvements, furniture, and equipment are depreciated on a straight-line basis over the estimated useful lives of these assets. Furniture and equipment are depreciated over periods ranging from 3 to 10 years. Leasehold improvements are amortized on a straight-line basis over the periods covered by the applicable leases or the estimated useful life of the improvement, whichever is less. Buildings are depreciated over periods ranging from 30 to 40 years. The Company periodically reviews long-lived assets for impairment whenever events or changes indicate that the carrying value of assets may not be recoverable. The components of fixed assets are as follows:


December 31,
(In millions)	2023		2022
Furniture and equipment	$	776	$	772
Land and buildings	360		372
Leasehold and building improvements	1,308		1,258
	2,444		2,402
Less: accumulated depreciation and amortization	(1,562)		(1,531)
Fixed assets, net	$	882	$	871

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 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.

In 2023, the Company recorded net investment income of $5 million, compared to $21 million in 2022, and $61 million in 2021.

Goodwill and Other Intangible Assets: Goodwill represents acquisition costs in excess of the fair value of net assets acquired. Goodwill is assessed at least annually for impairment. The Company performs an annual impairment test for each of its reporting units during the third quarter of each year. A company can assess qualitative factors to determine whether it is necessary to perform a goodwill impairment test. Alternatively, a company may elect to proceed directly to the quantitative goodwill impairment test. When a quantitative test is performed, fair values of the reporting units are estimated using either a market approach or a discounted cash flow model. Carrying values for the reporting units are based on balances at the prior quarter-end and include directly identified assets and liabilities as well as an allocation of those assets and liabilities not recorded at the reporting unit level. As discussed in Note 6, Goodwill and Other Intangibles, the Company elected to perform a quantitative impairment assessment in 2023.

Other intangible assets, which primarily consist of acquired customer lists that are not deemed to have an indefinite life, are amortized over their estimated lives, typically ranging from 10 to 15 years, and assessed for impairment upon the occurrence of certain triggering events in accordance with applicable accounting literature. The Company had no indefinite lived identified intangible assets at December 31, 2023 and 2022.

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 net benefit (credit) cost of the Company’s defined benefit plans is measured on an actuarial basis using various methods and assumptions.

The Company uses actuaries from Mercer, a subsidiary of the Company, to perform valuations of its pension plans. The long-term rate of return on plan assets assumption is determined for each plan based on the facts and circumstances that exist as of the measurement date, and the specific portfolio mix of each plan's assets. The Company utilizes a model developed by the Mercer actuaries to assist in the determination of this assumption. The model takes into account several factors, including: actual and target portfolio allocation; investment, administrative and trading expenses incurred directly by the plan trust; historical portfolio performance; relevant forward-looking economic analysis; and expected returns, variances and correlations for different asset classes. These measures are used to determine probabilities using standard statistical techniques to calculate a range of expected returns on the portfolio. Generally, the Company does not adjust the rate of return assumption from year to year if, at the measurement date, it is within the range between the 25th and 75th percentile of the expected long-term annual returns. Historical long-term average asset returns of the most significant plans are also reviewed to determine whether they are consistent and reasonable compared with the rate selected. The expected return on plan assets is determined by applying the assumed long-term rate of return to the market-related value of plan assets. This market-related value recognizes investment gains or losses over a five-year period from the year in which they occur. Investment gains or losses for this purpose are the difference between the expected return calculated using the market-related value of assets and the actual return based on the market value of assets. Since the market-related value of assets recognizes gains or losses over a five-year period, the future market-related value of the assets will be impacted as previously deferred gains or losses are reflected.

The Company reviews its actuarial assumptions on an annual basis and modifies these assumptions based on current rates and trends.

The funded status of the Company's pension plans is recorded in the consolidated balance sheets and provides for a delayed recognition of actuarial gains or losses arising from changes in the projected benefit obligation due to changes in the assumed discount rates, differences between the actual and expected value of plan assets and other assumption changes. The unrecognized pension plan actuarial gains or losses and prior service costs not yet recognized in net periodic benefit (credit) cost are recognized in Accumulated Other Comprehensive Income (Loss) ("AOCI"), net of tax. These gains and losses are amortized prospectively out of AOCI over a period that approximates the remaining life expectancy of participants in plans where substantially all participants are inactive, or the average remaining service period of active participants for plans with active participants. The vast majority of unrecognized losses relate to inactive plans and are amortized over the remaining life expectancy of the participants.

The discount rate selected for each U.S. plan is based on a model bond portfolio with coupons and redemptions that closely match the expected liability cash flows from the plan. Discount rates for non-U.S. plans are based on appropriate bond indices adjusted for duration. In the United Kingdom (U.K.), the plan duration is reflected using the Mercer yield curve.

Defined Benefit Pension Plans in the U.K. and certain other countries allow participants an option for the payment of a lump sum distribution from plan assets before retirement in full satisfaction of the retirement benefits due to the participant as well as any survivor’s benefit. The Company’s policy is to treat these lump sum payments as a partial settlement of the plan liability if they exceed the total of interest plus service costs.

Refer to Note 8, Retirement Benefits, for additional information.

Leases: A lease is defined as a party obtaining the right to use an asset legally owned by another party. The Company determines if an arrangement is a lease at inception. Right-of-use ("ROU") assets and lease liabilities are recorded at the lease commencement date. Lease liabilities are recognized at the present value of the contractual fixed lease payments. The Company uses discount rates to determine the present value of future lease payments. The Company primarily uses its incremental borrowing rate adjusted to reflect a secured rate, based on the information available for leases, including the lease term and interest rate environment in the country in which the lease exists. The lease terms used to calculate the ROU asset and lease liability may include options to extend or terminate when it is reasonably certain that the Company will exercise that option. ROU assets are recognized equal to lease liabilities, adjusted for prepaid lease payments, initial direct costs and lease incentives. Operating lease expense is recognized on a straight-line basis over the lease term, while variable lease payments are expensed as incurred.

Leases are negotiated with third-parties and, in some instances, contain renewal, expansion and termination options. The Company also subleases certain office facilities to third-parties when the Company no longer utilizes the space. In addition to the base rental costs, the Company's lease agreements generally provide for rent escalations resulting from increased assessments for real estate taxes and other charges. A portion of the Company's real estate lease portfolio contains base rents subject to annual changes in the Consumer Price Index ("CPI") as well as charges for operating expenses which are reimbursable to the landlord based on actual usage. Changes to the CPI and payments for such reimbursable operating expenses are considered variable and are recognized as variable lease costs in the period in which the obligation for those payments was incurred. Approximately 98% of the Company's lease obligations are for the use of office space. All of the Company's material leases are operating leases.

As a practical expedient, the Company has elected an accounting policy not to separate non-lease components from lease components and instead account as a single lease component. The Company has also elected not to recognize ROU assets and lease liabilities for leases that, at the commencement date, are for 12 months or less. Refer to Note 12, Leases for additional information.

Capitalized Software Costs: The Company capitalizes certain costs to develop, purchase or modify software for the internal use of the Company. These costs are amortized on a straight-line basis over periods ranging from 3 to 10 years. Costs incurred during the preliminary project stage and post implementation stage are expensed as incurred. Costs incurred during the application development stage are capitalized. Costs related to updates and enhancements are only capitalized if they will result in additional functionality. Capitalized computer software costs of $519 million and $492 million, net of accumulated amortization of $2.0 billion and $1.8 billion at December 31, 2023 and 2022, respectively, are included in other assets in the consolidated balance sheets.

Legal and Other Loss Contingencies: The Company and its subsidiaries are subject to a significant number of claims, lawsuits and proceedings including claims for errors and omissions ("E&O"). The Company records a liability when a loss is both probable and reasonably estimable which requires significant management judgment. Legal and other contingent liabilities recorded are not discounted.

The Company utilizes case level reviews by inside and outside counsel, an internal actuarial analysis by Oliver Wyman Group, a subsidiary of the Company, and other methods to estimate potential losses, including estimated legal costs. The liability is reviewed quarterly and adjusted as developments warrant. In many cases, the Company has not recorded a liability, other than for legal fees to defend the claim, because the Company is unable, at present time, to make a determination that a loss is both probable and reasonably estimable. Given the unpredictability of E&O claims and of litigation that could arise from such claims, it is possible that an adverse outcome in a particular matter could have a material adverse effect on the Company's businesses, results of operations, financial condition or cash flows in a given quarterly or annual period.

At December 31, 2023, the Company’s liability for E&O was $385 million, compared to $419 million at December 31, 2022, of which $71 million and $64 million, respectively, were current liabilities and included in accounts payable and accrued liabilities in the consolidated balance sheets. In addition, to the extent that insurance coverage is available, significant management judgment is required to determine the amount of recoveries that are probable of collection in accordance with the Company’s various insurance programs.

Income Taxes: The Company's effective 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 tax provision and in evaluating uncertain tax positions and the ability to realize deferred tax assets.

The Company reports a liability for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in a tax return. The evaluation of a tax position is a two-step process. The first step involves recognition. The Company determines whether it is more-likely-than-not that a tax position will be sustained upon tax examination, including resolution of any related appeals or litigation, based on only the technical merits of the position. The technical merits of a tax position derive from both statutory and judicial authority (legislation and statutes, legislative intent, regulations, rulings, and case law) and their applicability to the facts and circumstances of the tax position. If a tax position does not meet the more-likely-than-not recognition threshold, the benefit of that position is not recognized in the financial statements. The second step is measurement. A tax position that meets the more-likely-than-not recognition threshold is measured to determine the amount of benefit to recognize in the financial statements. The tax position is measured as the largest amount of benefit that is greater than 50% likely to be realized upon ultimate resolution with a taxing authority. Uncertain tax positions are evaluated based on the facts and circumstances that exist at each reporting period. Subsequent changes in judgment based on new information may lead to changes in recognition, de-recognition, and measurement. Adjustments may result, for example, upon resolution of an issue with the taxing authorities, or expiration of a statute of limitations barring an assessment for an issue. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits in income tax expense.

Tax law may require items be included in the Company's tax returns at different times than the items are reflected in the financial statements. As a result, the annual tax expense reflected in the consolidated statements of income is different than that reported in the income tax returns. Some of these differences are permanent, such as expenses that are not deductible in the returns, and some differences are temporary and reverse over time, such as depreciation expense. Temporary differences create deferred tax assets and liabilities. Deferred tax assets generally represent items that can be used as a tax deduction or credit in tax returns in future years for which benefit has already been recorded in the financial statements. Valuation allowances are established for deferred tax assets when it is estimated that future taxable income will be insufficient to use a deduction or credit in that jurisdiction. Deferred tax liabilities generally represent tax expense recognized in the financial statements for which payment has been deferred, or expense for which a deduction has been taken already in the tax return but the expense has not yet been recognized in the financial statements.

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 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.

Derivative Instruments: All derivatives, whether designated in hedging relationships or not, are recorded on the consolidated balance sheets at fair value. If the derivative is designated as a fair value hedge, the changes in the fair value of the derivative and of the hedged item attributable to the hedged risk are recognized in earnings. The fair value of the derivative is recorded in the consolidated balance sheets in other receivables or accounts payable and accrued liabilities. If the derivative is designated as a cash flow hedge, the effective portions of changes in the fair value of the derivative are recorded in other comprehensive income and are recognized in the consolidated statements of income when the hedged item affects earnings. Changes in the fair value attributable to the ineffective portion of cash flow hedges are recognized in earnings. If a derivative is not designated as an accounting hedge, such as forward contracts periodically used by the Company to limit foreign currency exchange rate exposure on net income, the change in fair value is recorded in earnings.

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
(In millions, except per share data)	2023		2022		2021
Net income before non-controlling interests	$	3,802	$	3,087	$	3,174
Less: Net income attributable to non-controlling interests	46		37		31
Net income attributable to the Company	$	3,756	$	3,050	$	3,143
Basic weighted average common shares outstanding	494		499		507
Dilutive effect of potentially issuable common shares	5		6		6
Diluted weighted average common shares outstanding	499		505		513
Average stock price used to calculate common stock equivalents	$	182.30	$	160.39	$	141.57

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 $453 million, $120 million and $15 million in 2023, 2022 and 2021, respectively.

Net uncollected premiums and claims and the related payables were $13.8 billion and $13.0 billion at December 31, 2023 and 2022, respectively. The Company is not a principal to the contracts under which the right to receive premiums or the right to receive reimbursement of insured losses arises. Accordingly, net uncollected premiums and claims and the related payables are not assets and liabilities of the Company and are not included in the accompanying consolidated balance sheets.

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

Reclassification of Fiduciary Assets and Liabilities

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 reclassification had no impact on the Company’s total equity at December 31, 2022. The presentation in the December 31, 2022 consolidated balance sheet was conformed to the current presentation as follows:


(In millions)	As Reported		As Reclassified
Total current assets	$	8,299	$	18,959
Total assets	$	33,454	$	44,114
Total current liabilities	$	7,172	$	17,832

As a result of reclassifying cash and cash equivalents held in a fiduciary capacity, total RIS and Consulting assets at December 31, 2022 and 2021, were also conformed to the current presentation for comparative purposes. Refer to Note 17, Segment Information, for the reclassified segment balances.

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 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.

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

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

Such matters include:

estimates of revenue;
impairment assessments and charges;
recoverability of long-lived assets;
liabilities for errors and omissions;
deferred tax assets, uncertain tax positions and income tax expense;
share-based and incentive compensation expense;
the allowance for current expected credit losses on receivables;
useful lives assigned to long-lived assets, and depreciation and amortization; and
fair value estimates of contingent consideration receivable or payable related to acquisitions or dispositions.

The Company believes these estimates are reasonable based on information currently available at the time they are made. The Company also considered the potential impact of 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.

New Accounting Pronouncements

Recently Issued Accounting Pronouncements Not Yet Adopted

In November 2023, the Financial Accounting Standards Board ("FASB") issued an accounting standard update on segment reporting. The new guidance: (1) introduces a requirement to disclose significant segment expenses regularly provided to the chief operating decision maker ("CODM"), (2) extends certain annual disclosures to interim periods, (3) clarifies disclosure requirements for single reportable segment entities, (4) permits more than one measure of segment profit or loss to be reported under certain conditions, and (5) requires disclosure of the title and position of the CODM. The standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The guidance applies retrospectively to all periods presented in the financial statements. The Company is currently evaluating the guidance and expects it to only impact disclosures with no impact to results of operations, cash flows, or financial condition.

In December 2023, the FASB issued an accounting standard update on income tax disclosures, primarily related to the rate reconciliation and income taxes paid information. The new guidance requires public business entities, on an annual basis, disclose specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. In addition, all entities are required to disclose on an annual basis the amount of income taxes paid, net of refunds received, disaggregated by federal, state and foreign taxes, and by individual jurisdictions if the amount is equal to or greater than 5% of total income taxes paid, net of refunds received. The guidance is effective for annual periods beginning after December 15, 2024. Early adoption is permitted. An entity should apply the amendments in the standard prospectively, even though retrospective application is permitted. The Company is currently evaluating the guidance and expects it to only impact disclosures with no impact to results of operations, cash flows, or financial condition.

New Accounting Pronouncement Adopted Effective January 1, 2022:

In October 2021, the FASB issued new guidance for measuring contract assets and contract liabilities acquired in a business combination. In accordance with the new guidance, contract assets and contract liabilities should be measured in accordance with the guidance for revenue from contracts with customers as opposed to the guidance for business combinations. The guidance must be applied on a prospective basis, and is effective for fiscal years beginning after December 15, 2022, including interim periods therein. Early adoption is permitted. The Company elected to adopt this new standard effective January 1, 2022. Adoption of this guidance did not have a material impact on the Company's financial position or results of operations.

2. 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.

Risk and Insurance Services

Risk and Insurance Services revenue reflects compensation for brokerage and consulting services through commissions and fees. Commission rates and fees vary in amount and can depend on a number of factors, including the type of insurance or reinsurance coverage provided, the particular insurer or reinsurer selected, and the capacity in which the broker acts and negotiates with clients. For the majority of the insurance and reinsurance brokerage arrangements, advice and services provided which culminate in the placement of an effective policy are considered a single performance obligation. Arrangements with clients may include the placement of a single policy, multiple policies or a combination of policy placements and other services. Consideration related to such "bundled arrangements" is allocated to the individual performance obligations based on their relative fair value. Revenue for policy placement is generally recognized on the policy effective date, at which point control over the services provided by the Company has transferred to the client and the client has accepted the services. In many cases, fee compensation may be negotiated in advance, based on the type of risk, coverage required and service provided by the Company and ultimately, the extent of the risk placed into the insurance market or retained by the client. The trends and comparisons of revenue from one period to the next can be affected by changes in premium rate levels, fluctuations in client risk retention and increases or decreases in the value of risks that have been insured, as well as new and lost business, and the volume of business from new and existing clients. For such arrangements, revenue is recognized using output measures, which correspond to the progress toward completing the performance obligation. Fees for non-risk transfer services provided to clients are recognized over time in the period the services are provided, using a proportional performance model, primarily based on input measures. These measures of progress provide a faithful depiction of the progress towards completion of the performance obligation.

Revenue related to reinsurance brokerage for excess of loss ("XOL") treaties is estimated based on contractually specified minimum or deposit premiums, and adjusted as additional evidence of the ultimate amount of brokerage is received. Revenue for quota share treaties is estimated based on indications of estimated premium income provided by the ceding insurer. The estimated brokerage revenue recognized for quota share treaties is constrained to an amount that is probable to not have a significant negative adjustment. The estimated revenue and the constraint are evaluated as additional evidence of the ultimate amount of underlying risks to be covered and are received over the 12 to 18 months following the effective date of the placement.

In addition to compensation from its clients, Marsh also receives other compensation, separate from retail fees and commissions, from insurance companies. This other compensation includes, among other things, payments for consulting and analytics services provided to insurers; compensation for administrative and other services (including fees for underwriting services and services provided to or on behalf of insurers relating to the administration and management of quota shares, panels and other facilities in which insurers participate); and contingent commissions, which are paid by insurers based on factors such as volume or profitability of Marsh's placements primarily in Marsh McLennan Agency ("MMA") and parts of Marsh's international operations. Revenue for contingent commissions from insurers is estimated based on historical evidence of the achievement of the respective contingent metrics and recorded as the underlying policies that contribute to the achievement of the metric are placed. Due to the uncertainty of the amount of contingent consideration that will be received, the estimated revenue is constrained to an amount that is probable to not have a significant negative adjustment. Contingent consideration is generally received in the first quarter of the subsequent year.

A significant portion of the Company's Risk and Insurance Services revenue is commission revenue for brokerage arrangements recognized at a point in time on the effective date of the underlying policy. Commission revenue is estimated using historical information about the risks to be covered over the policy period, some of which are dependent on variable factors such as number of employees covered, covered payroll, airline passenger miles flown, shipped tonnage of marine cargo and others. Marsh and Guy Carpenter also receive interest income on certain funds (such as premiums and claims proceeds) held in a fiduciary capacity for others.

Insurance brokerage commissions are generally invoiced on the policy effective date. Fee based arrangements generally include a percentage of the total fee due upon signing the arrangement, with additional fixed installments payable over the remainder of the year. Payment terms range from receipt of invoice up to 30 days from invoice date.

Reinsurance brokerage revenue is recognized on the effective date of the treaty. Payment terms depend on the type of reinsurance. For XOL treaties, brokerage revenue is typically collected in 4 installments during an annual treaty period based on a contractually specified minimum or deposit premium. For proportional or quota share treaties, brokerage is billed as underlying insured risks attach to the reinsurance treaty, generally over 12 to 18 months.

Consulting

The major component of revenue in the Consulting business is fees paid by clients for advice and services. Mercer, principally through its health line of business, also earns revenue in the form of commissions received from insurance companies for the placement of group (and occasionally individual) insurance contracts, primarily health, life and accident coverages. Revenue for Mercer’s investment management business and certain of Mercer’s defined benefit and contribution administration services consists principally of fees based on assets under delegated management or administration. For a majority of the Mercer-managed investment funds, revenue received from Mercer's investment management clients as sub-advisor fees is reported in accordance with U.S. GAAP, on a gross basis rather than a net basis.

Consulting projects in Mercer’s wealth and career businesses, and consulting projects in Oliver Wyman Group, typically consist of a single performance obligation, which is recognized over time as control is transferred continuously to customers. Therefore, revenue is typically recognized over time using an input measure of time expended to date relative to total estimated time to be incurred at project completion. Incurred hours represent services rendered and thereby faithfully depicts the transfer of control to the customer.

On a limited number of engagements, performance fees may also be earned for achieving certain prescribed performance criteria. Revenue for achievement is estimated and constrained to an amount that is probable to not have a significant negative adjustment.

A significant majority of fee revenues in the Consulting segment is recognized over time.

For consulting projects, Mercer generally invoices monthly in arrears with payment due within 30 days of the invoice date. Fees for delegated management services are either deducted from the net asset value of the fund or invoiced to the client on a monthly or quarterly basis in arrears. Oliver Wyman Group typically bills its clients 30 to 60 days in arrears with payment due upon receipt of the invoice.

Health brokerage and consulting services are components of both Marsh, which includes MMA, and Mercer, with approximately 57% of such revenues reported in Mercer. Health contracts typically involve a series of distinct services that are treated as a single performance obligation. Revenue for these services is recognized over time based on the amount of remuneration the Company expects to be entitled in exchange for these services. Payments for health brokerage and consulting services are typically paid monthly in arrears from carriers based on insured lives under the contract.

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


For the Years Ended December 31,
(In millions)	2023		2022		2021
Marsh:
EMEA (a) (b) (f)	$	3,262	$	2,997	$	3,236
Asia Pacific (a)	1,295		1,215		1,172
Latin America	559		502		453
Total International	5,116		4,714		4,861
U.S./Canada	6,262		5,791		5,342
Total Marsh	11,378		10,505		10,203
Guy Carpenter (c)	2,258		2,020		1,867
Subtotal	13,636		12,525		12,070
Fiduciary interest income	453		120		15
Total Risk and Insurance Services	$	14,089	$	12,645	$	12,085

Mercer:
Wealth (d)	$	2,507	$	2,366	$	2,509
Health (e)	2,061		2,017		1,855
Career	1,019		962		890
Total Mercer	5,587		5,345		5,254
Oliver Wyman Group (b)	3,122		2,794		2,535
Total Consulting	$	8,709	$	8,139	$	7,789

(a)In the first quarter of 2023, the Company began reporting the Marsh India operations in EMEA. Prior years' results for India have been reclassified from Asia Pacific to EMEA for comparative purposes. Revenue in 2021 also included a gain on consolidation of Marsh India of $267 million.

(b)Revenue in 2022 includes the loss on deconsolidation of the Company's Russian businesses at Marsh and Oliver Wyman Group of $27 million and $12 million, respectively.

(c)Revenue in 2023 includes a gain from a legal settlement with a competitor of $58 million, excluding legal fees.

(d)Revenue in 2023 includes the loss on sale of an individual financial advisory business in Canada of $17 million.

(e)Revenue in 2022 includes a net gain from the sale of the Mercer U.S. affinity business of $112 million.

(f)Revenue in 2021 includes a net gain on the disposition of businesses of approximately $50 million.

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


December 31, (In millions)	2023		2022		2021
Contract assets	$	357	$	335	$	290
Contract liabilities	$	869	$	837	$	776

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

Contract assets are included in other current assets in the Company's consolidated balance sheets. Contract liabilities primarily relate to the advance consideration received from customers. Contract liabilities are included in current liabilities in the Company's consolidated balance sheets.

Details of the change in Contract Assets and Contract Liabilities for 2023 and 2022 are as follows:


For the Years Ended December 31,
(In millions)	2023		2022
Contract Assets
Balance at January 1,	$	335	$	290
Additions	825		661
Transfers to accounts receivable (a)	(805)		(614)
Effect of foreign exchange rate changes	2		(2)
Balance at December 31,	$	357	$	335

Contract Liabilities
Balance at January 1,	$	837	$	776
Cash received for performance obligations not yet fulfilled	822		726
Revenue recognized	(799)		(640)
Effect of foreign exchange rate changes	9		(25)
Balance at December 31,	$	869	$	837

(a) Amounts transferred to accounts receivable as the rights to bill and collect became unconditional.

The amount of revenue recognized in 2023, 2022 and 2021 from performance obligations satisfied in previous periods, mainly due to variable consideration from contracts with insurers, quota share business and consulting contracts previously considered constrained was $71 million, $83 million, and $84 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.

Costs to Obtain and Fulfill a Contract

The Company capitalizes the incremental costs to obtain contracts primarily related to commissions or sales bonus payments in both segments. These deferred costs are amortized over the expected life of the underlying customer relationships.

In Risk and Insurance Services, the Company capitalizes certain pre-placement costs that are considered fulfillment costs that meet the following criteria: these costs (1) relate directly to a contract, (2) enhance resources used to satisfy the Company’s performance obligation and (3) are expected to be recovered through revenue generated by the contract. These costs are amortized at a point in time when the associated revenue is recognized.

In Consulting, the Company incurs implementation costs necessary to facilitate the delivery of the contracted services. These costs are capitalized and amortized over the initial contract term plus expected renewal periods.

At December 31, 2023, the Company’s capitalized assets related to deferred implementation costs, costs to obtain and costs to fulfill were $10 million, $362 million and $370 million, respectively. At December 31, 2022, the Company's capitalized assets related to deferred implementation costs, costs to obtain and costs to fulfill were $19 million, $328 million and $320 million, respectively. Costs to obtain and deferred implementation costs are primarily included in other assets and costs to fulfill are primarily included in other current assets in the Company's consolidated balance sheets. The Company recorded compensation and benefits expense of $1.8 billion, $1.6 billion and $1.5 billion for the years ended December 31, 2023, 2022 and 2021, respectively, related to the amortization of these capitalized assets.

A significant portion of deferred costs to fulfill in Risk and Insurance Services is amortized within 3 to 6 months. Therefore, the deferral of the cost and its amortization often occur in the same annual period. The Company has elected to use the practical expedient and recognizes the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets is one year or less.

3. Supplemental Disclosures to the Consolidated Statements of Cash Flows

The following table provides additional information concerning acquisitions, interest and income taxes paid:


For the Years Ended December 31,
(In millions)	2023		2022		2021
Assets acquired, excluding cash, and cash and cash equivalents held in a fiduciary capacity	$	1,292	$	734	$	1,697
Acquisition-related deposit	—		24		—
Fiduciary liabilities assumed	(93)		(6)		(18)
Liabilities assumed	(182)		(49)		(213)
Non-controlling interests assumed	—		(5)		(64)
Fair value of previously-held equity method investment	—		(6)		(390)
Contingent/deferred purchase consideration	(41)		(120)		(153)


Net cash outflow for acquisitions	$	976	$	572	$	859


(In millions)	2023		2022		2021
Interest paid	$	499	$	431	$	441
Income taxes paid, net of refunds	$	1,119	$	1,049	$	1,069

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 Years Ended December 31,
(In millions)	2023		2022		2021
Operating:
Contingent consideration payments for prior year acquisitions	$	(41)	$	(38)	$	(49)
Receipt of contingent consideration for dispositions	1		—		19
Acquisition/disposition related net charges for adjustments	29		49		57


Adjustments and payments related to contingent consideration	$	(11)	$	11	$	27
Financing:
Contingent consideration for prior year acquisitions	$	(135)	$	(32)	$	(28)
Deferred consideration related to prior year acquisitions	(67)		(126)		(89)
Payments of deferred and contingent consideration for acquisitions	$	(202)	$	(158)	$	(117)

Receipts of contingent consideration for dispositions	$	2	$	3	$	71

The Company had non-cash issuances of common stock under its share-based payment plan of $310 million, $372 million and $228 million in 2023, 2022 and 2021, respectively.

The Company recorded share-based compensation expense related to restricted stock units, performance stock units and stock options of $363 million, $367 million and $348 million in 2023, 2022 and 2021, respectively.

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.

An analysis of the allowance for credit losses is provided below:


For the Years Ended December 31,
(In millions)	2023		2022		2021
Balance at January 1,	$	160	$	166	$	142
Provision charged to operations	17		17		46
Accounts written-off, net of recoveries	(20)		(17)		(16)
Effect of exchange rate changes and other	(6)		(6)		(6)
Balance at December 31,	$	151	$	160	$	166

Other

In October 2023, the Company recorded a gain from a legal settlement with a competitor for $58 million, excluding legal fees of approximately $10 million. In 2022, the Company had incurred $30 million in settlement charges and legal costs related to strategic recruiting.

4. Accumulated Other Comprehensive (Loss) Income

The changes, net of tax, in the balances of each component of AOCI for the years ended December 31, 2023 and 2022, 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, 2023	$	(2,721)	$	(2,593)	$	(5,314)

Other comprehensive (loss) income before reclassifications	(394)		399		5
Amounts reclassified from accumulated other comprehensive income	14		—		14
Net current period other comprehensive (loss) income	(380)		399		19
Balance at December 31, 2023	$	(3,101)	$	(2,194)	$	(5,295)


(In millions)	Pension/Post-Retirement Plans Gains (Losses)		Foreign Currency Translation Adjustments		Total
Balance at January 1, 2022	$	(3,202)	$	(1,373)	$	(4,575)

Other comprehensive income (loss) before reclassifications	371		(1,220)		(849)
Amounts reclassified from accumulated other comprehensive income	110		—		110
Net current period other comprehensive income (loss)	481		(1,220)		(739)
Balance at December 31, 2022	$	(2,721)	$	(2,593)	$	(5,314)

The components of other comprehensive (loss) income for the years ended December 31, 2023, 2022 and 2021 are as follows:


For the Year Ended December 31,	2023

(In millions)	Pre-Tax		Tax (Credit)		Net of Tax
Foreign currency translation adjustments	$	389	$	(10)	$	399

Pension/post-retirement plans:
Amortization of (gains) losses included in net benefit (credit) cost:
Prior service credits (a)	(2)		—		(2)
Net actuarial losses (a)	20		5		15

Effect of settlement (a)	2		1		1


Subtotal	20		6		14
Net losses arising during period	(349)		(85)		(264)
Foreign currency translation adjustments	(167)		(42)		(125)
Other adjustments	(7)		(2)		(5)
Pension/post-retirement plans loss	(503)		(123)		(380)
Other comprehensive (loss) income	$	(114)	$	(133)	$	19

(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.


For the Year Ended December 31,	2022
(In millions)	Pre-Tax		Tax (Credit)		Net of Tax
Foreign currency translation adjustments	$	(1,198)	$	22	$	(1,220)

Pension/post-retirement plans:
Amortization of (gains) losses included in net benefit (credit) cost:
Prior service credits (a)	(2)		—		(2)
Net actuarial losses (a)	150		38		112


Effect of settlement (a)	2		—		2
Subtotal	150		38		112

Net gains arising during period	203		51		152
Foreign currency translation adjustments	285		71		214
Other adjustments	3		—		3
Pension/post-retirement plans gains	641		160		481
Other comprehensive (loss) income	$	(557)	$	182	$	(739)

(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.


For the Year Ended December 31,	2021

(In millions)	Pre-Tax		Tax (Credit)		Net of Tax
Foreign currency translation adjustments	$	(389)	$	—	$	(389)

Pension/post-retirement plans:
Amortization of (gains) losses included in net benefit (credit) cost:
Prior service credits (a)	(2)		—		(2)
Net actuarial losses (a)	208		52		156

Effect of curtailment (a)	2		1		1
Effect of settlement (a)	5		1		4

Subtotal	213		54		159
Net gains arising during period	1,003		249		754
Foreign currency translation adjustments	19		4		15
Other adjustments	(6)		(2)		(4)
Pension/post-retirement plans gains	1,229		305		924
Other comprehensive income	$	840	$	305	$	535

(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.

The components of accumulated other comprehensive loss are as follows:


(In millions)	December 31, 2023		December 31, 2022
Foreign currency translation adjustments (net of deferred tax asset of $2 in 2023 and deferred tax liability of $8 in 2022, respectively)	$	(2,194)	$	(2,593)

Net charges related to pension/post-retirement plans (net of deferred tax asset of $1,463 and $1,340 in 2023 and 2022, respectively)	(3,101)		(2,721)
Total	$	(5,295)	$	(5,314)

5. 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 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 Marsh & McLennan Agency ("MMA") acquired SOLV Risk Solutions, LLC, a Texas-based risk management advisory services firm.
July – MMA acquired Integrity HR, Inc., a Kentucky-based human resources consulting firm and Trideo Systems, an Illinois-based risk management information systems provider for health care organizations; and Marsh acquired Asprose Corredora de Seguros, a Costa Rica-based insurance broker that provides insurance brokerage and risk advisory services to commercial organizations.
August – MMA acquired Graham Company, a Pennsylvania-based risk management consultancy and insurance and employee benefits broker, specializing in construction, real estate, manufacturing and distribution, health and human services and professional services.
September – MMA acquired Blue Water Insurance LLC, a Kentucky-based employee health and benefits insurance broker.
November - Marsh acquired HIG Australia Holdco Pty Ltd ("Honan Insurance Group"), an Australia-based insurance broker in the areas of corporate risk, employee benefits, and strata and real estate insurance.

The Consulting segment completed 5 acquisitions in 2023:

March – Mercer acquired Leapgen LLC, a Minnesota-based human resources consulting technology advisory firm focused on digital strategy and transformation, workforce solutions, and improving employee experience.
April – Mercer acquired Westpac Banking Corporation’s ("Westpac") financial advisory business, Advance Asset Management, and completed the transfer from Westpac of BT Financial Group's personal and corporate pension funds to the Mercer Super Trust managed by Mercer Australia (referred to collectively, as the "Westpac Transaction"). Oliver Wyman Group acquired the business of Gorman Actuarial, Inc., a Massachusetts-based life and health actuarial consultant business.
July – Oliver Wyman Group acquired the actuarial consulting business of ISC Strategies Consulting, Inc., a Florida-based life insurance and actuarial consulting firm.
October – Mercer acquired BT Financial Group's Private Portfolio Management, an Australia-based wealth management business that provides investment solutions to not-for-profit organizations, high-net worth clients and their financial advisers.

Total purchase consideration for acquisitions made during 2023 was $1.2 billion, which consisted of cash paid of $1.1 billion, and deferred and estimated contingent purchase consideration of $41 million. Contingent 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 the contingent consideration was based on projected revenue and earnings of the acquired entities.

In 2023, the Company also paid $67 million of deferred purchase consideration and $176 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.

The following table presents the preliminary allocation of purchase consideration to the assets acquired and liabilities assumed in 2023, based on the estimated fair values for the acquisitions as of their respective acquisition dates. Amounts in the table primarily reflect the impact of Honan Insurance Group, Graham Company and the Westpac Transaction.


Acquisitions for the Year Ended December 31, 2023
(In millions)
Cash	$	1,140
Estimated fair value of deferred/contingent consideration	41

Total consideration	$	1,181
Allocation of purchase price:
Cash and cash equivalents	$	48
Cash and cash equivalents held in a fiduciary capacity	93
Net receivables	46
Other current assets	9
Goodwill	813
Other intangible assets	427
Fixed assets, net	3

Right of use assets	17


Total assets acquired	1,456
Current liabilities	68
Fiduciary liabilities	93





Other liabilities	114
Total liabilities assumed	275

Net assets acquired	$	1,181

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

Items subject to change include:

amounts of intangible assets, fixed assets, capitalized software assets and right-of-use assets, subject to finalization of valuation efforts;
amounts for contingencies, pending the finalization of the Company’s assessment of the portfolio of contingencies;
amounts for deferred tax assets and liabilities pending the finalization of valuations of the assets acquired, liabilities assumed and associated goodwill discussed below; and
amounts for income tax assets, receivables and liabilities, pending the filing of the acquired companies' pre-acquisition income tax returns and receipt of information from taxing authorities which may change certain estimates and assumptions used.

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

The following table provides information about other intangible assets acquired in 2023:


Other intangible assets through December 31, 2023 (In millions)	Amount		Weighted Average Amortization Period
Customer relationships	$	407	12.8 years
Other	20		4.0 years
Total other intangible assets	$	427

The consolidated statements of income include the results of operations of acquired companies since their respective acquisition dates. The consolidated statement of income for 2023 includes approximately $152 million of revenue and $24 million of operating income related to acquisitions made in 2023. The consolidated statement of income for 2022 includes approximately $58 million of revenue and $5 million of operating loss related to acquisitions made in 2022, and the consolidated statement of income for 2021 includes approximately $114 million of revenue and $3 million of operating income related to acquisitions made in 2021.

In 2023 and 2022, acquisition and integration related costs were $45 million and $29 million, respectively. These included $39 million and $21 million in 2023 and 2022, respectively, related to the Westpac Transaction, primarily for technology, consulting, legal and people related costs. Acquisition and integrations 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.S. health and benefits and U.K pension administration businesses for approximately $110 million. The Company expects the gain on sale not to be material. The Company reclassified $70 million of related net assets as assets held for sale, primarily goodwill and intangible assets, to other current assets at December 31, 2023.

In January 2023, the Company entered into an agreement for the sale of an individual financial advisory business in Canada which was completed in May 2023. As a result, the Company recorded a loss of $17 million in 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 $24 million of cash and cash equivalents held in a fiduciary capacity in 2023.

Prior year acquisitions

The Risk and Insurance Services segment completed 16 acquisitions in 2022:

January – MMA acquired Heil & Kay Insurance Agency Inc., an Illinois-based full-service broker providing business insurance, employee health benefits services and personal lines insurance.
April – Marsh acquired the business of Regional Treaty Services Corporation, a Rhode Island-based managing general underwriter, which manages reinsurance facilities for small to midsize U.S.-based insurers primarily writing personal lines, small agriculture, and main street commercial business.
June – MMA acquired Clark Insurance, a Maine-based full-service broker providing business insurance, employee health and benefits and private client services to businesses and individuals across the region.
July – MMA acquired CS Insurance Strategies, Inc., an Illinois-based full-service broker providing employee health and benefits, business insurance, and risk management consulting services to organizations of all sizes across the U.S. and Suchanek Partners LLC, an Ohio-based employee benefits insurance broker.
August – Marsh acquired Best Insurance Co. Ltd, a Japan-based insurance broker that provides affinity type schemes, general and personal lines insurance.
September – MMA acquired Steinberg & Associates, Inc., a South Carolina-based insurance broker that primarily offers employee health benefit services to group clients and Leykell, Inc., a Texas-based full-service broker that provides specialty insurance focused on trade credit.
October – MMA acquired Galbraith Group, a Texas-based employee health and benefits insurance broker.
November – MMA acquired Focus Insurance and Financial Services, a Texas-based personal insurance broker and Bradley Insurance Agency, a commercial insurance broker in Knoxville, Tennessee, with

expertise serving the hospitality and construction industries. Marsh increased its ownership interest in Beassur SARL, a Morocco-based multi-line insurance broker, from 35% to 70%.

December – MMA acquired McDonald-Zaring Insurance, Inc., a Washington-based full-service broker focused on agribusiness, wineries, crops and contractors, Chartwell Insurance Brokers, Inc., a Massachusetts-based full-service broker that specializes in commercial Property & Casualty insurance in the technology, financial services and non-profit space, and HMS Insurance Associates, Inc., a Maryland-based full-service broker providing commercial, surety, employee benefits, and personal lines insurance. Marsh acquired BHM Consultores S.A., d/b/a Grupo Mesos, a leading auto affinity insurance broker specialist in Chile that has extensive distribution partnerships with car dealerships, original equipment manufacturers and auto finance companies.

The Consulting segment completed 4 acquisitions in 2022:

February – Oliver Wyman acquired Azure Consulting, an Australia-based management consulting firm with expertise in strategy development, organizational design and operations in the industrials, energy and natural resources sectors.
March – Mercer acquired GeFi Assurances, a France-based brokerage and consulting firm specializing in collective corporate social protection.
September – Oliver Wyman acquired Booz Allen Hamilton's strategy consulting business serving the Middle East and North Africa.
November – Oliver Wyman acquired the Avascent Group Ltd, an aerospace and defense management consulting firm focused on the corporate and private equity sectors based in the U.S., U.K., Canada and France.

Total purchase consideration for acquisitions made in 2022 was $705 million, which consisted of cash paid of $579 million and deferred and estimated contingent purchase consideration of $120 million and the fair value of a previously held equity method investment of $6 million. Contingent consideration arrangements are generally based on EBITDA or revenue targets over periods of 2 to 4 years. The fair value of the contingent consideration was based on projected revenue and earnings of the acquired entities. In 2022, the Company also paid $126 million of deferred purchase consideration and $70 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.

In December 2021, in connection with its increased investment in Marsh India, the Company recorded a gain of $267 million related to the re-measurement and consolidation of its previously held equity method investment to fair value. The fair value of the pre-existing equity method investment was calculated using an average of applying an income approach based on discounted future cash flows and market approach.

Prior year dispositions

In April 2022, Mercer sold its U.S. affinity business that provided insurance marketing, brokerage and administration to association and affinity groups for cash proceeds of approximately $140 million and recorded a net gain of $112 million which is included in revenue in the consolidated statements of income.

In addition, in 2022, the Company sold certain businesses in the U.K., the Czech Republic, Brazil and Belgium for cash proceeds of approximately $15 million and recorded a net gain of $15 million.

The cash proceeds received were partially offset by $36 million primarily related to cash and cash equivalents held in a fiduciary capacity in the disposed businesses.

Deconsolidation of Russia

In the first quarter of 2022, the Company concluded that it did not meet the accounting criteria for control over its wholly-owned Russian subsidiaries due to the evolving trade and economic sanctions against Russia and the related Russian counter sanctions. These sanctions included restrictions on payments to and from Russian companies and reduced currency access through official exchange markets that have significantly impacted the Company's ability to effectively manage and operate its Russian businesses.

As a result, the Company deconsolidated its Russian businesses effective as of the end of the first quarter of 2022, and recorded a loss of $39 million included in revenue in the consolidated statements of income. The loss consisted of the reclassification of cumulative translation losses from AOCI and a charge for the write-off of the Russia businesses' net assets.

In June 2022, the Company entered into a definitive agreement to exit its businesses in Russia and transfer ownership to local management, pending regulatory approvals.

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 2023, 2022 and 2021. In accordance with accounting guidance related to pro-forma disclosures, the information presented for current year acquisitions is as if they occurred on January 1, 2022 and reflects acquisitions made in 2022 as if they occurred on January 1, 2021. The 2021 information includes 2021 acquisitions as if they occurred on January 1, 2020. 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.


For the Years Ended December 31,
(In millions, except per share data)	2023		2022		2021
Revenue	$	22,904	$	21,238	$	20,220

Net income attributable to the Company	$	3,807	$	3,058	$	3,177


Basic net income per share attributable to the Company	$	7.71	$	6.12	$	6.27


Diluted net income per share attributable to the Company	$	7.63	$	6.06	$	6.20

6. 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 identified intangible assets at December 31, 2023 and 2022.

Changes in the carrying amount of goodwill are as follows:


(In millions)	2023		2022
Balance at January 1,	$	16,251	$	16,317
Goodwill acquired	813		460
Other adjustments (a)	167		(526)
Balance at December 31,	$	17,231	$	16,251

(a) Primarily reflects the impact of foreign exchange.

The goodwill arising from acquisitions in 2023 and 2022 consists largely of the synergies and economies of scale expected from combining the operations of the Company and the acquired entities and the trained assembled workforce acquired.

The goodwill acquired in 2023 included approximately $230 million and $12 million in the Risk and Insurance Services and Consulting segments, respectively, which is deductible for tax purposes. The goodwill acquired in 2022 included approximately $348 million and $64 million in the Risk and Insurance Service and Consulting segments, respectively, which is deductible for tax purposes.

Goodwill allocable to the Company’s reportable segments at December 31, 2023, is $13.2 billion for Risk and Insurance Services and $4.0 billion for Consulting.

The gross cost and accumulated amortization of other intangible assets at December 31, 2023 and 2022 are as follows:


(In millions)	2023						2022
	Gross Cost		Accumulated Amortization		Net Carrying Amount		Gross Cost		Accumulated Amortization		Net Carrying Amount
Customer relationships	$	4,337	$	1,761	$	2,576	$	3,993	$	1,508	$	2,485
Other (a)	391		337		54		360		308		52
Other intangible assets	$	4,728	$	2,098	$	2,630	$	4,353	$	1,816	$	2,537

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

Aggregate amortization expense was $343 million, $338 million, and $365 million for the years ended December 31, 2023, 2022 and 2021, respectively. The estimated future aggregate amortization expense is as follows:


For the Years Ended December 31,
(In millions)	Estimated Expense
2024	$	351
2025	309
2026	287
2027	278
2028	270
Subsequent years	1,135
Total future amortization	$	2,630

7. Income Taxes

For financial reporting purposes, income before income taxes includes the following components:


For the Years Ended December 31,
(In millions)	2023		2022		2021
Income before income taxes:
U.S.	$	1,823	$	1,468	$	1,590
Other	3,203		2,614		2,618
	$	5,026	$	4,082	$	4,208

The expense (benefit) for income taxes is comprised of:

Current –
U.S. Federal	$	273	$	262	$	251
Other national governments	838		653		714
U.S. state and local	142		123		132
	1,253		1,038		1,097
Deferred –
U.S. Federal	29		38		(40)
Other national governments	(73)		(91)		(12)
U.S. state and local	15		10		(11)
	(29)		(43)		(63)
Total income taxes	$	1,224	$	995	$	1,034

The significant components of deferred income tax assets and liabilities and their balance sheet classifications are as follows:


December 31,
(In millions)	2023		2022
Deferred tax assets:
Accrued expenses not currently deductible (a)	$	679	$	670
Differences related to non-U.S. operations (b)	299		275

Accrued U.S. retirement benefits	134		172
Net operating losses (c)	297		285
Income currently recognized for tax	48		34

Other	32		25
	$	1,489	$	1,461


Deferred tax liabilities:

Differences related to non-U.S. operations	$	586	$	543
Depreciation and amortization	527		510
Accrued retirement & post-retirement benefits – non-U.S. operations	404		408
Capitalized expenses currently recognized for tax	120		107
Other	38		57
	$	1,675	$	1,625

(a) Net of valuation allowances of $3 million in 2023 and $5 million in 2022.

(b) Net of valuation allowances of $53 million in 2023 and $160 million in 2022.


December 31,
(In millions)	2023		2022
Balance sheet classifications:



Deferred tax assets	$	357	$	358
Other liabilities	$	543	$	522

The amount of cumulative undistributed earnings that are indefinitely reinvested in non-U.S. subsidiaries is approximately $830 million at December 31, 2023. While no additional U.S. federal income tax would be required if such earnings were repatriated, additional state and withholding taxes would apply. The amount of these additional taxes is estimated to be approximately $80 million.

Future U.S. federal tax costs related to basis differences in non-U.S. subsidiaries would primarily be realized through the U.S. Global Intangible Low-Taxed Income ("GILTI") minimum tax regime. The Company elected to recognize GILTI tax costs as a period cost and has not provided deferred tax liabilities on these basis differences.

A reconciliation from the U.S. federal statutory income tax rate to the Company’s effective income tax rate is as follows:


For the Years Ended December 31,	2023		2022		2021
U.S. Federal statutory rate	21.0	%	21.0	%	21.0	%
U.S. state and local income taxes — net of U.S. Federal income tax benefit	2.6		2.7		2.3
Differences related to non-U.S. operations	2.2		0.8		0.1
Change in valuation allowance	(1.4)		(0.1)		—
U.K. statutory rate change	—		—		2.6
Gain on consolidation of business	—		—		(1.5)
Equity compensation	(0.7)		(0.7)		(0.7)
Uncertain tax positions	(0.1)		0.1		0.1
Other	0.7		0.6		0.7
Effective tax rate	24.3	%	24.4	%	24.6	%

The rates in all periods reflect the effects of tax planning and the ongoing impact of regulatory and other guidance as it became available. The tax rates in all periods include a valuation allowance for certain tax credits, the impact of uncertain tax positions, and certain tax planning benefits. The tax rate in 2023 includes the effect of a release of valuation allowances on deferred tax assets related to the Company’s non-U.S. operations, due to sustained profitability. The tax rate in 2021 also included the effect of a statutory rate change in the U.K. and the tax effect of a gain from the fair value re-measurement of the Company’s previously held equity method investment in Marsh India when the Company increased its ownership interest from 49% to 92%. The Company does not intend to dispose the business and has indefinitely reinvested this gain.

A valuation allowance was recorded to adjust deferred tax assets to the amount that the Company believes is more likely than not to be realized. Valuation allowances had a net decrease of $110 million and $1 million in 2023 and 2022, respectively, and an increase of $36 million in 2021. Adjustments of the beginning of the year balances of valuation allowances decreased income tax expense by $94 million in 2023. Adjustments of the beginning of the year valuation allowances decreased income tax expense by $5 million in 2022 and increased tax expense by $2 million in 2021. Approximately 10% of the Company’s net operating loss carryforwards expire from 2023 through 2038, and the remaining 90% are unlimited. The gross deferred tax assets of the potential tax benefit from net operating loss carryforwards at the end of 2023 comprised of federal, state and local, and non-U.S. tax benefits of $1 million, $4 million, and $363 million, respectively.

Changes in tax laws, rulings, policies or related legal and regulatory interpretations occur frequently and may also have significant favorable or adverse impacts on our effective tax rate. In July 2023, the U.K. enacted legislation to implement Pillar 2 of the Organization for Economic Cooperation and Development's ("OECD") framework, effective from January 1, 2024. This minimum tax will be treated as a period cost in future years and does not impact operating results for 2023. Other countries in the European Union (E.U.) and elsewhere have similarly adopted legislation. The Company is continuing to monitor legislative developments, especially in the E.U.

countries, and is in the process of evaluating the potential impact of the U.K. and other enacted legislation on its results of future operations.

On August 16, 2022, the Inflation Reduction Act of 2022 ("IRA") was enacted into law. The Company evaluated the provisions of the IRA, the most significant of which are the corporate alternative minimum tax and the share repurchase tax. The IRA was effective as of January 1, 2023, and does not have a significant impact on the Company's financial results of operations for the current year.

Following is a reconciliation of the Company’s total gross unrecognized tax benefits for the years ended December 31, 2023, 2022 and 2021:


(In millions)	2023		2022		2021
Balance at January 1,	$	97	$	94	$	98
Additions, based on tax positions related to current year	6		1		2
Additions for tax positions of prior years	44		15		11
Reductions for tax positions of prior years	(8)		(2)		(1)

Settlements	(8)		(2)		(1)
Lapses in statutes of limitations	(7)		(9)		(15)
Balance at December 31,	$	124	$	97	$	94

Of the total unrecognized tax benefits at December 31, 2023, 2022, and 2021, $122 million, $94 million and $87 million, respectively, represent the amount that, if recognized, would favorably affect the effective tax rate in any future periods. The total gross amount of accrued interest and penalties, before any applicable federal benefit, was $48 million at December 31, 2023 and 2022, and $45 million at December 31, 2021.

The Company is routinely examined by the jurisdictions in which it has significant operations. In the U.S. federal jurisdiction, the Company participates in the Internal Revenue Service’s ("IRS") Compliance Assurance Process ("CAP"), which is structured to be, in effect, a real-time audit. In 2021, the IRS concluded its examination of the Company’s 2017, 2018, and 2019 tax returns. The Company was accepted into the Bridge phase of the CAP program for tax years 2020 and 2021, and generally will not be audited by the IRS for those years. The IRS CAP Maintenance Audit for tax year 2022 is ongoing. In 2023, the IRS began its pre-filing examination of the Company's 2023 tax year. New York is a significant tax jurisdiction for the Company. New York State and New York City have continuing examinations underway in 2023 for various entities covering the years 2015 through 2019. In 2023, the New York State audits for 2013-2014 and the New York City audits for 2010-2014 were finalized. The New York State audits for 2010-2012 were finalized in 2022.

We conduct business through multiple legal entities in significant jurisdictions outside the U.S. Separate audits for individual entities within a jurisdiction may open or close within a particular year. The status of audits for significant jurisdictions outside the U.S. are summarized in the table below:


Tax Audit (Years)
Jurisdiction:	Initiated in 2023	Ongoing	Concluded in 2023
Germany	2017 - 2020	2013 - 2016
Italy	2017	2015, 2016
Singapore	2019, 2020	2017 - 2021	2020
United Kingdom	2021	2016 - 2020
Mexico	2017
Canada	2019 - 2021
India	2021	2007 - 2020

The Company has established liabilities for uncertain tax positions in relation to potential assessments in the jurisdictions in which it operates. The Company believes the resolution of tax matters will not have a material effect on the consolidated financial position of the Company. However, an adverse resolution of tax matters from current or future audits or tax litigation could have a material impact on the Company's net income or cash flows and on its effective tax rate in a particular future period. It is reasonably possible that the total amount of unrecognized tax benefits could decrease up to approximately $58 million within the next 12 months due to settlement of audits and expiration of statutes of limitations.

8. Retirement Benefits

The Company maintains qualified and non-qualified defined benefit pension plans for its U.S. and non-U.S. eligible employees.

Combined U.S. and Non-U.S. Plans

The weighted average actuarial assumptions utilized for the U.S. and significant non-U.S. defined benefit plans and post-retirement benefit plans are as follows:


	Pension Benefits				Post-retirement Benefits
	2023		2022		2023		2022
Weighted average assumptions:
Discount rate (for expense)	5.16	%	2.28	%	4.92	%	2.36	%
Expected return on plan assets	5.31	%	4.57	%	—		—
Rate of compensation increase (for expense) *	3.16	%	3.34	%	—		—
Discount rate (for benefit obligation)	4.95	%	5.16	%	5.26	%	4.92	%
Rate of compensation increase (for benefit obligation) *	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 December 31, 2023, the actual allocation for the U.S. plans was 49% equities and equity alternatives and 51% fixed income. The target asset allocation for the U.K. plans, which comprise approximately 79% of non-U.S. plan assets, is 14% equities and equity alternatives and 86% fixed income. At December 31, 2023, the actual allocation for the U.K. plans was 13% equities and equity alternatives and 87% fixed income. 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 (credit) or cost of the Company's defined benefit and other post-retirement plans is measured on an actuarial basis using various methods and assumptions. The components of the net benefit (credit) or cost for the years 2023, 2022 and 2021 are as follows:


Combined U.S. and significant non-U.S. Plans	Pension						Post-retirement
For the Years Ended December 31,	Benefits						Benefits
(In millions)	2023		2022		2021		2023		2022		2021
Service cost	$	23	$	28	$	38	$	—	$	—	$	1
Interest cost	599		389		341		3		3		2
Expected return on plan assets	(860)		(778)		(832)		—		—		—
Amortization of prior service	—		1		—		(2)		(2)		(2)
Recognized actuarial loss (gain)	22		149		206		(3)		1		1
Net periodic benefit (credit) cost	(216)		(211)		(247)		(2)		2		2
Curtailment loss	—		—		2		—		—		—

Settlement loss	2		2		5		—		—		—
Net benefit (credit) cost	$	(214)	$	(209)	$	(240)	$	(2)	$	2	$	2

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


Combined U.S. and significant non-U.S. Plans	Pension Benefits						Post-retirement Benefits
For the Years Ended December 31,
(In millions)	2023		2022		2021		2023		2022		2021
Compensation and benefits expense	$	23	$	28	$	38	$	—	$	—	$	1
Other net benefit (credit) cost	(237)		(237)		(278)		(2)		2		1
Net benefit (credit) cost	$	(214)	$	(209)	$	(240)	$	(2)	$	2	$	2

Plan Assets

For the U.S. plans, investment allocation decisions are made by a fiduciary committee composed of senior executives appointed by the Company’s Chief Executive Officer. For the non-U.S. plans, investment allocation decisions are made by local fiduciaries, in consultation with the Company for the larger plans. Plan assets are invested in a manner consistent with the fiduciary standards set forth in all relevant laws relating to pensions and trusts in each country. Primary investment objectives are (1) to achieve an investment return that, in combination with current and future contributions, will provide sufficient funds to pay benefits as they become due, and (2) to minimize the risk of large losses. The investment allocations are designed to meet these objectives by broadly diversifying plan assets among numerous asset classes with differing expected returns, volatilities, and correlations.

The major categories of plan assets include equity securities, equity alternative investments, and fixed income securities. For the U.S. plan, the category ranges are 46%-54% for both equities and equity alternatives, and for fixed income. For the U.K. plans, the category ranges are 11%-17% for equities and equity alternatives, and 83%-89% for fixed income. Asset allocation is frequently monitored and re-balancing actions are taken as appropriate.

Plan investments are exposed to stock market, interest rate, and credit risk. Concentrations of these risks are generally limited due to diversification by investment style within each asset class, diversification by investment manager, diversification by industry sectors and issuers, and the dispersion of investments across many geographic areas.

U.S. Plans

The following tables provide information concerning the Company’s U.S. defined benefit pension and post-retirement benefit plans:


	U.S. Pension Benefits				U.S. Post-retirement Benefits
(In millions)	2023		2022		2023		2022
Change in benefit obligation:
Benefit obligation at beginning of year	$	4,876	$	6,594	$	22	$	28

Interest cost	260		193		1		1
Employee contributions	—		—		3		3




Actuarial (gain) loss	(20)		(1,625)		2		(3)

Benefits paid	(426)		(286)		(8)		(7)

Benefit obligation, December 31	$	4,690	$	4,876	$	20	$	22
Change in plan assets:
Fair value of plan assets at beginning of year	$	4,276	$	5,537	$	2	$	2

Actual return on plan assets	351		(1,005)		—		—
Employer contributions	33		30		5		4
Employee contributions	—		—		3		3

Benefits paid	(426)		(286)		(8)		(7)

Fair value of plan assets, December 31	$	4,234	$	4,276	$	2	$	2
Net funded status, December 31	$	(456)	$	(600)	$	(18)	$	(20)
Amounts recognized in the consolidated balance sheets:
Current liabilities	$	(31)	$	(31)	$	(1)	$	(1)
Non-current liabilities	(425)		(569)		(17)		(19)
Net liability recognized, December 31	$	(456)	$	(600)	$	(18)	$	(20)
Amounts recognized in other comprehensive income (loss):
Prior service (cost)	$	(1)	$	(1)	$	—	$	—
Net actuarial (loss) gain	(1,347)		(1,419)		4		8
Total recognized accumulated other comprehensive (loss) income, December 31	$	(1,348)	$	(1,420)	$	4	$	8
Cumulative employer contributions in excess of (less than) net benefit (credit) cost	892		820		(22)		(28)
Net amount recognized in consolidated balance sheet	$	(456)	$	(600)	$	(18)	$	(20)
Accumulated benefit obligation, December 31	$	4,690	$	4,876	$	—	$	—


	U.S. Pension Benefits				U.S. Post-retirement Benefits
(In millions)	2023		2022		2023		2022
Reconciliation of net actuarial (loss) gain recognized in accumulated other comprehensive income (loss):
Beginning balance	$	(1,419)	$	(1,777)	$	8	$	3
Recognized as component of net benefit cost (credit)	19		74		(2)		—
Changes in plan assets and benefit obligations recognized in other comprehensive income (loss):

Other	(7)		—		—		2
Liability experience	20		1,625		(2)		3
Asset experience	40		(1,341)		—		—
Total gain recognized as change in plan assets and benefit obligations	53		284		(2)		5
Net actuarial (loss) gain, December 31	$	(1,347)	$	(1,419)	$	4	$	8


For the Years Ended December 31,	U.S. Pension Benefits						U.S. Post-retirement Benefits
(In millions)	2023		2022		2021		2023		2022		2021
Total recognized in net benefit (credit) cost and other comprehensive (income) loss	$	(105)	$	(427)	$	(722)	$	3	$	(4)	$	—

The weighted average actuarial assumptions utilized in determining expense during the year and benefit obligation at the end of the year for the U.S. defined benefit and other U.S. post-retirement plans are as follows:


	U.S. Pension Benefits				U.S. Post-retirement Benefits
	2023		2022		2023		2022
Weighted average assumptions:
Discount rate (for expense)	5.53	%	3.00	%	5.31	%	2.56	%
Expected return on plan assets	6.49	%	6.88	%	—		—

Discount rate (for benefit obligation)	5.52	%	5.53	%	5.34	%	5.31	%

The accumulated benefit obligation and aggregate fair value of plan assets for U.S. pension plans with accumulated benefit obligations in excess of plan assets were $4.7 billion and $4.2 billion, respectively, at December 31, 2023 and $4.9 billion and $4.3 billion, respectively, at December 31, 2022.

The projected benefit obligation and fair value of plan assets for U.S. pension plans with projected benefit obligations in excess of plan assets was $4.7 billion and $4.2 billion, respectively, at December 31, 2023 and $4.9 billion and $4.3 billion, respectively, at December 31, 2022.

At December 31, 2023, the U.S. qualified plan holds 1 million shares of the Company’s common stock which were contributed to the qualified plan by the Company in 2005. This represented approximately 4.5% of that plan's assets at December 31, 2023.

The components of the net benefit (credit) cost for the U.S. defined benefit and other post-retirement benefit plans are as follows:


U.S. Plans only	Pension Benefits						Post-retirement Benefits
For the Years Ended December 31,
(In millions)	2023		2022		2021		2023		2022		2021

Interest cost	$	260	$	193	$	184	$	1	$	1	$	1
Expected return on plan assets	(311)		(336)		(327)		—		—		—

Recognized actuarial loss (gain)	19		74		90		(2)		—		(1)
Net benefit (credit) cost	$	(32)	$	(69)	$	(53)	$	(1)	$	1	$	—

The assumed health care cost trend rate for Medicare eligibles and non-Medicare eligibles is approximately 6.1% in 2023, gradually declining to 4.0% in 2046. Assumed health care cost trend rates have a small effect on the amounts reported for the U.S. health care plans because the Company caps its share of health care trend at 5.0%.

Estimated Future Contributions

The Company expects to contribute approximately $31 million to its non-qualified U.S. plans in 2024. 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 in the U.S. and applicable foreign law. The Company was not required to and made no contributions to its U.S. qualified plans in 2023. In 2024, the Company is required to make contributions totaling $2 million to its U.S. qualified plans.

Non-U.S. Plans

The following tables provide information concerning the Company’s non-U.S. defined benefit pension and post-retirement benefit plans:


	Non-U.S. Pension Benefits				Non-U.S. Post-retirement Benefits
(In millions)	2023		2022		2023		2022
Change in benefit obligation:
Benefit obligation at beginning of year	$	6,886	$	12,057	$	48	$	68
Service cost	23		28		—		—
Interest cost	339		196		2		2
Employee contributions	3		3		—		—
Plan combination	—		2		—		—
Actuarial loss (gain)	226		(3,953)		(10)		(14)

Effect of settlement	(15)		(22)		—		—


Benefits paid	(352)		(342)		(2)		(2)
Foreign currency changes	411		(1,083)		2		(6)

Benefit obligation, December 31	$	7,521	$	6,886	$	40	$	48
Change in plan assets:
Fair value of plan assets at beginning of year	$	8,764	$	13,855	$	—	$	—
Plan combination	—		1		—		—
Actual return on plan assets	358		(3,609)		—		—
Effect of settlement	(15)		(22)		—		—
Company contributions	78		139		2		2
Employee contributions	3		3		—		—
Benefits paid	(352)		(342)		(2)		(2)
Foreign currency changes	472		(1,261)		—		—


Fair value of plan assets, December 31	$	9,308	$	8,764	$	—	$	—
Net funded status, December 31	$	1,787	$	1,878	$	(40)	$	(48)
Amounts recognized in the consolidated balance sheets:
Non-current assets	$	2,050	$	2,127	$	—	$	—
Current liabilities	(7)		(6)		(3)		(3)
Non-current liabilities	(256)		(243)		(37)		(45)
Net asset (liability) recognized, December 31	$	1,787	$	1,878	$	(40)	$	(48)
Amounts recognized in other comprehensive loss:
Prior service (cost) credit	$	(17)	$	(16)	$	3	$	5
Net actuarial (loss) gain	(3,219)		(2,610)		17		6
Total recognized accumulated other comprehensive (loss) income, December 31	$	(3,236)	$	(2,626)	$	20	$	11
Cumulative employer contributions in excess of (less than) net benefit (credit) cost	5,023		4,504		(60)		(59)
Net asset (liability) recognized in consolidated balance sheets, December 31	$	1,787	$	1,878	$	(40)	$	(48)
Accumulated benefit obligation, December 31	$	7,396	$	6,776	$	—	$	—


	Non-U.S. Pension Benefits				Non-U.S. Post-retirement Benefits
(In millions)	2023		2022		2023		2022
Reconciliation of prior service (cost) credit recognized in accumulated other comprehensive income (loss):
Beginning balance	$	(16)	$	(18)	$	5	$	7
Recognized as component of net benefit (credit) cost:
Amortization of prior service credit	—		—		(2)		(2)

Total recognized as component of net benefit (credit) cost	—		—		(2)		(2)
Changes in plan assets and benefit obligations recognized in other comprehensive income:

Exchange rate adjustments	(1)		2		—		—
Prior service (cost) credit, December 31	$	(17)	$	(16)	$	3	$	5


	Non-U.S. Pension Benefits				Non-U.S. Post-retirement Benefits
(In millions)	2023		2022		2023		2022
Reconciliation of net actuarial (loss) gain recognized in accumulated other comprehensive (loss) income:
Beginning balance	$	(2,610)	$	(2,904)	$	6	$	(10)
Recognized as component of net benefit (credit) cost:
Amortization of net loss (gain)	3		75		(1)		1
Effect of settlement	2		2		—		—
Total recognized as component of net benefit cost (credit)	5		77		(1)		1
Changes in plan assets and benefit obligations recognized in other comprehensive income (loss):
Liability experience	(226)		3,953		10		14
Asset experience	(191)		(4,051)		—		—


Total amount recognized as change in plan assets and benefit obligations	(417)		(98)		10		14
Exchange rate adjustments	(197)		315		2		1
Net actuarial (loss) gain, December 31	$	(3,219)	$	(2,610)	$	17	$	6


For the Years Ended December 31,	Non-U.S. Pension Benefits						Non-U.S. Post-retirement Benefits
(In millions)	2023		2022		2021		2023		2022		2021
Total recognized in net benefit (credit) cost and other comprehensive (income) loss	$	429	$	(436)	$	(745)	$	(9)	$	(13)	$	(2)

The weighted average actuarial assumptions utilized in determining expense during the year and benefit obligation at the end of the year for the non-U.S. defined benefit plans are as follows:


	Non-U.S. Pension Benefits				Non-U.S. Post-retirement Benefits
	2023		2022		2023		2022
Weighted average assumptions:
Discount rate (for expense)	4.89	%	1.89	%	4.73	%	2.28	%
Expected return on plan assets	4.74	%	3.64	%	—		—
Rate of compensation increase (for expense)	3.16	%	3.34	%	—		—
Discount rate (for benefit obligation)	4.59	%	4.89	%	5.22	%	4.73	%
Rate of compensation increase (for benefit obligation)	3.16	%	3.16	%	—		—

The accumulated benefit obligation and fair value of plan assets for the non-U.S. pension plans with accumulated benefit obligations in excess of plan assets were $427 million and $210 million, respectively, at December 31, 2023 and $935 million and $718 million, respectively, at December 31, 2022.

The projected benefit obligation and fair value of plan assets for non-U.S. pension plans with projected benefit obligations in excess of plan assets was $1.3 billion and $1.0 billion, respectively, at December 31, 2023 and $1.0 billion and $723 million, respectively, at December 31, 2022.

Components of Net Benefit (Credit) or Cost

The components of the net benefit (credit) or cost for the non-U.S. defined benefit and other post-retirement benefit plans and the curtailment, settlement and termination expenses are as follows:


For the Years Ended December 31,	Non-U.S. Pension Benefits						Non-U.S. Post-retirement Benefits
(In millions)	2023		2022		2021		2023		2022		2021
Service cost	$	23	$	28	$	38	$	—	$	—	$	1
Interest cost	339		196		157		2		2		1
Expected return on plan assets	(549)		(442)		(505)		—		—		—
Amortization of prior service credit	—		1		—		(2)		(2)		(2)
Recognized actuarial loss	3		75		116		(1)		1		2
Net periodic benefit (credit) cost	(184)		(142)		(194)		(1)		1		2
Settlement loss	2		2		5		—		—		—
Curtailment loss	—		—		2		—		—		—

Net benefit (credit) cost	$	(182)	$	(140)	$	(187)	$	(1)	$	1	$	2

The assumed health care cost trend rate was approximately 8.87% in 2023, gradually declining to 4.46% in 2040. Assumed health care cost trend rates can have a significant effect on the amounts reported for the non-U.S. health care plans.

Estimated Future Contributions

The Company expects to contribute approximately $78 million to its non-U.S. pension plans in 2024. Funding requirements for non-U.S. plans vary by country. Contribution rates are generally based on local funding practices and requirements, which may differ significantly from measurements under U.S. GAAP. Funding amounts may be influenced by future asset performance, the level of discount rates and other variables impacting the assets and/or liabilities of the plan. Discretionary contributions may also be affected by alternative uses of the Company’s cash flows, including dividends, investments and share repurchases.

In the U.K., the assumptions used to determine pension contributions are the result of legally prescribed negotiations between the Company and the plans' trustee that typically occurs every 3 years in conjunction with the actuarial valuation of the plans. Currently, this results in a lower funded status than under U.S. GAAP and may result in contributions irrespective of the U.S. GAAP funded status.

In 2021, following the acquisition of Jardine Lloyd Thompson Group plc ("JLT"), the JLT Pension Scheme was merged into the MMC U.K. Pension Fund with a new segregated JLT section created. The Company made deficit contributions of $41 million to the JLT section in 2023 and is expected to make contributions totaling approximately $38 million in 2024.

For the MMC U.K. Pension Fund, excluding the JLT section, an agreement was reached with the trustee in the fourth quarter of 2022 based on the surplus funding position at December 31, 2021. In accordance with the agreement no deficit funding is required the earliest until 2026. The funding level will be re-assessed during 2025, as part of the December 31, 2024 actuarial valuation, to determine if contributions are required in 2026. In December 2022, the Company renewed its agreement to support annual deficit contributions by the U.K. operating companies under certain circumstances, up to £450 million (or $576 million) over a seven-year period. This is part of an agreement which gives the Company greater influence over asset allocation and overall investment decisions.

Estimated Future Benefit Payments

The estimated future benefit payments for the Company's pension and post-retirement benefit plans are as follows:


For the Years Ended December 31,	Pension Benefits				Post-retirement Benefits
(In millions)	U.S.		Non-U.S.		U.S.		Non-U.S.
2024	$	316	$	380	$	3	$	3
2025	$	327	$	367	$	3	$	3
2026	$	338	$	377	$	2	$	3
2027	$	342	$	390	$	2	$	3
2028	$	344	$	404	$	2	$	3
2029-2033	$	1,719	$	2,227	$	7	$	14

Defined Benefit Plans Fair Value Disclosures

The U.S. and non-U.S. plan investments are classified into:

Level 1, which refers to investments valued using quoted prices from active markets for identical assets;
Level 2, which refers to investments not traded on an active market but for which observable market inputs are readily available;
Level 3, which refers to investments valued based on significant unobservable inputs; and
Investments valued using net asset value ("NAV") as a practical expedient.

Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Refer to Note 10, Fair Value Measurements, for further description of the fair value hierarchy.

The following table sets forth, by level within the fair value hierarchy, a summary of the U.S. and non-U.S. plans' investments measured at fair value on a recurring basis at December 31, 2023 and 2022:


	Fair Value Measurements at December 31, 2023
Assets (In millions)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		NAV		Total
Common/collective trusts	$	43	$	—	$	—	$	3,535	$	3,578
Corporate obligations	—		2,806		—		—		2,806
Corporate stocks	227		37		1		—		265
Private equity/partnerships	—		—		—		1,444		1,444
Government securities	23		5,077		—		—		5,100
Real estate	—		—		—		63		63
Short-term investment funds	488		—		—		—		488
Company common stock	189		—		—		—		189
Other investments	7		14		302		—		323
Total investments	$	977	$	7,934	$	303	$	5,042	$	14,256
Net derivative liabilities	—		(804)		—		—		(804)
Net investments	$	977	$	7,130	$	303	$	5,042	$	13,452


	Fair Value Measurements at December 31, 2022
Assets (In millions)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		NAV		Total
Common/collective trusts	$	43	$	—	$	—	$	3,995	$	4,038
Corporate obligations	—		2,402		—		—		2,402
Corporate stocks	527		36		1		—		564
Private equity/partnerships	—		—		—		1,433		1,433
Government securities	15		4,662		—		—		4,677
Real estate	—		—		—		261		261
Short-term investment funds	609		3		—		—		612
Company common stock	331		—		—		—		331
Other investments	10		11		308		—		329
Total investments	$	1,535	$	7,114	$	309	$	5,689	$	14,647
Net derivative liabilities	—		(1,605)		—		—		(1,605)
Net investments	$	1,535	$	5,509	$	309	$	5,689	$	13,042

The above tables do not include receivables or payables related to securities at December 31, 2023 and 2022.

The tables below set forth a summary of changes in the fair value of the plans’ Level 3 assets for the years ended December 31, 2023 and December 31, 2022:


Assets (In millions)	Fair Value, January 1, 2023		Purchases		Sales		Unrealized Gain/ (Loss)		Realized Gain/ (Loss)		Exchange Rate Impact		Transfers in/(out) and Other		Fair Value, December 31, 2023


Other investments	$	308	$	16	$	(15)	$	(21)	$	—	$	14	$	—	$	302


Corporate stocks	1		—		—		—		—		—		—		1


Total assets	$	309	$	16	$	(15)	$	(21)	$	—	$	14	$	—	$	303


Assets (In millions)	Fair Value, January 1, 2022		Purchases		Sales		Unrealized Gain/ (Loss)		Realized Gain/ (Loss)		Exchange Rate Impact		Transfers in/(out) and Other		Fair Value, December 31, 2022


Other investments	$	662	$	18	$	(19)	$	(302)	$	—	$	(51)	$	—	$	308


Corporate stocks	1		—		—		—		—		—		—		1


Total assets	$	663	$	18	$	(19)	$	(302)	$	—	$	(51)	$	—	$	309

The following is a description of the valuation methodologies used for assets measured at fair value:

Company common stock: Valued at the closing price reported on the New York Stock Exchange.

Common stocks, preferred stocks, convertible equity securities, rights/warrants and real estate investment trusts (included in Corporate stocks): Valued at the closing price reported on the primary exchange.

Corporate bonds (included in Corporate obligations): The fair value of corporate bonds is estimated using recently executed transactions, market price quotations (where observable) and bond spreads. The spread data used are for the same maturity as the bond. If the spread data does not reference the issuer, then data that references a comparable issuer are used. When observable price quotations are not available, fair value is determined based on cash flow models.

Commercial mortgage-backed and asset-backed securities (included in Corporate obligations): Fair value is determined using discounted cash flow models. Observable inputs are based on trade and quote activity of bonds with similar features including issuer vintage, purpose of underlying loan (first or second lien), prepayment speeds and credit ratings. The discount rate is the combination of the appropriate rate from the benchmark yield curve and the discount margin based on quoted prices.

Common/Collective trusts: Trust assets include mutual funds that are valued based on readily determinable market values and other assets valued at the net asset value of units of a bank collective trust. The net asset value as provided by the trustee, is used as a practical expedient to estimate fair value. The net asset value is based on the fair value of the underlying investments held by the fund less its liabilities. This practical expedient is not used when it is determined to be probable that the fund will sell the investment for an amount different than the reported net asset value.

U.S. government bonds (included in Government securities): The fair value of U.S. government bonds is estimated by pricing models that utilize observable market data including quotes, spreads and data points for yield curves.

U.S. agency securities (included in Government securities): U.S. agency securities are comprised of two main categories consisting of agency issued debt and mortgage pass-throughs. Agency issued debt securities are valued by benchmarking market-derived prices to quoted market prices and trade data for identical or comparable securities. Mortgage pass-throughs include certain "To-be-announced" (TBA) securities and mortgage pass-through pools. TBA securities are generally valued using quoted market prices or are benchmarked thereto. Fair value of mortgage pass-through pools are model driven with respect to spreads of the comparable TBA security.

Private equity and real estate partnerships: Investments in private equity and real estate partnerships are valued based on the fair value reported by the manager of the corresponding partnership and reported on a one quarter lag. The managers provide unaudited quarterly financial statements and audited annual financial statements which set forth the value of the fund. The valuations obtained from the managers are based on various analyses on the underlying holdings in each partnership, including financial valuation models and projections, comparable valuations from the public markets, and precedent private market transactions. Investments are valued in the

accompanying financial statements based on the Plan’s beneficial interest in the underlying net assets of the partnership as determined by the partnership agreement.

Insurance group annuity contracts (included in Other investments): The fair values for these investments are based on the current market value of the aggregate accumulated contributions plus interest earned.

Net derivative liabilities: Includes interest rate swaps, inflation swaps, total return swaps, repurchase agreements and equity based derivatives, primarily related to the U.K. plans. These derivatives are structured to hedge interest rate, inflation and equity exposure in the U.K. plans. Fair values for interest rate, inflation and equity based derivatives are calculated using a discounted cash flow pricing model. These models use observable market data such as contractual fixed rate, spot equity price or index value and dividend data.

Short-term investment funds: Primarily high-grade money market instruments valued at a readily determinable price.

Registered investment companies: Valued at the closing price reported on the primary exchange.

Defined Contribution Plans

The Company maintains certain defined contribution plans for its employees, including the Marsh & McLennan Companies 401(k) Savings & Investment Plan ("MMC 401(k) Plan") and the Marsh & McLennan Agency Savings and Investment Plan (collectively, the "401(k) Plans"), that are qualified under U.S. tax laws. For the 401(k) Plans, eligible employees may contribute a percentage of their base salary, subject to certain limitations, and the Company matches a fixed portion of the employees’ contributions. In addition, the Company also amended the MMC 401(k) Plan for most of its U.S. employees to add an automatic Company contribution equal to 4% of eligible base pay beginning on January 1, 2017. The 401(k) Plans contain an Employee Stock Ownership Plan feature under U.S. tax law. Approximately $726 million of the 401(k) Plans' assets at December 31, 2023 and $677 million at December 31, 2022 were invested in the Company’s common stock. If a participant does not choose an investment direction for their future contributions, they are automatically invested in a BlackRock LifePath Portfolio that most closely matches the participant’s expected retirement year. The cost of these defined contribution plans was $173 million in 2023, $161 million in 2022 and $150 million in 2021. In addition, the Company has significant defined contribution plans in the U.K. Effective August 1, 2014, a newly formed defined contribution plan replaced the existing defined contribution and defined benefit plans with regard to future service. In addition, the Company assumed responsibility for the defined contribution section of the JLT U.K. plan. Members of the JLT U.K. plan defined contribution section transferred to the MMC U.K. Pension Fund defined contribution section in 2021. The cost of the U.K. defined contribution plan was $158 million, $140 million and $141 million in 2023, 2022 and 2021, respectively.

9. Stock Benefit Plans

The Company maintains multiple stock-based payment arrangements under which employees may be awarded restricted stock units, stock options and other forms of stock-based benefits.

Marsh & McLennan Companies, Inc. Incentive and Stock Award Plans

On May 21, 2020, the Marsh & McLennan Companies, Inc. 2020 Incentive and Stock Award Plan (the "2020 Plan") was approved by the Company's stockholders. The 2020 Plan replaced the Company's previous equity incentive plan, the 2011 Incentive and Stock Award Plan.

The types of awards permitted under the 2020 Plan include stock options, restricted stock units payable in Company common stock or cash, and other stock-based awards. Performance-based restricted stock units are referred to as performance stock units. The 2020 Plan contains a provision which, in the event of a change in control of the Company, may accelerate the vesting of awards. This provision requires both a change in control of the Company and a subsequent specified termination of employment for vesting to be accelerated. There are 20 million shares approved for issuance under the 2020 plan. The total number of shares issued in connection with full-value awards may not exceed 12.5 million shares. Full-value awards include awards such as restricted stock units and performance stock units but exclude stock options.

The Company's current practice is to grant non-qualified stock options, restricted stock units ("RSUs") and/or performance stock units ("PSUs") on an annual basis to certain employees as part of their annual total compensation. Senior executives are granted options and PSU awards. In addition, a small group of other employees are granted options, PSU and RSU awards and a larger group of other employees are granted RSU awards. RSU awards are also granted to new hires or as retention awards for certain employees.

Stock Options: The Company currently grants non-qualified stock options under the 2020 Plan. The Compensation Committee determines when the options vest and may be exercised and under what terms the options are forfeited. Options are generally granted with an exercise price equal to the market value of the Company's common stock on the date of grant. Option awards generally vest 25% per year and have a contractual term of 10 years.

The estimated fair value of options granted is calculated using the Black-Scholes option pricing valuation model. This model considers several factors and assumptions. The dividend yield assumption is based on anticipated dividends over the expected life of the stock options.

The assumptions used in the Black-Scholes option pricing valuation model for options granted by the Company in 2023, 2022 and 2021 are as follows:


	2023		2022		2021
Risk-free interest rate	4.11	%	1.88	%	0.79	%
Expected life (in years)	5.8		5.8		6.0
Expected volatility	22.59	%	22.58	%	23.45	%
Expected dividend yield	1.44	%	1.41	%	1.58	%

A summary of the status of the Company’s stock option awards at December 31, 2023 and changes during the year then ended are presented below:


	Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value ($000)
Balance at January 1, 2023	7,533,045	$	99.18
Granted	699,662	$	164.15
Exercised	(1,537,473)	$	75.59

Forfeited	(99,472)	$	143.89

Balance at December 31, 2023	6,595,762	$	110.90	5.2 years	$	514,853
Options vested or expected to vest at December 31, 2023	6,542,158	$	110.66	5.2 years	$	512,214
Options exercisable at December 31, 2023	4,320,314	$	94.59	4.2 years	$	407,683

In the above table, forfeited options are unvested options whose requisite service period has not been met. Expired options are vested options that were not exercised. The weighted-average grant-date fair value of the Company's option awards granted in 2023, 2022 and 2021 was $41.92, $31.38 and $22.25, respectively. The total intrinsic value of options exercised during the same periods was $164 million, $56 million and $138 million, respectively.

At December 31, 2023, there was $30 million of unrecognized compensation cost related to the Company's option awards. The weighted-average period over which that cost is expected to be recognized is approximately 1.38 years. Cash received from the exercise of stock options in 2023, 2022 and 2021 was $116 million, $50 million and $103 million, respectively.

The Company's policy is to issue treasury shares upon option exercises or share unit conversion. The Company intends to issue treasury shares as long as an adequate number of those shares is available.

Restricted Stock Units and Performance Stock Units: The Company currently grants RSU and PSU awards under the 2020 Plan. The Compensation Committee determines the restrictions on such units, when the restrictions lapse, when the units vest and are paid, and under what terms the units are forfeited. The cost of these awards is amortized over the vesting period, which is generally 3 years. Dividend equivalents are not paid out unless and until such time that the award vests and shares are distributed.

The payout for PSU awards is based on the Company's adjusted EPS growth as modified for executive compensation purposes and a relative total stockholder return ("TSR") modifier versus the S&P 500 constituents, both measured on a three-year basis. The number of shares earned at the end of the three-year vesting period varies from 0% to 200% of the number of PSUs granted depending on adjusted EPS growth and relative TSR performance. PSU awards are paid out generally at the end of February after the three-year performance period is completed.

The Company accounts for PSU awards as performance condition restricted stock units. The adjusted EPS-related performance condition is not considered in the determination of grant date fair value of such awards. Compensation cost is recognized over the performance period based on management's estimate of the number of units expected to vest and shares to be paid in connection with adjusted EPS growth and is adjusted to reflect the actual number of shares paid out at the end of the three-year performance period for such performance.

The TSR modifier is a market condition with the grant-date fair value determined using a Monte Carlo simulation model. The Monte Carlo model considers several factors and assumptions including the risk-free interest rate, historical volatility of and correlations between the stock prices of the Company and the S&P 500 constituents, and the Company's relative TSR versus S&P 500 constituents for the brief portion of the three-year performance period prior to the grant date.

The assumptions used in the Monte Carlo simulation model for PSU awards granted with the TSR modifier by the Company in 2023 include:


	2023
Risk-Free Interest Rate	4.44	%
Dividend Yield	1.4	%
Volatility	28.0	%
Initial TSR	(2.6)	%

A summary of the status of the Company's RSU and PSU awards at December 31, 2023 and changes during the period then ended are presented below:


	Restricted Stock Units			Performance Stock Units
	Shares	Weighted Average Grant Date Fair Value		Shares	Weighted Average Grant Date Fair Value
Non-vested balance at January 1, 2023	4,182,695	$	135.01	638,978	$	133.36
Granted	1,939,993	$	165.05	178,738	$	170.80
Vested	(1,998,640)	$	128.51	(206,580)	$	127.71
Forfeited	(200,380)	$	146.22	(19,799)	$	147.84

Non-vested balance at December 31, 2023	3,923,668	$	152.60	591,337	$	146.17

The weighted-average grant-date fair value of the Company's RSU awards granted in 2022 and 2021 was $152.34 and $120.19, respectively. The weighted-average grant-date fair value of the Company's PSU awards granted in 2022 and 2021 was $151.00 and $122.77, respectively. The total fair value of the shares distributed in 2023, 2022 and 2021 in connection with the Company's non-option equity awards was $398 million, $560 million and $278 million, respectively.

The payout of shares in 2023 with respect to the PSU awards granted in 2020 was 200% of target based on performance for the three-year performance period. In aggregate, 413,160 shares became distributable in respect to PSUs vested in 2023.

At December 31, 2023, there was $368 million of unrecognized compensation cost related to the Company's RSU and PSU awards. The weighted-average period over which that cost is expected to be recognized is approximately one year.

Marsh & McLennan Companies Stock Purchase Plans

In May 1999, the Company's stockholders approved an employee stock purchase plan (the "1999 Plan") to replace the 1994 Employee Stock Purchase Plan (the "1994 Plan"), which terminated on September 30, 1999 following its fifth annual offering. In accordance with the current terms of the 1999 Plan, shares are purchased 4 times during the plan year at a price that is 95% of the average market price on each quarterly purchase date. In accordance with the 1999 Plan, after including the available remaining unused shares in the 1994 Plan and reducing the shares available by 10,000,000 consistent with the Company's Board of Directors' action in March 2007 and the addition of 4,750,000 shares due to a shareholder action in May 2018, no more than 40,350,000 shares of the Company's common stock may be sold. Employees purchased 331,017 shares in 2023 and at December 31, 2023, 3,862,742 shares were available for issuance for the 1999 Plan.

In accordance with the 1995 Company Stock Purchase Plan for International Employees (the "International Plan"), after reflecting the additional 5,000,000 shares of common stock for issuance approved by the Company's Board of Directors in July 2002, the addition of 4,000,000 shares due to a shareholder action in May 2007 and reducing the shares available by 1,000,000 consistent with the Company's Board of Directors' action in March 2018, no more than 11,000,000 shares of the Company's common stock may be sold. Employees purchased 116,578 shares in 2023 and there were 804,211 shares available for issuance at December 31, 2023 for the International Plan. The plans are considered non-compensatory.

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).

Assets and liabilities using Level 2 inputs are related to an equity security.

*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.

Contingent Purchase Consideration Assets and Liabilities - Level 3

Purchase consideration for some acquisitions and dispositions made by the Company includes 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 December 31, 2023 and 2022:


(In millions)	Identical Assets (Level 1)				Observable Inputs (Level 2)				Unobservable Inputs (Level 3)				Total
	12/31/23		12/31/22		12/31/23		12/31/22		12/31/23		12/31/22		12/31/23		12/31/22
Assets:
Financial instruments owned:
Exchange traded equity securities (a)	$	5	$	6	$	—	$	—	$	—	$	—	$	5	$	6
Mutual funds (a)	178		162		—		—		—		—		178		162
Money market funds (b)	606		146		—		—		—		—		606		146
Other equity investment (a)	—		—		—		13		—		—		—		13
Contingent purchase consideration asset (c)	—		—		—		—		1		3		1		3

Total assets measured at fair value	$	789	$	314	$	—	$	13	$	1	$	3	$	790	$	330
Fiduciary Assets:




Money market funds	180		201		—		—		—		—		180		201

Total fiduciary assets measured at fair value	$	180	$	201	$	—	$	—	$	—	$	—	$	180	$	201
Liabilities:
Contingent purchase consideration liability (d)	$	—	$	—	$	—	$	—	$	252	$	377	$	252	$	377

Total liabilities measured at fair value	$	—	$	—	$	—	$	—	$	252	$	377	$	252	$	377

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

(b) Included in cash and cash equivalents 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. The change in the contingent purchase consideration assets from December 31, 2022 is driven primarily by cash receipts of approximately $3 million.

In 2023 and 2022, 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 years ended December 31, 2023 and December 31, 2022.


(In millions)	2023		2022
Balance at January 1,	$	377	$	352
Net additions	22		46
Payments	(176)		(70)
Revaluation impact	29		49


Balance at December 31,	$	252	$	377

Long-Term Investments

The Company holds 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 $266 million and $215 million at December 31, 2023 and 2022, respectively.

Investments in Public and Private Companies

The Company has investments in private insurance and consulting companies with a carrying value of $63 million and $56 million at December 31, 2023 and 2022, 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. In December 2021, the Company increased its ownership in Marsh India from 49% to 92%. Prior to the increase in ownership, the Company accounted for the investment under the equity method of accounting.

Private Equity Investments

The Company's investments in private equity funds were $203 million and $159 million at December 31, 2023 and 2022, respectively. The carrying values of these private equity investments approximates 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 in 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 income from these investments of $7 million, $18 million and $56 million in 2023, 2022 and 2021, respectively.

At December 31, 2023, the Company has commitments for potential future investments of approximately $121 million in private equity funds that invest primarily in financial services companies.

Other Investments

The Company held certain equity investments with readily determinable market values at December 31, 2023 and 2022, of $16 million and $17 million, respectively. In 2023, the Company recorded a mark-to-market loss on these investments of $1 million, and mark-to-market gains of $11 million and $5 million in 2022 and 2021, respectively.

The Company also held investments without readily determinable market values of $20 million and $42 million at December 31, 2023 and 2022, respectively. In 2023, the Company recorded a net loss of $1 million on these investments. In 2022, the Company sold certain of these investments for cash proceeds of approximately $62 million, including its remaining investment in the common stock of Alexander Forbes, and recorded a net loss of $4 million.

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 increased by $54 million in 2023 related to the change in foreign exchange rates. The Company concluded that the hedge was highly effective and recorded an increase to accumulated other comprehensive loss for the year ended December 31, 2023.

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 the commencement date of the lease.

In 2023 and 2022, the Company determined that $27 million and $118 million of its ROU assets, respectively, were impaired and recorded a charge to the consolidated statements of income with an offsetting reduction to the ROU assets.

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


For the Years Ended December 31, (In millions, except weighted average data)	2023			2022
Lease Cost:
Operating lease cost (a)	$	324		$	343
Short-term lease cost	5			4
Variable lease cost	122			133
Sublease income	(11)			(17)
Net lease cost	$	440		$	463
Other information:
Operating cash outflows from operating leases	$	379		$	380
Right of use assets obtained in exchange for new operating lease liabilities	$	224		$	196
Weighted average remaining lease term – real estate	7.98 years			8.37 years

Weighted average discount rate – real estate leases	3.35		%	2.90		%

(a) Excludes ROU asset impairment charges.

Future minimum lease payments for the Company’s operating leases at December 31, 2023 are as follows:


(In millions)	Real Estate Leases
2024	$	372
2025	345
2026	319
2027	280
2028	199
Subsequent years	722
Total future lease payments	2,237
Less: imputed interest	(264)
Total	$	1,973
Current lease liabilities	$	312
Long-term lease liabilities	1,661
Total lease liabilities	$	1,973

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 December 31, 2023, the Company had additional operating real estate leases that had not yet commenced of $62 million. These operating leases will commence over the next 12 months.

13. Debt

The Company’s outstanding debt is as follows:


December 31,
(In millions)	2023		2022
Short-term:


Current portion of long-term debt	$	1,619	$	268
	1,619		268
Long-term:









Senior notes – 4.05% due 2023	—		250
Senior notes – 3.50% due 2024	600		599
Senior notes – 3.875% due 2024	1,000		998
Senior notes – 3.50% due 2025	499		499
Senior notes – 1.349% due 2026	617		587
Senior notes – 3.75% due 2026	599		598
Senior notes – 4.375% due 2029	1,499		1,499
Senior notes – 1.979% due 2030	601		576
Senior notes – 2.25% due 2030	741		739
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		—
Senior notes – 4.75% due 2039	496		495
Senior notes – 4.35% due 2047	494		493
Senior notes – 4.20% due 2048	593		593
Senior notes – 4.90% due 2049	1,239		1,238
Senior notes – 2.90% due 2051	346		346
Senior notes – 6.25% due 2052	491		492
Senior notes – 5.450% due 2053	591		—
Senior notes – 5.700% due 2053	988		—
Mortgage – 5.70% due 2035	284		301

Other	5		4
	13,463		11,495
Less current portion	1,619		268
	$	11,844	$	11,227

The senior notes in the table are registered by the Company with the Securities and Exchange Commission and are not guaranteed.

In November 2023, the Company increased its short-term commercial paper financing program (the "Program") to $3.5 billion from $2.8 billion. The Company had previously increased the Program's capacity in October 2022 to $2.8 billion from $2.0 billion. The Company did not have any commercial paper outstanding at December 31, 2023 and 2022.

Credit Facilities

In October 2023, the Company increased its multi-currency unsecured five-year credit facility (the "Credit Facility") capacity to $3.5 billion from $2.8 billion and extended the expiration to October 2028. The interest rate on the Credit Facility was initially based on LIBOR plus a fixed margin which varied with the Company's credit rating. In the second quarter of 2023, the Credit Facility was amended that borrowings under the Credit Facility bear interest at a rate per annum equal, at the Company's option, either at (a) SOFR benchmark rate for U.S. dollar borrowings, or (b) a currency specific benchmark rate, plus an applicable margin which varies with the Company's

credit ratings. The Company is required to maintain certain coverage and leverage ratios for the Credit Facility, which are evaluated quarterly.

The Credit Facility includes provisions for determining a benchmark replacement rate in the event existing benchmark rates are no longer available or in certain other circumstances, in which an alternative rate may be required. At December 31, 2023 and 2022, the Company had no borrowings under this facility.

In October 2023, the Company terminated its one-year uncommitted revolving credit facility ("Uncommitted Credit Facility"). There were no borrowings outstanding under the Uncommitted Credit Facility at December 31, 2022.

The Company also maintains other credit and overdraft facilities with various financial institutions aggregating $113 million at December 31, 2023 and $362 million at December 31, 2022. There were no outstanding borrowings under these facilities at December 31, 2023 and 2022.

The Company has outstanding guarantees and letters of credit with various banks aggregating $139 million and $152 million at December 31, 2023 and 2022, respectively.

Senior Notes

In October 2023, the Company repaid $250 million of 4.05% senior notes that matured.

In September 2023, the Company issued $600 million of 5.400% senior notes due 2033 and $1 billion of 5.700% senior notes due 2053. In March 2023, the Company issued $600 million of 5.450% senior notes due 2053. The Company intends to use the net proceeds from these issuances for general corporate purposes.

In October 2022, the Company issued $500 million of 5.75% senior notes due 2032 and $500 million of 6.25% senior notes due 2052. The Company used the net proceeds from these issuances for general corporate purposes, and repaid $350 million of 3.30% senior notes in November 2022, with an original maturity date of March 2023.

Scheduled repayments of long-term debt in 2024 and in the 4 succeeding years are $1.6 billion, $518 million, $1.2 billion, $21 million and $21 million, respectively.

Fair Value of Short-term and Long-term Debt

The estimated fair value of the Company’s short-term and long-term debt is provided below. Certain estimates and judgments were required to develop the fair value amounts. The fair value amounts shown below are not necessarily indicative of the amounts that the Company would realize upon disposition, nor do they indicate the Company’s intent or need to dispose of the financial instrument.


	December 31, 2023				December 31, 2022
(In millions)	Carrying Amount		Fair Value		Carrying Amount		Fair Value


Short-term debt	$	1,619	$	1,610	$	268	$	265
Long-term debt	$	11,844	$	11,723	$	11,227	$	10,544

The fair value of the Company’s short-term debt consists of term debt maturing within the next year and its fair value approximates its carrying value. The estimated fair value of a primary portion of the Company's long-term debt is based on discounted future cash flows using current interest rates available for debt with similar terms and remaining maturities. Short- and long-term debt would be classified as Level 2 in the fair value hierarchy.

14. Restructuring Costs

In the fourth quarter of 2022, the Company initiated activities focused on workforce actions, rationalization of technology and functional services, and reductions in real estate. The Company anticipates total charges related to these activities to be approximately $475 million. Through December 31, 2023, the Company has incurred $441 million of restructuring costs, primarily related to severance and lease exit charges, of which $222 million were incurred in 2023. Any remaining costs are expected to be incurred by the end of 2024. The Company continues to refine its detailed plans for each business and location, which may change the expected timing, estimates of expected costs and related savings.

Restructuring activities also include charges related to improving the Company's global information technology function and improving efficiencies and client services related to the Marsh operational excellence program.

In 2022, costs also included charges related to the remaining JLT integration, including additional lease related exit charges of $89 million in the Risk and Insurance services segments for a legacy JLT U.K. location.

The Company incurred costs related to these initiatives as follows:


For the Years Ended December 31, (In millions)	2023		2022
Risk and Insurance Services	$	177	$	254
Consulting	62		77
Corporate	62		96
Total	$	301	$	427

Details of the restructuring activity from January 1, 2022 through December 31, 2023, are as follows:


(In millions)	Severance		Real Estate Related Costs (a)		Information Technology		Consulting and Other Outside Services		Total
Liability at January 1, 2022	$	35	$	34	$	—	$	—	$	69
2022 charges	111		195		15		106		427
Cash payments	(58)		(25)		(6)		(104)		(193)
Non-cash charges	—		(148)		(9)		—		(157)

Liability at December 31, 2022	$	88	$	56	$	—	$	2	$	146
2023 charges	148		96		15		42		301
Cash payments	(147)		(69)		(13)		(42)		(271)
Non-cash charges	—		(44)		(2)		—		(46)

Liability at December 31, 2023	$	89	$	39	$	—	$	2	$	130

(a)Includes ROU and fixed asset impairments and other related costs.

The expenses associated with these initiatives are included in compensation and benefits and other operating expenses in the consolidated statements of income. The liabilities associated with these initiatives are classified on the consolidated balance sheets as accounts payable and accrued liabilities, other liabilities or accrued compensation and employee benefits, depending on the nature of the items.

15. Common Stock

The Company has a share repurchases program authorized by the Board of Directors.

In 2023, the Company repurchased 6.4 million shares of its common stock for $1.15 billion. At December 31, 2023, the Company remained authorized to repurchase up to approximately $3.2 billion in shares of its common stock. There is no time limit on the authorization. In 2022, the Company repurchased 12.2 million shares of its common stock for $1.9 billion.

In March 2022, the Board of Directors of the Company authorized an additional $5 billion in share repurchases. This was in addition to the Company's existing share repurchase program, which had approximately $1.3 billion of remaining authorization at December 31, 2021.

The Company issued approximately 3.6 million and 3.5 million shares related to stock compensation and employee stock purchase plans during the years ended December 31, 2023 and 2022, respectively.

In January 2024, the Board of Directors of the Company declared a quarterly dividend of $0.710 per share on outstanding common stock, payable in February 2024.

16. Claims, Lawsuits and Other Contingencies

Nature of Contingencies

The Company and its subsidiaries are subject to a significant number of claims, lawsuits and proceedings in the course of our business. Such claims and lawsuits consist principally of alleged errors and omissions in connection with the performance of professional services, including the placement of insurance, the provision of actuarial services for corporate and public sector clients, the provision of investment advice and investment management services to pension plans, the provision of advice relating to pension buy-out transactions and the provision of consulting services relating to the drafting and interpretation of trust deeds and other documentation governing pension plans. These claims often seek damages, including punitive and treble damages, in amounts that could be significant. In establishing liabilities for errors and omissions claims, the Company utilizes case level reviews by inside and outside counsel, and internal actuarial analysis by Oliver Wyman Group, a subsidiary of the Company, and other methods to estimate potential losses. A liability is established when a loss is both probable and reasonably estimable. The liability is reviewed quarterly and adjusted as developments warrant. In many cases, the Company has not recorded a liability, other than for legal fees to defend the claim, because we are unable, at the present time, to make a determination that a loss is both probable and reasonably estimable. To the extent that expected losses exceed our deductible in any policy year, the Company also records an asset for the amount that we expect to recover under any available third-party insurance programs. The Company has varying levels of third-party insurance coverage, with policy limits and coverage terms varying significantly by policy year.

Our activities are regulated under the laws of the U.S. and its various states, the U.K., the E.U. and its member states, and the many other jurisdictions in which the Company operates. The Company also receives subpoenas in the ordinary course of business, and from time to time requests for information in connection with government investigations.

Current Matters

Risk and Insurance Services Segment

In January 2019, the Company received a notice that the Administrative Council for Economic Defense anti-trust agency in Brazil had commenced an administrative proceeding against a number of insurance brokers, including both Marsh and JLT, and insurers "to investigate an alleged sharing of sensitive commercial and competitive confidential information" in the aviation insurance and reinsurance sector.
From 2014, Marsh Ltd. was engaged by Greensill Capital (UK) Limited as its insurance broker. Marsh Ltd. placed a number of trade credit insurance policies for Greensill. On March 1, 2021, Greensill filed an action against certain of its trade credit insurers in Australia seeking a mandatory injunction compelling these insurers to renew coverage under expiring policies. Later that day, the Australian court denied Greensill’s application. Since then, a number of Greensill entities have filed for, or been subject to, insolvency proceedings, and several litigations and investigations have been commenced in the U.K., Australia, Germany, Switzerland and the U.S., including claims brought by Greensill's administrators and loss payees under Greensill's trade credit insurance policies. In June 2023, White Oak, one such loss payee, filed a claim in the High Court of Justice in London against Marsh Ltd., related to White Oak’s purchase of accounts receivable from Greensill. In November 2023, Credit Suisse, another loss payee, added Marsh Ltd. as a party to the omnibus trade credit insurance policy litigation among Greensill and its insurers and loss payees in Australia. The claims by both loss payees allege that Marsh Ltd., which was not the insurance broker for either White Oak or Credit Suisse, failed to take required steps to make complete and accurate representations to them in their respective capacities as loss payees.

Other Contingencies-Guarantees

In connection with its acquisition of U.K.-based Sedgwick Group in 1998, the Company acquired several insurance underwriting businesses that were already in run-off, including River Thames Insurance Company Limited ("River Thames"), which the Company sold in 2001. Sedgwick guaranteed payment of claims on certain policies underwritten through the Institute of London Underwriters (the "ILU") by River Thames. The policies covered by this guarantee are partly reinsured by a related party of River Thames. Payment of claims under the reinsurance agreement is collateralized by funds withheld by River Thames from the reinsurer. To the extent River Thames or the reinsurer is unable to meet its obligations under those policies, a claimant may seek to recover from the Company under the guarantee.

From 1980 to 1983, the Company owned indirectly the English & American Insurance Company ("E&A"), which was a member of the ILU. The ILU required the Company to guarantee a portion of E&A's obligations. After E&A became insolvent in 1993, the ILU agreed to discharge the guarantee in exchange for the Company's agreement to post an evergreen letter of credit that is available to pay claims by policyholders on certain E&A policies issued through the ILU and incepting between July 3, 1980 and October 6, 1983. Certain claims have been paid under the letter of credit and the Company anticipates that additional claimants may seek to recover against the letter of credit.

The pending proceedings described above and other matters not explicitly described in this Note 16 on Claims, Lawsuits and Other Contingencies may expose the Company or its subsidiaries to liability for significant monetary damages, fines, penalties or other forms of relief. Where a loss is both probable and reasonably estimable, the Company establishes liabilities in accordance with the FASB guidance on Contingencies - Loss Contingencies.

The Company is not able at this time to provide a reasonable estimate of the range of possible loss attributable to these matters or the impact they may have on the Company's consolidated results of operations, financial position or cash flows. This is primarily because these matters are still developing and involve complex issues subject to inherent uncertainty. Adverse determinations in one or more of these matters could have a material impact on the Company's consolidated results of operations, financial condition or cash flows in a future period.

17. Segment Information

The Company is organized based on the types of services provided. Under this structure, the Company’s segments are:

▪Risk and Insurance Services, comprising insurance services (Marsh) and reinsurance services (Guy Carpenter); and

▪Consulting, comprising Mercer and Oliver Wyman Group.

The accounting policies of the segments are the same as those used for the consolidated financial statements described in Note 1, Summary of Significant Accounting Policies. Segment performance is evaluated based on segment operating income, which includes directly related expenses, and charges or credits related to restructuring but not the Company’s corporate-level expenses. Revenues are attributed to geographic areas on the basis of where the services are performed.

Selected information about the Company’s segments and geographic areas of operation are as follows:


For the Years Ended December 31, (In millions)	Revenue			Operating Income (Loss)		Total Assets			Depreciation and Amortization		Capital Expenditures
2023 –
Risk and Insurance Services	$	14,089	(a)	$	3,945	$	34,449	(c)	$	487	$	242
Consulting	8,709		(b)	1,666		11,461		(d)	152		105
Total Segments	22,798			5,611		45,910			639		347
Corporate/Eliminations	(62)			(329)		2,120		(e)	74		69
Total Consolidated	$	22,736		$	5,282	$	48,030		$	713	$	416
2022 –
Risk and Insurance Services	$	12,645	(a)	$	3,089	$	33,022	(c)	$	469	$	283
Consulting	8,139		(b)	1,553		10,446		(d)	158		109
Total Segments	20,784			4,642		43,468			627		392
Corporate/Eliminations	(64)			(362)		646		(e)	92		78
Total Consolidated	$	20,720		$	4,280	$	44,114		$	719	$	470
2021 –
Risk and Insurance Services	$	12,085	(a)	$	3,080	$	31,233	(c)	$	505	$	214
Consulting	7,789		(b)	1,504		10,731		(d)	171		109
Total Segments	19,874			4,584		41,964			676		323
Corporate/Eliminations	(54)			(272)		2,046		(e)	71		83
Total Consolidated	$	19,820		$	4,312	$	44,010		$	747	$	406

(a)Includes inter-segment revenue of $6 million in 2023, and $5 million in 2022 and 2021, interest income on fiduciary funds of $453 million, $120 million and $15 million in 2023, 2022 and 2021, respectively, and equity method income of $18 million, $12 million and $31 million in 2023, 2022 and 2021, respectively. Revenue in 2023 includes a gain from a legal settlement with a competitor of $58 million, excluding legal fees. Revenue in 2022 includes the loss on deconsolidation of the Russian businesses of $27 million. Revenue in 2021 includes the gain on the consolidation of Marsh India of $267 million and a net gain on disposition of business of approximately $50 million.

(b)Includes inter-segment revenue of $56 million, $59 million and $49 million in 2023, 2022 and 2021, respectively, and equity method income of $1 million in 2022. Revenue in 2023 includes the loss on sale of an individual financial advisory business in Canada of $17 million. Revenue in 2022 includes a net gain on the sale of the Mercer U.S. affinity business of $112 million, partially offset by the loss on deconsolidation of the Russian businesses of $12 million.

(c)Includes equity method investments of $57 million, $50 million and $53 million at December 31, 2023, 2022 and 2021, respectively.

(d)Includes equity method investments of $6 million at December 31, 2023 and 2022, and $5 million at December 31, 2021.

(e)Corporate assets primarily include insurance recoverables, pension related assets, the owned portion of the Company headquarters building and intercompany eliminations.

Details of operating segment revenue are as follows:


For the Years Ended December 31,
(In millions)	2023		2022		2021
Risk and Insurance Services
Marsh	$	11,657	$	10,585	$	10,214
Guy Carpenter	2,432		2,060		1,871
Total Risk and Insurance Services	14,089		12,645		12,085
Consulting
Mercer	5,587		5,345		5,254
Oliver Wyman Group	3,122		2,794		2,535
Total Consulting	8,709		8,139		7,789
Total Segments	22,798		20,784		19,874
Corporate/Eliminations	(62)		(64)		(54)
Total	$	22,736	$	20,720	$	19,820

Information by geographic area is as follows:


For the Years Ended December 31,
(In millions)	2023		2022		2021
Revenue
United States (a)	$	10,924	$	10,215	$	9,343
United Kingdom (b)	3,555		3,114		3,130


Other (c)	8,319		7,455		7,401
	22,798		20,784		19,874
Corporate/Eliminations	(62)		(64)		(54)
Total	$	22,736	$	20,720	$	19,820

(a)Revenue in 2022 includes a net gain from the sale of the Mercer U.S. affinity business of $112 million.

(b)Revenue in 2023 includes a gain from a legal settlement with a competitor of $58 million, excluding legal fees. Revenue in 2021 includes net gain on disposition of businesses of approximately $50 million.

(c)Revenue in 2023 includes the loss on sale of an individual financial advisory business in Canada of $17 million. Revenue in 2022 includes the loss on deconsolidation of the Company's Russian businesses at Marsh and Oliver Wyman Group of $27 million and $12 million, respectively. Revenue in 2021 includes the gain on the consolidation of Marsh India of $267 million.


For the Years Ended December 31,
(In millions)	2023		2022		2021
Fixed Assets, Net
United States	$	468	$	473	$	484
United Kingdom	168		166		116


Other	246		232		247
Total	$	882	$	871	$	847

In 2023, the Company reclassified revenues and fixed assets for certain geographic regions into Other. Prior years' amounts have been reclassified for comparative purposes.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Directors of Marsh & McLennan Companies, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Marsh & McLennan Companies, Inc. and subsidiaries (the "Company") as of December 31, 2023 and 2022, the related consolidated statements of income, comprehensive income, cash flows, and equity for each of the three years in the period ended December 31, 2023, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 12, 2024, expressed an unqualified opinion on the Company's internal control over financial reporting.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Liability for Errors and Omissions — Refer to Notes 1 and 16 to the financial statements

Critical Audit Matter Description

The Company is subject to a significant number of claims, lawsuits and proceedings in the ordinary course of business. Such claims and lawsuits consist principally of alleged errors and omissions ("E&O") in connection with the performance of professional services. These claims may seek damages, including punitive and treble damages, in amounts that could be significant. The Company uses case level reviews performed by inside and outside counsel, internal actuarial analysis and other methods to estimate potential losses resulting from reported and unreported claims.

Given that the determination of the liability for E&O requires management to make significant estimates and assumptions in projecting ultimate settlement values of reported and unreported claims, performing audit procedures to evaluate the reasonableness of such estimates and assumptions required a high degree of auditor judgment, including the need to involve our actuarial specialists.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the determination of the liability for E&O included the following, among others:

We tested the effectiveness of internal controls related to the determination of the liability for E&O, including controls over the projection of ultimate settlement values of reported and unreported claims determined through internal actuarial analyses, management’s review of the appropriateness of the assumptions used and calculation of case loss estimates, and management’s independent review of case level estimates provided by inside and outside counsel, as applicable.
For selected E&O matters, we evaluated the reasonableness of management’s case loss estimates and, as applicable, made inquiries of the Company’s inside and outside counsel regarding the status of these matters and likelihood of settlement.
We compared total incurred losses and current case estimates as of the balance sheet date to amounts reported in prior periods to evaluate trends and developments in reported cases.
With the assistance of our actuarial specialists, we evaluated the reasonableness of the assumptions and methodologies involved in the development of the liability for E&O by:

–Testing the underlying data that served as the basis for the actuarial analysis, including historical claims and case loss estimates, to evaluate whether the inputs to the actuarial estimate were reasonable.

–Comparing management’s prior-year assumptions of expected development and ultimate loss to actual amounts incurred during the current year to identify potential bias in the determination of the liability for E&O.

–Developing a range of independent estimates and comparing those to the liability for E&O recorded by the Company.

/s/ Deloitte & Touche LLP

New York, New York

February 12, 2024

We have served as the Company’s auditor since 1989.

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