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)202520242023
Revenue$26,981$24,458$22,736
Expense:
Compensation and benefits15,57713,99613,099
Other operating expenses5,1814,6454,355
Operating expenses20,75818,64117,454
Operating income6,2235,8175,282
Other net benefits credits194268239
Interest income488378
Interest expense(960)(700)(578)
Investment income34125
Income before income taxes5,5395,4805,026
Income tax expense1,3051,3631,224
Net income before non-controlling interests4,2344,1173,802
Less: Net income attributable to non-controlling interests745746
Net income attributable to the Company$4,160$4,060$3,756
Net income per share attributable to the Company
– Basic$8.48$8.26$7.60
– Diluted$8.43$8.18$7.53
Average number of shares outstanding
– Basic491492494
– Diluted494496499
Shares outstanding at December 31,485491492

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)202520242023
Net income before non-controlling interests$4,234$4,117$3,802
Other comprehensive (loss) income, before tax:
Foreign currency translation adjustments1,075(613)389
(Loss) gain related to pension and post-retirement plans(389)(400)(503)
Other comprehensive (loss) income, before tax686(1,013)(114)
Income tax (credit) expense on other comprehensive (loss) income(125)(68)(133)
Other comprehensive (loss) income, net of tax811(945)19
Comprehensive income5,0453,1723,821
Less: Comprehensive income attributable to non-controlling interests745746
Comprehensive income attributable to the Company$4,971$3,115$3,775

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)20252024
ASSETS
Current assets:
Cash and cash equivalents$2,687$2,398
Cash and cash equivalents held in a fiduciary capacity11,47311,276
Receivables
Commissions and fees7,0156,533
Advanced premiums and claims6784
Other750706
7,8327,323
Less – allowance for credit losses(162)(167)
Net receivables7,6707,156
Other current assets1,3701,287
Total current assets23,20022,117
Goodwill24,33723,306
Other intangible assets4,7464,820
Fixed assets, net829859
Pension related assets2,1401,914
Right of use assets1,4601,498
Deferred tax assets212237
Other assets1,7861,730
$58,710$56,481
LIABILITIES AND EQUITY
Current liabilities:
Short-term debt$1,267$519
Accounts payable and accrued liabilities3,6523,402
Accrued compensation and employee benefits3,9623,620
Current lease liabilities333325
Accrued income taxes373376
Fiduciary liabilities11,47311,276
Total current liabilities21,06019,518
Long-term debt18,32019,428
Pension, post-retirement and post-employment benefits786840
Long-term lease liabilities1,5291,590
Liability for errors and omissions288305
Other liabilities1,4121,265
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, 2025 and 2024561561
Additional paid-in capital1,5471,370
Retained earnings27,76725,306
Accumulated other comprehensive loss(5,429)(6,240)
Non-controlling interests215193
24,66121,190
Less – treasury shares, at cost, 75,783,063 shares at December 31, 2025 and 69,239,488 shares at December 31, 2024(9,346)(7,655)
Total equity15,31513,535
$58,710$56,481

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)202520242023
Operating cash flows:
Net income before non-controlling interests$4,234$4,117$3,802
Adjustments to reconcile net income provided by operations:
Depreciation and amortization of fixed assets and capitalized software361369370
Amortization of intangible assets549377343
Non-cash lease expense295280288
Adjustments and payments related to contingent consideration assets and liabilities37(77)(11)
Gain on consolidation of entity(13)——
Net (gain) on investments(34)(9)(5)
Net (gain) loss on disposition of assets(13)(48)16
Share-based compensation expense394368363
Changes in assets and liabilities:
Net receivables(128)(467)(467)
Other assets(143)(217)(154)
Accrued compensation and employee benefits24292195
Provision for taxes, net of payments and refunds12123105
Contributions to pension and other benefit plans in excess of current year credit(259)(352)(335)
Other liabilities935564
Operating lease liabilities(335)(309)(316)
Net cash provided by (used for) operations5,2924,3024,258
Financing cash flows:
Purchase of treasury shares(2,012)(900)(1,150)
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—8,1702,169
Repayments of debt(519)(1,617)(266)
Payment of bridge loan commitment fees—(23)—
Purchase of non-controlling interests—(7)(139)
Shares withheld for taxes on vested units – treasury shares(148)(180)(148)
Issuance of common stock from treasury shares250264199
Payments of deferred and contingent consideration for acquisitions(67)(113)(202)
Receipts of deferred and contingent consideration for dispositions—32
Distributions of non-controlling interests(57)(40)(31)
Dividends paid(1,699)(1,513)(1,298)
Change in fiduciary liabilities(382)411(255)
Net cash provided by (used for) financing activities(4,634)4,455(1,119)
Investing cash flows:
Capital expenditures(291)(316)(416)
Purchases of long-term investments(26)(108)(57)
Sales of long-term investments1005538
Dispositions2289(17)
Acquisitions, net of cash and cash held in a fiduciary capacity acquired(652)(8,542)(976)
Other, net2111
Net cash provided by (used for) investing activities(845)(8,821)(1,417)
Effect of exchange rate changes on cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity673(414)328
Increase (decrease) in cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity486(478)2,050
Cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity at beginning of year13,67414,15212,102
Cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity at end of year$14,160$13,674$14,152
Reconciliation of cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity to the Consolidated Balance Sheets
Balance at December 31,202520242023
(In millions)
Cash and cash equivalents$2,687$2,398$3,358
Cash and cash equivalents held in a fiduciary capacity11,47311,27610,794
Total cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity$14,160$13,674$14,152

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)202520242023
COMMON STOCK
Balance, beginning and end of year$561$561$561
ADDITIONAL PAID-IN CAPITAL
Balance, beginning of year$1,370$1,242$1,179
Change in accrued stock compensation costs383856
Issuance of shares under stock compensation plans and employee stock purchase plans1399475
Purchase of non-controlling interest—(4)(68)
Balance, end of year$1,547$1,370$1,242
RETAINED EARNINGS
Balance, beginning of year$25,306$22,759$20,301
Net income attributable to the Company4,1604,0603,756
Dividend equivalents declared and paid – (per share amounts: $3.43 in 2025, $3.05 in 2024, and $2.60 in 2023)(14)(14)(13)
Dividends declared and paid – (per share amounts: $3.43 in 2025, $3.05 in 2024, and $2.60 in 2023)(1,685)(1,499)(1,285)
Balance, end of year$27,767$25,306$22,759
ACCUMULATED OTHER COMPREHENSIVE LOSS
Balance, beginning of year$(6,240)$(5,295)$(5,314)
Other comprehensive income (loss), net of tax811(945)19
Balance, end of year$(5,429)$(6,240)$(5,295)
TREASURY SHARES
Balance, beginning of year$(7,655)$(7,076)$(6,207)
Issuance of shares under stock compensation plans and employee stock purchase plans321322286
Purchase of treasury shares(2,012)(901)(1,155)
Balance, end of year$(9,346)$(7,655)$(7,076)
NON-CONTROLLING INTERESTS
Balance, beginning of year$193$179$229
Net income attributable to non-controlling interests745746
Net non-controlling interests acquired (disposed)6(7)(70)
Distributions and other changes(58)(36)(26)
Balance, end of year$215$193$179
TOTAL EQUITY$15,315$13,535$12,370

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" or "Marsh") is a global professional services firm in the areas of risk, reinsurance and capital, people and investments, and management consulting.

Effective January 14, 2026, the Company updated its brand name from Marsh McLennan to Marsh and the brand names of Marsh and Oliver Wyman Group businesses to Marsh Risk and Marsh Management Consulting, respectively. References to the Company and its businesses in the consolidated financial statements reflect these changes. Mercer and Guy Carpenter will continue to report under their current brands through a transition period.

The changes to the brand names had no impact on the Company's operating and reporting segments.

The Company 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 and insurance/reinsurance broking and services conducted through Marsh Risk and Guy Carpenter. Marsh Risk is an insurance broker and risk advisor, offering risk management, insurance broking, insurance program management, risk consulting, analytical modeling and alternative risk financing services, to a wide range of businesses, government entities, professional service organizations and individuals. Guy Carpenter, the Company's reinsurance intermediary and advisor, provides specialized reinsurance broking, strategic advisory and actuarial services, and analytics solutions.

The Consulting segment includes health, wealth and career advice, solutions and products, and specialized management, strategic, economic and brand consulting services conducted through Mercer and Marsh Management Consulting. Mercer delivers advice, solutions and products that help organizations meet the health, wealth and career needs of a changing workforce. Marsh Management Consulting offers management consulting and advisory services across various industries.

Acquisition of McGriff

On November 15, 2024, the Company completed the acquisition of McGriff Insurance Services, LLC ("McGriff"), an affiliate of TIH Insurance Holdings (the "McGriff Transaction").

The Company's results in 2025 include the results of operations of McGriff in Marsh Risk, in the Risk and Insurance Services segment. McGriff's results of operations for the period November 15, 2024 through December 31, 2024 were included in the Company’s results of operations for 2024. As of November 15, 2024, the historical McGriff business was combined into the Company's operations and the Company assumed the assets and legal liabilities of McGriff.

Principles of Consolidation: The accompanied consolidated financial statements are prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") 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, 2025, the Company maintained $553 million, compared to $455 million at December 31, 2024 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)20252024
Furniture and equipment$710$696
Land and buildings363364
Leasehold and building improvements1,4251,337
2,4982,397
Less: accumulated depreciation and amortization(1,669)(1,538)
Fixed assets, net$829$859

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.

The Company recorded net investment income of $34 million, $12 million, and $5 million in 2025 , 2024 and in 2023, respectively.

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.

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, 2025 and 2024.

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 sub-leases 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 $466 million and $474 million, net of accumulated amortization of $2.3 billion and $2.1 billion at December 31, 2025 and 2024, 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 Marsh Management Consulting, 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, 2025, the Company’s liability for E&O was $379 million, compared to $391 million at December 31, 2024, of which $91 million and $86 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)202520242023
Net income before non-controlling interests$4,234$4,117$3,802
Less: Net income attributable to non-controlling interests745746
Net income attributable to the Company$4,160$4,060$3,756
Basic weighted average common shares outstanding491492494
Dilutive effect of potentially issuable common shares345
Diluted weighted average common shares outstanding494496499
Average stock price used to calculate common stock equivalents$211.14$212.26$182.30

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 $403 million, $497 million and $453 million in 2025, 2024 and 2023, respectively.

Net uncollected premiums and claims and the related payables were $14.6 billion and $15.1 billion at December 31, 2025 and 2024, respectively. The net uncollected premiums and claims and the related payables at December 31, 2024, included $465 million related to the acquisition of McGriff. 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.

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 and global conflicts, social unrest, tariffs or changes in trade policies, slower GDP growth or recession, fluctuations in foreign exchange rates, lower interest rates, capital markets volatility, inflation and changes in insurance premiums rates 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 December 2025, the Financial Accounting Standards Board ("FASB") issued an accounting standard update to improve the guidance for interim reporting, by improving the navigability of the required interim disclosures and clarifying when that guidance is applicable. The update also provides additional guidance on what disclosures should be provided in interim reporting periods. The new guidance adds a principle that requires entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. The new guidance is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The update can be applied either prospectively or retrospectively to any or all prior periods presented in the financial statements. The Company is currently evaluating the guidance and its impact on results of operations, cash flows, or financial condition.

In September 2025, the FASB issued an accounting standard update which amends certain aspects of the accounting for and disclosure for internal-use software costs. The new guidance removes references to software development project stages so that it is neutral to different software development methods, including methods that entities may use to develop software in the future. The new guidance requires an entity to capitalize software costs when: (1) Management has authorized and committed to funding the software project and (2) It is probable that the project will be completed and the software will be used to perform the function intended (referred to as the “probable-to-complete recognition threshold"). In evaluating the probable-to-complete recognition threshold, an entity is required to consider whether there is significant uncertainty associated with the development activities of the software. The new guidance is effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Early adoption is permitted as of the beginning of an annual reporting period. The Company is currently evaluating the guidance and its impact on results of operations, cash flows, or financial condition.

In November 2024, the FASB issued an accounting standard update on the disaggregated disclosure of income statement expenses. The new guidance requires disclosures about specific types of expenses included in the expense captions presented on the face of the income statement, as well as disclosures about selling expenses. The new standard does not change the requirements for the presentation of expenses on the face of the income statement. The standard is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The new guidance will be applied prospectively with the option for retrospective application. 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 December 31, 2025:

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 adopted the new standard effective December 31, 2025, on a prospective basis, which impacted disclosures only, with no impact to results of operations, cash flows, or financial condition.

New Accounting Pronouncement Adopted Effective December 31, 2024:

In November 2023, the 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 adopted the new standard effective December 31, 2024, which impacted disclosures only, with no impact to results of operations, cash flows, or financial condition.

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 (single performance obligation), 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 stand alone selling price (multiple performance obligations).

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. 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. 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.

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 Risk 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 insurer revenue, paid by insurers based on factors such as volume or profitability of Marsh Risk's placements primarily in Marsh McLennan Agency ("MMA") and parts of Marsh Risk's international operations.

Revenue for contingent commissions from insurers is recorded at a point in time, 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 Risk 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 on a gross basis rather than a net basis, with the sub-advisor fees included in other operating expenses.

Consulting projects in Mercer’s wealth and career businesses, and consulting projects in Marsh Management Consulting, 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.

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. Marsh Management Consulting 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 Risk, which includes MMA, and Mercer, with approximately 51% 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)202520242023
Marsh Risk:
EMEA$3,812$3,530$3,262
Asia Pacific1,4601,4141,295
Latin America571575559
Total International5,8435,5195,116
U.S./Canada8,5237,0176,262
Total Marsh Risk14,36612,53611,378
Guy Carpenter2,4962,3622,258
Subtotal16,86214,89813,636
Fiduciary interest income403497453
Total Risk and Insurance Services$17,265$15,395$14,089
Mercer:
Wealth (a)$2,819$2,584$2,507
Health (a)2,2842,1002,061
Career1,0871,0591,019
Total Mercer6,1905,7435,587
Marsh Management Consulting (b)3,6043,3903,122
Total Consulting$9,794$9,133$8,709
Total Segments$27,059$24,528$22,798
Corporate/Eliminations(78)(70)(62)
Total$26,981$24,458$22,736

(a)Revenue in 2024 includes a net gain of $35 million from the sale of the U.K. pension administration and U.S.health and benefits administration businesses, that comprised of a $70 million gain in Wealth, offset by a $35 million loss in Health.

(b)Revenue in 2024 includes a gain of $20 million from the sale of a business in Marsh Management Consulting.

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

December 31, (In millions)202520242023
Contract assets$540$473$357
Contract liabilities$927$866$869

The Company records accounts receivable when the right to consideration is unconditional, subject only to the passage of time. Contract assets primarily relate to quota share reinsurance brokerage and contingent insurer revenue. The Company does not have the right to bill and collect revenue for quota share brokerage until the underlying policies written by the ceding insurer attach to the treaty. Estimated revenue related to 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 2025 and 2024 are as follows:

For the Years Ended December 31,
(In millions)20252024
Contract Assets
Balance at January 1,$473$357
Additions (a)1,046963
Transfers to accounts receivable (b)(984)(844)
Effect of foreign exchange rate changes5(3)
Balance at December 31,$540$473
Contract Liabilities
Balance at January 1,$866$869
Cash received for performance obligations not yet fulfilled884847
Revenue recognized(846)(835)
Effect of foreign exchange rate changes23(15)
Balance at December 31,$927$866

(a)Includes $69 million from the acquisition of McGriff in 2024.

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

The amount of revenue recognized in 2025, 2024 and 2023 from performance obligations satisfied in previous periods, mainly due to variable consideration from contracts with insurers, quota share business and consulting contracts previously considered constrained was $83 million, $73 million and $71 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 fulfillment 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, 2025, the Company’s capitalized assets related to deferred implementation costs, costs to obtain and costs to fulfill were $1 million, $459 million and $438 million, respectively. At December 31, 2024, the Company's capitalized assets related to deferred implementation costs, costs to obtain and costs to fulfill were $3 million, $396 million and $397 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 $2.1 billion, $1.9 billion and $1.8 billion for the years ended December 31, 2025, 2024 and 2023, 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 and interest paid:

For the Years Ended December 31,
(In millions)202520242023
Assets acquired, excluding cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity$911$9,724$1,292
Fiduciary liabilities assumed(47)(421)(93)
Liabilities assumed(73)(571)(182)
Non-controlling interests assumed(8)——
Fair value of previously-held equity method investment(15)——
Contingent/deferred purchase consideration(116)(190)(41)
Net cash outflow for acquisitions$652$8,542$976
(In millions)202520242023
Interest paid$885$591$499

The following table provides information on income taxes paid, net of refunds, by jurisdiction:

For the Years Ended December 31,
(In millions)2025
U.S. federal income taxes$250
U.S. state and local income taxes126
Foreign
United Kingdom198
Canada88
Other630
Total income taxes paid, net of refunds received$1,292

Income taxes paid, net of refunds, were $1.2 billion and $1.1 billion in 2024 and 2023, respectively. The amounts in 2025 and 2024 include a payment for the purchase of green energy income tax credits which reduced the Company's income tax liabilities in those years.

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)202520242023
Operating:
Contingent consideration payments for prior year acquisitions$(28)$(92)$(41)
Receipt of contingent consideration for dispositions——1
Acquisition/disposition related net charges for adjustments651529
Adjustments and payments related to contingent consideration$37$(77)$(11)
Financing:
Contingent consideration for prior year acquisitions$(13)$(74)$(135)
Deferred consideration for prior year acquisitions(54)(39)(67)
Payments of deferred and contingent consideration for acquisitions$(67)$(113)$(202)
Receipts of contingent consideration for dispositions$—$1$2

The Company had non-cash issuances of common stock under its share-based payment plan of $359 million, $333 million and $310 million in 2025, 2024 and 2023, respectively.

The Company recorded share-based compensation expense related to restricted stock units, performance stock units and stock options of $394 million, $368 million and $363 million in 2025, 2024 and 2023, 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)202520242023
Balance at January 1,$167$151$160
Provision charged to operations253117
Accounts written-off, net of recoveries(31)(14)(20)
Effect of exchange rate changes and other1(1)(6)
Balance at December 31,$162$167$151

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.

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, 2025 and 2024, including amounts reclassified out of AOCI, are as follows:

(In millions)Pension/Post-Retirement Plans Gains (Losses)Foreign Currency Translation AdjustmentsTotal
Balance at January 1, 2025$(3,408)$(2,832)$(6,240)
Other comprehensive (loss) before reclassifications(332)1,110778
Amounts reclassified from accumulated other comprehensive income33—33
Net current period other comprehensive (loss) income(299)1,110811
Balance at December 31, 2025$(3,707)$(1,722)$(5,429)
(In millions)Pension/Post-Retirement Plans Gains (Losses)Foreign Currency Translation AdjustmentsTotal
Balance at January 1, 2024$(3,101)$(2,194)$(5,295)
Other comprehensive (loss) income before reclassifications(326)(638)(964)
Amounts reclassified from accumulated other comprehensive income19—19
Net current period other comprehensive (loss)(307)(638)(945)
Balance at December 31, 2024$(3,408)$(2,832)$(6,240)

The components of other comprehensive (loss) income for the years ended December 31, 2025, 2024 and 2023 are as follows:

For the Year Ended December 31,2025
(In millions)Pre-TaxTax (Credit)Net of Tax
Foreign currency translation adjustments$1,075$(35)$1,110
Pension/post-retirement plans:
Amortization of (gains) losses included in net benefit (credit) cost:
Net actuarial losses (a)41833
Effect of settlement (a)1138
Subtotal521141
Net losses arising during period(164)(34)(130)
Foreign currency translation adjustments(277)(67)(210)
Pension/post-retirement plans (loss)(389)(90)(299)
Other comprehensive income (loss)$686$(125)$811

(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 31,2024
(In millions)Pre-TaxTax (Credit)Net of Tax
Foreign currency translation adjustments$(613)$25$(638)
Pension/post-retirement plans:
Amortization of (gains) losses included in net benefit (credit) cost:
Prior service credits (a)(1)—(1)
Net actuarial losses (a)25619
Effect of settlement (a)211
Subtotal26719
Net losses arising during period(520)(124)(396)
Foreign currency translation adjustments922369
Other adjustments211
Pension/post-retirement plans (loss)(400)(93)(307)
Other comprehensive (loss)$(1,013)$(68)$(945)

(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 31,2023
(In millions)Pre-TaxTax (Credit)Net of Tax
Foreign currency translation adjustments$389$(10)$399
Pension/post-retirement plans:
Amortization of (gains) losses included in net benefit (credit) cost:
Prior service credits (a)(2)—(2)
Net actuarial losses (a)20515
Effect of settlement (a)211
Subtotal20614
Net gains arising during period(349)(85)(264)
Foreign currency translation adjustments(167)(42)(125)
Other adjustments(7)(2)(5)
Pension/post-retirement plans gains(503)(123)(380)
Other comprehensive (loss) income$(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.

The components of accumulated other comprehensive loss are as follows:

(In millions)December 31, 2025December 31, 2024
Foreign currency translation adjustments (net of deferred tax asset of $15 in 2025 and deferred tax liability of $23 in 2024, respectively)$(1,722)$(2,832)
Net charges related to pension/post-retirement plans (net of deferred tax asset of $1,648 and $1,558 in 2025 and 2024, respectively)(3,707)(3,408)
Total$(5,429)$(6,240)

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 14 acquisitions in 2025:

  • January – Guy Carpenter acquired the remaining 51.5% ownership share in Carpenter Turner Cyprus Ltd., a Greece-based insurance broker that provides reinsurance and advisory services, including treaty and facultative reinsurance, data and analytics, strategic advisory, and capital markets solutions.

  • February – Marsh Risk acquired Fontana Rava-Toscano & Partners S.r.l., an Italy-based insurance broker that offers property and casualty insurance brokerage and risk consulting.

  • March – Marsh Risk acquired the business of Cohere Insurance Solutions, an Australia-based insurance broker that specializes in life sciences, start-up and professional services businesses.

  • April – Marsh McLennan Agency ("MMA") acquired Arthur C. Hall Insurance, Inc., a Pennsylvania-based insurance broker that provides commercial and personal lines solutions to clients, with specialties in life sciences, information management, non-profit, craft beverage manufacturing and municipal industries.

  • May – Marsh Risk acquired Thornton Harvey Group, LLC (d/b/a ProWriters), a Pennsylvania-based wholesale insurance broker that provides solutions for cyber, management and professional liability insurance to a network of retail brokers in the U.S.

  • July – MMA acquired Excel Insurance LLC, a Florida-based insurance broker that provides property and casualty insurance solutions to small businesses and individuals in South Florida, with specialties in watercraft and motor vehicle protection; and Donald S. Barberie Insurance Agency, Inc. (d/b/a Olympic Insurance Agency), a California-based insurance broker that provides business insurance, employee benefits, and personal asset protection expertise to clients in Southern California, serving real estate investors, property managers, and manufacturing businesses.

  • August – MMA acquired Robins Insurance Agency Inc., a Tennessee-based insurance broker that provides business insurance and personal lines solutions, with expertise in real estate, construction, hospitality, community associations and manufacturing.

  • October – MMA acquired Robison Insurance Services Inc., a North Carolina-based insurance broker that provides life, health, disability and long term care insurance services to businesses and individuals; and Hayden Wood Insurance Agency, a Massachusetts-based insurance broker that provides personal lines insurance solutions to clients nationally, with a specialty in collector auto and motorsports products.

  • November – Marsh Risk acquired Mitsubishi Electric Insurance Service Co, Ltd., a Japan-based insurance broker offering clients access to high-value, cost-effective insurance solutions across a broad range of commercial lines, including liability, property, cargo, workers compensation, commercial auto, commercial umbrella, directors and officers, and cyber, as well as non-life/life insurance, medical care, and nursing care; and Jointly – il Welfare Condiviso S.r.l., an Italy-based provider of integrated corporate well-being solutions for organizations and their employees, including parenting and family care support programs, mental and physical well-being initiatives, and flexible benefits.

  • December – MMA acquired three insurance brokers, Atlas Insurance Agency, Inc., Pyramid Insurance Centre, Ltd., and NMF Insurance, Inc. d/b/a IC International, a collective group of Hawaii-based insurance brokers offering insurance solutions to businesses and individuals throughout Hawaii with a niche industry specialization in municipality, transportation and hospitality; and Marsh Risk acquired Finassur, a France-

based insurance broker offering tailored insurance solutions in Northern France, specializing in property and casualty, and health and life insurance risk management.

The Consulting segment completed 6 acquisitions in 2025:

  • April – Mercer acquired the business of Cerebrus Consultants Private Limited., an India-based provider of human resources consulting and advisory services.

  • May – Mercer acquired SECOR Asset Management, L.P., a U.S. and United Kingdom (U.K.) based global provider of bespoke strategic and portfolio solutions to institutional investors, including investment advisory and implementation, fiduciary and asset liability management.

  • August – Marsh Management Consulting acquired Validate Health Inc., an Illinois-based healthcare analytics consultancy that provides analytics solutions to healthcare providers and accountable care organizations to help clients to better manage costs, risk and performance. Mercer acquired ConvictionsRH, a France-based consulting firm specializing in Human Resources transformation, supporting companies of all sizes in their strategic, organizational, digital, technological and cultural changes.

  • October – Mercer acquired Fundhouse Limited and Fundhouse Bespoke Limited, a United Kingdom-based provider of investment advisory and model portfolio services to financial advisors and institutional wealth investors.

  • November – Mercer acquired Hexarem Inc., a Canada-based human resources consulting firm specializing in executive compensation and governance advisory services.

Total purchase consideration for acquisitions made in 2025 was $857 million, which consisted of cash paid of $726 million, deferred and estimated contingent purchase consideration of $116 million, and the remeasurement to fair value of a previously held equity method investment upon consolidation of $15 million. Contingent purchase consideration arrangements are generally based on earnings before interest, tax, depreciation and amortization ("EBITDA") or revenue targets over a period of 2 to 4 years. The fair value of contingent purchase consideration was based on projected revenue and earnings of the acquired entities.

In 2025, the Company also paid $54 million of deferred purchase consideration and $41 million of contingent purchase consideration related to prior year acquisitions. 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 2025, based on the estimated fair values for the other acquisitions as of their respective acquisition dates. Amounts in the table primarily reflect the impact from the acquisition of the three Hawaii-based insurance brokers, Atlas Insurance Agency, Inc., Pyramid Insurance Centre, Ltd., and NMF Insurance, Inc.

Acquisitions for the Year Ended December 31, 2025
(In millions)Total
Cash$726
Estimated fair value of deferred/contingent consideration116
Fair value of previously-held equity method investment15
Total consideration$857
Allocation of purchase price:
Cash and cash equivalents$27
Cash and cash equivalents held in a fiduciary capacity47
Net receivables32
Other current assets6
Goodwill562
Other intangible assets295
Fixed assets, net4
Right of use assets4
Other assets8
Total assets acquired985
Current liabilities37
Fiduciary liabilities47
Other liabilities36
Total liabilities assumed120
Non-controlling interests8
Net assets acquired$857

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 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 2025:

Other intangible assets for the Year Ended December 31, (In millions)AmountWeighted Average Amortization Period
Customer relationships$27513.3 years
Other204.3 years
Total other intangible assets$295

The consolidated statements of income include the results of operations of acquired companies since their respective acquisition dates. The following table provides information about the consolidated statements of income for each respective period:

Results For the Year Ended December 31,
(In millions)202520242023
Revenue$72$451$152
Operating income$7$34$24

The Company incurred acquisition related expenses of approximately $282 million and $119 million in 2025 and 2024, respectively. These costs included approximately $215 million and $63 million of integration and retention related costs in connection with the acquisition of McGriff in 2025 and 2024, respectively. Acquisition related expenses are included in compensation and benefits or other operating expenses in the Company's consolidated statements of income, depending on the nature of the items.

In the first quarter of 2025, in connection with its increased investment in Carpenter Turner Cyprus Ltd., the Company recorded a gain of $13 million related to the remeasurement of its previously held equity method investment to fair value upon consolidation. The fair value of the pre-existing equity method investment was calculated considering both an income approach based on discounted future cash flows and market approach.

Dispositions

In the first quarter of 2025, the Company sold MMA's Technology Consulting and Administrative Solutions ("TCAS") business for approximately $25 million, and recorded a gain of $15 million, which is included in revenue in the consolidated statements of income.

Prior year acquisitions

The Risk and Insurance Services segment completed 10 acquisitions in 2024:

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

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

  • May – MMA acquired AC Risk Management, a New York-based commercial lines insurance broker primarily offering property and casualty insurance to businesses with a focus on the construction industry; Perkins Insurance Agencies LLC, a Texas-based insurance broker providing commercial property and casualty, and personal lines coverage to businesses, non-profits and families with expertise in the oil and gas, trucking, farm and ranch, and restaurant industries; and Fisher Brown Bottrell Insurance, Inc. ("FBBI"), a Mississippi-based insurance broker providing commercial property and casualty insurance, surety and employee benefits services to businesses and individuals.

  • July – MMA acquired AmeriStar Agency Inc., a Minnesota-based insurance broker offering insurance coverage solutions to high-net-worth individuals and commercial clients; and Hudson Shore Group, a New Jersey-based public and private sector employee benefits broker, that specializes in public sector clients providing employee benefits, consulting, and administrative services with a focus on large group and alternative-funded benefits programs.

  • August – MMA acquired The Horton Group, Inc. (the "Horton Group"), an Illinois-based insurance broker that offers property and casualty insurance, employee benefits consultation, and personal lines coverage to businesses and individuals.

  • November – MMA acquired McGriff, a North Carolina-based provider of insurance broking and risk management services.

  • December – MMA acquired Acumen Solutions Group, LLC, a New York-based insurance broker offering customized insurance programs to businesses and individuals across the country with specialties in the construction, real estate and aviation industries.

The Consulting segment completed 7 acquisitions in 2024:

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

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

  • July – Marsh Management Consulting acquired Veritas Total Solutions, a Texas-based commodity trading advisory firm with expertise in risk, systems, analytics and artificial intelligence.

  • October – Mercer acquired hkp///group, a Germany-based human resources and corporate governance consulting firm advising clients throughout Germany and the Netherlands.

  • November – Mercer acquired Gerolamo Holding S.À.R.L. (referred to as "Cardano"), a Luxembourg-based pension services, advisory and investment solutions firm, offering a range of fiduciary management, investment advisory services, and liability-driven investing and derivatives solutions to both defined benefit and defined contribution pension schemes in the U.K. and the Netherlands.

Total purchase consideration for acquisitions made in 2024 was $9.4 billion, which consisted of cash paid of $9.2 billion and deferred and estimated contingent purchase consideration of $190 million. Contingent purchase consideration arrangements are generally based primarily on EBITDA or revenue targets over a period of 2 to 4 years. The fair value of the contingent purchase consideration was based on projected revenue and earnings of the acquired entities.

In 2024, the Company also paid $39 million of deferred purchase consideration and $166 million of contingent purchase consideration related to acquisitions made in prior years. Estimated fair values of assets acquired and liabilities assumed are subject to adjustment when purchase accounting is finalized.

Prior year dispositions

On December 31, 2024, the Company sold Marsh Management Consulting's Celent advisory business for approximately $24 million and recorded a gain of $20 million, which is included in revenue in the consolidated statements of income.

In the third quarter of 2024, the Company obtained regulatory approval and completed its definite agreement to exit its businesses in Russia and transfer ownership to local management under an agreement entered into in 2022.

On January 1, 2024, the Company sold its Mercer U.K. pension administration and U.S. health and benefits administration businesses for approximately $120 million and recorded a net gain of $35 million, included in revenue in the consolidated statement of income. As part of the disposition of the businesses, the Company incurred exit costs of $18 million in the first quarter of 2024. These costs are included in expenses in the consolidated statements of income.

Pro-Forma Information

The following unaudited pro-forma financial data gives effect to the acquisitions made by the Company in 2025, 2024 and 2023. In accordance with accounting guidance related to pro-forma disclosures, the information presented for the current year acquisitions is as if they occurred on January 1, 2024 and reflects acquisitions made in 2024 as if they occurred on January 1, 2023. The 2023 information includes 2023 acquisitions as if they occurred on January 1, 2022.

The unaudited pro-forma financial data includes the effects of amortization of acquired intangibles and acquisition related costs in all years. The unaudited pro-forma information presented in the table below also includes adjustments for additional interest expense related to the issuance of debt and bridge financing costs.

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)202520242023
Revenue$27,131$26,159$24,723
Net income attributable to the Company$4,184$4,123$3,684
Basic net income per share attributable to the Company$8.53$8.38$7.46
Diluted net income per share attributable to the Company$8.48$8.31$7.39

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 at the same level as the Company's operating segments. A company can assess qualitative factors to determine whether it is necessary to perform a quantitative goodwill impairment test. Alternatively, a company may elect to proceed directly to the quantitative goodwill impairment test. In the third quarter of 2025, the Company completed a qualitative impairment assessment, updated for significant considerations at year-end, and concluded that goodwill was not impaired. As part of its assessment, the Company considered numerous factors, including:

  • that the fair value of each reporting unit exceeds its carrying value by a substantial margin based on its most recent quantitative assessment in 2023;

  • whether significant acquisitions or dispositions occurred which might alter the fair value of its reporting units;

  • macroeconomic conditions and their potential impact on reporting unit fair values;

  • actual performance compared with budget and prior projections used in its estimation of reporting unit fair values;

  • industry and market conditions; and

  • the year-over-year change in the Company’s share price.

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, 2025 and 2024.

Changes in the carrying amount of goodwill are as follows:

(In millions)20252024
Balance at January 1,$23,306$17,231
Goodwill acquired (a)5626,407
Other adjustments (b)469(332)
Balance at December 31,$24,337$23,306

(a)Includes $5.2 billion from the acquisition of McGriff in 2024.

(b)Primarily reflects the impact of foreign exchange.

The goodwill from acquisitions in 2025 and 2024 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 2025 included approximately $264 million and $29 million in the Risk and Insurance Services and Consulting segments, respectively, which is deductible for tax purposes. The goodwill acquired in 2024 included approximately $1.8 billion and $88 million in the Risk and Insurance Services and Consulting segments, respectively, which is deductible for tax purposes.

Goodwill allocable to the Company’s reportable segments at December 31, 2025, is $19.5 billion for Risk and Insurance Services and $4.8 billion for Consulting.

The gross cost and accumulated amortization of other intangible assets at December 31, 2025 and 2024 are as follows:

(In millions)20252024
Gross CostAccumulated AmortizationNet Carrying AmountGross CostAccumulated AmortizationNet Carrying Amount
Customer relationships (a)$7,091$2,422$4,669$6,650$1,961$4,689
Other (a) (b)47639977476345131
Other intangible assets$7,567$2,821$4,746$7,126$2,306$4,820

(a)Customer relationships and Other include $2.1 billion and $60 million, respectively from the acquisition of McGriff in 2024.

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

Aggregate amortization expense was $549 million, $377 million, and $343 million for the years ended December 31, 2025, 2024 and 2023, respectively.

The estimated future aggregate amortization expense is as follows:

For the Years Ended December 31,
(In millions)Estimated Expense
2026$544
2027520
2028479
2029436
2030433
Subsequent years2,334
Total future amortization$4,746

7. Income Taxes

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

For the Years Ended December 31,
(In millions)202520242023
Income before income taxes:
U.S.$1,986$1,894$1,823
Foreign3,5533,5863,203
$5,539$5,480$5,026
The expense (benefit) for income taxes is comprised of:
Current –
U.S. federal$203$247$273
U.S. state and local131123142
Foreign848836838
1,1821,2061,253
Deferred –
U.S. federal735329
U.S. state and local162015
Foreign3484(73)
123157(29)
Total income taxes$1,305$1,363$1,224

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

December 31,
(In millions)20252024
Deferred tax assets:
Accrued expenses not currently deductible$745$713
Differences related to non-U.S. operations (a)286282
Accrued U.S. retirement benefits131149
Net operating losses (b)346312
Income currently recognized for tax3940
Other4940
$1,596$1,536
Deferred tax liabilities:
Differences related to non-U.S. operations$590$588
Depreciation and amortization699616
Accrued retirement & post-retirement benefits – non-U.S. operations440374
Capitalized expenses currently recognized for tax144133
Other4842
$1,921$1,753

(a)Net of valuation allowances of $96 million in 2025 and $75 million in 2024.

(b)Net of valuation allowances of $62 million in 2025 and $69 million in 2024.

December 31,
(In millions)20252024
Balance sheet classifications:
Deferred tax assets$212$237
Other liabilities$537$454

Additional U.S. state and withholding taxes would apply to the cumulative undistributed earnings that are indefinitely reinvested in non-U.S. subsidiaries, if such earnings were repatriated. The amount of these additional taxes is estimated to be approximately $100 million.

Future U.S. federal tax costs related to basis differences in non-U.S. subsidiaries are realized through the U.S. Net Controlled Foreign Corporation Tested Income ("NCTI") minimum tax regime, formerly known as Global Intangible Low-Taxed Income ("GILTI"). The Company elected to recognize NCTI 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 31,2025
AmountPercentage
U.S. federal statutory rate$1,16321.0%
U.S. state and local income taxes – net of U.S. Federal income tax benefit (a)1162.1
Change in valuation allowance190.4
Tax credits(20)(0.4)
Nontaxable and nondeductible items, net(8)(0.1)
Cross-border taxes
Tax on flow through entities(138)(2.5)
Other240.4
Other U.S. adjustments(24)(0.4)
Foreign tax effects
United Kingdom410.7
Other foreign1292.3
Worldwide changes in prior year unrecognized tax benefits30.1
Effective tax rate$1,30523.6%

(a)State taxes in New York State, California, New York City, Illinois, New Jersey, and Pennsylvania made up the majority (greater than 50 percent) of the tax effect in this category.

For the Years Ended December 31,20242023
U.S. federal statutory rate21.0%21.0%
U.S. state and local income taxes – net of U.S. Federal income tax benefit2.12.6
Differences related to non-U.S. operations2.52.2
Change in valuation allowance—(1.4)
Equity compensation(0.7)(0.7)
Uncertain tax positions(0.3)(0.1)
Other0.30.7
Effective tax rate24.9%24.3%

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.

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 increase of $16 million in 2025, a net increase of $24 million in 2024, and a net decrease of $110 million in 2023. Adjustments of the beginning of the year balances of valuation allowances increased tax expense by $1 million in 2025. Adjustments of the beginning of the year balances of valuation allowances had no impact to the income tax expense in 2024, and decreased income tax expense by $94 million in 2023. Approximately 8% of the Company’s net operating loss carryforwards expire from 2026 through 2038, and the remaining 92% are unlimited. The gross deferred tax assets of the potential tax benefit from net operating loss carryforwards at the end of 2025 is primarily comprised of non-U.S. tax benefits of $410 million.

Changes in tax laws, rulings, policies, or related legal and regulatory interpretations occur frequently and may have significant favorable or adverse impacts on our effective tax rate.

On July 4, 2025, U.S. tax legislation was signed into law (known as the "One Big Beautiful Bill Act" or "OBBBA") which made permanent many of the tax provisions enacted in 2017 as part of the Tax Cuts and Jobs Act that were set to expire at the end of 2025. In addition, the OBBBA made changes to certain U.S. corporate tax provisions, but many are generally not effective until 2026. The enactment of the OBBBA does not have a material impact on the results from operations for the current or future years.

The Organization for Economic Cooperation and Development ("OECD") provided model rules for a 15% global minimum tax, known as Pillar Two. Pillar Two has now been enacted by most key non-U.S. jurisdictions where the Company operates, including the U.K. and Ireland. Parts of the minimum tax rules were applicable for 2024, with the remaining provisions becoming fully effective for 2025. This minimum tax is treated as a period cost and does not have a material impact on the Company's financial results of operations for the current period.

While the U.S. has negotiated a "side-by-side" arrangement for the existing U.S. minimum taxes with the intent to exempt U.S. multinational companies from certain of the Pillar Two provisions, uncertainty remains related to the implementation of this arrangement. The Company continues to monitor legislative developments, as well as additional guidance from countries that have enacted Pillar Two legislation, and will ensure it complies with any changes.

Following is a reconciliation of the Company’s total gross unrecognized tax benefits for the years ended December 31, 2025, 2024 and 2023:

(In millions)202520242023
Balance at January 1,$112$124$97
Additions, based on tax positions related to current year556
Additions for tax positions of prior years3844
Reductions for tax positions of prior years(1)—(8)
Settlements(1)(10)(8)
Lapses in statutes of limitations(9)(15)(7)
Balance at December 31,$109$112$124

Of the total unrecognized tax benefits at December 31, 2025, 2024 and 2023, $108 million, $111 million and $122 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, 2025, $45 million at December 31, 2024, and $48 million at December 31, 2023.

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. The IRS CAP Audit for tax year 2025 and CAP Maintenance Audits for tax years 2024 and 2023 are ongoing. In 2024, the IRS concluded its examination of the Company’s 2022 tax return.

New York is a significant tax jurisdiction for the Company. New York State and New York City have continuing examinations underway in 2025 for various entities covering the years 2015 through 2021. In 2023, the New York State audits for 2013-2014 and the New York City audits for 2010-2014 were finalized.

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 2025OngoingConcluded in 2025
United Kingdom20232016 - 2022
Canada20242021
Australia2021 - 20232019 - 2020
Germany2017 - 2020
France2022 - 20232021
Italy20202015 - 20172018
Singapore20232019 - 20222018
Japan20242021 - 2024
Mexico2020
India2007 - 2022

In 2024, the Company received closure notices and assessments from the U.K. tax authority in relation to its 2016-2020 examinations which disallowed certain interest expense deductions. The Company has appealed the assessments and is prepared to resolve this matter through litigation or alternative dispute resolution, which may take several years.

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.

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 BenefitsPost-retirement Benefits
2025202420252024
Weighted average assumptions:
Discount rate (for expense)5.36%4.95%5.07%5.26%
Expected return on plan assets5.43%5.44%——
Rate of compensation increase (for expense) *3.22%3.16%——
Discount rate (for benefit obligation)5.39%5.36%5.18%5.07%
Rate of compensation increase (for benefit obligation) *3.12%3.22%——

(*)There are no rate of compensation increase assumptions included for the primary U.S. defined benefit plans since all 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, 2025, the actual allocation for the U.S. plans was 50% equities and equity alternatives and 50% fixed income. The target asset allocation for the U.K. plans, which comprise approximately 78% of non-U.S. plan assets, is 7% equities and equity alternatives and 93% fixed income. At December 31, 2025, the actual allocation for the U.K. plans was 8% equities and equity alternatives and 92% 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' asset returns within acceptable risk parameters. Asset allocation is frequently monitored to ensure the actual portfolio remains consistent with target asset allocation ranges. This includes the use of threshold-based portfolio re-balancing where appropriate.

In the third quarter of 2025, the Trustee of the MMC U.K. Pension Fund (the "Fund") invested in a $2.5 billion (£1.9 billion) insurance policy that will reimburse the Fund for all future benefit payments to the retirees and beneficiaries in one of the sections of the Fund (a "buy-in"). Fund assets were used for the buy-in and it is accounted for at fair value as an investment. The transaction had no impact on the 2025 net benefit credit.

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 2025, 2024 and 2023 are as follows:

Combined U.S. and significant non-U.S. PlansPension BenefitsPost-retirement Benefits
For the Years Ended December 31,
(In millions)202520242023202520242023
Service cost$28$23$23$—$—$—
Interest cost592579599333
Expected return on plan assets(842)(876)(860)———
Amortization of prior service11——(2)(2)
Recognized actuarial loss (gain)423122(1)(6)(3)
Net periodic benefit (credit) cost(179)(242)(216)2(5)(2)
Settlement loss1122———
Net benefit (credit) cost$(168)$(240)$(214)$2$(5)$(2)

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

Combined U.S. and significant non-U.S. PlansPension BenefitsPost-retirement Benefits
For the Years Ended December 31,
(In millions)202520242023202520242023
Compensation and benefits expense$28$23$23$—$—$—
Other net benefit (credit) cost(196)(263)(237)2(5)(2)
Net benefit (credit) cost$(168)$(240)$(214)$2$(5)$(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. plans, the Company uses threshold-based portfolio re-balancing to ensure the actual portfolio remains consistent with target asset allocation ranges. The category ranges for both equities and equity alternatives, and for fixed income securities are 46%-54%. For the U.K. plans, 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 BenefitsU.S. Post-retirement Benefits
(In millions)2025202420252024
Change in benefit obligation:
Benefit obligation at beginning of year$4,594$4,690$17$20
Service cost1———
Interest cost25325011
Employee contributions——33
Plan combinations (a)(17)62——
Actuarial loss (gain)63(107)32
Effect of settlement(4)———
Benefits paid(309)(301)(8)(9)
Benefit obligation, December 31$4,581$4,594$16$17
Change in plan assets:
Fair value of plan assets at beginning of year$4,062$4,234$2$2
Actual return on plan assets32395——
Employer contributions383455
Employee contributions——34
Effect of settlement(4)———
Benefits paid(309)(301)(8)(9)
Fair value of plan assets, December 31$4,110$4,062$2$2
Net funded status, December 31$(471)$(532)$(14)$(15)
Amounts recognized in the consolidated balance sheets:
Current liabilities$(34)$(37)$—$(1)
Non-current liabilities(437)(495)(14)(14)
Net liability recognized, December 31$(471)$(532)$(14)$(15)
Amounts recognized in other comprehensive income (loss):
Prior service (cost)$(1)$(1)$—$—
Net actuarial (loss) gain(1,436)(1,427)(1)2
Total recognized accumulated other comprehensive (loss) income, December 31$(1,437)$(1,428)$(1)$2
Cumulative employer contributions in excess of (less than) net benefit (credit) cost966896(13)(17)
Net amount recognized in consolidated balance sheets$(471)$(532)$(14)$(15)
Accumulated benefit obligation, December 31$4,576$4,577$—$—

(a)Includes plans from the acquisition of McGriff in 2024.

U.S. Pension BenefitsU.S. Post-retirement Benefits
(In millions)2025202420252024
Reconciliation of net actuarial (loss) gain recognized in accumulated other comprehensive income (loss):
Beginning balance$(1,427)$(1,347)$2$4
Recognized as component of net benefit cost (credit)2421——
Changes in plan assets and benefit obligations recognized in other comprehensive income (loss):
Liability experience(63)107(3)(2)
Asset experience30(208)——
Total gain recognized as change in plan assets and benefit obligations(33)(101)(3)(2)
Net actuarial (loss) gain, December 31$(1,436)$(1,427)$(1)$2
For the Years Ended December 31,U.S. Pension BenefitsU.S. Post-retirement Benefits
(In millions)202520242023202520242023
Total recognized in net benefit (credit) cost and other comprehensive (income) loss$(6)$48$(105)$4$2$3

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 BenefitsU.S. Post-retirement Benefits
2025202420252024
Weighted average assumptions:
Discount rate (for expense)5.76%5.52%5.52%5.34%
Expected return on plan assets6.49%6.49%——
Discount rate (for benefit obligation)5.61%5.76%5.10%5.52%

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 $4.6 billion and $4.1 billion, respectively, at both December 31, 2025 and December 31, 2024.

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 $4.6 billion and $4.1 billion, respectively, at both December 31, 2025 and December 31, 2024.

At December 31, 2025, the U.S. qualified plan held one 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, 2025.

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 onlyPension BenefitsPost-retirement Benefits
For the Years Ended December 31,
(In millions)202520242023202520242023
Service cost$1$—$—$—$—$—
Interest cost253$250260111
Expected return on plan assets(293)(303)(311)———
Recognized actuarial loss (gain)242119—(1)(2)
Net periodic benefit (credit) cost(15)(32)(32)1—(1)
Settlement loss1—————
Net benefit (credit) cost$(14)$(32)$(32)$1$—$(1)

The assumed health care cost trend rate for Medicare eligibles and non-Medicare eligibles was approximately 8.6% in 2025, gradually declining to 4.0% in 2049. 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 $34 million to its non-qualified U.S. plans in 2026. 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 made required contributions of $2 million to its U.S. qualified plans in 2025. In 2026, the Company is expected to be required to make contributions totaling $33 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 BenefitsNon-U.S. Post-retirement Benefits
(In millions)2025202420252024
Change in benefit obligation:
Benefit obligation at beginning of year$6,834$7,521$46$40
Service cost2723——
Interest cost33932922
Employee contributions33——
Plan combination3———
Actuarial (gain) loss(244)(423)(1)9
Plan amendments—(2)——
Effect of settlement(28)(16)——
Benefits paid(372)(365)(3)(3)
Foreign currency changes539(236)3(2)
Benefit obligation, December 31$7,101$6,834$47$46
Change in plan assets:
Fair value of plan assets at beginning of year$8,495$9,308$—$—
Plan combination4———
Actual return on plan assets180(259)——
Effect of settlement(28)(16)——
Employer contributions445933
Employee contributions33——
Benefits paid(372)(365)(3)(3)
Foreign currency changes657(235)——
Fair value of plan assets, December 31$8,983$8,495$—$—
Net funded status, December 31$1,882$1,661$(47)$(46)
Amounts recognized in the consolidated balance sheets:
Non-current assets$2,140$1,913$—$—
Current liabilities(10)(8)(2)(3)
Non-current liabilities(248)(244)(45)(43)
Net asset (liability) recognized, December 31$1,882$1,661$(47)$(46)
Amounts recognized in other comprehensive loss:
Prior service (cost) credit$(14)$(14)$—$1
Net actuarial (loss) gain(3,897)(3,519)33
Total recognized accumulated other comprehensive (loss) income, December 31$(3,911)$(3,533)$3$4
Cumulative employer contributions in excess of (less than) net benefit (credit) cost5,7935,194(50)(50)
Net asset (liability) recognized in consolidated balance sheets, December 31$1,882$1,661$(47)$(46)
Accumulated benefit obligation, December 31$6,995$6,725$—$—
Non-U.S. Pension BenefitsNon-U.S. Post-retirement Benefits
(In millions)2025202420252024
Reconciliation of prior service (cost) credit recognized in accumulated other comprehensive (loss) income:
Beginning balance$(14)$(17)$1$3
Recognized as component of net benefit (credit) cost:
Amortization of prior service credit (cost)11(1)(2)
Total recognized as component of net benefit cost (credit)11(1)(2)
Changes in plan assets and benefit obligations recognized in other comprehensive income:
Plan amendments—2——
Exchange rate adjustments(1)———
Prior service (cost) credit, December 31$(14)$(14)$—$1
Non-U.S. Pension BenefitsNon-U.S. Post-retirement Benefits
(In millions)2025202420252024
Reconciliation of net actuarial (loss) gain recognized in accumulated other comprehensive (loss) income:
Beginning balance$(3,519)$(3,219)$3$17
Recognized as component of net benefit cost (credit):
Amortization of net gain (loss)1810(1)(5)
Effect of settlement102——
Total recognized as component of net benefit cost (credit)2812(1)(5)
Changes in plan assets and benefit obligations recognized in other comprehensive income (loss):
Liability experience2444231(9)
Asset experience(373)(831)——
Total amount recognized as change in plan assets and benefit obligations(129)(408)1(9)
Exchange rate adjustments(277)96——
Net actuarial (loss) gain, December 31$(3,897)$(3,519)$3$3
For the Years Ended December 31,Non-U.S. Pension BenefitsNon-U.S. Post-retirement Benefits
(In millions)202520242023202520242023
Total recognized in net benefit (credit) cost and other comprehensive (income) loss$224$89$429$2$11$(9)

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 BenefitsNon-U.S. Post-retirement Benefits
2025202420252024
Weighted average assumptions:
Discount rate (for expense)5.09%4.59%4.90%5.22%
Expected return on plan assets4.92%4.96%——
Rate of compensation increase (for expense)3.22%3.16%——
Discount rate (for benefit obligation)5.25%5.09%5.20%4.90%
Rate of compensation increase (for benefit obligation)3.12%3.22%——

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 $436 million and $222 million, respectively, at December 31, 2025 and $462 million and $248 million, respectively, at December 31, 2024.

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 $532 million and $275 million, respectively, at December 31, 2025 and $564 million and $312 million, respectively, at December 31, 2024.

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 BenefitsNon-U.S. Post-retirement Benefits
(In millions)202520242023202520242023
Service cost$27$23$23$—$—$—
Interest cost339329339222
Expected return on plan assets(549)(573)(549)———
Amortization of prior service credit11——(2)(2)
Recognized actuarial loss18103(1)(5)(1)
Net periodic benefit (credit) cost(164)(210)(184)1(5)(1)
Settlement loss1022———
Net benefit (credit) cost$(154)$(208)$(182)$1$(5)$(1)

The assumed health care cost trend rate was approximately 5.43% in 2025, gradually declining to 5.11% 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 $39 million to its non-U.S. pension plans in 2026. 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 in accordance with 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.

The MMC U.K. Pension Fund has four segregated defined benefit sections, all in a surplus funding position at December 31, 2024. Based on that funding position, an agreement was reached with the trustee in the fourth quarter of 2025 that no deficit funding will be required to any of the defined benefit sections until 2029 at the earliest, following the completion in 2028 of the December 31, 2027 valuation. The Company’s prior agreement to support certain annual deficit contributions that may have been required by U.K. operating companies under certain circumstances, expiring on December 31, 2025, was not renewed in January 2026 due to the improved surplus funding position.

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 BenefitsPost-retirement Benefits
(In millions)U.S.Non-U.S.U.S.Non-U.S.
2026$331$411$3$3
2027$341$406$2$3
2028$350$419$2$3
2029$352$437$2$3
2030$353$448$2$3
2031-2035$1,732$2,396$6$17

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.

In 2025, the Company refined the presentation of Other Investments in the fair value tables below to reclassify certain items to Insurance group annuity contracts and Net derivative liabilities. The prior year presentation was conformed to the current presentation with no impact on the total of net investments.

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, 2025 and 2024:

Fair Value Measurements at December 31, 2025
Assets (In millions)Quoted Prices in Active Markets for Identical Assets (Level 1)Significant Other Observable Inputs (Level 2)Significant Unobservable Inputs (Level 3)NAVTotal
Common/collective trusts$—$—$—$3,330$3,330
Corporate obligations—1,458——1,458
Corporate stocks86531—140
Private equity/partnerships———1,2221,222
Government securities163,018——3,034
Real estate———5757
Short-term investment funds774———774
Company common stock186———186
Insurance group annuity contracts——2,722—2,722
Other investments3356253—342
Total investments1,0954,5852,9764,60913,265
Net derivative liabilities—(78)(115)—(193)
Net investments$1,095$4,507$2,861$4,609$13,072
Fair Value Measurements at December 31, 2024
Assets (In millions)Quoted Prices in Active Markets for Identical Assets (Level 1)Significant Other Observable Inputs (Level 2)Significant Unobservable Inputs (Level 3)NAVTotal
Common/collective trusts$2$—$—$3,226$3,228
Corporate obligations—2,675——2,675
Corporate stocks339351—375
Private equity/partnerships———1,2951,295
Government securities204,559——4,579
Real estate———5757
Short-term investment funds292———292
Company common stock212———212
Insurance group annuity contracts——164—164
Other investments913249—271
Total investments8747,2824144,57813,148
Net derivative liabilities—(449)(124)—(573)
Net investments$874$6,833$290$4,578$12,575

The above tables do not include receivables or payables related to securities at December 31, 2025 and 2024.

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, 2025 and December 31, 2024:

Assets (In millions)Fair Value, January 1, 2025PurchasesSalesSettlementsUnrealized Gain/ (Loss)Realized Gain/ (Loss)Exchange Rate ImpactTransfers in/(out) and OtherFair Value, December 31, 2025
Corporate stocks$1$—$—$—$—$—$—$—$1
Insurance group annuity contracts1642,468—(75)92—73—2,722
Other investments24914(20)—(20)—30—253
Total investments4142,482(20)(75)72—103—2,976
Net derivative liabilities(124)—78—(60)—(9)—(115)
Net investments$290$2,482$58$(75)$12$—$94$—$2,861
Assets (In millions)Fair Value, January 1, 2024PurchasesSalesSettlementsUnrealized Gain/ (Loss)Realized Gain/ (Loss)Exchange Rate ImpactTransfers in/(out) and OtherFair Value, December 31, 2024
Corporate stocks$1$—$—$—$—$—$—$—$1
Insurance group annuity contracts185——(13)(18)—10—164
Other investments25117(18)—16—(17)—249
Total investments43717(18)(13)(2)—(7)—414
Net derivative liabilities(134)———8—2—(124)
Net investments$303$17$(18)$(13)$6$—$(5)$—$290

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.

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: The fair value for these investments has been calculated based on the price paid for the annuity contracts, updated to reflect changes in market conditions and annuity payments received. The calculation discounts the insured projected cash flows using a risk-free discount rate adjusted for estimated insurer pricing.

Net derivative liabilities: Includes interest rate swaps, inflation swaps, longevity 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, longevity 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. The fair value for the longevity swap is determined by discounting expected future cash flows using market-consistent rates and probabilities to estimate the replacement policy value.

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

Other investments: Primarily insured retirement plan assets valued using significant unobservable inputs.

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 $580 million of the 401(k) Plans' assets at December 31, 2025 and $737 million at December 31, 2024 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 $208 million in 2025, $188 million in 2024 and $173 million in 2023.

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 $183 million, $170 million and $158 million in 2025, 2024 and 2023, 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 15, 2025, the Amended and Restated 2020 Incentive and Stock Award Plan (the "2020 Plan") was approved by the Company's stockholders and replaced the Marsh & McLennan Companies, Inc. 2020 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 29 million shares approved for issuance under the 2020 Plan.

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, as defined in the plan under which the options are granted. 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 2025, 2024 and 2023 are as follows:

202520242023
Risk-free interest rate4.36%4.31%4.11%
Expected life (in years)5.85.85.8
Expected volatility20.87%20.96%22.59%
Expected dividend yield1.42%1.42%1.44%

A summary of the status of the Company’s stock option awards at December 31, 2025 and changes during the year then ended are presented below:

SharesWeighted Average Exercise PriceWeighted Average Remaining Contractual TermAggregate Intrinsic Value ($000)
Balance at January 1, 20255,610,653$126.64
Granted611,699$230.29
Exercised(1,511,663)$97.20
Forfeited(47,437)$185.49
Balance at December 31, 20254,663,252$149.185.3 years$208,615
Options vested or expected to vest at December 31, 20254,625,651$148.835.3 years$208,211
Options exercisable at December 31, 20253,079,037$124.104.0 years$194,027

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 2025, 2024 and 2023 was $57.32, $49.80 and $41.92, respectively. The total intrinsic value of options exercised during the same periods was $197 million, $190 million and $164 million, respectively.

At December 31, 2025, there was $32.9 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 1.24 years. Cash received from the exercise of stock options in 2025, 2024 and 2023 was $147 million, $137 million and $116 million, respectively.

The Company's policy is to issue treasury shares upon option exercises or share unit conversions. 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 2025 include:

2025
Risk-Free Interest Rate4.28%
Volatility18.87%
Initial TSR6.72%

A summary of the status of the Company's RSU and PSU awards at December 31, 2025 and changes during the period then ended are presented below:

Restricted Stock UnitsPerformance Stock Units
SharesWeighted Average Grant Date Fair ValueSharesWeighted Average Grant Date Fair Value
Non-vested balance at January 1, 20253,456,722$179.66513,273$178.19
Granted1,558,267$229.89152,312$253.23
Vested(1,736,000)$171.32(191,864)$151.15
Forfeited(199,375)$202.02(8,140)$210.76
Non-vested balance at December 31, 20253,079,614$208.33465,581$213.32

The weighted-average grant-date fair value of the Company's RSU awards granted in 2024 and 2023 was $201.01 and $165.05, respectively. The weighted-average grant-date fair value of the Company's PSU awards granted in 2024 and 2023 was $220.05 and $170.80, respectively. The total fair value of the shares distributed in 2025, 2024 and 2023 in connection with the Company's non-option equity awards was $492 million, $483 million and $398 million, respectively.

The payout of shares in 2025 with respect to the PSU awards granted in 2022 was 200% of target based on performance for the three-year performance period. In aggregate, 383,597 shares became distributable in respect to PSUs vested in 2025.

At December 31, 2025, there was $359.6 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 314,743 shares in 2025 and at December 31, 2025, a total of 3,232,472 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 136,957 shares in 2025 and there were 546,820 shares available for issuance at December 31, 2025 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).

*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.

Unit Investment Trust - Level 2

Generally valued at the prices of units in unlisted managed investment trusts that are either published on the

investment manager’s website and/or circulated among market participants as executable quotes.

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, 2025 and 2024:

(In millions)Identical Assets (Level 1)Observable Inputs (Level 2)Unobservable Inputs (Level 3)Total
12/31/2512/31/2412/31/2512/31/2412/31/2512/31/2412/31/2512/31/24
Assets:
Financial instruments owned:
Exchange traded equity securities (a)$12$7$—$—$—$—$12$7
Mutual funds (a)202194————202194
Unit investment trust (a)———83———83
Money market funds (b)633353————633353
Total assets measured at fair value$847$554$—$83$—$—$847$637
Fiduciary Assets:
Money market funds$322$76$—$—$—$—$322$76
Total fiduciary assets measured at fair value$322$76$—$—$—$—$322$76
Liabilities:
Contingent purchase consideration liabilities (c)$—$—$—$—$268$161$268$161
Total liabilities measured at fair value$—$—$—$—$268$161$268$161

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

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

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

In 2025 and 2024, 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, 2025 and December 31, 2024.

(In millions)20252024
Balance at January 1,$161$252
Net additions8064
Payments(41)(166)
Revaluation impact6215
Other6(4)
Balance at December 31,$268$161

Long-Term Investments

The Company has investments in certain private equity funds as well as in public and private companies that are accounted for using the equity method of accounting. The carrying value of these investments was $301 million and $257 million at December 31, 2025 and 2024, respectively.

Private Equity Investments

The Company's investments in private equity funds were $220 million and $182 million at December 31, 2025 and 2024, 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 $30 million, $4 million and $7 million in 2025, 2024 and 2023, respectively.

At December 31, 2025, the Company has commitments of potential future investments of approximately $101 million in private equity funds that invest primarily in financial services companies.

Investments in Public and Private Companies

The Company has investments in private insurance brokerage and consulting companies with a carrying value of $81 million and $75 million at December 31, 2025 and 2024, 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.

Other Investments

The Company held certain equity investments with readily determinable market values of $24 million and $19 million, at December 31, 2025 and 2024, respectively. The Company recorded mark-to-market gains on these investments of $4 million and $1 million in 2025 and 2024, respectively, and a mark-to-market loss of $1 million in 2023.

The Company also held investments without readily determinable market values of $17 million and $16 million at December 31, 2025 and 2024, respectively. In 2023, the Company recorded a net loss of $1 million on these investments.

In January 2025, the Company disposed an investment in a unit trust fund of $83 million held at December 31, 2024. The Company recorded mark-to-market gains from this investment of $7 million in 2024.

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. As part of its risk management program, 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 $149 million in 2025, 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, 2025.

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. On November 15, 2024, the Company recorded approximately $76 million of ROU assets and lease liabilities from the McGriff acquisition.

In 2025 and 2024, the Company determined that a total of $11 million and $15 million, respectively, of the ROU assets 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)20252024
Lease Cost:
Operating lease cost (a)$351$331
Short-term lease cost56
Variable lease cost134116
Sub-lease income(22)(15)
Net lease cost$468$438
Other information:
Operating cash outflows from operating leases$402$376
Right of use assets obtained in exchange for new operating lease liabilities$187$279
Weighted average remaining lease term – real estate7.23 years7.57 years
Weighted average discount rate – real estate leases3.73%3.73%

(a)Excludes ROU asset impairment charges.

Future minimum lease payments for the Company’s operating leases at December 31, 2025 are as follows:

(In millions)Real Estate Leases
2026$393
2027359
2028281
2029233
2030199
Subsequent years653
Total future lease payments2,118
Less: imputed interest(256)
Total$1,862
Current lease liabilities$333
Long-term lease liabilities1,529
Total lease liabilities$1,862

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, 2025, the Company had additional operating leases that had not yet commenced of $36 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)20252024
Short-term:
Current portion of long-term debt$1,267$519
$1,267$519
Long-term:
Senior notes – 3.500% due 2025$—$500
Senior notes – 1.349% due 2026647579
Senior notes – 3.750% due 2026600599
Senior notes – 4.550% due 2027946945
Senior notes – Floating due 2027299299
Senior notes – 4.375% due 20291,4991,499
Senior notes – 1.979% due 2030646566
Senior notes – 2.250% due 2030744742
Senior notes – 4.650% due 2030992991
Senior notes – 2.375% due 2031398397
Senior notes – 4.850% due 2031992992
Senior notes – 5.750% due 2032494494
Senior notes – 5.875% due 2033298299
Senior notes – 5.400% due 2033594593
Senior notes – 5.150% due 2034496495
Senior notes – 5.000% due 20351,9831,982
Senior notes – 4.750% due 2039496496
Senior notes – 5.350% due 2044495495
Senior notes – 4.350% due 2047494494
Senior notes – 4.200% due 2048594593
Senior notes – 4.900% due 20491,2401,239
Senior notes – 2.900% due 2051346346
Senior notes – 6.250% due 2052492491
Senior notes – 5.450% due 2053591591
Senior notes – 5.700% due 2053989989
Senior notes – 5.450% due 2054493493
Senior notes – 5.400% due 20551,4791,479
Mortgage – 5.701% due 2035249267
Other12
19,58719,947
Less: current portion1,267519
$18,320$19,428

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

The Company has a $3.5 billion short-term debt financing program through the issuance of commercial paper. The proceeds from the issuance of commercial paper are used for general corporate purposes. The Company did not have any commercial paper outstanding at December 31, 2025 and 2024.

Credit Facilities

The Company has a $3.5 billion multi-currency unsecured five-year revolving credit facility (the "Credit Facility") expiring October 2028. Borrowings under the Credit Facility bear interest at a rate per annum equal, at the Company's option, either at (a) the Secured Overnight Financing Rate ("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, 2025 and 2024, the Company had no borrowings under this facility.

The Company also maintains other credit and overdraft facilities with various financial institutions aggregating $122 million at December 31, 2025 and $123 million at December 31, 2024. There were no outstanding borrowings under these facilities at December 31, 2025 and 2024.

The Company has outstanding guarantees and letters of credit with various banks aggregating $150 million and $163 million at December 31, 2025 and 2024, respectively.

Senior Notes

In March 2025, the Company repaid $500 million of 3.500% senior notes at maturity.

In November 2024, the Company issued $7.25 billion in senior notes as follows:

  • $950 million 4.550% senior notes due 2027;

  • $1 billion 4.650% senior notes due 2030;

  • $1 billion 4.850% senior notes due 2031;

  • $2 billion 5.000% senior notes due 2035;

  • $500 million 5.350% senior notes due 2044;

  • $1.5 billion 5.400% senior notes due 2055; and

  • $300 million floating rate senior notes due 2027 (the "Floating Notes"),

collectively referred to as the "November 2024 Notes".

For the Floating Notes, interest is calculated based on a compounded SOFR benchmark rate plus 0.700%.

The Company used the net proceeds from the November 2024 Notes offering to fund, in part, the McGriff Transaction, including the payment of related fees and expenses, as well as for general corporate purposes.

In June 2024, the Company repaid $600 million of 3.500% senior notes at maturity. In March 2024, the Company repaid $1 billion of 3.875% senior notes at maturity.

In February 2024, the Company issued $500 million of 5.150% senior notes due 2034 and $500 million of 5.450% senior notes due 2054. The Company used the net proceeds from these issuances for general corporate purposes.

Scheduled repayments of long-term debt in 2026 and in the 4 succeeding years are $1.3 billion, $1.3 billion, $22 million, $1.5 billion and $2.4 billion, respectively.

Bridge Loan Commitment Letter

In connection with the McGriff Transaction, on September 29, 2024, the Company entered into a Bridge Loan Commitment Letter (the "Commitment Letter") to provide the Company under a 364-day unsecured bridge term loan facility in an amount not to exceed $7.75 billion (the "Bridge Loan Facility"). The Company paid approximately $23 million for customary upfront fees related to the Commitment Letter, amortized as interest expense. On November 8, 2024, the Company terminated the Commitment Letter.

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 in the following table 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, 2025December 31, 2024
(In millions)Carrying AmountFair ValueCarrying AmountFair Value
Short-term debt$1,267$1,261$519$518
Long-term debt$18,320$18,093$19,428$18,734

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

The Company incurred a total of $222 million for restructuring costs in 2025, compared to $276 million in 2024.

In the third quarter of 2025, the Company launched a three-year program, Thrive (the "Program"), which focuses on brand strategy, delivering greater value to clients, accelerating growth and improving efficiency. Based on current Program estimates, the Company expects to incur approximately $500 million of cost over the three years. Costs will primarily relate to severance, technology and outside services. The Company expects charges incurred to be evenly distributed over the Program period.

In 2025, costs incurred in connection with the Program were $150 million, primarily related to severance. The Company continues to refine its detailed plans for the Program which may change the timing, expected costs, and related savings.

In 2024, the Company incurred $221 million of restructuring costs, primarily severance and lease exit charges, related to the Company initiated activities in the fourth quarter of 2022 focused on workforce actions, rationalization of technology and functional services, and reductions in real estate that were completed at the end of 2024.

The Company incurred restructuring costs in 2025 and 2024, as follows:

For the Years Ended December 31, (In millions)20252024
Risk and Insurance Services$134$148
Consulting6479
Corporate2449
Total$222$276

Details of the restructuring activity from January 1, 2024 through December 31, 2025, are as follows:

(In millions)SeveranceReal Estate Related Costs (a)Information TechnologyConsulting and Other Outside ServicesTotal
Liability at January 1, 2024$89$39$—$2$130
2024 charges163662522276
Cash payments(177)(45)(24)(24)(270)
Non-cash charges—(18)(1)—(19)
Liability at December 31, 20247542——117
2025 charges17432—16222
Cash payments(150)(39)—(16)(205)
Non-cash charges—(5)——(5)
Liability at December 31, 2025$99$30$—$—$129

(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 repurchase program authorized by the Board of Directors.

In November 2025, the Board of Directors of the Company authorized the Company to repurchase up to $6 billion of the Company’s common stock, which superseded any prior authorizations.

In 2025, the Company repurchased 10.1 million shares of its common stock for $2.0 billion. At December 31, 2025, the Company remained authorized to repurchase up to approximately $5.7 billion in shares of its common stock. There is no time limit on the authorization.

In 2024, the Company repurchased 4.3 million shares of its common stock for $900 million.

The Company issued approximately 3.5 million and 3.7 million shares related to stock compensation and employee stock purchase plans for the years ended December 31, 2025 and 2024, respectively.

In January 2026, the Board of Directors of the Company declared a quarterly dividend of $0.900 per share on outstanding common stock, payable in February 2026.

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 Marsh Management Consulting, 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, Australia 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 Risk 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 and its affiliates 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. The applicants in the omnibus trade credit insurance policy litigation among Greensill and its insurers and loss

payees in Australia (the "Australian proceedings") have collectively claimed losses totaling approximately $5 billion plus interest and costs.

In June 2023, White Oak, a 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 May 2025, Marsh Ltd. reached a settlement with White Oak to resolve the matter in the U.K. The settlement was recoverable through the Company's E&O insurance and did not have an impact on the consolidated statements of income in 2025.

In November 2023, two Credit Suisse funds ("Credit Suisse"), bringing claims as loss payees, added Marsh Ltd. as a party to the Australian proceedings. The claims by Credit Suisse allege that Marsh Ltd. failed to take required steps to ensure representations made to them in their capacity as loss payees were complete and accurate, and that Marsh Ltd. made misleading statements and omissions.

In November 2024, Greensill Bank AG (in insolvency), an affiliate of Greensill and an insured entity under the policies, added Marsh Pty Ltd as a party to the Australian proceedings. Greensill Bank subsequently joined Marsh Ltd. to the Australian proceedings in March 2025. Greensill Bank alleges that Marsh Ltd. and Marsh Pty Ltd. did not arrange suitable insurance cover and made misrepresentations regarding trade credit insurance placed for Greensill Bank.

The claims in the Australian proceedings are being pursued against a number of parties in addition to Marsh, and the parties are also pursuing (or are expected to pursue) various cross-claims.

At this time, the Company is unable to estimate the amount or range of loss due to the complexity of the proceedings, including the number of claims and parties involved. Mediation in the omnibus litigation is expected to begin in the first quarter 2026, with trial currently scheduled for August 2026.

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 operating segments are: Marsh Risk, Guy Carpenter, Mercer and Marsh Management Consulting. The four segments are aggregated into two operating and reporting segments as follows:

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

▪Consulting, comprising Mercer and Marsh Management Consulting.

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. Revenues are attributed to geographic areas based on location out of which the services are performed.

The Chief Executive Officer, as the Company's Chief Operating Decision Maker ("CODM"), evaluates segment performance and allocates resources 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. Segment operating income is also used to monitor budget versus actual results.

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

For the Years Ended December 31, (In millions)RevenueCompensation and benefitsDepreciation and amortization expenseIdentified intangible amortization expenseOther segment itemsOperating Income (Loss)
2025 –
Risk and Insurance Services$17,265(a)$9,711$204$475$2,239$4,636
Consulting9,794(b)5,710100742,0141,896
Total Segments27,05915,4213045494,2536,532
Corporate/Eliminations(78)15657—18(309)
Total Consolidated$26,981$15,577$361$549$4,271$6,223
2024 –
Risk and Insurance Services$15,395(a)$8,499$192$326$2,013$4,365
Consulting9,133(b)5,358114511,8401,770
Total Segments24,52813,8573063773,8536,135
Corporate/Eliminations(70)13963—46(318)
Total Consolidated$24,458$13,996$369$377$3,899$5,817
2023 –
Risk and Insurance Services$14,089(a)$7,702$190$297$1,955$3,945
Consulting8,7095,249106461,6421,666
Total Segments22,79812,9512963433,5975,611
Corporate/Eliminations(62)14874—45(329)
Total Consolidated$22,736$13,099$370$343$3,642$5,282

(a)Includes interest income on fiduciary funds of $403 million, $497 million and $453 million in 2025, 2024 and 2023, respectively, and equity method income of $24 million, $22 million and $18 million in 2025, 2024 and 2023, respectively. Revenue in 2025 also includes $28 million from a gain on the sale of the TCAS business and a gain on remeasurement of a previously held equity method investment to fair value upon consolidation. Revenue in 2023 includes a gain from a legal settlement with a competitor of $58 million, excluding legal fees.

(b)Includes inter-segment revenue of $73 million, $60 million and $56 million in 2025, 2024 and 2023, respectively. Revenue in 2024 includes a net gain of $35 million on the sale of the Mercer U.K. pension administration and U.S. health and benefits administration business. Revenue in 2024 also includes a gain of $20 million from the sale of a business in Marsh Management Consulting.

Other Risk and Insurance Services and Consulting segment items consist primarily of costs such as travel and entertainment, outside services, information and technology, facilities and equipment, and taxes and insurance.

The reconciliation of total consolidated operating income (loss) to income before income taxes is provided on the consolidated statements of income.

The Company does not report its assets by segment, including capital expenditures, as that information is not used by the CODM in assessing segment performance and allocating resources.

Details of operating segment revenue are as follows:

For the Years Ended December 31,
(In millions)202520242023
Risk and Insurance Services
Marsh Risk$14,630$12,851$11,657
Guy Carpenter2,6352,5442,432
Total Risk and Insurance Services17,26515,39514,089
Consulting
Mercer6,1905,7435,587
Marsh Management Consulting3,6043,3903,122
Total Consulting9,7949,1338,709
Total Segments27,05924,52822,798
Corporate/Eliminations(78)(70)(62)
Total$26,981$24,458$22,736

Information by geographic area is as follows:

For the Years Ended December 31,
(In millions)202520242023
Revenue
United States (a)$13,344$11,671$10,924
United Kingdom (b)3,8163,5953,555
Other (c)9,8999,2628,319
27,05924,52822,798
Corporate/Eliminations(78)(70)(62)
Total$26,981$24,458$22,736

(a)Revenue in 2025 includes a gain on the sale of the TCAS business of $15 million. Revenue in 2024 includes the loss on the sale of the Mercer U.S. health and benefits administration business of $35 million, and a gain of $20 million from the sale of a business in Marsh Management Consulting.

(b)Revenue in 2024 includes the gain on the sale of the Mercer U.K. pension administration business of $70 million. Revenue in 2023 includes a gain from a legal settlement with a competitor of $58 million, excluding legal fees.

(c)Revenue in 2025 incudes a $13 million gain on remeasurement of a previously held equity method investment to fair value upon consolidation.

For the Years Ended December 31,
(In millions)202520242023
Fixed Assets, Net
United States$469$494$468
United Kingdom136150168
Other224215246
Total$829$859$882

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, 2025 and 2024, the related consolidated statements of income, comprehensive income, cash flows, and equity for each of the three years in the period ended December 31, 2025, 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, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, 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, 2025, 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 9, 2026, 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 9, 2026

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

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