Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

General

Marsh & McLennan Companies, Inc. and its consolidated subsidiaries (the "Company") is a global professional services firm offering clients advice in the areas of risk, strategy and people. The Company’s 86,000 colleagues advise clients in over 130 countries. With annual revenue of approximately $20 billion, the Company helps clients navigate an increasingly dynamic and complex environment through four market-leading businesses. Marsh provides data-driven risk advisory services and insurance solutions to commercial and consumer clients. Guy Carpenter develops advanced risk, reinsurance and capital strategies that help clients grow profitably and identify and capitalize on emerging opportunities. Mercer delivers advice and solutions that help organizations create a dynamic world of work, shape retirement and investment outcomes, and unlock health and well being for a changing workforce. Oliver Wyman Group serves as a critical strategic, economic and brand advisor to private sector and governmental clients.

The Company conducts business through two segments:

• Risk and Insurance Services** includes risk management activities (risk advice, risk transfer and risk control and mitigation solutions) as well as insurance and reinsurance broking and services. The Company conducts business in this segment through Marsh and Guy Carpenter.

• Consulting** includes health, wealth and career consulting services and products, and specialized management, economic and brand consulting services. The Company conducts business in this segment through Mercer and Oliver Wyman Group.

The results of operations in the Management Discussion & Analysis ("MD&A") includes an overview of the Company's consolidated three and nine months ended September 30, 2022 results compared to the corresponding periods in 2021, and should be read in conjunction with the consolidated financial statements and notes. This section also includes a discussion of the key drivers impacting the Company's financial results of operations both on a consolidated basis and by reportable segments.

We describe the primary sources of revenue and categories of expense for each segment in the discussion of segment financial results. A reconciliation of segment operating income to total operating income is included in Note 18, Segment Information, in the notes to the consolidated financial statements included in Part I, Item 1 of this report.

For information on the three and nine months ended September 30, 2021 results and similar comparisons, see "Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations" of our Form 10-Q for the quarter ended September 30, 2021.

This MD&A contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. See "Information Concerning Forward-Looking Statements" at the outset of this report.

Financial Highlights

*•*Consolidated revenue for the three months ended September 30, 2022 was $4.8 billion, an increase of 4% or 8% on an underlying basis compared to the corresponding quarter in the prior year. For the nine months ended September 30, 2022, consolidated revenue was $15.7 billion, an increase of 7% or 9% on an underlying basis compared to the corresponding period in the prior year.

*•*Consolidated operating income increased $51 million, or 7% to $791 million for the three months ended September 30, 2022, compared to the corresponding quarter in the prior year. Net income attributable to the Company was $546 million. Earnings per share increased 3% to $1.08. For the nine months ended September 30, 2022, consolidated operating income increased $274 million, or 8% to $3.6 billion compared to the corresponding period in the prior year. Net income attributable to the Company was $2.6 billion. Earnings per share increased 12% to $5.11.

• Risk and Insurance Services revenue for the three months ended September 30, 2022 was $2.8 billion, an increase of 6%, or 9% on an underlying basis. Operating income was $529 million, compared with $403 million in the corresponding quarter in the prior year. For the nine months ended September 30, 2022, Risk and Insurance Services revenue was $9.7 billion, an increase of 7%, or 10% on an underlying basis. Operating income was $2.6 billion, compared with $2.4 billion for the corresponding period in the prior year.

• Consulting revenue for the three months ended September 30, 2022 was $2.0 billion, an increase of 1%, or 8% on an underlying basis. Operating income was $350 million, compared with $404 million in the corresponding quarter in the prior year. For the nine months ended September 30, 2022, Consulting

revenue was $6.0 billion, an increase of 6%, or 9% on an underlying basis. Operating income was $1.2 billion, compared with $1.1 billion for the corresponding period in the prior year.

• In April 2022, Mercer sold its U.S. affinity business that provided insurance marketing, brokerage and administration to association and affinity groups for cash proceeds of approximately $140 million and a net gain of $112 million.

• In June 2022, Marsh McLennan Agency ("MMA") acquired Clark Insurance, a full-service independent insurance agency in Maine.

• In September 2022, Oliver Wyman acquired Booz Allen Hamilton's management consulting business serving the Middle East and North Africa regions.

• Results for the nine months ended September 30, 2022, include a loss of $52 million on the deconsolidation of the Company's Russian businesses and other related charges. In June 2022, the Company also entered into a definitive agreement to exit its businesses in Russia and transfer ownership of its Russian entities to local management which are currently pending regulatory approvals.

• In the third quarter of 2022, the Company repurchased 3.1 million shares of stock for $500 million. For the nine months ended September 30, 2022, the Company repurchased 10.1 million shares for $1.6 billion.

For additional details, refer to the Consolidated Results of Operations and Liquidity and Capital Resources sections in this MD&A.

Acquisitions and dispositions impacting the Risk and Insurance Services and Consulting segments are discussed in Note 8, Acquisitions and Dispositions, in the notes to the consolidated financial statements.

Deconsolidation of Russia

On February 24, 2022, Russian forces launched a military invasion of Ukraine. In response, the United States, the European Union, United Kingdom and other governments have imposed significant economic sanctions on Russia, and Russia has responded with counter-sanctions. The war in Ukraine has disrupted international commerce and the global economy.

In the first quarter of 2022, the Company concluded that it did not meet the accounting criteria for control over its wholly-owned Russian businesses due to the evolving trade and economic sanctions, and recorded a loss of $52 million on the deconsolidation of the Russian businesses and other related charges.

In June 2022, the Company entered into a definitive agreement to exit its businesses in Russia and transfer ownership to local management pending regulatory approvals. Refer to Note 8, Acquisitions and Dispositions, in the notes to the consolidated financial statements for additional information on the deconsolidation of the Russian businesses.

The war in Ukraine has continued to result in worldwide geopolitical and macroeconomic uncertainty. The Company continues to monitor the ongoing situation and its potential impact on our business, financial condition, results of operations and cash flows.

Business Update related to COVID-19

For nearly three years, the COVID-19 pandemic has impacted businesses globally including in every geography in which the Company operates. Our businesses have remained resilient throughout the pandemic and demand for our advice and services remains strong. The ultimate extent of the impact of COVID-19 to the Company will depend on future developments that it is unable to predict.

Factors that could adversely affect the Company’s financial statements related to the financial and operational impact of COVID-19 are outlined in “Item 1A - Risk Factors” in the Company’s Form 10-K for the year ended December 31, 2021.

Consolidated Results of Operations

			Three Months Ended September 30,												Nine Months Ended September 30,
(In millions, except per share data)			2022						2021						2022						2021
Revenue			$	4,770					$	4,583					$	15,698					$	14,683
Expense:
Compensation and benefits			2,923						2,853						9,033						8,520
Other operating expenses			1,056						990						3,065						2,837
Operating expenses			3,979						3,843						12,098						11,357
Operating income			791						740						3,600						3,326
Income before income taxes			733						716						3,469						3,247
Net income before non-controlling interests			552						542						2,616						2,367
Net income attributable to the Company			$	546					$	537					$	2,584					$	2,340
Net income per share attributable to the Company:
- Basic			$	1.10					$	1.06					$	5.16					$	4.61
- Diluted			$	1.08					$	1.05					$	5.11					$	4.56
Average number of shares outstanding:
- Basic			498						506						501						508
- Diluted			503						513						506						513
Shares outstanding at September 30,			497						505						497						505

Consolidated operating income increased $51 million, or 7% to $791 million for the three months ended September 30, 2022, compared to the corresponding prior year quarter, reflecting a 4% increase in both revenue and expenses. Revenue growth was driven by increases in the Risk and Insurance Services and Consulting segments of 6% and 1%, respectively.

Consolidated operating income increased $274 million, or 8% to $3.6 billion for the nine months ended September 30, 2022, compared to the corresponding period in the prior year, reflecting a 7% increase in both revenue and expenses. The revenue growth was driven by increases in the Risk and Insurance Services and Consulting segments of 7% and 6%, respectively.

The increase in revenue for the three and nine months ended September 30, 2022, reflects the continued strong demand for our advice and services and the expansion of the global economy. The increase in expenses is primarily due to increased headcount and higher incentive compensation. Expenses also reflect higher travel and entertainment costs, partly offset by lower depreciation and amortization primarily in the Risk and Insurance Services segment for the nine months ended September 30, 2022, compared to the corresponding periods in the prior year.

Diluted earnings per share increased 3% to $1.08 for the three months ended September 30, 2022, compared to $1.05 for the three months ended September 30, 2021, and 12% to $5.11 for the nine months ended September 30, 2022, compared to $4.56 for the nine months ended September 30, 2021. The increase for both the three and nine months ended September 30, 2022 is primarily the result of higher operating income in 2022 compared to the corresponding periods in the prior year. For the three and nine months ended September 30, 2022, net operating income was also impacted by foreign exchange movements across both segments due to the strengthening of the U.S. dollar in 2022.

Results for the nine months ended September 30, 2022 also include the net gain from the sale of the Mercer U.S. affinity business of approximately $112 million, offset by a charge of approximately $52 million for the deconsolidation of the Company's Russian businesses and other related charges in Marsh and Oliver Wyman recorded in the first quarter of 2022. Results for the three and nine months ended September 30, 2021, included a $63 million reduction in the liability for a legacy JLT Errors and Omissions ("E&O"), as well as recoveries under indemnities and insurance. The nine months ended September 30, 2021, also included a net charge of approximately $100 million related to the remeasurement of deferred taxes and liabilities due to the enactment of a tax rate increase from 19% to 25% in the U.K. in the second quarter of 2021.

In the three and nine months ended September 30, 2022 and 2021, the Company's results of operations and earnings per share were impacted by the following items:

			Three Months Ended September 30,												Nine Months Ended September 30,
(In millions)			2022						2021						2022						2021
Restructuring			$	38					$	31					$	96					$	96
Changes in contingent consideration			11						18						38						11
JLT acquisition-related costs			4						11						28						35
JLT legacy legal charges			—						(63)						3						(63)
Legal claims and other			—						22						39						29
Disposal of businesses			—						—						(114)						(49)
Deconsolidation of Russian businesses and other related charges			—						—						52						—
Other			7						—						—						—
Impact on income before taxes			$	60					$	19					$	142					$	59

• Restructuring:** Reflects costs primarily related to the Company's global information technology and HR functions, JLT integrations costs, Marsh operational excellence and adjustments to restructuring liabilities for future rent under non-cancellable leases.

• Changes in contingent consideration:** Primarily includes the change in fair value of contingent consideration related to acquisitions and dispositions measured each quarter.

• JLT acquisition-related costs:** Includes retention costs related to the acquisition of JLT.

• JLT legacy legal charges:** Reflects charges and recoveries related to legacy JLT legal matters in 2022. In the third quarter of 2021, the Company recorded a $36 million reduction in the liability for a legacy JLT E&O related to the suitability of advice provided to individuals for defined benefit pension transfers in the U.K., as well as $27 million of recoveries under indemnities and insurance. See Note 17, Claims, Lawsuits and Other Contingencies, in the notes to the consolidated financial statements in this report for additional detail.

• Legal claims and Other:** The Company recorded settlement and legal costs related to strategic recruiting.

• Disposal of Businesses:** Reflects a gain on the sale of the Mercer U.S. affinity business during the second quarter of 2022, that provided insurance marketing, brokerage and administration to association and affinity groups. The nine months ended September 30, 2021, primarily reflects a gain on the sale of the U.K. commercial networks business that provided broking and back-office solutions for small independent brokers. These amounts are reflected as a component of revenue in the consolidated statements of income and excluded from the calculations of underlying revenue.

• Deconsolidation of Russian businesses and other related charges:** The loss on deconsolidation is included in revenue and excluded from the underlying revenue calculations.

Consolidated Revenue and Expense

Revenue – Components of Change

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

The impact of foreign currency exchange fluctuations, acquisitions and dispositions, including transfers among businesses, on the Company’s operating revenues by segment are as follows:

			Three Months Ended September 30,												% Change GAAP Revenue						Components of Revenue Change*
Currency Impact						Acquisitions/ Dispositions/ Other Impact						Underlying Revenue
(In millions, except percentages)			2022						2021
Risk and Insurance Services
Marsh			$	2,470					$	2,352					5		%				(4)		%				1		%				8		%
Guy Carpenter			328						314						4		%				(3)		%				—						7		%
Subtotal			2,798						2,666						5		%				(4)		%				1		%				8		%
Fiduciary Interest Income			40						4
Total Risk and Insurance Services			2,838						2,670						6		%				(4)		%				1		%				9		%
Consulting
Mercer			1,284						1,315						(2)		%				(6)		%				(2)		%				5		%
Oliver Wyman Group			667						610						9		%				(5)		%				1		%				13		%
Total Consulting			1,951						1,925						1		%				(6)		%				(1)		%				8		%
Corporate Eliminations			(19)						(12)
Total Revenue			$	4,770					$	4,583					4		%				(5)		%				—						8		%

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

			Three Months Ended September 30,												% Change GAAP Revenue						Components of Revenue Change*
Currency Impact						Acquisitions/ Dispositions/ Other Impact						Underlying Revenue
(In millions, except percentages)			2022						2021
Marsh:
EMEA			$	589					$	600					(2)		%				(11)		%				(1)		%				9		%
Asia Pacific			312						281						11		%				(9)		%				7		%				14		%
Latin America			118						105						12		%				(3)		%				—						15		%
Total International			1,019						986						3		%				(9)		%				2		%				11		%
U.S./Canada			1,451						1,366						6		%				—						1		%				5		%
Total Marsh			$	2,470					$	2,352					5		%				(4)		%				1		%				8		%
Mercer:
Wealth			$	561					$	613					(9)		%				(7)		%				—						(1)		%
Health			451						449						1		%				(4)		%				(5)		%				10		%
Career			272						253						8		%				(7)		%				—						15		%
Total Mercer			$	1,284					$	1,315					(2)		%				(6)		%				(2)		%				5		%

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

			Nine Months Ended September 30,												% Change GAAP Revenue																		Components of Revenue Change*
Currency Impact						Acquisitions/ Dispositions/ Other Impact						Underlying Revenue
(In millions, except percentages)			2022						2021
Risk and Insurance Services
Marsh			$	7,794					$	7,327					6		%																(3)		%				—						9		%
Guy Carpenter			1,849						1,697						9		%																(2)		%				1		%				10		%
Subtotal			9,643						9,024						7		%																(3)		%				1		%				9		%
Fiduciary interest income			57						12
Total Risk and Insurance Services			9,700						9,036						7		%																(3)		%				1		%				10		%
Consulting
Mercer			4,016						3,877						4		%																(4)		%				2		%				6		%
Oliver Wyman Group			2,029						1,813						12		%																(4)		%				1		%				15		%
Total Consulting			6,045						5,690						6		%																(4)		%				1		%				9		%
Corporate Eliminations			(47)						(43)
Total Revenue			$	15,698					$	14,683					7		%																(3)		%				1		%				9		%

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

			Nine Months Ended September 30,												% Change GAAP Revenue																		Components of Revenue Change*
Currency Impact						Acquisitions/ Dispositions/ Other Impact						Underlying Revenue
(In millions, except percentages)			2022						2021
Marsh:
EMEA			$	2,176					$	2,233					(3)		%																(7)		%				(4)		%				8		%
Asia Pacific			1,015						902						13		%																(7)		%				6		%				14		%
Latin America			340						298						14		%																(1)		%				—						15		%
Total International			3,531						3,433						3		%																(6)		%				(1)		%				10		%
U.S./Canada			4,263						3,894						9		%																—						1		%				8		%
Total Marsh			$	7,794					$	7,327					6		%																(3)		%				—						9		%
Mercer:
Wealth			$	1,775					$	1,861					(5)		%																(5)		%				—						1		%
Health			1,562						1,398						12		%																(3)		%				5		%				10		%
Career			679						618						10		%																(5)		%				—						15		%
Total Mercer			$	4,016					$	3,877					4		%																(4)		%				2		%				6		%

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

Consolidated Revenue

Consolidated revenue increased $187 million, or 4% to $4.8 billion for the three months ended September 30, 2022, compared to $4.6 billion for the three months ended September 30, 2021. Consolidated revenue increased 8% on an underlying basis, partly offset by a decrease of 5% from the impact of foreign currency translation. On an underlying basis, revenue increased 9% and 8% for the three months ended September 30, 2022, in the Risk and Insurance Services and Consulting segments, respectively.

Consolidated revenue increased $1.0 billion, or 7% to $15.7 billion for the nine months ended September 30, 2022, compared to $14.7 billion for the nine months ended September 30, 2021. Consolidated revenue increased 9% on an underlying basis and 1% from acquisitions, partly offset by a decrease of 3% from the impact of foreign currency translation. On an underlying basis, revenue increased 10% and 9% for the nine months ended September 30, 2022, in the Risk and Insurance Services and Consulting segments, respectively.

Underlying revenue growth in the Risk and Insurance Services and Consulting segments for the three and nine months ended September 30, 2022, was driven by strong demand for our advice and services, the expansion of the global economy, new business growth, and solid retention including continued benefits from pricing in the market place.

Consolidated Operating Expenses

Consolidated operating expenses increased $136 million, or 4% to $4.0 billion for the three months ended September 30, 2022, compared to $3.8 billion for the three months ended September 30, 2021, reflecting an increase of 9% on an underlying basis and 1% from acquisitions, partly offset by a decrease of 6% from the impact of foreign currency translation. On an underlying basis, expenses increased 6% and 12% for the three months ended September 30, 2022, in the Risk and Insurance Services and Consulting segments, respectively.

Consolidated operating expenses increased $741 million, or 7% to $12.1 billion for the nine months ended September 30, 2022, compared to $11.4 billion for the nine months ended September 30, 2021, reflecting increases of 10% on an underlying basis and 1% from acquisitions, partly offset by a decrease of 4% from the impact of foreign currency translation. On an underlying basis, expenses increased 9% and 10% for the nine months ended September 30, 2022, in the Risk and Insurance Services and Consulting segments, respectively.

The increase in underlying expenses for the three and nine months ended September 30, 2022 is primarily due to increased headcount and higher incentive compensation. Expenses also reflect higher travel and entertainment costs, partly offset by lower depreciation and amortization primarily in the Risk and Insurance Services segment for the nine months ended September 30, 2022, compared to the corresponding periods in the prior year.

Risk and Insurance Services

In the Risk and Insurance Services segment, the Company’s subsidiaries and other affiliated entities act as brokers, agents or consultants for insureds, insurance underwriters and other brokers in the areas of risk management, insurance broking and insurance program management services, primarily under the name of Marsh, and engage in reinsurance broking, catastrophe and financial modeling services and related advisory functions, primarily under the name of Guy Carpenter.

The results of operations for the Risk and Insurance Services segment are presented below:

			Three Months Ended September 30,												Nine Months Ended September 30,
(In millions, except percentages)			2022						2021						2022						2021
Revenue			$	2,838					$	2,670					$	9,700					$	9,036
Compensation and benefits			1,688						1,634						5,239						4,876
Other operating expenses			621						633						1,844						1,747
Operating expenses			2,309						2,267						7,083						6,623
Operating income			$	529					$	403					$	2,617					$	2,413
Operating income margin			18.7%						15.1%						27.0%						26.7%

Revenue

Revenue in the Risk and Insurance Services segment increased $168 million, or 6% to $2.8 billion for the three months ended September 30, 2022, compared to $2.7 billion for the three months ended September 30, 2021. Revenue grew 9% on an underlying basis and 1% from the impact of acquisitions, partly offset by a decrease of 4% related to the impact of foreign currency translation. Interest earned on fiduciary funds increased $36 million to $40 million for the three months ended September 30, 2022, compared to $4 million for the three months ended September 30, 2021.

Revenue in the Risk and Insurance Services segment increased $664 million, or 7% to $9.7 billion for the nine months ended September 30, 2022, compared to $9.0 billion for the nine months ended September 30, 2021. Revenue grew 10% on an underlying basis and 1% from the impact of acquisitions, partly offset by a decrease of 3% related to the impact of foreign currency translation. Interest earned on fiduciary funds increased $45 million to $57 million for the nine months ended September 30, 2022, compared to $12 million for the nine months ended September 30, 2021.

The increase in underlying revenue in the Risk and Insurance Services segment for the three and nine months ended September 30, 2022 was primarily due to growth in new business from existing clients, investments in talent, and solid retention including continued benefits from pricing in the marketplace. The increase in interest earned on fiduciary funds in 2022 is a result of higher interest rates compared to the corresponding periods in the prior year.

At Marsh, revenue increased $118 million, or 5% to $2.5 billion for the three months ended September 30, 2022, compared to $2.4 billion for the three months ended September 30, 2021. This reflects an increase of 8% on an underlying basis and an increase of 1% from the impact of acquisitions, partly offset by 4% from the impact of foreign currency translation. On an underlying basis, the U.S. and Canada rose 5%. Total International operations produced underlying revenue growth of 11%, reflecting growth of 14% in Asia Pacific, 9% in EMEA and 15% in Latin America.

At Marsh, revenue increased $467 million, or 6% to $7.8 billion for the nine months ended September 30, 2022, compared to $7.3 billion for the nine months ended September 30, 2021. This reflects an increase of 9% on an underlying basis, partly offset by a decrease of 3% from the impact of foreign currency translation. On an underlying basis, the U.S. and Canada rose 8%. Total International operations produced underlying revenue growth of 10%, reflecting growth of 14% in Asia Pacific, 8% in EMEA and 15% in Latin America.

Results for the nine months ended September 30, 2022 also included a charge of approximately $27 million related to the loss on deconsolidation of the Company's Russian businesses. The nine months ended September 30, 2021 included a gain of approximately $50 million related to the disposition of the commercial networks business in the U.K. that provided broking and back-office solutions for small independent brokers.

At Guy Carpenter, revenue increased $14 million, or 4% to $328 million for the three months ended September 30, 2022, compared to $314 million for the three months ended September 30, 2021. On an underlying basis, revenue increased 7%.

At Guy Carpenter, revenue increased $152 million, or 9% to $1.8 billion for the nine months ended September 30, 2022, compared to $1.7 billion for the nine months ended September 30, 2021. On an underlying basis, revenue increased 10%.

The Risk and Insurance Services segment completed eight acquisitions during the nine months ended September 30, 2022. Information regarding these acquisitions is included in Note 8, Acquisitions and Dispositions, in the notes to the consolidated financial statements.

Operating Expenses

Expenses in the Risk and Insurance Services segment increased $42 million, or 2% to $2.3 billion for the three months ended September 30, 2022, compared to the corresponding quarter in the prior year. This reflects an increase of 6% on an underlying basis and 1% from the impact of acquisitions, partly offset by a decrease of 6% from the impact of foreign currency translation.

Expenses in the Risk and Insurance Services segment increased $460 million, or 7% to $7.1 billion for the nine months ended September 30, 2022, compared to $6.6 billion for the nine months ended September 30, 2021. This reflects increases of 9% on an underlying basis and 2% from the impact of acquisitions, partly offset by a decrease of 4% from the impact of foreign currency translation.

The increase in underlying expenses for the three and nine months ended September 30, 2022 is primarily due to increased headcount and higher incentive compensation. Expenses also reflect higher travel and entertainment costs, partly offset by lower depreciation and amortization for the nine months ended September 30, 2022, compared to the corresponding periods in the prior year.

Consulting

The Company conducts business in its Consulting segment through Mercer and Oliver Wyman Group. Mercer delivers advice and solutions that help organizations create a dynamic world of work, shape retirement and investment outcomes, and unlock health and well being for a changing workforce. Oliver Wyman serves as critical strategic, economic and brand advisor to private sector and governmental clients.

The results of operations for the Consulting segment are presented below:

			Three Months Ended September 30,												Nine Months Ended September 30,
(In millions, except percentages)			2022						2021						2022						2021
Revenue			$	1,951					$	1,925					$	6,045					$	5,690
Compensation and benefits			1,107						1,103						3,416						3,287
Other operating expenses			494						418						1,412						1,294
Operating expenses			1,601						1,521						4,828						4,581
Operating income			$	350					$	404					$	1,217					$	1,109
Operating income margin			17.9%						21.0%						20.1%						19.5%

Revenue

Consulting revenue increased $26 million, or 1% to $2.0 billion for the three months ended September 30, 2022, compared to $1.9 billion for the three months ended September 30, 2021. This reflects an increase of 8% on an underlying basis, offset by a decrease of 1% from the disposition of businesses and a decrease of 6% related to the impact of foreign currency translation.

Consulting revenue increased $355 million, or 6% to $6.0 billion for the nine months ended September 30, 2022, compared to $5.7 billion for the nine months ended September 30, 2021. This reflects an increase of 9% on an underlying basis and 1% from the disposition of businesses, partly offset by a decrease of 4% related to the impact of foreign currency translation.

Mercer's revenue decreased $31 million, or 2% to $1.3 billion for the three months ended September 30, 2022, compared to the corresponding quarter in the prior year. This reflects an increase of 5% on an underlying basis, offset by a decrease of 2% from the disposition of businesses and a decrease of 6% from the impact of foreign currency translation. On an underlying basis, revenue for Career and Health increased 15% and 10%, respectively, while revenue for Wealth decreased 1%, as compared to the corresponding quarter in the prior year.

Mercer's revenue increased $139 million, or 4% to $4.0 billion for the nine months ended September 30, 2022, compared to $3.9 billion for the corresponding period in the prior year. This reflects an increase of 6% on an underlying basis and 2% from the disposition of businesses, partly offset by a decrease of 4% from the impact of foreign currency translation. On an underlying basis, revenue for Career, Health and Wealth increased 15%, 10% and 1%, respectively, as compared to the corresponding period in the prior year.

The increase in underlying revenue at Mercer for the three and nine months ended September 30, 2022 was primarily due to strong demand for our advice and services and the expansion of the global economy. The increase in underlying revenue for Career products and services was due to continued demand for solutions linked to new ways of working, skill gaps, workforce transformation and diversity & inclusion issues. Health continued to benefit from growth in new business, higher retention, increased enrolled lives from a strong labor market, and medical inflation. Underlying revenue in Wealth grew in project-based services for the three and nine months ended September 30, 2022, offset by decrease in investment management fees from the decline in assets under management due to market volatility on investments. Results for the nine months ended September 30, 2022 also included a net gain of $112 million from the sale of the Mercer U.S. affinity business.

Oliver Wyman's revenue increased $57 million, or 9% to $667 million for the three months ended September 30, 2022, compared to $610 million for the corresponding quarter in the prior year, reflecting an increase of 13% on an underlying basis and 1% from the impact of acquisitions, partly offset by a decrease of 5% related to the impact of foreign currency translation.

Oliver Wyman's revenue increased $216 million, or 12% to $2.0 billion for the nine months ended September 30, 2022, compared to $1.8 billion for the corresponding period in the prior year. This reflects an increase of 15% on an underlying basis and 1% from the impact of acquisitions, partly offset by a decrease of 4% from the impact of foreign currency translation.

The increase in underlying revenue at Oliver Wyman for the three and nine months ended September 30, 2022 was primarily due to the increased demand for project-based services across all industries. Results for the nine months ended September 30, 2022 also included a charge of approximately $12 million at Oliver Wyman related to the loss on the deconsolidation of the Company's Russian businesses.

The Consulting segment completed three acquisitions during the nine months ended September 30, 2022. Information regarding these acquisitions is included in Note 8, Acquisitions and Dispositions, in the notes to the consolidated financial statements.

Operating Expenses

Consulting expenses increased $80 million, or 5% to $1.6 billion for the three months ended September 30, 2022, compared to $1.5 billion for the three months ended September 30, 2021. This reflects an increase of 12% on an underlying basis, partly offset by a 6% decrease from the impact of foreign currency translation.

Consulting expenses increased $247 million, or 5% to $4.8 billion for the nine months ended September 30, 2022, compared to $4.6 billion for the nine months ended September 30, 2021. This reflects an increase of 10% on an underlying basis partly offset by a 4% decrease from the impact of foreign currency translation.

The increase in underlying expenses in the Consulting segment for the three and nine months ended September 30, 2022 is primarily due to increased headcount and incentive compensation. Expenses also reflect higher travel and entertainment costs compared to the corresponding periods in the prior year. Results for the three and nine months ended September 30, 2021 also included a $63 million reduction in the liability for a legacy JLT E&O, as well as recoveries under indemnities and insurance.

Corporate and Other

Corporate expenses were $88 million for the three months ended September 30, 2022, compared to $67 million for the three months ended September 30, 2021, and $234 million for the nine months ended September 30, 2022, compared to $196 million for the nine months ended September 30, 2021. Expenses for the three and nine months ended September 30, 2022, increased 31% and 20%, respectively, on an underlying basis primarily due to restructuring costs related to improving and streamlining the Company's global information technology and HR functions.

Interest

Interest expense was $118 million for the three months ended September 30, 2022, compared to $107 million for the three months ended September 30, 2021. Interest expense was $342 million for the nine months ended September 30, 2022, compared to $335 million for the nine months ended September 30, 2021. Interest expense for the three and nine months ended September 30, 2022 increased in both periods due to higher short term borrowings at higher interest rates compared to the corresponding periods in the prior year.

Investment (Loss) Income

The caption "Investment (loss) income" in the consolidated statements of income comprises realized and unrealized gains and losses from investments. 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 its investments in private equity funds. The Company's investments may include direct investments in insurance, consulting or other strategically linked companies and investments in private equity funds.

The Company recorded a net investment loss of $1 million and investment income of $27 million for the three and nine months ended September 30, 2022, respectively, compared to net investment income of $13 million and $43 million for the corresponding periods in the prior year. The decrease in 2022 is primarily driven by lower mark-to-market gains in the Company's private equity investments compared to the corresponding periods in the prior year. In the third quarter of 2022, the Company also recorded a net loss of $4 million from the sale of certain investments.

Income and Other Taxes

The Company's effective tax rate for the three months ended September 30, 2022 was 24.6%, compared with 24.2% for the corresponding quarter of 2021. The effective tax rates for the nine months ended September 30, 2022 and 2021 were 24.6% and 27.1%, respectively.

The tax rates in both periods reflect the impact of discrete tax matters such as excess tax benefits related to share-based compensation, enacted tax legislation, changes in uncertain tax positions, deferred tax adjustments and non-taxable adjustments related to contingent consideration for acquisitions. The rate in both periods also reflects tax benefits from planning that postponed the utilization of current year losses in the U.K. to a future year when the tax rate will be 25%.

The excess tax benefit related to share-based payments is the most significant discrete item for the three and nine months ended September 30, 2022, reducing the effective tax rate by 0.9% and 1.2%, respectively. The reduction for both the three and nine months ended September 30, 2021 was 0.9%.

The effective tax rate for the nine months ended September 30, 2021, reflects the charge related to re-measuring the Company’s U.K. deferred tax assets and liabilities upon the enactment of legislation increasing the U.K. corporate income tax rate from 19% to 25%, effective April 1, 2023. The Company recorded a net charge of $100 million in the second quarter of 2021, which reflects the re-measurement of the Company's U.K. deferred tax assets and liabilities upon enactment of the legislation. The re-measurement of the Company’s U.K. deferred tax assets and liabilities was the most significant discrete item in the prior year, increasing the Company’s effective tax rate by 3.1% for the nine month period ended September 30, 2021.

The effective tax rate may vary significantly from period to period. The effective tax rate is sensitive to the geographic mix and repatriation of the Company's earnings, which may result in higher or lower effective tax rates. Thus, a shift in the mix of profits among jurisdictions, or changes in the Company's repatriation strategy to access offshore cash, can affect the effective tax rate.

In addition, losses in certain jurisdictions cannot be offset by earnings from other operations, and may require valuation allowances that affect the rate in a particular period, depending on estimates of the value of associated deferred tax assets which can be realized. A valuation allowance was recorded to reduce deferred tax assets to the amount that the Company believes is more likely than not to be realized. The effective tax rate is also sensitive to changes in unrecognized tax benefits, including the impact of settled tax audits and expired statutes of limitations.

On August 16, 2022, the Inflation Reduction Act of 2022 ("IRA") was enacted into law. The Company is currently evaluating the provisions of the new legislation, the most significant of which are the corporate alternative minimum tax and the share repurchase tax. The Company does not expect the IRA to have a significant impact on its financial results of operations when it becomes effective on January 1, 2023.

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

As a U.S. domiciled parent holding company, the Company is the issuer of essentially all of the external indebtedness and incurs the related interest expense in the U.S. The Company’s interest expense deductions are not currently limited. Further, most senior executive and oversight functions are conducted in the U.S. and the associated costs are incurred primarily in the U.S. Some of these expenses may not be deductible in the U.S., which may impact the effective tax rate.

The quasi-territorial U.S. tax regime provides an opportunity for the Company to repatriate foreign earnings more tax efficiently and there is less incentive for permanent reinvestment of these earnings. However, permanent reinvestment continues to be a component of the Company’s global capital strategy. The Company continues to evaluate its global investment and repatriation strategy in light of its capital requirements, considering the treatment of future earnings under the quasi-territorial tax regime.

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, although a resolution of tax matters could have a material impact on the Company's net income or cash flows and on its effective tax rate in a particular future period. It is reasonably possible that the total amount of unrecognized tax benefits will decrease between zero and approximately $48 million within the next twelve months due to audit settlements and statute of limitations expirations.

The Coronavirus Aid, Relief and Economic Security Act (the "CARES Act") was signed into law on March 27, 2020. The CARES Act provided over $2 trillion in economic relief to individuals, governmental agencies and companies, to deal with the public health and economic impacts of COVID-19. Pursuant to the CARES Act, the Company deferred payroll taxes due from March 27, 2020 through December 31, 2020 and paid 50% in 2021 and expect to pay the remaining 50% at the end of 2022.

Liquidity and Capital Resources

The Company is organized as a legal entity separate and distinct from its operating subsidiaries. As the Company does not have significant operations of its own, the Company is dependent upon dividends and other payments from its operating subsidiaries to pay principal and interest on its outstanding debt obligations, pay dividends to stockholders, repurchase its shares and pay corporate expenses. The Company can also provide financial support to its operating subsidiaries for acquisitions, investments and certain parts of their business that require liquidity, such as the capital markets business of Guy Carpenter. Other sources of liquidity include borrowing facilities discussed in financing cash flows.

The Company derives a significant portion of its revenue and operating profit from operating subsidiaries located outside of the U.S. Funds from those operating subsidiaries are regularly repatriated to the U.S. out of annual earnings. At September 30, 2022, the Company had approximately $768 million of cash and cash equivalents in its foreign operations, which includes $271 million of operating funds required to be maintained for regulatory requirements or as collateral under certain captive insurance arrangements. The Company expects to continue its practice of repatriating available funds from its non-U.S. operating subsidiaries out of current annual earnings. Where appropriate, a portion of the current year earnings will continue to be permanently reinvested.

During the first nine months of 2022, the Company recorded foreign currency translation adjustments which decreased net equity by $1.6 billion. Continued strengthening of the U.S. dollar against foreign currencies would further decrease the translated U.S. dollar value of the Company’s net investments in its non-U.S. subsidiaries, as well as the translated U.S. dollar value of cash repatriations from those subsidiaries.

Cash and cash equivalents on our consolidated balance sheets includes funds available for general corporate purposes. Funds held on behalf of clients in a fiduciary capacity are segregated and shown separately in the consolidated balance sheets as an offset to fiduciary liabilities. Fiduciary funds cannot be used for general corporate purposes, and should not be considered as a source of liquidity for the Company.

Operating Cash Flows

The Company provided $2.0 billion of cash from operations for the nine months ended September 30, 2022, compared to $2.1 billion provided by operations in the first nine months of 2021. These amounts reflect the net income of the Company during those periods, excluding gains or losses from investments, adjusted for non-cash charges and changes in working capital which relate primarily to the timing of payments of accrued liabilities or receipts of assets and pension plan contributions. The Company paid $124 million related to its restructuring activities for both the nine months ended September 30, 2022 and 2021.

Pension Related Items

Contributions

The Company's policy for funding its tax-qualified defined benefit plans is to contribute amounts at least sufficient to meet the funding requirements set forth in accordance with applicable law. During the first nine months of 2022, the Company contributed $23 million to its U.S. defined benefit pension plans and $118 million to its non-U.S. defined benefit pension plans. For the first nine months of 2021, the Company contributed $27 million to its U.S. defined benefit pension plans and $63 million to its non-U.S. defined benefit pension plans.

In the U.S., contributions to the tax-qualified defined benefit plans are based on ERISA guidelines and the Company generally expects to maintain a funded status of 80% or more of the liability determined in accordance with the ERISA guidelines. During the first nine months of 2022, the Company made $23 million of contributions to its non-qualified plans and expects to fund approximately an additional $8 million over the remainder of 2022. The Company is not required to make any contributions to its U.S. qualified plans in 2022.

Outside the U.S., the Company has a large number of non-U.S. defined benefit pension plans, the largest of which are in the U.K., which comprise approximately 81% of non-U.S. plan assets at December 31, 2021. Contribution rates for non-U.S. plans are generally based on local funding practices and statutory requirements, which may differ significantly from measurements under U.S. GAAP.

The Company contributed $104 million to its U.K. plans (including the JLT section) for the first nine months of 2022. The Company contributions to its U.K. plans (including the JLT section) for the remainder of 2022 are expected to be approximately $12 million.

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 occur every three years in conjunction with the actuarial valuation of the plans. Currently, this results in a lower funded status compared to U.S. GAAP and may result in contributions irrespective of the U.S. GAAP funded status.

During 2021, the JLT Pension Scheme was merged into the MMC U.K. Pension Fund with a new segregated JLT section created. The Company made deficit contributions of $97 million to the JLT section in the first nine months of 2022, and is expected to make $9 million of contributions in the remainder of 2022. The funding level of the JLT section will be reassessed during 2022 to determine contributions in 2023 and onwards.

For the Marsh McLennan U.K. Pension Fund, excluding the JLT section, an agreement was reached with the trustee in the fourth quarter of 2019 based on the surplus funding position at December 31, 2018. In accordance with the agreement, no deficit funding is required until 2023. The funding level will be re-assessed during 2022 as part of the December 31, 2021 actuarial valuation to determine if contributions are required in 2023. As part of a long term strategy which depends on having greater influence over asset allocation and overall investment decisions, in November 2019, the Company renewed its agreement to support annual deficit contributions by the U.K. operating companies under certain circumstances, up to £450 million over a seven-year period.

The Company expects to fund an additional $20 million to its non-U.S. defined benefit plans over the remainder of 2022, comprising approximately $12 million to the U.K. plans and $8 million to plans outside of the U.K.

Financing Cash Flows

Net cash provided by financing activities was $28 million for the nine months ended September 30, 2022, compared with $127 million used by financing activities for the same period in 2021.

Credit Facilities

The Company has a multi-currency unsecured $2.8 billion five-year revolving credit facility (the "Credit Facility"). The interest rate on the Credit Facility is based on LIBOR plus a fixed margin which varies with the Company’s credit ratings. The Credit Facility expires in April 2026, and requires the Company to maintain certain coverage and leverage ratios which are tested quarterly. The Credit Facility includes provisions for determining a LIBOR successor rate in the event LIBOR reference rates are no longer available or in certain other circumstances which are determined to make using an alternative rate desirable. As of September 30, 2022, the Company had no borrowings under this facility.

On May 31, 2022, the Company secured a $250 million uncommitted revolving credit facility. The facility expires in May 2023, and has similar coverage and leverage ratios as the Credit Facility. The Company had no borrowings outstanding under this facility at September 30, 2022.

The Company also maintains other credit facilities, guarantees and letters of credit with various banks, aggregating $507 million at September 30, 2022, and $508 million at December 31, 2021. There were no outstanding borrowings under these facilities at September 30, 2022 and December 31, 2021.

Debt

On April 9, 2021, the Company increased its short-term commercial paper financing program to $2.0 billion from $1.5 billion. The Company had $600 million of commercial paper outstanding at September 30, 2022, at an effective interest rate of 3.39%.

On April 15, 2021, the Company repaid $500 million of senior notes maturing in July 2021.

In December 2021, the Company issued $400 million of 2.375% senior notes due 2031 and $350 million of 2.90% senior notes due 2051. The Company used the net proceeds from these issuances for general corporate purposes, and repaid $500 million of 2.75% senior notes with an original maturity date of January 2022 in December 2021.

The Company's senior debt is currently rated A- by Standard & Poor's ("S&P") and Baa1 by Moody's. The Company's short-term debt is currently rated A-2 by S&P and P-2 by Moody's. The Company carries a Stable outlook with both S&P and Moody's.

Share Repurchases

On March 23, 2022, the Board of Directors of the Company authorized an additional $5 billion in share repurchases. This is in addition to the Company's existing share repurchase program, which had approximately $1.3 billion of remaining authorization as of December 31, 2021. During the first nine months of 2022, the Company repurchased 10.1 million shares of its common stock for $1.6 billion. As of September 30, 2022, the Company remained authorized to repurchase up to approximately $4.7 billion in shares of its common stock. There is no time limit on the authorization.

During the first nine months of 2021, the Company repurchased 5.3 million shares of its common stock for total consideration of approximately $734 million.

Dividends

The Company paid dividends on its common shares of $840 million ($1.66 per share) during the first nine months of 2022, as compared with $750 million ($1.465 per share) during the first nine months of 2021.

In September 2022, the Board of Directors of the Company declared a quarterly dividend of $0.590 per share on outstanding common stock, payable on November 15, 2022, to stockholders of record on October 7, 2022.

In July 2022, the Board of Directors of the Company increased the quarterly dividend by 10% from $0.535 to $0.590 per share paid in the third quarter of 2022.

Contingent and Deferred Payments Related to Acquisitions

The classification of contingent consideration in the consolidated statements of cash flows is dependent upon whether the receipt, payment, or adjustment 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 Nine Months Ended September 30,
(In millions)			2022						2021
Operating:
Contingent consideration payments for prior year acquisitions			$	(38)					$	(46)
Receipt of contingent consideration for dispositions			—						19
Acquisition/disposition related net charges for adjustments			38						11
Adjustments and payments related to contingent consideration			$	—					$	(16)
Financing:
Contingent consideration for prior year acquisitions			$	(28)					$	(26)
Deferred consideration related to prior year acquisitions			(116)						(84)
Payments of deferred and contingent consideration for acquisitions			$	(144)					$	(110)
Receipt of contingent consideration for dispositions			$	3					$	71

Remaining estimated future contingent and deferred consideration payments of $328 million and $91 million, respectively, for acquisitions completed in the first nine months of 2022, and in prior years are recorded in accounts payable and accrued liabilities or other liabilities in the consolidated balance sheet at September 30, 2022.

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 issued €1.1 billion Senior Notes, and designated the debt instruments as a net investment hedge of its Euro denominated subsidiaries. The hedge is re-assessed each quarter to confirm that the designated equity balance at the beginning of each period continues to equal or exceed 80% of the outstanding balance of the Euro debt instrument and that all the critical terms of the hedging instrument and the hedged net investment continue to match. If the hedge is highly effective, the change in the debt balance related to foreign exchange fluctuations is recorded in accumulated other comprehensive loss in the consolidated balance sheets.

The U.S. dollar value of the Euro notes decreased by $179 million through September 30, 2022, related to the change in foreign exchange rates. The Company concluded that the hedge was highly effective and recorded a decrease to accumulated other comprehensive loss for the nine months ended September 30, 2022.

Fiduciary Liabilities

Since cash and cash equivalents held in a fiduciary capacity are not available for corporate use, they are shown in the consolidated balance sheets as an offset to fiduciary liabilities. Financing cash flows reflect an increase of $2.1 billion and $1.9 billion for the nine months ended September 30, 2022 and 2021, respectively, related to the increase in fiduciary liabilities.

Investing Cash Flows

Net cash used for investing activities amounted to $363 million for the first nine months of 2022, compared with $572 million used for investing activities for the corresponding period in 2021.

The Company paid $213 million and $384 million, net of cash, cash equivalents and cash and cash equivalents held in a fiduciary capacity acquired, for acquisitions it made during the first nine months of 2022 and 2021, respectively.

During the first nine months of 2022, the Company sold certain business, primarily Mercer's U.S. affinity business, for cash proceeds of approximately $147 million. In the first nine months of 2021, the Company sold certain of its businesses, primarily in the U.S. and U.K., for cash proceeds of approximately $84 million.

In the third quarter of 2022, the Company sold certain investments, primarily the investment in the common stock of Alexander Forbes ("AF"), for cash proceeds of approximately $62 million.

The Company's additions to fixed assets and capitalized software, which amounted to $367 million in the first nine months of 2022, and $268 million in the first nine months of 2021, primarily related to computer equipment purchases, the refurbishing and modernizing of office facilities, and software development costs.

The Company has commitments for potential future investments of approximately $176 million in 10 private equity funds that invest primarily in financial services companies, including a $100 million commitment to invest in a private equity fund entered into on April 1, 2022.

Commitments and Obligations

The following sets forth the Company’s future contractual obligations by the types identified in the table as of September 30, 2022:

(In millions)			Payment due by Period
Contractual Obligations			Total						Within 1 Year						1-3 Years						4-5 Years						After 5 Years
Commercial paper			$	600					$	600					$	—					$	—					$	—
Current portion of long-term debt			367						367						—						—						—
Long-term debt			10,461						—						2,387						1,175						6,899
Interest on long-term debt			4,830						402						687						570						3,171
Net operating leases			2,161						348						591						481						741
Service agreements			168						88						62						16						2
Other long-term obligations			464						240						214						6						4
Total			$	19,051					$	2,045					$	3,941					$	2,248					$	10,817

The above table does not include the liability for unrecognized tax benefits of $107 million as the Company is unable to reasonably predict the timing of settlement of these liabilities, other than approximately $35 million that may become payable within one year.

The table also does not include the remaining transitional tax payments related to the Tax Cuts and Jobs Act ("the TCJA") of $62 million, which will be paid in installments beginning in 2023 through 2026.

Management’s Discussion of Critical Accounting Policies and Estimates

The Company’s discussion of critical accounting policies and estimates that place the most significant demands on management’s judgment and requires management to make significant estimates about matters that are inherently uncertain are discussed in the MD&A in the 2021 Form 10-K.

New Accounting Guidance

Note 19, New Accounting Guidance, in the notes to the consolidated financial statements in this report contains a discussion of recently issued accounting guidance and their impact or potential future impact on the Company’s financial results, if determinable.