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 more than 85,000 colleagues advise clients in over 130 countries. With annual revenue of over $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 technology-driven solutions that help organizations redefine the future of work, shape retirement and investment outcomes, and advance 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 solutions and products, and specialized management, strategic, economic and brand consulting services. The Company conducts business in this segment through Mercer and Oliver Wyman Group.

The results of operations in the Management Discussion & Analysis ("MD&A") include an overview of the Company's consolidated results for the three and six months ended June 30, 2023, compared to the corresponding periods in 2022, 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 and comparability of the Company's results of operations and liquidity and capital resources for the three and six months ended June 30, 2022, refer to "Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations" of the Company's Form 10-Q for the quarter ended June 30, 2022.

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

Non-GAAP measures

The Company reports its financial results in accordance with accounting principles generally accepted in the United States (U.S.), referred to as in accordance with "GAAP" or "reported" results. The Company also refers to and presents a non-GAAP financial measure in non-GAAP revenue, within the meaning of Regulation G and Item 10(e) of Regulation S-K in accordance with the Securities Exchange Act of 1934. The Company has included a reconciliation of this non-GAAP financial measure to the most directly comparable financial measure calculated in accordance with GAAP as part of the consolidated revenue and expense discussion. Percentage changes, referred to as non-GAAP underlying revenue, are calculated by dividing the period over period change in non-GAAP revenue by the prior period non-GAAP revenue.

The Company believes this non-GAAP financial measure provides useful supplemental information that enables investors to better compare the Company’s performance across periods. Management also uses this measure internally to assess the operating performance of its businesses and to decide how to allocate resources. However, investors should not consider this non-GAAP measure in isolation from, or as a substitute for, the financial information that the Company reports in accordance with GAAP. The Company's non-GAAP measure includes adjustments that reflect how management views its businesses and may differ from similarly titled non-GAAP measures presented by other companies.

Financial Highlights

*•*Consolidated revenue for the three months ended June 30, 2023 was $5.9 billion, an increase of 9%, or 11% on an underlying basis. For the six months ended June 30, 2023, consolidated revenue was $11.8 billion, an increase of 8%, or 10% on an underlying basis compared to the corresponding period in the prior year.

• Consolidated operating income increased $93 million, or 7%, to $1.5 billion for the three months ended June 30, 2023, compared to the corresponding quarter in the prior year. Net income attributable to the Company was $1.0 billion. Earnings per share on a diluted basis increased to $2.07 from $1.91, or 8%, compared to the corresponding quarter in the prior year. For the six months ended June 30, 2023, consolidated operating income increased $374 million, or 13% to $3.2 billion, compared to the corresponding period in the prior year. Net income attributable to the Company was $2.3 billion. Earnings per share on a diluted basis increased to $4.55 from $4.01, or 13%, compared to the corresponding period in the prior year.

• Risk and Insurance Services revenue for the three months ended June 30, 2023 was $3.7 billion, an increase of 12%, or 13% on an underlying basis. Operating income was $1.2 billion, compared with $967 million in the corresponding quarter in the prior year. For the six months ended June 30, 2023, Risk and Insurance Services revenue was $7.6 billion, an increase of 11%, or 12% on an underlying basis.

Operating income was $2.6 billion, compared with $2.1 billion for the corresponding period in the prior year.

• Consulting revenue for the three months ended June 30, 2023 was $2.2 billion, an increase of 4%, or 8% on an underlying basis. Operating income was $388 million, compared with $475 million in the corresponding quarter in the prior year. For the six months ended June 30, 2023, Consulting revenue was $4.2 billion, an increase of 3%, or 6% on an underlying basis. Operating income was $799 million, compared with $867 million for the corresponding period in the prior year.

*•*In April 2023, the Company completed the acquisition of Westpac Banking Corporation’s ("Westpac") financial advisory business, Advance Asset Management, and the transfer from Westpac of BT Financial Group's personal and corporate pension funds to the Mercer Super Trust managed by Mercer Australia (referred to collectively, as the "Westpac Transaction").

• The Company repurchased 1.7 million shares of stock for $300 million in the second quarter of 2023. During the six months ended June 30, 2023, the Company repurchased 3.5 million shares for $600 million.

• In March 2023, the Company issued $600 million of 5.45% senior notes due 2053.

• In July 2023, the Board of Directors of the Company declared a dividend of $0.71 per share on outstanding common stock, payable in August 2023.

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.

Consolidated Results of Operations

			Three Months Ended June 30,												Six Months Ended June 30,
(In millions, except per share data)			2023						2022						2023						2022
Revenue			$	5,876					$	5,379					$	11,800					$	10,928
Expense:
Compensation and benefits			3,337						3,010						6,544						6,110
Other operating expenses			1,082						1,005						2,073						2,009
Operating expenses			4,419						4,015						8,617						8,119
Operating income			$	1,457					$	1,364					$	3,183					$	2,809
Income before income taxes			$	1,384					$	1,312					$	3,048					$	2,736
Net income before non-controlling interests			$	1,047					$	978					$	2,299					$	2,064
Net income attributable to the Company			$	1,035					$	967					$	2,270					$	2,038
Net income per share attributable to the Company:
– Basic			$	2.09					$	1.93					$	4.59					$	4.06
– Diluted			$	2.07					$	1.91					$	4.55					$	4.01
Average number of shares outstanding:
– Basic			495						501						495						502
– Diluted			499						506						499						508
Shares outstanding at June 30,			494						499						494						499

Consolidated operating income increased $93 million, or 7% to $1.5 billion for the three months ended June 30, 2023, compared to $1.4 billion in the corresponding quarter in the prior year, reflecting a 9% increase in revenue and a 10% increase in expenses. Revenue growth was driven by increases in the Risk and Insurance Services and Consulting segments of 12% and 4%, respectively.

Consolidated operating income increased $374 million, or 13% to $3.2 billion for the six months ended June 30, 2023, compared to $2.8 billion in the corresponding period in the prior year, reflecting an 8% increase in revenue and a 6% increase in expenses. Revenue growth was driven by increases in the Risk and Insurance Services and Consulting segments of 11% and 3%, respectively.

Revenue growth for both the three and six months ended June 30, 2023 was primarily driven by continued demand for our advice and services, new business and renewal growth, and solid client retention, as well as higher insurance and reinsurance rates. Results also benefited from investments in talent and increased fiduciary income due to higher interest rates. Revenue growth was partially offset by a gain from the sale of the Mercer U.S. affinity business in 2022 of $112 million.

The increase in expenses for both the three and six months ended June 30, 2023 is primarily due to increased headcount and higher incentive compensation. Expenses for the six months ended June 30, 2023 also reflect higher travel and entertainment costs, compared to the corresponding period in the prior year.

For the six months ended June 30, 2023, operating income was also impacted by foreign exchange movements across both segments due to the strengthening of the U.S. dollar.

Diluted earnings per share increased to $2.07 from $1.91, or 8% for the three months ended June 30, 2023, and to $4.55 from $4.01, or 13% for the six months ended June 30, 2023, compared to corresponding periods in the prior year. The increase for the three and six months ended June 30, 2023 is primarily the result of higher operating income compared to the corresponding periods in the prior year.

Results for the six months ended June 30, 2022 also include a charge of approximately $52 million for the deconsolidation of the Company's Russian businesses and other related charges in Marsh and Oliver Wyman Group recorded in the first quarter of 2022.

For the three and six months ended June 30, 2023 and 2022, the Company's results of operations and earnings per share were impacted by the following items:

			Three Months Ended June 30,												Six Months Ended June 30,
(In millions)			2023						2022						2023						2022
Restructuring, excluding JLT			$	62					$	28					$	102					$	46
Changes in contingent consideration			10						17						17						27
JLT integration and restructuring costs			3						—						16						12
JLT legacy legal charges			—						10						(51)						3
Disposal of business			(2)						(112)						17						(112)
Acquisition related costs			10						—						27						—
JLT acquisition-related costs and other			—						14						—						24
Legal claims			—						—						—						30
Deconsolidation of Russian businesses and other related charges			—						—						—						52
Impact on income before taxes			$	83					$	(43)					$	128					$	82

• Restructuring, excluding JLT:** In 2023, costs primarily include severance and lease exit charges for activities focused on workforce actions, rationalization of technology and functional resources, and reductions in real estate. Costs also reflect charges for Marsh's operational excellence program. These costs are discussed in more detail in Note 15, Restructuring Costs, in the notes to the consolidated financial statements.

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

• JLT integration and restructuring****:** Reflects adjustments to restructuring liabilities for future rent under non-cancelable leases for a legacy JLT U.K. location.

• JLT legacy legal charges:** Reflects insurance and indemnity recoveries for a legacy JLT Errors and Omissions ("E&O") matter relating to suitability of advice provided to individuals for defined benefit pension transfers in the U.K.

• Disposal of Business:** Loss on sale of an individual financial advisory business in Canada in 2023. The second quarter of 2022 reflects a gain of $112 million on the sale of the Mercer U.S. affinity business. These amounts are reflected as a component of revenue in the consolidated statements of income and excluded from non-GAAP revenue.

• Acquisition related costs:** Includes integration costs for the Westpac Transaction in Australia, which closed on April 1, 2023. Refer to Note 8, Acquisitions and Dispositions, in the notes to the consolidated financial statements for additional detail.

• JLT acquisition-related costs and other:** Retention costs related to the acquisition of JLT.

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

• Deconsolidation of Russian businesses and other related charges:** The loss on deconsolidation of the Company's Russian businesses of $39 million is reflected as a component of revenue in the consolidated statements of income and excluded from non-GAAP revenue. The remaining expenses of $13 million are included in other operating expenses in the consolidated statements of income.

Consolidated Revenue and Expense

Revenue – Non-GAAP Revenue and 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 acquisitions and dispositions, including transfers among businesses, may impact period over period comparisons of revenue. Non-GAAP revenue measures the change in revenue from one period to the next by isolating these impacts on an underlying revenue basis. Percentage changes, referred to as non-GAAP underlying revenue, are calculated by dividing the period over period change in non-GAAP revenue by the prior period non-GAAP revenue.

The non-GAAP revenue measure is presented on a constant currency basis excluding the impact of foreign currency fluctuations. The Company isolates the impact of foreign exchange rate movements period over period, by translating the current period foreign currency GAAP revenue into U.S. Dollars based on the difference in the current and corresponding prior period exchange rates.

The percentage change for acquisitions, dispositions, and other includes the impact of current and prior year items excluded from the calculation of non-GAAP underlying revenue for comparability purposes. Details on these items are provided in the reconciliation of non-GAAP revenue to GAAP revenue tables.

The following tables present the Company's non-GAAP revenue for the three and six months ended June 30, 2023 and 2022 and the related non-GAAP underlying revenue change:

Three Months Ended June 30, (In millions, except percentages)			GAAP Revenue						% Change GAAP Revenue*						Non-GAAP Revenue						Non-GAAP Underlying Revenue*
2023			2022						2023			2022
Risk and Insurance Services
Marsh			$	3,038		$	2,778		9		%				$	3,040		$	2,773		10		%
Guy Carpenter			576			522			10		%				580			522			11		%
Subtotal			3,614			3,300			9		%				3,620			3,295			10		%
Fiduciary interest income			108			13									108			13
Total Risk and Insurance Services			3,722			3,313			12		%				3,728			3,308			13		%
Consulting
Mercer			1,374			1,389			(1)		%				1,381			1,303			6		%
Oliver Wyman Group			798			695			15		%				770			695			11		%
Total Consulting			2,172			2,084			4		%				2,151			1,998			8		%
Corporate Eliminations			(18)			(18)									(18)			(18)
Total Revenue			$	5,876		$	5,379		9		%				$	5,861		$	5,288		11		%

The following table provides more detailed revenue information for certain of the components presented in the previous table:

Three Months Ended June 30, (In millions, except percentages)			GAAP Revenue						% Change GAAP Revenue*						Non-GAAP Revenue						Non-GAAP Underlying Revenue*
2023			2022						2023			2022
Marsh:
EMEA (a)			$	858		$	780		10		%				$	862		$	775		11		%
Asia Pacific (a)			357			347			3		%				369			347			6		%
Latin America			137			118			15		%				138			118			17		%
Total International			1,352			1,245			9		%				1,369			1,240			10		%
U.S./Canada			1,686			1,533			10		%				1,671			1,533			9		%
Total Marsh			$	3,038		$	2,778		9		%				$	3,040		$	2,773		10		%
Mercer:
Wealth			$	637		$	597		7		%				$	643		$	623		3		%
Health			518			587			(12)		%				520			475			10		%
Career			219			205			6		%				218			205			6		%
Total Mercer			$	1,374		$	1,389		(1)		%				$	1,381		$	1,303		6		%

(a) In the first quarter of 2023, the Company began reporting the Marsh India operations in EMEA. Prior year results for India have been reclassified from Asia Pacific to EMEA for comparative purposes.

Six Months Ended June 30, (In millions, except percentages)			GAAP Revenue						% Change GAAP Revenue*						Non-GAAP Revenue						Non-GAAP Underlying Revenue*
2023			2022						2023			2022
Risk and Insurance Services
Marsh			$	5,782		$	5,324		9		%				$	5,831		$	5,341		9		%
Guy Carpenter			1,647			1,521			8		%				1,655			1,502			10		%
Subtotal			7,429			6,845			9		%				7,486			6,843			9		%
Fiduciary interest income			199			17									201			17
Total Risk and Insurance Services			7,628			6,862			11		%				7,687			6,860			12		%
Consulting
Mercer			2,718			2,732			(1)		%				2,794			2,619			7		%
Oliver Wyman Group			1,485			1,362			9		%				1,449			1,373			6		%
Total Consulting			4,203			4,094			3		%				4,243			3,992			6		%
Corporate Eliminations			(31)			(28)									(31)			(28)
Total Revenue			$	11,800		$	10,928		8		%				$	11,899		$	10,824		10		%

The following table provides more detailed revenue information for certain of the components presented in the previous table:

Six Months Ended June 30, (In millions, except percentages)			GAAP Revenue						% Change GAAP Revenue*						Non-GAAP Revenue						Non-GAAP Underlying Revenue*
2023			2022						2023			2022
Marsh:
EMEA (a)			$	1,790		$	1,649		9		%				$	1,841		$	1,666		10		%
Asia Pacific (a)			669			641			4		%				695			641			8		%
Latin America			252			222			13		%				253			222			14		%
Total International			2,711			2,512			8		%				2,789			2,529			10		%
U.S./Canada			3,071			2,812			9		%				3,042			2,812			8		%
Total Marsh			$	5,782		$	5,324		9		%				$	5,831		$	5,341		9		%
Mercer:
Wealth			$	1,218		$	1,214		—						$	1,273		$	1,238		3		%
Health			1,063			1,111			(4)		%				1,078			974			11		%
Career			437			407			7		%				443			407			9		%
Total Mercer			$	2,718		$	2,732		(1)		%				$	2,794		$	2,619		7		%

(a) In the first quarter of 2023, the Company began reporting the Marsh India operations in EMEA. Prior year results for India have been reclassified from Asia Pacific to EMEA for comparative purposes.

• Rounded to whole percentages.

Revenue – Reconciliation of Non-GAAP Measures

The following tables provide the reconciliation of GAAP revenue to Non-GAAP revenue for the three and six months ended June 30, 2023 and 2022 :

			2023																								2022
Three Months Ended June 30, (In millions)			GAAP Revenue						Currency Impact						Acquisitions/ Dispositions/ Other Impact						Non-GAAP Revenue						GAAP Revenue						Acquisitions/ Dispositions/ Other Impact						Non-GAAP Revenue
Risk and Insurance Services
Marsh			$	3,038					$	26					$	(24)					$	3,040					$	2,778					$	(5)					$	2,773
Guy Carpenter			576						5						(1)						580						522						—						522
Subtotal			3,614						31						(25)						3,620						3,300						(5)						3,295
Fiduciary interest income			108						—						—						108						13						—						13
Total Risk and Insurance Services			3,722						31						(25)						3,728						3,313						(5)						3,308
Consulting
Mercer (a)			1,374						11						(4)						1,381						1,389						(86)						1,303
Oliver Wyman Group			798						(2)						(26)						770						695						—						695
Total Consulting			2,172						9						(30)						2,151						2,084						(86)						1,998
Corporate Eliminations			(18)						—						—						(18)						(18)						—						(18)
Total Revenue			$	5,876					$	40					$	(55)					$	5,861					$	5,379					$	(91)					$	5,288

The following table provides more detailed revenue information for certain of the components presented in the previous table:

			2023																								2022
Three Months Ended June 30, (In millions)			GAAP Revenue						Currency Impact						Acquisitions/ Dispositions/ Other Impact						Non-GAAP Revenue						GAAP Revenue						Acquisitions/ Dispositions/ Other Impact						Non-GAAP Revenue
Marsh:
EMEA (b)			$	858					$	5					$	(1)					$	862					$	780					$	(5)					$	775
Asia Pacific (b)			357						14						(2)						369						347						—						347
Latin America			137						1						—						138						118						—						118
Total International			1,352						20						(3)						1,369						1,245						(5)						1,240
U.S./Canada			1,686						6						(21)						1,671						1,533						—						1,533
Total Marsh			$	3,038					$	26					$	(24)					$	3,040					$	2,778					$	(5)					$	2,773
Mercer:
Wealth (a)			$	637					$	7					$	(1)					$	643					$	597					$	26					$	623
Health (a)			518						2						—						520						587						(112)						475
Career			219						2						(3)						218						205						—						205
Total Mercer			$	1,374					$	11					$	(4)					$	1,381					$	1,389					$	(86)					$	1,303

(a)Acquisitions, dispositions, and other in 2022 includes revenue from the Westpac Transaction in Wealth and a gain from the sale of the Mercer U.S. affinity business of $112 million in Health.

(b)In the first quarter of 2023, the Company began reporting the Marsh India operations in EMEA. Prior year results for India have been reclassified from Asia Pacific to EMEA for comparative purposes.

			2023																								2022
Six Months Ended June 30, (In millions)			GAAP Revenue						Currency Impact						Acquisitions/ Dispositions/ Other Impact						Non-GAAP Revenue						GAAP Revenue						Acquisitions/ Dispositions/ Other Impact						Non-GAAP Revenue
Risk and Insurance Services
Marsh (a)			$	5,782					$	97					$	(48)					$	5,831					$	5,324					$	17					$	5,341
Guy Carpenter			1,647						23						(15)						1,655						1,521						(19)						1,502
Subtotal			7,429						120						(63)						7,486						6,845						(2)						6,843
Fiduciary interest income			199						2						—						201						17						—						17
Total Risk and Insurance Services			7,628						122						(63)						7,687						6,862						(2)						6,860
Consulting
Mercer (b)			2,718						61						15						2,794						2,732						(113)						2,619
Oliver Wyman Group (a)			1,485						14						(50)						1,449						1,362						11						1,373
Total Consulting			4,203						75						(35)						4,243						4,094						(102)						3,992
Corporate Eliminations			(31)						—						—						(31)						(28)						—						(28)
Total Revenue			$	11,800					$	197					$	(98)					$	11,899					$	10,928					$	(104)					$	10,824

The following table provides more detailed revenue information for certain of the components presented in the previous table:

			2023																								2022
Six Months Ended June 30, (In millions)			GAAP Revenue						Currency Impact						Acquisitions/ Dispositions/ Other Impact						Non-GAAP Revenue						GAAP Revenue						Acquisitions/ Dispositions/ Other Impact						Non-GAAP Revenue
Marsh:
EMEA (a) (c)			$	1,790					$	55					$	(4)					$	1,841					$	1,649					$	17					$	1,666
Asia Pacific (a)			669						29						(3)						695						641						—						641
Latin America			252						1						—						253						222						—						222
Total International			2,711						85						(7)						2,789						2,512						17						2,529
U.S./Canada			3,071						12						(41)						3,042						2,812						—						2,812
Total Marsh			$	5,782					$	97					$	(48)					$	5,831					$	5,324					$	17					$	5,341
Mercer:
Wealth (b)			$	1,218					$	35					$	20					$	1,273					$	1,214					$	24					$	1,238
Health (b)			1,063						16						(1)						1,078						1,111						(137)						974
Career			437						10						(4)						443						407						—						407
Total Mercer			$	2,718					$	61					$	15					$	2,794					$	2,732					$	(113)					$	2,619

(a)Acquisitions, dispositions, and other in 2022 includes the loss on deconsolidation of the Company's Russian businesses of $27 million and Oliver Wyman Group of $12 million.

(b)Acquisitions, dispositions, and other in 2022 includes revenue from the Westpac Transaction in Wealth and a gain from the sale of the Mercer U.S. affinity business of $112 million in Health. Results for 2023 in Wealth include the loss on sale of an individual financial advisory business in Canada of $17 million.

(c)In the first quarter of 2023, the Company began reporting the Marsh India operations in EMEA. Prior year results for India have been reclassified from Asia Pacific to EMEA for comparative purposes.

Consolidated Revenue

Consolidated revenue increased $497 million, or 9% to $5.9 billion for the three months ended June 30, 2023, compared to $5.4 billion for the three months ended June 30, 2022. Consolidated revenue increased 11% on an underlying basis, partially offset by decreases of 1% each from dispositions and the impact of foreign currency translation. On an underlying basis, revenue increased 13% and 8% for the three months ended June 30, 2023 in the Risk and Insurance Services and Consulting segments, respectively.

Consolidated revenue increased $872 million, or 8% to $11.8 billion for the six months ended June 30, 2023, compared to $10.9 billion for the six months ended June 30, 2022. Consolidated revenue increased 10% on an underlying basis, partially offset by a decrease of 2% from the impact of foreign currency translation. On an underlying basis, revenue increased 12% and 6% for the six months ended June 30, 2023 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 six months ended June 30, 2023 was driven by the continued demand for our advice and services, as well as growth in renewal and new business. Renewal growth was driven by client retention, exposure growth and higher insurance and reinsurance rates. Revenue growth also benefited from investments in talent and increased fiduciary income due to higher interest rates. Revenue in Consulting reflected underlying growth at both Mercer and Oliver Wyman Group. Mercer's results included growth in Health from new business, higher retention, increased enrolled lives from a strong labor market, and medical inflation across all segments. Career growth was driven by continued demand for rewards, talent strategy, and workforce transformation advice and solutions. Wealth also grew due to continued demand in defined benefit consulting and modest growth in investment management. Growth at Oliver Wyman Group was broad-based across practice groups.

Consolidated Operating Expenses

Consolidated operating expenses increased $404 million, or 10% to $4.4 billion for the three months ended June 30, 2023, compared to $4.0 billion for the three months ended June 30, 2022. Expenses reflect a 2% increase from acquisitions and a decrease of 1% from the impact of foreign currency translation. Expenses, excluding the impact from acquisitions and foreign currency translation, increased 9% for the three months ended June 30, 2023, with increases of 9% and 8% in the Risk and Insurance Services and Consulting segments, respectively.

Consolidated operating expenses increased $498 million, or 6% to $8.6 billion for the six months ended June 30, 2023, compared to $8.1 billion for the six months ended June 30, 2022. Expenses reflect a 1% increase from acquisitions and a decrease of 2% from the impact of foreign currency translation. Expenses, excluding the impact from acquisitions and foreign currency translation, increased 7% for the six months ended June 30, 2023, with increases of 8% and 5% in the Risk and Insurance Services and Consulting segments, respectively.

The increase in expenses for the three and six months ended June 30, 2023 is primarily due to increased headcount and higher incentive compensation. Expenses for the six months ended June 30, 2023 also reflect higher travel and entertainment costs, primarily in the Risk and Insurance Services segment, compared to the corresponding period in the prior year.

In the fourth quarter of 2022, the Company initiated activities focused on workforce actions, rationalization of technology and functional services, and reductions in real estate. Based on current estimates, the Company continues to anticipate total charges related to these activities to be between $375 million and $400 million. The Company has incurred approximately $300 million of restructuring costs through June 30, 2023, primarily severance and lease exit charges, of which $48 million and $72 million were incurred for the three and six months ended June 30, 2023, respectively. The majority of the remaining costs are expected to be incurred in the remainder of 2023. Related estimated savings are expected to be approximately $300 million by 2024, with $200 million expected to be realized in 2023. The Company's plans are still being finalized, which may change the expected timing, estimates of expected costs and related savings, as the Company continues to refine its detailed plans for each business and location.

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, insurance program management, risk consulting, analytical modeling and alternative risk financing services, primarily under the brand of Marsh, and engage in specialized reinsurance broking, strategic advisory services and analytics solutions, primarily under the brand of Guy Carpenter.

The results of operations for the Risk and Insurance Services segment are as follows:

			Three Months Ended June 30,												Six Months Ended June 30,
(In millions, except percentages)			2023						2022						2023						2022
Revenue			$	3,722					$	3,313					$	7,628					$	6,862
Compensation and benefits			1,923						1,750						3,803						3,551
Other operating expenses			642						596						1,273						1,223
Operating expenses			2,565						2,346						5,076						4,774
Operating income			$	1,157					$	967					$	2,552					$	2,088
Operating income margin			31.1		%				29.2		%				33.5		%				30.4		%

Revenue

Revenue in the Risk and Insurance Services segment increased $409 million, or 12% to $3.7 billion for the three months ended June 30, 2023, compared to $3.3 billion for the three months ended June 30, 2022. Revenue increased 13% on an underlying basis and 1% from acquisitions, partially offset by a decrease of 1% related to the impact of foreign currency translation. Interest earned on fiduciary funds increased $95 million to $108 million for the three months ended June 30, 2023, compared to $13 million for the corresponding quarter in the prior year.

Revenue in the Risk and Insurance Services segment increased $766 million, or 11% to $7.6 billion for the six months ended June 30, 2023, compared to $6.9 billion for the six months ended June 30, 2022. Revenue increased 12% on an underlying basis and 1% from acquisitions, partially offset by a decrease of 2% from the impact of foreign currency translation. Interest earned on fiduciary funds increased by $182 million to $199 million for the six months ended June 30, 2023, compared to $17 million for the corresponding period in the prior year.

The increase in revenue on an underlying basis in the Risk and Insurance Services segment for the three and six months ended June 30, 2023 was primarily due to strong growth in renewals and new business. Renewal growth was driven by solid client retention, as well as higher property casualty pricing. Results also benefited from increased fiduciary income, driven by higher interest rates compared to the corresponding periods in the prior year.

Marsh's revenue increased $260 million, or 9% to $3.0 billion for the three months ended June 30, 2023, compared to $2.8 billion for the three months ended June 30, 2022. This reflects increases of 10% on an underlying basis and 1% from acquisitions, partially offset by a decrease of 1% from the impact of foreign currency translation. On an underlying basis, U.S./Canada rose 9%. Total International operations produced underlying revenue growth of 10%, reflecting growth of 17% in Latin America, 11% in EMEA, and 6% in Asia Pacific.

Marsh's revenue increased $458 million, or 9% to $5.8 billion for the six months ended June 30, 2023, compared to $5.3 billion for the six months ended June 30, 2022. This reflects increases of 9% on an underlying basis and 1% from acquisitions, partially offset by a decrease of 2% from the impact of foreign currency translation. On an underlying basis, U.S./Canada rose 8%. Total International operations produced underlying revenue growth of 10%, reflecting growth of 14% in Latin America, 10% in EMEA, and 8% in Asia Pacific.

Results for the six months ended June 30, 2022, also included a charge of approximately $27 million related to the loss on deconsolidation of the Company's Russian businesses.

Guy Carpenter's revenue increased $54 million, or 10% to $576 million for the three months ended June 30, 2023, compared to $522 million for the three months ended June 30, 2022. This reflects an increase of 11% on an underlying basis, partially offset by a decrease of 1% from the impact of foreign currency translation.

Guy Carpenter's revenue increased $126 million, or 8% to $1.6 billion for the six months ended June 30, 2023, compared to $1.5 billion for the six months ended June 30, 2022. This reflects an increase of 10% on an underlying basis, partially offset by a decrease of 1% from the impact of foreign currency translation.

The Risk and Insurance Services segment completed three acquisitions during the six months ended June 30, 2023. 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 $219 million, or 9% to $2.6 billion for the three months ended June 30, 2023, compared to $2.3 billion for the three months ended June 30, 2022. Expenses reflect a 1% increase from acquisitions offset by a decrease of 1% from the impact of foreign currency translation.

Expenses in the Risk and Insurance Services segment increased $302 million, or 6% to $5.1 billion for the six months ended June 30, 2023, compared to $4.8 billion for the six months ended June 30, 2022. Expenses reflect a 1% increase from acquisitions offset by a decrease of 2% from the impact of foreign currency translation.

The increase in expenses excluding the impact from acquisitions and foreign currency translation for the three and six months ended June 30, 2023 is primarily due to increased headcount and higher incentive compensation. Expenses for the six months ended June 30, 2023 also reflect higher travel and entertainment costs, compared to the corresponding period in the prior year.

For the three and six months ended June 30, 2023, the Company incurred $31 million and $63 million of restructuring costs in the Risk and Insurance Services segment, respectively, of which $22 million and $33 million, respectively, were primarily for severance and lease exit charges, related to the Company's activities focused on workforce actions, rationalization of technology and functional services, and reductions in real estate.

Consulting

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

The results of operations for the Consulting segment are as follows:

			Three Months Ended June 30,												Six Months Ended June 30,
(In millions, except percentages)			2023						2022						2023						2022
Revenue			$	2,172					$	2,084					$	4,203					$	4,094
Compensation and benefits			1,271						1,145						2,439						2,309
Other operating expenses			513						464						965						918
Operating expenses			1,784						1,609						3,404						3,227
Operating income			$	388					$	475					$	799					$	867
Operating income margin			17.9		%				22.8%						19.0		%				21.2		%

Revenue

Consulting revenue increased $88 million, or 4% to $2.2 billion for the three months ended June 30, 2023, compared to $2.1 billion for the three months ended June 30, 2022. This reflects an increase of 8% on an underlying basis, partially offset by a decrease of 3% primarily from the disposition of businesses.

Consulting revenue increased $109 million, or 3% to $4.2 billion for the six months ended June 30, 2023, compared to $4.1 billion for the six months ended June 30, 2022. This reflects an increase of 6% on an underlying basis, partially offset by decreases of 2% from both the disposition of businesses and the impact of foreign currency translation.

Mercer's revenue decreased $15 million, or 1% to $1.4 billion for the three months ended June 30, 2023, compared to the corresponding quarter in the prior year. This reflects an increase of 6% on an underlying basis, offset by decreases of 6% primarily from the disposition of businesses and 1% from the impact of foreign currency

translation. On an underlying basis, revenue for Health, Career, and Wealth increased 10%, 6% and 3% respectively, as compared to the corresponding quarter in the prior year.

Mercer's revenue decreased $14 million, or 1% to $2.7 billion for the six months ended June 30, 2023, compared to the corresponding period in the prior year. This reflects an increase of 7% on an underlying basis, offset by decreases of 5% primarily from the disposition of businesses and 2% from the impact of foreign currency translation. On an underlying basis, revenue for Health, Career and Wealth increased 11%, 9%, and 3%, respectively, as compared to the corresponding period in the prior year.

The increase in revenue on an underlying basis at Mercer for the three and six months ended June 30, 2023 was primarily due to the continued demand for our advice and services. Health continued to benefit from growth in new business, higher retention, increased enrolled lives from a strong labor market, and medical inflation. The increase in Career products and services was due to continued demand in rewards, talent strategy, and workforce transformation advice and solutions. Revenue in Wealth on an underlying basis grew in defined benefit consulting and investment management fees due to a modest rebound in capital markets and positive net flows.

Results for the six months ended June 30, 2023 included a loss of $17 million related to the sale of an individual financial advisory business in Canada. Results for the three and six months ended June 30, 2022 also included a gain of $112 million from the sale of the Mercer U.S. affinity business.

Oliver Wyman Group's revenue increased $103 million, or 15% to $798 million for the three months ended June 30, 2023, compared to $695 million for the three months ended June 30, 2022. This reflects an increase of 11% on an underlying basis and 4% from acquisitions.

Oliver Wyman Group's revenue increased $123 million, or 9% to $1.5 billion for the six months ended June 30, 2023, compared to $1.4 billion for the six months ended June 30, 2022. This reflects an increase of 6% on an underlying basis and 4% from acquisitions, partially offset by a decrease of 1% related to the impact of foreign currency translation.

The increase in underlying revenue at Oliver Wyman Group for the three and six months ended June 30, 2023 was driven by growth across all practice groups. Results for the six months ended June 30, 2022, also included a charge of approximately $12 million related to the loss on the deconsolidation of the Company's Russian businesses.

The Consulting segment completed three acquisitions during the six months ended June 30, 2023. Information regarding these acquisitions are included in Note 8, Acquisitions and Dispositions, in the notes to the consolidated financial statements.

Operating Expenses

Expenses in the Consulting segment increased $175 million, or 11% to $1.8 billion for the three months ended June 30, 2023, compared to $1.6 billion for the three months ended June 30, 2022. Expenses reflect an increase of 4% from acquisitions and a decrease of 1% from the impact of foreign currency translation.

Expenses in the Consulting segment increased $177 million, or 5% to $3.4 billion for the six months ended June 30, 2023, compared to $3.2 billion for the six months ended June 30, 2022. Expenses reflect an increase 2% from acquisitions offset by a decrease of 2% from the impact of foreign currency translation.

The increase in expenses excluding the impact from acquisitions and foreign currency translation for the three and six months ended June 30, 2023 is primarily due to increased headcount. The increase in expenses for the six months ended June 30, 2023 is partially offset by $51 million of insurance recoveries for a legacy JLT E&O matter relating to suitability of advice provided to individuals for defined benefit pension transfers in the U.K.

For the three and six months ended June 30, 2023, the Company incurred $7 million and $16 million of restructuring costs in the Consulting segment, respectively, of which $6 million and $12 million, respectively, were primarily for severance and lease exit charges, related to the Company's activities focused on workforce actions, rationalization of technology and functional services, and reductions in real estate. The remaining restructuring costs relate primarily to adjustments to restructuring liabilities for future rent under non-cancellable leases.

Corporate and Other

Corporate expenses increased $10 million, or 14% to $88 million for the three months ended June 30, 2023, compared to $78 million for the three months ended June 30, 2022. Expenses decreased 1% from the impact of foreign currency translation.

Corporate expenses increased $22 million, or 16% to $168 million for the six months ended June 30, 2023, compared to $146 million for the six months ended June 30, 2022. Expenses decreased 1% from the impact of foreign currency translation.

The increase in expenses for the three and six months ended June 30, 2023, excluding the impact of foreign currency translation, is primarily due to restructuring costs for improving and streamlining the Company's global information technology function.

Interest

Interest expense was $146 million for the three months ended June 30, 2023, compared to $114 million for the three months ended June 30, 2022. Interest expense was $282 million for the six months ended June 30, 2023, compared to $224 million for the six months ended June 30, 2022.

Interest expense for the three and six months ended June 30, 2023, increased $32 million and $58 million, respectively, due to new debt issuances in October 2022 and March 2023, and higher interest rates on the Company's short term borrowings in 2023, compared to the corresponding periods in the prior year.

Investment Income

The caption "Investment 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 net investment income of $3 million and $5 million for the three and six months ended June 30, 2023, respectively, compared to net investment income of $2 million and $28 million, respectively, for the corresponding periods in the prior year. The decrease in the six months ended results in 2023 is primarily driven by lower mark-to-market gains from the Company's private equity investments compared to the corresponding period in the prior year.

Income and Other Taxes

The Company's effective tax rate for the three months ended June 30, 2023 was 24.4%, compared with 25.5% for the corresponding quarter of 2022. The effective tax rate for the six months ended June 30, 2023 and 2022 was 24.6% for both periods.

The tax rate in each period reflects the impact of discrete tax items such as excess tax benefits related to share-based compensation, enacted tax legislation, changes in uncertain tax positions, deferred tax adjustments and non-taxable adjustments related to contingent consideration for acquisitions, and valuation allowances for certain tax credits and, or losses. The rate for the three and six months ended June 30, 2023 reflects the previously enacted change in the U.K. corporate income tax rate from 19% to 25%, effective April 1, 2023. The blended U.K. statutory tax rate for 2023 is 23.5%.

The excess tax benefit related to share-based payments is the most significant discrete item in both periods, reducing the effective tax rate by 1.2% and 0.8% for the three months ended June 30, 2023 and 2022, and by 1.3% for the six months periods ended June 30, 2023 and 2022.

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. Therefore, 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.

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 could decrease up to approximately $52 million within the next 12 months due to settlement of audits and expiration of statutes of limitations.

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

As a U.S. domiciled parent holding company, the Company is the issuer of essentially all the Company's 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.

Changes to the U.S. tax law in recent years have allowed the Company to repatriate foreign earnings without incurring additional U.S. federal income tax costs as foreign income is generally already taxed in the U.S. 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 our capital requirements and potential costs of repatriation, which are generally limited to local country withholding taxes.

In addition to U.S. tax law changes, the Company's global operations make the tax rate sensitive to significant foreign tax law changes. A number of countries have begun to enact legislation to implement the Organization for Economic Cooperation and Development's ("OECD") international tax framework, including the Pillar II minimum tax regime with effect from January 1, 2024.

In July 2023, the U.K. enacted legislation to implement the OECD framework, effective from January 1, 2024. The implementation of the OECD framework in the U.K. will impose additional reporting and compliance obligations. This minimum tax will be treated as a period cost in future years and will not impact operating results for 2023. The Company is continuing to monitor legislative developments, especially in the European Union (E.U.) countries, and is in the process of evaluating the potential impact of the U.K. and other legislation on its results of future operations.

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

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 June 30, 2023, the Company had approximately $1.1 billion of cash and cash equivalents in its foreign operations, which includes $441 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.

For the six months ended June 30, 2023, the Company recorded foreign currency translation adjustments which increased net equity by $258 million. Continued weakening of the U.S. dollar against foreign currencies would further increase 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. Fiduciary assets 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. Fiduciary assets 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 $665 million of cash from operations for the six months ended June 30, 2023, compared to $580 million provided by operations in the first six months of 2022. 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, including incentive compensation, or receipts of receivables and pension plan contributions. The Company used cash of $151 million and $80 million related to its restructuring activities for the six months ended June 30, 2023 and 2022, respectively.

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. For the three and six months ended June 30, 2023, the Company contributed $7 million and $15 million, respectively, to its U.S. defined benefit pension plans and $19 million and $32 million to its non-U.S. defined benefit pension plans, respectively. For the three and six months ended June 30, 2022, the Company contributed $7 million and $15 million to its U.S. defined benefit pension plans, respectively, $38 million and $98 million to its non-U.S. defined benefit pension plans, respectively.

In the U.S., contributions to the tax-qualified defined benefit plans are based on Employee Retirement Income Security Act ("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 three and six months ended June 30, 2023, the Company made $7 million and $15 million, respectively, of contributions to its non-qualified plans and expects to fund approximately an additional $15 million over the remainder of 2023. The Company is not required to make any contributions to its U.S. qualified plans in 2023.

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 79% of non-U.S. plan assets at December 31, 2022. Contribution rates for non-U.S. plans are generally based on local funding practices and statutory requirements, which may differ significantly from measurements in accordance with U.S. GAAP.

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 3 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.

In 2021, the JLT Pension Scheme was merged into the MMC U.K. Pension Fund with a new segregated JLT section created. During the first six months of 2023, the Company made deficit contributions of $20 million to its U.K. plans, all in respect of the JLT section, and is expected to make $20 million of contributions in the remainder of 2023.

For the Marsh McLennan U.K. Pension Fund, excluding the JLT section, an agreement was reached with the trustee in the fourth quarter of 2022 based on the surplus funding position at December 31, 2021. In accordance with the agreement, no deficit funding is required until 2026. The funding level will be re-assessed during 2025 as part of the December 31, 2024 actuarial valuation to determine if contributions are required in 2026. As part of a long term strategy which depends on having greater influence over asset allocation and overall investment decisions, in December 2022, the Company renewed its agreement to support annual deficit contributions by the U.K. operating companies under certain circumstances, up to £450 million (or $569 million) over a seven-year period.

The Company expects to fund an additional $44 million to its non-U.S. defined benefit plans over the remainder of 2023, comprising approximately $20 million to the U.K. plans and $24 million to plans outside of the U.K.

Financing Cash Flows

Net cash provided by financing activities was $227 million for the six months ended June 30, 2023, compared with $498 million provided by financing activities for the corresponding period in 2022.

Credit Facilities

The Company has a multi-currency unsecured $2.8 billion five-year revolving credit facility (the "Credit Facility"), entered into on April 1, 2021. The interest rate on the Credit Facility was initially based on LIBOR plus a fixed margin which varies with the Company’s credit ratings. In the second quarter of 2023, the Credit Facility was amended so that borrowings under the Credit Facility bear interest at a rate per annum equal, at the borrower's option, either at (a) SOFR benchmark rate for U.S. dollar borrowings, or (b) a currency specific benchmark rate, plus an applicable margin which varies with the Company's credit ratings. The 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 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. As of June 30, 2023 and December 31, 2022 the Company had no borrowings under this facility.

In connection with the Credit Facility, the Company terminated its previous multi-currency unsecured $1.8 billion five-year and its unsecured $1 billion 364-day revolving credit facilities.

In May 2022, the Company secured a one-year $250 million uncommitted revolving credit facility with similar coverage and leverage ratios as the Credit Facility. In May 2023, the Company extended the facility until May 2024, at a reduced capacity of $200 million effective June 2023. At June 30, 2023, the Company had $200 million borrowings outstanding under this facility with a weighted average interest rate of 5.50%. There were no borrowings outstanding under this facility at December 31, 2022.

The Company also maintains other credit and overdraft facilities with various financial institutions aggregating $112 million at June 30, 2023. There were no outstanding borrowings under these facilities at June 30, 2023 and December 31, 2022. The Company also has outstanding guarantees and letters of credit with various banks aggregating $118 million at June 30, 2023.

Debt

The Company has a short-term commercial paper financing program of $2.8 billion. The program was increased from $2.0 billion in October 2022. The Company had $308 million of commercial paper outstanding at June 30, 2023, at an average effective interest rate of 5.33%.

In March 2023, the Company issued $600 million of 5.45% senior notes due 2053. The Company used the net proceeds from this issuance for general corporate purposes.

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

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

Share Repurchases

During the first six months of 2023, the Company repurchased 3.5 million shares of its common stock for $600 million. As of June 30, 2023, the Company remained authorized to repurchase up to approximately $3.7 billion in shares of its common stock. There is no time limit on the authorization.

During the first six months of 2022, the Company repurchased 7.0 million shares of its common stock for $1.1 billion.

Dividends

The Company paid dividends on its common stock shares of $591 million ($1.18 per share) during the first six months of 2023, as compared with $547 million ($1.07 per share) during the first six months of 2022. In July 2023, the Board of Directors of the Company declared a quarterly dividend of $0.71 per share on outstanding common stock, payable in August 2023.

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 Six Months Ended June 30,
(In millions)			2023						2022
Operating:
Contingent consideration payments for prior year acquisitions			$	(41)					$	(18)
Receipt of contingent consideration for dispositions			1						—
Acquisition/disposition related net charges for adjustments			17						27
Adjustments and payments related to contingent consideration			$	(23)					$	9
Financing:
Contingent consideration for prior year acquisitions			$	(134)					$	(16)
Deferred consideration related to prior year acquisitions			(51)						(76)
Payments of deferred and contingent consideration for acquisitions			$	(185)					$	(92)
Receipt of contingent consideration for dispositions			$	2					$	3

For acquisitions completed during the first six months of 2023 and in prior years, remaining estimated future contingent payments of $223 million and deferred consideration payments of $92 million, are recorded in accounts payable and accrued liabilities or other liabilities in the consolidated balance sheet at June 30, 2023.

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 increased by $33 million through June 30, 2023, related to the change in foreign exchange rates. The Company concluded that the hedge was highly effective and recorded as an increase to accumulated other comprehensive loss for the six months ended June 30, 2023.

Purchase of remaining non-controlling interest

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

Fiduciary Liabilities

Since fiduciary assets 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. Financing cash flows reflect an increase of $682 million and $1.4 billion for the six months ended June 30, 2023 and 2022, respectively, related to fiduciary liabilities.

Investing Cash Flows

Net cash used for investing activities amounted to $501 million for the first six months of 2023, compared with $258 million used for investing activities for the corresponding period in 2022.

The Company paid $292 million and $151 million, net of cash, cash equivalents and cash and cash equivalents held in a fiduciary capacity acquired, for acquisitions it made during the first six months of 2023 and 2022, respectively. The outflow of funds in 2023 primarily relates to the completion of the Westpac Transaction for $233 million.

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

During the first six months of 2022, the Company sold certain businesses, primarily Mercer's U.S. affinity business, for cash proceeds of approximately $143 million.

The Company's additions to fixed assets and capitalized software, which amounted to $185 million during the first six months of 2023, and $239 million during the first six months of 2022, related primarily to computer equipment purchases, the refurbishing and modernizing of office facilities, and software development costs.

Cash used for long term investments in the first six months of 2023 is due to investments in private equity funds. As of June 30, 2023, the Company has commitments for potential future investments of approximately $132 million in private equity funds that invest primarily in financial services companies, including a $80 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 type as of June 30, 2023:

			Payment due by Period
(In millions)			Total						Within 1 Year						1-3 Years						4-5 Years						After 5 Years
Commercial paper			$	310					$	310					$	—					$	—					$	—
Term loan facility			200						200						—						—						—
Current portion of long-term debt			1,869						1,869						—						—						—
Long-term debt			10,328						—						1,139						641						8,548
Interest on long-term debt			6,775						486						821						746						4,722
Net operating leases			2,280						365						636						504						775
Service agreements			381						184						167						30						—
Other long-term obligations (a)			378						78						249						43						8
Total			$	22,521					$	3,492					$	3,012					$	1,964					$	14,053

(a)Primarily reflects the future payments of deferred and contingent purchase consideration.

The 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 $44 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 $58 million, which will be paid in installments from 2024 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 2022 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.