Item 1. Financial Statements.

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Item 1. Financial Statements.

MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

Three Months Ended September 30,Nine Months Ended September 30,
(In millions, except per share data)2024202320242023
Revenue$5,697$5,382$18,391$17,182
Expense:
Compensation and benefits3,4423,28710,3669,831
Other operating expenses1,1471,0993,3503,172
Operating expenses4,5894,38613,71613,003
Operating income1,1089964,6754,179
Other net benefit credits6862201180
Interest income12166140
Interest expense(154)(145)(469)(427)
Investment income1136
Income before income taxes1,0359304,4713,978
Income tax expense2831921,155941
Net income before non-controlling interests7527383,3163,037
Less: Net income attributable to non-controlling interests584437
Net income attributable to the Company$747$730$3,272$3,000
Net income per share attributable to the Company:
– Basic$1.52$1.48$6.65$6.07
– Diluted$1.51$1.47$6.59$6.01
Average number of shares outstanding:
– Basic492494492494
– Diluted496499496499
Shares outstanding at September 30,491493491493

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

MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

Three Months Ended September 30,Nine Months Ended September 30,
(In millions)2024202320242023
Net income before non-controlling interests$752$738$3,316$3,037
Other comprehensive income (loss), before tax:
Foreign currency translation adjustments661(473)389(131)
(Loss) gain related to pension/post-retirement plans(173)107(105)(13)
Other comprehensive income (loss) before tax488(366)284(144)
Income tax (benefit) expense on other comprehensive loss(49)39(21)2
Other comprehensive income (loss), net of tax537(405)305(146)
Comprehensive income1,2893333,6212,891
Less: comprehensive income attributable to non-controlling interest584437
Comprehensive income attributable to the Company$1,284$325$3,577$2,854

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

MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In millions, except share data)(Unaudited) September 30, 2024December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents$1,798$3,358
Cash and cash equivalents held in a fiduciary capacity11,92310,794
Receivables
Commissions and fees6,7835,806
Advanced premiums and claims102103
Other702660
7,5876,569
Less-allowance for credit losses(165)(151)
Net receivables7,4226,418
Other current assets1,1431,178
Total current assets22,28621,748
Goodwill18,23517,231
Other intangible assets2,7202,630
Fixed assets (net of accumulated depreciation and amortization of $1,638 at September 30, 2024 and $1,562 at December 31, 2023)884882
Pension related assets2,3842,051
Right of use assets1,4871,541
Deferred tax assets242357
Other assets1,6261,590
$49,864$48,030

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

MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (Continued)

(In millions, except share data)(Unaudited) September 30, 2024December 31, 2023
LIABILITIES AND EQUITY
Current liabilities:
Short-term debt$518$1,619
Accounts payable and accrued liabilities3,0993,403
Accrued compensation and employee benefits2,7853,346
Current lease liabilities313312
Accrued income taxes565321
Dividends payable401—
Fiduciary liabilities11,92310,794
Total current liabilities19,60419,795
Long-term debt12,33011,844
Pension, post-retirement and post-employment benefits704779
Long-term lease liabilities1,6181,661
Liabilities for errors and omissions330314
Other liabilities1,3961,267
Commitments and contingencies——
Equity:
Preferred stock, $1 par value, authorized 6,000,000 shares, none issued——
Common stock, $1 par value, authorized 1,600,000,000 shares, issued 560,641,640 shares at September 30, 2024 and December 31, 2023561561
Additional paid-in capital1,2891,242
Retained earnings24,52022,759
Accumulated other comprehensive loss(4,990)(5,295)
Non-controlling interests194179
21,57419,446
Less – treasury shares, at cost, 69,608,340 shares at September 30, 2024 and 68,635,498 shares at December 31, 2023(7,692)(7,076)
Total equity13,88212,370
$49,864$48,030

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

MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

For the Nine Months Ended September 30**,**
(In millions)20242023
Operating cash flows:
Net income before non-controlling interests$3,316$3,037
Adjustments to reconcile net income provided by operations:
Depreciation and amortization of fixed assets and capitalized software276270
Amortization of intangible assets269257
Non-cash lease expense206215
Adjustments and payments related to contingent consideration assets and liabilities(69)(19)
Net gain on investments—(6)
Net (gain) loss on disposition of assets(18)18
Share-based compensation expense283273
Changes in assets and liabilities:
Net receivables(821)(670)
Other assets(45)(98)
Accrued compensation and employee benefits(582)(458)
Provision for taxes, net of payments and refunds233242
Contributions to pension and other benefit plans in excess of current year credit(262)(246)
Other liabilities(211)(103)
Operating lease liabilities(229)(237)
Net cash provided by operations2,3462,475
Financing cash flows:
Purchase of treasury shares(900)(900)
Issuance of commercial paper with maturity greater than 90 days—146
Repayment of commercial paper with maturity greater than 90 days—(146)
Proceeds from issuance of debt9882,170
Repayments of debt(1,613)(12)
Payment of bridge loan commitment fees(23)—
Purchase of non-controlling interests(5)(139)
Shares withheld for taxes on vested units – treasury shares(177)(145)
Issuance of common stock from treasury shares221165
Payments of deferred and contingent consideration for acquisitions(91)(187)
Receipts of deferred and contingent consideration for dispositions32
Distributions of non-controlling interests(29)(18)
Dividends paid(1,110)(944)
Change in fiduciary liabilities9161,223
Net cash (used for) provided by financing activities(1,820)1,215
Investing cash flows:
Capital expenditures(240)(296)
Purchases of long term investments(18)(44)
Sales of long term investments1718
Dispositions106(18)
Acquisitions, net of cash and cash held in a fiduciary capacity acquired(1,042)(619)
Other, net116
Net cash used for investing activities(1,176)(943)
Effect of exchange rate changes on cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity219(120)
(Decrease)/increase in cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity(431)2,627
Cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity at beginning of period14,15212,102
Cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity at end of period$13,721$14,729
Reconciliation of cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity to the Consolidated Balance Sheets
Balance at September 30,20242023
(In millions)
Cash and cash equivalents$1,798$2,901
Cash and cash equivalents held in a fiduciary capacity11,92311,828
Total cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity$13,721$14,729

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

MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited)

Three Months Ended September 30,Nine Months Ended September 30,
(In millions, except per share data)2024202320242023
COMMON STOCK
Balance, beginning and end of period$561$561$561$561
ADDITIONAL PAID-IN CAPITAL
Balance, beginning of period$1,197$1,074$1,242$1,179
Change in accrued stock compensation costs8474(41)(27)
Issuance of shares under stock compensation plans and employee stock purchase plans828868
Purchase of non-controlling interest———(70)
Balance, end of period$1,289$1,150$1,289$1,150
RETAINED EARNINGS
Balance, beginning of period$24,578$21,980$22,759$20,301
Net income attributable to the Company7477303,2723,000
Dividend equivalents declared(3)(1)(10)(9)
Dividends declared(802)(702)(1,501)(1,285)
Balance, end of period$24,520$22,007$24,520$22,007
ACCUMULATED OTHER COMPREHENSIVE LOSS
Balance, beginning of period$(5,527)$(5,055)$(5,295)$(5,314)
Other comprehensive income (loss), net of tax537(405)305(146)
Balance, end of period$(4,990)$(5,460)$(4,990)$(5,460)
TREASURY SHARES
Balance, beginning of period$(7,442)$(6,599)$(7,076)$(6,207)
Issuance of shares under stock compensation plans and employee stock purchase plans5047284255
Purchase of treasury shares(300)(300)(900)(900)
Balance, end of period$(7,692)$(6,852)$(7,692)$(6,852)
NON-CONTROLLING INTERESTS
Balance, beginning of period$198$178$179$229
Net income attributable to non-controlling interests584437
Net non-controlling interests acquired———(69)
Distributions and other changes(9)(6)(29)(17)
Balance, end of period$194$180$194$180
TOTAL EQUITY$13,882$11,586$13,882$11,586
Dividends declared per share$1.63$1.42$3.05$2.60

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

MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Nature of Operations

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

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

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

2. Principles of Consolidation and Other Matters

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

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

The financial information contained herein reflects all normal recurring adjustments which are, in the opinion of management, necessary for a fair presentation of the Company’s consolidated financial statements as of and for the nine months ended September 30, 2024 and 2023.

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

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

Such matters include:

  • estimates of revenue;

  • impairment assessments and charges;

  • recoverability of long-lived assets;

  • liabilities for errors and omissions;

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

  • share-based and incentive compensation expense;

  • the allowance for current expected credit losses on receivables;

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

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

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

Cash and Cash Equivalents

Cash and cash equivalents primarily consist of certificates of deposit and time deposits, with original maturities of three months or less, and money market funds. The estimated fair value of the Company's cash and cash equivalents approximates their carrying value. The Company is required to maintain operating funds primarily related to regulatory requirements outside of the U.S. or as collateral under captive insurance arrangements. At September 30, 2024, the Company maintained $507 million compared to $486 million at December 31, 2023 related to these regulatory requirements.

Allowance for Credit Losses on Accounts Receivable

The Company’s policy for providing an allowance for credit losses on its accounts receivable is based on a combination of factors, including historical write-offs, aging of balances, and other qualitative and quantitative analyses. The charge related to expected credit losses was not material to the consolidated statements of income for the three and nine months ended September 30, 2024 and 2023, respectively.

Investments

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

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

The Company recorded net investment income of $1 million and $3 million for the three and nine months ended September 30, 2024, respectively, compared to net investment income of $1 million and $6 million, respectively, for the corresponding periods in the prior year.

Income Taxes

The Company's effective tax rate for the three months ended September 30, 2024 was 27.3%, compared with 20.6% for the corresponding quarter of 2023. The effective tax rates for the nine months ended September 30, 2024 and 2023 were 25.8% and 23.7%, respectively.

The tax rate in each period reflects the impact of discrete tax items such as excess tax benefits related to share-based compensation, enacted tax legislation, changes in uncertain tax positions, deferred tax adjustments, non-taxable adjustments related to contingent consideration for acquisitions, and valuation allowances for certain tax credits and attributes. The rate for the three and nine months ended September 30, 2024 reflects the previously enacted change in the United Kingdom (U.K.) corporate income tax rate from 19% to 25%, which was effective April 1, 2023. The blended U.K. statutory tax rate for 2023 was 23.5%.

The excess tax benefit related to share-based payments is the most significant discrete item for the nine months ended September 30, 2024 and 2023, reducing the effective tax rate by 1.3% and 1.2%, respectively. The reduction to the effective tax rate for the three months ended September 30, 2024 and 2023 is 0.3% and 1.0%, respectively.

During the third quarter of 2023, the Company released a valuation allowance related to the realizability of deferred tax assets for its non-U.S. operations of $48 million as a discrete tax benefit, primarily due to the sustained profitability of its operations. This was the most significant discrete item for the three months ended September 30, 2023, reducing the effective tax rate by 4.8%. For the nine months ended September 30, 2023, the reduction to the effective tax rate was 1.1%.

The Company's tax rate reflects its income, statutory tax rates, and tax planning in the various jurisdictions in which it operates. Significant judgment is required in determining the annual effective tax rate and in evaluating uncertain tax positions. Losses in one jurisdiction, generally, cannot offset earnings in another, and within certain jurisdictions profits and losses may not offset between entities. Consequently, losses in certain jurisdictions may require valuation allowances affecting the effective tax rate, depending on estimates of the realizability of associated deferred tax assets. The tax rate is also sensitive to changes in unrecognized tax benefits, including the impact of settled tax audits and expired statutes of limitations.

The Company reports a liability for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in tax returns. The Company's gross unrecognized tax benefits were $122 million at September 30, 2024, and $124 million at December 31, 2023. It is reasonably possible that the total amount of unrecognized tax benefits could decrease up to approximately $66 million within the next twelve months due to settlement of audits and expirations of statutes of limitations. In the third quarter of 2024, the Company received closure notices and assessments from the U.K. tax authority in relation to its 2016-2020 examinations which disallowed certain interest expense deductions. The Company has appealed the assessments and resolving this matter through litigation or alternative dispute resolution may take several years. The Company believes the resolution of tax matters will not have a material effect on the consolidated financial position of the Company. However, an adverse resolution of tax matters 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.

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

Restructuring Costs

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

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

Costs for real estate consolidation are recognized based on the type of cost, and the expected future use of the facility. For locations where the Company does not expect to sub-lease the property, the amortization of any ROU asset is accelerated from the decision date to the cease use date. For locations where the Company expects to sub-lease the properties subsequent to its vacating the property, the ROU asset is reviewed for potential impairment at the earlier of the cease use date or the date a sub-lease is signed. To determine the amount of impairment, the fair value of the ROU asset is determined based on the present value of the estimated net cash flows related to the property. Contractual costs outside of the ROU asset are recognized based on the net present value of expected future cash outflows for which the Company will not receive any benefit.

Such amounts are reliant on estimates of future sub-lease income to be received and future contractual costs to be incurred. These costs are included in other operating expenses in the consolidated statements of income. Other costs related to restructuring, such as moving, legal or consulting costs are recognized as incurred. These costs are included in other operating expenses in the consolidated statements of income.

Foreign Currency

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

3. Revenue

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

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

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

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

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

Three Months Ended September 30,Nine Months Ended September 30,
(In millions)2024202320242023
Marsh:
EMEA$747$692$2,684$2,482
Asia Pacific3423111,069980
Latin America134134396386
Total International1,2231,1374,1493,848
U.S./Canada1,7111,5635,0534,634
Total Marsh2,9342,7009,2028,482
Guy Carpenter3813592,1612,006
Subtotal3,3153,05911,36310,488
Fiduciary interest income138131385330
Total Risk and Insurance Services$3,453$3,190$11,748$10,818
Mercer:
Wealth$625$635$1,909$1,853
Health5204961,6051,559
Career307294742731
Total Mercer1,4521,4254,2564,143
Oliver Wyman Group8107812,4362,266
Total Consulting$2,262$2,206$6,692$6,409

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

(In millions)September 30, 2024December 31, 2023
Contract assets$433$357
Contract liabilities$864$869

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

Contract assets are included in other current assets in the Company's consolidated balance sheets. Contract liabilities primarily relate to the advance consideration received from customers. Contract liabilities are included in current liabilities in the Company's consolidated balance sheets. Revenue recognized for the three and nine months ended September 30, 2024 that was included in the contract liability balance at the beginning of each of those periods was $149 million and $730 million, respectively, compared to revenue recognized of $187 million and $698 million, respectively, for the corresponding periods in the prior year.

The amount of revenue recognized for the three and nine months ended September 30, 2024 from performance obligations satisfied in previous periods, mainly due to variable consideration from contracts with insurers, quota share business and consulting contracts previously considered constrained was $18 million and $61 million, respectively, and $20 million and $64 million, respectively, for the corresponding periods in the prior year.

The Company applies the practical expedient and does not disclose the value of unsatisfied performance obligations for (1) contracts with original contract terms of one year or less and (2) contracts where the Company has the right to invoice for services performed.

4. Fiduciary Assets and Liabilities

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

Risk and Insurance Services revenue includes interest on fiduciary assets of $138 million and $385 million for the three and nine months ended September 30, 2024, respectively, and $131 million and $330 million for the

three and nine months ended September 30, 2023, respectively.

Net uncollected premiums and claims and the related payables were $15.6 billion at September 30, 2024, and $13.8 billion at December 31, 2023. The Company is not a principal to the contracts under which the right to receive premiums or the right to receive reimbursement of insured losses arises. Accordingly, net uncollected premiums and claims and the related payables are not assets and liabilities of the Company and are not included in the accompanying consolidated balance sheets. In certain instances, the Company advances premiums, refunds or claims to insurance underwriters or insureds prior to collection. These advances are made from corporate funds and are reflected in the accompanying consolidated balance sheets as receivables.

5. Per Share Data

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

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

Basic and Diluted EPS CalculationThree Months Ended September 30,Nine Months Ended September 30,
(In millions, except per share data)2024202320242023
Net income before non-controlling interests$752$738$3,316$3,037
Less: Net income attributable to non-controlling interests584437
Net income attributable to the Company$747$730$3,272$3,000
Basic weighted average common shares outstanding492494492494
Dilutive effect of potentially issuable common shares4545
Diluted weighted average common shares outstanding496499496499
Average stock price used to calculate common stock equivalents$222.13$191.66$209.06$178.64

6. Supplemental Disclosures to the Consolidated Statements of Cash Flows

The following table provides additional information concerning acquisitions, interest and income taxes paid for the nine months ended September 30, 2024 and 2023:

(In millions)20242023
Assets acquired, excluding cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity$1,310$760
Fiduciary liabilities assumed(8)(14)
Liabilities assumed(84)(98)
Contingent/deferred purchase consideration(176)(29)
Net cash outflow for acquisitions$1,042$619
(In millions)20242023
Interest paid$538$427
Income taxes paid, net of refunds$922$699

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

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

For the Nine Months Ended September 30,
(In millions)20242023
Operating:
Contingent consideration payments for prior year acquisitions$(90)$(41)
Receipt of contingent consideration for dispositions—1
Acquisition/disposition related net charges for adjustments2121
Adjustments and payments related to contingent consideration$(69)$(19)
Financing:
Contingent consideration for prior year acquisitions$(73)$(135)
Deferred consideration related to prior year acquisitions(18)(52)
Payments of deferred and contingent consideration for acquisitions$(91)$(187)
Receipts of contingent consideration for dispositions$1$2

The Company had non-cash issuances of common stock in accordance with its share-based payment plan of $328 million and $304 million for the nine months ended September 30, 2024 and 2023, respectively.

The Company recorded share-based compensation expense related to restricted stock units, performance stock units and stock options of $90 million and $283 million for the three and nine months ended September 30, 2024, respectively, and $82 million and $273 million for the three and nine months ended September 30, 2023, respectively.

7. Other Comprehensive (Loss) Income

The changes, net of tax, in the balances of each component of AOCI for the three and nine months ended September 30, 2024 and 2023, including amounts reclassified out of AOCI, are as follows:

(In millions)Pension/Post-Retirement Plans Gains (Losses)Foreign Currency Translation AdjustmentsTotal
Balance at July 1, 2024$(3,050)$(2,477)$(5,527)
Other comprehensive (loss) income before reclassifications(135)668533
Amounts reclassified from accumulated other comprehensive income4—4
Net current period other comprehensive (loss) income(131)668537
Balance at September 30, 2024 (a)$(3,181)$(1,809)$(4,990)
(In millions)Pension/Post-Retirement Plans Gains (Losses)Foreign Currency Translation AdjustmentsTotal
Balance at July 1, 2023$(2,811)$(2,244)$(5,055)
Other comprehensive income (loss) before reclassifications76(485)(409)
Amounts reclassified from accumulated other comprehensive income4—4
Net current period other comprehensive income (loss)80(485)(405)
Balance at September 30, 2023 (a)$(2,731)$(2,729)$(5,460)

(a)At September 30, 2024 and 2023, balances are net of deferred tax assets in pension and post-retirement plans gains (losses) of $1.5 billion and $1.3 billion, respectively.

(In millions)Pension/Post-Retirement Plans Gains (Losses)Foreign Currency Translation AdjustmentsTotal
Balance at January 1, 2024$(3,101)$(2,194)$(5,295)
Other comprehensive (loss) income before reclassifications(93)385292
Amounts reclassified from accumulated other comprehensive income13—13
Net current period other comprehensive (loss) income(80)385305
Balance at September 30, 2024 (a)$(3,181)$(1,809)$(4,990)
(In millions)Pension/Post-Retirement Plans Gains (Losses)Foreign Currency Translation AdjustmentsTotal
Balance at January 1, 2023$(2,721)$(2,593)$(5,314)
Other comprehensive (loss) income before reclassifications(20)(136)(156)
Amounts reclassified from accumulated other comprehensive income10—10
Net current period other comprehensive (loss) income(10)(136)(146)
Balance at September 30, 2023 (a)$(2,731)$(2,729)$(5,460)

(a)At September 30, 2024 and 2023, balances are net of deferred tax assets in pension and post-retirement plans gains (losses) of $1.5 billion and $1.3 billion, respectively.

The components of other comprehensive (loss) income for the three and nine months ended September 30, 2024 and 2023 are as follows:

Three Months Ended September 30,20242023
(In millions)Pre-TaxTaxNet of TaxPre-TaxTax (Credit)Net of Tax
Foreign currency translation adjustments$661$(7)$668$(473)$12$(485)
Pension/post-retirement plans:
Amortization of (gains) losses included in net benefit (credit) cost:
Net actuarial losses (a)624514
Subtotal624514
Foreign currency translation adjustments(180)(44)(136)1022676
Effect of settlement1—1———
Pension/post-retirement plans (losses) gains(173)(42)(131)1072780
Other comprehensive income (loss)$488$(49)$537$(366)$39$(405)

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

Nine Months Ended September 30,20242023
(In millions)Pre-TaxTaxNet of TaxPre-TaxTax (Credit)Net of Tax
Foreign currency translation adjustments$389$4$385$(131)$5$(136)
Pension/post-retirement plans:
Amortization of (gains) losses included in net benefit (credit) cost:
Prior service credits (a)(1)—(1)(1)—(1)
Net actuarial losses (a)1951415411
Subtotal1851314410
Foreign currency translation adjustments(124)(30)(94)(20)(5)(15)
Effect of settlement1—1———
Other adjustments———(7)(2)(5)
Pension/post-retirement plans (losses) gains(105)(25)(80)(13)(3)(10)
Other comprehensive income (loss)$284$(21)$305$(144)$2$(146)

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

8. Acquisitions and Dispositions

The Company’s acquisitions have been accounted for as business combinations. Net assets and results of operations are included in the Company’s consolidated financial statements commencing at the respective purchase closing dates. In connection with acquisitions, the Company records the estimated values of the net tangible assets and the identifiable intangible assets purchased, which typically consist of customer relationships, developed technology, trademarks and non-compete agreements. The valuation of purchased intangible assets involves significant estimates and assumptions. The Company estimates the fair value of purchased intangible assets, primarily using the income approach, by determining the present value of future cash flows over the remaining economic life of the respective assets. The significant estimates and assumptions used in this approach include the determination of the discount rate, economic life, future revenue growth rates, expected account attrition rates and earnings margins. Refinement and completion of final valuation of net assets acquired could affect the carrying value of tangible assets, goodwill and identifiable intangible assets.

The Risk and Insurance Services segment completed 8 acquisitions for the nine months ended September 30, 2024:

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

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

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

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

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

The Consulting segment completed 5 acquisitions for the nine months ended September 30, 2024:

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

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

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

Total purchase consideration for acquisitions made for the nine months ended September 30, 2024 was $1.3 billion, which consisted of cash paid of $1.1 billion and deferred and estimated contingent purchase consideration of $176 million. Contingent purchase consideration arrangements are generally based on earnings before interest, tax, depreciation and amortization ("EBITDA") or revenue targets over a period of 2 to 4 years. The fair value of contingent purchase consideration was based on projected revenue and earnings of the acquired entities.

For the nine months ended September 30, 2024, the Company also paid $18 million of deferred purchase consideration and $163 million of contingent purchase consideration related to prior year acquisitions. Estimated fair values of assets acquired and liabilities assumed are subject to adjustment until purchase accounting is finalized.

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

Acquisitions through September 30, 2024
(In millions)
Cash$1,078
Estimated fair value of deferred/contingent purchase consideration176
Total consideration$1,254
Allocation of purchase price:
Cash and cash equivalents$28
Cash and cash equivalents held in a fiduciary capacity8
Net receivables67
Other current assets30
Goodwill826
Other intangible assets371
Fixed assets, net5
Right of use assets9
Other assets2
Total assets acquired1,346
Current liabilities29
Fiduciary liabilities8
Other liabilities55
Total liabilities assumed92
Net assets acquired$1,254

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

Items subject to change include:

  • amounts of intangible assets, fixed assets, capitalized software assets and right-of-use assets, subject to finalization of valuation efforts;

  • amounts for contingencies, pending the finalization of the Company’s assessment of the portfolio of contingencies;

  • amounts for deferred tax assets and liabilities, pending the finalization of valuations of the assets acquired, liabilities assumed and associated goodwill; and

  • amounts for income tax assets, receivables and liabilities, pending the filing of the acquired companies' pre-acquisition income tax returns and receipt of information from taxing authorities which may change certain estimates and assumptions used.

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

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

Other intangible assets through September 30, 2024 (In millions)AmountWeighted Average Amortization Period
Client relationships$34912.3 years
Other222.8 years
Total other intangible assets$371

The consolidated statements of income include the results of operations of acquired companies since their respective acquisition dates. The consolidated statements of income for the three and nine months ended September 30, 2024 include revenue of approximately $82 million and $144 million, respectively, and operating losses of $2 million and $5 million, respectively, for acquisitions made in 2024. The consolidated statements of income for both the three and nine months ended September 30, 2023, include revenue of approximately $50 million and $91 million respectively, and operating income of $5 million and $14 million for acquisitions made in 2023.

The Company incurred approximately $20 million and $49 million of acquisition related expenses for the three and nine months ended September 30, 2024, respectively. For the three and nine months ended September 30, 2023, the Company incurred integration costs of $5 million and $32 million, respectively, for 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 corporate pension funds to the Mercer Super Trust managed by Mercer Australia (referred to collectively, as the "Westpac Transaction"). The expenses for the Westpac Transaction related primarily to technology, consulting, legal and people related costs. Acquisition and integration costs are included in other operating expenses in the Company's consolidated statements of income.

Pending Acquisition

On September 30, 2024, the Company announced that it had reached an agreement to acquire McGriff Insurance Services, LLC ("McGriff"), an affiliate of TIH Insurance Holdings (the "Transaction"). McGriff is an insurance broking and risk management services provider in the U.S. Under the terms of the Transaction, the Company will acquire McGriff for an aggregate purchase price of $7.75 billion in cash consideration, funded by a combination of cash proceeds and debt financing. In conjunction with the Transaction, the Company expects to assume a deferred tax asset valued at approximately $500 million. The Transaction is targeted to close by the end of 2024, subject to regulatory clearance and other standard closing conditions.

Dispositions

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

As part of the disposition of the businesses, the Company incurred exit costs of $18 million in the first quarter of 2024. These costs are included in expenses in the Company's consolidated statements of income.

Prior year acquisitions

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

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

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

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

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

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

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

The Consulting segment completed 5 acquisitions in 2023:

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

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

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

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

Total purchase consideration for acquisitions made for the nine months ended September 30, 2023 was $711 million, which consisted of cash paid of $682 million and deferred and estimated contingent purchase consideration of $29 million. Contingent purchase consideration arrangements are generally based primarily on EBITDA or revenue targets over a period of 2 to 4 years.

For the first nine months of 2023, the Company also paid $52 million of deferred purchase consideration and $176 million of contingent purchase consideration related to acquisitions made in prior years. Estimated fair values of assets acquired and liabilities assumed are subject to adjustment when purchase accounting is finalized.

Prior year dispositions

In January 2023, the Company entered into an agreement for the sale of an individual financial advisory business in Canada which was completed in May 2023. As a result, the Company recorded a loss of $17 million for the nine months ended September 30, 2023, primarily related to the write-down of the customer relationship intangible assets. The loss is included in revenue in the consolidated statements of income.

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

Deconsolidation of Russia

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

Purchase of remaining non-controlling interest

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

Pro-Forma Information

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

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

Three Months Ended September 30,Nine Months Ended September 30,
(In millions, except per share data)2024202320242023
Revenue$5,707$5,494$18,535$17,621
Net income attributable to the Company$755$749$3,309$3,065
Basic net income per share attributable to the Company$1.54$1.52$6.73$6.20
Diluted net income per share attributable to the Company$1.52$1.50$6.67$6.14

9. Goodwill and Other Intangibles

The Company is required to assess goodwill and any indefinite-lived intangible assets for impairment annually, or more frequently if circumstances indicate an impairment may have occurred. The Company performs the annual impairment assessment for each of its reporting units during the third quarter of each year. The reporting unit level is defined at the same level as the Company's operating segments. In accordance with applicable accounting guidance, a company can assess qualitative factors to determine whether it is necessary to perform a quantitative goodwill impairment test. Alternatively, a company may elect to proceed directly to the quantitative goodwill impairment test. In the third quarter of 2024, the Company completed a qualitative impairment assessment and concluded that goodwill was not impaired. As part of its assessment, the Company considered numerous factors, including:

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

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

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

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

  • industry and market conditions; and

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

Other intangible assets that are not deemed to have an indefinite life are amortized over their estimated lives and assessed for impairment upon the occurrence of certain triggering events in accordance with applicable accounting literature. Based on its assessment, the Company concluded that other intangible assets were not impaired. The Company had no indefinite lived intangible assets at September 30, 2024 and December 31, 2023.

Changes in the carrying amount of goodwill are as follows:

(In millions)20242023
Balance at January 1,$17,231$16,251
Goodwill acquired826480
Other adjustments (a)178(76)
Balance at September 30,$18,235$16,655

(a) Primarily reflects the impact of foreign exchange.

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

The goodwill acquired in 2024 included approximately $263 million and $88 million in the Risk and Insurance Services and Consulting segments, respectively, which is deductible for tax purposes.

Goodwill allocated to the Company’s reportable segments at September 30, 2024 is $14.0 billion for Risk and Insurance Services and $4.2 billion for Consulting.

The gross cost and accumulated amortization of other identified intangible assets at September 30, 2024 and December 31, 2023 are as follows:

September 30, 2024December 31, 2023
(In millions)Gross CostAccumulated AmortizationNet Carrying AmountGross CostAccumulated AmortizationNet Carrying Amount
Client relationships$4,614$1,937$2,677$4,337$1,761$2,576
Other (a)3863434339133754
Other intangible assets$5,000$2,280$2,720$4,728$2,098$2,630

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

Aggregate amortization expense for the three and nine months ended September 30, 2024 was $90 million and $269 million, respectively, compared to $85 million and $257 million, respectively, for the corresponding periods in the prior year.

The estimated future aggregate amortization expense is as follows:

For the Years Ending December 31,
(In millions)Estimated Expense
2024 (excludes amortization through September 30, 2024)$91
2025337
2026317
2027308
2028285
Subsequent years1,382
Total future amortization$2,720

10. Fair Value Measurements

Fair Value Hierarchy

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

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

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

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

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

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

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

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

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

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

Valuation Techniques

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

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

Contingent Purchase Consideration Assets and Liabilities – Level 3

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

The following fair value hierarchy table presents information about the Company’s assets and liabilities measured at fair value on a recurring basis at September 30, 2024 and December 31, 2023:

Identical Assets (Level 1)Observable Inputs (Level 2)Unobservable Inputs (Level 3)Total
(In millions)09/30/2412/31/2309/30/2412/31/2309/30/2412/31/2309/30/2412/31/23
Assets:
Financial instruments owned:
Exchange traded equity securities (a)$8$5$—$—$—$—$8$5
Mutual funds (a)189178————189178
Money market funds (b)440606————440606
Contingent purchase consideration assets (c)—————1—1
Total assets measured at fair value$637$789$—$—$—$1$637$790
Fiduciary Assets:
Money market funds$66$180$—$—$—$—$66$180
Total fiduciary assets measured at fair value$66$180$—$—$—$—$66$180
Liabilities:
Contingent purchase consideration liabilities (d)$—$—$—$—$168$252$168$252
Total liabilities measured at fair value$—$—$—$—$168$252$168$252

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

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

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

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

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

During the nine months ended September 30, 2024 and 2023, there were no assets or liabilities that were transferred between levels. The change in the contingent purchase consideration assets from December 31, 2023 is driven primarily by cash receipts of approximately $1 million.

The following table sets forth a summary of the changes in fair value of the Company’s Level 3 liabilities for the three and nine months ended September 30, 2024 and 2023:

Three Months Ended September 30,Nine Months Ended September 30,
(In millions)2024202320242023
Balance at beginning of period$121$223$252$377
Net additions435609
Payments(2)(1)(163)(176)
Revaluation impact642121
Other——(2)—
Balance at end of period$168$231$168$231

Long-Term Investments

The Company has investments in public and private companies as well as certain private equity investments that are accounted for using the equity method of accounting. The carrying value of these investments was $275 million and $266 million at September 30, 2024 and December 31, 2023, respectively.

Investments in Public and Private Companies

The Company has investments in private insurance and consulting companies with a carrying value of $74 million and $63 million at September 30, 2024 and December 31, 2023, respectively. These investments are accounted for using the equity method of accounting, the results of which are included in revenue in the consolidated statements of income and the carrying value of which is included in other assets in the consolidated balance sheets. The Company records its share of income or loss on its equity method investments, some of which are on a one quarter lag basis.

Private Equity Investments

The Company's investments in private equity funds were $201 million and $203 million at September 30, 2024 and December 31, 2023, respectively. The carrying values of these private equity investments approximate fair value. The underlying private equity funds follow investment company accounting, where investments within the fund are carried at fair value. The Company records in earnings its proportionate share of the change in fair value of the funds on the investment income line in the consolidated statements of income. These investments are included in other assets in the consolidated balance sheets.

At September 30, 2024, the Company has commitments of potential future investments of approximately $120 million in private equity funds that invest primarily in financial services companies.

Other Investments

The Company held equity investments with readily determinable market values at September 30, 2024 and December 31, 2023, of $19 million and $16 million, respectively.

The Company also held investments without readily determinable market values of $21 million and $20 million at September 30, 2024 and December 31, 2023, respectively.

11. Derivatives

Net Investment Hedge

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

The U.S. dollar value of the Euro notes increased by $8 million through September 30, 2024 related to the change in foreign exchange rates. The Company concluded that the hedge was highly effective and recorded an increase to accumulated other comprehensive loss for the nine months ended September 30, 2024.

12. Leases

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

Operating leases are recognized on the consolidated balance sheets as ROU assets and operating lease liabilities based on the present value of the remaining future minimum payments over the lease term at commencement date of the lease. For the three and nine months ended September 30, 2024 and 2023, the Company determined that $7 million and $9 million, respectively, and $6 million and $19 million, respectively, of the ROU assets were impaired and recorded a charge to the consolidated statements of income with an offsetting reduction to ROU assets.

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

Three Months Ended September 30,Nine Months Ended September 30,
(In millions)2024202320242023
Lease Cost:
Operating lease cost (a)$84$82$247$243
Short-term lease cost1144
Variable lease cost31318594
Sublease income(2)(2)(10)(8)
Net lease cost$114$112$326$333
Other information:
Operating cash outflows from operating leases$278$284
Right of use assets obtained in exchange for new operating lease liabilities$135$177
Weighted average remaining lease term – real estate7.8 years8.1 years
Weighted average discount rate – real estate leases3.64%3.28%

(a) Excludes ROU asset impairment charges.

Future minimum lease payments for the Company’s operating leases at September 30, 2024 are as follows:

(In millions)Real Estate Leases
2024 (excludes payments through September 30, 2024)$95
2025371
2026343
2027305
2028229
2029183
Subsequent years678
Total future lease payments2,204
Less: Imputed interest(273)
Total$1,931
Current lease liabilities$313
Long-term lease liabilities1,618
Total lease liabilities$1,931

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

At September 30, 2024, the Company did not have any additional operating real estate leases that had not yet commenced.

13. Retirement Benefits

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

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

Combined U.S. and significant non-U.S. PlansPension Benefits
September 30,20242023
Weighted average assumptions:
Expected return on plan assets5.44%5.31%
Discount rate4.95%5.16%
Rate of compensation increase *3.16%3.16%

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

The target asset allocation for the U.S. plans is 50% equities and equity alternatives, and 50% fixed income. At September 30, 2024, the actual allocation for the U.S. plans was 50% equities and equity alternatives, and 50% fixed income. The target allocation for the U.K. plans at September 30, 2024 is 13% equities and equity alternatives, and 87% fixed income. At September 30, 2024, the actual allocation for the U.K. plans was 14% equities and equity alternatives and 86% fixed income. The Company's U.K. plans comprised approximately 79% of non-U.S. plan assets at December 31, 2023. The assets of the Company's defined benefit plans are diversified and are managed in accordance with applicable laws and with the goal of maximizing the plans' real return within acceptable risk parameters. The Company uses threshold-based portfolio re-balancing to ensure the actual portfolio remains consistent with target asset allocation ranges.

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

The components of the net benefit credit for defined benefit plans are as follows:

Combined U.S. and significant non-U.S. Plans
For the Three Months Ended September 30,Pension Benefits
(In millions)20242023
Service cost$5$7
Interest cost146151
Expected return on plan assets(222)(218)
Recognized actuarial loss85
Net periodic benefit credit$(63)$(55)
Settlement loss1—
Net benefit credit$(62)$(55)
Combined U.S. and significant non-U.S. Plans
For the Nine Months Ended September 30,Pension Benefits
(In millions)20242023
Service cost$17$18
Interest cost434449
Expected return on plan assets(657)(645)
Amortization of prior service cost1—
Recognized actuarial loss2316
Net periodic benefit credit$(182)$(162)
Settlement loss1—
Net benefit credit$(181)$(162)

The following tables provide the amounts reported in the consolidated statements of income:

Combined U.S. and significant non-U.S. Plans
For the Three Months Ended September 30,Pension Benefits
(In millions)20242023
Compensation and benefits expense$5$7
Other net benefit credits(67)(62)
Net benefit credit$(62)$(55)
Combined U.S. and significant non-U.S. Plans
For the Nine Months Ended September 30,Pension Benefits
(In millions)20242023
Compensation and benefits expense$17$18
Other net benefit credits(198)(180)
Net benefit credit$(181)$(162)

The components of the net benefit credit for the U.S. defined benefit plans are as follows:

U.S. Plans only
For the Three Months Ended September 30,Pension Benefits
(In millions)20242023
Interest cost$62$65
Expected return on plan assets(76)(78)
Recognized actuarial loss55
Net benefit credit$(9)$(8)
U.S. Plans only
For the Nine Months Ended September 30,Pension Benefits
(In millions)20242023
Interest cost$187$195
Expected return on plan assets(227)(233)
Recognized actuarial loss1514
Net benefit credit$(25)$(24)

The components of the net benefit credit for the non-U.S. defined benefit plans are as follows:

Significant non-U.S. Plans only
For the Three Months Ended September 30,Pension Benefits
(In millions)20242023
Service cost$5$7
Interest cost8486
Expected return on plan assets(146)(140)
Recognized actuarial loss3—
Net periodic benefit credit$(54)$(47)
Settlement loss1—
Net benefit credit$(53)$(47)
Significant non-U.S. Plans only
For the Nine Months Ended September 30,Pension Benefits
(In millions)20242023
Service cost$17$18
Interest cost247254
Expected return on plan assets(430)(412)
Amortization of prior service cost1—
Recognized actuarial loss82
Net periodic benefit credit$(157)$(138)
Settlement loss1—
Net benefit credit$(156)$(138)

The Company made contributions to its U.S. and non-U.S. defined benefit pension plans for the three and nine months ended September 30, 2024 of approximately $16 million and $67 million, respectively, compared to contributions of $26 million and $73 million, respectively, for the corresponding periods in the prior year. The Company expects to contribute approximately $25 million to its U.S. and non-U.S. defined benefit pension plans during the remainder of 2024.

Defined Contribution Plans

The Company maintains defined contribution plans ("DC Plans") for its employees, the most significant being in the U.S. and the U.K. The cost of the U.S. DC Plans for the three and nine months ended September 30, 2024 was $45 million and $142 million, respectively, and $45 million and $133 million, respectively, for the corresponding periods in the prior year. The cost of the U.K. DC Plans for the three and nine months ended September 30, 2024 was $39 million and $130 million, respectively, and $39 million and $120 million, respectively, for the corresponding periods in the prior year.

14. Debt

The Company’s outstanding debt is as follows:

(In millions)September 30, 2024December 31, 2023
Short-term:
Current portion of long-term debt$518$1,619
$518$1,619
Long-term:
Senior notes – 3.50% due 2024$—$600
Senior notes – 3.875% due 2024—1,000
Senior notes – 3.50% due 2025500499
Senior notes – 1.349% due 2026623617
Senior notes – 3.75% due 2026599599
Senior notes – 4.375% due 20291,4991,499
Senior notes – 1.979% due 2030603601
Senior notes – 2.25% due 2030742741
Senior notes – 2.375% due 2031397397
Senior notes – 5.750% due 2032493493
Senior notes – 5.875% due 2033298298
Senior notes – 5.400% due 2033593592
Senior notes – 5.150% due 2034495—
Senior notes – 4.75% due 2039496496
Senior notes – 4.35% due 2047494494
Senior notes – 4.20% due 2048593593
Senior notes – 4.90% due 20491,2391,239
Senior notes – 2.90% due 2051346346
Senior notes – 6.25% due 2052491491
Senior notes – 5.450% due 2053591591
Senior notes – 5.700% due 2053988988
Senior notes – 5.450% due 2054493—
Mortgage – 5.70% due 2035271284
Other45
12,84813,463
Less: current portion5181,619
$12,330$11,844

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

In November 2023, the Company increased its short-term commercial paper financing program (the "Program") to $3.5 billion from $2.8 billion. The Company did not have any commercial paper outstanding at September 30, 2024 and December 31, 2023.

Credit Facilities

In October 2023, the Company increased its multi-currency unsecured five-year credit facility (the "Credit Facility") capacity to $3.5 billion from $2.8 billion and extended the expiration to October 2028. The interest rate on the Credit Facility was initially based on LIBOR plus a fixed margin which varied with the Company's credit rating.

In the second quarter of 2023, the Credit Facility was amended so that borrowings under the Credit Facility bear interest at a rate per annum, equal, at the Company's option, either at (a) SOFR benchmark rate for U.S. dollar borrowings, or (b) a currency specific benchmark rate, plus an applicable margin which varies with the Company's credit ratings. The Company is required to maintain certain coverage and leverage ratios for the Credit Facility, which are evaluated quarterly.

The Credit Facility includes provisions for determining a benchmark replacement rate in the event existing benchmark rates are no longer available, or in certain other circumstances, in which an alternative rate may be required. At September 30, 2024 and December 31, 2023, the Company had no borrowings under this facility.

In October 2023, the Company terminated its one-year uncommitted revolving credit facility ("Uncommitted Credit Facility"). In the third quarter of 2023, the Company repaid $200 million of borrowings outstanding under this facility with a weighted average interest rate of 5.50%. There were no borrowings outstanding under the Uncommited Credit Facility at September 30, 2023.

The Company also maintains other credit and overdraft facilities with various financial institutions aggregating $124 million and $113 million, at September 30, 2024 and December 31, 2023, respectively. There were no outstanding borrowings under these facilities at September 30, 2024 and December 31, 2023.

The Company also has outstanding guarantees and letters of credit with various banks aggregating $153 million and $139 million, at September 30, 2024 and December 31, 2023, respectively.

Senior Notes

In June 2024, the Company repaid $600 million of 3.50% senior notes at maturity.

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

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

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

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

Pending Acquisition

In connection with the pending McGriff Transaction, on September 29, 2024, the Company entered into a Bridge Loan Commitment Letter (the “Commitment Letter”) to provide the Company with 100% of the loans under a 364-day unsecured bridge term loan facility in an amount not to exceed $7.75 billion (the “Bridge Loan Facility”). The Company paid approximately $23 million for customary upfront fees related to the Commitment Letter, which will be amortized as interest expense based on the period of time the Bridge Loan Facility is expected to be in effect. Any borrowing under the Bridge Loan Facility will mature 364 days from the funding date, and the Company will be required to comply with certain covenants including maintaining an interest coverage ratio and leverage ratio within specified levels. The loans will bear interest at a rate per annum, equal to, at the Company’s election, either (a) SOFR-based rate, or (b) an alternative base rate, in each case, plus an applicable margin which varies with the Company's credit ratings.

At September 30, 2024, there has not been any funding of bridge loans under the Commitment Letter. The commitments under the Bridge Loan Facility are expected to be reduced, or any loans borrowed repaid, with long-term financing, equity issuances, or disposition of assets.

Fair Value of Short-term and Long-term Debt

The estimated fair value of the Company's short-term and long-term debt is provided below. Certain estimates and judgments were required to develop the fair value amounts.

The fair value amounts shown in the following table are not necessarily indicative of the amounts that the Company would realize upon disposition, nor do they indicate the Company’s intent or need to dispose of the financial instrument.

September 30, 2024December 31, 2023
(In millions)Carrying AmountFair ValueCarrying AmountFair Value
Short-term debt$518$515$1,619$1,610
Long-term debt$12,330$12,279$11,844$11,723

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

15. Restructuring Costs

In the fourth quarter of 2022, the Company initiated activities focused on workforce actions, rationalization of technology and functional services, and reductions in real estate. In the third quarter of 2024, the Company finalized its detailed plans and anticipates total charges related to these activities to be approximately $650 million. The Company has incurred approximately $540 million of these restructuring costs through September 30, 2024, primarily severance and lease exit charges, of which $36 million and $96 million were incurred for the three and nine months ended September 30, 2024, respectively. The Company is expected to complete these activities by the end of 2024.

The Company incurred a total of $54 million and $140 million for restructuring activities for the three and nine months ended September 30, 2024, respectively, compared to $52 million and $170 million, for the corresponding periods in the prior year.

The Company incurred costs related to these initiatives as follows:

Three Months Ended September 30,Nine Months Ended September 30,
(In millions)2024202320242023
Risk and Insurance Services$22$26$73$89
Consulting14173033
Corporate1893748
Total$54$52$140$170

Details of the restructuring activity from January 1, 2023 through September 30, 2024, are as follows:

(In millions)SeveranceReal Estate Related Costs (a)Information TechnologyConsulting and Other Outside ServicesTotal
Liability at January 1, 2023$88$56$—$2$146
2023 charges148961542301
Cash payments(147)(69)(13)(42)(271)
Non-cash charges—(44)(2)—(46)
Liability at December 31, 2023$89$39$—$2$130
2024 charges63411917140
Cash payments(123)(34)(19)(19)(195)
Non-cash charges—(9)——(9)
Liability at September 30, 2024$29$37$—$—$66

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

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

16. Common Stock

The Company has a share repurchases program authorized by the Board of Directors. For the first nine months of 2024, the Company repurchased 4.3 million shares of its common stock for $900 million.

At September 30, 2024, the Company remained authorized to repurchase up to approximately $2.3 billion in shares of its common stock. There is no time limit on the authorization. For the first nine months of 2023, the Company repurchased 5.1 million shares of its common stock for $900 million.

The Company issued approximately 3.3 million shares related to stock compensation and employee stock purchase plans for the first nine months of both 2024 and 2023.

In January and March of 2024, the Board of Directors of the Company declared quarterly dividends of $0.710 per share on outstanding common stock, which were paid in February and May 2024, respectively. In July 2024, the Board of Directors of the Company declared a quarterly dividend of $0.815 per share on outstanding common stock, paid in August 2024.

In September 2024, the Board of Directors of the Company declared a quarterly dividend of $0.815 per share on outstanding common stock, payable in November 2024.

17. Claims, Lawsuits and Other Contingencies

Nature of Contingencies

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

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

Current Matters

Risk and Insurance Services Segment

  • In January 2019, the Company received a notice that the Administrative Council for Economic Defense anti-trust agency in Brazil had commenced an administrative proceeding against a number of insurance brokers, including both Marsh and JLT, and insurers "to investigate an alleged sharing of sensitive commercial and competitive confidential information" in the aviation insurance and reinsurance sector.

  • From 2014, Marsh Ltd. was engaged by Greensill Capital (UK) Limited and its affiliates as its insurance broker. Marsh Ltd. placed a number of trade credit insurance policies for Greensill. On March 1, 2021, Greensill filed an action against certain of its trade credit insurers in Australia seeking a mandatory injunction compelling these insurers to renew coverage under expiring policies. Later that day, the Australian court denied Greensill’s application. Since then, a number of Greensill entities have filed for, or been subject to, insolvency proceedings, and several litigations and investigations have been commenced in the U.K., Australia, Germany, Switzerland and the U.S., including claims brought by Greensill's administrators and loss payees under Greensill's trade credit insurance policies. In June 2023,

White Oak, one such loss payee, filed a claim in the High Court of Justice in London against Marsh Ltd., related to White Oak’s purchase of accounts receivable from Greensill. In November 2023, Credit Suisse, another loss payee, added Marsh Ltd. as a party to the omnibus trade credit insurance policy litigation among Greensill and its insurers and loss payees in Australia. The claims by both loss payees allege that Marsh Ltd., which was not the insurance broker for either White Oak or Credit Suisse, failed to take required steps to make complete and accurate representations to them in their respective capacities as loss payees.

Other Contingencies-Guarantees

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

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

The pending proceedings described above and other matters not explicitly described in this Note 17 on Claims, Lawsuits and Other Contingencies may expose the Company or its subsidiaries to liability for significant monetary damages, fines, penalties or other forms of relief. Where a loss is both probable and reasonably estimable, the Company establishes liabilities in accordance with the Financial Accounting Standards Board ("FASB") guidance on Contingencies - Loss Contingencies.

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

18. Segment Information

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

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

  • Consulting**, comprising Mercer and Oliver Wyman Group.

The accounting policies of the segments are the same as those used for the consolidated financial statements described in Note 1, Summary of Significant Accounting Policies, in the Company’s 2023 Form 10-K. Segment performance is evaluated based on segment operating income, which includes directly related expenses, and charges or credits related to restructuring but not the Company’s corporate-level expenses. Revenues are attributed to geographic areas on the basis of where the services are performed.

Selected information about the Company’s segments for the three and nine months ended September 30, 2024 and 2023 is as follows:

Three Months Ended September 30,Nine Months Ended September 30,
(In millions)RevenueOperating Income/(Loss)RevenueOperating Income/(Loss)
2024 –
Risk and Insurance Services$3,453(a)$733$11,748(c)$3,595
Consulting2,262(b)4626,692(d)1,304
Total Segments5,7151,19518,4404,899
Corporate/Eliminations(18)(87)(49)(224)
Total Consolidated$5,697$1,108$18,391$4,675
2023 –
Risk and Insurance Services$3,190(a)$640$10,818(c)$3,192
Consulting2,206(b)4246,409(d)1,223
Total Segments5,3961,06417,2274,415
Corporate/Eliminations(14)(68)(45)(236)
Total Consolidated$5,382$996$17,182$4,179

(a)Includes interest income on fiduciary funds of $138 million and $131 million in 2024 and 2023, respectively, and equity method income of $7 million and $3 million in 2024 and 2023, respectively.

(b)Includes inter-segment revenue of $18 million and $14 million in 2024 and 2023, respectively.

(c)Includes inter-segment revenue of $5 million in both 2024 and 2023, interest income on fiduciary funds of $385 million and $330 million in 2024 and 2023, respectively, and equity method income of $17 million and $14 million in 2024 and 2023, respectively.

(d)Includes inter-segment revenue of $44 million and $40 million in 2024 and 2023, respectively. Revenue in 2024 also includes a net gain of $21 million from the sale of Mercer's U.K. pension administration and U.S. health and benefits administration businesses.

Details of operating segment revenue for the three and nine months ended September 30, 2024 and 2023 are as follows:

Three Months Ended September 30,Nine Months Ended September 30,
(In millions)2024202320242023
Risk and Insurance Services
Marsh$3,023$2,782$9,446$8,685
Guy Carpenter4304082,3022,133
Total Risk and Insurance Services3,4533,19011,74810,818
Consulting
Mercer1,4521,4254,2564,143
Oliver Wyman Group8107812,4362,266
Total Consulting2,2622,2066,6926,409
Total Segments5,7155,39618,44017,227
Corporate Eliminations(18)(14)(49)(45)
Total$5,697$5,382$18,391$17,182

19. New Accounting Pronouncements

Recently Issued Accounting Pronouncements Not Yet Adopted

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

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

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