SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_____________________________________________

FORM 10-Q ~~Filing~~

_____________________________________________

Quarterly Report Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

For the quarterly period ended ~~September 30, 2014~~March 31, 2015

_____________________________________________

Marsh & McLennan Companies, Inc.

1166 Avenue of the Americas

New York, New York 10036

(212) 345-5000

_____________________________________________

Commission file number 1-5998

State of Incorporation: Delaware

I.R.S. Employer Identification No. 36-2668272

_____________________________________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting Company. See the definitions of ~~“large~~"large accelerated filer,~~” “accelerated filer”~~" "accelerated filer" and ~~“smaller~~"smaller reporting ~~Company”~~Company" in Rule 12b-2 of the Exchange Act. (Check one):



Large Accelerated Filer x		Accelerated Filer ¨

Non-Accelerated Filer ¨(Do not check if a smaller reporting company)		Smaller Reporting Company ¨

Indicate by check mark whether the registrant is a shell Company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No ý

As of ~~October 27, 2014,~~April 24, 2015, there were outstanding ~~540,899,238~~536,881,743 shares of common stock, par value $1.00 per share, of the registrant.

INFORMATION CONCERNING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains ~~“forward-looking~~"forward-looking statements,”" as defined in the Private Securities Litigation Reform Act of 1995. These statements, which express management's current views concerning future events or results, use words like ~~“anticipate,” “assume,” “believe,” “continue,” “estimate,” “expect,” “future,” “intend,” “plan,” “project”~~"anticipate," "assume," "believe," "continue," "estimate," "expect," "future," "intend," "plan," "project" and similar terms, and future or conditional tense verbs like ~~“could,” “may,” “might,” “should,” “will”~~"could," "may," "might," "should," "will" and ~~“would.”~~"would." For example, we may use forward-looking statements when addressing topics such as: the outcome of contingencies; the expected impact of acquisitions and dispositions; the impact of competition; pension obligations; the impact of foreign currency exchange rates; our effective tax rates; changes in our business strategies and methods of generating revenue; the development and performance of our services and products; changes in the composition or level of our revenues; our cost structure, dividend policy, cash flow and liquidity; future actions by regulators; and the impact of changes in accounting rules.

Forward-looking statements are subject to inherent risks and uncertainties. Factors that could cause actual results to differ materially from those expressed or implied in our forward-looking statements include, among other things:

our ability to maintain adequate safeguards to protect the security of confidential, personal or proprietary information, and the potential for the improper disclosure or use of such information, whether due to human error, improper action by employees, vendors or third parties, or as a result of a cyberattack;

the impact of fluctuations in foreign currency exchange rates, particularly in light of the recent strengthening of the U.S. dollar against most other currencies worldwide;

the impact of competition on our business, including the impact of our corporate tax rate, which is higher than the tax rate of some of our competitors;

the impact on our global pension obligations of changes in discount rates and asset returns, as well as projected salary increases, mortality rates, demographics, and inflation, and the impact of cash contributions required to be made to our global defined benefit pension plans due to changes in the funded status of those plans;

our exposure to potential liabilities arising from errors and omissions claims against us;

the impact of competition, including with respect to our geographic reach, the sophistication and quality of our services, our pricing relative to competitors, our customers' option to self-insure or use internal resources instead of consultants, and our corporate tax rates relative to a number of our competitors;

~~the extent to which we retain existing clients and attract new business, and our ability to incentivize and retain key employees;~~

our ability to maintain adequate physical, technical and administrative safeguards to protect the security of confidential information or data, and the potential of a system or network disruption that results in regulatory penalties, remedial costs or the improper disclosure of confidential information or data;

our exposure to potential ~~criminal sanctions or~~ civil remedies or criminal penalties if we fail to comply with foreign and U.S. laws ~~and regulations~~ that are applicable in the domestic and international jurisdictions in which we operate, including ~~evolving sanctions against Russia and existing~~ trade sanctions laws relating to countries such as Cuba, Iran, Russia, Sudan and Syria, anti-corruption laws such as the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act 2010 and local laws prohibiting corrupt payments to government ~~officials, as well as import~~officials;

the extent to which we are able to retain existing clients and ~~export restrictions;~~attract new business, and our ability to effectively incentivize and retain key employees;

our ability to make acquisitions and dispositions and to integrate, and realize expected synergies, savings or benefits from, the businesses we acquire;

~~changes in the funded status of our global defined benefit pension plans and the impact of any increased pension funding resulting from those changes;~~

~~the impact on our net income of fluctuations in foreign currency exchange rates;~~

our ability to successfully recover should we experience a disaster or other business continuity ~~problem, such as an earthquake, hurricane, flood, terrorist attack, pandemic, security breach, cyber attack, power loss, telecommunications failure or other natural or man-made disaster;~~problem;

the impact of changes in interest rates and deterioration of counterparty credit quality on our cash balances and the performance of our investment ~~portfolios, including corporate and fiduciary funds;~~portfolios;

the ~~potential~~ impact of potential rating agency actions on our cost of financing and ability to borrow, as well as on our operating costs and competitive position;

changes in applicable tax or accounting requirements; and

potential income statement effects from the application of FASB's ASC Topic No. 740 (“Income Taxes”) regarding accounting treatment of uncertain tax benefits and valuation allowances, including the effect of any subsequent adjustments to the estimates we use in applying this accounting standard.

The factors identified above are not exhaustive. Marsh & McLennan Companies and its subsidiaries operate in a dynamic business environment in which new risks may emerge frequently. Accordingly, we caution readers not to place undue reliance on ~~the above~~any forward-looking statements, which are based only on information currently available to us and speak only as of the dates on which they are made. The Company undertakes no obligation to update or revise any forward-looking statement to reflect events or circumstances arising after the date on which it is made. Further information concerning Marsh & McLennan Companies and its businesses, including information about factors that could materially affect our results of operations and financial condition, is contained in the Company's filings with the Securities and Exchange Commission, including the ~~“Risk Factors”~~"Risk Factors" section and the "Management’s Discussion and Analysis of Financial Condition and Results of Operations" section of our most recently filed Annual Report on Form 10-K.

TABLE OF CONTENTS



PART I. FINANCIAL INFORMATION		4

ITEM 1.	FINANCIAL STATEMENTS (UNAUDITED)	4

	CONSOLIDATED STATEMENTS OF INCOME	4

	CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME	5

	CONSOLIDATED BALANCE SHEETS	6

	CONSOLIDATED BALANCE SHEETS (Continued)	7

	CONSOLIDATED STATEMENTS OF CASH FLOWS	8

	CONSOLIDATED STATEMENTS OF EQUITY	9

	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS	10

ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS	3127
	OF OPERATIONS
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	4237

ITEM 4.	CONTROLS & PROCEDURES	4338

PART II. OTHER INFORMATION		4439

ITEM 1.	LEGAL PROCEEDINGS	4439

ITEM 1A.	RISK FACTORS	4439

ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	4439

ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	4540

ITEM 4.	MINE SAFETY DISCLOSURE	4540

ITEM 5.	OTHER INFORMATION	4540

ITEM 6.	EXHIBITS	4540

PART I. FINANCIAL INFORMATION


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,						Three Months Ended March 31,
(In millions, except per share figures)	2014			2013			2014			2013			2015			2014
Revenue	$	3,141		$	2,932		$	9,705		$	9,146		$	3,215		$	3,264
Expense:
Compensation and benefits	1,904			1,824			5,619			5,393			1,730			1,839
Other operating expenses	792			704			2,321			2,165			750			752
Operating expenses	2,696			2,528			7,940			7,558			2,480			2,591
Operating income	445			404			1,765			1,588			735			673
Interest income	6			5			16			13			3			5
Interest expense	(45		)	(40		)	(129		)	(124		)	(36		)	(42		)
Investment income	26			14			37			58			2			13
Income before income taxes	432			383			1,689			1,535			704			649
Income tax expense	127			123			487			463			206			192
Income from continuing operations	305			260			1,202			1,072			498			457
Discontinued operations, net of tax	(1		)	(1		)	(4		)	6			(3		)	(1		)
Net income before non-controlling interests	304			259			1,198			1,078			495			456
Less: Net income attributable to non-controlling interests	7			6			27			24			13			13
Net income attributable to the Company	$	297		$	253		$	1,171		$	1,054		$	482		$	443
Basic net income per share – Continuing operations	$	0.55		$	0.46		$	2.15		$	1.91		$	0.90		$	0.81
– Net income attributable to the Company	$	0.55		$	0.46		$	2.14		$	1.92		$	0.89		$	0.81
Diluted net income per share – Continuing operations	$	0.54		$	0.45		$	2.12		$	1.88		$	0.89		$	0.80
– Net income attributable to the Company	$	0.54		$	0.45		$	2.11		$	1.89		$	0.88		$	0.80
Average number of shares outstanding – Basic	544			549			547			549			539			548
– Diluted	551			558			554			558			545			556
Shares outstanding at September 30	542			547			542			547
Shares outstanding at March 31													538			549

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

MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended March 31,
(In millions)	2014			2013			2014			2013			2015			2014
Net income before non-controlling interests	$	304		$	259		$	1,198		$	1,078		$	495		$	456
Other comprehensive income (loss), before tax:
Foreign currency translation adjustments	(421		)	254			(214		)	(91		)	(426		)	71
Unrealized investment loss	—			—			—			(1		)
Gain (loss) related to pension/post-retirement plans	172			(37		)	(69		)	265			236			(199		)
Other comprehensive income (loss), before tax	(249		)	217			(283		)	173
Other comprehensive (loss) income, before tax													(190		)	(128		)
Income tax expense (credit) on other comprehensive income	39			(5		)	(9		)	79			53			(41		)
Other comprehensive income (loss), net of tax	(288		)	222			(274		)	94
Other comprehensive (loss) income, net of tax													(243		)	(87		)
Comprehensive income	16			481			924			1,172			252			369
Less: comprehensive income attributable to non-controlling interest	7			6			27			24			13			13
Comprehensive income attributable to the Company	$	9		$	475		$	897		$	1,148		$	239		$	356

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

MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)


	(Unaudited)
(In millions, except share and per share figures)	September 30, 2014			December 31, 2013			March 31, 2015			December 31, 2014
ASSETS
Current assets:
Cash and cash equivalents	$	2,649		$	2,303		$	1,104		$	1,958
Receivables
Commissions and fees	3,266			3,065			3,135			3,142
Advanced premiums and claims	77			61			56			50
Other	258			282			285			280
	3,601			3,408			3,476			3,472
Less-allowance for doubtful accounts and cancellations	(105		)	(98		)	(96		)	(95		)
Net receivables	3,496			3,310			3,380			3,377
Current deferred tax assets	478			482			466			521
Other current assets	229			205			227			199
Total current assets	6,852			6,300			5,177			6,055
Goodwill and intangible assets	7,814			7,365			7,832			7,933
Fixed assets (net of accumulated depreciation and amortization of $1,655 at September 30, 2014 and $1,597 at December 31, 2013)	822			828
Fixed assets (net of accumulated depreciation and amortization of $1,635 at March 31, 2015 and $1,639 at December 31, 2014)							794			809
Pension related assets	1,007			979			1,010			967
Deferred tax assets	516			626			812			876
Other assets	976			882			1,209			1,200
	$	17,987		$	16,980		$	16,834		$	17,840

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

MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (Continued)

(Unaudited)


	(Unaudited)
(In millions, except share and per share figures)	September 30, 2014			December 31, 2013			March 31, 2015			December 31, 2014
LIABILITIES AND EQUITY
Current liabilities:
Short-term debt	$	640		$	334		$	61		$	11
Accounts payable and accrued liabilities	1,800			1,861			1,699			1,883
Accrued compensation and employee benefits	1,338			1,466			706			1,633
Accrued income taxes	199			148			136			178
Dividends payable	153			—			151			—
Total current liabilities	4,130			3,809			2,753			3,705
Fiduciary liabilities	4,871			4,234			4,585			4,552
Less – cash and investments held in a fiduciary capacity	(4,871		)	(4,234		)	(4,585		)	(4,552		)
	—			—			—			—
Long-term debt	3,379			2,621			3,828			3,376
Pension, post-retirement and post-employment benefits	1,094			1,150			2,070			2,244
Liabilities for errors and omissions	355			373			334			341
Other liabilities	1,114			1,052			986			1,041
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, 2014
and December 31, 2013	561			561
1,600,000,000 shares, issued 560,641,640 shares at March 31, 2015
and December 31, 2014							561			561
Additional paid-in capital	922			1,028			837			930
Retained earnings	10,042			9,452			10,515			10,335
Accumulated other comprehensive loss	(2,895		)	(2,621		)	(4,090		)	(3,847		)
Non-controlling interests	82			70			91			79
	8,712			8,490			7,914			8,058
Less – treasury shares, at cost, 18,346,142 shares at September 30, 2014
and 13,882,204 shares at December 31, 2013	(797		)	(515		)
Less – treasury shares, at cost, 22,229,254 shares at March 31, 2015
and 20,499,596 shares at December 31, 2014							(1,051		)	(925		)
Total equity	7,915			7,975			6,863			7,133
	$	17,987		$	16,980		$	16,834		$	17,840

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

MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


For the Nine Months Ended September 30,
For the Three Months Ended March 31,
(In millions)	2014			2013			2015			2014
Operating cash flows:
Net income before non-controlling interests	$	1,198		$	1,078		$	495		$	456
Adjustments to reconcile net income to cash provided by operations:
Adjustments to reconcile net income to cash used for operations:
Depreciation and amortization of fixed assets and capitalized software	225			213			77			75
Amortization of intangible assets	64			53			24			22
Intangible asset impairment	—			5
Adjustments to acquisition related contingent consideration liability	5			16			(2		)	(6		)
Provision for deferred income taxes	103			137			87			59
Gain on investments	(37		)	(58		)	(2		)	(13		)
Loss on disposition of assets	4			1			1			1
Share based compensation expense	74			100
Share-based compensation expense							24			33
Changes in assets and liabilities:
Net receivables	(182		)	(229		)	(1		)	(150		)
Other current assets	(19		)	(71		)	28			(35		)
Other assets	16			(60		)	(43		)	33
Accounts payable and accrued liabilities	(53		)	47			(128		)	47
Accrued compensation and employee benefits	(128		)	(279		)	(927		)	(764		)
Accrued income taxes	59			39			(37		)	28
Contributions to pension and other benefit plans in excess of current year expense/credit	(141		)	(400		)	(134		)	(93		)
Other liabilities	(75		)	(15		)	(82		)	(85		)
Effect of exchange rate changes	28			(2		)	90			12
Net cash provided by operations	1,141			575
Net cash used for operations							(530		)	(380		)
Financing cash flows:
Purchase of treasury shares	(600		)	(400		)	(300		)	(100		)
Net increase in commercial paper							—			100
Proceeds from debt	1,393			546			500			—
Repayments of debt	(327		)	(257		)	(2		)	(3		)
Shares withheld for taxes on vested units – treasury shares	(56		)	(74		)	(47		)	(49		)
Issuance of common stock from treasury shares	190			254			104			92
Payments of contingent consideration for acquisitions	(28		)	(8		)
Payments of deferred and contingent consideration for acquisitions							(32		)	(20		)
Distributions of non-controlling interests	(13		)	(17		)	(1		)	(1		)
Dividends paid	(429		)	(394		)	(151		)	(137		)
Net cash provided by (used for) financing activities	130			(350		)	71			(118		)
Investing cash flows:
Capital expenditures	(285		)	(288		)	(91		)	(99		)
Net (purchases) sales of long-term investments	(117		)	90			(87		)	—
Proceeds from sales of fixed assets	2			2			1			1
Dispositions	—			3
Acquisitions	(416		)	(108		)	(16		)	(319		)
Other, net	—			2			(1		)	1
Net cash used for investing activities	(816		)	(299		)	(194		)	(416		)
Effect of exchange rate changes on cash and cash equivalents	(109		)	(53		)	(201		)	(9		)
Increase (decrease) in cash and cash equivalents	346			(127		)
Decrease in cash and cash equivalents							(854		)	(923		)
Cash and cash equivalents at beginning of period	2,303			2,301			1,958			2,303
Cash and cash equivalents at end of period	$	2,649		$	2,174		$	1,104		$	1,380

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

MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited)


For the Nine Months Ended September 30,
For the Three Months Ended March 31,
(In millions, except per share figures)	2014			2013			2015			2014
COMMON STOCK
Balance, beginning and end of period	$	561		$	561		$	561		$	561
ADDITIONAL PAID-IN CAPITAL
Balance, beginning of year	$	1,028		$	1,107		$	930		$	1,028
Change in accrued stock compensation costs	(26		)	(45		)	(40		)	(59		)
Issuance of shares under stock compensation plans and employee stock purchase plans and related tax impact	(80		)	(52		)	(53		)	(60		)
Balance, end of period	$	922		$	1,010		$	837		$	909
RETAINED EARNINGS
Balance, beginning of year	$	9,452		$	8,628		$	10,335		$	9,452
Net income attributable to the Company	1,171			1,054			482			443
Dividend equivalents declared - (per share amounts: $1.06 in 2014 and $0.96 in 2013)	(3		)	(5		)
Dividends declared – (per share amounts: $1.06 in 2014 and $0.96 in 2013)	(578		)	(526		)
Dividend equivalents declared – (per share amounts: $0.56 in 2015 and $0.50 in 2014)							(1		)	(1		)
Dividends declared – (per share amounts: $0.56 in 2015 and $0.50 in 2014)							(301		)	(274		)
Balance, end of period	$	10,042		$	9,151		$	10,515		$	9,620
ACCUMULATED OTHER COMPREHENSIVE LOSS
Balance, beginning of year	$	(2,621	)	$	(3,307	)	$	(3,847	)	$	(2,621	)
Other comprehensive income (loss), net of tax	(274		)	94			(243		)	(87		)
Balance, end of period	$	(2,895	)	$	(3,213	)	$	(4,090	)	$	(2,708	)
TREASURY SHARES
Balance, beginning of year	$	(515	)	$	(447	)	$	(925	)	$	(515	)
Issuance of shares under stock compensation plans and employee stock purchase plans	318			380			174			194
Purchase of treasury shares	(600		)	(400		)	(300		)	(100		)
Balance, end of period	$	(797	)	$	(467	)	$	(1,051	)	$	(421	)
NON-CONTROLLING INTERESTS
Balance, beginning of year	$	70		$	64		$	79		$	70
Net income attributable to non-controlling interests	27			24			13			13
Distributions	(13		)	(17		)	(1		)	—
Other changes	(2		)	7			—			(1		)
Balance, end of period	$	82		$	78		$	91		$	82
TOTAL EQUITY	$	7,915		$	7,120		$	6,863		$	8,043

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

MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Nature of Operations

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

The Risk and Insurance Services segment provides risk management activities and insurance broking, reinsurance broking and insurance program management 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.

The Company conducts business in its Consulting segment through two main business groups. Mercer provides consulting expertise, advice, services and solutions in the areas of health, retirement, talent and investments. Within the investments business, Mercer provides delegated investment (fiduciary management) solutions to institutional investors (such as retirement plan sponsors and trustees) and to individual investors (primarily through the inclusion of funds managed by Mercer on defined contribution and wealth management platforms). As of ~~September 30, 2014,~~March 31, 2015, Mercer had assets under management of ~~$108~~$125 billion worldwide. Oliver Wyman Group provides specialized management and economic and brand consulting services.

Acquisitions impacting the Risk and Insurance Services and Consulting segments are discussed in Note 7 to the consolidated financial statements.

2. Principles of Consolidation and Other Matters

The consolidated financial statements included herein have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission. While certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted pursuant to such rules and regulations for interim filings, 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, ~~2013~~2014 (the “~~2013~~ ~~10-K”~~"2014 10-K").

The financial information contained herein reflects all adjustments consisting only of 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 ~~three- and nine-month~~three-month periods ended ~~September 30, 2014~~March 31, 2015 and ~~2013~~2014.

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 of approximately ~~$202~~$171 million related to regulatory requirements outside the U.S. or as collateral under captive insurance arrangements.

~~Investment Income~~Investments

The Company holds investments in private companies and private equity funds. Investments in private equity funds are accounted for under 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. The Company records in earnings, investment gains/losses for its proportionate share of the change in fair value of the funds. Investments using the equity method of accounting are included in other assets in the consolidated balance sheets.

The caption “Investment income” in the consolidated statements of income comprises realized and unrealized gains and losses from investments recognized in current earnings. It includes, when applicable, other than temporary declines in the value of debt and available for sale securities and the change in value of the Company’s holdings in certain private equity funds, including equity method gains (losses) on its investment in the Trident funds. The Company’s investments may include direct investments in insurance or consulting companies and investments in

private equity funds. The Company recorded investment income of ~~$26~~$2 million in the ~~third~~first quarter of ~~2014~~2015 compared to ~~$14~~$13 million for the same period in 2013, primarily related to our general partner carried interest from Trident III no longer subject to claw-back. Investment income for the nine months of 2014 was $37 million compared to $58 million in 2013. 2014 includes carried interest from Trident III of $31 million compared with $34 million in 2013. The Company also recorded $20 million of investment gains for the nine months of 2013 related to its investment in Trident II. The Company no longer holds an investment in Trident II. At September 30, 2014 and 2013, the Company had deferred performance fees of approximately $15 million and $43 million, respectively,

related to Trident III. Recognition of these deferred performance fees will only occur as the Trident III investments are harvested and the performance fees are no longer subject to claw-back. The timing of recognition of the remaining deferred performance fees is unknown and is not controlled by the Company.2014.

Income Taxes

The Company's effective tax rate in the ~~third~~first quarter of 2015 was 29.2% compared with 29.5% in the first quarter of 2014 ~~was~~ ~~29.6%~~ ~~compared with 32.1% in the third quarter of~~ ~~2013~~. ~~The effective tax rates for the first nine months of 2014 and~~ ~~2013~~ ~~were 28.9% and 30.1%, respectively.~~ These rates reflect non-U.S. income taxed at rates below the U.S. statutory rate, including the effect of repatriation, as well as the impact of discrete tax matters such as changes in circumstances that result in a change in judgment about the beginning balance in valuation allowances, the resolution of tax examinations and expirations of statutes of limitations. ~~The rate in the third quarter of 2013 also included the impact of tax changes on the Company's deferred tax assets and liabilities.~~

The Company is routinely examined by tax authorities in the jurisdictions in which it has significant operations. The Company regularly considers the likelihood of assessments in each of the taxing jurisdictions resulting from examinations. When evaluating the potential imposition of penalties, the Company considers a number of relevant factors under penalty statutes, including appropriate disclosure of the tax return position, the existence of legal authority supporting the Company's position, and reliance on the opinion of professional tax advisors.

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 ~~decreased~~increased from

$~~128~~97 million at December 31, ~~2013~~2014 to ~~$105~~$100 million at ~~September 30, 2014~~March 31, 2015. It is reasonably possible that the total amount of unrecognized tax benefits will decrease between zero and approximately ~~$15~~$22 million within the next twelve months due to settlements of audits and expirations of statutes of limitation.

During the second quarter of 2014, the Company settled the federal tax audit with the IRS for the year 2012. During the second quarter of 2013, the Company settled federal tax audits with the IRS for the years 2007 and 2009 through 2011.

~~Reclassifications~~

In the first quarter of 2014, the Company enhanced its operating cash flow presentation within the statement of cash flows to show on single lines the impact of pension and other benefit plan contributions in excess of the related expenses, and the non-cash impact of equity share awards. Previously, the cash flow impact of those items was presented as part of changes in other assets and other liabilities, and changes in other liabilities, respectively. The prior year’s presentation was conformed to the current presentation for the following line items within operating cash flows:

~~Share-based compensation expense~~

~~Changes in other assets~~

~~Contributions to pension and other benefit plans in excess of current year expense/credit~~

~~Changes in other liabilities~~

3. Fiduciary Assets and Liabilities

In its capacity as an insurance broker or agent, the Company 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. Risk and Insurance Services revenue includes interest on fiduciary funds of $185 million and $21$6 million for the ~~nine~~three-month periods ended ~~September 30, 2014~~March 31, 2015 and ~~2013~~2014, respectively. The Consulting segment recorded fiduciary interest income of $51 million ~~and $3 million~~ for ~~the~~each of the ~~nine~~three-month periods ended ~~September 30, 2014~~March 31, 2015 and ~~2013~~2014~~, respectively.~~. Since fiduciary assets are not available for corporate use, they are shown in the consolidated balance sheets as an offset to fiduciary liabilities.

Net uncollected premiums and claims and the related payables amounted to ~~$7.8~~$8.1 billion at ~~September 30, 2014~~March 31, 2015 and $~~8.2~~7.3 billion at December 31, ~~2013~~2014. 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. Net uncollected premiums and claims and the related payables are, therefore, 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.

Mercer manages approximately ~~$20~~$26 billion of assets in trusts or funds for which Mercer’s management or trustee fee is considered a variable interest. Mercer is not the primary beneficiary of these trusts or funds. Mercer’s only variable interest in any of these trusts or funds is its unpaid fees, if any. Mercer’s maximum exposure to loss of its interests is, therefore, limited to collection of its fees.

4. Per Share Data

Basic net income per share attributable to the Company and income from continuing operations per share are calculated by dividing the respective after-tax income by the weighted average number of outstanding shares of the Company’s common stock.

Diluted net income per share attributable to the Company and income from continuing operations per share are calculated by dividing the respective after-tax income 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. Reconciliations of the applicable income components used for diluted EPS - Continuing operations and basic weighted average common shares outstanding to diluted weighted average common shares outstanding are presented below. The reconciling items related to the calculation of diluted weighted average common shares outstanding are the same for net income attributable to the Company.


Basic and Diluted EPS Calculation - Continuing Operations	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended March 31,
(In millions, except per share figures)	2014		2013		2014		2013		2015		2014
Net income from continuing operations	$	305	$	260	$	1,202	$	1,072	$	498	$	457
Less: Net income attributable to non-controlling interests	7		6		27		24		13		13
	$	298	$	254	$	1,175	$	1,048	$	485	$	444
Basic weighted average common shares outstanding	544		549		547		549		539		548
Dilutive effect of potentially issuable common shares	7		9		7		9		6		8
Diluted weighted average common shares outstanding	551		558		554		558		545		556
Average stock price used to calculate common stock equivalents	$	52.15	$	42.08	$	49.89	$	39.15	$	56.37	$	47.84

There were ~~19.3~~17.2 million and ~~24.9~~21.6 million stock options outstanding as of ~~September 30, 2014~~March 31, 2015 and ~~2013~~2014, respectively.

5. Supplemental Disclosures to the Consolidated Statements of Cash Flows

The following schedule provides additional information concerning acquisitions, interest and income taxes paid for the ~~nine~~three-month periods ended ~~September 30, 2014~~March 31, 2015 and ~~2013~~2014.


(In millions of dollars)	2014			2013			2015			2014
Assets acquired, excluding cash	$	598		$	199		$	30		$	464
Liabilities assumed	(45		)	(59		)	(2		)	(38		)
Contingent/deferred purchase consideration	(147		)	(37		)	(12		)	(113		)
Net cash outflow for current year acquisitions	406			103			$	16		$	313
Purchase of other intangibles	—			1
Deferred purchase consideration from prior years' acquisitions	10			4
Net cash outflow for acquisitions	$	416		$	108


(In millions of dollars)	2014		2013		2015		2014
Interest paid	$	126	$	140	$	40	$	44
Income taxes paid	$	306	$	258	$	118	$	120

The Company paid deferred purchase consideration related to prior years' acquisitions of $26 million and $6 million for the three months ended March 31, 2015 and 2014, respectively.

The Company had non-cash issuances of common stock of ~~$105~~$64 million and ~~$148~~$92 million for the ~~nine~~three months ended ~~September 30,~~March 31, 2015 and 2014, ~~and~~ ~~2013~~, respectively, primarily related to its share-based payment plans. The Company recorded share-based compensation expense related to equity awards (excluding stock options) of ~~$60~~$16 million and ~~$84~~$26 million for the ~~nine-month~~three-month periods ended ~~September 30,~~March 31, 2015 and 2014, ~~and~~ ~~2013~~, respectively.

The consolidated statement of cash flows includes the cash flow impact of discontinued operations related to indemnification payments from the Putnam disposition, that reduced the net cash flow used for operations by $82 million for the quarter ended March 31, 2015.

6. Other Comprehensive Income (Loss)

The changes in the balances of each component of Accumulated Other Comprehensive Income ("AOCI") for the ~~three- and nine-month~~three-month periods ended ~~September 30, 2014~~March 31, 2015 and ~~2013,~~2014, including amounts reclassified out of AOCI, are as follows:


(In millions of dollars)	Unrealized Investment Gains		Pension/Post-Retirement Plans Gains (Losses)			Foreign Currency Translation Adjustments			Total			Unrealized Investment Gains		Pension/Post-Retirement Plans Gains (Losses)			Foreign Currency Translation Adjustments			Total
Balance as of July 1, 2014	$	5	$	(2,883	)	$	271		$	(2,607	)
Balance as of January 1, 2015												$	5	$	(3,393	)	$	(459	)	$	(3,847	)
Other comprehensive income (loss) before reclassifications	—		94			(419		)	(325		)	—		128			(423		)	(295		)
Amounts reclassified from accumulated other comprehensive income	—		37			—			37			—		52			—			52
Net current period other comprehensive income (loss)	—		131			(419		)	(288		)	—		180			(423		)	(243		)
Balance as of September 30, 2014	$	5	$	(2,752	)	$	(148	)	$	(2,895	)
Balance as of March 31, 2015												$	5	$	(3,213	)	$	(882	)	$	(4,090	)


(In millions of dollars)	Unrealized Investment Gains		Pension/Post-Retirement Plans Gains (Losses)			Foreign Currency Translation Adjustments			Total			Unrealized Investment Gains		Pension/Post-Retirement Plans Gains (Losses)			Foreign Currency Translation Adjustments		Total
Balance as of July 1, 2013	$	3	$	(3,238	)	$	(200	)	$	(3,435	)
Balance as of January 1, 2014												$	5	$	(2,682	)	$	56	$	(2,621	)
Other comprehensive income (loss) before reclassifications	—		(85		)	256			171			—		(199		)	78		(121		)
Amounts reclassified from accumulated other comprehensive income	—		51			—			51			—		34			—		34
Net current period other comprehensive income (loss)	—		(34		)	256			222			—		(165		)	78		(87		)
Balance as of September 30, 2013	$	3	$	(3,272	)	$	56		$	(3,213	)
Balance as of March 31, 2014												$	5	$	(2,847	)	$	134	$	(2,708	)

(In millions of dollars) Unrealized Investment Gains Pension/Post-Retirement Plans Gains (Losses) Foreign Currency Translation Adjustments Total
Balance as of January 1, 2014 $ 5
$ (2,682 ) $ 56
$ (2,621 )
Other comprehensive income (loss) before reclassifications —
(174 ) (204 ) (378 )
Amounts reclassified from accumulated other comprehensive income —
104
—
104
Net current period other comprehensive income (loss) —
(70 ) (204 ) (274 )
Balance as of September 30, 2014 $ 5
$ (2,752 ) $ (148 ) $ (2,895 )

(In millions of dollars) Unrealized Investment Gains Pension/Post-Retirement Plans Gains (Losses) Foreign Currency Translation Adjustments Total
Balance as of January 1, 2013 $ 4
$ (3,451 ) $ 140
$ (3,307 )
Other comprehensive income (loss) before reclassifications (1 ) 36
(84 ) (49 )
Amounts reclassified from accumulated other comprehensive income —
143
—
143
Net current period other comprehensive income (loss) (1 ) 179
(84 ) 94
Balance as of September 30, 2013 $ 3
$ (3,272 ) $ 56
$ (3,213 )

The components of other comprehensive income (loss) for the ~~three- and nine-month~~three-month periods ended ~~September 30, 2014~~March 31, 2015 and ~~2013~~2014 are as follows:


Three Months Ended September 30,	2014									2013

Three Months Ended March 31,																			2015									2014
(In millions of dollars)	Pre-Tax			Tax			Net of Tax			Pre-Tax			Tax			Net of Tax			Pre-Tax			Tax			Net of Tax			Pre-Tax			Tax			Net of Tax
Foreign currency translation adjustments	$	(421	)	$	(2	)	$	(419	)	$	254		$	(2	)	$	256		$	(426	)	$	(3	)	$	(423	)	$	71		$	(7	)	$	78
Unrealized investment gains (losses)	—			—			—			—			—			—			—			—			—			—			—			—
Pension/post-retirement plans:
Amortization of losses (gains) included in net periodic pension cost:
Prior service gains (a)	(3		)	(1		)	(2		)	(6		)	(2		)	(4		)	—			—			—			(3		)	(1		)	(2		)
Net actuarial losses (a)	57			18			39			81			26			55			77			25			52			51			15			36
Subtotal	54			17			37			75			24			51			77			25			52			48			14			34
Effect of remeasurement	(1		)	(1		)	—			—			—			—			(4		)	(1		)	(3		)	(166		)	(33		)	(133		)
Effect of curtailment	—			—			—			—			—			—			—			—			—			(65		)	(13		)	(52		)
Plan Termination																			(6		)	(2		)	(4		)	—			—			—
Foreign currency translation adjustments	119			25			94			(106		)	(25		)	(81		)	169			34			135			(17		)	(2		)	(15		)
Other	—			—			—			(6		)	(2		)	(4		)	—			—			—			1			—			1
Pension/post-retirement plans (losses) gains	172			41			131			(37		)	(3		)	(34		)	236			56			180			(199		)	(34		)	(165		)
Other comprehensive income (loss)	$	(249	)	$	39		$	(288	)	$	217		$	(5	)	$	222		$	(190	)	$	53		$	(243	)	$	(128	)	$	(41	)	$	(87	)
(a) Components of net periodic pension cost are included in compensation and benefits in the Consolidated Statements of Income. Tax on prior service gains and net actuarial losses is included in income tax expense.

Nine Months Ended September 30, 2014 2013
(In millions of dollars) Pre-Tax
Tax
Net of Tax
Pre-Tax
Tax
Net of Tax
Foreign currency translation adjustments $ (214 ) $ (10 ) $ (204 ) $ (91 ) $ (7 ) $ (84 )
Unrealized investment gains (losses) —
—
—
(1 ) —
(1 )
Pension/post-retirement plans:
Amortization of losses (gains) included in net periodic pension cost:

Prior service gains (a) (8 ) (3 ) (5 ) (17 ) (6 ) (11 )
Net actuarial losses (a) 157
48
109
237
83
154
Subtotal 149
45
104
220
77
143
Effect of remeasurement (167 ) (34 ) (133 ) —
—
—
Effect of curtailment (65 ) (13 ) (52 ) —
—
—
Foreign currency translation adjustments 11
3
8
51
11
40
Other 3
—
3
(6 ) (2 ) (4 )
Pension/post-retirement plans (losses) gains (69 ) 1
(70 ) 265
86
179
Other comprehensive (loss) income $ (283 ) $ (9 ) $ (274 ) $ 173
$ 79
$ 94
(a) Components of net periodic pension cost are included in compensation and benefits in the Consolidated Statements of Income. Tax on prior service gains and net actuarial losses is included in income tax expense.
(a) Components of net periodic pension cost are included in compensation and benefits in the Consolidated Statements of Income. Tax on prior service gains and net actuarial losses is included in income tax expense.

1413

7. Acquisitions

The Company completed 123 acquisitions during the first ~~nine~~three months of ~~2014~~2015.

January - Marsh & McLennan Agency ("MMA") acquired Barney & Barney, a San Diego-based insurance broking firm that provides insurance, risk management, and employee benefits solutions to businesses and individuals throughout the U.S. and abroad. Also in January,– Marsh acquired ~~Central Insurance Services, an independent insurance broker in Scotland that provides insurance broking and risk advisory services to companies of all sizes across industry sectors.~~

~~February - MMA acquired Great Lakes Employee Benefits Services, Inc.~~INGESEG S.A., an ~~employee group benefits consulting and brokerage firm based in Michigan, and Bond Network, Inc., a surety bonding agency based in North Carolina.~~

March - MMA acquired Capstone Insurance Services, LLC, an agency that provides property/casualty insurance and risk management solutions to businesses and individuals throughout South Carolina, and Mercer acquired Transition Assist, a retiree exchange specializing in helping retirees in employer-sponsored plans select Medicare supplemental health care insurance.

May - MMA acquired Kinker-Eveleigh Insurance Agency, an Ohio-based agency specializing in property-casualty and employee benefits solutions, and VISICOR, a full-service employee benefits brokerage and consulting firm based in Texas.

~~June - MMA acquired Senn Dunn Insurance, a full service~~ insurance brokerage located in ~~North Carolina.~~Argentina.

~~July - Marsh acquired Seguros Morrice y Urrutia S.A., an insurance broker based in Panama City, Panama.~~

~~September - Marsh acquired Kocisko Insurance Brokers, Inc., an insurance agency located in Montreal, Quebec; and~~February – Oliver Wyman acquired ~~Bonfire Communications, an agency specializing in employee engagement~~TeamSAI, a Georgia-based provider of consulting and ~~internal communications based in San Francisco, California.~~technical services to the transportation industry, and Mercer acquired Strategic Capital Management AG, a Switzerland-based institutional investment advisor.

Total purchase consideration for acquisitions made during the first ~~nine~~three months of ~~2014~~2015 was $~~573~~32 million, which consisted of cash paid of $~~426~~20 million and deferred purchase and estimated contingent consideration of $~~147~~12 million. Contingent consideration arrangements are primarily based on EBITDA and revenue targets over periods ranging from two to four years. The fair value of the contingent consideration was based on projected revenue and earnings of the acquired entities. The estimated fair values of assets acquired and liabilities assumed are subject to adjustment when purchase accounting is finalized. The Company also paid ~~$10~~$26 million of deferred purchase consideration and ~~$40~~$19 million of contingent consideration related to acquisitions made in prior years. In addition, the Company purchased other intangible assets in the amount of $3 million.

The following table presents the preliminary allocation of the acquisition cost to the assets acquired and liabilities assumed during ~~2014~~2015 based on their fair values:


For the Nine Months Ended September 30, 2014
(Amounts in millions)
For the Three Months Ended March 31, 2015
(In millions of dollars)
Cash	$	426	$	20
Estimated fair value of deferred/contingent consideration	147		12
Total Consideration	$	573	$	32
Allocation of purchase price:
Cash and cash equivalents	$	20	$	4
Accounts receivable, net	6		3
Other current assets	—
Property, plant, and equipment	4
Intangible assets	233		10
Goodwill	350		12
Other assets	5		5
Total assets acquired	618		34
Current liabilities	36		—
Other liabilities	9		2
Total liabilities assumed	45		2
Net assets acquired	$	573	$	32

Prior Year Acquisitions

The Risk and Insurance Services segment completed ~~six~~fifteen acquisitions during ~~2013.~~2014.

~~June -~~January – Marsh & McLennan Agency ("MMA") acquired Barney & Barney, LLC, a San Diego-based insurance broking firm that provides insurance, risk management and employee benefits solutions to businesses and individuals throughout the U.S. and abroad, Great Lakes Employee Benefits Services, Inc., an employee group benefits consulting and brokerage firm based in Michigan, and Bond Network, Inc., a surety bonding agency based in North Carolina.

February – Marsh acquired ~~Rehder y Asociados Group,~~Central Insurance Services, an ~~insurance adviser in Peru. The business includes the~~independent insurance broker ~~Rehder y Asociados~~in Scotland that provides insurance broking and risk advisory services to companies of all sizes across industry sectors.

March – MMA acquired Capstone Insurance Services, LLC, an agency that provides property-casualty insurance and risk management solutions to businesses and individuals throughout South Carolina.

May – MMA acquired Kinker-Eveleigh Insurance Agency, an Ohio-based agency specializing in property-casualty and employee ~~health~~benefits solutions, VISICOR, a full-service employee benefits brokerage and ~~benefits specialist, Humanasalud. Marsh also completed the acquisition of Franco & Acra Tecniseguros, an insurance advisor in the Dominican Republic.~~

~~July - Guy Carpenter acquired Smith Group, a specialist disability reinsurance risk manager and consultant~~consulting firm based in ~~Maine.~~Texas, and Senn Dunn Insurance, a full-service insurance brokerage located in North Carolina.

~~September -~~

August – Marsh ~~purchased an additional stake in Insia a.s.~~acquired Seguros Morrice y Urrutia S.A., an insurance broker ~~operating~~based in ~~the Czech Republic and Slovakia which, when combined with its prior holdings, gave~~Panama City, Panama.

September – Marsh acquired Kocisko Insurance Brokers, Inc., a ~~controlling interest. Insia a.s. was previously accounted for under the equity method.~~full-service commercial insurance brokerage located in Montreal, Quebec.

October – MMA acquired NuWest Insurance Services, Inc., a California-based property-casualty agency.

November -– Marsh acquired Torrent Technologies, Inc., a Montana-based flood insurance specialist.

December – Marsh acquired Seafire Insurance Services, LLC, a Kansas-based managing general underwriter, and Trade Insure NV, a leading distributor of credit insurance policies in Belgium, and MMA acquired ~~Elsey & Associates,~~The Benefit Planning Group, Inc., a ~~Texas-based provider of surety bonds and insurance coverage to the construction industry.~~

~~December - MMA acquired Cambridge Property and Casualty, a Michigan-based company providing insurance and risk management services to high net worth individuals and mid-sized businesses.~~North Carolina-based employee benefit consulting firm.

The Consulting segment completed ~~two~~six acquisitions during ~~2013.~~2014.

~~July -~~February – Mercer acquired Transition Assist, a retiree exchange specializing in helping retirees in employer-sponsored plans select Medicare supplemental health care insurance.

September – Oliver Wyman acquired ~~Corven, a U.K.-based management consultancy firm.~~Bonfire Communications, an agency specializing in employee engagement and internal communications based in San Francisco, California.

~~August -~~November – Mercer acquired ~~Global Remuneration Solutions,~~AUSREM, a ~~market leading~~remuneration research and workforce consulting specialist based in Australia, and Jeitosa Group International, a global HR business consultancy and IT systems integration firm.

December – Mercer acquired Denarius, a compensation and benefits survey and information products consulting firm based in ~~South Africa.~~Chile, and Oliver Wyman acquired OC&C Strategy Consultants (Boston) LLC (part of the OC&C network), a Boston-based consulting firm specializing in the business media, information services and education sectors.

Total purchase consideration for acquisitions made during the first ~~nine~~three months of ~~2013~~2014 was ~~$156~~$444 million, which consisted of cash paid of ~~$119~~$331 million and deferred purchase and estimated contingent consideration of ~~$37~~$113 million. Contingent consideration arrangements are primarily based on EBITDA and revenue targets over periods ranging from two to four years. The fair value of the contingent consideration was based on projected revenue and earnings of the acquired entities. The estimated fair values of assets acquired and liabilities assumed are subject to adjustment when purchase accounting is finalized. The Company also paid $4$6 million of deferred purchase consideration and $8$30 million of contingent consideration related to acquisitions made in prior years.

Pro-Forma Information

~~While the~~The Company ~~does not believe~~believes its acquisitions made during the first ~~nine~~three months of ~~2014~~ ~~and~~ ~~2013~~2015 are ~~material in the aggregate, the following unaudited~~immaterial and no pro-forma ~~financial data gives effect~~adjustments to ~~the acquisitions~~information presented for 2015 or 2014 has been made ~~by the Company. In accordance with accounting guidance related to pro-forma disclosure, the~~for those acquisitions. The information presented for the 2014 acquisitions is as if they occurred on January 1, ~~2013 and reflects acquisitions made in~~ ~~2013~~ ~~as if they occurred on January 1, 2012.~~2013. The unaudited pro-forma information adjusts for the effects of amortization of acquired intangibles. 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,				Three Months Ended March 31,
(In millions, except per share figures)	2014		2013		2014		2013		2015		2014
Revenue	$	3,143	$	2,981	$	9,744	$	9,338	$	3,215	$	3,302
Income from continuing operations	$	305	$	263	$	1,205	$	1,085	$	498	$	460
Net income attributable to the Company	$	298	$	256	$	1,174	$	1,067	$	482	$	445
Basic net income per share:
– Continuing operations	$	0.55	$	0.47	$	2.15	$	1.93	$	0.90	$	0.81
– Net income attributable to the Company	$	0.55	$	0.47	$	2.15	$	1.94	$	0.89	$	0.81
Diluted net income per share:
– Continuing operations	$	0.54	$	0.46	$	2.13	$	1.90	$	0.89	$	0.80
– Net income attributable to the Company	$	0.54	$	0.46	$	2.12	$	1.91	$	0.88	$	0.80

The consolidated statements of income include the results of operations of acquired companies since their respective acquisition dates. The consolidated statement of income for the ~~three- and nine-month periods ending September 30, 2014~~three-months ended March 31, 2015 includes approximately ~~$46~~$3 million of revenue and $5$0 million of ~~net~~ operating income ~~and approximately $104 million of revenue and $11 million of net operating income, respectively,~~ related to acquisitions made in ~~2014.~~

~~Equity Investment~~

On June 23, 2014, Mercer announced that it had entered into a definitive agreement to acquire a 34% stake in South Africa-based Alexander Forbes Group Holdings Limited ("Alexander Forbes"), becoming a strategic shareholder after Alexander Forbes successfully launched an initial public offering. Mercer purchased its stake in Alexander Forbes in two tranches at 7.50 South African Rand per share. On July 24, 2014, the Company purchased 14.9% of Alexander Forbes common shares for approximately $137 million, which is included in other assets in the consolidated balance sheets. The investment in Alexander Forbes is accounted for using the equity method and included in other assets in the consolidated balance sheet. In October 2014, the Company paid approximately $166 million for the remaining 19.1% of Alexander Forbes common shares.

Alexander Forbes principally focuses on employee benefits and investment solutions for institutional clients, and financial wellbeing and retail financial solutions for individual clients. Services include retirement funds and investment consulting, actuarial and administration services, employee risk benefits and health-care consulting, multi-manager investments solutions, and personal lines and business insurance. The range of services provided by Alexander Forbes aligns closely with Mercer's global business.

2015.

8. Dispositions

Summarized Statements of Income data for discontinued operations is as follows:

Three Months Ended
September 30, Nine Months Ended
September 30,
(In millions of dollars, except per share figures) 2014
2013
2014
2013
Disposals of discontinued operations $ (1 ) $ —
$ (1 ) $ (5 )
Income tax expense (credit) —
1
3
(11 )
Disposals of discontinued operations, net of tax (1 ) (1 ) (4 ) 6
Discontinued operations, net of tax $ (1 ) $ (1 ) $ (4 ) $ 6
Discontinued operations, net of tax per share
– Basic $ —
$ —
$ (0.01 ) $ 0.01
– Diluted $ —
$ —
$ (0.01 ) $ 0.01

~~The~~ ~~nine~~ ~~month period ended September 30, 2013 includes estimated costs under the indemnity related to the Kroll sale and tax indemnities related to the Putnam sale.~~



	Three Months Ended March 31,
(In millions of dollars, except per share figures)	2015			2014
Disposals of discontinued operations	$	(5	)	$	—
Income tax (credit) expense	(2		)	1
Disposals of discontinued operations, net of tax	(3		)	(1		)
Discontinued operations, net of tax	$	(3	)	$	(1	)
Discontinued operations, net of tax per share
– Basic	$	(0.01	)	$	—
– Diluted	$	(0.01	)	$	—

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 impairment may have occurred. The Company performs the annual impairment test for each of its reporting units during the third quarter of each year. In accordance with applicable accounting guidance, the Company assesses qualitative factors to determine whether it is necessary to perform the two-step goodwill impairment test. The Company ~~considered~~considers numerous factors, which ~~included~~include that the fair value of each reporting unit ~~exceeded~~exceeds its fair value by a substantial margin in its most recent estimate of reporting unit fair values, 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~~year-over-year change in the Company’s share price. The Company completed its qualitative assessment in the third quarter of 2014 and concluded that a two-step goodwill impairment test was not required in 2014, that goodwill was not ~~impaired, and that each reporting unit’s fair value exceeded its carrying value by a substantial margin.~~impaired.

Other intangible assets that are not deemed to have an indefinite life are amortized over their estimated lives and reviewed for impairment upon the occurrence of certain triggering events in accordance with applicable accounting literature.

Changes in the carrying amount of goodwill are as follows:


September 30,
March 31,
(In millions of dollars)	2014			2013			2015			2014
Balance as of January 1, as reported	$	6,893		$	6,792		$	7,241		$	6,893
Goodwill acquired	350			93			12			267
Other adjustments^(a)	(64		)	(20		)	(93		)	(1		)
Balance at September 30,	$	7,179		$	6,865
Balance at March 31,							$	7,160		$	7,159


^(a)	Primarily reflects the impact of foreign exchange in each period.

Goodwill allocable to the Company’s reportable segments at ~~September 30, 2014~~March 31, 2015 is as follows: Risk & Insurance Services, $5 billion and Consulting, $2.2 billion.

1816

Amortized intangible assets consist of the cost of client lists, client relationships and trade names acquired. The gross cost and accumulated amortization are as follows:

September 30, 2014 December 31, 2013
(In millions of dollars)
Gross
Cost

Accumulated
Amortization

Net
Carrying
Amount

Gross
Cost

Accumulated
Amortization

Net
Carrying
Amount

Amortized intangibles $ 1,093
$ 458
$ 635
$ 888
$ 416
$ 472

~~The company recorded an intangible asset impairment of $5 million in the third quarter of 2013 in the Risk & Insurance Services segment.~~



	March 31, 2015						December 31, 2014
(In millions of dollars)	Gross Cost		Accumulated Amortization		Net Carrying Amount		Gross Cost		Accumulated Amortization		Net Carrying Amount
Amortized intangibles	$	1,163	$	491	$	672	$	1,177	$	485	$	692

Aggregate amortization expense for the ~~nine~~three months ended ~~September 30, 2014~~March 31, 2015 and ~~2013~~2014 was $6424 million and ~~$53~~$22 million, respectively. The estimated future aggregate amortization expense is as follows:


For the Years Ending December 31,
(In millions of dollars)	Estimated Expense		Estimated Expense
2014 (excludes amortization through September 30, 2014)	$	23
2015	87
2015 (excludes amortization through March 31, 2015)			$	66
2016	76		77
2017	69		74
2018	67		72
2019			73
Subsequent years	313		310
	$	635	$	672

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 as defined by the Financial Accounting Standards Board ("FASB"~~) in Accounting Standards Codification ("ASC") Topic No. 820 ("Fair Value Measurements and Disclosures"~~). 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 money market mutual funds).

Assets and liabilities utilizing Level 1 inputs include exchange-traded equity securities and mutual funds.


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


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


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


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


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

Assets and liabilities utilizing Level 2 inputs include corporate and municipal bonds, senior notes and interest rate swaps.

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 (examples include private equity investments, certain commercial mortgage whole loans, and long-dated or complex derivatives including certain foreign exchange options and long-dated options on gas and power).

Liabilities utilizing Level 3 inputs include liabilities for contingent purchase consideration.

Valuation Techniques

Equity Securities and Mutual Funds -– Level 1

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

~~Interest Rate Swap Derivatives - Level 2~~

~~The fair value of interest rate swap derivatives is based on the present value of future cash flows at each valuation date resulting from utilization of the swaps, using a constant discount rate of~~ ~~1.6%~~ ~~compared to discount rates based on projected future yield curves. The Company settled its interest rate swap positions in July 2014.~~

~~Senior Notes due July 2014 - Level 2~~

~~In the first quarter of 2011, the Company entered into~~ ~~two~~ interest rate swaps to convert interest on a portion of its Senior Notes from a fixed rate to a floating rate. The swaps are designated as fair value hedging instruments. The change in the fair value of the swaps is recorded on the balance sheet. The carrying value of the debt related to these swaps is adjusted by an equal amount. The ~~$250 million~~ ~~of Senior Notes that were tied to the interest rate swaps discussed above matured in July 2014.~~

Contingent Consideration Liability -– Level 3

Purchase consideration for some acquisitions made by the Company includes contingent consideration arrangements. Contingent consideration arrangements are primarily based on meeting EBITDA and revenue targets over periods ~~ranging~~ from two to four years. The fair value of contingent consideration is estimated as the present value of future cash flows resulting from the projected revenue and earnings of the acquired entities.

The following fair value hierarchy table presents information about the Company’s assets and liabilities measured at fair value on a recurring basis as of ~~September 30, 2014~~March 31, 2015 and December 31, ~~2013~~2014.


	Identical Assets (Level 1)				Observable Inputs (Level 2)				Unobservable Inputs (Level 3)				Total				Identical Assets (Level 1)				Observable Inputs (Level 2)				Unobservable Inputs (Level 3)				Total
(In millions of dollars)	09/30/14		12/31/13		09/30/14		12/31/13		09/30/14		12/31/13		09/30/14		12/31/13		03/31/15		12/31/14		03/31/15		12/31/14		03/31/15		12/31/14		03/31/15		12/31/14
Assets:
Financial instruments owned:
Mutual funds^(a)	$	150	$	154	$	—	$	—	$	—	$	—	$	150	$	154	$	140	$	150	$	—	$	—	$	—	$	—	$	140	$	150
Money market funds^(b)	348		45		—		—		—		—		348		45		36		107		—		—		—		—		36		107
Interest rate swap derivatives^(c)	—		—		—		3		—		—		—		3
Total assets measured at fair value	$	498	$	199	$	—	$	3	$	—	$	—	$	498	$	202	$	176	$	257	$	—	$	—	$	—	$	—	$	176	$	257
Fiduciary Assets:
Money market funds	$	77	$	—	$	—	$	—	$	—	$	—	$	77	$	—	$	95	$	57	$	—	$	—	$	—	$	—	$	95	$	57
Total fiduciary assets measured at fair value	$	77	$	—	$	—	$	—	$	—	$	—	$	77	$	—	$	95	$	57	$	—	$	—	$	—	$	—	$	95	$	57
Liabilities:
Contingent purchase consideration liability^(d)	$	—	$	—	$	—	$	—	$	151	$	104	$	151	$	104
Senior Notes due 2014^(e)	—		—		—		253		—		—		—		253
Contingent purchase consideration liability^(c)																	$	—	$	—	$	—	$	—	$	206	$	207	$	206	$	207
Total liabilities measured at fair value	$	—	$	—	$	—	$	253	$	151	$	104	$	151	$	357	$	—	$	—	$	—	$	—	$	206	$	207	$	206	$	207


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


^(e)	~~Included in long-term debt in the consolidated balance sheets.~~

During the ~~nine~~three-month period ended ~~September 30, 2014~~March 31, 2015, there were no assets or liabilities that were transferred between any of the levels.

The table below sets forth a summary of the changes in fair value of the Company’s Level 3 liabilities as of ~~September 30, 2014~~March 31, 2015 and ~~2013~~2014 that represent contingent consideration related to acquisitions:


(In millions of dollars)	2014			2013			2015			2014
Balance at January 1,	$	104		$	63		$	207		$	104
Additions	70			21			8			55
Payments	(40		)	(8		)	(19		)	(30		)
Revaluation Impact	17			16			10			4
Balance at September 30,	$	151		$	92
Balance at March 31,							$	206		$	133

The fair value of the contingent liability is based on projections of revenue and earnings for the acquired entities that are reassessed on a quarterly basis. As set forth in the table above, based on the Company's ongoing assessment of the fair value of contingent consideration, the Company recorded a net increase in the estimated fair value of such liabilities for prior-period acquisitions of $1710 million in the ~~nine~~three-month period ended ~~September 30, 2014~~March 31, 2015. A 5% increase in the above mentioned projections would increase the liability by approximately ~~$22~~$21 million. A 5% decrease in the above mentioned projections would decrease the liability by approximately ~~$25~~$24 million.

Fair Value of Long-Term Investments

The Company holds investments in certain private companies, public companies and certain private equity investments that are accounted for using the equity method of accounting. The carrying value of these investments amounted to $399 million at March 31, 2015 and $388 million at December 31, 2014. The Company's investments in private equity funds were $74 million and $61 million at March 31, 2015 and December 31, 2014, respectively. The carrying values of these private equity investments approximates fair value. The underlying private equity funds follow investment company accounting, where investments within the fund are carried at fair value. The Company records in earnings, investment gains/losses for its proportionate share of the change in fair value of the funds. These investments would be classified as Level 3 in the fair value hierarchy and are included in other assets in the consolidated balance sheets.

During 2014, the Company purchased 34% of the common stock of Alexander Forbes. As of March 31, 2015, the carrying value of the Company’s investment in Alexander Forbes was approximately $278 million. As of March 31, 2015, the market value of the approximately 443 million shares of Alexander Forbes owned by the Company, based on the March 31, 2015 closing share price of 10.54 South African Rand per share, was approximately $386 million. The Company’s investment in Alexander Forbes and its other equity investments in private companies are accounted for using the equity method of accounting and included in revenue in the consolidated income statements and in other assets in the consolidated balance sheets. The Company records its share of income or loss on its equity method investments on a one quarter lag basis.

On February 24, 2015, Mercer purchased shares of common stock of Benefitfocus (NASDAQ:BNFT) constituting approximately 9.9% of BNFT's outstanding capital stock as of the acquisition date. The purchase price for the BNFT shares and certain other rights and other consideration was approximately $75 million. The Company has elected to account for this investment under the cost method of accounting as the shares purchased are categorized as restricted and cannot be sold for more than one year. When the restrictions on sale are less than one year in duration (January 1, 2017), the shares are expected to be classified as available for sale. This investment would then be classified as Level 2 in the fair value hierarchy and included in other assets in the consolidated balance sheets. The value of the BNFT shares based on the closing price on the NASDAQ at March 31, 2015 and without regard to the restrictions on sale was approximately $104 million.

2119

11. 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~~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 target asset allocation for the Company's U.S. Plan was ~~58%~~62% equities and equity alternatives and ~~42%~~38% fixed income and at ~~September 30, 2014,~~March 31, 2015, the actual allocation for the Company's U.S. Plan was ~~57%~~61% equities and equity alternatives and ~~43%~~39% fixed income. The target asset allocation for the Company's U.K. Plans, which comprises approximately ~~82%~~83% of non-U.S. Plan assets, is ~~50%~~48% equities and equity alternatives and ~~50%~~52% fixed income. ~~As of September 30, 2014,~~At March 31, 2015, the actual allocation for the U.K. Plans was ~~45%~~47% equities and equity alternatives and ~~55%~~53% fixed income. The assets of the Company's defined benefit plans are diversified and are managed in accordance with applicable laws and with the goal of maximizing the plans' real return within acceptable risk parameters. The Company generally uses threshold-based portfolio re-balancing to ensure the actual portfolio remains consistent with target asset allocation ranges.~~Effective~~

The components of the net periodic benefit cost for defined benefit and other post-retirement plans are as follows:



Combined U.S. and significant non-U.S. Plans	Pension						Post-retirement
For the Three Months Ended March 31,	Benefits						Benefits
(In millions of dollars)	2015			2014			2015			2014
Service cost	$	52		$	61		$	1		$	1
Interest cost	146			161			2			3
Expected return on plan assets	(243		)	(248		)	—			—
Amortization of prior service credit	—			(3		)	—			—
Recognized actuarial loss	76			51			—			—
Net periodic benefit cost	$	31		$	22		$	3		$	4
Curtailment (credit)	—			(65		)	—			—
Plan termination	—			—			(128		)	—
Total cost (credit)	$	31		$	(43	)	$	(125	)	$	4

U.S. Plans only	Pension						Post-retirement
For the Three Months Ended March 31,	Benefits						Benefits
(In millions of dollars)	2015			2014			2015			2014
Service cost	$	30		$	22		$	1		$	—
Interest cost	62			63			1			2
Expected return on plan assets	(92		)	(86		)	—			—
Amortization of prior service credit	—			(2		)	—			—
Recognized actuarial loss	45			26			—			—
Net periodic benefit cost	$	45		$	23		$	2		$	2
Plan termination	—			—			(128		)	—
Total cost (credit)	$	45		$	23		$	(126	)	$	2

In March 2015, the Company amended its U.S. Post-65 retiree medical reimbursement plan (the "RRA plan"), resulting in its termination, with benefits to certain participants paid through December 31, 2016. As a result of ~~October 17, 2014,~~ the ~~target asset allocation for~~termination of the ~~U.S. Plan was changed to 62% equities and equity alternatives and 38% fixed income.~~RRA plan, the Company recognized a net credit of approximately $125 million in the first quarter of 2015.



Significant non-U.S. Plans only	Pension						Post-retirement
For the Three Months Ended March 31,	Benefits						Benefits
(In millions of dollars)	2015			2014			2015		2014
Service cost	$	22		$	39		$	—	$	1
Interest cost	84			98			1		1
Expected return on plan assets	(151		)	(162		)	—		—
Amortization of prior service cost	—			(1		)	—		—
Recognized actuarial loss	31			25			—		—
Net periodic benefit cost	$	(14	)	$	(1	)	$	1	$	2
Curtailment (credit)	—			(65		)	—		—
Total (credit) cost	$	(14	)	$	(66	)	$	1	$	2

After completion of a consultation period with affected colleagues, in January 2014, the Company amended its U.K. defined benefit pension plans to close those plans to future benefit accruals effective August 1, 2014 and replaced those plans, along with its existing U.K. defined contribution plans, with a new, comprehensive defined contribution arrangement. This change resulted in a curtailment of the U.K. defined benefit plans, and as required under GAAP, the Company re-measured the defined benefit plans’ assets and liabilities at the amendment date, based on assumptions and market conditions at that date. As a result of the re-measurement, the projected benefit obligation ("PBO") increased by approximately $147 million and the funded status decreased by approximately $137 million. The change in the PBO and in the funded status relates primarily to a decrease in the discount rate at the re-measurement date. The net periodic benefit costs recognized in 2014 ~~are~~were the weighted average resulting from the December 31, 2013 measurement and the January 2014 re-measurement. The Company recognized a curtailment gain of $65 million in the first quarter of 2014, primarily resulting from the recognition of the remaining unamortized prior service credit related to a plan amendment made in December 2012. This gain was mostly offset by the cost of a transition benefit for certain employees most impacted by the amendment, which is not part of net periodic pension cost.

~~The components of the net periodic benefit cost for defined benefit and other post-retirement plans are as follows:~~

Combined U.S. and significant non-U.S. Plans Pension Postretirement
For the Three Months Ended September 30, Benefits Benefits
(In millions of dollars) 2014
2013
2014
2013
Service cost $ 49
$ 63
$ 2
$ 2
Interest cost 163
144
3
2
Expected return on plan assets (251 ) (227 ) —
—
Amortization of prior service credit (2 ) (5 ) —
—
Recognized actuarial loss 55
79
(1 ) —
Net periodic benefit cost $ 14
$ 54
$ 4
$ 4

Combined U.S. and significant non-U.S. Plans Pension Postretirement
For the Nine Months Ended September 30, Benefits Benefits
(In millions of dollars) 2014
2013
2014
2013
Service cost $ 172
$ 188
$ 4
$ 4
Interest cost 485
433
9
8
Expected return on plan assets (749 ) (680 ) —
—
Amortization of prior service credit (8 ) (16 ) —
—
Recognized actuarial loss 159
237
(1 ) 1
Net periodic benefit cost $ 59
$ 162
$ 12
$ 13
Curtailment (credit) (65 ) —
—
—
Total cost (credit) $ (6 ) $ 162
$ 12
$ 13

U.S. Plans only Pension Postretirement
For the Three Months Ended September 30, Benefits Benefits
(In millions of dollars) 2014
2013
2014
2013
Service cost $ 23
$ 26
$ 1
$ 1
Interest cost 65
57
2
1
Expected return on plan assets (87 ) (81 ) —
—
Amortization of prior service credit (1 ) (4 ) —
—
Recognized actuarial loss 31
52
(1 ) —
Net periodic benefit cost $ 31
$ 50
$ 2
$ 2

U.S. Plans only Pension Postretirement
For the Nine Months Ended September 30, Benefits Benefits
(In millions of dollars) 2014
2013
2014
2013
Service cost $ 68
$ 78
$ 2
$ 2
Interest cost 190
171
6
5
Expected return on plan assets (260 ) (243 ) —
—
Amortization of prior service credit (5 ) (12 ) —
—
Recognized actuarial loss (gain) 84
156
(2 ) —
Net periodic benefit cost $ 77
$ 150
$ 6
$ 7

Significant non-U.S. Plans only Pension Postretirement
For the Three Months Ended September 30, Benefits Benefits
(In millions of dollars) 2014
2013
2014
2013
Service cost $ 26
$ 37
$ 1
$ 1
Interest cost 98
87
1
1
Expected return on plan assets (164 ) (146 ) —
—
Amortization of prior service credit (1 ) (1 ) —
—
Recognized actuarial loss 24
27
—
—
Net periodic benefit cost $ (17 ) $ 4
$ 2
$ 2

Significant non-U.S. Plans only Pension Postretirement
For the Nine Months Ended September 30, Benefits Benefits
(In millions of dollars) 2014
2013
2014
2013
Service cost $ 104
$ 110
$ 2
$ 2
Interest cost 295
262
3
3
Expected return on plan assets (489 ) (437 ) —
—
Amortization of prior service cost (3 ) (4 ) —
—
Recognized actuarial loss 75
81
1
1
Net periodic benefit cost $ (18 ) $ 12
$ 6
$ 6
Curtailment (credit) (65 ) —
—
—
Total cost (credit) $ (83 ) $ 12
$ 6
$ 6

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. Plans	Pension Benefits				Postretirement Benefits				Pension Benefits				Post-retirement Benefits
September 30,	2014		2013		2014		2013
March 31,									2015		2014		2015		2014
Weighted average assumptions:
Expected return on plan assets	7.53	%	7.66	%	—	%	—	%	7.25	%	7.53	%	—	%	—	%
Discount rate	4.74	%	4.38	%	5.03	%	4.32	%	3.79	%	4.74	%	4.08	%	5.03	%
Rate of compensation increase	2.64	%	2.43	%	—	%	—	%	2.42	%	2.64	%	—	%	—	%

The Company made approximately ~~$140~~$42 million of contributions to its U.S. and non-U.S. defined benefit plans in the first ~~nine~~three months of ~~2014.~~2015. The Company expects to contribute approximately ~~$43~~$152 million to its non-qualified U.S. pension and non-U.S. pension plans during the remainder of ~~2014~~.2015.

2421

12. Debt

The Company’s outstanding debt is as follows:


(In millions of dollars)	September 30, 2014		December 31, 2013		March 31, 2015		December 31, 2014
Short-term:
Current portion of long-term debt	$	640	$	334	$	61	$	11

Long-term:
Senior notes – 5.875% due 2033	297		297
Senior notes – 5.375% due 2014	—		323
Senior notes – 5.75% due 2015	230		230
Senior notes – 2.30% due 2017	249		249		249		249
Senior notes – 9.25% due 2019	399		399
Senior notes – 2.55% due 2018					249		249
Senior notes – 2.35% due 2019					300		300
Senior notes – 2.35% due 2020					500		—
Senior notes – 4.80% due 2021	497		497		497		497
Senior notes – 2.55% due 2018	249		248
Senior notes – 4.05% due 2023	248		247		248		248
Senior notes – 3.50% due 2024	595		—		599		595
Senior notes – 2.35% due 2019	300		—
Senior notes – 3.50% due 2025	498		—		498		498
Senior notes – 5.875% due 2033					297		297
Mortgage – 5.70% due 2035	405		413		400		403
Term Loan Facility - due 2016	50		50
Term Loan Facility – due 2016					50		50
Other	2		2		2		1
	4,019		2,955		3,889		3,387
Less current portion	640		334		61		11
	$	3,379	$	2,621	$	3,828	$	3,376

The senior notes in the table above are publicly registered by the Company with no guarantees attached.

In March 2015, the Company issued $500 million of 2.35% five-year senior notes. The Company intends to use the net proceeds for general corporate purposes.

In September 2014, the Company issued $300 million of 2.35% five-year senior notes and $500 million of 3.50% 10.5 year senior notes. In October 2014, a significant portion of the net proceeds of this offering were used to redeem $630 million of debt, including $230 million of 5.75% senior notes due in September 2015 and $400 million of 9.25% senior notes due in 2019. Total cash outflow related to this transaction was approximately $765 million, ~~which included approximately $135~~including a $137 million cost for early redemption, which ~~will be~~was reflected as a charge in the consolidated statements of income in the fourth quarter of 2014.

In May 2014, the Company issued $600 million of 3.50% ten-year senior notes. The net proceeds of this offering were used for general corporate purposes, which included the repayment of $320 million of the existing 5.375% senior notes, which matured on July 15, 2014.

~~In September 2013, the Company issued $250 million~~ of ~~2.55%five-year senior notes and $250 million~~ of ~~4.05%ten-year senior notes. The net proceeds of this offering were used for general corporate purposes, which included a partial redemption of $250 million~~ ~~of the outstanding principal amount of the existing~~ ~~5.75%~~ ~~senior notes due 2015. The redemption settled in October 2013 with a total cash outflow of approximately $275 million, which included a~~ ~~$24 million~~ ~~cost for early redemption.~~

~~In February 2013, the Company repaid its~~ ~~4.850%$250 million~~ ~~senior notes.~~

On March ~~28,~~27, 2014, the Company and certain of its foreign subsidiaries amended and restated its $1.0 billion facility ~~as discussed below~~ into a $1.2 billion multi-currency five-year unsecured revolving credit facility. The interest rate on this facility is based on LIBOR plus a fixed margin which varies with the Company's credit ratings. This facility expires in March 2019 and requires the Company to maintain certain coverage and leverage ratios which are tested quarterly. There were no borrowings outstanding under this facility at ~~September 30, 2014~~March 31, 2015.

~~The Company and certain of its foreign subsidiaries previously maintained a $1.0 billion~~ ~~multi-currency five-year revolving credit facility. The facility was previously due to expire in October 2016 and was in effect until March 2014. There were~~ no ~~borrowings outstanding under this facility at the time it was amended.~~

In December 2012, the Company closed on a $$50 million, three-year term loan facility. The interest rate on this facility at ~~September 30, 2014~~March 31, 2015 was ~~1.15%~~1.17%, which is based on LIBOR plus a fixed margin which varies with the Company's credit ratings. The facility requires the Company to maintain coverage ratios and leverage ratios consistent with the revolving credit facility discussed above. The Company had $50 million of borrowings outstanding under this facility at ~~September 30, 2014~~March 31, 2015.

Fair Value of Short-term and Long-term Debt

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


	September 30, 2014				December 31, 2013				March 31, 2015				December 31, 2014
(In millions of dollars)	Carrying Amount		Fair Value		Carrying Amount		Fair Value		Carrying Amount		Fair Value		Carrying Amount		Fair Value
Short-term debt	$	640	$	776	$	334	$	334	$	61	$	61	$	11	$	11
Long-term debt	$	3,379	$	3,500	$	2,621	$	2,819	$	3,828	$	4,009	$	3,376	$	3,493

The fair value of the Company’s short-term debt, which ~~at September 30, 2014 primarily consists of debt that was extinguished in October 2014, is based on the cost to extinguish. In 2013, short-term debt~~ consists primarily of term debt maturing ~~within~~in the next year, ~~and its fair value~~ approximates its carrying value. The estimated fair value of a primary portion of the Company's long-term debt is based on discounted future cash flows using current interest rates available for debt with similar terms and remaining maturities. Short- and long-term debt would be classified as Level 2 in the fair value hierarchy.

13. Restructuring Costs

The Company recorded total restructuring costs of $102 million in the first ~~nine~~three months of ~~2014~~2015 primarily ~~due to severance and~~for future rent under non-cancelable leases. These costs were incurred in Corporate.

Details of the restructuring activity from January 1, ~~2013~~2014 through ~~September 30, 2014~~March 31, 2015, which includes liabilities from actions prior to ~~2014~~2015, are as follows:


(In millions of dollars)	Liability at 1/1/13		Amounts Accrued		Cash Paid			Other			Liability at 12/31/13		Amounts Accrued		Cash Paid			Other			Liability at 9/30/14		Liability at 1/1/14		Amounts Accrued		Cash Paid			Other			Liability at 12/31/14		Amounts Accrued		Cash Paid			Other			Liability at 3/31/15
Severance	$	36	$	9	$	(33	)	$	(1	)	$	11	$	4	$	(7	)	$	(1	)	$	7	$	11	$	4	$	(8	)	$	—		$	7	$	—	$	(2	)	$	—		$	5
Future rent under non-cancelable leases and other costs	134		13		(32		)	(2		)	113		6		(27		)	(1		)	91		113		8		(35		)	(1		)	85		2		(5		)	(1		)	81
Total	$	170	$	22	$	(65	)	$	(3	)	$	124	$	10	$	(34	)	$	(2	)	$	98	$	124	$	12	$	(43	)	$	(1	)	$	92	$	2	$	(7	)	$	(1	)	$	86

The expenses associated with the above 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, other liabilities, or accrued compensation, depending on the nature of the items.

14. Common Stock

During the first ~~nine~~three months of ~~2014,~~2015, the Company repurchased approximately ~~11.8~~5.3 million shares of its common stock for consideration of ~~$600~~$300 million. In May 2014, the Board of Directors of the Company authorized share repurchases of up to $2 billion of the Company's common stock. ~~The~~At March 31, 2015, the Company remains authorized to purchase additional shares of its common stock up to a value of ~~$1.5~~approximately $1 billion. There is no time limit on the authorization. During the first ~~nine~~three months of ~~2013,~~2014, the Company repurchased 102 million shares of its common stock for consideration of ~~$400~~$100 million.

15. Claims, Lawsuits and Other Contingencies

~~Errors and Omissions Claims~~Litigation Matters

The Company and its subsidiaries are subject to a significant number of claims, lawsuits and proceedings in the ordinary course of business. Such claims and lawsuits consist principally of alleged errors and omissions 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. ~~Errors and omissions~~These claims may seek damages, including punitive and treble damages, in amounts that could, if awarded, be significant. In establishing liabilities for errors and omissions claims in accordance with FASB ASC Subtopic No. 450-20 (Contingencies-Loss Contingencies), the Company ~~utilizes~~uses case level reviews by inside and outside counsel, an internal actuarial analysis and other analysis 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.

Governmental Inquiries and ~~Related Claims~~

~~In January 2005, the Company and its subsidiary Marsh Inc. (the predecessor entity to Marsh LLC) entered into a settlement agreement with the New York State Attorney General (~~“~~NYAG~~”~~) and the New York State Insurance Department to settle a civil complaint and related citation regarding Marsh~~'s use of market service agreements with various insurance companies. The parties subsequently entered into an amended and restated settlement agreement in February 2010 that restored a level playing field for Marsh.

Numerous private party lawsuits based on similar allegations to those made in the NYAG complaint were commenced against the Company, one or more of its subsidiaries, and their current and former directors and officers. All but one of these matters have been resolved.Enforcement Matters

Our activities are regulated under the laws of the United States and its various states, the European Union and its member states, and the other jurisdictions in which the Company operates. In the ordinary course of business, the Company is also subject to subpoenas, investigations, lawsuits ~~and/or~~and other regulatory actions undertaken by governmental authorities. ~~In this regard, in November 2013, Mercer received a subpoena from the New York Department of Financial Services in connection with a review of New York's public pension funds.~~

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 reinsured up to £40 million by a related party of River Thames. Payment of claims under the reinsurance agreement is collateralized by segregated assets held in a trust. As of ~~September 30, 2014,~~March 31, 2015, the reinsurance coverage exceeded the best estimate of the projected liability of the policies covered by the guarantee. To the extent River Thames or the reinsurer is unable to meet its obligations under those policies, a claimant may seek to recover from us 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 we anticipate that additional claimants may seek to recover against the letter of credit.

Kroll-related Matters

Under the terms of a stock purchase agreement with Altegrity, Inc. (“Altegrity”) related to Altegrity's purchase of Kroll from the Company in August 2010, a copy of which is attached as an exhibit to the Company's Quarterly Report on Form 10-Q for the period ended June 30, 2010, the Company agreed to provide a limited indemnity to Altegrity with respect to certain Kroll-related litigation and regulatory matters.

* * * *

The pending proceedings and other matters described in this Note 15 on Claims, Lawsuits and Other Contingencies may expose the Company or its subsidiaries to liability for significant monetary damages and other forms of relief. Where a loss is both probable and reasonably estimable, the Company establishes liabilities in accordance with FASB ASC Subtopic No. 450-20 (Contingencies - Loss Contingencies). Except as described above, 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.

16. Segment Information

The Company is organized based on the types of services provided. Under this organizational structure, the Company’s business 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 to the Company’s ~~2013~~2014 Form 10-K. Segment performance is evaluated based on segment operating income, which includes directly related expenses, and charges or credits related to integration and 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 operating segments for the ~~three- and nine-month~~three-month periods ended ~~September 30,~~March 31, 2015 and 2014 ~~and~~ ~~2013~~ are as follows:


	Three Months Ended September 30,							Nine Months Ended September 30,							Three Months Ended March 31,
(In millions of dollars)	Revenue				Operating Income (Loss)			Revenue				Operating Income (Loss)			Revenue				Operating Income (Loss)
2014 –
2015–
Risk and Insurance Services	$	1,610		^(a)	$	229		$	5,240		^(c)	$	1,170		$	1,803		^(a)	$	533
Consulting	1,541			^(b)	274			4,493			^(d)	746			1,421			^(b)	248
Total Operating Segments	3,151				503			9,733				1,916			3,224				781
Corporate / Eliminations	(10		)		(58		)	(28		)		(151		)	(9		)		(46		)
Total Consolidated	$	3,141			$	445		$	9,705			$	1,765		$	3,215			$	735
2013–
2014–
Risk and Insurance Services	$	1,504		^(a)	$	222		$	4,963		^(c)	$	1,111		$	1,839		^(a)	$	493
Consulting	1,437			^(b)	232			4,209			^(d)	624			1,432			^(b)	225
Total Operating Segments	2,941				454			9,172				1,735			3,271				718
Corporate / Eliminations	(9		)		(50		)	(26		)		(147		)	(7		)		(45		)
Total Consolidated	$	2,932			$	404		$	9,146			$	1,588		$	3,264			$	673


^(a)	Includes inter-segment revenue of $1 million and $0 million ~~and $1 million~~ in ~~2014~~2015 and ~~2013,~~2014, respectively, interest income on fiduciary funds of $5 million and $6 million in 2015 and ~~$7 million in~~ 2014, ~~and 2013,~~ respectively, and equity method income of $4$2 million and $2$0 million in ~~2014~~2015 and ~~2013,~~2014, respectively.


^(b)	Includes inter-segment revenue of ~~$10~~$8 million and $8$7 million in ~~2014~~2015 and ~~2013, respectively, and interest income on fiduciary funds of $2 million in~~ 2014, ~~and $1 million in 2013.~~


^(c)	~~Includes inter-segment revenue of $3 million and $4 million in 2014 and 2013,~~ respectively, interest income on fiduciary funds of ~~$18 million and $21~~$1 million in ~~2014~~both 2015 and ~~2013, respectively,~~2014, and equity method income of ~~$10 million in both 2014 and 2013.~~


^(d)	~~Includes inter-segment revenue of $25 million and $22 million in 2014 and 2013, respectively, and interest income on fiduciary funds of $5 million and~~ $3 million in ~~2014~~2015 and ~~2013, respectively.~~$0 million in 2014.

Details of operating segment revenue for the ~~three- and nine-month~~three-month periods ended ~~September 30,~~March 31, 2015 and 2014 ~~and~~ ~~2013~~ are as follows:


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended March 31,
(In millions of dollars)	2014			2013			2014			2013			2015			2014
Risk and Insurance Services
Marsh	$	1,343		$	1,241		$	4,295		$	4,038		$	1,434		$	1,457
Guy Carpenter	267			263			945			925			369			382
Total Risk and Insurance Services	1,610			1,504			5,240			4,963			1,803			1,839
Consulting
Mercer	1,112			1,072			3,244			3,157			1,037			1,061
Oliver Wyman Group	429			365			1,249			1,052			384			371
Total Consulting	1,541			1,437			4,493			4,209			1,421			1,432
Total Operating Segments	3,151			2,941			9,733			9,172			3,224			3,271
Corporate/ Eliminations	(10		)	(9		)	(28		)	(26		)	(9		)	(7		)
Total	$	3,141		$	2,932		$	9,705		$	9,146		$	3,215		$	3,264

2925

17. New Accounting Guidance

In February 2015, the FASB issued new accounting guidance intended to improve targeted areas of consolidation guidance for legal entities such as limited partnerships, limited liability corporations and securitization structures. The guidance focuses on the consolidation evaluation for reporting organizations that are required to evaluate whether they should consolidate certain legal entities. The guidance is effective for periods beginning after December 15, 2015. Early adoption is permitted, including adoption in an interim period. The Company is currently evaluating the impact of the adoption of the guidance on its financial condition and results of operations.

In January 2015, the FASB issued new accounting guidance that eliminated the concept of extraordinary items. The guidance is effective for annual periods beginning after December 15, 2015. The guidance may be adopted prospectively, or retrospectively to all prior periods presented in the financial statements. Early adoption is permitted provided the guidance is applied from the beginning of the fiscal year of adoption. Adoption of the guidance is not expected to materially affect the Company's financial condition, results of operations or cash flows.

In June 2014, the FASB issued new accounting guidance to clarify the treatment of share-based payment awards that require a specific performance target to be achieved in order for employees to be eligible to vest in the awards which include terms that may provide that the performance conditions could be achieved after an employee completes the requisite service period. The guidance requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. As such, a reporting entity should apply the existing guidance as it relates to awards with performance conditions that affect vesting. The guidance is effective for annual periods beginning after December 15, 2015. ~~Earlier~~Early adoption is permitted. Adoption of the guidance is not expected to materially affect the Company's financial condition, results of operations or cash flows.

In May 2014, the FASB issued new accounting guidance to clarify the principles for revenue recognition. The core principle of the 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 that principle, the entity should apply 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. The guidance is effective for fiscal years beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. Entities are permitted to adopt the guidance under one of the following methods: retrospectively to each prior reporting period presented (with certain practical expedients allowed) or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application. If an entity elects this transition method, it must provide disclosures in reporting periods that include the date of initial application of the amount by which each financial statement line item is affected in the current reporting period by application of the guidance as compared to guidance that was in effect before the change, and an explanation for the reasons for significant changes. The Company is currently evaluating the impact of the adoption of the guidance on its financial condition and results of operations.

In April 2014, the FASB issued new accounting guidance which changes the criteria for reporting discontinued operations and enhances disclosures in this area. Under the new guidance, only disposals representing a strategic shift in operations, such as disposal of a major geographic area or a major line of business, should be presented as discontinued operations. Those strategic shifts should have a major impact on the organization's operations and financial results. In addition, the new guidance requires expanded disclosures about discontinued operations. The guidance is effective for fiscal years beginning on or after December 15, 2014. Adoption of the guidance isdid not ~~expected to materially~~ affect the Company's financial condition, results of operations or cash flows.

In July 2013, the FASB issued new accounting guidance related to the presentation of unrecognized tax benefits as a reduction to a deferred tax asset for a net operating loss carry-forward, a similar tax loss, or a tax credit carry-forward. However, to the extent a net operating loss carry-forward, a similar tax loss, or a tax credit carry-forward is not available at the reporting date under the tax law of the applicable jurisdiction, the unrecognized tax benefit shall be presented in the financial statement as a liability and shall not be combined with deferred tax assets. The guidance is effective for fiscal years beginning after December 15, 2013. The adoption of this new guidance did not have a material impact on the Company's financial statements.

In July 2013, the FASB issued new accounting guidance which amends the criteria for an entity to qualify as an investment company. The guidance clarifies the characteristics of an investment company, provides comprehensive guidance to determine whether an entity is an investment company and sets measurement and disclosure requirements for investment companies. The guidance is effective for interim and annual reporting periods beginning after December 13, 2013. The adoption of this new guidance did not have a material impact on the Company's financial statements.

3026

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

General

Marsh & McLennan Companies, Inc. ~~and Subsidiaries (“the Company”~~(the "Company") is a global professional services firm ~~providing~~offering clients advice and solutions in ~~the areas of~~ risk, strategy, and ~~human capital.~~people. It is the parent company of a number of ~~the world's~~ leading risk experts and specialty consultants, including: Marsh, the insurance broker, intermediary and risk advisor; Guy Carpenter, the risk and reinsurance specialist; Mercer, the provider of HR and related financial advice and services; and Oliver Wyman Group, the management, economic and brand consultancy. With approximately ~~56,000~~57,000 employees worldwide and annual revenue of more than ~~$12~~$13 billion, the Company provides analysis, advice and transactional capabilities to clients in ~~over~~more than 130 countries.

The Company conducts business through two segments:

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

Consulting includes Health, Retirement, Talent and Investments consulting ~~and~~ services and products, and specialized management, economic and ~~economic~~brand consulting services. We conduct business in this segment through Mercer and Oliver Wyman Group.

~~The Company completed twelve acquisitions during the first nine months of 2014.~~

In January 2014, Marsh & McLennan Agency ("MMA") acquired Barney & Barney, a San Diego-based insurance broking firm that provides insurance, risk management, and employee benefits solutions to businesses and individuals throughout the U.S. and abroad. Also in January, Marsh acquired Central Insurance Services, an independent insurance broker in Scotland that provides insurance broking and risk advisory services to companies of all sizes across industry sectors. In February 2014, MMA acquired Great Lakes Employee Benefits Services, Inc., an employee group benefits consulting and brokerage firm based in Michigan, and Bond Network, Inc., a leading surety bonding agency based in North Carolina. In March 2014, MMA acquired Capstone Insurance Services, LLC, an agency that provides property/casualty insurance and risk management solutions to businesses and individuals throughout South Carolina, and Mercer acquired Transition Assist, a retiree exchange specializing in helping retirees in employer-sponsored plans select Medicare supplemental health care insurance. In May 2014, MMA acquired Kinker-Eveleigh Insurance Agency, an Ohio-based agency specializing in property-casualty and employee benefits solutions, and VISICOR, a full-service employee benefits brokerage and consulting firm based in Texas. In June 2014, MMA acquired Senn Dunn Insurance, an insurance agency located in North Carolina. In July 2014 Marsh acquired Seguros Morrice y Urrutia S.A., an insurance broker based in Panama City, Panama. In September 2014 Marsh acquired Kocisko Insurance Brokers, Inc., an insurance agency located in Montreal, Quebec and Oliver Wyman acquired Bonfire Communications, an agency specializing in employee engagement and internal communications based in San Francisco, California.

A reconciliation of segment operating income to total operating income is included in Note 16 to the consolidated financial statements included in Part I Item 1 in this report. The accounting policies used for each segment are the same as those used for the consolidated financial statements.

This Management's Discussion & Analysis ("MD&A") contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. See “Information Concerning Forward-Looking Statements” at the outset of this report.

3127

Consolidated Results of Operations


	Third Quarter						Nine Months					Three Months Ended March 31,
(In millions, except per share figures)	2014			2013			2014			2013		2015			2014
Revenue	$	3,141		$	2,932		$	9,705		$	9,146	$	3,215		$	3,264
Expense:
Compensation and Benefits	1,904			1,824			5,619			5,393		1,730			1,839
Other Operating Expenses	792			704			2,321			2,165		750			752
Operating Expenses	2,696			2,528			7,940			7,558		2,480			2,591
Operating Income	445			404			1,765			1,588		735			673
Income from Continuing Operations	305			260			1,202			1,072		498			457
Discontinued Operations, net of tax	(1		)	(1		)	(4		)	6		(3		)	(1		)
Net Income Before Non-Controlling Interests	304			259			1,198			1,078		495			456
Net Income Attributable to the Company	$	297		$	253		$	1,171		$	1,054	$	482		$	443
Income From Continuing Operations Per Share:
Basic	$	0.55		$	0.46		$	2.15		$	1.91	$	0.90		$	0.81
Diluted	$	0.54		$	0.45		$	2.12		$	1.88	$	0.89		$	0.80
Net Income Per Share Attributable to the Company:
Basic	$	0.55		$	0.46		$	2.14		$	1.92	$	0.89		$	0.81
Diluted	$	0.54		$	0.45		$	2.11		$	1.89	$	0.88		$	0.80
Average Number of Shares Outstanding:
Basic	544			549			547			549		539			548
Diluted	551			558			554			558		545			556
Shares Outstanding at September 30	542			547			542			547
Shares Outstanding at March 31												538			549

The Company's consolidated operating income increased ~~10%~~9% to ~~$445~~$735 million in the ~~third~~first quarter of ~~2014~~2015 compared with ~~$404~~$673 million in the prior year. This ~~represents~~reflects the combined impact of a 1% decrease in revenue and a 4% decrease in expense. In the first quarter of 2015, the Company was adversely impacted by the strengthening of the U.S. dollar, which had the effect of reducing the translated value of the Company’s foreign earnings while pension expense worldwide increased due to lower interest rates. The impact of these headwinds was more than offset in the quarter by the impact of a ~~7% increase~~net credit from the termination of the Company's post-65 retiree medical reimbursement plan in ~~both revenue and expenses compared to~~ the ~~same period last year. Consulting operating income increased $42 million or 18% compared with the same period last year, while~~U.S. (the "RRA plan") of approximately $125 million. Risk and Insurance Services operating income increased $7$40 million or ~~3%.~~8% while Consulting operating income increased $23 million or 10% compared with the same period last year.

Income from continuing operations increased ~~$45~~$41 million, or ~~17% in the third quarter of 2014,~~9%, primarily reflecting the increase in operating income discussed above ~~higher investment income~~ and a ~~lower effective tax rate,~~decrease in interest expense, partly offset by ~~higher corporate expenses.~~a decrease in investment income. Diluted net income per share from continuing operations increased ~~20%~~11% to ~~$0.54,~~$0.89, reflecting the increase in income from continuing operations and a ~~slight~~2% decrease in the average number of diluted shares ~~outstanding.~~outstanding as compared to the same period last year. Shares issued related to the vesting of share awards and exercise of employee stock options were more than offset by share repurchases over the past four quarters.

Consolidated operating income was approximately $1.8 billion for the first nine months of 2014 compared with consolidated operating income of $1.6 billion in the prior year, reflecting increases of $122 million in Consulting and$59 million in Risk and Insurance Services.

3228

Consolidated Revenue and Expense

The Company conducts business in many countries, as a result of which the impact of foreign exchange rate movements may impact period-to-period comparisons of revenue. Similarly, certain items that affect comparability, such as the revenue impact of acquisitions and dispositions, including transfers among businesses, may impact period-to-period comparisons of revenue. Underlying revenue measures the change in revenue from one period to another by isolating these impacts. The impact of foreign currency exchange fluctuations, acquisitions and dispositions, including transfers among businesses, on the Company’s operating revenues by segment was as follows:


	Three Months Ended September 30,						% Change GAAP Revenue		Components of Revenue Change*						Three Months Ended March 31,						% Change GAAP Revenue		Components of Revenue Change*
	Three Months Ended September 30,								Currency Impact		Acquisitions/ Dispositions Impact		Underlying Revenue		Three Months Ended March 31,								Currency Impact		Acquisitions/ Dispositions Impact		Underlying Revenue
(In millions of dollars)	2014			2013					Currency Impact		Acquisitions/ Dispositions Impact		Underlying Revenue		2015			2014					Currency Impact		Acquisitions/ Dispositions Impact		Underlying Revenue
Risk and Insurance Services
Marsh	$	1,338		$	1,235		8	%	—		4	%	5	%	$	1,430		$	1,452		(2	)%	(7	)%	3	%	3	%
Guy Carpenter	266			262			2	%	—		(1	)%	3	%	368			381			(4	)%	(4	)%	(2	)%	2	%
Subtotal	1,604			1,497			7	%	—		3	%	4	%	1,798			1,833			(2	)%	(6	)%	2	%	3	%
Fiduciary Interest Income	6			7											5			6
Total Risk and Insurance Services	1,610			1,504			7	%	—		3	%	4	%	1,803			1,839			(2	)%	(6	)%	2	%	3	%
Consulting
Mercer	1,112			1,072			4	%	1	%	—		3	%	1,037			1,061			(2	)%	(6	)%	—		4	%
Oliver Wyman Group	429			365			18	%	1	%	1	%	16	%	384			371			4	%	(6	)%	2	%	8	%
Total Consulting	1,541			1,437			7	%	1	%	—		6	%	1,421			1,432			(1	)%	(6	)%	1	%	5	%
Corporate/Eliminations	(10		)	(9		)									(9		)	(7		)
Total Revenue	$	3,141		$	2,932		7	%	—		2	%	5	%	$	3,215		$	3,264		(1	)%	(6	)%	1	%	4	%

Three Months Ended
September 30,
%
Change
GAAP
Revenue
Components of Revenue Change*
Currency
Impact

Acquisitions/
Dispositions
Impact

Underlying
Revenue
(In millions of dollars) 2014
2013

Marsh:
EMEA $ 414
$ 387
7 % 1 % 2 % 4 %
Asia Pacific 175
165
6 % 1 % —
5 %
Latin America 99
94
7 % (6 )% 1 % 11 %
Total International 688
646
6 % —
1 % 5 %
U.S. / Canada 650
589
10 % —
7 % 4 %
Total Marsh $ 1,338
$ 1,235
8 % —
4 % 5 %
Mercer:
Health $ 392
$ 378
4 % —
—
4 %
Retirement 330
325
2 % 2 % —
—
Talent 177
179
(1 )% (1 )% —
—
Investments 213
190
12 % 2 % —
10 %
Total Mercer $ 1,112
$ 1,072
4 % 1 % —
3 %



Underlying revenue measures the change in revenue using consistent currency exchange rates, excluding the impact of certain items that affect comparability such as: acquisitions, dispositions and transfers among businesses.
*	~~Components of revenue change may not add due to rounding.~~

Nine Months Ended
September 30,
%
Change
GAAP
Revenue
Components of Revenue Change*
Currency
Impact

Acquisitions/
Dispositions
Impact

Underlying
Revenue
(In millions of dollars) 2014
2013

Risk and Insurance Services
Marsh $ 4,280
$ 4,020
6 % (1 )% 3 % 4 %
Guy Carpenter 942
922
2 % —
1 % 1 %
Subtotal 5,222
4,942
6 % (1 )% 3 % 3 %
Fiduciary Interest Income 18
21

Total Risk and Insurance Services 5,240
4,963
6 % (1 )% 3 % 3 %
Consulting
Mercer 3,244
3,157
3 % —
—
3 %
Oliver Wyman Group 1,249
1,052
19 % 2 % 2 % 15 %
Total Consulting 4,493
4,209
7 % —
1 % 6 %
Corporate/Eliminations (28 ) (26 )
Total Revenue $ 9,705
$ 9,146
6 % —
2 % 5 %

~~The following table provides more detailed revenue information for certain of the components presented above:~~


	Nine Months Ended September 30,				% Change GAAP Revenue		Components of Revenue Change*						Three Months Ended March 31,				% Change GAAP Revenue		Components of Revenue Change*
	Nine Months Ended September 30,						Currency Impact		Acquisitions/ Dispositions Impact		Underlying Revenue		Three Months Ended March 31,						Currency Impact		Acquisitions/ Dispositions Impact		Underlying Revenue
(In millions of dollars)	2014		2013				Currency Impact		Acquisitions/ Dispositions Impact		Underlying Revenue		2015		2014				Currency Impact		Acquisitions/ Dispositions Impact		Underlying Revenue
Marsh:
EMEA	$	1,509	$	1,436	5	%	2	%	1	%	2	%	$	563	$	617	(9	)%	(12	)%	1	%	2	%
Asia Pacific	520		496		5	%	(3	)%	—		8	%	148		151		(2	)%	(7	)%	—		5	%
Latin America	285		260		10	%	(10	)%	7	%	13	%	81		84		(3	)%	(13	)%	4	%	6	%
Total International	2,314		2,192		6	%	(1	)%	2	%	5	%	792		852		(7	)%	(11	)%	1	%	3	%
U.S. / Canada	1,966		1,828		8	%	(1	)%	5	%	3	%	638		600		6	%	(1	)%	5	%	3	%
Total Marsh	$	4,280	$	4,020	6	%	(1	)%	3	%	4	%	$	1,430	$	1,452	(2	)%	(7	)%	3	%	3	%
Mercer:
Health	$	1,173	$	1,135	3	%	—		—		3	%	$	384	$	388	(1	)%	(4	)%	—		3	%
Retirement	1,032		1,006		3	%	2	%	—		1	%	331		357		(7	)%	(7	)%	—		—
Investments													205		199		3	%	(10	)%	1	%	13	%
Talent	417		435		(4	)%	(1	)%	(1	)%	(2	)%	117		117		—		(6	)%	3	%	4	%
Investments	622		581		7	%	(2	)%	1	%	8	%
Total Mercer	$	3,244	$	3,157	3	%	—		—		3	%	$	1,037	$	1,061	(2	)%	(6	)%	—		4	%



Underlying revenue measures the change in revenue using consistent currency exchange rates, excluding the impact of certain items that affect comparability such as: acquisitions, dispositions and transfers among businesses.
*	Components of revenue change may not add due to rounding.

3429

Revenue

Consolidated revenue for the ~~third~~first quarter of ~~2014~~2015 was ~~$3.1~~$3.2 billion, ~~an increase~~a decrease of 7%1% on a reported basis, ~~and 5%~~reflecting a 4% increase on an underlying basis and a 1% increase from the ~~third quarter~~impact of ~~2013.~~acquisitions, which were more than offset by a decrease of 6% from the impact of foreign currency translation.

Revenue in the Risk and Insurance Services segment for the ~~third~~first quarter of ~~2014~~2015 was ~~$1.6~~$1.8 billion, ~~an increase~~a decrease of 7%2% from the same period last ~~year, or 4% on an underlying basis. Marsh produced underlying revenue growth across all major geographies. Guy Carpenter's revenue~~year. Revenue increased ~~2% from the prior year, or~~ 3% on an underlying ~~basis.~~basis and 2% from the impact of acquisitions, offset by a 6% decrease from the impact of foreign currency translation. Consulting revenue of ~~$1.5~~$1.4 billion in the ~~third~~first quarter of ~~2014 increased 7% from the third quarter of 2013. On an underlying basis, Consulting revenue increased 6%, reflecting increases of 3% in Mercer and 16% in Oliver Wyman.~~

~~For the first nine months of 2014, Risk and Insurance Services revenue increased 6%~~2015 decreased 1% from the same period in ~~2013, and 3%~~2014. Revenue increased 5% on an underlying ~~basis. Consulting revenue increased 7%~~basis as compared ~~with~~to the ~~nine-month~~same period last ~~year. On an underlying basis, Consulting revenue increased 6%, reflecting a 3% increase at Mercer and a 15% increase at Oliver Wyman.~~year, offset by the impact of foreign currency translation.

Operating Expense

Consolidated operating expense in the ~~third~~first quarter ~~increased 7%~~decreased 4% compared to the same period last year ~~or 4%~~and was flat on an underlying basis. ~~The increase on an underlying basis is primarily due~~First quarter results reflect a net benefit from actions relating to the RRA plan that more than offset higher ~~incentive compensation, facilities and software amortization costs, partly offset by lower~~expenses related to pension ~~costs.~~plans.

Risk and Insurance Services

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


For the Three and Nine Months Ended September 30,	Third Quarter						Nine Months
For the Three Months Ended March 31,
(In millions of dollars)	2014			2013			2014			2013			2015			2014
Revenue	$	1,610		$	1,504		$	5,240		$	4,963		$	1,803		$	1,839
Compensation and Benefits	960			915			2,844			2,712			862			941
Other Expenses	421			367			1,226			1,140			408			405
Expense	1,381			1,282			4,070			3,852			1,270			1,346
Operating Income	$	229		$	222		$	1,170		$	1,111		$	533		$	493
Operating Income Margin	14.2		%	14.8		%	22.3		%	22.4		%	29.6		%	26.8		%

Revenue

Revenue in the Risk and Insurance Services segment in the ~~third~~first quarter of ~~2014~~2015 was ~~$1.6~~$1.8 billion, ~~an increase~~a decrease of ~~7%, or 4% on an underlying basis,~~2% as compared ~~with~~to the same period last year, reflecting the impact of a 6% decrease from foreign currency translation, partly offset by a 3% increase in ~~2013.~~underlying revenue and a 2% increase from acquisitions.

In Marsh, revenue in the ~~third~~first quarter of ~~2014~~2015 was ~~$1.3~~$1.4 billion, ~~an increase~~a decrease of 8%2% compared with the same quarter of the prior year, ~~or 5%~~reflecting a 7% decrease from foreign currency translation, partly offset by a 3% increase in acquisitions and an increase of 3% on an underlying basis. The increase in underlying revenue was driven primarily by new business. The international division grew 5%3% on an underlying basis, ~~led by~~with growth of ~~11%~~2% in ~~Latin America,~~EMEA, 5% in Asia Pacific and 4%6% in ~~EMEA.~~Latin America. Underlying revenue increased 4%3% in ~~the~~ U.S./ ~~Canada division. Marsh's revenue growth was driven by strong new business, particularly in countries such as the U.S., Canada, U.K., Brazil and Peru.~~ Canada.Guy Carpenter's ~~third~~first quarter revenue ~~increased 2%~~decreased 4% compared to the same period in the prior year, ~~or 3% on an underlying basis, driven by increases~~reflecting a 4% decrease from the impact of foreign exchange translation. Underlying revenue increased 2% as compared to the same period last year due to growth in ~~U.S., Continental Europe, U.K. Facultative and~~ Global Specialties, ~~such as~~primarily Marine and ~~Aviation.~~

~~Revenue~~Lloyd's Property. International operations showed strong results and expansion in U.S. Treaty drove the ~~Risk and Insurance Services segment increased 6% in the first nine months of 2014 compared with 2013, or 3% on an underlying basis.~~U.S. Operations.

Expense

Expenses in the Risk and Insurance Services segment ~~increased 8%~~decreased 6% in the ~~third~~first quarter of ~~2014~~2015 compared with the same period ~~in the prior~~last year, ~~reflecting a 4% increase~~or 2% on an underlying ~~basis and~~basis. Foreign currency translation reduced expense by 6%, offset by a 3%2% increase ~~from~~related to acquisitions. The decrease in underlying ~~expense increase~~expenses reflects ~~higher base salary, incentive compensation and facilities costs,~~the impact of the net benefit from the termination of the RRA plan, partly offset by ~~lower pension costs.~~

Expenses for the nine-month period in 2014 increased 6% compared to the prior year, reflecting a 3% increase in underlying expenses and a 3% increase due to acquisitions. The increase in underlying expenses is primarily due to higher base salaries ~~incentive compensation, facilities~~ and ~~intangible asset amortization expenses, partly offset by lower~~ pension costs.

3530

Consulting

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


For the Three and Nine Months Ended September 30,	Third Quarter						Nine Months
For the Three Months Ended March 31,
(In millions of dollars)	2014			2013			2014			2013			2015			2014
Revenue	$	1,541		$	1,437		$	4,493		$	4,209		$	1,421		$	1,432
Compensation and Benefits	859			823			2,523			2,425			783			813
Other Expenses	408			382			1,224			1,160			390			394
Expense	1,267			1,205			3,747			3,585			1,173			1,207
Operating Income	$	274		$	232		$	746		$	624		$	248		$	225
Operating Income Margin	17.8		%	16.1		%	16.6		%	14.8		%	17.4		%	15.8		%

Revenue

Consulting revenue in the ~~third~~first quarter of ~~2014 increased 7%, or 6%~~2015 decreased 1% reflecting a 5% increase on an underlying basis ~~compared with~~and a 1% increase related to acquisitions, which were more than offset by a 6% decrease from the ~~same period in 2013.~~impact of foreign currency translation. Mercer's revenue decreased 2% to $1.0 billion. On an underlying basis, Mercer's revenue increased 4% ~~to $1.1 billion, or 3% on an underlying basis,~~ compared to the same period last year. The increase in underlying revenue was driven bygrowth in ~~Mercer's~~ Health,Talent and Investments, ~~lines of business,~~ which increased 3%, 4% and ~~10%~~13%, respectively. Oliver Wyman's revenue increased ~~18%~~4% to ~~$429~~$384 million in the ~~third~~first quarter of ~~2014, or 16% on~~2015 as compared to the same period last year, reflecting an ~~underlying basis. The~~8% increase was driven by balanced performance across industry groups with particular strength in Financial Services. On a geographic basis, the revenue growth was attributable to both North America and Europe. We expect Oliver Wyman's growth to moderate in the fourth quarter.

~~Consulting revenue in the first nine months of 2014 increased 7%, or 6%~~ on an underlying basis, ~~compared with~~a 2% increase from acquisitions, partly offset by a decrease of 6% from the ~~same period~~impact of foreign currency translation.

In February 2015, Mercer made a $75 million strategic investment in ~~2013, with underlying growth of 3% in~~Benefitfocus (NASDAQ:BNFT), a benefits technology provider. The investment expands the relationship between Mercer Marketplace, MMC's private healthcare exchange, and ~~15% in Oliver Wyman.~~Benefitfocus.

Expense

Consulting expenses in the ~~third~~first quarter of 2015 decreased 3% from the first quarter of 2014 ~~increased 5%, or 4% on an~~as a 6% decrease from the impact of foreign currency translation was partly offset by a 3% increase in underlying ~~basis, compared with the same period in 2013.~~expenses. The underlying expense increase in the ~~third~~first quarter of ~~2014~~2015 was primarily due to higher ~~incentive compensation costs,~~base salaries, partly offset by ~~lower pension costs.~~

~~Expenses for~~ the ~~nine months~~impact of ~~2014 increased 5% as compared to~~ the ~~same period in 2013, or 4% on an underlying basis.~~net benefit from the termination of the RRA plan.

Corporate and Other

Corporate expenses in the ~~third~~first quarter of ~~2014~~2015 were ~~$58~~$46 million compared with ~~$50~~$45 million in the prior year. The increase was primarily due to corporate initiatives, primarily related to strenghtening our cyber security protections, expenses related to strategic investments and corporate transformation efforts, primarily within HR and Finance.year.

~~Expenses for the first nine months of 2014 increased $4 million from $147 million in 2013.~~

Interest

Interest income earned on corporate funds was $6$3 million in the ~~third~~first quarter of ~~2014,~~2015, compared with $5 million in the ~~third~~first quarter of ~~2013,~~2014, reflecting a ~~higher~~lower level of invested funds ~~partly offset by~~and lower effective interest rates. Interest expense ~~increased $5~~decreased $6 million in ~~2014~~2015 compared with the ~~third~~first quarter of ~~2013.~~2014. The ~~increase~~decrease was due to ~~a higher level of debt during~~lower average interest rates compared with the ~~third quarter of 2014.~~prior year.

Investment Income

The caption ~~“Investment income”~~"Investment income" in the consolidated statements of income comprises realized and unrealized gains and losses from investments recognized in current earnings. It includes, when applicable, other than temporary declines in the value of debt and available-for-sale securities and equity method gains or losses on its investment in private equity. The Company's investments may include direct investments in insurance or consulting companies and investments in private equity funds. The Company recorded investment income of ~~$26~~$2 million in the ~~third~~first quarter of ~~2014~~2015 compared to ~~$14~~$13 million for the same period in ~~2013,~~2014. The gains recorded in 2015 primarily relate to our investments in private equity funds. Investment income in 2014 included $7 million related to our general partner carried interest ~~from~~in Trident III that was no longer subject to ~~claw-back. Investment income for the nine months~~claw-back, and gains of ~~2014 was $37~~$6 million compared to $58 million in 2013. 2014 includes carried interest from Trident III of $31 million compared with $34 million in 2013. The Company also recorded $20 million of investment gains for the first nine months of 2013

primarily related to ~~its investment~~our investments in ~~Trident II. The Company no longer holds an investment in Trident II.~~private equity funds. At ~~September 30, 2014 and 2013,~~March 31, 2015, the Company had deferred performance fees of approximately ~~$15~~$20 million ~~and $43 million, respectively,~~ related to Trident III. The timing of recognition of the remaining deferred performance fees from Trident III is unknown and is not controlled by the Company.

Income Taxes

The Company's effective tax rate in the ~~third~~first quarter of ~~2014~~2015 was ~~29.6%~~29.2% compared with ~~32.1%~~29.5% in the ~~third~~first quarter of ~~2013. The effective tax rate for the nine months of 2014 was 28.9% compared with 30.1% for the first nine months of 2013.~~2014. The rates reflect non-U.S. income taxed at rates below the U.S. statutory rate, including the effect of repatriation, as well as the impact of discrete tax matters such as changes in judgment about the beginning balance in valuation allowances, the resolution of tax examinations and expiration of statutes of limitations. The rate in the third quarter of 2013 also reflected the impact of tax rate changes on the Company's deferred tax assets and liabilities.repatriation.

The effective tax rate is sensitive to the geographic mix and repatriation of the Company's earnings, which may result in higher or lower tax rates. U.S. federal and state corporate tax rates substantially exceed tax rates applicable in most jurisdictions outside the U.S. A significant portion of the Company's profits ~~were~~are earned outside the U.S. In ~~2014,~~2015, the forecasted pre-tax income in the U.K., Canada, Australia, Germany, ~~France~~ and Bermuda is expected to account for approximately 60% of the Company's total non-U.S. pre-tax income, with estimated effective rates in those countries of 21%, 27%, 30%, ~~31% and 41%~~33% and 0%, respectively. Consequently, ~~increases~~continued improvement in ~~pre-tax income~~the profitability of the Company's U.S.-based operations ~~at a rate higher than operations outside of the U.S.~~ would tend to result in higher effective tax rates. ~~Losses~~A loss 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 cannot be offset by earnings from other~~ operations ~~and~~ 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 limitation.

Changes in tax laws or tax rulings may have a significant impact on our effective tax rate. Discussions continue within Congress and the Administration about broad reform of the corporate tax system in the U.S. It is not possible to predict the ultimate outcome of these discussions. Future legislation could have a material impact on our effective tax rate and consolidated financial statements due to reforms that could include changes in the corporate tax rate and in the way U.S. corporations are taxed on foreign earnings.

The Company reports a liability for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in the tax return. The Company's gross unrecognized tax benefits ~~decreased~~increased from ~~$128~~$97 million at December 31, ~~2013~~2014 to ~~$105~~$100 million at ~~September 30, 2014.~~March 31, 2015. It is reasonably possible that the total amount of unrecognized tax benefits will decrease by an amount between zero and approximately ~~$15~~$22 million within the next twelve months due to settlements of audits and expirations of statutes of limitation.

Dispositions

Summarized Statements of Income data for discontinued operations is as follows:


	Third Quarter						Nine Months						Three Months
(In millions of dollars, except per share figures)	2014			2013			2014			2013			2015			2014
Disposals of discontinued operations	$	(1	)	$	—		$	(1	)	$	(5	)	$	(5	)	$	—
Income tax expense (credit)	—			1			3			(11		)
Income tax (credit) expense													(2		)	1
Disposals of discontinued operations, net of tax	(1		)	(1		)	(4		)	6			(3		)	(1		)
Discontinued operations, net of tax	$	(1	)	$	(1	)	$	(4	)	$	6		$	(3	)	$	(1	)
Discontinued operations, net of tax per share
– Basic	$	—		$	—		$	(0.01	)	$	0.01		$	(0.01	)	$	—
– Diluted	$	—		$	—		$	(0.01	)	$	0.01		$	(0.01	)	$	—

~~The nine months ended September 30, 2013 include estimated costs covered under the indemnity related to the Kroll sale. The~~ ~~nine~~ ~~months ended September 30, 2013 also includes tax indemnities related to the Putnam sale.~~

3732

Liquidity and Capital Resources

The Company is organized as a holding company, a legal entity separate and distinct from its operating subsidiaries. As a holding company without significant operations of its own, the Company is dependent upon dividends and other payments from its operating subsidiaries to meet its obligations for paying principal and interest on outstanding debt obligations, for paying dividends to stockholders, for share repurchases and for corporate expenses. Other sources of liquidity include borrowing facilities discussed below in Financing Cash Flows.

The Company derives a significant portion of its revenue and operating profit from operating subsidiaries located outside of the United States. Funds from the Company’s operating subsidiaries located outside of the United States are regularly repatriated to the United States out of annual earnings. At December 31, ~~2013,~~2014, the Company had approximately ~~$1.4~~$1.3 billion of cash and cash equivalents in its foreign operations, substantially all of which is considered to be permanently invested in those operations to fund foreign investments and working capital needs. At the current time, the Company does not intend to repatriate any of this cash. The non-U.S. cash and cash equivalents considered permanently reinvested includes approximately ~~$202~~$171 million of operating funds required to be maintained for regulatory requirements or as collateral under certain captive insurance arrangements. The Company expects to continue its practice of repatriating foreign funds out of current annual earnings. The analysis of the portion of ~~2014~~2015 earnings that the Company expects to repatriate and the portion that will be permanently reinvested will be finalized later in the year as the amount of non-U.S. earnings and the Company's cash requirements become more certain. While management does not foresee a need to repatriate the funds which are currently deemed permanently invested, if facts or circumstances change, management could elect to repatriate them, ~~if necessary,~~ which could result in higher effective tax rates in the future.

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

Operating Cash Flows

The Company ~~generated $1.1 billion~~used $530 million of cash from operations for the ~~nine~~three months ended ~~September 30, 2014,~~March 31, 2015, compared with ~~$575~~$380 million used by operations for the same period in ~~2013.~~2014. These amounts reflect the net income of the Company during those periods, excluding gains or losses from investments and from the disposition of businesses, adjusted for non-cash charges, and changes in working capital which relate primarily to the timing of payments of accrued liabilities or receipts of assets and pension contributions. The use of cash is driven primarily by cash award payments, which are generally paid in the first quarter of each each year.

Pension Related Items

The Company's policy for funding its tax-qualified defined benefit plans is to contribute amounts at least sufficient to meet the funding requirements set forth in the applicable laws or regulations of the U.S. and other jurisdictions. During the first ~~nine~~three months of ~~2014,~~2015, the Company contributed ~~$122~~$36 million to its non-U.S. pension plans and ~~$19~~$6 million to its U.S. pension plans. ~~During~~In the first ~~nine months~~quarter of ~~2013,~~2014, the Company contributed ~~$532~~$47 million to its non-U.S. pension plans and ~~$20~~$7 million to its U.S. ~~plans, including a contribution of $250 million to prefund its 2014, and a substantial portion of its 2015 deficit funding contribution for its U.K.~~ pension ~~plans and a $70 million discretionary contribution to its Canadian~~ plans.

In the U.S., contributions to the tax-qualified defined benefit plans are based on ERISA guidelines and the Company generally expects to maintain a funded status of 80% or more of the liability determined under the ERISA guidelines. The pension stabilization provisions included in the ~~“Moving~~"Moving Ahead for Progress in the 21st Century ~~Act”~~Act", enacted on July 6, 2012, changed the methodology for determining the discount rate used for calculating plan liabilities under ERISA, which determines, in part, the funding requirements. ~~After~~considering the impact of the pension funding stabilization provisions discussed above, the Company made a $0.2 million required contribution to its U.S. tax-qualified plan in the first quarter of 2014.

The Company has a large number of non-U.S. defined benefit pension plans, the largest of which are in the U.K., which comprise approximately ~~82%~~83% of non-U.S. plan assets. In the U.K., contributions to defined benefit pension plans are determined through a negotiation process between the Company and the plans' trustee that typically occurs every three years in conjunction with the actuarial valuation of the plans. This process is governed by U.K. pension regulations. The assumptions that result from the funding negotiations are different from those used for U.S. GAAP and currently result in a lower funded status than under U.S. GAAP. In March 2014, the Company and the Trustee of the U.K. Defined ~~Benefit~~Benefits Plans agreed ~~to the outcome of the December 31, 2012 valuation and~~ to a funding deficit recovery ~~plan.~~plan for the U.K. defined benefit pension plans. The ~~recovery plan~~current agreement with the Trustee sets out the ~~maximum~~ annual deficit contributions which would be due based on the deficit as at December 31, 2012. ~~However, the funding agreement includes a provision for the~~

The funding level is subject to ~~be assessed~~re-assessment, in most cases on November 1^st of each year. If the funding level on November 1^st has sufficiently improved, no deficit funding contributions will be required in the following year, and the contribution amount will be deferred. As part of a long-term strategy, which depends on having greater influence over asset allocation and overall investment decisions,

the Company has agreed to support annual deficit contributions by the U.K. operating companies under certain circumstances, up to GBP 450 million over a seven-year period.

As a result of the significant improvement in funded status during 2013, which ~~includes~~included the $250 million deficit ~~funding~~pre-funding contribution discussed above, no additional deficit recovery contributions ~~are~~were required in 2014. ~~The next~~Based on the funding test ~~will be~~ carried out as at November 1, 2014, Company contributions to ~~assess~~ the ~~deficit contributions payable during 2015. Deficit recovery contributions~~U.K. plans in 2015 ~~can range from $0~~are expected to ~~a maximum of $57.9 (£35.3)~~be $54 million. The U.K. employers also contribute an expense allowance each year of approximately $9 million.

The Company expects to fund an additional $6$133 million to its ~~U.S. plans and $38 million to its~~ non-U.S. defined benefit plans over the remainder of ~~2014.~~2015, comprising approximately $84 million to plans outside of the U.K. and $49 million to the U.K. plans.

Funding amounts may be influenced by future asset performance, the level of discount rates and other variables impacting the funded status of the plan.

After completion of a consultation period with affected colleagues, in January 2014, the Company amended its U.K. defined benefit pension plans to close those plans to future benefit accruals effective August 1, 2014 and replaced those plans, along with its existing defined contribution plans, with a new, comprehensive defined contribution arrangement. This change resulted in a curtailment of the U.K. defined benefit plans, and as required under GAAP, the Company re-measured the defined benefit plans’ assets and liabilities at the amendment date, based on assumptions and market conditions at that date. As a result of the re-measurement, the Projected Benefit Obligation ("PBO") increased by approximately $147 million and the funded status decreased by approximately $137 million. The change in the PBO and in the funded status relates primarily to a decrease in the discount rate at the re-measurement date. The ~~net periodic benefit costs to be recognized in 2014 are based on a weighted average resulting from the December 31, 2013 measurement and the January 2014 re-measurement. The~~ Company recognized a curtailment gain of $65 million in the first quarter of 2014, primarily resulting from the recognition of the remaining unamortized prior service credit related to a plan amendment made in December 2012. This gain was largely offset by the cost of a transition benefit to certain employees most impacted by the amendment. As a result of the amendments to the U.K. plans, the Company expects an increase in contributions to its defined contribution plans of approximately $30 million compared to the prior year, related to the transfer of colleagues from defined benefit to defined contribution plans, and funding of a portion of the transition benefit.

Financing Cash Flows

Net cash provided by financing activities was ~~$130~~$71 million for the period ended ~~September 30, 2014,~~March 31, 2015, compared with ~~$350~~$118 million net cash used for the same period in ~~2013.~~2014.

In March 2015, the Company issued $500 million of 2.35% five-year senior notes. The Company intends to use the net proceeds for general corporate purposes.

In September 2014, the Company issued $300 million of 2.35% five-year senior notes and $500 million of 3.50% 10.5 year senior notes. In October 2014, a significant portion of the net proceeds of this offering was used to redeem $630 million of debt, including $230 million of 5.75% senior notes due in September 2015 and $400 million of 9.25% senior notes due in 2019. Total cash outflow related to this transaction was approximately $765 million, including a ~~$135~~$137 million cost for early redemption, which ~~will be~~is reflected as a charge in the consolidated statements of income in the fourth quarter of 2014.

During the second quarter of 2014, the Company issued $600 million of 3.5% ten-year senior notes. A portion of the net proceeds of this offering was used for general corporate purposes, including the repayment of $320 million of 5.375% senior notes that matured in July 2014.

~~In September 2013, the Company issued $250 million of 2.55% five-year senior notes and $250 million of 4.05% ten-year senior notes.~~ The net proceeds of this offering will be used for general corporate purposes, which includes a partial redemption of $250 million of the outstanding principal amount of the existing 5.75% senior notes due 2015. The redemption settled in October 2013 with a total cash outflow of approximately $275 million including a $24 million charge for early redemption.

~~During the first quarter of 2013, the Company used cash to repay its 4.85% fixed rate $250 million senior notes that matured.~~

~~On March 28, 2014, the~~ Company and certain of its foreign subsidiaries ~~amended the $1.0 billion facility discussed below, into~~maintain a ~~new~~ $1.2 billion multi-currency five-year unsecured revolving credit facility. The interest rate on this facility is based on LIBOR plus a fixed margin which varies with the Company's credit ~~ratings.~~ratings, which are set forth below. This facility expires in March 2019 and requires the Company to maintain certain coverage and leverage ratios which are tested quarterly. There were no borrowings outstanding under this facility at ~~September 30, 2014.~~

The Company and certain of its foreign subsidiaries previously maintained a $1.0 billion multi-currency five-year revolving credit facility. The facility was previously due to expire in October 2016 and was in effect until March ~~2014. There were no borrowings outstanding under this facility at the time it was amended.~~31, 2015.

In December 2012, the Company closed on a $50 million, three-year delayed draw term loan facility. The interest rate on this facility is based on LIBOR plus an agreed fixed margin which varies with the Company's credit ratings. The facility requires the Company to maintain coverage ratios and leverage ratios consistent with the current revolving credit facility discussed above. The Company had $50 million of borrowings under this facility at ~~September 30, 2014.~~March 31, 2015.

The Company's senior debt is currently rated Baa1 by Moody's and A- by Standard & Poor's. The Company's short-term debt is currently rated P-2 by Moody's and A-2 by Standard & Poor's. The Company carries a stable outlook from Moody's and Standard & Poor's.

During the first ~~nine~~three months of ~~2014,~~2015, the Company paid ~~$40~~$19 million of contingent payments related to acquisitions made in prior periods. These payments are split between financing and operating cash flows in the consolidated statements of cash flows. The portion of these payments reflected as a financing activity is ~~$28~~$6 million, which

represents payments related to the contingent consideration liability that was recorded on the date of acquisition. Payments related to increases in the contingent consideration liability subsequent to the date of acquisition, which were ~~$12~~$13 million for the first ~~nine months~~quarter of ~~2014,~~2015, are reflected as operating cash flows. In the first ~~nine~~three months of ~~2013,~~2015, the Company paid ~~$8 million of contingent payments related to acquisitions made in prior periods.~~

During the first nine months of 2014, the Company repurchased approximately 11.8 million shares of its common stock for consideration of $600 million. In May 2014, the Board of Directors increased the Company's share repurchase program to $2 billion. The Company remains authorized to purchase additional shares of its common stock up to a value of $1.5 billion. There is no time limit on this authorization. During the first nine months of 2013, the Company repurchased 10 million shares of its common stock for total consideration of $400 million.

The Company paid dividends on its common shares of $429 million ($0.78 per share) during the first nine months of 2014, as compared with $394 million ($0.71 per share) during the first nine months of 2013.

~~Investing Cash Flows~~

~~Net cash used for investing activities amounted to $816 million in the first nine months of 2014, compared with $299million used during the same period in 2013.~~

The Company made twelve acquisitions during the first nine months of 2014. Cash used for these acquisitions, net of cash acquired, was $406 million. In addition, in the first nine months of 2014, the Company paid $10$26 million of deferred purchase consideration related to acquisitions made in prior years. Remaining deferred cash payments of approximately ~~$95~~$72 million and estimated future contingent consideration payments of ~~$151~~$206 million for acquisitions completed in the first ~~nine~~three months of ~~2014~~2015 and in prior years are recorded in accounts payable and accrued liabilities or other liabilities in the consolidated balance sheet at ~~September 30,~~March 31, 2015.

In the first three months of 2014, the Company paid $30 million of contingent payments related to acquisitions made in prior periods. Of this amount, $20 million was reported as financing cash flows and $10 million as operating cash flows. In addition, in the first three months of 2014, the Company paid $6 million of deferred purchase consideration related to acquisitions made in prior years.

In May 2014, the Board of Directors increased the Company's share repurchase program to $2 billion. At March 31, 2015, the Company remains authorized to purchase additional shares of its common stock up to a value of approximately $1 billion. There is no time limit on this authorization.

During the first three months of 2015, the Company repurchased approximately 5.3 million shares of its common stock for consideration of $300 million. During the first three months of 2014, the Company repurchased approximately 2 million shares of its common stock for consideration of $100 million.

The Company paid dividends on its common shares of $151 million ($0.28 per share) during the first three months of 2015, as compared with $137 million ($0.25 per share) during the first three months of 2014.

~~On June 23,~~Investing Cash Flows

Net cash used for investing activities amounted to $194 million in the first three months of 2015, compared with $416million used during the same period in 2014.

The Company made 3 acquisitions during the first three months of 2015. Cash used for these acquisitions, net of cash acquired, was $16 million.

During 2014, Mercer ~~announced that it had entered into a definitive agreement to acquire a~~acquired 34% ~~stake in~~of the common shares of South Africa-based Alexander Forbes Group Holdings Limited ("Alexander Forbes")~~, becoming a strategic shareholder after Alexander Forbes successfully launched an initial public offering.~~. Mercer purchased its stake in Alexander Forbes in two tranches at 7.50 South African Rand per share. On July 24, 2014, the Company purchased 14.9% of Alexander Forbes common shares for approximately $137 million, ~~which is included in other assets in~~and on October 2014, the ~~consolidated balance sheets.~~Company paid approximately $166 million for the remaining 19.1% of Alexander Forbes common shares. The investment in Alexander Forbes ~~will be~~is accounted for using the equity method and included in other assets in the consolidated balance sheet. ~~In October 2014, the Company paid approximately $166 million for the remaining 19.1%.~~

The Company made six acquisitions during the first ~~nine~~three months of ~~2013.~~2014. Cash used for these acquisitions, net of cash acquired was ~~$103~~$313 million. ~~In addition, in the first nine months of 2013, the Company paid $4 million of deferred purchase consideration related to acquisitions made in prior years.~~

The Company used cash of ~~$285~~$91 million to purchase fixed assets and capitalized software in the first ~~nine~~three months of ~~2014,~~2015, compared with ~~$288~~$99 million in the first ~~nine~~three months of ~~2013,~~2014, primarily related to computer equipment and software purchases, software development costs and the refurbishing and modernizing of office facilities.

The Company has commitments for potential future investments of approximately ~~$23~~$75 million in ~~two~~three private equity funds that invest primarily in financial services companies.

4035

Commitments and Obligations

The Company’s contractual obligations of the types identified in the table below were of the following amounts as of ~~September 30, 2014~~March 31, 2015 (In millions of dollars):


	Payment due by Period										Payment due by Period
Contractual Obligations	Total		Within 1 Year		1-3 Years		4-5 Years		After 5 Years		Total		Within 1 Year		1-3 Years		4-5 Years		After 5 Years
Current portion of long-term debt	$	640	$	640	$	—	$	—	$	—	$	61	$	61	$	—	$	—	$	—
Long-term debt	3,396		—		323		575		2,498		3,841		—		274		1,076		2,491
Interest on long-term debt	1,521		287		263		245		726		1,359		144		283		261		671
Net operating leases	2,120		320		523		415		862		2,138		309		516		383		930
Service agreements	463		161		191		103		8		393		175		159		54		5
Other long-term obligations	334		86		162		84		2		307		67		202		36		2
Acquisitions	166		166		—		—		—
Purchases commitments	15		15		—		—		—
Total	$	8,655	$	1,675	$	1,462	$	1,422	$	4,096	$	8,099	$	756	$	1,434	$	1,810	$	4,099

The above does not include unrecognized tax benefits of ~~$105~~$100 million, accounted for under ASC Topic No. 740, as the Company is unable to reasonably predict the timing of settlement of these liabilities, other than approximately $4 million that may become payable within one year. The above does not include the indemnified liabilities discussed in Note 15 as the Company is unable to reasonably predict the timing of settlement of these liabilities. The above does not include net pension liabilities for underfunded plans of approximately ~~$825 million~~$1.9 billion because the timing and amount of ultimate payment of such liability is dependent upon future events, including, but not limited to, future returns on plan assets and changes in the discount rate used to measure the liabilities. The Company expects to contribute approximately $6$19 million and ~~$38~~$133 million to its U.S. and non-U.S. pension plans, respectively, in the remainder of ~~2014.~~2015.

New Accounting Guidance

Note 17 to the consolidated financial statements in this report contains a discussion of recently issued accounting guidance and their impact or potential future impact on the Company’s financial results, if determinable.

4136


Item 3.	Quantitative and Qualitative Disclosures About Market Risk.

Market Risk and Credit Risk

Certain of the Company’s revenues, expenses, assets and liabilities are exposed to the impact of interest rate changes and fluctuations in foreign currency exchange rates and equity markets.

The Company had the following investments subject to variable interest rates:


(In millions of dollars)	September 30, 2014		March 31, 2015
Cash and cash equivalents invested in money market funds, certificates of deposit and time deposits	$	2,649	$	1,104
Fiduciary cash and investments	$	4,871	$	4,585

Based on the above balances, if short-term interest rates increased or decreased by 10%, or 8 basis points, over the course of the remainder of the year, annual interest income, including interest earned on fiduciary funds, would increase or decrease by approximately $1$2 million.

In addition to interest rate risk, our cash and cash equivalents and fiduciary fund investments are subject to potential loss of value due to counter-party credit risk. To minimize this risk, the Company and its subsidiaries invest pursuant to a Board-approved investment policy. The policy mandates the preservation of principal and liquidity and requires broad diversification with counter-party limits assigned based primarily on credit rating and type of investment. The Company carefully monitors its cash and fiduciary fund investments and will further restrict the portfolio as appropriate in response to market conditions. The majority of cash and fiduciary fund investments are invested in short-term bank deposits.

Foreign Currency Risk

The translated values of revenue and expense from the Company’s international operations are subject to fluctuations due to changes in currency exchange rates. The non-U.S. based revenue that is exposed to foreign exchange fluctuations is approximately 55% of total revenue. We periodically use forward contracts to limit foreign currency exchange rate exposure on net income and cash flows for specific, clearly defined transactions arising in the ordinary course of business. Although the Company has significant revenue generated in foreign locations which is subject to foreign exchange rate fluctuations, in most cases both the foreign currency revenue and expenses are in the functional currency of the foreign location. As such, the U.S. dollar translation of both the revenues and expenses, as well as the potentially offsetting movements of various currencies against the U.S. dollar, generally tend to mitigate the impact on net operating income of foreign currency risk. The Company estimates that a 10% movement of major foreign currencies (Euro, Sterling, Australian dollar and Canadian dollar) in the same direction against the U.S. dollar that held constant over the course of the year would increase or decrease full year net operating income by approximately ~~$50~~$54 million. In the fourth quarter of 2014 and the first quarter of 2015, the U.S. dollar strengthened significantly against most currencies. If exchange rates at March 31, 2015 hold constant throughout 2015, the Company estimates the year-over-year impact from conversion of foreign currency earnings would reduce full year net operating income by approximately $120 million. In Continental Europe, the largest amount of revenue from renewals for the Risk & Insurance segment occurs in the first quarter. Consequently, a significant portion of the year-over-year foreign exchange impact occurs in the first quarter.

Equity Price Risk

The Company holds investments in both public and private companies as well as private equity funds that invest primarily in financial services companies. ~~Publicly~~The Company holds publicly traded investments of $92 million of which $17 million are classified as available for ~~sale.~~sale and $75 million are accounted for using the cost method, as the shares are categorized as restricted and cannot be sold for more than one year. Non-publicly traded investments of ~~$12~~$13 million are accounted for using the cost method and an additional ~~$223~~$399 million of investments are accounted for using the equity method. These investments are subject to risk of changes in market value, which if determined to be other than temporary, could result in realized impairment losses. The Company periodically reviews the carrying value of such investments to determine if any valuation adjustments are appropriate under the applicable accounting pronouncements.

Other

~~A number of lawsuits and regulatory proceedings are pending.~~ See Note 15 to the consolidated financial statements included elsewhere in this ~~report.~~report for a discussion of lawsuits and regulatory proceedings.

4237


Item 4.	Controls & Procedures.

a. Evaluation of Disclosure Controls and Procedures

Based on their evaluation, as of the end of the period covered by this report, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Securities Exchange Act of 1934) are effective.

b. Changes in Internal Control

There were no changes in the Company’s internal control over financial reporting identified in connection with the evaluation required by Rules 13a-15(d) or 15d-15(d) under the Securities Exchange Act of 1934 that occurred during the Company’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

4338

PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

The information set forth in Note 15 to the consolidated financial statements provided in Part I of this report is incorporated herein by reference.

Item 1A. Risk Factors.

The Company and its subsidiaries face a number of risks and uncertainties. In addition to the other information in this report and our other filings with the SEC, readers should consider carefully the risk factors discussed in ~~“Part~~"Part I, Item 1A. Risk ~~Factors”~~Factors" in our Annual Report on Form 10-K for the year ended December 31, ~~2013~~2014. If any of the risks described in our Annual Report on Form 10-K or such other risks actually occur, our business, results of operations or financial condition could be materially adversely affected.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Issuer Repurchases of Equity Securities

In May 2014, the Board of Directors of the Company authorized share repurchases up to a dollar value of $2 billion of the Company's common stock. The Company repurchased approximately ~~4.8~~5.3 million shares of its common stock for ~~$250~~$300 million during the ~~third~~first quarter of ~~2014. The~~2015. At March 31, 2015, the Company remains authorized to repurchase shares of its common stock up to a dollar value of approximately ~~$1.5~~$1.0 billion. There is no time limit on the authorization.

Period
(a)
Total
Number of
Shares (or
Units)
Purchased

(b)
Average
Price
Paid per
Share
(or Unit)

(c)
Total Number of
Shares (or
Units)
Purchased as
Part of Publicly
Announced
Plans or
Programs

(d)
Maximum
Number (or
Approximate
Dollar Value) of
Shares (or
Units) that May
Yet Be
Purchased
Under the Plans
or Programs

July 1-31, 2014 1,923,624
$ 51.9852
1,923,624
$ 1,697,241,056
August 1-31, 2014 1,575,498
$ 51.5693
1,575,498
$ 1,615,993,802
September 1-30, 2014 1,297,639
$ 52.9816
1,297,639
$ 1,547,242,807
Total Q3 2014 4,796,761
$ 52.1181
4,796,761
$ 1,547,242,807



Period	(a) Total Number of Shares (or Units) Purchased	(b) Average Price Paid per Share (or Unit)		(c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs	(d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs
January 1-31, 2015	1,770,799	$	56.4717	1,770,799	$	1,247,246,704
February 1-28, 2015	1,457,370	$	56.6918	1,457,370	$	1,164,625,825
March 1-31, 2015	2,071,342	$	56.6681	2,071,342	$	1,047,246,728
Total	5,299,511	$	56.6090	5,299,511	$	1,047,246,728

4439

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosure.

Not Applicable.

Item 5. Other Information.

None.

Item 6. Exhibits.

See the Exhibit Index immediately following the signature page of this report, which is incorporated herein by reference.

4540

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



Date:	~~November~~May 4, ~~2014~~2015	/s/ J. Michael Bischoff
		J. Michael Bischoff
		Chief Financial Officer

Date:	~~November~~May 4, ~~2014~~2015	/s/ Robert J. Rapport
		Robert J. Rapport
		Senior Vice President & Controller
		(Chief Accounting Officer)

4641

EXHIBIT INDEX



Exhibit No.		Exhibit Name

4.1		~~Form~~Sixth Supplemental Indenture, dated as of ~~Fifth Supplemental Indenture~~March 6, 2015, between Marsh & McLennan Companies, Inc. (the "Company") and The Bank of New York Mellon, as trustee ~~(incorporated by reference to~~

10.1		Letter Agreement, effective as of March 20, 2013, between the ~~Company's Current Report on~~ Company and Peter J. Beshar

10.2		Non-Competition and Non-Solicitation Agreement, effective as of November 21, 2013, between the Company and Peter J. Beshar

10.3		Form ~~8-K~~of 2015 Long-term Incentive Award under the Marsh & McLennan Companies, Inc. 2011 Incentive and Stock Award Plan

10.4		Form of Deferred Stock Unit Award, dated ~~September 10, 2014)~~as of March 1, 2015, under the Marsh & McLennan Companies, Inc. 2011 Incentive and Stock Award Plan

12.1		Statement Re: Computation of Ratio of Earnings to Fixed Charges

31.1		Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer

31.2		Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer

32.1		Section 1350 Certifications

101.INS		XBRL Instance Document

101.SCH		XBRL Taxonomy Extension Schema

101.CAL		XBRL Taxonomy Extension Calculation Linkbase

101.DEF	��	XBRL Taxonomy Extension Definition Linkbase

101.LAB		XBRL Taxonomy Extension Label Linkbase

101.PRE		XBRL Taxonomy Extension Presentation Linkbase

4742



Nine Months Ended September 30,	2014									2013
(In millions of dollars)	Pre-Tax			Tax			Net of Tax			Pre-Tax			Tax			Net of Tax
Foreign currency translation adjustments	$	(214	)	$	(10	)	$	(204	)	$	(91	)	$	(7	)	$	(84	)
Unrealized investment gains (losses)	—			—			—			(1		)	—			(1		)
Pension/post-retirement plans:
Amortization of losses (gains) included in net periodic pension cost:
Prior service gains (a)	(8		)	(3		)	(5		)	(17		)	(6		)	(11		)
Net actuarial losses (a)	157			48			109			237			83			154
Subtotal	149			45			104			220			77			143
Effect of remeasurement	(167		)	(34		)	(133		)	—			—			—
Effect of curtailment	(65		)	(13		)	(52		)	—			—			—
Foreign currency translation adjustments	11			3			8			51			11			40
Other	3			—			3			(6		)	(2		)	(4		)
Pension/post-retirement plans (losses) gains	(69		)	1			(70		)	265			86			179
Other comprehensive (loss) income	$	(283	)	$	(9	)	$	(274	)	$	173		$	79		$	94
(a) Components of net periodic pension cost are included in compensation and benefits in the Consolidated Statements of Income. Tax on prior service gains and net actuarial losses is included in income tax expense.



Combined U.S. and significant non-U.S. Plans	Pension						Postretirement
For the Three Months Ended September 30,	Benefits						Benefits
(In millions of dollars)	2014			2013			2014			2013
Service cost	$	49		$	63		$	2		$	2
Interest cost	163			144			3			2
Expected return on plan assets	(251		)	(227		)	—			—
Amortization of prior service credit	(2		)	(5		)	—			—
Recognized actuarial loss	55			79			(1		)	—
Net periodic benefit cost	$	14		$	54		$	4		$	4

Combined U.S. and significant non-U.S. Plans	Pension						Postretirement
For the Nine Months Ended September 30,	Benefits						Benefits
(In millions of dollars)	2014			2013			2014			2013
Service cost	$	172		$	188		$	4		$	4
Interest cost	485			433			9			8
Expected return on plan assets	(749		)	(680		)	—			—
Amortization of prior service credit	(8		)	(16		)	—			—
Recognized actuarial loss	159			237			(1		)	1
Net periodic benefit cost	$	59		$	162		$	12		$	13
Curtailment (credit)	(65		)	—			—			—
Total cost (credit)	$	(6	)	$	162		$	12		$	13

U.S. Plans only	Pension						Postretirement
For the Three Months Ended September 30,	Benefits						Benefits
(In millions of dollars)	2014			2013			2014			2013
Service cost	$	23		$	26		$	1		$	1
Interest cost	65			57			2			1
Expected return on plan assets	(87		)	(81		)	—			—
Amortization of prior service credit	(1		)	(4		)	—			—
Recognized actuarial loss	31			52			(1		)	—
Net periodic benefit cost	$	31		$	50		$	2		$	2