SECURITIES AND EXCHANGE COMMISSION


☒			Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

~~_____________________________________________~~ OR

Title of each class

Trading symbol(s)

Name of exchange on which registered

Common Stock, par value $1.00 per share

MMC

New York Stock Exchange

Chicago Stock Exchange

London Stock Exchange

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, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

☐(Do not check if a smaller reporting company)

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o¨

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 25, 2017,~~April 22, 2021, there were outstanding ~~510,356,826~~508,531,926 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 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," "intend," "plan," "project" and similar terms, and future or conditional tense verbs like "could," "may," "might," "should," "will" and "would."

Forward-looking statements are subject to inherent risks and uncertainties that could cause actual results to differ materially from those expressed or implied in our forward-looking statements.

•the financial and operational impact of ~~any investigations, reviews or other activity by regulatory or law enforcement authorities,~~COVID-19 on our revenue and ability to generate new business, our overall level of profitability and cash flow, and our liquidity, including the ~~European Commission’s investigation into the aviation insurance~~timeliness and ~~reinsurance sector; (2)~~ collectability of our receivables;

•the impact from lawsuits, other contingent liabilities and loss contingencies arising from errors and omissions, breach of fiduciary duty or other claims against us; ~~(3) our ability to compete effectively and adapt to changes in~~

•the ~~competitive environment, including to respond to disintermediation, pricing pressures and technological and other types~~impact of ~~innovation; (4) our exposure to potential civil damages, criminal penalties~~investigations, reviews, or other ~~consequences,~~activity by regulatory or law enforcement authorities;

•the financial and operational impact of complying with laws and regulations where we operate and the risks of noncompliance with such laws, including anti-corruption laws such as ~~reputational impact, if we fail to comply with applicable~~the U.S. Foreign Corrupt Practices Act, U.K. Anti-Bribery Act, trade sanctions regimes and ~~non-U.S. laws~~cybersecurity and ~~regulations; (5)~~ data privacy regulations such as the E.U.’s General Data Protection Regulation;

•our ~~organization's~~ ability to maintain adequate safeguards to protect the security of our information systems and confidential, personal or proprietary information, particularly given the increased risk of cybersecurity attacks, including hacking, viruses, malware, ransomware and other types of data security breaches, as well as the heightened risk caused by remote work arrangements;

•our ability to compete effectively and adapt to changes in the competitive environment, including to respond to technological change, disintermediation, digital disruption and other types of innovation;

•our ability to manage risks associated with our investment management and related services business, particularly in the context of uncertain equity markets, including our ability to execute timely trades in light of increased trading volume and to manage potential conflicts of interest between investment consulting and fiduciary management services;

•our ~~vendor network~~ability to attract and retain industry leading talent;

•the ~~need~~impact of changes in tax laws, guidance and interpretations, particularly due to ~~patch software vulnerabilities; (6)~~ proposals from the current administrations in the U.S. and U.K., or disagreements with tax authorities;

•our ability to successfully recover if we experience a business continuity problem due to cyberattack, natural disaster, government unrest or otherwise; ~~(7)~~ and

•the ~~impact of macroeconomic, political,~~ regulatory, ~~or market conditions~~contractual and reputational risks that arise based on ~~us, our clients~~insurance placement activities and the industries in which we operate; (8) the financial and operational impact of complying with laws and regulations where we operate, including the E.U.’s General Data Protection Regulation; (9) our ability to attract and retain key employees; (10) the impact on our competitive position of our tax rate relative to our competitors; (11) the impact of fluctuations in foreign exchange, interest rates and securities markets on our results; (12) the effect of our global pension obligations on our financial position, earnings and cash flows and the impact of low interest rates on those obligations; and (13) the impact of changes in accounting rules or in our accounting estimates or assumptions, including the impact of the adoption of the newvarious insurer revenue ~~recognition standard.~~streams.

The factors identified above are not exhaustive. WeMarsh & McLennan Companies, Inc. and its subsidiaries (the "Company" or "Marsh McLennan") operate in a dynamic business environment in which new risks emerge frequently. Accordingly, we caution readers not to place undue reliance on 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" section and in the "Management’s Discussion and Analysis of Financial Condition and Results of Operations" section of this Quarterly Report on Form 10-Q and our most recently filed Annual Report on Form 10-K.

PART I. FINANCIAL INFORMATION

Item 1.Financial Statements.

MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

Net income Per Share Attributable to the Company:

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

MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


	Three Months Ended March 31,
(In millions)		2021		2020
Net income before non-controlling interests		$	998	$	767
Other comprehensive income (loss), before tax:
Foreign currency translation adjustments		(91)		(941)

Gain related to pension/post-retirement plans		6		175
Other comprehensive loss, before tax		(85)		(766)
Income tax expense on other comprehensive income		2		26
Other comprehensive loss, net of tax		(87)		(792)
Comprehensive income (loss)		911		(25)
Less: comprehensive income attributable to non-controlling interest		15		13
Comprehensive income (loss) attributable to the Company		$	896	$	(38)

Three Months Ended
September 30, Nine Months Ended
September 30,
(In millions) 2017
2016
2017
2016
Net income before non-controlling interests $ 397
$ 384
$ 1,482
$ 1,354
Other comprehensive income (loss), before tax:
    Foreign currency translation adjustments 127
(52 ) 652
(373 )
    Unrealized investment (losses) gains (8 ) 1
11
1
    (Loss) gain related to pension/post-retirement plans (168 ) 82
(140 ) 383
Other comprehensive (loss) income, before tax (49 ) 31
523
11
Income tax (credit) expense on other comprehensive income (30 ) 19
(10 ) 80
Other comprehensive (loss) income, net of tax (19 ) 12
533
(69 )
Comprehensive income 378
396
2,015
1,285
Less: comprehensive income attributable to non-controlling interest 4
5
19
22
Comprehensive income attributable to the Company $ 374
$ 391
$ 1,996
$ 1,263

MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS


(In millions, except share amounts)	(Unaudited) March 31, 2021		December 31, 2020
ASSETS
Current assets:
Cash and cash equivalents	$	1,120	$	2,089
Receivables
Commissions and fees	5,032		4,679
Advanced premiums and claims	119		112

Other	592		677
	5,743		5,468
Less-allowance for credit losses	(146)		(142)
Net receivables	5,597		5,326


Other current assets	832		740
Total current assets	7,549		8,155
Goodwill	15,458		15,517
Other intangible assets	2,603		2,699
Fixed assets (net of accumulated depreciation and amortization of $2,197 at March 31, 2021 and $2,159 at December 31, 2020)	830		856
Pension related assets	1,823		1,768
Right of use assets	1,824		1,894
Deferred tax assets	704		702
Other assets	1,482		1,458
	$	32,273	$	33,049

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

MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (Continued)


(In millions, except share amounts)	(Unaudited) March 31, 2021		December 31, 2020
LIABILITIES AND EQUITY
Current liabilities:
Short-term debt	$	1,015	$	517
Accounts payable and accrued liabilities	2,940		3,050
Accrued compensation and employee benefits	1,220		2,400

Current lease liabilities	342		342
Accrued income taxes	368		247
Dividends payable	238		0
Total current liabilities	6,123		6,556
Fiduciary liabilities	8,782		8,585
Less – cash and investments held in a fiduciary capacity	(8,782)		(8,585)
	0		0
Long-term debt	10,242		10,796
Pension, post-retirement and post-employment benefits	2,594		2,662
Long-term lease liabilities	1,850		1,924
Liabilities for errors and omissions	354		366
Other liabilities	1,514		1,485
Commitments and contingencies	0		0
Equity:
Preferred stock, $1 par value, authorized 6,000,000 shares, NaN issued	0		0
Common stock, $1 par value, authorized 1,600,000,000 shares, issued 560,641,640 shares at March 31, 2021 and December 31, 2020	561		561
Additional paid-in capital	851		943
Retained earnings	16,780		16,272
Accumulated other comprehensive loss	(5,197)		(5,110)
Non-controlling interests	162		156
	13,157		12,822
Less – treasury shares, at cost, 51,871,847 shares at March 31, 2021 and 52,914,550 shares at December 31, 2020	(3,561)		(3,562)
Total equity	9,596		9,260
	$	32,273	$	33,049

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

MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED ~~BALANCE SHEETS~~STATEMENTS OF CASH FLOWS (Unaudited)

(In millions, except share amounts)
(Unaudited)
September 30,
2017
December 31,
2016
ASSETS
Current assets:
Cash and cash equivalents $ 1,078
$ 1,026
Receivables
Commissions and fees 3,651
3,370
Advanced premiums and claims 52
83
Other 311
286
4,014
3,739
Less-allowance for doubtful accounts and cancellations (105 ) (96 )
Net receivables 3,909
3,643
Other current assets 228
215
Total current assets 5,215
4,884
Goodwill 9,100
8,369
Other intangible assets 1,320
1,126
Fixed assets
(net of accumulated depreciation and amortization of $1,822 at September 30, 2017 and $1,683 at December 31, 2016) 728
725
Pension related assets 1,155
776
Deferred tax assets 947
1,097
Other assets 1,225
1,213
$ 19,690
$ 18,190

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

~~MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES~~

~~CONSOLIDATED BALANCE SHEETS (Continued)~~

(In millions, except share amounts)
(Unaudited)
September 30,
2017
December 31,
2016
LIABILITIES AND EQUITY
Current liabilities:
Short-term debt $ 13
$ 312
Accounts payable and accrued liabilities 2,002
1,969
Accrued compensation and employee benefits 1,377
1,655
Accrued income taxes 229
146
Dividends payable 193
—
Total current liabilities 3,814
4,082
Fiduciary liabilities 5,128
4,241
Less – cash and investments held in a fiduciary capacity (5,128 ) (4,241 )
—
—
Long-term debt 5,475
4,495
Pension, post-retirement and post-employment benefits 1,948
2,076
Liabilities for errors and omissions 316
308
Other liabilities 1,006
957
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, 2017
and December 31, 2016 561
561
Additional paid-in capital 783
842
Retained earnings 13,113
12,388
Accumulated other comprehensive loss (4,560 ) (5,093 )
Non-controlling interests 85
80
9,982
8,778
Less – treasury shares, at cost, 49,484,693 shares at September 30, 2017
and 46,150,415 shares at December 31, 2016 (2,851 ) (2,506 )
Total equity 7,131
6,272
$ 19,690
$ 18,190


For the Three Months Ended March 31,
(In millions)	2021		2020
Operating cash flows:
Net income before non-controlling interests	$	998	$	767
Adjustments to reconcile net income used for operations:
Depreciation and amortization of fixed assets and capitalized software	97		97
Amortization of intangible assets	100		86

Non cash lease expense	79		80
Adjustments and payments related to contingent consideration liability	(1)		(10)


Provision for deferred income taxes	14		9
Net (gain) loss on investments	(11)		2
Net loss (gain) on disposition of assets	3		(3)
Share-based compensation expense	78		72

Changes in assets and liabilities:
Net receivables	(275)		(313)
Other current assets	(91)		(34)
Other assets	(54)		57
Accounts payable and accrued liabilities	(73)		(140)
Accrued compensation and employee benefits	(1,180)		(1,178)
Accrued income taxes	121		91
Contributions to pension and other benefit plans in excess of current year credit	(102)		(85)
Other liabilities	26		(38)
Operating lease liabilities	(82)		(86)
Effect of exchange rate changes	(55)		(12)
Net cash used for operations	(408)		(638)
Financing cash flows:
Purchase of treasury shares	(112)		0
Net increase in commercial paper	0		193
Borrowings from term-loan and credit facilities	0		2,000

Repayments of debt	(4)		(503)


Purchase of non-controlling interests	0		(3)

Shares withheld for taxes on vested units – treasury shares	(93)		(112)
Issuance of common stock from treasury shares	35		44
Payments of deferred and contingent consideration for acquisitions	(32)		(29)
Distributions of non-controlling interests	(8)		(18)
Dividends paid	(237)		(232)
Net cash (used for) provided by financing activities	(451)		1,340
Investing cash flows:
Capital expenditures	(69)		(118)
Net sales of long-term investments	4		57



Dispositions	—		7
Acquisitions	0		(200)

Other, net	(2)		9
Net cash used for investing activities	(67)		(245)
Effect of exchange rate changes on cash and cash equivalents	(43)		(132)
(Decrease) increase in cash and cash equivalents	(969)		325
Cash and cash equivalents at beginning of period	2,089		1,155



Cash and cash equivalents at end of period	$	1,120	$	1,480

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

~~MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES~~

~~CONSOLIDATED STATEMENTS OF CASH FLOWS~~

~~(Unaudited)~~

For the Nine Months Ended September 30,
(In millions) 2017
2016
Operating cash flows:
Net income before non-controlling interests $ 1,482
$ 1,354
Adjustments to reconcile net income to cash provided by operations:
Depreciation and amortization of fixed assets and capitalized software 234
231
Amortization of intangible assets 122
99
Adjustments and payments related to contingent consideration liability (30 ) (37 )
Gain on deconsolidation of subsidiary —
(12 )
Provision for deferred income taxes 52
43
(Gain) loss on investments (3 ) 2
Loss on disposition of assets 9
3
Share-based compensation expense 111
84
Changes in assets and liabilities:
Net receivables (248 ) (162 )
Other current assets (14 ) (20 )
Other assets (18 ) (2 )
Accounts payable and accrued liabilities 11
(29 )
Accrued compensation and employee benefits (278 ) (349 )
Accrued income taxes 77
65
Contributions to pension and other benefit plans in excess of current year expense/credit (337 ) (214 )
Other liabilities 83
(3 )
Effect of exchange rate changes (116 ) 59
Net cash provided by operations 1,137
1,112
Financing cash flows:
Purchase of treasury shares (600 ) (625 )
Proceeds from debt 987
347
Repayments of debt (313 ) (9 )
Shares withheld for taxes on vested units – treasury shares (49 ) (38 )
Issuance of common stock from treasury shares 134
154
Payments of deferred and contingent consideration for acquisitions (127 ) (96 )
Distributions of non-controlling interests (14 ) (12 )
Dividends paid (545 ) (504 )
Net cash used for financing activities (527 ) (783 )
Investing cash flows:
Capital expenditures (217 ) (174 )
Net sales (purchases) of long-term investments (21 ) (4 )
Proceeds from sales of fixed assets 4
5
Acquisitions (629 ) (88 )
Other, net 4
3
Net cash used for investing activities (859 ) (258 )
Effect of exchange rate changes on cash and cash equivalents 301
(57 )
Increase in cash and cash equivalents 52
14
Cash and cash equivalents at beginning of period 1,026
1,374
Cash and cash equivalents at end of period $ 1,078
$ 1,388

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

MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited)


								Three Months Ended March 31,
For the Nine Months Ended September 30,
(In millions, except per share amounts)	2017			2016			(In millions, except per share amounts)	2021		2020
COMMON STOCK							COMMON STOCK
Balance, beginning and end of period	$	561		$	561		Balance, beginning and end of period	$	561	$	561
ADDITIONAL PAID-IN CAPITAL							ADDITIONAL PAID-IN CAPITAL
Balance, beginning of year	$	842		$	861
Balance, beginning of period							Balance, beginning of period	$	943	$	862
Change in accrued stock compensation costs	26			14			Change in accrued stock compensation costs	(133)		(129)
Issuance of shares under stock compensation plans and employee stock purchase plans and related tax impact in 2016	(82		)	(63		)
Issuance of shares under stock compensation plans and employee stock purchase plans							Issuance of shares under stock compensation plans and employee stock purchase plans	41		14
Other	(3		)	—			Other	0		(1)
Balance, end of period	$	783		$	812		Balance, end of period	$	851	$	746
RETAINED EARNINGS							RETAINED EARNINGS
Balance, beginning of year	$	12,388		$	11,302
Balance, beginning of period							Balance, beginning of period	$	16,272	$	15,199

Net income attributable to the Company	1,463			1,332			Net income attributable to the Company	983		754
Dividend equivalents declared – (per share amounts: $1.43 in 2017 and $1.30 in 2016)	(4		)	(5		)
Dividends declared – (per share amounts: $1.43 in 2017 and $1.30 in 2016)	(734		)	(676		)
Dividend equivalents declared							Dividend equivalents declared	(3)		(4)
Dividends declared							Dividends declared	(472)		(459)
Balance, end of period	$	13,113		$	11,953		Balance, end of period	$	16,780	$	15,490
ACCUMULATED OTHER COMPREHENSIVE LOSS
Balance, beginning of year	$	(5,093	)	$	(4,220	)
Other comprehensive income (loss), net of tax	533			(69		)
ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME							ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME
Balance, beginning of period							Balance, beginning of period	$	(5,110)	$	(5,055)

Other comprehensive loss, net of tax							Other comprehensive loss, net of tax	(87)		(792)
Balance, end of period	$	(4,560	)	$	(4,289	)	Balance, end of period	$	(5,197)	$	(5,847)
TREASURY SHARES							TREASURY SHARES
Balance, beginning of year	$	(2,506	)	$	(1,991	)
Balance, beginning of period							Balance, beginning of period	$	(3,562)	$	(3,774)
Issuance of shares under stock compensation plans and employee stock purchase plans	255			250			Issuance of shares under stock compensation plans and employee stock purchase plans	113		119

Purchase of treasury shares	(600		)	(625		)	Purchase of treasury shares	(112)		0
Balance, end of period	$	(2,851	)	$	(2,366	)	Balance, end of period	$	(3,561)	$	(3,655)
NON-CONTROLLING INTERESTS							NON-CONTROLLING INTERESTS
Balance, beginning of year	$	80		$	89
Balance, beginning of period							Balance, beginning of period	$	156	$	150
Net income attributable to non-controlling interests	19			22			Net income attributable to non-controlling interests	15		13
Deconsolidation of subsidiary	—			(14		)

Net non-controlling interests acquired (disposed)							Net non-controlling interests acquired (disposed)	0		(3)
Distributions and other changes	(14		)	(14		)	Distributions and other changes	(9)		(4)

Balance, end of period	$	85		$	83		Balance, end of period	$	162	$	156
TOTAL EQUITY	$	7,131		$	6,754		TOTAL EQUITY	$	9,596	$	7,451
Dividends declared per share							Dividends declared per share	$	0.93	$	0.91

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

MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Nature of Operations

Marsh & McLennan Companies, Inc. ~~and its consolidated subsidiaries~~ (the "Company" or "Marsh McLennan"), a global professional services firm, is organized based on the different services that it offers. Under this structure, the Company’s ~~two~~2 business segments are Risk and Insurance Services and Consulting.

The Risk and Insurance Services segment provides risk management solutions, services, advice 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. Marsh advises individual and commercial clients of all sizes on insurance broking and innovative risk management solutions. Guy Carpenter develops advanced risk, reinsurance and capital strategies that help clients grow profitably and pursue emerging opportunities.

The Company conducts business in its Consulting segment through Mercer and Oliver Wyman Group. Mercer provides consulting expertise, advice, services and solutions in the areas of health, wealth and ~~career. As of September 30, 2017, Mercer had assets under delegated management of approximately $210 billion worldwide.~~career consulting services and products. Oliver Wyman Group provides specialized management and economic and brand consulting services.

~~Acquisitions impacting~~Business Update Related To COVID-19

The COVID-19 pandemic has now surpassed one year in duration and it continues to impact virtually every geography in which the ~~Risk~~Company operates. The safety and ~~Insurance Services and Consulting segments~~well-being of our colleagues remains our first priority, while continuing to serve the needs of our clients. Approximately 70% of the Company’s offices are ~~discussed~~open, however, the vast majority of colleagues continue to work in ~~Note 7~~a remote environment which is expected to continue through much of 2021. The Company continues to plan the multiple aspects of a return to the ~~consolidated financial statements.~~office model, considering health, colleague privacy and potential government restrictions. The Company expects to continue to service clients effectively in the current remote environment and as colleagues gradually return to the office.

Although the pandemic is ongoing, the global economy is showing signs of recovery as various countries begin to ease restrictions. The Company had strong revenue growth in the first quarter of 2021 and continues to benefit from reduced expense levels in areas such as travel and entertainment and outside services. However, uncertainty remains in the economic outlook and the ultimate extent of COVID-19 impact to the Company will depend on future developments that it is unable to predict, including new “waves” of infection, newly emerging variants of the virus, potential renewed restrictions by various governments or agencies, and the effectiveness and distribution rate of vaccines.

2. Principles of Consolidation and Other Matters

The Company prepared 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~~For interim filings, 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~~regulations. The Company believes that the information and disclosures presented are adequate to make such information and disclosures not misleading. These consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2016~~2020 (the ~~"2016~~"2020 Form 10-K").

The financial information contained herein reflects all normal recurring adjustments which are, in the opinion of management, necessary for a fair presentation of the Company’s consolidated financial statements as of and for the three ~~and nine~~ month periods ended ~~September 30, 2017~~March 31, 2021 and ~~2016~~2020.

Estimates: The preparation of the consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expense during the reporting period. On an ongoing basis, the Company evaluates its estimates, judgments and methodologies. The estimates are based on historical experience and on various other assumptions that the Company believes are reasonable. Such matters include:

•the allowance for current expected credit losses on receivables,

•estimates of revenue,

•impairment assessments and charges,

•recoverability of long-lived assets,

•liabilities for errors and omissions,

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

•share-based and incentive compensation expense,

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

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

The Company believes these estimates are reasonable based on information currently available at the time they are made. The Company also considered any COVID-19 potential impacts to its customer base in various industries and geographies and has concluded through March 31, 2021, that COVID-19 did not have a material adverse impact on the Company's financial position or estimates. The ultimate extent to which COVID-19 will directly or indirectly impact the Company’s businesses, results of operations and financial condition will depend on numerous evolving factors and future developments that it is not able to predict. Actual results may differ from these estimates.

Cash and Cash Equivalents

Cash and cash equivalents primarily consist of certificates of deposit and time deposits, with original maturities of three months or less, and money market funds. The estimated fair value of the Company's cash and cash equivalents approximates their carrying value. The Company is required to maintain operating funds ~~of approximately $184 million~~,primarily related to regulatory requirements outside of the United States or as collateral under captive insurance ~~arrangements.~~arrangements. At March 31, 2021, the Company maintained $272 million compared to $270 million at December 31, 2020 related to these regulatory requirements.

Allowance for Credit Losses on Accounts Receivable

The Company’s policy for providing an allowance for credit losses on its accounts receivable is based on a combination of factors, including historical write-offs, aging of balances, and other qualitative and quantitative analyses. The charge related to expected credit losses was immaterial to the consolidated statement of income for the three months ended March 31, 2021.

Investments

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

The caption "Investment income (loss)" in the consolidated statements of income comprises realized and unrealized gains and losses from investments recognized in earnings. It includes, when applicable, other than temporary declines in the value of debt and available-for-sale securities and equity method gains or losses on the Company's investments in private equity funds. The Company recorded a net investment ~~loss~~income of ~~$2 million in the third quarter of 2017 compared to a net investment gain of less than $1~~$11 million for ~~the same period in 2016, and net investment income of $3 million~~the three months ended March 31, 2021 compared to a net investment loss of $2$2 million for the ~~nine months ended September 30, 2017 and 2016, respectively.~~same period last year. The increase is primarily due to gains from its investments in private equity funds.

Income Taxes

The Company's effective tax rate in the ~~third~~first quarter of ~~2017~~2021 was ~~26.2%~~24.5% compared with ~~26.8%~~23.8% in the ~~third~~first quarter of ~~2016.~~2020. The ~~effective~~ tax ~~rate for the first nine months of 2017 and 2016 was 25.9% and 28.4%, respectively. The~~ rates in both periods reflect ~~foreign operations which are taxed at rates below the U.S. statutory tax rate, including the effect of repatriation, as well as~~ the impact of discrete tax ~~matters~~items such as ~~tax legislation, changes in valuation allowances, nontaxable adjustments to contingent acquisition consideration and, starting in 2017,~~ excess tax benefits related to share-based ~~compensation.~~compensation, enacted tax legislation, changes in uncertain tax positions, deferred tax adjustments and nontaxable adjustments to contingent acquisition consideration. The excess tax benefit related to share-based payments is the most significant discrete item, reducing the effective tax rate by 1.1% and 2.6% in the first quarters of 2021 and 2020, respectively.

The ~~Company is routinely examined by~~Company's tax ~~authorities~~rate reflects its income, statutory tax rates and tax planning in the various jurisdictions in which it ~~has significant operations. The Company regularly considers~~operates. Significant judgment is required in determining the ~~likelihood of assessments~~annual effective tax rate and in ~~each~~evaluating uncertain tax positions.

Losses in one jurisdiction, generally, cannot offset earnings in another, and within certain jurisdictions profits and losses may not offset between entities. Consequently, losses in certain jurisdictions may require valuation allowances affecting the effective tax rate, depending on estimates of the ~~taxing jurisdictions resulting from examinations. When evaluating~~realizability of associated deferred tax assets. The tax rate is also sensitive to changes in unrecognized tax benefits, including the ~~potential imposition~~impact of ~~penalties, the Company considers~~settled tax audits and expired statutes of limitation.

Changes in tax laws or tax rulings may have a ~~number of relevant factors under penalty statutes, including appropriate disclosure of the~~significant impact on our effective tax ~~return position, the existence of legal authority supporting the Company's position, and reliance on the opinion of professional tax advisors.~~

rate. 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 from $65~~was $96 million at March 31, 2021 and $98 million at December 31, ~~2016 to $64 million at September 30, 2017 due to settlements of audits and expirations of statutes of limitation, partially offset by current accruals.~~2020. It is reasonably possible that the total amount of unrecognized tax benefits will decrease between ~~zero~~0 and approximately $9$35 million within the next twelve months due to settlements of audits and expirations of statutes of limitation.

Integration and Restructuring Charges

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

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

These costs are included in other operating expenses in the consolidated statements of income.

Other costs related to integration and restructuring, such as moving, legal or consulting costs are recognized as incurred. These costs are included in other operating expenses in the consolidated statements of income.

3. Revenue

The core principle of the revenue recognition guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that principle, the entity applies the following steps: identify the contract(s) with the customer, identify the performance obligations in the contract(s), determine the transaction price, allocate the transaction price to the performance obligations in the contract and recognize revenue when (or as) the entity satisfies a performance obligation. A performance obligation is satisfied either at a “point in time” or “over time” depending on the nature of the product or service provided, and the specific terms of the contract with customers.

The Company's revenue recognition guidance is provided in more detail in Note 2 of the consolidated financial statements and the notes thereto included in 2020 Form 10-K for the year ended December 31, 2020.

The following schedule disaggregates components of the Company's revenue:


	Three Months Ended March 31,
(In millions)		2021		2020
Marsh:
EMEA		$	837	$	754
Asia Pacific		274		238
Latin America		90		91
Total International		1,201		1,083
U.S./Canada		1,124		978
Total Marsh		2,325		2,061
Guy Carpenter		895		827
Subtotal		3,220		2,888
Fiduciary interest income		5		23
Total Risk and Insurance Services		$	3,225	$	2,911
Mercer:


Wealth		$	623	$	592
Health		487		486
Career		178		173
Total Mercer		1,288		1,251
Oliver Wyman		585		511
Total Consulting		$	1,873	$	1,762

The Company recognizes commission revenue from arrangements for a significant portion of its brokerage arrangements at a point in time on the effective date of the underlying policy. Commission revenue is estimated using historical information about the risks to be covered over the policy period, some of which are dependent on variable factors such as number of employees covered, covered payroll, airline passenger miles flown, shipped tonnage of marine cargo and others.

The following schedule provides contract assets and contract liabilities information from contracts with customers.


(In millions)	March 31, 2021		December 31, 2020
Contract Assets	$	304	$	236
Contract Liabilities	$	737	$	676

The Company records accounts receivable when the right to consideration is unconditional, subject only to the passage of time. Contract assets primarily relate to quota share reinsurance brokerage and contingent insurer revenue. The Company does not have the right to bill and collect revenue for quota share brokerage until the underlying policies written by the ceding insurer attach to the treaty. Contract assets are included in other current assets in the Company's consolidated balance sheet. Contract liabilities primarily relate to the advance consideration received from customers. Contract liabilities are included in current liabilities in the Company's consolidated balance sheet. Revenue recognized in the first three months of 2021 and 2020 that was included in the contract liability balance at the beginning of each of those years was $238 million and $289 million, respectively.

The amount of revenue recognized in the first three months of 2021 and 2020 from performance obligations satisfied in previous periods, mainly due to variable consideration from contracts with insurers, quota share business and consulting contracts previously considered constrained was $34 million and $29 million, respectively.

The Company applies the practical expedient and does not disclose the value of unsatisfied performance obligations for (1) contracts with original contract terms of one year or less and (2) contracts where the Company has the right to invoice for services performed. The revenue expected to be recognized in future periods during the non-cancellable term of existing contracts greater than one year that is related to performance obligations that are unsatisfied or partially satisfied at the end of the reporting period is approximately $40 million for Marsh, $169 million for Mercer and $2 million for Oliver Wyman. The Company expects revenue in 2022, 2023, 2024, 2025 and

2026 and beyond of $102 million, $72 million, $29 million, $5 million and $3 million, respectively, related to these performance obligations.

4. 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 $11 million and $8 million for the three months ended September 30, 2017 and 2016, respectively, and $28 million and $20 million for the nine months ended September 30, 2017 and 2016, respectively. The Consulting segment recorded ("fiduciary interest ~~income~~income") of $2$5 million and $1 $23 million for ~~each of the~~the three month periods ended ~~September 30, 2017~~March 31, 2021 and ~~2016, respectively, and $3 million and $2 million for~~March 31, 2020, respectively. The decrease in 2021 compared to 2020 reflects the ~~nine months ended September 30, 2017 and 2016, respectively.~~impact of lower interest rates partially offset by a higher level of average invested funds. 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 ~~$6.8~~$12.5 billion at ~~September 30, 2017~~March 31, 2021 and ~~$7.0~~$11.2 billion atDecember 31, ~~2016.~~2020. The Company is not a principal to the contracts under which the right to receive premiums or the right to receive reimbursement of insured losses arises. Accordingly, net uncollected premiums and claims and the related payables are not assets and liabilities of the Company and are not included in the accompanying consolidated balance sheets.

In certain instances, the Company advances premiums, refunds or claims to insurance underwriters or insureds prior to collection. These advances are made from corporate funds and are reflected in the accompanying consolidated balance sheets as receivables.

4.5. Per Share Data

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

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


Basic and Diluted EPS Calculation	Three Months Ended March 31,
(In millions, except per share amounts)	2021		2020
Net income before non-controlling interests	$	998	$	767
Less: Net income attributable to non-controlling interests	15		13
Net income attributable to the Company	$	983	$	754
Basic weighted average common shares outstanding	509		505
Dilutive effect of potentially issuable common shares	5		5
Diluted weighted average common shares outstanding	514		510
Average stock price used to calculate common stock equivalents	$	114.96	$	107.10

Basic and Diluted EPS Calculation Three Months Ended
September 30, Nine Months Ended
September 30,
(In millions, except per share amounts) 2017
2016
2017
2016
Net income before non-controlling interests $ 397
$ 384
$ 1,482
$ 1,354
Less: Net income attributable to non-controlling interests 4
5
19
22
Net income attributable to the Company $ 393
$ 379
$ 1,463
$ 1,332
Basic weighted average common shares outstanding 512
518
514
520
Dilutive effect of potentially issuable common shares 7
5
6
5
Diluted weighted average common shares outstanding 519
523
520
525
Average stock price used to calculate common stock equivalents $ 79.35
$ 66.98
$ 75.36
$ 62.33

~~There were 11.3 million and~~ ~~13.6 million~~ ~~stock options outstanding as of~~ ~~September 30, 2017~~ ~~and~~ ~~2016, respectively.~~

5.6. 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-month~~three-month periods ended ~~September 30, 2017~~March 31, 2021 and ~~2016~~.2020.


(In millions)	2021		2020
Assets acquired, excluding cash	$	0	$	249
Liabilities assumed	0		(5)

Contingent/deferred purchase consideration	0		(44)
Net cash outflow for current year acquisitions	$	0	$	200

(In millions) 2017
2016
Assets acquired, excluding cash $ 852
$ 121
Liabilities assumed (129 ) (4 )
Contingent/deferred purchase consideration (94 ) (29 )
Net cash outflow for current year acquisitions $ 629
$ 88


(In millions)	2017		2016		(In millions)	2021		2020
Interest paid	$	174	$	148	Interest paid	$	191	$	199
Income taxes paid, net of refunds	$	406	$	417	Income taxes paid, net of refunds	$	122	$	136

The classification of contingent consideration in the statement of cash flows is determined by whether the payment was part of the initial liability established on the acquisition date (financing) or an adjustment to the acquisition date liability (operating).

The following amounts are included in the consolidated statements of cash flows as a financing activity. The Company paid deferred and contingent consideration of ~~$127~~$37 million for the ~~nine~~three months ended ~~September 30, 2017.~~March 31, 2021. This consisted of deferred purchase consideration related to prior years' acquisitions of ~~$47~~$27 million and contingent purchase consideration of ~~$80~~$10 million. Financing cash flows also reflect the receipt of contingent consideration of $5 million related to prior year dispositions. For the ~~nine~~three months ended ~~September 30, 2016,~~March 31, 2020, the Company paid deferred and contingent consideration of ~~$96~~$29 million, consisting of deferred purchase consideration related to prior years' acquisitions of ~~$53~~$25 million and contingent consideration of ~~$43~~$4 million.

The following amounts are included in the operating section of the consolidated statements of cash flows. For the ~~nine~~three months ended ~~September 30, 2017,~~March 31, 2021, the Company paid contingent consideration payments of $1 million. For the three months ended March 31, 2020, the Company recorded a net credit for adjustments to ~~acquisition related accounts~~contingent consideration liabilities of $3$1 million and made contingent consideration payments of $27 million. For the nine months ended September 30, 2016, the Company recorded a net charge for adjustments related to acquisition related accounts of $5 million and made contingent consideration payments of $42$9 million.

The Company had non-cash issuances of common stock under its share-based payment ~~plan~~plan of ~~$88~~$212 million and ~~$71~~$201 million for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2021 and ~~2016,~~2020, respectively. The Company recorded stock-based compensation expense for equity awards related to restricted stock units, performance stock units and stock options ~~of $111~~of $78 million ~~and $84~~and $72 million for the ~~nine-month periods~~three-months ended ~~September 30, 2017~~March 31, 2021 and ~~2016,~~2020, respectively.

Effective January 1, 2017, the Company adopted new accounting guidance related to share-based compensation, that requires companies to record excess tax benefits and tax deficiencies as an income tax benefit or expense in the income statement and classify excess tax benefits as an operating activity in the statement of cash flows. Prior to the adoption of this standard, the Company recorded excess tax benefits in equity in the consolidated balance sheet and as a financing activity in the consolidated statement of cash flows. For the nine months ended September 30, 2017, the adoption of this new standard reduced income tax expense in the consolidated statement of income by approximately $58 million. For the nine months ended September 30, 2016, the Company recorded an

~~excess tax benefit of $30 million as an increase to equity in its consolidated balance sheet, which was reflected as cash provided by financing activities in the consolidated statement of cash flows.~~

6.7. Other Comprehensive Income (Loss)

The changes, net of tax, in the balances of each component of Accumulated Other Comprehensive Income ("AOCI") for the ~~three and nine-month~~three-month periods ended ~~September 30, 2017~~March 31, 2021 and ~~2016,~~2020, including amounts reclassified out of AOCI, are as follows:



(In millions)	Pension/Post-Retirement Plans Gains (Losses)		Foreign Currency Translation Gains (Losses)		Total Gains (Losses)
Balance as of December 31, 2020	$	(4,126)	$	(984)	$	(5,110)

Other comprehensive loss before reclassifications	(36)		(91)		(127)
Amounts reclassified from accumulated other comprehensive income	40		0		40
Net current period other comprehensive income (loss)	4		(91)		(87)
Balance as of March 31, 2021	$	(4,122)	$	(1,075)	$	(5,197)

(In millions) Unrealized Investment Gains (Losses) Pension/Post-Retirement Plans Gains (Losses) Foreign Currency Translation Gains (Losses) Total Gains (Losses)
Balance as of July 1, 2017 $ 30
$ (3,215 ) $ (1,356 ) $ (4,541 )
Other comprehensive (loss) income before reclassifications (5 ) (173 ) 126
(52 )
Amounts reclassified from accumulated other comprehensive income —
33
—
33
Net current period other comprehensive (loss) income (5 ) (140 ) 126
(19 )
Balance as of September 30, 2017 $ 25
$ (3,355 ) $ (1,230 ) $ (4,560 )

(In millions) Unrealized Investment Gains Pension/Post-Retirement Plans Gains (Losses) Foreign Currency Translation Gains (Losses) Total Gains (Losses)
Balance as of July 1, 2016 $ 6
$ (2,885 ) $ (1,422 ) $ (4,301 )
Other comprehensive income (loss) before reclassifications 1
36
(54 ) (17 )
Amounts reclassified from accumulated other comprehensive income —
29
—
29
Net current period other comprehensive income (loss) 1
65
(54 ) 12
Balance as of September 30, 2016 $ 7
$ (2,820 ) $ (1,476 ) $ (4,289 )

(In millions) Unrealized Investment Gains Pension/Post-Retirement Plans Gains (Losses) Foreign Currency Translation Gains (Losses) Total Gains (Losses)
Balance as of January 1, 2017 $ 19
$ (3,232 ) $ (1,880 ) $ (5,093 )
Other comprehensive income (loss) before reclassifications 6
(219 ) 650
437
Amounts reclassified from accumulated other comprehensive income —
96
—
96
Net current period other comprehensive income (loss) 6
(123 ) 650
533
Balance as of September 30, 2017 $ 25
$ (3,355 ) $ (1,230 ) $ (4,560 )


(In millions)	Unrealized Investment Gains		Pension/Post-Retirement Plans Gains (Losses)			Foreign Currency Translation Gains (Losses)			Total Gains (Losses)			(In millions)	Pension/Post-Retirement Plans Gains (Losses)		Foreign Currency Translation Gains (Losses)		Total Gains (Losses)
Balance as of January 1, 2016	$	6	$	(3,124	)	$	(1,102	)	$	(4,220	)
Balance as of December 31, 2019												Balance as of December 31, 2019	$	(3,512)	$	(1,543)	$	(5,055)

Other comprehensive income (loss) before reclassifications	1		214			(374		)	(159		)	Other comprehensive income (loss) before reclassifications	109		(930)		(821)
Amounts reclassified from accumulated other comprehensive income	—		90			—			90			Amounts reclassified from accumulated other comprehensive income	29		0		29
Net current period other comprehensive income (loss)	1		304			(374		)	(69		)	Net current period other comprehensive income (loss)	138		(930)		(792)
Balance as of September 30, 2016	$	7	$	(2,820	)	$	(1,476	)	$	(4,289	)
Balance as of March 31, 2020												Balance as of March 31, 2020	$	(3,374)	$	(2,473)	$	(5,847)

The components of other comprehensive income (loss) for the ~~three and nine-month~~three-month periods ended ~~September 30, 2017~~March 31, 2021 and ~~2016~~2020 are as follows:


Three Months Ended March 31,	2021						2020
(In millions)	Pre-Tax		Tax (Credit)		Net of Tax		Pre-Tax		Tax (Credit)		Net of Tax
Foreign currency translation adjustments	$	(91)	$	0	$	(91)	$	(941)	$	(11)	$	(930)

Pension/post-retirement plans:
Amortization of (gains) losses included in net periodic pension cost:

Net actuarial losses (a)	52		12		40		40		11		29



Subtotal	52		12		40		40		11		29

Foreign currency translation adjustments	(37)		(8)		(29)		135		26		109
Other adjustments	(7)		(2)		(5)		0		0		0
Effect of remeasurement	(2)		0		(2)		0		0		0
Pension/post-retirement plans gains	6		2		4		175		37		138
Other comprehensive (loss) income	$	(85)	$	2	$	(87)	$	(766)	$	26	$	(792)
(a) Components of net periodic pension cost are included in other net benefit credits in the consolidated statements of income. Income tax expense on net actuarial losses are included in income tax expense.

8. Acquisitions and Dispositions

Three Months Ended September 30, 2017 2016
(In millions) Pre-Tax Tax (Credit) Net of Tax Pre-Tax Tax Net of Tax
Foreign currency translation adjustments $ 127
$ 1
$ 126
$ (52 ) $ 2
$ (54 )
Unrealized investment (losses) gains (8 ) (3 ) (5 ) 1
—
1
Pension/post-retirement plans:
Amortization of losses included in net periodic pension cost:

Prior service cost (a) —
—
—
1
1
—
Net actuarial losses (a) 43
10
33
41
12
29
Subtotal 43
10
33
42
13
29
Effect of remeasurement 3
—
3
—
—
—
Effect of settlement 1
—
1
—
—
—
Foreign currency translation (losses) gains (215 ) (38 ) (177 ) 40
4
36
Pension/post-retirement plans (losses) gains (168 ) (28 ) (140 ) 82
17
65
Other comprehensive (loss) income $ (49 ) $ (30 ) $ (19 ) $ 31
$ 19
$ 12
(a) Components of net periodic pension cost are included in compensation and benefits in the consolidated statements of income. Income tax credits on prior service cost and net actuarial losses are included in income tax expense.

Nine Months Ended September 30, 2017 2016
(In millions) Pre-Tax
Tax
(Credit)
Net of Tax Pre-Tax Tax Net of Tax
Foreign currency translation adjustments $ 652
$ 2
$ 650
$ (373 ) $ 1
$ (374 )
Unrealized investment gains 11
5
6
1
—
1
Pension/post-retirement plans:
Amortization of losses included in net periodic pension cost:

Prior service cost (a) —
—
—
2
1
1
Net actuarial losses (a) 125
29
96
125
36
89
Subtotal 125
29
96
127
37
90
Effect of remeasurement 12
3
9
(1 ) —
(1 )
Effect of curtailment (1 ) —
(1 ) 3
1
2
Effect of settlement 2
—
2
1
—
1
Foreign currency translation (losses) gains (277 ) (49 ) (228 ) 253
41
212
Other (1 ) —
(1 ) —
—
—
Pension/post-retirement plans (losses) gains (140 ) (17 ) (123 ) 383
79
304
Other comprehensive income (loss) $ 523
$ (10 ) $ 533
$ 11
$ 80
$ (69 )
(a) Components of net periodic pension cost are included in compensation and benefits in the consolidated statements of income. Tax on prior service cost and net actuarial losses is included in income tax expense.

~~7. Acquisitions~~

~~The Company has continued its strategy to grow its businesses and build shareholder value through strategic acquisitions.~~ The Company’s acquisitions have been accounted for as business combinations. Net assets and results of operations are included in the Company’s consolidated financial statements commencing at the respective purchase closing dates. In connection with acquisitions, the Company records the estimated ~~value~~values of the net tangible assets ~~purchased~~ and ~~the value of~~ the identifiable intangible assets purchased, which typically consist of ~~purchased~~ customer ~~lists,~~relationships, developed technology, trademarks and non-compete agreements. The valuation of purchased intangible assets

involves significant estimates and assumptions. ~~Until~~The Company estimates the fair value of purchased intangible assets, primarily using the income approach, by determining the present value of future cash flows over the remaining economic life of the respective assets. The significant estimates and assumptions used in this approach include the determination of the discount rate, economic life, future revenue growth rates, expected account attrition rates and earnings margins. Refinement and completion of final ~~valuations are complete, any change in assumptions~~valuation of net assets acquired could affect the carrying value of tangible assets, goodwill and identifiable intangible assets.

The Company had 0 acquisitions during the first three months of 2021.

On April 1, 2021, MMA completed the acquisitions of PayneWest Insurance, Inc., a Montana-based full-service broker providing business insurance, surety, employee benefits and personal insurance services to companies and individuals, and The Pryor Group, LLC, a Texas-based full-service broker providing business insurance with a specialty in quick service restaurants and the personal lines of franchise owners.

The Company paid $27 million of deferred purchase consideration and $11 million of contingent consideration related to acquisitions made in prior years.

Dispositions

There were 0 dispositions during the first three months of 2021.

Prior-Year Acquisitions

The Risk and Insurance Services segment ~~completed seven acquisitions~~completed 7 acquisitions during ~~the first nine months of 2017.~~2020.

•January – Marsh & McLennan Agency ("MMA") acquired ~~J. Smith Lanier & Co. ("JSL")~~Momentous Insurance Brokerage Inc., a ~~privately held insurance brokerage firm providing insurance,~~California-based full-service risk management and employee benefits firm specializing in high net worth private client services and insurance solutions for the entertainment industry, and Ironwood Insurance Services, LLC, an Atlanta-based broker that provides commercial property/casualty insurance, employee benefits, and private client solutions to mid-size businesses and individuals across the U.S.

•April – MMA acquired Assurance Holdings, Inc., an Illinois-based full service brokerage providing business insurance, employee benefits, private client insurance, and retirement services to businesses and individuals ~~throughout~~across the U.S.

~~February~~•June – MMA acquired ~~iaConsulting~~Nico Insurance Services, Inc., a ~~Texas-based~~California-based agency providing employee benefits ~~consulting firm.~~solutions to groups and individuals.

~~March~~•December – MMA acquired ~~Blakestad,~~Heritage Insurance Services, Inc., a ~~Minnesota-based private client~~Kentucky-based full service broker that provides commercial property and ~~commercial~~casualty and personal lines ~~insurance agency,~~primarily in the trucking and ~~RJF Financial Services,~~transportation industry, Inspro Insurance, Inc., a ~~Minnesota-based retirement advisory firm.~~

~~May – MMA acquired Insurance Partners of Texas, a Texas-based employee benefits consulting firm.~~

~~August – Marsh acquired International Catastrophe Insurance Managers, LLC, a Colorado-based~~Nebraska-based full service broker that provides commercial property and casualty insurance, ~~agent,~~personal lines and ~~MMA acquired Hendrick & Hendrick, Inc.,~~employee benefits services, and Compass Financial Partners, LLC, a ~~Texas-based insurance agency.~~North Carolina-based retirement consulting and investment advisory firm.

~~The Consulting segment completed~~ ~~one~~ ~~acquisition during the first nine months of 2017.~~

~~August – Mercer acquired Jaeson Associates, a Portugal-based talent management consulting organization.~~

Total purchase consideration for acquisitions made during the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2020 was ~~$734~~approximately $245 million,, which consisted of cash paid of ~~$640~~$201 million and deferred purchase and estimated contingent consideration of ~~$94 million~~.$44 million. Contingent consideration arrangements are based primarily on earnings before interest, tax, depreciation and amortization ("EBITDA") or revenue targets over a period of two to four years. ~~The fair value~~In 2020, the Company also paid $25 million of ~~the~~deferred purchase consideration and $13 million of contingent consideration ~~was based on projected revenue or EBITDA of the acquired entities.~~related to acquisitions made in prior years. Estimated fair values of assets acquired and liabilities assumed are subject to adjustment when purchase accounting is finalized.

The ~~Company also paid $47~~consolidated statements of income include the results of operations of acquired companies since their respective acquisition dates. The consolidated statements of income for the three-month period ended March 31, 2020 included approximately $15 million of ~~deferred purchase consideration~~revenue and ~~$107~~operating income of $4 million ~~of contingent consideration~~ related to acquisitions made in ~~prior years.~~2020.

~~The following table presents the preliminary allocation of the acquisition cost to the assets acquired and liabilities assumed during~~ ~~2017~~ ~~based on their fair values:~~

Prior year dispositions

For the Nine Months Ended September 30, 2017

(In millions)
Cash $ 640
Estimated fair value of deferred/contingent consideration 94
Total Consideration $ 734
Allocation of purchase price:
Cash and cash equivalents $ 11
Accounts receivable, net 17
Property, plant, and equipment 7
Other intangible assets 293
Goodwill 533
Other assets 2
Total assets acquired 863
Current liabilities 21
Other liabilities 108
Total liabilities assumed 129
Net assets acquired $ 734

~~The following chart provides information about other intangible assets acquired during 2017:~~

Amount Weighted Average Amortization Period
Client relationships $ 252
12 years
Other 41
5 years
$ 293

~~Prior-Year Acquisitions~~

~~The Risk and Insurance Services segment completed nine acquisitions during 2016.~~

February – MMA acquired The Celedinas Agency, Inc., a Florida-based brokerage firm, providing property, casualty and marine insurance, as well as employee benefits services, and Aviation Solutions, LLC, a Missouri-based aviation risk advisor and insurance broker.

~~March – MMA acquired Corporate Consulting Services, Ltd., a New York-based insurance brokerage and human resource consulting firm.~~

~~August – MMA acquired Benefits Advisory Group LLC, an Atlanta-based employee benefits consulting firm.~~

~~September – MMA acquired Vero Insurance, Inc., a Florida-based agency specializing in private client insurance services.~~

~~November – MMA acquired Benefits Resource Group Agency, LLC, an Ohio-based benefits consulting firm and Presidio Benefits Group, Inc., a California-based employee benefits consulting firm.~~

~~December – Marsh acquired AD Corretora, a multi-line broker located in Brazil, and Bluefin Insurance Group, Ltd, a U.K.-based insurance brokerage.~~

~~The Consulting segment completed six acquisitions during 2016.~~

~~January – Mercer acquired The Positive Ageing Company Limited, a U.K.-based firm providing advice on issues surrounding the aging workforce.~~

April – Mercer acquired the Extratextual software system and related client contracts. Extratextual is a web based compliance system that assists clients to manage and meet their compliance and risk management obligations.

December – Oliver Wyman acquired LShift Limited, a software development company, and Mercer acquired Sirota Consulting LLC, a global provider of employee benefit solutions; Pillar Administration, a superannuation provider located in Australia; and Thomsons Online Benefits, a U.K.-based global benefits software business.

~~Total purchase consideration for acquisitions made during the first~~ ~~nine~~ months of 2016 was $119 million, which consisted of cash paid of $90 million and deferred purchase and estimated contingent consideration of $29 million. Contingent consideration arrangements are primarily based on EBITDA or revenue targets over a period of two to four years. The fair value of the contingent consideration was based on projected revenue or earnings of the acquired entities. Estimated fair values of assets acquired and liabilities assumed are subject to adjustment when purchase accounting is finalized. In ~~the first nine months of 2016,~~2020, the Company ~~also paid $53 million~~sold certain businesses primarily in the U.S., U.K. and Canada for cash proceeds of ~~deferred purchase consideration and $85 million of contingent consideration related to acquisitions made in prior years.~~approximately $98 million.

Pro-Forma Information

The following unaudited pro-forma financial data gives effect to the acquisitions made by the Company during ~~2017 and 2016.~~2020. In accordance with accounting guidance related to pro-forma disclosures, the information presented for ~~current year~~ acquisitions made in 2020 is as if they occurred on January 1, ~~2016 and reflects acquisitions made in 2016 as if they occurred on January 1, 2015.~~2019. 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 March 31,
(In millions, except per share figures)		2021		2020
Revenue		$	5,083	$	4,705

Net income attributable to the Company		$	983	$	755

Basic net income per share attributable to the Company		$	1.93	$	1.50


Diluted net income per share attributable to the Company		$	1.91	$	1.48

Three Months Ended
September 30, Nine Months Ended
September 30,
(In millions, except per share figures) 2017
2016
2017
2016
Revenue $ 3,349
$ 3,256
$ 10,416
$ 10,232
Net income attributable to the Company $ 392
$ 372
$ 1,466
$ 1,320
Basic net income per share attributable to the Company $ 0.77
$ 0.72
$ 2.85
$ 2.54
Diluted net income per share attributable to the Company $ 0.76
$ 0.71
$ 2.82
$ 2.52

The consolidated statements of income include the results of operations of acquired companies since their respective acquisition dates. The consolidated statements of income for the three and nine-month periods ended

~~September 30, 2017 include approximately $40 million and$103 million of revenue, respectively, and an operating loss of $1 million and operating income of $16 million, respectively, related to acquisitions made in 2017.~~

8.9. 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 assessment for each of its reporting units during the third quarter of each year. In accordance with applicable accounting guidance, ~~the Company assesses~~a company can assess qualitative factors to determine whether it is necessary to perform ~~the two-step~~a quantitative goodwill impairment test. ~~The~~Alternatively, the Company ~~considers~~may elect to proceed directly to the quantitative goodwill impairment test. In 2020, the Company elected to perform a qualitative impairment assessment. As part of its assessment, the Company considered numerous factors, ~~which include whether~~including:

•that the fair value of each reporting unit ~~exceeded~~exceeds its carrying value by a substantial margin inbased on its most recent ~~estimate of reporting unit fair values,~~ quantitative assessment in 2019;

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

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

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

•industry and market ~~conditions,~~conditions; and

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

The Company completed its qualitative assessment in the third quarter of ~~2017~~2020 and concluded ~~that a two-step goodwill impairment test was not required in 2017 and~~ that goodwill was not impaired.

~~Changes in the carrying amount of goodwill are as follows:~~

September 30,

(In millions) 2017
2016
Balance as of January 1, as reported $ 8,369
$ 7,889
Goodwill acquired 533
74
Other adjustments^(a)
198
12
Balance at September 30, $ 9,100
$ 7,975


^(a)	~~The increase in 2017 primarily reflects the impact of foreign exchange.~~

~~Goodwill allocable to the Company’s reportable segments at September 30, 2017 is as follows: Risk and Insurance Services, $6.5 billion and Consulting, $2.6 billion.~~

~~Other~~Other intangible assets that are not deemed to have an indefinite life are amortized over their estimated lives and ~~reviewed~~assessed for impairment upon the occurrence of certain triggering events in accordance with applicable accounting literature. Based on its assessment, the Company concluded that other intangible assets were not impaired. The Company does not have any indefinite lived intangible assets.

Changes in the carrying amount of goodwill are as follows:


March 31,
(In millions)	2021		2020
Balance as of January 1,	$	15,517	$	14,671
Goodwill acquired	0		142
Other adjustments(a)	(59)		(401)
Balance at March 31,	$	15,458	$	14,412

(a) Primarily reflects the impact of foreign exchange.

The goodwill arising from the acquisitions in 2020 consists largely of the synergies and economies of scale

expected from combining the operations of the Company and the acquired entities and the trained and assembled

workforce acquired.

Goodwill allocable to the Company’s reportable segments at March 31, 2021 is as follows: Risk and Insurance Services, $11.7 billion and Consulting, $3.8 billion.

The gross cost and accumulated amortization of identified intangible assets at ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016~~2020 are as follows:


	March 31, 2021						December 31, 2020
(In millions)	Gross Cost		Accumulated Amortization		Net Carrying Amount		Gross Cost		Accumulated Amortization		Net Carrying Amount
Client Relationships	$	3,717	$	1,260	$	2,457	$	3,713	$	1,170	$	2,543
Other (a)	387		241		146		386		230		156
Amortized intangibles	$	4,104	$	1,501	$	2,603	$	4,099	$	1,400	$	2,699

September 30, 2017 December 31, 2016
(In millions)
Gross
Cost

Accumulated
Amortization

Net
Carrying
Amount

Gross
Cost

Accumulated
Amortization

Net
Carrying
Amount

Client Relationships $ 1,679
$ 487
$ 1,192
$ 1,390
$ 392
$ 998
Other ^(a)
231
103
128
204
76
128
Amortized intangibles $ 1,910
$ 590
$ 1,320
$ 1,594
$ 468
$ 1,126

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

Aggregate amortization expense for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2021 and~~2016~~2020 was ~~$122~~$100 million and ~~$99~~$86 million, respectively. The estimated future aggregate amortization expense is as follows:


For the Years Ending December 31,
(In millions)	Estimated Expense
2021 (excludes amortization through March 31, 2021)	$	258
2022	318
2023	293
2024	276
2025	238
Subsequent years	1,220
	$	2,603

For the Years Ending December 31,
(In millions) Estimated Expense
2017 (excludes amortization through September 30, 2017) $ 50
2018 176
2019 166
2020 145
2021 135
Subsequent years 648
$ 1,320

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

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

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

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

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

~~The Company does not have any~~ assets or liabilities ~~that~~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 ~~measured~~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 using Level 2 ~~inputs.~~inputs are related to an equity security.

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

Assets and liabilities 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.

~~Liabilities~~ measured using Level 3 inputs ~~include~~relate to assets and liabilities for contingent purchase consideration.

Valuation Techniques

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

Investments for which market quotations are readily available are valued at the sale price on their principal exchange or, for certain markets, official closing bid price. Money market mutual funds are valued using a valuation technique that results in price per share at $1.00.

Contingent Purchase Consideration ~~Liability~~Assets and Liabilities – Level 3

Purchase consideration for some acquisitions and dispositions made by the Company ~~includes~~include contingent consideration arrangements. ~~These~~Contingent consideration arrangements ~~typically provide for the payment of additional consideration if earnings~~are based primarily on EBITDA or revenue targets ~~are met~~ over ~~periods from~~ a period of two to four years. The fair value of the contingent purchase consideration asset and liability is estimated as the present value of future cash flows to be paid, based on projections of revenue and earnings and related targets of the acquired and disposed entities.

The following fair value hierarchy table presents information about the Company’s assets and liabilities measured at fair value on a recurring basis as of ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016~~.2020.


	Identical Assets (Level 1)				Observable Inputs (Level 2)				Unobservable Inputs (Level 3)				Total
(In millions)	03/31/21		12/31/20		03/31/21		12/31/20		03/31/21		12/31/20		03/31/21		12/31/20
Assets:
Financial instruments owned:
Exchange traded equity securities(a)	$	60	$	59	$	0	$	0	$	0	$	0	$	60	$	59
Mutual funds(a)	183		186		0		0		0		0		183		186
Money market funds(b)	65		587		0		0		0		0		65		587
Other equity investment(a)	0		0		8		8		0		0		8		8
Contingent purchase consideration asset(c)	0		0		0		0		66		68		66		68
Total assets measured at fair value	$	308	$	832	$	8	$	8	$	66	$	68	$	382	$	908
Fiduciary Assets:


U.S. Treasury Bills	$	0	$	150	$	0	$	0	$	0	$	0	$	0	$	150
Money market funds	241		173		0		0		0		0		241		173
Total fiduciary assets measured at fair value	$	241	$	323	$	0	$	0	$	0	$	0	$	241	$	323
Liabilities:
Contingent purchase consideration liability(d)	$	0	$	0	$	0	$	0	$	233	$	243	$	233	$	243

Total liabilities measured at fair value	$	0	$	0	$	0	$	0	$	233	$	243	$	233	$	243

Identical Assets
(Level 1)

Observable Inputs
(Level 2)

Unobservable
Inputs
(Level 3)
Total
(In millions) 09/30/17
12/31/16
09/30/17
12/31/16
09/30/17
12/31/16
09/30/17
12/31/16
Assets:
Financial instruments owned:
Exchange traded equity securities^(a)
$ 99
$ 89
$ —
$ —
$ —
$ —
$ 99
$ 89
Mutual funds^(a)
143
141
—
—
—
—
143
141
Money market funds^(b)
54
22
—
—
—
—
54
22
Total assets measured at fair value $ 296
$ 252
$ —
$ —
$ —
$ —
$ 296
$ 252
Fiduciary Assets:
Money market funds $ 50
$ 90
$ —
$ —
$ —
$ —
$ 50
$ 90
Total fiduciary assets measured
at fair value
$ 50
$ 90
$ —
$ —
$ —
$ —
$ 50
$ 90
Liabilities:
Contingent purchase
consideration liability^(c)
$ —
$ —
$ —
$ —
$ 170
$ 241
$ 170
$ 241
Total liabilities measured at fair value $ —
$ —
$ —
$ —
$ 170
$ 241
$ 170
$ 241
(a) Included in other assets in the consolidated balance sheets.

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

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

The Level 3 assets in the above chart reflect contingent purchase consideration from the sale of businesses during 2019. The change in the asset from December 31, 2020 is primarily due to the net impact of payments and accretion.

During the ~~nine-month~~three-month period ended ~~September 30, 2017~~,March 31, 2021, 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, 2017~~for the three month periods ended March 31, 2021 and ~~2016 that represent contingent consideration related to acquisitions:~~2020:


	Three Months Ended March 31,
(In millions)	2021		2020
Balance at beginning of period	$	243	$	225
Net Additions	0		30
Payments	(11)		(13)
Revaluation Impact	1		1

Other (a)	0		(4)
Balance at March 31,	$	233	$	239

Three Months Ended
September 30, Nine Months Ended
September 30,
(In millions) 2017
2016
2017
2016
Balance at beginning of period, $ 203
$ 279
$ 241
$ 309
Additions 2
1
36
9
Payments (42 ) (35 ) (107 ) (85 )
Revaluation Impact 5
(13 ) (3 ) 5
Other ^(a)
2
—
3
(6 )
Balance at September 30, $ 170
$ 232
$ 170
$ 232

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

The fair value of the contingent purchase consideration liability is based on projections of revenue and EBITDA for the acquired entities in relation to the established targets and is 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 decrease in the estimated fair value of such liabilities for prior-period acquisitions of ~~$3 million~~ ~~in the~~ ~~nine-month period ended~~ ~~September 30, 2017~~. A 5% increase in the above mentioned projections would increase the liability by approximately $18 million. A 5% decrease in the above mentioned projections would decrease the liability by approximately $19 million.

Long-Term Investments

The Company holds investments in public and private companies as well as certain private equity investments ~~public companies and private companies~~ that are accounted for using the equity method of accounting. The carrying value of these investments was ~~$405~~$289 million and ~~$389~~$280 million at ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016,~~2020, respectively.

~~Private Equity Investments~~

The Company's investments in private equity funds were $72 million and $79 million at September 30, 2017 and December 31, 2016, respectively. The carrying values of these private equity investments approximate fair value. The underlying private equity funds follow investment company accounting, where investments within the fund are carried at fair value. The Company records in earnings, investment gains/losses for its proportionate share of the change in fair value of the funds. These investments are included in other assets in the consolidated balance sheets.

Investments in Public and Private Companies

~~Alexander Forbes~~: The Company owns approximately 33% of the common stock of Alexander Forbes, a South African company listed on the Johannesburg Stock Exchange, which it purchased in 2014 for 7.50 South African Rand per share. As of September 30, 2017, the carrying value of the Company’s investment in Alexander Forbes was approximately $268 million. As of September 30, 2017, the market value of the approximately 443 million shares of Alexander Forbes owned by the Company, based on the September 30, 2017 closing share price of 6.75 South African Rand per share, was approximately $225 million. The Company considered several factors in assessing its investment in Alexander Forbes, including its financial position, the near- and long-term prospects of Alexander Forbes and the broader South African economy and capital markets, the length of time and extent to which the market value was below cost and the Company’s intent and ability to retain the investment for a sufficient period of time to allow for anticipated recovery in market value. During the first nine months of 2017, the daily closing share price ranged from a high of 7.89 Rand (in early January) to a low of 5.99 Rand (in late April). During the third quarter of 2017, the Alexander Forbes average opening and closing stock price was approximately 6.75 Rand (approximately 90% of the original purchase price) and ranged from 6.40 Rand to 7.28 Rand (approximately 85% to 97% of the purchase price). Based on its assessment of the factors discussed above, the Company determined the investment was not impaired.

~~The Company’s investment in Alexander Forbes and its other equity~~has investments in private insurance and consulting companies with a carrying value of $172 million and $169 million at March 31, 2021 and December 31, 2020, respectively. These investments are accounted for using the equity method of accounting, the results of which are included in revenue in the consolidated statements of income and the carrying value of which is included in other assets in the consolidated balance sheets. The Company records its share of income or loss on its equity method investments, some of which are on a one quarter lag basis.

~~Benefitfocus~~: ~~On February 24, 2015,~~Private Equity Investments

The Company's investments in private equity funds were $117 million and $111 million at March 31, 2021 and December 31, 2020, respectively. The carrying values of these private equity investments approximate fair value. The underlying private equity funds follow investment company accounting, where investments within the fund are carried at fair value. The Company ~~purchased shares of common stock of Benefitfocus (NASDAQ:BNFT) constituting 9.9% of BNFT's outstanding capital stock as~~records in earnings its proportionate share of the ~~acquisition date. The purchase price for~~change in fair value of the ~~BNFT shares and certain other rights and other consideration was approximately $75 million. Until December 31, 2016,~~funds on the ~~Company accounted for this~~ investment ~~under~~income (loss) line in the ~~cost method~~consolidated statements of ~~accounting as the shares purchased were categorized as restricted. Effective December 31, 2016, these shares were no longer considered restricted for the purpose of determining if they~~income. These investments are ~~marketable securities under applicable accounting guidance, and are now accounted for as available for sale securities and~~ included in other assets in the consolidated balance sheets. The Company recorded net investment gains of $10 million and losses of $1 million from these investments for the three month periods ended March 31, 2021 and March 31, 2020.

Other Investments

At March 31, 2021 and December 31, 2020, the Company held certain equity investments with readily determinable market values of $74 million and $72 million, respectively, including an investment in the common stock of Alexander Forbes (" AF") of $55 million at March 31, 2021 and $54 million at December 31, 2020. The Company also held investments without readily determinable market values of $33 million at March 31, 2021 and December 31, 2020.

In February 2020 the Company sold 49 million shares and in May 2020 sold an additional 193 million shares of the common stock of AF. Upon completion of the May 2020 transaction, the investment in AF, which was previously accounted for using the equity method of accounting was accounted for at fair value, with investment gains and losses recorded as investment income (loss) in the consolidated statement of income.

11. Derivatives

Net Investment Hedge

The Company has investments in various subsidiaries with Euro functional currencies. As a result, the Company is exposed to the risk of fluctuations between the Euro and U.S. dollar exchange rates. The Company designated its €1.1 billion senior note debt instruments ("euro notes") as a net investment hedge (the "hedge") of its Euro denominated subsidiaries. The hedge effectiveness is re-assessed each quarter to confirm that the designated equity balance at the beginning of each period continues to equal or exceed 80% of the outstanding balance of the Euro debt instrument and that all the critical terms of the hedging instrument and the hedged net investment continue to match. If the Company concludes that the hedge is highly effective, the change in the debt balance related to foreign exchange fluctuations is recorded in foreign currency translation gains (losses) in the consolidated balance sheet. The Company concluded that the hedge continues to be highly effective as of March 31, 2021. The U.S. dollar value of the ~~BNFT shares~~euro notes decreased $53 million through March 31, 2021 due to the impact of foreign exchange rates, with a corresponding decrease to accumulated other comprehensive loss.

12. Leases

A lease is defined as a party obtaining the right to use an asset legally owned by another party. The Company determines if an arrangement is a lease at inception. Operating leases are recognized in the balance sheet as Right-of-Use ("ROU") assets and operating lease liabilities based on the ~~closing price~~present value of the remaining future minimum payments over the lease term at commencement date of the lease.

The Company uses discount rates to determine the present value of future lease payments. The Company primarily uses its incremental borrowing rate adjusted to reflect a secured rate, based on the ~~NASDAQ~~information available for leases, including the lease term and interest rate environment in the country in which the lease exists. The lease terms used to calculate the ROU asset and lease liability may include options to extend or terminate when it is reasonably certain that the Company will exercise that option.

The Company leases office facilities under non-cancelable operating leases with terms generally ranging between 10 and 25 years. The Company utilizes these leased office facilities for use by its employees in countries in which the Company conducts its business. Leases are negotiated with third-parties and, in some instances contain

renewal, expansion and termination options. The Company also subleases certain office facilities to third-parties when the Company no longer utilizes the space. None of the Company’s leases restrict the payment of dividends or the incurrence of debt or additional lease obligations, or contain significant purchase options. In addition to the base rental costs, our lease agreements generally provide for rent escalations resulting from increased assessments for real estate taxes and other charges. A portion of our real estate lease portfolio contains base rents subject to annual changes in the Consumer Price Index ("CPI") as well as charges for operating expenses which are reimbursable to the landlord based on actual usage. Changes to the CPI and payments for such reimbursable operating expenses are considered variable and are recognized as variable lease costs in the period in which the obligation for those payments is incurred. Approximately 99% of the Company’s lease obligations are for the use of office space. All of the Company’s material leases are operating leases.

As a practical expedient, the Company has elected an accounting policy not to separate non-lease components from lease components and instead account as a single lease component. The Company has also elected not to recognize ROU assets and lease liabilities for leases that, at the commencement date, are for 12 months or less.

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


	Three Months Ended March 31,
(In millions)		2021			2020
Lease Cost:
Operating lease cost		$	94		$	92
Short-term lease cost		1			1
Variable lease cost		37			37
Sublease income		(8)			(5)
Net lease cost		$	124		$	125
Other information:
Operating cash outflows from operating leases		$	99		$	103
Right of use assets obtained in exchange for new operating lease liabilities		$	22		$	79
Weighted-average remaining lease term – real estate		8.3 years			8.7 years

Weighted-average discount rate – real estate leases		2.93		%	3.06		%

Future minimum lease payments for the Company’s operating leases as of ~~September 30, 2017 was approximately $95 million. During~~March 31, 2021 are as follows:


Payment Dates (In millions)	Real Estate Leases
Remainder of 2021	$	308
2022	381
2023	332
2024	289
2025	257
2026	235
Subsequent years	678
Total future lease payments	2,480
Less: Imputed interest	(288)
Total	$	2,192
Current lease liabilities	$	342
Long-term lease liabilities	1,850
Total lease liabilities	$	2,192

Note: Table excludes obligations for leases with original terms of 12 months or less which have not been recognized as a right to use asset or liability in the ~~first nine months of 2017 an unrealized gain related to these shares of approximately $11 million was recorded in other comprehensive income.~~consolidated balance sheets.

~~10.~~

13. Retirement Benefits

The Company maintains qualified and non-qualified defined benefit pension plans for some of its U.S. and non-U.S. eligible employees. The Company’s policy for funding its tax-qualified defined benefit pension 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 such plans.~~accordance with applicable law.

The target asset allocation for the Company's U.S. ~~Plan was~~plans is 64% equities and equity alternatives and 36% fixed ~~income and at September 30, 2017,~~income. At March 31, 2021 the actual allocation for the Company's U.S. Plan was 65% equities and equity alternatives and 35% fixed income. The target allocation for the U.K. ~~plans~~Plans at ~~September 30, 2017 was46%~~March 31, 2021 is28% equities and equity alternatives and ~~54%~~72% fixed income. At ~~September 30, 2017,~~March 31, 2021, the actual allocation for the U.K. Plans was ~~47%~~30% equities and equity alternatives and ~~53%~~70% fixed income. The Company's U.K. Plans comprised approximately 81% of non-U.S. plan assets at December 31, ~~2016.~~2020. 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.

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 Benefits				Post-retirement Benefits
For the Three Months Ended March 31,
(In millions)	2021		2020		2021		2020
Service cost	$	10	$	8	$	0	$	0
Interest cost	85		106		0		1
Expected return on plan assets	(208)		(210)		0		0
Amortization of prior service credit	0		0		(1)		(1)
Recognized actuarial loss	52		40		1		0
Net periodic benefit credit	$	(61)	$	(56)	$	0	$	0


Amounts Recorded in the Consolidated Statement of Income
Combined U.S. and significant non-U.S. Plans	Pension Benefits				Post-retirement Benefits
For the Three Months Ended March 31,
(In millions)	2021		2020		2021		2020
Compensation and benefits expense	$	10	$	8	$	0	$	0
Other net benefit credits	(71)		(64)		0		0
Total credit	$	(61)	$	(56)	$	0	$	0


U.S. Plans only	Pension Benefits				Post-retirement Benefits
For the Three Months Ended March 31,
(In millions)	2021		2020		2021		2020

Interest cost	$	46	$	53	$	0	$	0
Expected return on plan assets	(82)		(86)		0		0

Recognized actuarial loss	23		18		0		0
Net periodic benefit credit	$	(13)	$	(15)	$	0	$	0

Combined U.S. and significant non-U.S. plans
Pension
Benefits

Post-retirement
Benefits
For the Three Months Ended September 30,
(In millions) 2017
2016
2017
2016
Service cost $ 19
$ 43
$ —
$ 1
Interest cost 125
132
1
—
Expected return on plan assets (232 ) (232 ) —
—
Amortization of prior service cost —
1
1
1
Recognized actuarial loss 42
43
—
—
Net periodic benefit (credit) cost $ (46 ) $ (13 ) $ 2
$ 2
Settlement loss 1
—
—
—
Total (credit) cost $ (45 ) $ (13 ) $ 2
$ 2

Combined U.S. and significant non-U.S. plans
Pension
Benefits

Post-retirement
Benefits
For the Nine Months Ended September 30,
(In millions) 2017
2016
2017
2016
Service cost $ 56
$ 133
$ —
$ 1
Interest cost 371
407
3
3
Expected return on plan assets (686 ) (715 ) —
—
Amortization of prior service (credit) cost (1 ) —
2
3
Recognized actuarial loss (gain) 125
127
—
(1 )
Net periodic benefit (credit) cost $ (135 ) $ (48 ) $ 5
$ 6
Curtailment gain (1 ) (5 ) —
—
Settlement loss 2
1
—
—
Total (credit) cost $ (134 ) $ (52 ) $ 5
$ 6

U.S. Plans only Pension
Benefits Post-retirement
Benefits
For the Three Months Ended September 30,
(In millions) 2017
2016
2017
2016
Service cost $ —
$ 26
$ —
$ —
Interest cost 66
66
—
—
Expected return on plan assets (89 ) (95 ) —
—
Amortization of prior service cost —
—
1
1
Recognized actuarial loss 9
19
—
—
Net periodic benefit (credit) cost $ (14 ) $ 16
$ 1
$ 1

U.S. Plans only Pension
Benefits Post-retirement
Benefits
For the Nine Months Ended September 30,
(In millions) 2017
2016
2017
2016
Service cost $ —
$ 79
$ —
$ —
Interest cost 198
198
1
1
Expected return on plan assets (268 ) (285 ) —
—
Amortization of prior service cost —
—
3
3
Recognized actuarial loss (gain) 28
55
(1 ) (1 )
Net periodic benefit (credit) cost $ (42 ) $ 47
$ 3
$ 3

In October 2016, the Company modified its U.S. defined benefit pension plans to discontinue further benefit accruals for participants after December 31, 2016. At the same time, the Company amended its U.S. defined contribution retirement plans for most of its U.S. employees to add an automatic Company contribution equal to 4% of eligible base pay beginning on January 1, 2017. This new Company contribution, together with the Company’s current matching contribution, provides eligible U.S. employees with the opportunity to receive a total contribution of up to 7% of eligible base pay. In addition, the U.S. qualified defined benefit plans were merged effective December 30, 2016.

Significant non-U.S. plans only Pension
Benefits Post-retirement
Benefits
For the Three Months Ended September 30,
(In millions) 2017
2016
2017
2016
Service cost $ 19
$ 17
$ —
$ 1
Interest cost 59
66
1
—
Expected return on plan assets (143 ) (137 ) —
—
Amortization of prior service cost —
1
—
—
Recognized actuarial loss 33
24
—
—
Net periodic benefit (credit) cost $ (32 ) $ (29 ) $ 1
$ 1
Settlement loss 1
—
—
—
Total (credit) cost $ (31 ) $ (29 ) $ 1
$ 1

Significant non-U.S. plans only Pension
Benefits Post-retirement
Benefits
For the Nine Months Ended September 30,
(In millions) 2017
2016
2017
2016
Service cost $ 56
$ 54
$ —
$ 1
Interest cost 173
209
2
2
Expected return on plan assets (418 ) (430 ) —
—
Amortization of prior service credit (1 ) —
(1 ) —
Recognized actuarial loss 97
72
1
—
Net periodic benefit (credit) cost $ (93 ) $ (95 ) $ 2
$ 3
Curtailment gain (1 ) (5 ) —
—
Settlement loss 2
1
—
—
Total (credit) cost $ (92 ) $ (99 ) $ 2
$ 3

In March 2017, the Company modified its defined benefit pension plans in Canada to discontinue further benefit accruals for participants after December 31, 2017 and replaced them with a defined contribution arrangement. The Company also amended its post-retirement benefits plan in Canada so that individuals who retire after April 1, 2019 will not be eligible to participate, except in certain situations. The Company re-measured the assets and liabilities of the plans, based on assumptions and market conditions on the amendment date.


Significant non-U.S. Plans only	Pension Benefits				Post-retirement Benefits
For the Three Months Ended March 31,
(In millions)	2021		2020		2021		2020
Service cost	$	10	$	8	$	0	$	0
Interest cost	39		53		0		1
Expected return on plan assets	(126)		(124)		0		0
Amortization of prior service credit	0		0		(1)		(1)
Recognized actuarial loss	29		22		1		0
Net periodic benefit credit	$	(48)	$	(41)	$	0	$	0

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

Post-retirement
Benefits
September 30,
2017
2016
2017
2016
Weighted average assumptions:
Expected return on plan assets 6.64 % 7.07 % —
—
Discount rate 3.40 % 4.11 % 3.64 % 4.12 %
Rate of compensation increase* 1.77 % 2.44 % —
—

*The 2017 assumption does not include a rate of compensation increase for the U.S. defined benefit plans since future benefit accruals were discontinued for those plans after December 31, 2016.


Combined U.S. and significant non-U.S. Plans	Pension Benefits				Post-retirement Benefits

March 31,	2021		2020		2021		2020
Weighted average assumptions:
Expected return on plan assets	4.72	%	5.31	%	0		0
Discount rate	1.92	%	2.57	%	2.42	%	2.72	%
Rate of compensation increase	1.85	%	1.76	%	0		0

The Company made approximately ~~$193~~$29 million of contributions to its U.S. and non-U.S. defined benefit pension plans infor the ~~first nine~~three months ~~of 2017.~~ended March 31, 2021. The Company expects to contribute approximately ~~$63~~$100 million to its U.S. ~~pension~~ and non-U.S. defined benefit pension plans during the remainder of ~~2017.~~2021.

Defined Contribution Plans

The Company maintains certain defined contribution plans ("DC Plans") for its employees, the most significant being in the U.S. and the U.K. The cost of ~~these~~the U.S. ~~and U.K. defined contribution plans~~DC Plans was ~~$99~~$39 million and ~~$56~~$37 million ~~respectively,~~ for the ~~nine~~three months ended ~~September 30, 2017.~~March 31, 2021 and 2020, respectively. The cost of the U.K. DC Plans was $39 million and $31 million for the three months ended March 31, 2021 and 2020, respectively.

~~11.~~

14. Debt

The Company’s outstanding debt is as follows:


(In millions)	September 30, 2017		December 31, 2016		(In millions)	March 31, 2021		December 31, 2020
Short-term:					Short-term:
Commercial paper	$	—	$	50

Current portion of long-term debt	13		262		Current portion of long-term debt	$	1,015	$	517
	13		312			1,015		517
Long-term:					Long-term:
Senior notes – 2.30% due 2017	—		250
Senior notes – 2.55% due 2018	250		249
Senior notes – 2.35% due 2019	299		299
Senior notes – 2.35% due 2020	498		497

Senior notes – 4.80% due 2021	498		498		Senior notes – 4.80% due 2021	500		500

Senior notes – 2.75% due 2022	496		—		Senior notes – 2.75% due 2022	499		499
Senior notes – 3.30% due 2023	347		347		Senior notes – 3.30% due 2023	349		349
Senior notes – 4.05% due 2023	248		248		Senior notes – 4.05% due 2023	249		249
Senior notes – 3.50% due 2024	596		596		Senior notes – 3.50% due 2024	598		598
Senior notes – 3.875% due 2024					Senior notes – 3.875% due 2024	995		995
Senior notes – 3.50% due 2025	496		495		Senior notes – 3.50% due 2025	498		498
Senior notes – 1.349% due 2026					Senior notes – 1.349% due 2026	650		677
Senior notes – 3.75% due 2026	596		596		Senior notes – 3.75% due 2026	598		597
Senior notes – 4.375% due 2029					Senior notes – 4.375% due 2029	1,499		1,499
Senior notes – 1.979% due 2030					Senior notes – 1.979% due 2030	638		664
Senior notes – 2.250% due 2030					Senior notes – 2.250% due 2030	738		737
Senior notes – 5.875% due 2033	297		297		Senior notes – 5.875% due 2033	298		298
Senior notes – 4.75% due 2039					Senior notes – 4.75% due 2039	495		495
Senior notes – 4.35% due 2047	492		—		Senior notes – 4.35% due 2047	493		493
Senior notes – 4.20% due 2048					Senior notes – 4.20% due 2048	592		592
Senior notes – 4.90% due 2049					Senior notes – 4.90% due 2049	1,237		1,237
Mortgage – 5.70% due 2035	373		382		Mortgage – 5.70% due 2035	327		331

Other	2		3		Other	4		5
	5,488		4,757			11,257		11,313
Less current portion	13		262		Less current portion	1,015		517
	$	5,475	$	4,495		$	10,242	$	10,796

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

~~The~~On April 9, 2021, the Company ~~has established a~~increased its short-term ~~debt~~commercial paper financing program ~~of up~~ to $2.0 billion from $1.5 ~~billion through the issuance of commercial paper.~~billion. The proceeds from the issuance of commercial paper are used for general corporate purposes. The Company had no0 commercial paper outstanding at ~~September 30, 2017.~~March 31, 2021.

~~In January 2017,~~Credit Facilities

On April 2, 2021, the Company ~~issued $500 million of 2.75% senior notes due 2022~~entered into an amended and ~~$500 million of 4.35% senior notes due 2047. The Company used the net proceeds for general corporate purposes, including the repayment of a $250 million debt maturity in April 2017.~~

~~In March 2016, the Company issued $350 million of 3.30% seven-year senior notes. The Company used the net proceeds for general corporate purposes.~~

~~The Company and certain of its foreign subsidiaries maintain a $1.5~~restated multi-currency unsecured $2.8 billion ~~multi-currency~~ five-year ~~unsecured~~ revolving credit ~~facility.~~facility ("New Facility"). The interest rate on ~~this facility~~the New Facility is based on LIBOR plus a fixed margin which varies with the ~~Company's~~Company’s credit ratings. ~~This facility~~The New Facility expires in ~~November 2020~~April 2026 and requires the Company to maintain certain coverage and leverage ratios which are tested quarterly. The New Facility includes provisions for determining a LIBOR successor rate in the event LIBOR reference rates are no longer available or in certain other circumstances which are determined to make using an alternative rate desirable.

In connection with the New Facility, the Company terminated its multicurrency unsecured $1.8 billion five-year revolving credit facility (“Old Facility”) and its unsecured $1 billion 364-day unsecured revolving credit facility (“364-day Facility). The Old Facility had similar interest rate, coverage and leverage ratios as the New Facility. The Company entered into the 364-day Facility in April 2020 with a term out option after one year. As of March 31, 2021, the Company had 0 borrowings under either of these facilities.

In January 2020, the Company closed on $500 million one-year and $500 million two-year term loan facilities. In the first quarter of 2020 the Company borrowed $1 billion against these facilities, which were subsequently repaid

during the third and fourth quarters of 2020. These two facilities were terminated as of December 31, 2020 after repayment of the initial draw down.

Additional credit facilities, guarantees and letters of credit are maintained with various banks, primarily related to operations located outside the United States, aggregating $517 million at March 31, 2021 and $573 million at December 31, 2020. There were no0 outstanding borrowings ~~outstanding~~ under ~~this facility~~these facilities at ~~September 30, 2017.~~March 31, 2021 and December 31, 2020.

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

In May 2020, the Company issued $750 million of Senior Notes due 2030.

In March 2020, the Company repaid $500 million of maturing senior notes and in December 2020, the Company repaid $700 million of maturing senior notes and $300 million of floating rate notes with an original maturity of December 2021.

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.

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

~~12.~~15. Restructuring Costs

Jardine Lloyd Thompson Group plc ("JLT") Related Integration and Restructuring

The Company ~~recorded total~~is in the final stages of its integration of JLT, which the Company acquired in April 2019. The costs incurred in connection with the integration and restructuring of the combined businesses, primarily related to severance, real estate rationalization and technology, consulting fees related to the management of the integration processes and legal fees related to the rationalization of legal entity structures.

Since the acquisition of JLT, the Company has incurred JLT integration and restructuring costs of ~~$32~~$609 million through March 31, 2021. This reflects $23 million of costs incurred during the first quarter of 2021 compared to $80 million for the same period in the ~~first~~ ~~nine~~ ~~months~~prior year.

Costs recognized are based on applicable accounting guidance which includes accounting for disposal or exit activities, guidance related to impairment of ~~2017~~long lived assets (for right of use assets related to real estate leases), ~~primarily for severance at Mercer, Marsh and Corporate,~~ as well as ~~future rent under non-cancelable leases at Corporate. These~~other costs resulting from accelerated depreciation or amortization of leasehold improvements and other property and equipment.

In connection with the JLT integration and restructuring, the Company incurred costs of $23 million: $16 million in RIS, $6 million in Consulting, and $1 million in Corporate for the three month period ended March 31, 2021. The severance and related costs were ~~incurred~~included in ~~Risk~~compensation and ~~Insurance Services ($7 million), Consulting ($18 million)~~benefits and ~~Corporate ($7 million).~~the other costs were included in other operating expenses in the consolidated statement of income.

Details of the JLT integration and restructuring activity from January 1, ~~2016~~2020 through ~~September 30, 2017, which includes liabilities from actions prior to 2017,~~March 31, 2021, are as follows:

(In millions) Liability at 1/1/16
Amounts
Accrued

Cash
Paid
Other Liability at 12/31/16
Amounts
Accrued

Cash
Paid
Other Liability at 9/30/17
Severance $ 15
$ 40
$ (22 ) $ (1 ) $ 32
$ 24
$ (42 ) $ —
$ 14
Future rent under non-cancelable leases and other costs 78
4
(17 ) (4 ) 61
8
(15 ) 1
55
Total $ 93
$ 44
$ (39 ) $ (5 ) $ 93
$ 32
$ (57 ) $ 1
$ 69


(In millions)	Severance		Real Estate Related Costs (a)		Information Technology (a)		Consulting and Other Outside Services (b)		Total
Liability at 1/1/20	$	42	$	5	$	0	$	0	$	47
2020 Charges	43		69		62		77		251
Cash payments	(69)		(25)		(55)		(77)		(226)
Non-cash charges	0		(42)		(5)		0		(47)

Liability at 12/31/20	$	16	$	7	$	2	$	0	$	25
2021 Charges	2		6		7		8		23
Cash payments	(10)		(2)		(7)		(7)		(26)
Non-cash charges	0		(4)		0		0		(4)
Liability at 3/31/21	$	8	$	7	$	2	$	1	$	18

(a) Includes ROU asset impairments, data center contract termination costs and temporary infrastructure leasing costs.

(b) Includes consulting fees related to the management of the integration processes and legal fees related to the rationalization of legal entity structures.

The Company incurred costs of $11 million for the three month period ended March 31, 2021 which reflect costs associated with the Company's global information technology and HR functions, and adjustments to restructuring liabilities for future rent under non-cancellable leases.

The following details other restructuring liabilities for actions initiated prior to 2021:


(In millions)	Liability at 1/1/20		Amounts Accrued		Cash Paid		Non-Cash/Other		Liability at 12/31/20		Amounts Accrued		Cash Paid		Non-Cash/Other		Liability at 3/31/21
Severance	$	51	$	39	$	(54)	$	0	$	36	$	5	$	(20)	$	0	$	21
Future rent under non-cancelable leases and other costs	51		50		(46)		(10)		45		6		(8)		0		43
Total	$	102	$	89	$	(100)	$	(10)	$	81	$	11	$	(28)	$	0	$	64

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 and accrued liabilities, other liabilities or accrued compensation and employee benefits, depending on the nature of the items.

~~13.~~16. Common Stock

During the first ~~nine~~three months of ~~2017,~~2021, the Company repurchased ~~approximately 8.0~~1.0 million shares of its common stock for ~~consideration~~$119 million, of ~~$600 million. During~~which approximately $112 million was paid in the first ~~nine months~~quarter of ~~2016, the Company repurchased approximately 10.0 million shares of its common stock for consideration of $625 million.~~2021. In November ~~2016,~~2019, the Board of Directors of the Company authorized the Company to repurchase up to $2.5 billion in shares of the Company's common stock, which superseded any prior authorizations. As of ~~September 30, 2017,~~March 31, 2021, the Company remained authorized to repurchase up to approximately ~~$1.8~~$2.3 billion in shares of its common stock. There is no time limit on the authorization. During the first three months of 2020 there were 0 repurchases of the Company's common stock.

The Company issued ~~approximately 4.6~~approximately 2.0 million ~~and 4.5~~and 2.3 million shares related to stock compensation and employee stock purchase plans during the first ~~nine~~three months of ~~2017~~2021 and ~~2016,~~2020, respectively.

~~14.~~17. Claims, Lawsuits and Other Contingencies

~~Litigation Matters~~Nature of Contingencies

The Company and its subsidiaries are subject to a significant number of claims, lawsuits and proceedings in the ~~ordinary~~ course of our business. Such claims and lawsuits consist principally of alleged errors and omissions in connection with the performance of professional services, including the placement of insurance, the provision of actuarial services for corporate and public sector clients, the provision of investment advice and investment management services to pension plans, the provision of advice relating to pension buy-out transactions and the provision of consulting services relating to the drafting and interpretation of trust deeds and other documentation governing pension plans. These claims ~~may~~often seek damages, including punitive and treble damages, in amounts that could be significant. In establishing liabilities for errors and omissions claims in accordance with FASB guidance on Contingencies - Loss Contingencies, the Company uses case level reviews by inside and outside counsel, and internal actuarial analysis by Oliver Wyman, ~~Group,~~ a subsidiary of the Company, and other methods to estimate potential losses. A liability is established when a loss is both probable and reasonably estimable. The liability is reviewed quarterly and adjusted as developments warrant. In many cases, the Company has not recorded a liability, other than for legal fees to defend the claim, because we are unable, at the present time, to make a determination that a loss is both probable and reasonably estimable.

~~Governmental Inquiries and Enforcement Matters~~

Risk and Insurance Services Segment

•In April 2017, the Financial Conduct Authority in the United Kingdom (the "FCA") commenced a civil competition investigation into the aviation insurance and reinsurance sector. In connection with that investigation, the FCA carried out an on-site inspection at the London office of Marsh Limited, our Marsh and Guy Carpenter operating subsidiary in the United Kingdom. The FCA indicated that it had reasonable grounds for suspecting that Marsh Limited and other participants in the market have been sharing competitively sensitive information within the aviation insurance and reinsurance broking sector.

•In ~~July~~ 2017, JLT identified payments to a third-party introducer that had been directed to unapproved bank accounts. These payments related to reinsurance placements made on behalf of an Ecuadorian state-owned insurer between 2014 and 2017. In early 2018, JLT voluntarily reported this matter to law enforcement authorities. In February and March 2020, money laundering charges were filed in the ~~Directorate-General for Competition~~United States against a former employee of JLT, the principals of the ~~European Commission together with~~third-party introducer and a former official of the ~~Irish Competition and Consumer Protection Commission conducted on-site inspections at~~state-owned insurer. These individuals, including the ~~offices of Marsh and other industry participants in Dublin in connection with an investigation regarding the "possible participation in anticompetitive agreements and/or concerted practices contrary~~former JLT employee, have since pleaded guilty to ~~[E.U. competition law] in the market for commercial motor insurance in the Republic of Ireland."~~

•From 2014, Marsh Ltd. was engaged by Greensill Capital (UK) Limited as its insurance broker. Marsh Ltd. placed a number of trade credit insurance policies for Greensill. On March 1, 2021, Greensill filed an action against certain of its trade credit insurers in Australia seeking a mandatory injunction compelling these ~~investigations~~insurers to renew coverage under expiring policies. Later that day, the Australian court denied Greensill’s application. Since then, a number of Greensill entities have filed for, or been subject to, insolvency proceedings in the U.K., Australia, Germany and ~~are conducting our own~~the U.S.

•In 2014, the FCA conducted an industry-wide review of the suitability of financial advice provided to individuals by a number of companies, including JLT, relating to enhanced transfer value ("ETV") defined benefit pension transfers. In January 2015, the FCA notified JLT that it was commissioning a Skilled Person review of ETV pension transfer advice given by JLT and a business acquired by JLT in 2012. Following the Skilled Person review which took place between 2015 and 2018, JLT engaged a compliance consulting firm to conduct an analysis of approximately 14,000 individual files to assess the suitability of the advice provided and, where appropriate, the amount of redress to be paid. In February 2019, prior to the completion of its acquisition by the Company, JLT recorded a gross liability of £59 million (or $77 million). This preliminary estimate by JLT, which reflected the projected redress amounts contained in the Skilled Person report, was based on a review of a limited number of files. Thereafter, the FCA expanded the scope of the thematic review. As of December 31, 2020, the updated redress liability, including the projected costs

of completing the review, increased to £155 million (or $210 million) resulting from the expansion in the scope of the review, and the significant progress made in completing the individual suitability reviews. As ~~these investigations are at early stages,~~of March 31, 2021, the recorded gross liability was £134 million (or $185 million). We expect to finalize the suitability review of the limited number of files that remain outstanding and calculate the majority of redress amounts by the end of the second quarter of 2021. We anticipate this gross liability will be partially offset by a contractual indemnity and insurance recoveries from third-party E&O insurers.

At this time, we are unable to predict ~~their~~the likely timing, outcome or ultimate ~~impact. There can be no assurance that~~impact of the ~~ultimate resolution~~foregoing matters. Adverse determinations in one or more of these ~~or any related~~ matters ~~will not~~could have a material ~~adverse effect~~impact on ~~our~~the Company's consolidated results of operations, financial condition or cash ~~flows.~~

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 ~~were~~are partly 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, 2017,~~funds withheld by River Thames from the ~~reinsurance coverage exceeded the best estimate of the projected liability of the policies covered by the guarantee.~~reinsurer. To the extent River Thames or the reinsurer is unable to meet its obligations under those policies, a claimant may seek to recover from the Company under the guarantee.

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

The pending proceedings described above and other matters not explicitly described in this Note 1417 on Claims, Lawsuits and Other Contingencies may expose the Company or its subsidiaries to liability for significant monetary damages, fines, penalties or other forms of relief. Where a loss is both probable and reasonably estimable, the Company establishes liabilities in accordance with FASB guidance on 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.

~~15.~~18. Segment Information

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

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

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

•Consulting, comprising Mercer and Oliver Wyman Group.

~~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 ~~2016~~2020 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, 2017~~March 31, 2021 and ~~2016~~2020 are as follows:


	Three Months Ended March 31,
(In millions)		Revenue			Operating Income (Loss)
2021–
Risk and Insurance Services		$	3,225	(a)	$	1,060
Consulting		1,873		(b)	361
Total Operating Segments		5,098			1,421
Corporate/Eliminations		(15)			(63)
Total Consolidated		$	5,083		$	1,358
2020–
Risk and Insurance Services		$	2,911	(a)	$	854
Consulting		1,762		(b)	282
Total Operating Segments		4,673			1,136
Corporate/Eliminations		(22)			(66)
Total Consolidated		$	4,651		$	1,070

(a) Includes interest income on fiduciary funds of $5 million and $23 million in 2021 and 2020, respectively.

(b) Includes inter-segment revenue of $15 million and $21 million in 2021 and 2020, respectively.

Three Months Ended
September 30, Nine Months Ended
September 30,
(In millions) Revenue
Operating
Income
(Loss)
Revenue
Operating
Income
(Loss)
2017–
Risk and Insurance Services $ 1,763
^(a)
$ 314
$ 5,668
^(c)
$ 1,455
Consulting 1,587
^(b)
329
4,705
^(d)
853
Total Operating Segments 3,350
   643
10,373
   2,308
Corporate / Eliminations (9 ) (46 ) (34 ) (138 )
Total Consolidated $ 3,341
   $ 597
$ 10,339
   $ 2,170
2016–
Risk and Insurance Services $ 1,632
^(a)
$ 315
$ 5,350
^(c)
$ 1,340
Consulting 1,513
^(b)
308
4,530
^(d)
838
Total Operating Segments 3,145
   623
9,880
   2,178
Corporate / Eliminations (10 ) (51 ) (33 ) (147 )
Total Consolidated $ 3,135
   $ 572
$ 9,847
   $ 2,031


^(a)	~~Includes inter-segment revenue of $1 million in both 2017and2016, interest income on fiduciary funds of $11 million and $8 million in 2017 and 2016, respectively, and equity method income of $2 million and $4 million in 2017 and 2016, respectively.~~


^(b)	Includes inter-segment revenue of $8 million and $9 million in 2017 and 2016, respectively, interest income on fiduciary funds of $2 million in 2017 and $1 million in 2016, respectively, and equity method income of $3 million in 2017 and $5 million in 2016, respectively.


^(c)	~~Includes inter-segment revenue of $5 million in both 2017 and2016, interest income on fiduciary funds of $28 million and $20 million in 2017 and 2016, respectively, and equity method income of $11 million in both 2017 and 2016.~~


^(d)	Includes inter-segment revenue of $29 million and $28 million in 2017 and 2016, respectively, interest income on fiduciary funds of $3 million in 2017 and $2 million in 2016, respectively, and equity method income of $12 million in 2017 and $14 million in 2016, respectively.

Details of operating segment revenue for the ~~three and nine-month~~three-month period ended ~~September 30, 2017~~March 31, 2021 and ~~2016~~2020 are as follows:


	Three Months Ended March 31,
(In millions)		2021		2020
Risk and Insurance Services
Marsh		$	2,329	$	2,076
Guy Carpenter		896		835
Total Risk and Insurance Services		3,225		2,911
Consulting
Mercer		1,288		1,251
Oliver Wyman Group		585		511
Total Consulting		1,873		1,762
Total Operating Segments		5,098		4,673
Corporate/Eliminations		(15)		(22)
Total		$	5,083	$	4,651

Three Months Ended
September 30, Nine Months Ended
September 30,
(In millions) 2017
2016
2017
2016
Risk and Insurance Services
Marsh $ 1,490
$ 1,370
$ 4,713
$ 4,427
Guy Carpenter 273
262
955
923
Total Risk and Insurance Services 1,763
1,632
5,668
5,350
Consulting
Mercer 1,149
1,109
3,335
3,227
Oliver Wyman Group 438
404
1,370
1,303
Total Consulting 1,587
1,513
4,705
4,530
Total Operating Segments 3,350
3,145
10,373
9,880
Corporate / Eliminations
(9 ) (10 ) (34 ) (33 )
Total $ 3,341
$ 3,135
$ 10,339
$ 9,847

~~16.~~19. New Accounting Guidance

New Accounting Pronouncements Adopted Effective January 1, 2021:

In ~~March 2017,~~January 2020, the FASB issued guidance that addresses accounting for the transition into and out of the equity method and measuring certain purchased options and forward contracts to acquire investments. The standard takes effect for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. The adoption of this standard did not have a material impact on the Company’s financial position or its results of operations.

In December 2019, the FASB issued guidance related to the accounting for income taxes. The standard removes specific exceptions in the current rules and eliminates the need for an organization to analyze whether the following apply in a given period: (a) exception to the incremental approach for intraperiod tax allocation; (b) exceptions to accounting for basis differences when there are ownership changes in foreign investments and (c) exception in interim period income tax accounting for year-to-date losses that exceed anticipated losses. The standard also is designed to improve financial statement preparers’ application of income tax-related guidance and simplify GAAP for (a) franchise taxes that are partially based on income; (b) transactions with a government that result in a step-up in the tax basis of goodwill; (c) separate financial statements of legal entities that are not subject to tax and (d) enacted changes in tax laws in interim periods. The standard takes effect for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. The adoption of this standard did not have a material impact on the Company’s financial position or its results of operations.

New Accounting Pronouncements Adopted Effective January 1, 2020:

In August 2018, the FASB issued new guidance that ~~changes the presentation of net periodic pension cost~~amends required fair value measurement disclosures. The guidance adds new requirements, eliminates some current disclosures and ~~net periodic postretirement cost (''net periodic benefit costs").~~modifies other required disclosures. The new ~~guidance requires employers~~disclosure requirements, along with modifications made to ~~report~~disclosures as a result of the ~~service cost component~~change in requirements for narrative descriptions of ~~net periodic benefit costs~~measurement uncertainty, must be applied on a prospective basis. The effects of all other amendments included in the ~~same line item as other compensation costs in the income statement. The other components of net periodic benefit costs are required to~~guidance must be ~~presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if one is~~applied retrospectively for all periods presented. In addition, only the service cost component is eligible for capitalization, when applicable. The guidance is effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods. Early adoption is permitted as of the beginning of an annual period for which financial statements (interim or annual) have not been issued or made available for issuance. The new guidance requires retrospective application for the presentation of the service cost component and the other components of net periodic benefit costs, and prospective application for the capitalization of the service cost component. The adoption of this guidance ~~will impact the presentation of the Company's results of operations, in particular, reducing net operating income, but will~~impacted disclosures only and did not have noan impact on the Company's ~~net income.~~financial position or results of operations.

In January 2017, the FASB issued new guidance to simplify the test for goodwill impairment. The new guidance eliminates the second step in the current two-step goodwill impairment process, under which a goodwill impairment loss is measured by comparing the implied fair value of a reporting unit's goodwill with the carrying amount of that goodwill for that reporting unit. The new guidance requires a one-step impairment test, in which the goodwill impairment charge is based on the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. The guidance should be applied on a prospective basis with the nature of and reason for the change in accounting principle disclosed upon transition. The ~~guidance is effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted. The Company does not expect the~~ adoption of this standard ~~to have a material impact on its financial position or results of operations.~~

In January 2017, the FASB issued guidance which clarifies the definition of a business in order to assist companies with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The guidance is effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods. Early adoption is permitted under certain circumstances and the guidance must be applied prospectively as of the beginning of the period of adoption. The Company is currently evaluating the impact, if any, the adoption of this standard will have on its financial position or results of operations.

In November 2016, the FASB issued new guidance which requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash or restricted cash equivalents. As a result, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-

of-period total amounts shown on the statement of cash flows. The new guidance is effective for public companies for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The guidance must be applied retrospectively to all periods presented. Early adoption is permitted. The adoption of this guidance is not expected to have an impact on the Company's consolidated balance sheets or consolidated statements of cash flows.

In October 2016, the FASB also issued new guidance which requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. The new guidance eliminates the exception for an intra-entity transfer of an asset other than inventory. The new guidance is effective for public companies for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted. The new guidance must be applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption. The Company does not expect the adoption of this standard to have a material impact on its financial position or results of operations.

In August 2016, the FASB issued new guidance which adds or clarifies guidance on the classification of certain cash receipts and payments in the statement of cash flows, including cash payments for debt prepayments or debt extinguishment costs, contingent consideration payments made after a business combination and distributions received from equity method investees. The guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The guidance must be applied retrospectively to all periods presented unless retrospective application is impracticable. Early adoption is permitted. The Company does not expect the adoption of this standard to have a significant impact on its statement of cash flows.

In February 2016, the FASB issued new guidance intended to improve financial reporting for leases. Under the new guidance, a lessee will be required to recognize assets and liabilities for leases with lease terms of more than 12 months. Consistent with current GAAP, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as a financing or operating lease. However, unlike current GAAP, which requires that only capital leases be recognized on the balance sheet, the new guidance requires that both types of leases be recognized on the balance sheet. The new guidance will require additional disclosures to help investors and other financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. These disclosures include qualitative and quantitative requirements, and additional information about the amounts recorded in the financial statements. The accounting by organizations that own the assets ("lessor") leased by the lessee will remain largely unchanged from current GAAP. However, the guidance contains some targeted improvements that are intended to align, where necessary, lessor accounting with the lessee accounting model and with the updated revenue recognition guidance issued in 2014. The new guidance on leases will take effect for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early application will be permitted. The Company is currently evaluating the impact the adoption of the guidance will have on its financial position and results of operations, but expects material "right to use" assets and lease liabilities to be recorded on its consolidated balance sheets.

In January 2016, the FASB issued new guidance intended to improve the recognition and measurement of financial instruments. The new guidance requires equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income; requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (i.e., securities or loans and receivables) on the balance sheet or the accompanying notes to the financial statements; eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet; and requires a reporting organization to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk (also referred to as "own credit") when the organization has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. The new guidance is effective for public companies for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company holds certain equity investments that are currently treated as available for sale securities, whereby the mark to market change is recorded to other comprehensive income in its consolidated balance sheet. The adoption of this new standard will impact the Company's results of operations, since the mark to market change to certain of its equity investments will be recorded in the consolidated income statement (See Note 9).

~~New Revenue Recognition Pronouncement~~

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 includes requirements to estimate variable or contingent consideration, which will result in revenue being recognized earlier than legacy GAAP. In addition, the guidance requires the capitalization and amortization of certain expenses which were expensed as incurred under legacy GAAP. As discussed in more detail below, the Company expects that once the standard is adopted as of January 1, 2018 revenue will shift among quarters, but does not expect a significant year-over-year impact on annual revenue.

The Company expects there will be significant movement in the quarterly timing of revenue recognition in the Risk and Insurance Services segment. In particular, under the new standard the recognition of revenue in the Company’s reinsurance broking operations will be accelerated from historical patterns. Currently, revenue related to most reinsurance placements is recognized on the later of billing or effective date as premiums are written and attached to the reinsurance treaties. This typically results in revenue being recognized over a 12 to 24 month period. Under the new guidance, revenue will be recognized largely at the policy effective date. In the insurance brokerage operations, revenue from commission based arrangements will continue to be recorded at the policy effective date, while the timing of revenue recognition for certain fee based arrangements will shift among quarters. However since the vast majority of our fee arrangements involve contracts that cover a single year of services, the Company does not believe there will be a significant change to the amount of revenue recognized in an annual period once the standard is adopted.

The Company believes application of the new standard in the Consulting segment will not materially change the existing timing of revenue recognition in quarterly or annual periods. The conclusions will be completed following a final review of customer arrangement legal terms and conditions in certain non-U.S. locations.

The Company expects that certain costs that are currently expensed will be capitalized as costs to obtain or costs to fulfill customer contracts under the new standard. Incremental costs to obtain a contract would generally be amortized over the expected life of the underlying customer relationship under the new guidance. The Company currently expenses those costs as incurred.

In Risk and Insurance Services, certain pre-placement costs will be deferred and "amortized" when the related services are transferred, generally over a period of one year or less. As such, the Company expects the recognition of costs to shift among quarters, but similar to the revenue impact discussed above, does not expect a significant impact on year over year expenses once the standard is adopted.

In several of its businesses, the Company incurs implementation costs necessary to facilitate the delivery of the contracted services. Although certain implementation costs are deferred under current GAAP, the Company has concluded that some additional implementation costs currently expensed under GAAP will be deferred. In addition, the amortization period for these costs will have a longer amortization period which includes the initial contract plus expected renewals. Currently, these deferred implementation costs are amortized over the initial contract term. The Company has not yet fully quantified the impact of the changes discussed above. However, the Company expects that it will recognize a significant amount of contract assets and/or receivables upon implementation of the standard, related to both capitalized costs to obtain and fulfill contracts, as well as commissions related to reinsurance brokerage activity.

~~The Company is currently designing and implementing changes in processes, controls and systems necessary to support the new revenue recognition requirements.~~

Entities are permitted to adopt the guidance under one of the following methods: the "full retrospective" method, which applies the guidance to each period presented (prior years restated) or the "modified retrospective" method in which the guidance is only applied to the year of adoption, with the cumulative effect of initially applying the guidance recognized as an adjustment to retained earnings. The Company will adopt the new guidance effective January 1, 2018 and expects to use the modified retrospective method.

~~New Accounting Pronouncements Recently Adopted~~

In October 2016, the FASB issued new guidance which changes the evaluation of whether a reporting entity is the primary beneficiary of a variable interest entity by changing how a reporting entity that is a single decision maker of a variable interest entity treats indirect interests in the entity held through related parties that are under common control with the reporting entity. If a reporting entity satisfies the first characteristic of a primary beneficiary (such that it is the single decision maker of a variable interest entity), the new guidance requires that reporting entity, in determining whether it satisfies the second characteristic of a primary beneficiary, to include all of its direct variable interest in a variable interest entity and, on a proportionate basis, its indirect variable interests in a variable interest entity held through related parties, including related parties that are under common control with the reporting entity. The adoption of this guidance did not have a significant impact on its financial position, results of operations and statement of cash flows.

In April 2016, the FASB issued new guidance which simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures and statutory tax withholding requirements, as well as classification in the statement of cash flows. The new guidance requires that companies record all excess tax benefits and tax deficiencies as an income tax benefit or expense in the income statement and classify excess tax benefits as an operating activity in the statement of cash flows. The Company adopted this new guidance prospectively, effective January 1, 2017 and prior periods have not been adjusted. For the nine months ended September 30, 2017, the adoption of this new standard reduced income tax expense in the consolidated statement of income by approximately $58 million. For the nine months ended September 30, 2016, the Company recorded an excess tax benefit of $30 million as an increase to equity in its consolidated balance sheet, which was reflected as cash provided by financing activities in the consolidated statement of cash flows.

In March 2016, the FASB issued new guidance which eliminates the requirement that when an investment qualifies for use of the equity method as a result of an increase in the level of ownership interest or degree of influence, an investor must adjust the investment, results of operations and retained earnings retroactively on a step-by-step basis as if the equity method had been in effect during all previous periods that the investment had been held. The amendments require that the equity method investor add the cost of acquiring the additional interest in the investee to the current basis of the investor’s previously held interest and adopt the equity method of accounting as of the date the investment becomes qualified for equity method accounting. Therefore, upon qualifying for the equity method of accounting, no retroactive adjustment of the investment is required. The amendments require that an entity that has an available-for-sale equity security that becomes qualified for the equity method of accounting recognize through earnings the unrealized holding gain or loss in accumulated other comprehensive income at the date the investment becomes qualified for use of the equity method. The new guidance is effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. The guidance was adopted on January 1, 2017 and did not have an impact on the Company's financial position or results of operations.

In June 2016, the FASB issued new guidance on the impairment of financial instruments. The new guidance adds an allowance for credit losses ("CECL") impairment model that is based on expected losses rather than incurred losses. Under the new guidance, an entity recognizes as an allowance its estimate of lifetime expected credit losses, which the FASB believes will result in more timely recognition of such losses. The new standard is also intended to reduce the complexity of U.S. GAAP by decreasing the number of credit impairment models that entities use to account for debt instruments. Further, the new standard makes targeted changes to the impairment model for available-for-sale debt securities. The adoption of this standard did not have a material impact on the Company's financial position or results of operations.

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

Marsh & McLennan Companies, Inc. and its consolidated subsidiaries (the "Company" or "Marsh McLennan") is a global professional services firm offering clients advice ~~and solutions~~ in the areas of risk, strategy and people. ~~It is~~The Company’s 76,000 colleagues advise clients in over 130 countries. With annual revenue over $17 billion, the ~~parent company~~Company helps clients navigate an increasingly dynamic and complex environment through four market-leading businesses. Marsh advises individual and commercial clients of ~~a number of leading~~all sizes on insurance broking and innovative risk ~~advisors and specialty consultants, including: Marsh, the insurance broker, intermediary and risk advisor;~~management solutions. Guy Carpenter ~~the~~develops advanced risk, reinsurance and ~~reinsurance specialist;~~capital strategies that help clients grow profitably and pursue emerging opportunities. Mercer ~~the provider of HR and Investment related financial~~delivers advice and ~~services;~~technology-driven solutions that help organizations redefine the world of work, reshape retirement and investment outcomes, and unlock health and well being for a changing workforce. Oliver Wyman Group ~~the management,~~serves as a critical strategic, economic and brand ~~consultancy. With more than 60,000 employees worldwide~~advisor to private sector and ~~annual revenue of more than $13 billion, the Company provides analysis, advice and transactional capabilities to clients in more than 130 countries.~~governmental clients.

The Company ~~operates~~conducts business through two segments:

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

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

Effective January 1, 2017, Mercer established a Wealth business reflecting a unified client strategy for its former Retirement and Investments businesses. Wealth is comprised of two practices, Defined Benefit Consulting & Administration (DBA), and Investment Management & Related Services (IMS). DBA encompasses mature businesses primarily in defined benefit and actuarial consulting, along with defined benefit administration. IMS includes businesses primarily in delegated solutions, defined contribution related investment services, and financial wellness. Among the changes, defined benefit investment consulting, previously reported in the Investments business, is now included in Defined Benefit Consulting & Administration. Revenue information is reported for these two practices to provide investors better insight into the underlying growth dynamics within Wealth. This change has no impact on previously reported Mercer total revenue, Consulting segment revenue or operating income, or consolidated revenue or financial results.

A reconciliation of segment operating income to total operating income is included in Note 1518 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.

For information on the three months ended March 31, 2020 results and similar comparisons, see "Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations" of our Form 10-Q for the quarter ended March 31, 2020.

Business Update Related To COVID-19

The COVID-19 pandemic has now surpassed one year in duration and it continues to impact virtually every geography in which the Company operates. The safety and well-being of our colleagues remains our first priority, while continuing to serve the needs of our clients. Approximately 70% of the Company’s offices are open, however, the vast majority of colleagues continue to work in a remote environment which is expected to continue through much of 2021. The Company continues to plan the multiple aspects of a return to the office model, considering health, colleague privacy and potential government restrictions. The Company expects to continue to service clients effectively in the current remote environment and as colleagues gradually return to the office.

Factors that could adversely affect the Company’s financial statements related to the financial and operational impact of COVID-19 are outlined in “Item 1A - Risk Factors” in the Company’s Form 10-K for the year ended December 31, 2020.

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.

Consolidated Results of Operations

Three Months Ended
September 30, Nine Months Ended
September 30,
(In millions, except per share figures) 2017
2016
2017
2016
Revenue $ 3,341
$ 3,135
$ 10,339
$ 9,847
Expense:
Compensation and Benefits 1,906
1,817
5,786
5,543
Other Operating Expenses 838
746
2,383
2,273
Operating Expenses 2,744
2,563
8,169

7,816
Operating Income 597
572
2,170

2,031
Net Income Before Non-Controlling Interests 397
384
1,482

1,354
Net Income Attributable to the Company $ 393
$ 379
$ 1,463
$ 1,332
Net Income Per Share Attributable to the Company:

Basic $ 0.77
$ 0.73
$ 2.85
$ 2.56
Diluted $ 0.76
$ 0.73
$ 2.81
$ 2.54
Average Number of Shares Outstanding:
Basic 512
518
514
520
Diluted 519
523
520
525
Shares Outstanding at September 30 511
516
511
516

Consolidated operating income in the first quarter of 2021 increased 27% to $1.4 billion compared to the same period last year, reflecting a 9% increase in revenue and 4% increase in expense. On an underlying basis, revenue increased 6%, reflecting an increase of 7% in Risk and Insurance Services and a 3% increase in Consulting. The underlying revenue increase in Risk and Insurance Services is as a result of growth in new business, strong retention of existing clients, and to a lesser extent, benefits from pricing in the marketplace. The growth in Consulting revenue was ~~approximately $2.2~~due to increase in demand for project-based services as the global economy continues to improve. On an underlying basis, expenses were slightly lower than last year due to lower travel and entertainment, meeting costs and outside services resulting from the Company’s restrictions on travel and cost containment measures taken in light of COVID-19, partly offset by higher incentive compensation and increase in headcount. Expenses were also impacted by lower Jardine Lloyd Thompson Group plc ("JLT") integration and restructuring costs of $57 million, which are winding down in 2021.

Income before income taxes increased to $1.3 billion in the first ~~nine months~~quarter of ~~2017, an increase of 7%~~2021, compared with $1.0 billion in the first ~~nine months~~quarter of ~~2016, reflecting 5% growth in revenue and expenses. Net income attributable to the Company increased 10% reflecting the~~2020. The increase inreflects higher operating income, higher investment income, and lower interest expense.

Diluted earnings per share increased from $1.48 in the first quarter of 2020 to $1.91 in 2021. This increase is a result of the factors discussed above offset by a higher effective tax rate in the first quarter of 2021 compared to 2020.

The Company’s results of operations and earnings per share for the three month periods ended March 31, 2021 and 2020 include costs related to JLT integration and restructuring activities, and other Marsh McLennan restructuring activities as ~~well~~discussed in more detail in Note 15 of the consolidated financial statements. These costs are reflected as part of net operating income and are summarized below:

The Company is in the ~~impact~~final stages of ~~a credit~~its integration of JLT. The costs incurred in connection with the integration and restructuring of the combined businesses, primarily related to ~~income tax expense~~severance, real estate rationalization and technology, consulting fees related to the ~~required change in accounting for share based awards, partially offset by higher interest expense. Diluted net income per share attributable to~~management of the Company increased 11% to $2.81 compared to $2.54 in 2016, reflecting a $131 million increase in net income attributable to the Company as well as a 1% decrease in the average number of diluted shares outstanding.

JLT Acquisition Related Costs

JLT acquisition related costs reflect retention costs related to the acquisition of JLT.

Consolidated Revenue and Expense

Revenue - Components of Change

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

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


	Three Months Ended March 31,				% Change GAAP Revenue				Components of Revenue Change*
							Currency Impact	Acquisitions/ Dispositions/ Other Impact	Underlying Revenue
(In millions, except percentage figures)	2021		2020
Risk and Insurance Services
Marsh	$	2,325	$	2,061	13	%			3	%	2	%	8	%
Guy Carpenter	895		827		8	%			2	%	—		7	%
Subtotal	3,220		2,888		11	%			3	%	1	%	7	%
Fiduciary Interest Income	5		23
Total Risk and Insurance Services	3,225		2,911		11	%			3	%	1	%	7	%
Consulting
Mercer	1,288		1,251		3	%			4	%	(1)	%	—
Oliver Wyman Group	585		511		14	%			3	%	—		11	%
Total Consulting	1,873		1,762		6	%			4	%	(1)	%	3	%
Corporate/Eliminations	(15)		(22)
Total Revenue	$	5,083	$	4,651	9	%			3	%	—		6	%

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

Acquisitions/
Dispositions
Impact

Underlying
Revenue
(In millions) 2017
2016

Risk and Insurance Services
Marsh $ 1,482
$ 1,364
9 % —
6 % 3 %
Guy Carpenter 270
260
4 % —
—
4 %
Subtotal 1,752
1,624
8 % —
5 % 3 %
Fiduciary Interest Income 11
8

Total Risk and Insurance Services 1,763
1,632
8 % —
5 % 3 %
Consulting
Mercer 1,149
1,109
4 % 1 % 3 % —
Oliver Wyman Group 438
404
8 % 1 % —
7 %
Total Consulting 1,587
1,513
5 % 1 % 2 % 2 %
Corporate / Eliminations (9 ) (10 )
Total Revenue $ 3,341
$ 3,135
7 % 1 % 3 % 3 %


	Three Months Ended March 31,				% Change GAAP Revenue				Components of Revenue Change*
							Currency Impact	Acquisitions/ Dispositions/ Other Impact	Underlying Revenue
(In millions, except percentage figures)	2021		2020
Marsh:
EMEA	$	837	$	754	11	%			7	%	(2)	%	6	%
Asia Pacific	274		238		15	%			7	%	1	%	8	%
Latin America	90		91		(1)	%			(7)	%	—		6	%
Total International	1,201		1,083		11	%			5	%	(1)	%	6	%
U.S./Canada	1,124		978		15	%			1	%	5	%	9	%
Total Marsh	$	2,325	$	2,061	13	%			3	%	2	%	8	%
Mercer:


Wealth	623		592		5	%			6	%	(1)	%	1	%
Health	487		486		—				1	%	(1)	%	—
Career	178		173		3	%			3	%	—		1	%
Total Mercer	$	1,288	$	1,251	3	%			4	%	(1)	%	—

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

Acquisitions/
Dispositions
Impact

Underlying
Revenue
(In millions) 2017
2016

Risk and Insurance Services
Marsh $ 4,692
$ 4,411
6 % (1 )% 4 % 3 %
Guy Carpenter 948
919
3 % (1 )% —
4 %
Subtotal 5,640
5,330
6 % (1 )% 4 % 3 %
Fiduciary Interest Income 28
20

Total Risk and Insurance Services 5,668
5,350
6 % (1 )% 4 % 3 %
Consulting
Mercer 3,335
3,227
3 % (1 )% 2 % 2 %
Oliver Wyman Group 1,370
1,303
5 % (1 )% —
6 %
Total Consulting 4,705
4,530
4 % (1 )% 2 % 3 %
Corporate / Eliminations (34 ) (33 )
Total Revenue $ 10,339
$ 9,847
5 % (1 )% 3 % 3 %

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

Acquisitions/
Dispositions
Impact

Underlying
Revenue
(In millions) 2017
2016

Marsh:
EMEA $ 1,512
$ 1,443
5 % (2 )% 7 % 1 %
Asia Pacific 484
482
1 % —
(7 )% 7 %
Latin America 274
252
9 % (1 )% 4 % 7 %
Total International 2,270
2,177
4 % (2 )% 3 % 3 %
U.S. / Canada 2,422
2,234
8 % —
5 % 3 %
Total Marsh $ 4,692
$ 4,411
6 % (1 )% 4 % 3 %
Mercer:
Defined Benefit Consulting & Administration $ 1,010
$ 1,083
(7 )% (2 )% (2 )% (3 )%
Investment Management & Related Services 572
454
26 % 1 % 15 % 10 %
Total Wealth 1,582
1,537
3 % (1 )% 3 % 1 %
Health 1,239
1,207
3 % (1 )% 1 % 2 %
Career 514
483
6 % (1 )% 3 % 4 %
Total Mercer $ 3,335
$ 3,227
3 % (1 )% 2 % 2 %



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 and the deconsolidation of Marsh India.
*	~~Components of revenue change may not add due to rounding.~~

Consolidated revenue for the ~~third~~first quarter of ~~2017~~2021 was ~~$3.3~~$5.1 billion, an increase of ~~7%, or 3%~~9% compared to the same quarter in prior year. This reflects an increase of 6% on an underlying basis, ~~with increases~~and an increase of 3% ~~from the impact of acquisitions and 1%~~ from the impact of foreign currency translation.

Revenue in the Risk and Insurance Services segment for the ~~third~~first quarter of ~~2017~~2021 was ~~$1.8~~$3.2 billion, an increase of 8%11% from the same ~~period last year~~quarter of the prior year. This reflects increases of 7% on an underlying basis, 3% from the impact of foreign currency translation and 1% from acquisitions. The increase in underlying revenue was primarily due to growth in new business, strong retention of existing clients, and to a lesser extent, benefits from pricing in the marketplace. Consulting revenue of $1.9 billion in the first quarter of 2021 increased 6%, reflecting increases of 3% on an underlying ~~basis. Consulting revenue of $1.6 billion in the third quarter of 2017 increased 5%, or 2% on an underlying basis.~~

~~For the first nine months of 2017, consolidated revenue increased 5% or 3% on an underlying basis. Risk~~basis and ~~Insurance Services revenue increased 6%~~4% from the ~~same period~~impact of foreign currency translation, partly offset by a decrease of 1% from the disposition of businesses. The increase in ~~2016, or 3% on an~~ underlying ~~basis. Consulting~~ revenue ~~increased 4% compared with~~was due to increase in demand for project-based services as the ~~nine-month period last year, or 3% on an underlying basis.~~

global economy continues to improve.

Consolidated operating expense in the ~~third~~first quarter increased 7% 4%compared with the same period last year reflecting a ~~2% increase on an underlying basis, a 4% increase from acquisitions, and a 1%~~3% increase from the impact of foreign currency ~~translation. The~~translation and an increase of 1% from acquisitions. Underlying expenses were slightly lower than last year reflecting lower travel and entertainment, meeting costs and outside services resulting from the Company’s restrictions on travel and cost containment measures taken in light of COVID-19, offset by an increase in ~~underlying~~incentive compensation and increase in headcount. The Company also incurred lower JLT integration and restructuring costs, which are winding down in 2021.

The Company incurred approximately $35 million and $93 million of operating expenses ~~is primarily due to higher base salaries~~for the three month periods ended March 31, 2021 and ~~identified intangible amortization, as well as a charge in 2017~~March 31, 2020, respectively, related to the ~~settlement of the final legacy litigation, originally filed in 2006, regarding Marsh's use of market service agreements.~~JLT acquisition, integration and restructuring charges.

Expenses for the nine months of 2017 increased 5% compared with the same period in 2016, reflecting a 2% increase on an underlying basis and a 4% increase from acquisitions, partly offset by a 1% decrease from the impact of foreign currency translation. The increase in underlying expenses is primarily due to the items discussed above, as well as higher severance related costs, partly offset by lower costs related to liabilities for errors and omissions.

Risk and Insurance Services

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

Revenue in the Risk and Insurance Services segment in the ~~third~~first quarter of ~~2017~~2021 was ~~$1.8~~$3.2 billion, an increase of 8%11% as compared to the same period last ~~year, reflecting a 3% increase~~year. This reflects increases of 7% in underlying revenue, ~~and a 5% increase related to acquisitions, while~~3% from the impact of foreign currency translation ~~was flat.~~and 1% from acquisitions.


PART I. FINANCIAL INFORMATION				4

ITEM 1.			~~PART I.~~ FINANCIAL ~~INFORMATION~~STATEMENTS (UNAUDITED)	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	3234
			OF OPERATIONS
ITEM 3.			QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	4344

ITEM 4.			CONTROLS & PROCEDURES	45

PART II. OTHER INFORMATION				46

ITEM 1.			LEGAL PROCEEDINGS	46

ITEM 1A.			RISK FACTORS	46

ITEM 2.			UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	46

ITEM 3.			DEFAULTS UPON SENIOR SECURITIES	4746

ITEM 4.			MINE SAFETY DISCLOSURE	4746

ITEM 5.			OTHER INFORMATION	4746

ITEM 6.			EXHIBITS	4746


☐			Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934


	Three Months Ended September 30,						Nine Months Ended September 30,							Three Months Ended March 31,
(In millions, except per share amounts)	2017			2016			2017			2016			(In millions, except per share amounts)		2021		2020
Revenue	$	3,341		$	3,135		$	10,339		$	9,847		Revenue		$	5,083	$	4,651
Expense:													Expense:
Compensation and benefits	1,906			1,817			5,786			5,543			Compensation and benefits		2,807		2,555
Other operating expenses	838			746			2,383			2,273			Other operating expenses		918		1,026
Operating expenses	2,744			2,563			8,169			7,816			Operating expenses		3,725		3,581
Operating income	597			572			2,170			2,031			Operating income		1,358		1,070
Other net benefit credits													Other net benefit credits		71		64
Interest income	2			—			6			4			Interest income		0		2
Interest expense	(60		)	(47		)	(178		)	(141		)	Interest expense		(118)		(127)
Investment (loss) income	(2		)	—			3			(2		)

Investment income (loss)													Investment income (loss)		11		(2)

Income before income taxes	537			525			2,001			1,892			Income before income taxes		1,322		1,007
Income tax expense	140			141			519			538			Income tax expense		324		240

Net income before non-controlling interests	397			384			1,482			1,354			Net income before non-controlling interests		998		767
Less: Net income attributable to non-controlling interests	4			5			19			22			Less: Net income attributable to non-controlling interests		15		13
Net income attributable to the Company	$	393		$	379		$	1,463		$	1,332		Net income attributable to the Company		$	983	$	754
Net income Per Share Attributable to the Company:
Net income per share attributable to the Company:													Net income per share attributable to the Company:
Basic	$	0.77		$	0.73		$	2.85		$	2.56		Basic		$	1.93	$	1.49

Diluted	$	0.76		$	0.73		$	2.81		$	2.54		Diluted		$	1.91	$	1.48

Average number of shares outstanding:													Average number of shares outstanding:
Basic	512			518			514			520			Basic		509		505
Diluted	519			523			520			525			Diluted		514		510
Shares outstanding at September 30,	511			516			511			516
Shares Outstanding at March 31,													Shares Outstanding at March 31,		509		506



(In millions, except share amounts)	(Unaudited) September 30, 2017			December 31, 2016
ASSETS
Current assets:
Cash and cash equivalents	$	1,078		$	1,026
Receivables
Commissions and fees	3,651			3,370
Advanced premiums and claims	52			83
Other	311			286
	4,014			3,739
Less-allowance for doubtful accounts and cancellations	(105		)	(96		)
Net receivables	3,909			3,643
Other current assets	228			215
Total current assets	5,215			4,884
Goodwill	9,100			8,369
Other intangible assets	1,320			1,126
Fixed assets (net of accumulated depreciation and amortization of $1,822 at September 30, 2017 and $1,683 at December 31, 2016)	728			725
Pension related assets	1,155			776
Deferred tax assets	947			1,097
Other assets	1,225			1,213
	$	19,690		$	18,190



(In millions)	Unrealized Investment Gains (Losses)			Pension/Post-Retirement Plans Gains (Losses)			Foreign Currency Translation Gains (Losses)			Total Gains (Losses)
Balance as of July 1, 2017	$	30		$	(3,215	)	$	(1,356	)	$	(4,541	)
Other comprehensive (loss) income before reclassifications	(5		)	(173		)	126			(52		)
Amounts reclassified from accumulated other comprehensive income	—			33			—			33
Net current period other comprehensive (loss) income	(5		)	(140		)	126			(19		)
Balance as of September 30, 2017	$	25		$	(3,355	)	$	(1,230	)	$	(4,560	)



Three Months Ended September 30,	2017									2016
(In millions)	Pre-Tax			Tax (Credit)			Net of Tax			Pre-Tax			Tax		Net of Tax
Foreign currency translation adjustments	$	127		$	1		$	126		$	(52	)	$	2	$	(54	)
Unrealized investment (losses) gains	(8		)	(3		)	(5		)	1			—		1
Pension/post-retirement plans:
Amortization of losses included in net periodic pension cost:
Prior service cost (a)	—			—			—			1			1		—
Net actuarial losses (a)	43			10			33			41			12		29
Subtotal	43			10			33			42			13		29
Effect of remeasurement	3			—			3			—			—		—
Effect of settlement	1			—			1			—			—		—
Foreign currency translation (losses) gains	(215		)	(38		)	(177		)	40			4		36
Pension/post-retirement plans (losses) gains	(168		)	(28		)	(140		)	82			17		65
Other comprehensive (loss) income	$	(49	)	$	(30	)	$	(19	)	$	31		$	19	$	12
(a) Components of net periodic pension cost are included in compensation and benefits in the consolidated statements of income. Income tax credits on prior service cost and net actuarial losses are included in income tax expense.



Nine Months Ended September 30,	2017									2016
(In millions)	Pre-Tax			Tax (Credit)			Net of Tax			Pre-Tax			Tax		Net of Tax
Foreign currency translation adjustments	$	652		$	2		$	650		$	(373	)	$	1	$	(374	)
Unrealized investment gains	11			5			6			1			—		1
Pension/post-retirement plans:
Amortization of losses included in net periodic pension cost:
Prior service cost (a)	—			—			—			2			1		1
Net actuarial losses (a)	125			29			96			125			36		89
Subtotal	125			29			96			127			37		90
Effect of remeasurement	12			3			9			(1		)	—		(1		)
Effect of curtailment	(1		)	—			(1		)	3			1		2
Effect of settlement	2			—			2			1			—		1
Foreign currency translation (losses) gains	(277		)	(49		)	(228		)	253			41		212
Other	(1		)	—			(1		)	—			—		—
Pension/post-retirement plans (losses) gains	(140		)	(17		)	(123		)	383			79		304
Other comprehensive income (loss)	$	523		$	(10	)	$	533		$	11		$	80	$	(69	)
(a) Components of net periodic pension cost are included in compensation and benefits in the consolidated statements of income. Tax on prior service cost and net actuarial losses is included in income tax expense.



For the Nine Months Ended September 30, 2017
(In millions)
Cash	$	640
Estimated fair value of deferred/contingent consideration	94
Total Consideration	$	734
Allocation of purchase price:
Cash and cash equivalents	$	11
Accounts receivable, net	17
Property, plant, and equipment	7
Other intangible assets	293
Goodwill	533
Other assets	2
Total assets acquired	863
Current liabilities	21
Other liabilities	108
Total liabilities assumed	129
Net assets acquired	$	734



September 30,
(In millions)	2017		2016
Balance as of January 1, as reported	$	8,369	$	7,889
Goodwill acquired	533		74
Other adjustments^(a)	198		12
Balance at September 30,	$	9,100	$	7,975



	September 30, 2017						December 31, 2016
(In millions)	Gross Cost		Accumulated Amortization		Net Carrying Amount		Gross Cost		Accumulated Amortization		Net Carrying Amount
Client Relationships	$	1,679	$	487	$	1,192	$	1,390	$	392	$	998
Other ^(a)	231		103		128		204		76		128
Amortized intangibles	$	1,910	$	590	$	1,320	$	1,594	$	468	$	1,126


~~Item 1.~~	~~Financial Statements.~~


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


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


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).


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


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



(In millions)	Liability at 1/1/16		Amounts Accrued		Cash Paid			Other			Liability at 12/31/16		Amounts Accrued		Cash Paid			Other		Liability at 9/30/17
Severance	$	15	$	40	$	(22	)	$	(1	)	$	32	$	24	$	(42	)	$	—	$	14
Future rent under non-cancelable leases and other costs	78		4		(17		)	(4		)	61		8		(15		)	1		55
Total	$	93	$	44	$	(39	)	$	(5	)	$	93	$	32	$	(57	)	$	1	$	69



	Three Months Ended September 30,						% Change GAAP Revenue		Components of Revenue Change*
	Three Months Ended September 30,								Currency Impact		Acquisitions/ Dispositions Impact		Underlying Revenue
(In millions)	2017			2016					Currency Impact		Acquisitions/ Dispositions Impact		Underlying Revenue
Risk and Insurance Services
Marsh	$	1,482		$	1,364		9	%	—		6	%	3	%
Guy Carpenter	270			260			4	%	—		—		4	%
Subtotal	1,752			1,624			8	%	—		5	%	3	%
Fiduciary Interest Income	11			8
Total Risk and Insurance Services	1,763			1,632			8	%	—		5	%	3	%
Consulting
Mercer	1,149			1,109			4	%	1	%	3	%	—
Oliver Wyman Group	438			404			8	%	1	%	—		7	%
Total Consulting	1,587			1,513			5	%	1	%	2	%	2	%
Corporate / Eliminations	(9		)	(10		)
Total Revenue	$	3,341		$	3,135		7	%	1	%	3	%	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 and the deconsolidation of Marsh India.
*	Components of revenue change may not add due to rounding.


For the Three and Nine Months Ended September 30,	Three Months						Nine Months
For the Three Months Ended March 31,													For the Three Months Ended March 31,	Three Months
(In millions)	2017			2016			2017			2016			(In millions)		2021			2020
Revenue	$	1,763		$	1,632		$	5,668		$	5,350		Revenue		$	3,225		$	2,911
Compensation and Benefits	999			924			2,947			2,779			Compensation and Benefits		1,610			1,452
Other Expenses	450			393			1,266			1,231
Other Operating Expenses													Other Operating Expenses		555			605
Expense	1,449			1,317			4,213			4,010			Expense		2,165			2,057
Operating Income	$	314		$	315		$	1,455		$	1,340		Operating Income		$	1,060		$	854
Operating Income Margin	17.8		%	19.2		%	25.7		%	25.0		%	Operating Income Margin		32.9		%	29.4		%


(In millions)	Payment due by Period
Contractual Obligations	Total		Within 1 Year		1-3 Years		4-5 Years		After 5 Years



Short-term debt	1,015		1,015		—		—		—
Long-term debt	10,309		—		1,635		1,736		6,938
Interest on long-term debt	5,255		445		806		644		3,360
Net operating leases	2,480		407		690		530		853
Service agreements	296		164		92		32		8
Other long-term obligations	512		153		311		47		1


Total	$	19,867	$	2,184	$	3,534	$	2,989	$	11,160



(In millions of dollars)	Payment due by Period
Contractual Obligations	Total		Within 1 Year		1-3 Years		4-5 Years		After 5 Years
Short-term debt	$	13	13		—		—		—
Long-term debt	5,512		—		1,077		1,030		3,405
Interest on long-term debt	1,959		206		387		325		1,041
Net operating leases	1,928		309		508		397		714
Service agreements	234		138		90		6		—
Other long-term obligations	324		107		209		5		3
Total	$	9,970	$	773	$	2,271	$	1,763	$	5,163


~~Item 3.~~	~~Quantitative and Qualitative Disclosures About Market Risk.~~



(In millions)	September 30, 2017
Cash and cash equivalents invested in money market funds, certificates of deposit and time deposits	$	1,078
Fiduciary cash and investments	$	5,128


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, 2021	—	$	—	—	$	2,422,987,756
February 1-28, 2021	—	$	—	—	$	2,422,987,756
March 1-31, 2021	1,008,148	$	117.57	1,008,148	$	2,304,455,428
Total	1,008,148			1,008,148	$	2,304,455,428


Date:			April 27, 2021	/s/ Mark C. McGivney
				Mark C. McGivney
				Chief Financial Officer

Date:			~~October~~April 27, ~~2017~~2021	/s/ ~~Mark C. McGivney~~Stacy M. Mills
				~~Mark C. McGivney~~Stacy M. Mills
				~~Chief Financial Officer~~

~~Date:~~	~~October 27, 2017~~	~~/s/ Robert J. Rapport~~
		~~Robert J. Rapport~~
		~~Senior~~ Vice President & Controller
				(Chief Accounting Officer)


Exhibit No.		Exhibit Name

~~Exhibit No.~~	~~Exhibit Name~~

10.1		Letter Agreement, effective ~~as of~~ February ~~22, 2017,~~19, 2019, between Marsh & McLennan Companies, Inc. and ~~Daniel S. Glaser~~Peter C. Hearn (incorporated by reference to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2019)

10.2		~~Letter~~Non-Competition and Non-Solicitation Agreement, effective as of ~~July 12, 2017,~~June 1, 2016, between Marsh & McLennan Companies, Inc. and ~~Julio A. Portalatin~~Peter C. Hearn (incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2019)

~~12.1~~10.3		~~Statement Re: Computation~~Letter Agreement, effective as of ~~Ratio of Earnings to Fixed Charges~~January 20, 2021, between Marsh & McLennan Companies, Inc. and Martine Ferland

10.4		Form of Deferred Stock Unit Award, with grant dates from March 1, 2021 through February 1, 2022, under the Marsh & McLennan Companies, Inc. 2020 Incentive and Stock Award Plan – Cliff Vesting

10.5		Form of Deferred Stock Unit Award, with grant dates from March 1, 2021 through February 1, 2022, under the Marsh & McLennan Companies, Inc. 2020 Incentive and Stock Award Plan – Ratable Vesting

10.6		Form of Restricted Stock Unit Award, dated as of February 22, 2021, under the Marsh & McLennan Companies, Inc. 2020 Incentive and Stock Award Plan

10.7		Form of Performance Stock Unit Award, dated as of February 22, 2021, under the Marsh & McLennan Companies, Inc. 2020 Incentive and Stock Award Plan

10.8		Form of Stock Option Award, dated as of February 22, 2021, under the Marsh & McLennan Companies, Inc. 2020 Incentive and Stock Award Plan

10.9		Amended and Restated 5 Year Credit Agreement, dated as of April 2, 2021, among Marsh & McLennan Companies, Inc., the designated subsidiaries party thereto as borrowers, Citibank, N.A., as administrative agent, and the lenders from time to time party thereto (incorporated by reference to the Company’s Current Report on Form 8-K filed on April 2, 2021)

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

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Weighted Average Amortization Period

Client relationships