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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_____________________________________________
FORM 10-Q
_____________________________________________
(Mark One)

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

For the quarterly period ended September 30, 2023
OR

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

For the transition period from to
____________________________________________
Marsh & McLennan Companies, Inc.
1166 Avenue of the Americas
New York, New York 10036
(212) 345-5000
_____________________________________________
Commission file number 1-5998
State of Incorporation: Delaware
I.R.S. Employer Identification No. 36-2668272
_____________________________________________
Securities registered pursuant to Section 12(b) of the Act:

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 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.

Large Accelerated Filer | ☒ |  | Accelerated Filer | ☐
Non-Accelerated Filer | ☐(Do not check if a smaller reporting company) |  | Smaller Reporting Company | ☐
|  |  | Emerging Growth 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. ¨
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 16, 2023, there were outstanding 493,072,439 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. Factors that could materially affect our future results include, among other things:
•the impact of geopolitical or macroeconomic conditions on us, our clients and the countries and industries in which we operate, including from conflicts such as the war in Ukraine and the evolving events in Israel and Gaza, slower GDP growth or recession, capital markets volatility and inflation;
•the increasing prevalence of ransomware, supply chain and other forms of cyber attacks, and their potential to disrupt our operations, or the operations of our third party vendors, and result in the disclosure of confidential client or company information;
•the impact from lawsuits or investigations arising from errors and omissions, breaches of fiduciary duty or other claims against us in our capacity as a broker or investment advisor, including claims related to our investment business’ ability to execute timely trades;
•the financial and operational impact of complying with laws and regulations, including domestic and international sanctions regimes, anti-corruption laws such as the U.S. Foreign Corrupt Practices Act, U.K. Anti Bribery Act and cybersecurity, data privacy and artificial intelligence regulations;
•our ability to attract, retain and develop industry leading talent;
•our ability to compete effectively and adapt to competitive pressures in each of our businesses, including from disintermediation as well as technological change, digital disruption and other types of innovation such as artificial intelligence;
•our ability to manage potential conflicts of interest, including where our services to a client conflict, or are perceived to conflict, with the interests of another client or our own interests;
•the impact of changes in tax laws, guidance and interpretations, such as the implementation of the Organization for Economic Cooperation and Development international tax framework, or the increasing number of disagreements with and challenges by tax authorities in the current global tax environment; and
•the regulatory, contractual and reputational risks that arise based on insurance placement activities and insurer revenue streams.
The factors identified above are not exhaustive. Marsh & McLennan Companies, Inc., and its consolidated subsidiaries (the "Company") 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 the Company, 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 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.
2

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION | 4
ITEM 1. | FINANCIAL STATEMENTS (UNAUDITED) | 4
| CONSOLIDATED STATEMENTS OF INCOME | 4
| CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | 5
| CONSOLIDATED BALANCE SHEETS | 6
| CONSOLIDATED 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 | 37
| OF OPERATIONS |
ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK | 56
ITEM 4. | CONTROLS & PROCEDURES | 57
PART II. OTHER INFORMATION | 58
ITEM 1. | LEGAL PROCEEDINGS | 58
ITEM 1A. | RISK FACTORS | 58
ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS | 58
ITEM 3. | DEFAULTS UPON SENIOR SECURITIES | 58
ITEM 4. | MINE SAFETY DISCLOSURE | 58
ITEM 5. | OTHER INFORMATION | 58
ITEM 6. | EXHIBITS | 58

3

PART I. FINANCIAL INFORMATION
Item 1.Financial Statements.
MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

| Three Months Ended September 30, |  | Nine Months Ended September 30,
(In millions, except per share data) | 2023 |  | 2022 |  | 2023 |  | 2022
Revenue | $ | 5,382 |  |  | $ | 4,770 |  |  | $ | 17,182 |  |  | $ | 15,698 |
Expense: |  |  |  |  |  |  |
Compensation and benefits | 3,287 |  |  | 2,923 |  |  | 9,831 |  |  | 9,033 |
Other operating expenses | 1,099 |  |  | 1,056 |  |  | 3,172 |  |  | 3,065 |
Operating expenses | 4,386 |  |  | 3,979 |  |  | 13,003 |  |  | 12,098 |
Operating income | 996 |  |  | 791 |  |  | 4,179 |  |  | 3,600 |
Other net benefit credits | 62 |  |  | 57 |  |  | 180 |  |  | 178 |
Interest income | 16 |  |  | 4 |  |  | 40 |  |  | 6 |
Interest expense | (145) |  |  | (118) |  |  | (427) |  |  | (342) |
Investment income (loss) | 1 |  |  | (1) |  |  | 6 |  |  | 27 |
Income before income taxes | 930 |  |  | 733 |  |  | 3,978 |  |  | 3,469 |
Income tax expense | 192 |  |  | 181 |  |  | 941 |  |  | 853 |
Net income before non-controlling interests | 738 |  |  | 552 |  |  | 3,037 |  |  | 2,616 |
Less: Net income attributable to non-controlling interests | 8 |  |  | 6 |  |  | 37 |  |  | 32 |
Net income attributable to the Company | $ | 730 |  |  | $ | 546 |  |  | $ | 3,000 |  |  | $ | 2,584 |
Net income per share attributable to the Company: |  |  |  |  |  |  |
– Basic | $ | 1.48 |  |  | $ | 1.10 |  |  | $ | 6.07 |  |  | $ | 5.16 |
– Diluted | $ | 1.47 |  |  | $ | 1.08 |  |  | $ | 6.01 |  |  | $ | 5.11 |
Average number of shares outstanding: |  |  |  |  |  |  |
– Basic | 494 |  |  | 498 |  |  | 494 |  |  | 501 |
– Diluted | 499 |  |  | 503 |  |  | 499 |  |  | 506 |
Shares outstanding at September 30, | 493 |  |  | 497 |  |  | 493 |  |  | 497 |

The accompanying notes are an integral part of these unaudited consolidated statements.
4

MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)

| Three Months Ended September 30, |  | Nine Months Ended September 30,
(In millions) | 2023 |  | 2022 |  | 2023 |  | 2022
Net income before non-controlling interests | $ | 738 |  |  | $ | 552 |  |  | $ | 3,037 |  |  | $ | 2,616 |
Other comprehensive loss, before tax: |  |  |  |  |  |  |
Foreign currency translation adjustments | (473) |  |  | (895) |  |  | (131) |  |  | (1,928) |
Gain (loss) related to pension/post-retirement plans | 107 |  |  | 281 |  |  | (13) |  |  | 603 |
Other comprehensive loss before tax | (366) |  |  | (614) |  |  | (144) |  |  | (1,325) |
Income tax expense on other comprehensive loss | 39 |  |  | 71 |  |  | 2 |  |  | 148 |
Other comprehensive loss, net of tax | (405) |  |  | (685) |  |  | (146) |  |  | (1,473) |
Comprehensive income (loss) | 333 |  |  | (133) |  |  | 2,891 |  |  | 1,143 |
Less: comprehensive income attributable to non-controlling interest | 8 |  |  | 6 |  |  | 37 |  |  | 32 |
Comprehensive income (loss) attributable to the Company | $ | 325 |  |  | $ | (139) |  |  | $ | 2,854 |  |  | $ | 1,111 |

The accompanying notes are an integral part of these unaudited consolidated statements.
5

MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

(In millions, except share data) | (Unaudited) September 30, 2023 |  | December 31, 2022
ASSETS |  |  |
Current assets: |  |  |
Cash and cash equivalents | $ | 2,901 |  |  | $ | 1,442 |
Cash and cash equivalents held in a fiduciary capacity | 11,828 |  |  | 10,660 |
Receivables |  |  |
Commissions and fees | 5,909 |  |  | 5,293 |
Advanced premiums and claims | 102 |  |  | 103 |
Other | 664 |  |  | 616 |
| 6,675 |  |  | 6,012 |
Less-allowance for credit losses | (155) |  |  | (160) |
Net receivables | 6,520 |  |  | 5,852 |
Other current assets | 1,030 |  |  | 1,005 |
Total current assets | 22,279 |  |  | 18,959 |
Goodwill | 16,655 |  |  | 16,251 |
Other intangible assets | 2,498 |  |  | 2,537 |
Fixed assets (net of accumulated depreciation and amortization of $1,619 at September 30, 2023 and $1,531 at December 31, 2022) | 859 |  |  | 871 |
Pension related assets | 2,310 |  |  | 2,127 |
Right of use assets | 1,519 |  |  | 1,562 |
Deferred tax assets | 348 |  |  | 358 |
Other assets | 1,532 |  |  | 1,449 |
| $ | 48,000 |  |  | $ | 44,114 |

The accompanying notes are an integral part of these unaudited consolidated statements.
6

MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (Continued)

(In millions, except share data) | (Unaudited) September 30, 2023 |  | December 31, 2022
LIABILITIES AND EQUITY |  |  |
Current liabilities: |  |  |
Short-term debt | $ | 1,868 |  |  | $ | 268 |
Accounts payable and accrued liabilities | 3,143 |  |  | 3,278 |
Accrued compensation and employee benefits | 2,632 |  |  | 3,095 |
Current lease liabilities | 303 |  |  | 310 |
Accrued income taxes | 480 |  |  | 221 |
Dividends payable | 351 |  |  | — |
Fiduciary liabilities | 11,828 |  |  | 10,660 |
Total current liabilities | 20,605 |  |  | 17,832 |
Long-term debt | 11,781 |  |  | 11,227 |
Pension, post-retirement and post-employment benefits | 840 |  |  | 921 |
Long-term lease liabilities | 1,643 |  |  | 1,667 |
Liabilities for errors and omissions | 319 |  |  | 355 |
Other liabilities | 1,226 |  |  | 1,363 |
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, 2023 and December 31, 2022 | 561 |  |  | 561 |
Additional paid-in capital | 1,150 |  |  | 1,179 |
Retained earnings | 22,007 |  |  | 20,301 |
Accumulated other comprehensive loss | (5,460) |  |  | (5,314) |
Non-controlling interests | 180 |  |  | 229 |
| 18,438 |  |  | 16,956 |
Less – treasury shares, at cost, 67,666,591 shares at September 30, 2023 and 65,855,914 shares at December 31, 2022 | (6,852) |  |  | (6,207) |
Total equity | 11,586 |  |  | 10,749 |
| $ | 48,000 |  |  | $ | 44,114 |

The accompanying notes are an integral part of these unaudited consolidated statements.
7

MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

For the Nine Months Ended September 30, |  |  |
(In millions) | 2023 |  | 2022
Operating cash flows: |  |  |
Net income before non-controlling interests | $ | 3,037 |  |  | $ | 2,616 |
Adjustments to reconcile net income provided by operations: |  |  |
Depreciation and amortization of fixed assets and capitalized software | 270 |  |  | 259 |
Amortization of intangible assets | 257 |  |  | 258 |
Non-cash lease expense | 215 |  |  | 223 |
Adjustments and payments related to contingent consideration assets and liabilities | (19) |  |  | — |
Deconsolidation of Russian businesses | — |  |  | 39 |
Net gain on investments | (6) |  |  | (27) |
Net loss (gain) on disposition of assets | 18 |  |  | (112) |
Share-based compensation expense | 273 |  |  | 283 |
Changes in assets and liabilities: |  |  |
Net receivables | (670) |  |  | (745) |
Other assets | (98) |  |  | (14) |
Accrued compensation and employee benefits | (458) |  |  | (451) |
Provision for taxes, net of payments and refunds | 242 |  |  | 156 |
Contributions to pension and other benefit plans in excess of current year credit | (246) |  |  | (306) |
Other liabilities | (103) |  |  | 28 |
Operating lease liabilities | (237) |  |  | (244) |
Net cash provided by operations | 2,475 |  |  | 1,963 |
Financing cash flows: |  |  |
Purchase of treasury shares | (900) |  |  | (1,600) |
Net proceeds from issuance of commercial paper | — |  |  | 600 |
Issuance of commercial paper with maturity greater than 90 days | 146 |  |  | — |
Repayment of commercial paper with maturity greater than 90 days | (146) |  |  | — |
Proceeds from issuance of debt | 2,170 |  |  | — |
Repayments of debt | (12) |  |  | (14) |
Purchase of non-controlling interests | (139) |  |  | — |
Shares withheld for taxes on vested units – treasury shares | (145) |  |  | (194) |
Issuance of common stock from treasury shares | 165 |  |  | 89 |
Payments of deferred and contingent consideration for acquisitions | (187) |  |  | (144) |
Receipts of contingent consideration for dispositions | 2 |  |  | 3 |
Distributions of non-controlling interests | (18) |  |  | (20) |
Dividends paid | (944) |  |  | (840) |
Change in fiduciary liabilities | 1,223 |  |  | 2,148 |
Net cash provided by financing activities | 1,215 |  |  | 28 |
Investing cash flows: |  |  |
Capital expenditures | (296) |  |  | (367) |
Purchases of long term investments | (44) |  |  | (19) |
Sales of long term investments | 18 |  |  | 84 |
Dispositions | (18) |  |  | 138 |
Acquisitions, net of cash and cash held in a fiduciary capacity acquired | (619) |  |  | (213) |
Other, net | 16 |  |  | 14 |
Net cash used for investing activities | (943) |  |  | (363) |
Effect of exchange rate changes on cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity | (120) |  |  | (1,592) |
Increase in cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity | 2,627 |  |  | 36 |
Cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity at beginning of period | 12,102 |  |  | 11,374 |
Cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity at end of period | $ | 14,729 |  |  | $ | 11,410 |

Reconciliation of cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity to the Consolidated Balance Sheets
Balance at September 30, | 2023 |  | 2022
(In millions) |  |  |
Cash and cash equivalents | $ | 2,901 |  |  | $ | 802 |
Cash and cash equivalents held in a fiduciary capacity | 11,828 |  |  | 10,608 |
Total cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity | $ | 14,729 |  |  | $ | 11,410 |

The accompanying notes are an integral part of these unaudited consolidated statements.
8

MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EQUITY
(Unaudited)

| Three Months Ended September 30, |  | Nine Months Ended September 30,
(In millions, except per share data) | 2023 |  | 2022 |  | 2023 |  | 2022
COMMON STOCK |  |  |  |  |  |  |
Balance, beginning and end of period | $ | 561 |  |  | $ | 561 |  |  | $ | 561 |  |  | $ | 561 |
ADDITIONAL PAID-IN CAPITAL |  |  |  |  |  |  |
Balance, beginning of period | $ | 1,074 |  |  | $ | 1,044 |  |  | $ | 1,179 |  |  | $ | 1,112 |
Change in accrued stock compensation costs | 74 |  |  | 60 |  |  | (27) |  |  | (80) |
Issuance of shares under stock compensation plans and employee stock purchase plans | 2 |  |  | 7 |  |  | 68 |  |  | 79 |
Purchase of non-controlling interest | — |  |  | — |  |  | (70) |  |  | — |
Balance, end of period | $ | 1,150 |  |  | $ | 1,111 |  |  | $ | 1,150 |  |  | $ | 1,111 |
RETAINED EARNINGS |  |  |  |  |  |  |
Balance, beginning of period | $ | 21,980 |  |  | $ | 19,880 |  |  | $ | 20,301 |  |  | $ | 18,389 |
Net income attributable to the Company | 730 |  |  | 546 |  |  | 3,000 |  |  | 2,584 |
Dividend equivalents declared | (1) |  |  | (3) |  |  | (9) |  |  | (10) |
Dividends declared | (702) |  |  | (586) |  |  | (1,285) |  |  | (1,126) |
Balance, end of period | $ | 22,007 |  |  | $ | 19,837 |  |  | $ | 22,007 |  |  | $ | 19,837 |
ACCUMULATED OTHER COMPREHENSIVE LOSS |  |  |  |  |  |  |
Balance, beginning of period | $ | (5,055) |  |  | $ | (5,363) |  |  | $ | (5,314) |  |  | $ | (4,575) |
Other comprehensive loss, net of tax | (405) |  |  | (685) |  |  | (146) |  |  | (1,473) |
Balance, end of period | $ | (5,460) |  |  | $ | (6,048) |  |  | $ | (5,460) |  |  | $ | (6,048) |
TREASURY SHARES |  |  |  |  |  |  |
Balance, beginning of period | $ | (6,599) |  |  | $ | (5,429) |  |  | $ | (6,207) |  |  | $ | (4,478) |
Issuance of shares under stock compensation plans and employee stock purchase plans | 47 |  |  | 33 |  |  | 255 |  |  | 182 |
Purchase of treasury shares | (300) |  |  | (500) |  |  | (900) |  |  | (1,600) |
Balance, end of period | $ | (6,852) |  |  | $ | (5,896) |  |  | $ | (6,852) |  |  | $ | (5,896) |
NON-CONTROLLING INTERESTS |  |  |  |  |  |  |
Balance, beginning of period | $ | 178 |  |  | $ | 224 |  |  | $ | 229 |  |  | $ | 213 |
Net income attributable to non-controlling interests | 8 |  |  | 6 |  |  | 37 |  |  | 32 |
Net non-controlling interests acquired | — |  |  | — |  |  | (69) |  |  | — |
Distributions and other changes | (6) |  |  | (4) |  |  | (17) |  |  | (19) |
Balance, end of period | $ | 180 |  |  | $ | 226 |  |  | $ | 180 |  |  | $ | 226 |
TOTAL EQUITY | $ | 11,586 |  |  | $ | 9,791 |  |  | $ | 11,586 |  |  | $ | 9,791 |
Dividends declared per share | $ | 1.42 |  |  | $ | 1.18 |  |  | $ | 2.60 |  |  | $ | 2.25 |

The accompanying notes are an integral part of these unaudited consolidated statements.
9

MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Nature of Operations
Marsh & McLennan Companies, Inc., and its consolidated subsidiaries (the "Company"), a global professional services firm, is organized based on the different services that it offers. Under this structure, the Company’s two business segments are Risk and Insurance Services and Consulting.
The Risk and Insurance Services segment ("RIS") includes risk management activities (risk advice, risk transfer, and risk control and mitigation solutions) as well as insurance and reinsurance broking and services for businesses, public entities, insurance companies, associations, professional services organizations, and private clients. The Company conducts business in this segment through Marsh and Guy Carpenter. Marsh provides data-driven risk advisory services and insurance solutions to commercial and consumer clients. Guy Carpenter develops advanced risk, reinsurance and capital strategies that help clients grow profitably and identify and capitalize on emerging opportunities.
The Consulting segment includes health, wealth and career solutions and products, and specialized management, strategic, economic and brand consulting services. The Company conducts business in this segment through Mercer and Oliver Wyman Group. Mercer delivers advice and technology-driven solutions that help organizations redefine the future of work, shape retirement and investment outcomes, and advance health and well-being for a changing workforce. Oliver Wyman Group serves as critical strategic, economic and brand advisor to private sector and governmental clients.
2. Principles of Consolidation and Other Matters
The Company prepared the consolidated financial statements included herein pursuant to the rules and regulations of the Securities and Exchange Commission. For interim filings, certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (U.S.) have been omitted pursuant to such rules and regulations. The Company believes that the information and disclosures presented are adequate to make such information and disclosures not misleading. These consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 (the "2022 Form 10-K").
The accompanying consolidated financial statements include all wholly-owned and majority owned subsidiaries. All significant inter-company transactions and balances have been eliminated.
The financial information contained herein reflects all normal recurring adjustments which are, in the opinion of management, necessary for a fair presentation of the Company’s consolidated financial statements as of and for the nine months ended September 30, 2023 and 2022.
The preparation of the consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expense during the reporting period.
On an ongoing basis, the Company evaluates its estimates, judgments and methodologies. The estimates are based on historical experience and on various other assumptions that the Company believes are reasonable.
Such matters include:
•estimates of revenue;
•impairment assessments and charges;
•recoverability of long-lived assets;
•liabilities for errors and omissions;
•deferred tax assets, uncertain tax positions and income tax expense;
•share-based and incentive compensation expense;
•the allowance for current expected credit losses on receivables;
10

•useful lives assigned to long-lived assets, and depreciation and amortization; and
•fair value estimates of contingent consideration receivable or payable related to acquisitions or dispositions.
The Company believes these estimates are reasonable based on information currently available at the time they are made. The Company also considered the potential impact of macroeconomic factors including inflation, volatility in interest rates, and the war in Ukraine to its customer base in various industries and geographies. Insurance exposures subject to variable factors are subject to mid-term and end-of-term adjustments, as well as policy audits, which may reduce premiums and corresponding commissions. Estimates were updated based on internal and industry specific economic data. Actual results may differ from these estimates.
Cash and Cash Equivalents
Cash and cash equivalents primarily consist of certificates of deposit and time deposits, with original maturities of three months or less, and money market funds. The estimated fair value of the Company's cash and cash equivalents approximates their carrying value. The Company is required to maintain operating funds primarily related to regulatory requirements outside of the U.S. or as collateral under captive insurance arrangements. At September 30, 2023, the Company maintained $448 million compared to $348 million at December 31, 2022 related to these regulatory requirements.
Allowance for Credit Losses on Accounts Receivable
The Company’s policy for providing an allowance for credit losses on its accounts receivable is based on a combination of factors, including historical write-offs, aging of balances, and other qualitative and quantitative analyses. The charge related to expected credit losses was not material to the consolidated statements of income for the three and nine months ended September 30, 2023 and 2022, respectively.
Investments
The caption "Investment income" in the consolidated statements of income comprises realized and unrealized gains and losses from investments recognized in earnings. It includes, when applicable, other than temporary declines in the value of securities, mark-to-market increases or decreases in equity investments with readily determinable fair values and equity method gains or losses on the Company's investments in private equity funds.
The Company holds investments in certain private equity funds. Investments in private equity funds are accounted for in accordance with the equity method of accounting using a consistently applied three-month lag period adjusted for any known significant changes from the lag period to the reporting date of the Company. The underlying private equity funds follow investment company accounting, where investments within the fund are carried at fair value. Investment gains or losses for its proportionate share of the change in fair value of the funds are recorded in earnings. Investments accounted for in accordance with the equity method of accounting are included in other assets in the consolidated balance sheets.
The Company recorded net investment income of $1 million and $6 million for the three and nine months ended September 30, 2023, respectively, compared to net investment loss of $1 million and net investment income of $27 million, respectively, for the corresponding periods in the prior year.
Income Taxes
The Company's effective tax rate for the three months ended September 30, 2023 was 20.6%, compared with 24.6% for the corresponding quarter of 2022. The effective tax rate for the nine months ended September 30, 2023 and 2022 were 23.7% and 24.6%, respectively.
The tax rate in each period reflects the impact of discrete tax items such as excess tax benefits related to share-based compensation, enacted tax legislation, changes in uncertain tax positions, deferred tax adjustments, nontaxable adjustments related to contingent consideration for acquisitions, and valuation allowances for certain tax credits and attributes. The tax rate for the three and nine months ended September 30, 2023 reflects the previously enacted change in the United Kingdom (U.K.) corporate income tax rate from 19% to 25%, effective April 1, 2023. The blended U.K. statutory tax rate for 2023 is 23.5%.
During the third quarter of 2023, the Company released a valuation allowance related to the realizability of deferred tax assets for its non-U.S. operations of $48 million as a discrete tax benefit, primarily due to the sustained profitability of its operations. This was the most significant discrete item for the quarter, reducing the effective tax rate by 4.8%. For the three months ended September 30, 2023, the effective tax rate was also
11

reduced by 1.0% from the impact of the excess tax benefit related to share-based payments. For the nine months ended September 30, 2023, the valuation allowance release and the excess tax benefit related to share-based payments were the most significant discrete items, reducing the effective tax rate by 1.1% and 1.2%, respectively.
The excess tax benefit related to share-based payments was the most significant discrete item for the three and nine months ended September 30, 2022, reducing the effective tax rate by 0.9% and 1.2%, respectively.
The Company's tax rate reflects its income, statutory tax rates, and tax planning in the various jurisdictions in which it operates. Significant judgment is required in determining the annual effective tax rate and in evaluating uncertain tax positions.
Losses in one jurisdiction, generally, cannot offset earnings in another, and within certain jurisdictions profits and losses may not offset between entities. Consequently, losses in certain jurisdictions may require valuation allowances affecting the effective tax rate, depending on estimates of the realizability of associated deferred tax assets. The tax rate is also sensitive to changes in unrecognized tax benefits, including the impact of settled tax audits and expired statutes of limitations.
The Company reports a liability for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in tax returns. The Company's gross unrecognized tax benefits were $134 million at September 30, 2023, and $97 million at December 31, 2022. It is reasonably possible that the total amount of unrecognized tax benefits could decrease up to approximately $79 million within the next twelve months due to settlement of audits and expirations of statutes of limitations.
Changes in tax laws, rulings, policies, or related legal and regulatory interpretations occur frequently and may have significant favorable or adverse impacts on our effective tax rate. In July 2023, the U.K. enacted legislation to implement Pillar 2 the Organization for Economic Cooperation and Development's ("OECD") framework, effective from January 1, 2024. This minimum tax will be treated as a period cost in future years and will not impact operating results for 2023. The Company is continuing to monitor legislative developments, especially in the European Union (E.U.) countries, and is in the process of evaluating the potential impact of the U.K. and other legislation on its results of future operations.
On August 16, 2022, the Inflation Reduction Act of 2022 ("IRA") was enacted into law. The Company evaluated the provisions of the new legislation, the most significant of which are the corporate alternative minimum tax and the share repurchase tax. The IRA was effective as of January 1, 2023 and does not have a significant impact on the Company's financial results of operations for the current year.
Restructuring Costs
Charges associated with restructuring activities are recognized in accordance with applicable accounting guidance which includes accounting for disposal or exit activities, guidance related to impairment of right-of-use ("ROU") assets related to real estate leases, as well as other costs resulting from accelerated depreciation or amortization of leasehold improvements and other property and equipment.
Severance and related costs are recognized based on amounts due under established severance plans or estimates of one-time benefits that will be provided. Typically, severance benefits are recognized when the impacted colleagues are notified of their expected termination and such termination is expected to occur within the legally required notification period. These costs are included in compensation and benefits in the consolidated statements of income.
Costs for real estate consolidation are recognized based on the type of cost, and the expected future use of the facility. For locations where the Company does not expect to sub-lease the property, the amortization of any ROU asset is accelerated from the decision date to the cease use date. For locations where the Company expects to sub-lease the properties subsequent to its vacating the property, the ROU asset is reviewed for potential impairment at the earlier of the cease use date or the date a sub-lease is signed. To determine the amount of impairment, the fair value of the ROU asset is determined based on the present value of the estimated net cash flows related to the property. Contractual costs outside of the ROU asset are recognized based on the net present value of expected future cash outflows for which the Company will not receive any benefit. Such amounts are reliant on estimates of future sub-lease income to be received and future contractual costs to be incurred. These costs are included in other operating expenses in the consolidated statements of income.
Other costs related to restructuring, such as moving, legal or consulting costs are recognized as incurred. These costs are included in other operating expenses in the consolidated statements of income.
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Foreign Currency
The financial statements of our international subsidiaries are translated from functional currency to U.S. dollars using month-end exchange rates for assets and liabilities, and average monthly exchange rates during the period for revenues and expenses. Translation adjustments are recorded in accumulated other comprehensive income (loss) ("AOCI") within the consolidated statements of equity. Foreign exchange transaction gains and losses resulting from the conversion of the transaction currency to functional currency are included in operating income in the consolidated statements of income.
3. Revenue
The core principle of the revenue recognition guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.
To achieve this principle, the entity applies the following steps: identify the contract(s) with the customer, identify the performance obligations in the contract(s), determine the transaction price, allocate the transaction price to the performance obligations in the contract, and recognize revenue when (or as) the entity satisfies a performance obligation. In accordance with the accounting guidance, a performance obligation is satisfied either at a "point in time" or "over time", depending on the nature of the product or service provided, and the specific terms of the contract with customers.
Other revenue included in the consolidated statements of income that is not from contracts with customers is less than 2% of total revenue and is not presented as a separate line item.
The Company's revenue policies are provided in more detail in Note 2, Revenue, in the Form 2022 10-K.
The following table disaggregates components of the Company's revenue:

| Three Months Ended September 30, |  | Nine Months Ended September 30,
(In millions) | 2023 | 2022 |  | 2023 | 2022
Marsh: |  |  |  |  |
EMEA (a) (b) | $ | 692 |  | $ | 615 |  |  | $ | 2,482 |  | $ | 2,264 |
Asia Pacific (a) | 311 |  | 286 |  |  | 980 |  | 927 |
Latin America | 134 |  | 118 |  |  | 386 |  | 340 |
Total International | 1,137 |  | 1,019 |  |  | 3,848 |  | 3,531 |
U.S./Canada | 1,563 |  | 1,451 |  |  | 4,634 |  | 4,263 |
Total Marsh | 2,700 |  | 2,470 |  |  | 8,482 |  | 7,794 |
Guy Carpenter | 359 |  | 328 |  |  | 2,006 |  | 1,849 |
Subtotal | 3,059 |  | 2,798 |  |  | 10,488 |  | 9,643 |
Fiduciary interest income | 131 |  | 40 |  |  | 330 |  | 57 |
Total Risk and Insurance Services | $ | 3,190 |  | $ | 2,838 |  |  | $ | 10,818 |  | $ | 9,700 |
Mercer: |  |  |  |  |
Wealth (c) | $ | 635 |  | $ | 561 |  |  | $ | 1,853 |  | $ | 1,775 |
Health (d) | 496 |  | 451 |  |  | 1,559 |  | 1,562 |
Career | 294 |  | 272 |  |  | 731 |  | 679 |
Total Mercer | 1,425 |  | 1,284 |  |  | 4,143 |  | 4,016 |
Oliver Wyman Group (b) | 781 |  | 667 |  |  | 2,266 |  | 2,029 |
Total Consulting | $ | 2,206 |  | $ | 1,951 |  |  | $ | 6,409 |  | $ | 6,045 |

(a) In the first quarter of 2023, the Company began reporting the Marsh India operations in EMEA. Prior year results for India have been reclassified from Asia Pacific to EMEA for comparative purposes.
(b) Revenue for the nine months ended September 30, 2022, includes the loss on deconsolidation of the Company's Russian businesses at Marsh and Oliver Wyman Group of $27 million and $12 million, respectively.
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(c) Revenue for the nine months ended September 30, 2023, includes the loss on sale of an individual financial advisory business in Canada of $17 million.
(d) Revenue for the nine months ended September 30, 2022, includes a gain from the sale of the Mercer U.S. affinity business of $112 million.
The following table provides contract assets and contract liabilities information from contracts with customers:

(In millions) | September 30, 2023 |  | December 31, 2022
Contract assets | $ | 398 |  |  | $ | 335 |
Contract liabilities | $ | 876 |  |  | $ | 837 |

The Company records accounts receivable when the right to consideration is unconditional, subject only to the passage of time. Contract assets primarily relate to quota share reinsurance brokerage and contingent insurer revenue. The Company does not have the right to bill and collect revenue for quota share brokerage until the underlying policies written by the ceding insurer attach to the treaty. Estimated revenue related to the achievement of volume or loss ratio metrics cannot be billed or collected until all related policy placements are completed and the contingency is resolved.
Contract assets are included in other current assets in the Company's consolidated balance sheets. Contract liabilities primarily relate to the advance consideration received from customers. Contract liabilities are included in current liabilities in the Company's consolidated balance sheets. Revenue recognized for the three and nine months ended September 30, 2023 that was included in the contract liability balance at the beginning of each of those periods was $187 million and $698 million, respectively, compared to revenue recognized of $75 million and $529 million, respectively, for the corresponding periods in the prior year.
The amount of revenue recognized for the three and nine months ended September 30, 2023 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 $20 million and $64 million, respectively, and $13 million and $74 million, respectively, for the corresponding periods in the prior year.
The Company applies the practical expedient and does not disclose the value of unsatisfied performance obligations for (1) contracts with original contract terms of one year or less and (2) contracts where the Company has the right to invoice for services performed. 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 $221 million, primarily related to Mercer. The Company expects revenue in 2023, 2024, 2025, 2026, and 2027 and beyond of $88 million, $62 million, $37 million, $22 million and $12 million, respectively, related to these performance obligations.
4. Fiduciary Assets and Liabilities
The Company, in its capacity as an insurance broker or agent, generally collects premiums from insureds and after deducting its commissions, remits the premiums to the respective insurance underwriters. The Company also collects claims or refunds from underwriters on behalf of insureds. Unremitted insurance premiums and claims proceeds are held by the Company in a fiduciary capacity. The Company's fiduciary assets primarily include bank or short-term time deposits and liquid money market funds, classified as cash and cash equivalents. Since fiduciary assets are not available for corporate use, they are shown separately in the consolidated balance sheets as cash and cash equivalents held in a fiduciary capacity, with a corresponding amount in current liabilities.
Risk and Insurance Services revenue includes interest on fiduciary funds of $131 million and $330 million for the three and nine months ended September 30, 2023, respectively, and $40 million and $57 million for the three and nine months ended September 30, 2022, respectively.
Net uncollected premiums and claims and the related payables were $14.4 billion at September 30, 2023, and $13.0 billion at December 31, 2022. 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.
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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.
The Company, through its Mercer subsidiary, manages assets in trusts or funds for which Mercer’s management or trustee fee is not considered a variable interest, since the fees are commensurate with the level of effort required to provide those services. Mercer is not the primary beneficiary of these trusts or funds. Mercer’s maximum exposure to loss of its interests is, therefore, limited to collection of its fees.
Reclassification of Fiduciary Assets and Liabilities
In the second quarter of 2023, the Company changed the presentation of fiduciary assets and liabilities on the consolidated balance sheets. Cash and cash equivalents held in a fiduciary capacity was reclassified from an offset to fiduciary liabilities to current assets, with the corresponding fiduciary liabilities reclassified to current liabilities. The reclassification had no impact on the Company’s total equity at December 31, 2022. The presentation in the December 31, 2022 consolidated balance sheet was conformed to the current presentation as follows:

(In millions) | As Reported | As Reclassified
Total current assets | $ | 8,299 |  | $ | 18,959 |
Total assets | $ | 33,454 |  | $ | 44,114 |
Total current liabilities | $ | 7,172 |  | $ | 17,832 |

As a result of reclassifying cash and cash equivalents held in a fiduciary capacity, total RIS assets and total Consulting assets at December 31, 2022 increased to $33,022 million and $10,446 million, respectiv ely.
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 September 30, |  | Nine Months Ended September 30,
(In millions, except per share data) | 2023 | 2022 |  | 2023 | 2022
Net income before non-controlling interests | $ | 738 |  | $ | 552 |  |  | $ | 3,037 |  | $ | 2,616 |
Less: Net income attributable to non-controlling interests | 8 |  | 6 |  |  | 37 |  | 32 |
Net income attributable to the Company | $ | 730 |  | $ | 546 |  |  | $ | 3,000 |  | $ | 2,584 |
Basic weighted average common shares outstanding | 494 |  | 498 |  |  | 494 |  | 501 |
Dilutive effect of potentially issuable common shares | 5 |  | 5 |  |  | 5 |  | 5 |
Diluted weighted average common shares outstanding | 499 |  | 503 |  |  | 499 |  | 506 |
Average stock price used to calculate common stock equivalents | $ | 191.66 |  | $ | 160.14 |  |  | $ | 178.64 |  | $ | 159.35 |

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6. Supplemental Disclosures to the Consolidated Statements of Cash Flows
The following table provides additional information concerning acquisitions, interest and income taxes paid for the nine months ended September 30, 2023 and 2022:

(In millions) | 2023 |  | 2022
Assets acquired, excluding cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity | $ | 760 |  |  | $ | 236 |
Acquisition-related deposit | — |  |  | 24 |
Fiduciary liabilities assumed | (14) |  |  | (2) |
Liabilities assumed | (98) |  |  | (28) |
Contingent/deferred purchase consideration | (29) |  |  | (17) |
Net cash outflow for acquisitions | $ | 619 |  |  | $ | 213 |

(In millions) |  | 2023 |  | 2022
Interest paid |  | $ | 427 |  |  | $ | 388 |
Income taxes paid, net of refunds |  | $ | 699 |  |  | $ | 697 |

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

For the Nine Months Ended September 30,
(In millions) | 2023 |  | 2022
Operating: |  |  |
Contingent consideration payments for prior year acquisitions | $ | (41) |  |  | $ | (38) |
Receipt of contingent consideration for dispositions | 1 |  |  | — |
Acquisition/disposition related net charges for adjustments | 21 |  |  | 38 |
Adjustments and payments related to contingent consideration | $ | (19) |  |  | $ | — |
Financing: |  |  |
Contingent consideration for prior year acquisitions | $ | (135) |  |  | $ | (28) |
Deferred consideration related to prior year acquisitions | (52) |  |  | (116) |
Payments of deferred and contingent consideration for acquisitions | $ | (187) |  |  | $ | (144) |
Receipts of contingent consideration for dispositions | $ | 2 |  |  | $ | 3 |

The Company had non-cash issuances of common stock under its share-based payment plan of $304 million and $366 million for the nine months ended September 30, 2023 and 2022, respectively.
The Company recorded share-based compensation expense related to restricted stock units, performance stock units and stock options of $82 million and $273 million for the three and nine months ended September 30, 2023, respectively, and $89 million and $283 million for the three and nine months ended September 30, 2022, respectively.
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7. Other Comprehensive (Loss) Income
The changes, net of tax, in the balances of each component of AOCI for the three and nine months ended September 30, 2023 and 2022, including amounts reclassified out of AOCI, are as follows:

(In millions) |  |  | Pension/Post-Retirement Plans Gains (Losses) |  | Foreign Currency Translation Adjustments |  | Total
Balance as of July 1, 2023 |  |  | $ | (2,811) |  |  | $ | (2,244) |  |  | $ | (5,055) |
Other comprehensive (loss) income before reclassifications |  |  | 76 |  |  | (485) |  |  | (409) |
Amounts reclassified from accumulated other comprehensive income |  |  | 4 |  |  | — |  |  | 4 |
Net current period other comprehensive income (loss) |  |  | 80 |  |  | (485) |  |  | (405) |
Balance as of September 30, 2023 (a) |  |  | $ | (2,731) |  |  | $ | (2,729) |  |  | $ | (5,460) |

(In millions) |  |  | Pension/Post-Retirement Plans Gains (Losses) |  | Foreign Currency Translation Adjustments |  | Total
Balance as of July 1, 2022 |  |  | $ | (2,957) |  |  | $ | (2,406) |  |  | $ | (5,363) |
Other comprehensive income (loss) before reclassifications |  |  | 182 |  |  | (895) |  |  | (713) |
Amounts reclassified from accumulated other comprehensive income |  |  | 28 |  |  | — |  |  | 28 |
Net current period other comprehensive income (loss) |  |  | 210 |  |  | (895) |  |  | (685) |
Balance as of September 30, 2022 (a) |  |  | $ | (2,747) |  |  | $ | (3,301) |  |  | $ | (6,048) |

(a) At September 30, 2023 and 2022, balances are net of deferred tax assets in pension and post-retirement plans gains (losses) of $1,344 million and $1,352 million, respectively, and net of deferred tax liability of $13 million and deferred tax assets of $21 million in foreign currency translation adjustments, respectively.

(In millions) |  |  | Pension/Post-Retirement Plans Gains (Losses) |  | Foreign Currency Translation Adjustments |  | Total
Balance as of January 1, 2023 |  |  | $ | (2,721) |  |  | $ | (2,593) |  |  | $ | (5,314) |
Other comprehensive (loss) income before reclassifications |  |  | (20) |  |  | (136) |  |  | (156) |
Amounts reclassified from accumulated other comprehensive loss |  |  | 10 |  |  | — |  |  | 10 |
Net current period other comprehensive loss |  |  | (10) |  |  | (136) |  |  | (146) |
Balance as of September 30, 2023 (a) |  |  | $ | (2,731) |  |  | $ | (2,729) |  |  | $ | (5,460) |

(In millions) |  |  | Pension/Post-Retirement Plans Gains (Losses) |  | Foreign Currency Translation Adjustments |  | Total
Balance as of January 1, 2022 |  |  | $ | (3,202) |  |  | $ | (1,373) |  |  | $ | (4,575) |
Other comprehensive income (loss) before reclassifications |  |  | 371 |  |  | (1,928) |  |  | (1,557) |
Amounts reclassified from accumulated other comprehensive loss |  |  | 84 |  |  | — |  |  | 84 |
Net current period other comprehensive income (loss) |  |  | 455 |  |  | (1,928) |  |  | (1,473) |
Balance as of September 30, 2022 (a) |  |  | $ | (2,747) |  |  | $ | (3,301) |  |  | $ | (6,048) |

(a) At September 30, 2023 and 2022, balances are net of deferred tax assets in pension and post-retirement plans gains (losses) of $1,344 million and $1,352 million, respectively, and net of deferred tax liability of $13 million and deferred tax assets of $21 million in foreign currency translation adjustments, respectively.
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The components of other comprehensive (loss) income for the three and nine months ended September 30, 2023 and 2022 are as follows:

Three Months Ended September 30, | 2023 |  | 2022
(In millions) | Pre-Tax | Tax (Credit) | Net of Tax |  | Pre-Tax | Tax (Credit) | Net of Tax
Foreign currency translation adjustments | $ | (473) |  | $ | 12 |  | $ | (485) |  |  | $ | (895) |  | $ | — |  | $ | (895) |
Pension and post-retirement plans: |  |  |  |  |  |  |
Amortization of (gains) losses included in net benefit (credit) cost: |  |  |  |  |  |  |
Net actuarial losses (a) | 5 |  | 1 |  | 4 |  |  | 37 |  | 9 |  | 28 |
Subtotal | 5 |  | 1 |  | 4 |  |  | 37 |  | 9 |  | 28 |
Foreign currency translation adjustments | 102 |  | 26 |  | 76 |  |  | 247 |  | 63 |  | 184 |
Effect of remeasurement | — |  | — |  | — |  |  | (2) |  | — |  | (2) |
Other adjustments | — |  | — |  | — |  |  | (1) |  | (1) |  | — |
Pension/post-retirement plans gains | 107 |  | 27 |  | 80 |  |  | 281 |  | 71 |  | 210 |
Other comprehensive (loss) income | $ | (366) |  | $ | 39 |  | $ | (405) |  |  | $ | (614) |  | $ | 71 |  | $ | (685) |

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

Nine Months Ended September 30, | 2023 |  | 2022
(In millions) | Pre-Tax | Tax (Credit) | Net of Tax |  | Pre-Tax | Tax (Credit) | Net of Tax
Foreign currency translation adjustments | $ | (131) |  | $ | 5 |  | $ | (136) |  |  | $ | (1,928) |  | $ | — |  | $ | (1,928) |
Pension/post-retirement plans: |  |  |  |  |  |  |
Amortization of (gains) losses included in net benefit (credit) cost: |  |  |  |  |  |  |
Prior service credits (a) | (1) |  | — |  | (1) |  |  | (1) |  | — |  | (1) |
Net actuarial losses (a) | 15 |  | 4 |  | 11 |  |  | 114 |  | 29 |  | 85 |
Subtotal | 14 |  | 4 |  | 10 |  |  | 113 |  | 29 |  | 84 |
Foreign currency translation adjustments | (20) |  | (5) |  | (15) |  |  | 499 |  | 123 |  | 376 |
Effect of remeasurement | — |  | — |  | — |  |  | 8 |  | 1 |  | 7 |
Effect of settlement | — |  | — |  | — |  |  | 2 |  | — |  | 2 |
Other adjustments | (7) |  | (2) |  | (5) |  |  | (19) |  | (5) |  | (14) |
Pension/post-retirement plans (losses) gains | (13) |  | (3) |  | (10) |  |  | 603 |  | 148 |  | 455 |
Other comprehensive (loss) income | $ | (144) |  | $ | 2 |  | $ | (146) |  |  | $ | (1,325) |  | $ | 148 |  | $ | (1,473) |

(a) Included in other net benefit credits in the consolidated statements of income. Income tax expense on net actuarial losses are included in income tax expense.
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8. Acquisitions and Dispositions
The Company’s acquisitions have been accounted for as business combinations. Net assets and results of operations are included in the Company’s consolidated financial statements commencing at the respective purchase closing dates. In connection with acquisitions, the Company records the estimated values of the net tangible assets and the identifiable intangible assets purchased, which typically consist of customer relationships, developed technology, trademarks and non-compete agreements. The valuation of purchased intangible assets involves significant estimates and assumptions. The Company estimates the fair value of purchased intangible assets, primarily using the income approach, by determining the present value of future cash flows over the remaining economic life of the respective assets. The significant estimates and assumptions used in this approach include the determination of the discount rate, economic life, future revenue growth rates, expected account attrition rates and earnings margins. Refinement and completion of final valuation of net assets acquired could affect the carrying value of tangible assets, goodwill and identifiable intangible assets.
The Risk and Insurance Services segment completed eight acquisitions during the nine months ended September 30, 2023:
•May – Marsh acquired Austral Insurance Brokers Pty Ltd, an Australia-based insurance broker that provides risk advice services and business insurance solutions in the labor hire, mining services, transport, manufacturing, agribusiness, retail and professional services sectors.
•June – Guy Carpenter acquired Re Solutions, an Israel-based reinsurance broker with actuarial and analytics capabilities and solutions, including an extensive facultative reinsurance offering, and Marsh & McLennan Agency ("MMA") acquired SOLV Risk Solutions, LLC, a Texas-based risk management advisory services firm.
•July – MMA acquired Integrity HR, Inc., a Kentucky-based human resources consulting firm and Trideo Systems, an Illinois-based risk management information systems provider for health care organizations; and Marsh acquired Asprose Corredora de Seguros, a Costa Rica-based insurance broker that provides insurance brokerage and risk advisory services to commercial organizations.
•August – MMA acquired Graham Company, a Pennsylvania-based risk management consultancy and insurance and employee benefits broker, specializing in construction, real estate, manufacturing and distribution, health and human services and professional services.
•September – MMA acquired Blue Water Insurance LLC, a Kentucky-based employee health and benefits insurance broker.
The Consulting segment completed four acquisitions for the nine months ended September 30, 2023:
•March – Mercer acquired Leapgen LLC, a Minnesota-based human resources consulting technology advisory firm focused on digital strategy and transformation, workforce solutions, and improving employee experience.
•April – Mercer acquired Westpac Banking Corporation’s ("Westpac") financial advisory business, Advance Asset Management, and completed the transfer from Westpac of BT Financial Group's personal and corporate pension funds to the Mercer Super Trust managed by Mercer Australia (referred to collectively, as the "Westpac Transaction"). Oliver Wyman Group acquired the business of Gorman Actuarial, Inc., a Massachusetts-based life and health actuarial consultant business.
•July – Oliver Wyman Group acquired the actuarial consulting business of ISC Strategies Consulting, Inc., a Florida-based life insurance and actuarial consulting firm.
Total purchase consideration for acquisitions made during the nine months ended September 30, 2023 was $711 million, which consisted of cash paid of $682 million and deferred purchase and estimated contingent consideration of $29 million. Contingent consideration arrangements are generally based on earnings before interest, tax, depreciation and amortization ("EBITDA") or revenue targets over a period of two to four years. During the nine months ended September 30, 2023, the Company also paid $52 million of deferred purchase consideration and $176 million of contingent consideration related to acquisitions made in prior years. Estimated fair values of assets acquired and liabilities assumed are subject to adjustment until purchase accounting is finalized.
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The following table presents the preliminary allocation of purchase consideration to the assets acquired and liabilities assumed in 2023, based on the estimated fair values for the acquisitions as of their respective acquisition dates. Amounts in the table primarily reflect the impact of the Westpac Transaction and the acquisition of Graham Company.

Acquisitions through September 30, 2023 |  |  |
(In millions) |  |  |
Cash | $ | 682 |  |  |
Estimated fair value of deferred/contingent consideration | 29 |  |  |
Total consideration | $ | 711 |  |  |
Allocation of purchase price: |  |  |
Cash and cash equivalents | $ | 27 |  |  |
Cash and cash equivalents held in a fiduciary capacity | 14 |  |  |
Net receivables | 28 |  |  |
Other current assets | 4 |  |  |
Goodwill | 480 |  |  |
Other intangible assets | 255 |  |  |
Fixed assets, net | 2 |  |  |
Right of use assets | 12 |  |  |
Other assets | 1 |  |  |
Total assets acquired | 823 |  |  |
Current liabilities | 52 |  |  |
Fiduciary liabilities | 14 |  |  |
Other liabilities | 46 |  |  |
Total liabilities assumed | 112 |  |  |
Net assets acquired | $ | 711 |  |  |

The purchase price allocation for assets acquired and liabilities assumed is based on estimates that are preliminary in nature and subject to adjustments, which could be material. Any necessary adjustments must be finalized during the measurement period, which for a particular asset, liability, or non-controlling interest ends once the acquirer determines that either (1) the necessary information has been obtained or (2) the information is not available. However, the measurement period for all items is limited to one year from the acquisition date.
Items subject to change include:
•amounts of intangible assets, fixed assets, capitalized software assets and right-of-use assets, subject to finalization of valuation efforts;
•amounts for contingencies, pending the finalization of the Company’s assessment of the portfolio of contingencies;
•amounts for deferred tax assets and liabilities, pending the finalization of valuations of the assets acquired, liabilities assumed and associated goodwill discussed below; and
•amounts for income tax assets, receivables and liabilities, pending the filing of the acquired companies' pre-acquisition income tax returns and receipt of information from taxing authorities which may change certain estimates and assumptions used.
The estimation of fair value requires numerous judgments, assumptions and estimates about future events and uncertainties, which could materially impact these values, and the related amortization, where applicable, in the Company’s results of operations.
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The following table provides information about other intangible assets acquired in 2023:

Other intangible assets through September 30, 2023 (In millions) |  | Amount |  | Weighted Average Amortization Period
Client relationships |  | $ | 246 |  |  | 13.0 years
Other |  | 9 |  |  | 5.0 years
Total other intangible assets |  | $ | 255 |  |  |

The consolidated statements of income include the results of operations of acquired companies since their respective acquisition dates. The consolidated statements of income for the three and nine months ended September 30, 2023, include revenue of approximately $50 million and $91 million, respectively, and operating income of $5 million and $14 million, respectively, for acquisitions made in 2023. The consolidated statements of income for the three and nine months ended September 30, 2022 include revenue of approximately $16 million and $22 million, respectively, and operating loss of $1 million for both three and nine months ended September 30, 2022, for acquisitions made in 2022.
In relation to the Westpac Transaction, the Company incurred approximately $5 million and $32 million of integration expenses for the three and nine months ended September 30, 2023, respectively, primarily for technology, consulting, legal and people related costs. These costs are included in other operating expenses in the Company's consolidated statements of income.
Dispositions
In January 2023, the Company entered into an agreement for the sale of an individual financial advisory business in Canada which was completed in May 2023. As a result, the Company recorded a loss of $17 million for the nine months ended September 30, 2023, primarily related to the write-down of the customer relationship intangible assets. The loss is included in revenue in the consolidated statements of income.
In connection with the disposition of the Mercer U.S. affinity business in 2022, the Company transferred to the buyer an additional $20 million of cash and cash equivalents held in a fiduciary capacity in the first quarter of 2023.
Prior year acquisitions
The Risk and Insurance Services segment completed sixteen acquisitions in 2022:
•January – MMA acquired Heil & Kay Insurance Agency Inc., an Illinois-based full-service broker providing business insurance, employee health benefits services and personal lines insurance.
•April – Marsh acquired the business of Regional Treaty Services Corporation, a Rhode Island-based managing general underwriter, which manages reinsurance facilities for small to midsize U.S.-based insurers primarily writing personal lines, small agriculture, and main street commercial business.
•June – MMA acquired Clark Insurance, a Maine-based full-service broker providing business insurance, employee health and benefits and private client services to businesses and individuals across the region.
•July – MMA acquired CS Insurance Strategies, Inc., an Illinois-based full-service broker providing employee health and benefits, business insurance, and risk management consulting services to organizations of all sizes across the U.S. and Suchanek Partners LLC, an Ohio-based employee benefits insurance broker.
•August – Marsh acquired Best Insurance Co. Ltd, a Japan-based insurance broker that provides affinity type schemes, general and personal lines insurance.
•September – MMA acquired Steinberg & Associates, Inc., a South Carolina-based insurance broker that primarily offers employee health benefit services to group clients and Leykell, Inc., a Texas-based full-service broker that provides specialty insurance focused on trade credit.
•October – MMA acquired Galbraith Group, a Texas-based employee health and benefits insurance broker.
•November – MMA acquired Focus Insurance and Financial Services, a Texas-based personal insurance broker and Bradley Insurance Agency, a commercial insurance broker in Knoxville, Tennessee, with expertise serving the hospitality and construction industries. Marsh increased its ownership interest in Beassur SARL, a Morocco-based multi-line insurance broker, from 35% to 70%.
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•December – MMA acquired McDonald-Zaring Insurance, Inc., a Washington-based full-service broker focused on agri-business, wineries, crops and contractors, Chartwell Insurance Brokers, Inc., a Massachusetts-based full-service broker that specializes in commercial Property & Casualty insurance in the technology, financial services and non-profit space, and HMS Insurance Associates, Inc., a Maryland-based full-service broker providing commercial, surety, employee benefits, and personal lines insurance. Marsh acquired BHM Consultores S.A., d/b/a Grupo Mesos, a leading auto affinity insurance broker specialist in Chile that has extensive distribution partnerships with car dealerships, original equipment manufacturers and auto finance companies.
The Consulting segment completed four acquisitions in 2022:
•February – Oliver Wyman acquired Azure Consulting, an Australia-based management consulting firm with expertise in strategy development, organizational design and operations in the industrials, energy and natural resources sectors.
•March – Mercer acquired GeFi Assurances, a France-based brokerage and consulting firm specializing in collective corporate social protection.
•September – Oliver Wyman acquired Booz Allen Hamilton's strategy consulting business serving the Middle East and North Africa.
•November – Oliver Wyman acquired the Avascent Group Ltd, an aerospace and defense management consulting firm focused on the corporate and private equity sectors based in the U.S., U.K., Canada and France.
Total purchase consideration for acquisitions made for the nine months ended September 30, 2022 was approximately $227 million, which consisted of cash paid of $210 million and deferred purchase and estimated contingent consideration of $17 million. Contingent consideration arrangements are based primarily on EBITDA or revenue targets over a period of two to four years. For the first nine months of 2022, the Company also paid $116 million of deferred purchase consideration and $66 million of contingent consideration related to acquisitions made in prior years. Estimated fair values of assets acquired and liabilities assumed are subject to adjustment when purchase accounting is finalized.
Prior year dispositions
In April 2022, Mercer sold its U.S. affinity business that provided insurance marketing, brokerage and administration to association and affinity groups for cash proceeds of approximately $140 million and recorded a gain of $112 million which is included in revenue in the consolidated statements of income.
In addition, during the first nine months of 2022, the Company sold certain businesses in Brazil and U.K. for cash proceeds of approximately $7 million.
Deconsolidation of Russia
In the first quarter of 2022, the Company concluded that it did not meet the accounting criteria for control over its wholly-owned Russian subsidiaries due to the evolving trade and economic sanctions against Russia and the related Russian counter sanctions. These sanctions included restrictions on payments to and from Russian companies and reduced currency access through official exchange markets that have significantly impacted the Company's ability to effectively manage and operate its Russian businesses.
As a result, the Company deconsolidated its Russian businesses effective as of the end of the first quarter of 2022, and recorded a loss of $39 million included in revenue in the consolidated statements of income. The loss consisted of the reclassification of cumulative translation losses from AOCI and a charge for the write-off of the Russian businesses' net assets.
In June 2022, the Company entered into a definitive agreement to exit its businesses in Russia and transfer ownership to local management pending regulatory approvals.
Purchase of remaining non-controlling interest
In the second quarter of 2023, the Company purchased the remaining interest in a subsidiary for $139 million.
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Pro-Forma Information
The following unaudited pro-forma financial data gives effect to the acquisitions made by the Company in 2023 and 2022. In accordance with accounting guidance related to pro-forma disclosures, the information presented for acquisitions made in 2023 is as if they occurred on January 1, 2022, and reflects acquisitions made in 2022, as if they occurred on January 1, 2021.
The unaudited pro-forma information includes the effects of amortization of acquired intangibles in all years. The unaudited pro-forma financial data is presented for illustrative purposes only and is not necessarily indicative of the operating results that would have been achieved if such acquisitions had occurred on the dates indicated, nor is it necessarily indicative of future consolidated results.

| Three Months Ended September 30, |  | Nine Months Ended September 30,
(In millions, except per share data) | 2023 |  | 2022 |  | 2023 |  | 2022
Revenue | $ | 5,389 |  |  | $ | 4,880 |  |  | $ | 17,290 |  |  | $ | 16,067 |
Net income attributable to the Company | $ | 737 |  |  | $ | 555 |  |  | $ | 3,035 |  |  | $ | 2,568 |
Basic net income per share attributable to the Company | $ | 1.49 |  |  | $ | 1.11 |  |  | $ | 6.14 |  |  | $ | 5.13 |
Diluted net income per share attributable to the Company | $ | 1.48 |  |  | $ | 1.10 |  |  | $ | 6.08 |  |  | $ | 5.07 |

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. The reporting unit level is defined as the same level as the Company's operating segments. In accordance with applicable accounting guidance, a company can assess qualitative factors to determine whether it is necessary to perform a quantitative goodwill impairment test. Alternatively, the Company may elect to proceed directly to the quantitative goodwill impairment test.
In 2023, the Company performed a quantitative goodwill impairment assessment. Fair values for the reporting units were estimated using both an income and market valuation approach. The carrying values were based on balances at June 30, 2023 and included directly identified assets and liabilities, as well as an allocation of those assets and liabilities not recorded at the reporting unit level. The Company concluded that goodwill was not impaired, as the fair value of each reporting unit exceeded the carrying value.
Other intangible assets that are not deemed to have an indefinite life are amortized over their estimated lives and assessed for impairment upon the occurrence of certain triggering events in accordance with applicable accounting literature. Based on its assessment, the Company concluded that other intangible assets were not impaired. The Company had no indefinite lived intangible assets at September 30, 2023 and December 31, 2022.
Changes in the carrying amount of goodwill are as follows:

(In millions) | 2023 |  | 2022
Balance as of January 1, | $ | 16,251 |  |  | $ | 16,317 |
Goodwill acquired | 480 |  |  | 139 |
Other adjustments (a) | (76) |  |  | (880) |
Balance at September 30, | $ | 16,655 |  |  | $ | 15,576 |

(a) Primarily reflects the impact of foreign exchange.
The goodwill arising from acquisitions in 2023 and 2022 consists largely of the synergies and economies of scale expected from combining the operations of the Company and the acquired entities and the trained and assembled workforce acquired.
The goodwill acquired in 2023 included approximately $234 million and $12 million in the Risk and Insurance Services and Consulting segments, respectively, which is deductible for tax purposes.
Goodwill allocable to the Company’s reportable segments at September 30, 2023, is $12.7 billion for Risk and Insurance Services and $4.0 billion for Consulting.
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The gross cost and accumulated amortization of other identified intangible assets at September 30, 2023 and December 31, 2022 are as follows:

| September 30, 2023 |  | December 31, 2022
(In millions) | Gross Cost |  | Accumulated Amortization |  | Net Carrying Amount |  | Gross Cost |  | Accumulated Amortization |  | Net Carrying Amount
Client relationships | $ | 4,133 |  |  | $ | 1,683 |  |  | $ | 2,450 |  |  | $ | 3,993 |  |  | $ | 1,508 |  |  | $ | 2,485 |
Other (a) | 373 |  |  | 325 |  |  | 48 |  |  | 360 |  |  | 308 |  |  | 52 |
Other intangible assets | $ | 4,506 |  |  | $ | 2,008 |  |  | $ | 2,498 |  |  | $ | 4,353 |  |  | $ | 1,816 |  |  | $ | 2,537 |

(a) Primarily reflects non-compete agreements, trade names and developed technology.
Aggregate amortization expense for the three and nine months ended September 30, 2023, was $85 million and $257 million, respectively, compared to $84 million and $258 million, respectively, for the corresponding periods in the prior year. The estimated future aggregate amortization expense is as follows:

For the Years Ending December 31, |
(In millions) | Estimated Expense
2023 (excludes amortization through September 30, 2023) | $ | 90 |
2024 | 320 |
2025 | 286 |
2026 | 266 |
2027 | 262 |
Subsequent years | 1,274 |
Total future amortization | $ | 2,498 |

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. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets and liabilities (Level 1) and lowest priority to unobservable inputs (Level 3). In some cases, the inputs used to measure fair value might fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy, for disclosure purposes, is determined based on the lowest level input that is significant to the fair value measurement. Assets and liabilities recorded in the consolidated balance sheets at fair value are categorized based on the inputs in the valuation techniques as follows:
Level 1.Assets and liabilities whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market (examples include active exchange-traded equity securities and exchange-traded money market mutual funds).
Assets and liabilities measured using Level 1 inputs include exchange-traded equity securities, exchange-traded mutual funds and money market funds.
Level 2.Assets and liabilities whose values are based on the following:
a)quoted prices for similar assets or liabilities in active markets;
b)quoted prices for identical or similar assets or liabilities in non-active markets (examples include corporate and municipal bonds, which trade infrequently);
c)pricing models whose inputs are observable for substantially the full term of the asset or liability (examples include most over-the-counter derivatives, including interest rate and currency swaps); and
d)pricing models whose inputs are derived principally from or corroborated by observable market data through correlation or other means for substantially the full asset or liability (for example, certain mortgage loans).
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Assets and liabilities using Level 2 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 measured using Level 3 inputs relate to assets and liabilities for contingent purchase consideration.
Valuation Techniques
Equity Securities, Money Market Funds and Mutual Funds – Level 1
Investments for which market quotations are readily available are valued at the sale price on their principal exchange or, for certain markets, official closing bid price. Money market funds are valued at a readily determinable price.
Contingent Purchase Consideration Assets and Liabilities – Level 3
Purchase consideration for some acquisitions and dispositions made by the Company include contingent consideration arrangements. Contingent consideration arrangements are based primarily on EBITDA or revenue targets over a period of 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, 2023 and December 31, 2022:

| Identical Assets (Level 1) |  | Observable Inputs (Level 2) |  | Unobservable Inputs (Level 3) |  | Total
(In millions) | 09/30/23 | 12/31/22 |  | 09/30/23 | 12/31/22 |  | 09/30/23 | 12/31/22 |  | 09/30/23 | 12/31/22
Assets: |  |  |  |  |  |  |  |  |  |  |
Financial instruments owned: |  |  |  |  |  |  |  |  |  |  |
Exchange traded equity securities (a) | $ | 5 |  | $ | 6 |  |  | $ | — |  | $ | — |  |  | $ | — |  | $ | — |  |  | $ | 5 |  | $ | 6 |
Mutual funds (a) | 163 |  | 162 |  |  | — |  | — |  |  | — |  | — |  |  | 163 |  | 162 |
Money market funds (b) | 585 |  | 146 |  |  | — |  | — |  |  | — |  | — |  |  | 585 |  | 146 |
Other equity investment (a) | — |  | — |  |  | — |  | 13 |  |  | — |  | — |  |  | — |  | 13 |
Contingent purchase consideration assets (c) | — |  | — |  |  | — |  | — |  |  | 1 |  | 3 |  |  | 1 |  | 3 |
Total assets measured at fair value | $ | 753 |  | $ | 314 |  |  | $ | — |  | $ | 13 |  |  | $ | 1 |  | $ | 3 |  |  | $ | 754 |  | $ | 330 |
Fiduciary Assets: |  |  |  |  |  |  |  |  |  |  |
Money market funds | $ | 77 |  | $ | 201 |  |  | $ | — |  | $ | — |  |  | $ | — |  | $ | — |  |  | $ | 77 |  | $ | 201 |
Total fiduciary assets measured at fair value | $ | 77 |  | $ | 201 |  |  | $ | — |  | $ | — |  |  | $ | — |  | $ | — |  |  | $ | 77 |  | $ | 201 |
Liabilities: |  |  |  |  |  |  |  |  |  |  |
Contingent purchase consideration liabilities (d) | $ | — |  | $ | — |  |  | $ | — |  | $ | — |  |  | $ | 231 |  | $ | 377 |  |  | $ | 231 |  | $ | 377 |
Total liabilities measured at fair value | $ | — |  | $ | — |  |  | $ | — |  | $ | — |  |  | $ | 231 |  | $ | 377 |  |  | $ | 231 |  | $ | 377 |

(a) Included in other assets in the consolidated balance sheets.
(b) Included in cash and cash equivalents in the consolidated balance sheets.
(c) Included in other receivables in the consolidated balance sheets.
(d) Included in accounts payable and accrued liabilities and other liabilities in the consolidated balance sheets.
The Level 3 assets in the table reflect contingent purchase consideration from the sale of businesses. The change in the contingent purchase consideration assets from December 31, 2022 is driven primarily by cash receipts of approximately $3 million.
During the nine months ended September 30, 2023 and 2022, there were no assets or liabilities that were transferred between levels.
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The following table sets forth a summary of the changes in fair value of the Company’s Level 3 liabilities for the three and nine months ended September 30, 2023 and 2022:

| Three Months Ended September 30, |  | Nine Months Ended September 30,
(In millions) | 2023 |  | 2022 |  | 2023 |  | 2022
Balance at beginning of period | $ | 223 |  |  | $ | 345 |  |  | $ | 377 |  |  | $ | 352 |
Net additions | 5 |  |  | 4 |  |  | 9 |  |  | 4 |
Payments | (1) |  |  | (32) |  |  | (176) |  |  | (66) |
Revaluation impact | 4 |  |  | 11 |  |  | 21 |  |  | 38 |
Balance at September 30, | $ | 231 |  |  | $ | 328 |  |  | $ | 231 |  |  | $ | 328 |

Long-Term Investments
The Company holds investments in public and private companies as well as certain private equity investments that are accounted for using the equity method of accounting. The carrying value of these investments was $260 million and $215 million at September 30, 2023 and December 31, 2022, respectively.
Investments in Public and Private Companies
The Company has investments in private insurance and consulting companies with a carrying value of $60 million and $56 million at September 30, 2023 and December 31, 2022, respectively. These investments are accounted for using the equity method of accounting, the results of which are included in revenue in the consolidated statements of income and the carrying value of which is included in other assets in the consolidated balance sheets. The Company records its share of income or loss on its equity method investments, some of which are on a one quarter lag basis.
Private Equity Investments
The Company's investments in private equity funds were $200 million and $159 million at September 30, 2023 and December 31, 2022, respectively. The carrying values of these private equity investments approximate fair value. The underlying private equity funds follow investment company accounting, where investments within the fund are carried at fair value. The Company records in earnings its proportionate share of the change in fair value of the funds on the investment income line in the consolidated statements of income. These investments are included in other assets in the consolidated balance sheets. The Company recorded net investment income from these investments of $1 million and $7 million for the three and nine months ended September 30, 2023, respectively, and net investment gains of $3 million and $23 million, respectively, from these investments for the corresponding periods in 2022.
As of September 30, 2023, the Company has commitments of potential future investments of approximately $131 million in private equity funds that invest primarily in financial services companies.
Other Investments
At September 30, 2023 and December 31, 2022, the Company held equity investments with readily determinable market values of $16 million and $17 million, respectively. The Company recorded mark-to-market investment losses on these investments of $1 million for the nine months ended September 30, 2023. During the first nine months of 2022, the Company recorded mark-to-market investment gains of $11 million.
The Company also held investments without readily determinable market values of $36 million and $42 million at September 30, 2023 and December 31, 2022, respectively.
In the third quarter of 2022, the Company sold certain of these investments for cash proceeds of approximately $62 million, including the investment in the common stock of Alexander Forbes, and recorded a net loss of $4 million.
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11. Derivatives
Net Investment Hedge
The Company has investments in various subsidiaries with Euro functional currencies. As a result, the Company is exposed to the risk of fluctuations between the Euro and U.S. dollar exchange rates. The Company designated its €1.1 billion senior note debt instruments ("Euro notes") as a net investment hedge (the "hedge") of its Euro denominated subsidiaries. The hedge effectiveness is re-assessed each quarter to confirm that the designated equity balance at the beginning of each period continues to equal or exceed 80% of the outstanding balance of the Euro debt instrument and that all the critical terms of the hedging instrument and the hedged net investment continue to match. If the hedge is highly effective, the change in the debt balance related to foreign exchange fluctuations is recorded in accumulated other comprehensive loss in the consolidated balance sheets.
The U.S. dollar value of the Euro notes decreased by $12 million through September 30, 2023, related to the change in foreign exchange rates. The Company concluded that the hedge was highly effective and recorded a decrease to accumulated other comprehensive loss for the nine months ended September 30, 2023.
12. Leases
The Company leases office facilities under non-cancelable operating leases with terms generally ranging between ten and twenty-five years. The Company utilizes these leased office facilities for use by its employees in countries in which the Company conducts its business. The Company’s leases have no restrictions on the payment of dividends, the acquisition of debt or additional lease obligations, or entering into additional lease obligations. The leases also do not contain significant purchase options.
Operating leases are recognized on the consolidated balance sheets as ROU assets and operating lease liabilities based on the present value of the remaining future minimum payments over the lease term at commencement date of the lease.
For the three and nine months ended September 30, 2023, the Company determined that $6 million and $19 million of its ROU assets, respectively, were impaired and recorded a charge to the consolidated statements of income with an offsetting reduction to ROU assets.
The following table provides additional information about the Company’s property leases:

| Three Months Ended September 30, |  | Nine Months Ended September 30,
(In millions) | 2023 | 2022 |  | 2023 | 2022
Lease Cost: |  |  |  |  |
Operating lease cost (a) | $ | 82 |  | $ | 84 |  |  | $ | 243 | $ | 262
Short-term lease cost | 1 |  | 1 |  |  | 4 | 3
Variable lease cost | 31 |  | 35 |  |  | 94 | 99
Sublease income | (2) |  | (3) |  |  | (8) | (12)
Net lease cost | $ | 112 |  | $ | 117 |  |  | $ | 333 | $ | 352
Other information: |  |  |  |  |
Operating cash outflows from operating leases |  |  |  | $ | 284 | $ | 286
Right of use assets obtained in exchange for new operating lease liabilities |  |  |  | $ | 177 | $ | 148
Weighted-average remaining lease term – real estate |  |  |  | 8.1 years | 8.4 years
Weighted-average discount rate – real estate leases |  |  |  | 3.28 | % | 2.87 | %

(a) Excludes ROU asset impairment charges.
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Future minimum lease payments for the Company’s operating leases as of September 30, 2023 are as follows:

(In millions) | Real Estate Leases
Remainder of 2023 | $ | 92 |
2024 | 354 |
2025 | 325 |
2026 | 302 |
2027 | 265 |
2028 | 188 |
Subsequent years | 680 |
Total future lease payments | 2,206 |
Less: Imputed interest | (260) |
Total | $ | 1,946 |
Current lease liabilities | $ | 303 |
Long-term lease liabilities | 1,643 |
Total lease liabilities | $ | 1,946 |

Note: The above table excludes obligations for leases with original terms of twelve months or less which have not been recognized as a ROU asset or liability in the consolidated balance sheets.
As of September 30, 2023, the Company had additional operating real estate leases that had not yet commenced of $56 million. These operating leases will commence over the next twelve months.
13. Retirement Benefits
The Company maintains qualified and non-qualified defined benefit pension plans for its U.S. and non-U.S. eligible employees. The Company’s policy for funding its tax-qualified defined benefit retirement plans is to contribute amounts at least sufficient to meet the funding requirements set forth by U.S. law and the laws of the non-U.S. jurisdictions in which the Company offers defined benefit plans.
The weighted average actuarial assumptions utilized to calculate the net periodic benefit costs for the U.S. and significant non-U.S. defined benefit plans are as follows:

Combined U.S. and significant non-U.S. Plans | Pension Benefits |  |
September 30, | 2023 |  | 2022 |  |  |  |
Weighted average assumptions: |  |  |  |  |  |  |
Expected return on plan assets | 5.31 | % |  | 4.56 | % |  |  |  |
Discount rate | 5.16 | % |  | 2.28 | % |  |  |  |
Rate of compensation increase | 3.16 | % |  | 2.16 | % |  |  |  |

The target asset allocation for the U.S. plans is 50% equities and equity alternatives and 50% fixed income. At September 30, 2023, the actual allocation for the U.S. plans was 48% equities and equity alternatives and 52% fixed income. The target allocation for the U.K. plans at September 30, 2023 is 14% equities and equity alternatives and 86% fixed income. At September 30, 2023, the actual allocation for the U.K. plans was 14% equities and equity alternatives and 86% fixed income. The Company's U.K. plans comprised approximately 79% of non-U.S. plan assets at December 31, 2022. 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.
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The net benefit cost or credit of the Company's defined benefit plans is measured on an actuarial basis using various methods and assumptions. The components of the net benefit credit for defined benefit plans are as follows:

Combined U.S. and significant non-U.S. Plans |  |  |
For the Three Months Ended September 30, | Pension Benefits
(In millions) | 2023 |  | 2022
Service cost | $ | 7 |  |  | $ | 6 |
Interest cost | 151 |  |  | 95 |
Expected return on plan assets | (218) |  |  | (191) |
Recognized actuarial loss | 5 |  |  | 38 |
Net benefit credit | $ | (55) |  |  | $ | (52) |

Combined U.S. and significant non-U.S. Plans |  |  |  |  |
For the Nine Months Ended September 30, | Pension Benefits |
(In millions) | 2023 |  | 2022 |  |  |  |
Service cost | $ | 18 |  |  | $ | 21 |  |  |  |  |
Interest cost | 449 |  |  | 294 |  |  |  |  |
Expected return on plan assets | (645) |  |  | (590) |  |  |  |  |
Recognized actuarial loss | 16 |  |  | 114 |  |  |  |  |
Net periodic benefit credit | (162) |  |  | (161) |  |  |  |  |
Settlement loss | — |  |  | 2 |  |  |  |  |
Net benefit credit | $ | (162) |  |  | $ | (159) |  |  |  |  |

Amounts recorded in the Consolidated Statements of Income |  |  |  |  |  |
Combined U.S. and significant non-U.S. Plans |  |  |  |  |
For the Three Months Ended September 30, | Pension Benefits |
(In millions) | 2023 |  | 2022 |  |  |  |
Compensation and benefits expense | $ | 7 |  |  | $ | 6 |  |  |  |  |
Other net benefit credits | (62) |  |  | (58) |  |  |  |  |
Net benefit credit | $ | (55) |  |  | $ | (52) |  |  |  |  |

Amounts Recorded in the Consolidated Statement of Income |  |  |  |  |  |
Combined U.S. and significant non-U.S. Plans |  |  |  |  |
For the Nine Months Ended September 30, | Pension Benefits |
(In millions) | 2023 |  | 2022 |  |  |  |
Compensation and benefits expense | $ | 18 |  |  | $ | 21 |  |  |  |  |
Other net benefit credits | (180) |  |  | (180) |  |  |  |  |
Net benefit credit | $ | (162) |  |  | $ | (159) |  |  |  |  |

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U.S. Plans only |  |  |  |  |
For the Three Months Ended September 30, | Pension Benefits |
(In millions) | 2023 |  | 2022 |  |  |  |
Interest cost | $ | 65 |  |  | $ | 48 |  |  |  |  |
Expected return on plan assets | (78) |  |  | (85) |  |  |  |  |
Recognized actuarial loss | 5 |  |  | 19 |  |  |  |  |
Net benefit credit | $ | (8) |  |  | $ | (18) |  |  |  |  |

U.S. Plans only |  |  |  |  |
For the Nine Months Ended September 30, | Pension Benefits |
(In millions) | 2023 |  | 2022 |  |  |  |
Interest cost | $ | 195 |  |  | $ | 145 |  |  |  |  |
Expected return on plan assets | (233) |  |  | (253) |  |  |  |  |
Recognized actuarial loss | 14 |  |  | 56 |  |  |  |  |
Net benefit credit | $ | (24) |  |  | $ | (52) |  |  |  |  |

Significant non-U.S. Plans only |  |  |  |  |
For the Three Months Ended September 30, | Pension Benefits |
(In millions) | 2023 |  | 2022 |  |  |  |
Service cost | $ | 7 |  |  | $ | 6 |  |  |  |  |
Interest cost | 86 |  |  | 47 |  |  |  |  |
Expected return on plan assets | (140) |  |  | (106) |  |  |  |  |
Recognized actuarial loss | — |  |  | 19 |  |  |  |  |
Net benefit credit | $ | (47) |  |  | $ | (34) |  |  |  |  |

Significant non-U.S. Plans only |  |  |  |  |
For the Nine Months Ended September 30, | Pension Benefits |
(In millions) | 2023 |  | 2022 |  |  |  |
Service cost | $ | 18 |  |  | $ | 21 |  |  |  |  |
Interest cost | 254 |  |  | 149 |  |  |  |  |
Expected return on plan assets | (412) |  |  | (337) |  |  |  |  |
Recognized actuarial loss | 2 |  |  | 58 |  |  |  |  |
Net periodic benefit credit | (138) |  |  | (109) |  |  |  |  |
Settlement loss | — |  |  | 2 |  |  |  |  |
Net benefit credit | $ | (138) |  |  | $ | (107) |  |  |  |  |

The Company made contributions to its U.S. and non-U.S. defined benefit pension plans for the three and nine months ended September 30, 2023 of approximately $26 million and $73 million, respectively, compared to contributions of $28 million and $141 million, respectively, for the corresponding periods in the prior year. The Company expects to contribute approximately $35 million to its U.S. and non-U.S. defined benefit pension plans during the remainder of 2023.
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 the U.S. DC Plans for the three and nine months ended September 30, 2023 was $45 million and $133 million, respectively, and $39 million and $122 million, respectively, for the corresponding periods in the prior year. The cost of the U.K. DC Plans for the three and nine months ended September 30, 2023, was $39 million and $120 million, respectively, and $31 million and $108 million, respectively, for the corresponding periods in the prior year.
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14. Debt
The Company’s outstanding debt is as follows:

(In millions) | September 30, 2023 |  | December 31, 2022
Short-term: |  |  |
Current portion of long-term debt | $ | 1,868 |  |  | $ | 268 |
Long-term: |  |  |
Senior notes – 4.05% due 2023 | 250 |  |  | 250 |
Senior notes – 3.50% due 2024 | 600 |  |  | 599 |
Senior notes – 3.875% due 2024 | 999 |  |  | 998 |
Senior notes – 3.50% due 2025 | 499 |  |  | 499 |
Senior notes – 1.349% due 2026 | 581 |  |  | 587 |
Senior notes – 3.75% due 2026 | 599 |  |  | 598 |
Senior notes – 4.375% due 2029 | 1,499 |  |  | 1,499 |
Senior notes – 1.979% due 2030 | 570 |  |  | 576 |
Senior notes – 2.25% due 2030 | 741 |  |  | 739 |
Senior notes – 2.375% due 2031 | 397 |  |  | 397 |
Senior notes – 5.750% due 2032 | 493 |  |  | 493 |
Senior notes – 5.875% due 2033 | 298 |  |  | 298 |
Senior notes – 5.400% due 2033 | 592 |  |  | — |
Senior notes – 4.75% due 2039 | 496 |  |  | 495 |
Senior notes – 4.35% due 2047 | 494 |  |  | 493 |
Senior notes – 4.20% due 2048 | 593 |  |  | 593 |
Senior notes – 4.90% due 2049 | 1,239 |  |  | 1,238 |
Senior notes – 2.90% due 2051 | 346 |  |  | 346 |
Senior notes – 6.25% due 2052 | 491 |  |  | 492 |
Senior notes – 5.450% due 2053 | 591 |  |  | — |
Senior notes – 5.700% due 2053 | 989 |  |  | — |
Mortgage – 5.70% due 2035 | 288 |  |  | 301 |
Other | 4 |  |  | 4 |
| 13,649 |  |  | 11,495 |
Less: current portion | 1,868 |  |  | 268 |
| $ | 11,781 |  |  | $ | 11,227 |

The senior notes in the table are registered by the Company with the Securities and Exchange Commission and are not guaranteed.
The Company has a short-term commercial paper financing program of $2.8 billion. The program was increased from $2.0 billion in October 2022. The Company did not have any commercial paper outstanding at September 30, 2023 and December 31, 2022.
Credit Facilities
In October 2023, the Company increased its multi-currency unsecured $2.8 billion five-year revolving credit facility capacity to $3.5 billion and extended the expiration to October 2028 (the "Credit Facility"). The interest rate on the Credit Facility was initially based on LIBOR plus a fixed margin which varied with the Company's credit rating. In the second quarter of 2023, the Credit Facility was amended that borrowings under the Credit Facility bear interest at a rate per annum equal, at the borrower's option, either at (a) SOFR benchmark rate for U.S. dollar borrowings, or (b) a currency specific benchmark rate, plus an applicable margin which varies with the Company's
31

credit ratings. The Company is required to maintain certain coverage and leverage ratios for the Credit Facility, which are tested quarterly.
The Credit Facility includes provisions for determining a benchmark replacement rate in the event existing benchmark rates are no longer available or in certain other circumstances, in which an alternative rate may be required. As of September 30, 2023 and December 31, 2022, the Company had no borrowings under this facility.
In October 2023, the Company terminated its one-year $200 million uncommitted revolving credit facility ("Uncommitted Credit Facility"). In the third quarter of 2023, the Company repaid $200 million of borrowings outstanding under the Uncommitted Credit Facility with a weighted average interest rate of 5.50%. There were no borrowings outstanding under the Uncommitted Credit Facility at September 30, 2023 and December 31, 2022.
The Company also maintains other credit and overdraft facilities with various financial institutions aggregating $112 million at September 30, 2023. There were no outstanding borrowings under these facilities at September 30, 2023 and December 31, 2022. The Company also has outstanding guarantees and letters of credit with various banks aggregating $131 million at September 30, 2023.
Senior Notes
In October 2023, the Company repaid $250 million of 4.05% senior notes that matured.
In September 2023, the Company issued $600 million of 5.400% senior notes due 2033 and $1 billion of 5.700% senior notes due 2053. The Company intends to use the net proceeds from these issuances for general corporate purposes.
In March 2023, the Company issued $600 million of 5.450% senior notes due 2053. The Company used the net proceeds from this issuance for general corporate purposes.
In October 2022, the Company issued $500 million of 5.75% senior notes due 2032 and $500 million of 6.25% senior notes due 2052. The Company used the net proceeds from these issuances for general corporate purposes and repaid $350 million of 3.30% senior notes in November 2022, with an original maturity date of March 2023.
Fair Value of Short-term and Long-term Debt
The estimated fair value of the Company's short-term and long-term debt is provided below. Certain estimates and judgments were required to develop the fair value amounts. The fair value amounts shown below are not necessarily indicative of the amounts that the Company would realize upon disposition, nor do they indicate the Company’s intent or need to dispose of the financial instrument.

| September 30, 2023 |  | December 31, 2022
(In millions) | Carrying Amount |  | Fair Value |  | Carrying Amount |  | Fair Value
Short-term debt | $ | 1,868 |  |  | $ | 1,849 |  |  | $ | 268 |  |  | $ | 265 |
Long-term debt | $ | 11,781 |  |  | $ | 10,731 |  |  | $ | 11,227 |  |  | $ | 10,544 |

The fair value of the Company's short-term debt consists of term debt maturing within the next year and its fair value approximates its carrying value. The estimated fair value of a primary portion of the Company's long-term debt is based on discounted future cash flows using current interest rates available for debt with similar terms and remaining maturities. Short-term and long-term debt would be classified as Level 2 in the fair value hierarchy.
15. Restructuring Costs
In the fourth quarter of 2022, the Company initiated activities focused on workforce actions, rationalization of technology and functional services, and reductions in real estate. The Company anticipates total charges related to these activities to be between $425 million and $475 million. The Company has incurred approximately $325 million of restructuring costs through September 30, 2023, primarily severance and lease exit charges, of which $37 million and $109 million were for the three and nine months ended September 30, 2023, respectively. The majority of the remaining costs are expected to be incurred by the end of 2023. The Company continues to refine its detailed plans for each business and location, which may change the expected timing, estimates of expected costs and related savings.
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Restructuring activities also include charges related to improving the Company's global information technology function and improving efficiencies and client services related to the Marsh operational excellence program. In 2022, costs also included charges related to the remaining JLT integration.
The Company incurred costs related to these initiatives as follows:

| Three Months Ended September 30, |  | Nine Months Ended September 30,
(In millions) | 2023 | 2022 |  | 2023 | 2022
Risk and Insurance Services | $ | 26 |  | $ | 18 |  |  | $ | 89 |  | $ | 44 |
Consulting | 17 |  | 5 |  |  | 33 |  | 16 |
Corporate | 9 |  | 15 |  |  | 48 |  | 36 |
Total | $ | 52 |  | $ | 38 |  |  | $ | 170 |  | $ | 96 |

Details of the restructuring activity from January 1, 2022 through September 30, 2023, are as follows:

(In millions) | Severance |  | Real Estate Related Costs (a) |  | Information Technology |  | Consulting and Other Outside Services |  | Total
Liability at 1/1/22 | $ | 35 |  |  | $ | 34 |  |  | $ | — |  |  | $ | — |  |  | $ | 69 |
2022 charges | 111 |  |  | 195 |  |  | 15 |  |  | 106 |  |  | 427 |
Cash payments | (58) |  |  | (25) |  |  | (6) |  |  | (104) |  |  | (193) |
Non-cash charges | — |  |  | (148) |  |  | (9) |  |  | — |  |  | (157) |
Liability at 12/31/22 | $ | 88 |  |  | $ | 56 |  |  | $ | — |  |  | $ | 2 |  |  | $ | 146 |
2023 charges | 62 |  |  | 63 |  |  | 7 |  |  | 38 |  |  | 170 |
Cash payments | (111) |  |  | (59) |  |  | (6) |  |  | (39) |  |  | (215) |
Non-cash charges | — |  |  | (27) |  |  | (1) |  |  | — |  |  | (28) |
Liability at 9/30/23 | $ | 39 |  |  | $ | 33 |  |  | $ | — |  |  | $ | 1 |  |  | $ | 73 |

(a) Includes ROU and fixed asset impairments and other real estate related costs.
The expenses associated with these initiatives are included in compensation and benefits and other operating expenses in the consolidated statements of income. The liabilities associated with these initiatives are classified on the consolidated balance sheets as accounts payable and accrued liabilities, other liabilities or accrued compensation and employee benefits, depending on the nature of the items.
16. Common Stock
During the first nine months of 2023, the Company repurchased 5.1 million shares of its common stock for $900 million. As of September 30, 2023, the Company remained authorized to repurchase up to approximately $3.4 billion in shares of its common stock. There is no time limit on the authorization. During the first nine months of 2022, the Company repurchased 10.1 million shares of its common stock for $1.6 billion.
The Company issued approximately 3.3 million and 3.1 million shares related to stock compensation and employee stock purchase plans during the first nine months of 2023 and 2022, respectively.
In January and March of 2023, the Board of Directors of the Company declared quarterly dividends of $0.59 per share on outstanding common stock, which were paid in February 2023 and May 2023, respectively. In July 2023, the Board of Directors of the Company declared a quarterly dividend of $0.71 per share on outstanding common stock, paid in the third quarter of 2023.
In September 2023, the Board of Directors of the Company declared a quarterly dividend of $0.71 per share on outstanding common stock, payable in November 2023.
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17. Claims, Lawsuits and Other Contingencies
Nature of Contingencies
The Company and its subsidiaries are subject to a significant number of claims, lawsuits and proceedings in the course of our business. Such claims and lawsuits consist principally of alleged errors and omissions in connection with the performance of professional services, including the placement of insurance, the provision of actuarial services for corporate and public sector clients, the provision of investment advice and investment management services to pension plans, the provision of advice relating to pension buy-out transactions and the provision of consulting services relating to the drafting and interpretation of trust deeds and other documentation governing pension plans. These claims often seek damages, including punitive and treble damages, in amounts that could be significant. In establishing liabilities for errors and omissions claims 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, a subsidiary of the Company, and other methods to estimate potential losses. A liability is established when a loss is both probable and reasonably estimable. The liability is reviewed quarterly and adjusted as developments warrant. In many cases, the Company has not recorded a liability, other than for legal fees to defend the claim, because we are unable, at the present time, to make a determination that a loss is both probable and reasonably estimable. To the extent that expected losses exceed our deductible in any policy year, the Company also records an asset for the amount that we expect to recover under any available third-party insurance programs. The Company has varying levels of third-party insurance coverage, with policy limits and coverage terms varying significantly by policy year.
Our activities are regulated under the laws of the U.S. and its various states, the U.K., the E.U. and its member states, and the many other jurisdictions in which the Company operates. The Company also receives subpoenas in the ordinary course of business, and, from time to time, requests for information in connection with government investigations.
Current Matters
Risk and Insurance Services Segment
•In January 2019, the Company received a notice that the Administrative Council for Economic Defense anti-trust agency in Brazil had commenced an administrative proceeding against a number of insurance brokers, including both Marsh and JLT, and insurers "to investigate an alleged sharing of sensitive commercial and competitive confidential information" in the aviation insurance and reinsurance sector.
•From 2014, Marsh Ltd. was engaged by Greensill Capital (UK) Limited as its insurance broker. Marsh Ltd. placed a number of trade credit insurance policies for Greensill. On March 1, 2021, Greensill filed an action against certain of its trade credit insurers in Australia seeking a mandatory injunction compelling these insurers to renew coverage under expiring policies. Later that day, the Australian court denied Greensill’s application. Since then, a number of Greensill entities have filed for, or been subject to, insolvency proceedings, and several litigations and investigations have been commenced in the U.K., Australia, Germany, Switzerland and the U.S., including claims brought by Greensill's administrators and loss payees under Greensill's trade credit insurance policies. In June 2023, White Oak, one such loss payee, filed a claim in the High Court of Justice in London against Marsh Ltd., related to White Oak’s purchase of accounts receivable from Greensill. The claim alleges that Marsh Ltd., which was not the insurance broker for White Oak, failed to take required steps to ensure accurate representations to White Oak in its capacity as a loss payee.
At this time, we are unable to predict the likely timing, outcome or ultimate impact of the foregoing matters. 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.
Other Contingencies-Guarantees
In connection with its acquisition of U.K.-based Sedgwick Group in 1998, the Company acquired several insurance underwriting businesses that were already in run-off, including River Thames Insurance Company Limited ("River Thames"), which the Company sold in 2001. Sedgwick guaranteed payment of claims on certain policies underwritten through the Institute of London Underwriters (the "ILU") by River Thames. The policies covered by this guarantee are partly reinsured by a related party of River Thames. Payment of claims under the reinsurance agreement is collateralized by funds withheld by River Thames from the reinsurer.
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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 describ ed above and other matters not explicitly described in this Note 17 on Claims, Lawsuits and Other Contingencies may expose the Company or its subsidiaries to liability for significant monetary damages, fines, penalties or other forms of relief. Where a loss is both probable and reasonably estimable, the Company establishes liabilities in accordance with FASB guidance on Contingencies - Loss Contingencies.
The Company is not able at this time to provide a reasonable estimate of the range of possible loss attributable to these matters or the impact they may have on the Company's consolidated results of operations, financial position or cash flows. This is primarily because these matters are still developing and involve complex issues subject to inherent uncertainty. Adverse determinations in one or more of these matters could have a material impact on the Company's consolidated results of operations, financial condition or cash flows in a future period.
18. Segment Information
The Company is organized based on the types of services provided. Under this structure, the Company’s segments are:
•Risk and Insurance Services, comprising insurance services (Marsh) and reinsurance services (Guy Carpenter); and
•Consulting, comprising Mercer and Oliver Wyman Group.
The accounting policies of the segments are the same as those used for the consolidated financial statements described in Note 1, Summary of Significant Accounting Policies, in the Company’s 2022 Form 10-K. Segment performance is evaluated based on segment operating income, which includes directly related expenses, and charges or credits related to restructuring but not the Company’s corporate-level expenses. Revenues are attributed to geographic areas on the basis of where the services are performed.
Selected information about the Company’s segments for the three and nine months ended September 30, 2023 and 2022 is as follows:

| Three Months Ended September 30, |  | Nine Months Ended September 30,
(In millions) | Revenue |  | Operating Income/(Loss) |  | Revenue |  | Operating Income/(Loss)
2023 – |  |  |  |  |  |  |
Risk and Insurance Services | $ | 3,190 |  | (a) | $ | 640 |  |  | $ | 10,818 |  | (c) | $ | 3,192 |
Consulting | 2,206 |  | (b) | 424 |  |  | 6,409 |  | (d) | 1,223 |
Total Operating Segments | 5,396 |  |  | 1,064 |  |  | 17,227 |  |  | 4,415 |
Corporate/Eliminations | (14) |  |  | (68) |  |  | (45) |  |  | (236) |
Total Consolidated | $ | 5,382 |  |  | $ | 996 |  |  | $ | 17,182 |  |  | $ | 4,179 |
2022 – |  |  |  |  |  |  |
Risk and Insurance Services | $ | 2,838 |  | (a) | $ | 529 |  |  | $ | 9,700 |  | (c) | $ | 2,617 |
Consulting | 1,951 |  | (b) | 350 |  |  | 6,045 |  | (d) | 1,217 |
Total Operating Segments | 4,789 |  |  | 879 |  |  | 15,745 |  |  | 3,834 |
Corporate/Eliminations | (19) |  |  | (88) |  |  | (47) |  |  | (234) |
Total Consolidated | $ | 4,770 |  |  | $ | 791 |  |  | $ | 15,698 |  |  | $ | 3,600 |

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(a) Includes interest income on fiduciary funds of $131 million and $40 million in 2023 and 2022, respectively; and equity method income of $3 million in 2023.
(b) Includes inter-segment revenue of $14 million and $19 million in 2023 and 2022, respectively.
(c) Includes inter-segment revenue of $5 million in both 2023 and 2022, interest income on fiduciary funds of $330 million and $57 million in 2023 and 2022, respectively, and equity method income of $14 million and $9 million in 2023 and 2022, respectively. Revenue for 2022 also includes the loss on deconsolidation of the Russian businesses at Marsh of $27 million.
(d) Includes inter-segment revenue of $40 million and $42 million in 2023 and 2022, respectively. Revenue for 2023 also includes the loss on sale of an individual financial advisory business in Canada of $17 million. Revenue for 2022 also includes a gain on the sale of the Mercer U.S. affinity business of $112 million, partially offset by the loss on deconsolidation of the Russian businesses at Oliver Wyman Group of $12 million.
Details of operating segment revenue for the three and nine months ended September 30, 2023 and 2022 are as follows:

| Three Months Ended September 30, |  | Nine Months Ended September 30,
(In millions) | 2023 |  | 2022 |  | 2023 |  | 2022
Risk and Insurance Services |  |  |  |  |  |  |
Marsh | $ | 2,782 |  |  | $ | 2,497 |  |  | $ | 8,685 |  |  | $ | 7,833 |
Guy Carpenter | 408 |  |  | 341 |  |  | 2,133 |  |  | 1,867 |
Total Risk and Insurance Services | 3,190 |  |  | 2,838 |  |  | 10,818 |  |  | 9,700 |
Consulting |  |  |  |  |  |  |
Mercer | 1,425 |  |  | 1,284 |  |  | 4,143 |  |  | 4,016 |
Oliver Wyman Group | 781 |  |  | 667 |  |  | 2,266 |  |  | 2,029 |
Total Consulting | 2,206 |  |  | 1,951 |  |  | 6,409 |  |  | 6,045 |
Total Operating Segments | 5,396 |  |  | 4,789 |  |  | 17,227 |  |  | 15,745 |
Corporate Eliminations | (14) |  |  | (19) |  |  | (45) |  |  | (47) |
Total | $ | 5,382 |  |  | $ | 4,770 |  |  | $ | 17,182 |  |  | $ | 15,698 |

19. Subsequent Events
In October 2023, the Company settled a claim with a competitor related to the unlawful recruiting of a limited number of the Company’s employees in Europe for $70 million, including reimbursement of legal expenses.
20. New Accounting Guidance
New Accounting Pronouncement Adopted Effective January 1, 2022:
In October 2021, the FASB issued new guidance for measuring contract assets and contract liabilities acquired in a business combination. In accordance with the new guidance, contract assets and contract liabilities should be measured in accordance with the guidance for revenue from contracts with customers as opposed to the guidance for business combinations. The guidance must be applied on a prospective basis, and is effective for fiscal years beginning after December 15, 2022, including interim periods therein. Early adoption is permitted. The Company elected to adopt this new standard effective January 1, 2022. Adoption of this guidance did not have a material impact on the Company's financial position or results of operations.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
General
Marsh & McLennan Companies, Inc., and its consolidated subsidiaries (the "Company") is a global professional services firm offering clients advice in the areas of risk, strategy and people. The Company’s more than 85,000 colleagues advise clients in over 130 countries. With annual revenue of over $20 billion, the Company helps clients navigate an increasingly dynamic and complex environment through four market-leading businesses.
Marsh provides data-driven risk advisory services and insurance solutions to commercial and consumer clients. Guy Carpenter develops advanced risk, reinsurance and capital strategies that help clients grow profitably and identify and capitalize on emerging opportunities. Mercer delivers advice and technology-driven solutions that help organizations redefine the future of work, shape retirement and investment outcomes, and advance health and well-being for a changing workforce. Oliver Wyman Group serves as a critical strategic, economic and brand advisor to private sector and governmental clients.
The Company conducts business through two segments:
•Risk and Insurance Services includes risk management activities (risk advice, risk transfer and risk control and mitigation solutions) as well as insurance and reinsurance broking and services. The Company conducts business in this segment through Marsh and Guy Carpenter.
•Consulting includes health, wealth and career solutions and products, and specialized management, strategic, economic and brand consulting services. The Company conducts business in this segment through Mercer and Oliver Wyman Group.
The results of operations in the Management Discussion & Analysis ("MD&A") include an overview of the Company's consolidated results for the three and nine months ended September 30, 2023, compared to the corresponding periods in 2022, and should be read in conjunction with the consolidated financial statements and notes. This section also includes a discussion of the key drivers impacting the Company's financial results of operations both on a consolidated basis and by reportable segments.
We describe the primary sources of revenue and categories of expense for each segment in the discussion of segment financial results. A reconciliation of segment operating income to total operating income is included in Note 18, Segment Information, in the notes to the consolidated financial statements included in Part I, Item 1, of this report.
For information and comparability of the Company's results of operations and liquidity and capital resources for the three and nine months ended September 30, 2022, refer to "Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations" of the Company's Form 10-Q for the quarter ended September 30, 2022.
This MD&A contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Refer to "Information Concerning Forward-Looking Statements" at the outset of this report.
Non-GAAP measures
The Company reports its financial results in accordance with accounting principles generally accepted in the United States (U.S.), referred to as in accordance with "GAAP" or "reported" results. The Company also refers to and presents a non-GAAP financial measure in non-GAAP revenue, within the meaning of Regulation G and Item 10(e) of Regulation S-K in accordance with the Securities Exchange Act of 1934. The Company has included a reconciliation of this non-GAAP financial measure to the most directly comparable financial measure calculated in accordance with GAAP as part of the consolidated revenue and expense discussion. Percentage changes, referred to as non-GAAP underlying revenue, are calculated by dividing the period over period change in non-GAAP revenue by the prior period non-GAAP revenue.
The Company believes this non-GAAP financial measure provides useful supplemental information that enables investors to better compare the Company’s performance across periods. Management also uses this measure internally to assess the operating performance of its businesses and to decide how to allocate resources. However, investors should not consider this non-GAAP measure in isolation from, or as a substitute for, the financial information that the Company reports in accordance with GAAP. The Company's non-GAAP measure includes adjustments that reflect how management views its businesses and may differ from similarly titled non-GAAP measures presented by other companies.
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Financial Highlights
•Consolidated revenue for the three months ended September 30, 2023 was $5.4 billion, an increase of 13%, or 10% on an underlying basis. For the nine months ended September 30, 2023, consolidated revenue was $17.2 billion, an increase of 9%, or 10% on an underlying basis compared to the corresponding period in the prior year.
•Consolidated operating income increased $205 million, or 26%, to $996 million for the three months ended September 30, 2023, compared to the corresponding quarter in the prior year. Net income attributable to the Company was $730 million. Earnings per share on a diluted basis increased to $1.47 from $1.08, or 36%, compared to the corresponding quarter in the prior year. For the nine months ended September 30, 2023, consolidated operating income increased $579 million, or 16% to $4.2 billion, compared to the corresponding period in the prior year. Net income attributable to the Company was $3.0 billion. Earnings per share on a diluted basis increased to $6.01 from $5.11, or 18%, compared to the corresponding period in the prior year.
•Risk and Insurance Services revenue for the three months ended September 30, 2023 was $3.2 billion, an increase of 12%, or 11% on an underlying basis. Operating income was $640 million, compared with $529 million in the corresponding quarter in the prior year. For the nine months ended September 30, 2023, Risk and Insurance Services revenue was $10.8 billion, an increase of 12%, and the same on an underlying basis. Operating income was $3.2 billion, compared with $2.6 billion for the corresponding period in the prior year.
•Consulting revenue for the three months ended September 30, 2023 was $2.2 billion, an increase of 13%, or 9% on an underlying basis. Operating income was $424 million, compared with $350 million in the corresponding quarter in the prior year. For the nine months ended September 30, 2023, Consulting revenue was $6.4 billion, an increase of 6%, or 7% on an underlying basis. Operating income was $1.2 billion, consistent to the corresponding period in the prior year.
•In April 2023, the Company completed the acquisition of Westpac Banking Corporation’s ("Westpac") financial advisory business, Advance Asset Management, and the transfer from Westpac of BT Financial Group's personal and corporate pension funds to the Mercer Super Trust managed by Mercer Australia (referred to collectively, as the "Westpac Transaction").
•In August 2023, the Company acquired Graham Company, a Philadelphia-based risk management consultancy and insurance and employee benefits broker.
•The Company repurchased 1.6 million shares of stock for $300 million in the third quarter of 2023. During the nine months ended September 30, 2023, the Company repurchased 5.1 million shares for $900 million.
•In September 2023, the Company issued $600 million of 5.400% senior notes due 2033 and $1 billion of 5.700% senior notes due 2053. In March 2023, the Company issued $600 million of 5.45% senior notes due 2053.
•In September 2023, the Board of Directors of the Company declared a dividend of $0.71 per share on outstanding common stock, payable in November of 2023.
For additional details, refer to the Consolidated Results of Operations and Liquidity and Capital Resources sections in this MD&A.
Acquisitions and dispositions impacting the Risk and Insurance Services and Consulting segments are discussed in Note 8, Acquisitions and Dispositions, in the notes to the consolidated financial statements.
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Consolidated Results of Operations

| Three Months Ended September 30, |  | Nine Months Ended September 30,
(In millions, except per share data) | 2023 |  | 2022 |  | 2023 |  | 2022
Revenue | $ | 5,382 |  |  | $ | 4,770 |  |  | $ | 17,182 |  |  | $ | 15,698 |
Expense: |  |  |  |  |  |  |
Compensation and benefits | 3,287 |  |  | 2,923 |  |  | 9,831 |  |  | 9,033 |
Other operating expenses | 1,099 |  |  | 1,056 |  |  | 3,172 |  |  | 3,065 |
Operating expenses | 4,386 |  |  | 3,979 |  |  | 13,003 |  |  | 12,098 |
Operating income | $ | 996 |  |  | $ | 791 |  |  | $ | 4,179 |  |  | $ | 3,600 |
Income before income taxes | $ | 930 |  |  | $ | 733 |  |  | $ | 3,978 |  |  | $ | 3,469 |
Net income before non-controlling interests | $ | 738 |  |  | $ | 552 |  |  | $ | 3,037 |  |  | $ | 2,616 |
Net income attributable to the Company | $ | 730 |  |  | $ | 546 |  |  | $ | 3,000 |  |  | $ | 2,584 |
Net income per share attributable to the Company: |  |  |  |  |  |  |
– Basic | $ | 1.48 |  |  | $ | 1.10 |  |  | $ | 6.07 |  |  | $ | 5.16 |
– Diluted | $ | 1.47 |  |  | $ | 1.08 |  |  | $ | 6.01 |  |  | $ | 5.11 |
Average number of shares outstanding: |  |  |  |  |  |  |
– Basic | 494 |  |  | 498 |  |  | 494 |  |  | 501 |
– Diluted | 499 |  |  | 503 |  |  | 499 |  |  | 506 |
Shares outstanding at September 30, | 493 |  |  | 497 |  |  | 493 |  |  | 497 |

Consolidated operating income increased $205 million, or 26% to $996 million for the three months ended September 30, 2023, compared to $791 million in the corresponding quarter in the prior year, reflecting a 13% increase in revenue and a 10% increase in expenses. Revenue growth was driven by increases in the Risk and Insurance Services and Consulting segments of 12% and 13%, respectively.
Consolidated operating income increased $579 million, or 16% to $4.2 billion for the nine months ended September 30, 2023, compared to $3.6 billion in the corresponding period in the prior year, reflecting a 9% increase in revenue and a 7% increase in expenses. Revenue growth was driven by increases in the Risk and Insurance Services and Consulting segments of 12% and 6%, respectively.
The increase in revenue for the three and nine months ended September 30, 2023 reflects the continued demand for our advice and services, new business and renewal growth, and solid client retentio n, as well as higher insurance and reinsurance rates. Results also benefited fro m investments in talent and increased fiduciary income due to higher interest rates.
The increase in expenses for both the three and nine months ended September 30, 2023 is primarily due to compensation and benefits driven by increased headcount and higher incentive compensation. Expenses for the nine months ended September 30, 2023 also reflect higher travel and entertainment, technology, and outside services costs, compared to the corresponding period in the prior year.
Diluted earnings per share increased to $1.47 from $1.08, or 36% for the three months ended September 30, 2023, and to $6.01 from $5.11, or 18% for the nine months ended September 30, 2023, compared to corresponding periods in the prior year. The increase for the three and nine months ended September 30, 2023 is primarily the result of higher operating income compared to the corresponding periods in the prior year.
Results for the nine months ended September 30, 2022 also include a charge of approximately $52 million for the deconsolidation of the Company's Russian businesses and other related charges in Marsh and Oliver Wyman Group recorded in the first quarter of 2022.
39

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

| Three Months Ended September 30, |  | Nine Months Ended September 30,
(In millions) | 2023 |  | 2022 |  | 2023 |  | 2022
Restructuring, excluding JLT | $ | 46 |  |  | $ | 32 |  |  | $ | 148 |  |  | $ | 78 |
Changes in contingent consideration | 4 |  |  | 11 |  |  | 21 |  |  | 38 |
JLT integration and restructuring costs | 6 |  |  | 6 |  |  | 22 |  |  | 18 |
JLT legacy legal charges | — |  |  | — |  |  | (51) |  |  | 3 |
Disposal of business | — |  |  | — |  |  | 17 |  |  | (114) |
Westpac acquisition related costs | 5 |  |  | — |  |  | 32 |  |  | — |
JLT acquisition related retention costs | — |  |  | 4 |  |  | — |  |  | 28 |
Legal claims and other | — |  |  | — |  |  | — |  |  | 39 |
Deconsolidation of Russian businesses and other related charges | — |  |  | — |  |  | — |  |  | 52 |
Other | 2 |  |  | 7 |  |  | 2 |  |  | — |
Impact on income before taxes | $ | 63 |  |  | $ | 60 |  |  | $ | 191 |  |  | $ | 142 |

•Restructuring, excluding JLT: In 2023, costs primarily include severance and lease exit charges for activities focused on workforce actions, rationalization of technology and functional resources, and reductions in real estate. Costs also reflect charges for Marsh's operational excellence program. These costs are discussed in more detail in Note 15, Restructuring Costs, in the notes to the consolidated financial statements.
•Changes in contingent consideration: Includes the change in fair value of contingent consideration related to acquisitions and dispositions measured each quarter.
•JLT integration and restructuring: In 2023, reflects adjustments to restructuring liabilities for lease exit charges for a legacy JLT U.K. location.
•JLT legacy legal charges: Reflects insurance and indemnity recoveries for a legacy JLT Errors and Omissions ("E&O") matter relating to suitability of advice provided to individuals for defined benefit pension transfers in the U.K.
•Disposal of Business: Loss on sale of an individual financial advisory business in Canada in 2023. In 2022, the amount reflects a gain of $112 million on the sale of the Mercer U.S. affinity business. These amounts are reflected as a component of revenue in the consolidated statements of income and excluded from non-GAAP revenue.
•Legal claims: The Company recorded settlement and legal costs related to strategic recruiting.
•Deconsolidation of Russian businesses and other related charges: The loss on deconsolidation of the Company's Russian businesses of $39 million is reflected as a component of revenue in the consolidated statements of income and excluded from non-GAAP revenue. The remaining expenses of $13 million are included in other operating expenses in the consolidated statements of income.
40

Consolidated Revenue and Expense
Revenue – Non-GAAP Revenue and Components of Change
The Company conducts business in 130 countries. As a result, foreign exchange rate movements may impact period-to-period comparisons of revenue. Similarly, certain other items such as acquisitions and dispositions, including transfers among businesses, may impact period over period comparisons of revenue. Non-GAAP revenue measures the change in revenue from one period to the next by isolating these impacts on an underlying revenue basis. Percentage changes, referred to as non-GAAP underlying revenue, are calculated by dividing the period over period change in non-GAAP revenue by the prior period non-GAAP revenue.
The non-GAAP revenue measure is presented on a constant currency basis excluding the impact of foreign currency fluctuations. The Company isolates the impact of foreign exchange rate movements period over period, by translating the current period foreign currency GAAP revenue into U.S. Dollars based on the difference in the current and corresponding prior period exchange rates.
The percentage change for acquisitions, dispositions, and other includes the impact of current and prior year items excluded from the calculation of non-GAAP underlying revenue for comparability purposes. Details on these items are provided in the reconciliation of non-GAAP revenue to GAAP revenue tables.
The following tables present the Company's non-GAAP revenue for the three and nine months ended September 30, 2023 and 2022 and the related non-GAAP underlying revenue change:

Three Months Ended September 30, (In millions, except percentages) | GAAP Revenue | % Change GAAP Revenue* |  | Non-GAAP Revenue | Non-GAAP Underlying Revenue*
2023 | 2022 |  | 2023 | 2022
Risk and Insurance Services |  |  |  |  |  |  |
Marsh | $ | 2,700 |  | $ | 2,470 |  | 9 | % |  | $ | 2,654 |  | $ | 2,468 |  | 8 | %
Guy Carpenter | 359 |  | 328 |  | 9 | % |  | 353 |  | 328 |  | 8 | %
Subtotal | 3,059 |  | 2,798 |  | 9 | % |  | 3,007 |  | 2,796 |  | 8 | %
Fiduciary interest income | 131 |  | 40 |  |  |  | 131 |  | 40 |  |
Total Risk and Insurance Services | 3,190 |  | 2,838 |  | 12 | % |  | 3,138 |  | 2,836 |  | 11 | %
Consulting |  |  |  |  |  |  |
Mercer | 1,425 |  | 1,284 |  | 11 | % |  | 1,404 |  | 1,305 |  | 8 | %
Oliver Wyman Group | 781 |  | 667 |  | 17 | % |  | 745 |  | 667 |  | 12 | %
Total Consulting | 2,206 |  | 1,951 |  | 13 | % |  | 2,149 |  | 1,972 |  | 9 | %
Corporate Eliminations | (14) |  | (19) |  |  |  | (14) |  | (19) |  |
Total Revenue | $ | 5,382 |  | $ | 4,770 |  | 13 | % |  | $ | 5,273 |  | $ | 4,789 |  | 10 | %

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

Three Months Ended September 30, (In millions, except percentages) | GAAP Revenue | % Change GAAP Revenue* |  | Non-GAAP Revenue | Non-GAAP Underlying Revenue*
2023 | 2022 |  | 2023 | 2022
Marsh: |  |  |  |  |  |  |
EMEA (a) | $ | 692 |  | $ | 615 |  | 13 | % |  | $ | 667 |  | $ | 614 |  | 9 | %
Asia Pacific (a) | 311 |  | 286 |  | 9 | % |  | 316 |  | 286 |  | 10 | %
Latin America | 134 |  | 118 |  | 14 | % |  | 134 |  | 118 |  | 14 | %
Total International | 1,137 |  | 1,019 |  | 12 | % |  | 1,117 |  | 1,018 |  | 10 | %
U.S./Canada | 1,563 |  | 1,451 |  | 8 | % |  | 1,537 |  | 1,450 |  | 6 | %
Total Marsh | $ | 2,700 |  | $ | 2,470 |  | 9 | % |  | $ | 2,654 |  | $ | 2,468 |  | 8 | %
Mercer: |  |  |  |  |  |  |
Wealth | $ | 635 |  | $ | 561 |  | 13 | % |  | $ | 623 |  | $ | 582 |  | 7 | %
Health | 496 |  | 451 |  | 10 | % |  | 490 |  | 451 |  | 8 | %
Career | 294 |  | 272 |  | 8 | % |  | 291 |  | 272 |  | 7 | %
Total Mercer | $ | 1,425 |  | $ | 1,284 |  | 11 | % |  | $ | 1,404 |  | $ | 1,305 |  | 8 | %

(a) In the first quarter of 2023, the Company began reporting the Marsh India operations in EMEA. Prior year results for India have been reclassified from Asia Pacific to EMEA for comparative purposes.
41

Nine Months Ended September 30, (In millions, except percentages) | GAAP Revenue | % Change GAAP Revenue* |  | Non-GAAP Revenue | Non-GAAP Underlying Revenue*
2023 | 2022 |  | 2023 | 2022
Risk and Insurance Services |  |  |  |  |  |  |
Marsh | $ | 8,482 |  | $ | 7,794 |  | 9 | % |  | $ | 8,485 |  | $ | 7,809 |  | 9 | %
Guy Carpenter | 2,006 |  | 1,849 |  | 8 | % |  | 2,008 |  | 1,830 |  | 10 | %
Subtotal | 10,488 |  | 9,643 |  | 9 | % |  | 10,493 |  | 9,639 |  | 9 | %
Fiduciary interest income | 330 |  | 57 |  |  |  | 332 |  | 57 |  |
Total Risk and Insurance Services | 10,818 |  | 9,700 |  | 12 | % |  | 10,825 |  | 9,696 |  | 12 | %
Consulting |  |  |  |  |  |  |
Mercer | 4,143 |  | 4,016 |  | 3 | % |  | 4,198 |  | 3,924 |  | 7 | %
Oliver Wyman Group | 2,266 |  | 2,029 |  | 12 | % |  | 2,194 |  | 2,040 |  | 8 | %
Total Consulting | 6,409 |  | 6,045 |  | 6 | % |  | 6,392 |  | 5,964 |  | 7 | %
Corporate Eliminations | (45) |  | (47) |  |  |  | (45) |  | (47) |  |
Total Revenue | $ | 17,182 |  | $ | 15,698 |  | 9 | % |  | $ | 17,172 |  | $ | 15,613 |  | 10 | %

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

Nine Months Ended September 30, (In millions, except percentages) | GAAP Revenue | % Change GAAP Revenue* |  | Non-GAAP Revenue | Non-GAAP Underlying Revenue*
2023 | 2022 |  | 2023 | 2022
Marsh: |  |  |  |  |  |  |
EMEA (a) | $ | 2,482 |  | $ | 2,264 |  | 10 | % |  | $ | 2,508 |  | $ | 2,280 |  | 10 | %
Asia Pacific (a) | 980 |  | 927 |  | 6 | % |  | 1,011 |  | 927 |  | 9 | %
Latin America | 386 |  | 340 |  | 13 | % |  | 387 |  | 340 |  | 14 | %
Total International | 3,848 |  | 3,531 |  | 9 | % |  | 3,906 |  | 3,547 |  | 10 | %
U.S./Canada | 4,634 |  | 4,263 |  | 9 | % |  | 4,579 |  | 4,262 |  | 7 | %
Total Marsh | $ | 8,482 |  | $ | 7,794 |  | 9 | % |  | $ | 8,485 |  | $ | 7,809 |  | 9 | %
Mercer: |  |  |  |  |  |  |
Wealth | $ | 1,853 |  | $ | 1,775 |  | 4% |  | $ | 1,896 |  | $ | 1,820 |  | 4 | %
Health | 1,559 |  | 1,562 |  | — |  |  | 1,568 |  | 1,425 |  | 10 | %
Career | 731 |  | 679 |  | 8 | % |  | 734 |  | 679 |  | 8 | %
Total Mercer | $ | 4,143 |  | $ | 4,016 |  | 3 | % |  | $ | 4,198 |  | $ | 3,924 |  | 7 | %

(a) In the first quarter of 2023, the Company began reporting the Marsh India operations in EMEA. Prior year results for India have been reclassified from Asia Pacific to EMEA for comparative purposes.
* Rounded to whole percentages.
42

Revenue – Reconciliation of Non-GAAP Measures
The following tables provide the reconciliation of GAAP revenue to Non-GAAP revenue for the three and nine months ended September 30, 2023 and 2022:

| 2023 |  | 2022
Three Months Ended September 30, (In millions) | GAAP Revenue |  | Currency Impact |  | Acquisitions/ Dispositions/ Other Impact |  | Non-GAAP Revenue |  | GAAP Revenue |  | Acquisitions/ Dispositions/ Other Impact |  | Non-GAAP Revenue
Risk and Insurance Services |  |  |  |  |  |  |  |  |  |  |  |  |
Marsh | $ | 2,700 |  |  | $ | (15) |  |  | $ | (31) |  |  | $ | 2,654 |  |  | $ | 2,470 |  |  | $ | (2) |  |  | $ | 2,468 |
Guy Carpenter | 359 |  |  | (3) |  |  | (3) |  |  | 353 |  |  | 328 |  |  | — |  |  | 328 |
Subtotal | 3,059 |  |  | (18) |  |  | (34) |  |  | 3,007 |  |  | 2,798 |  |  | (2) |  |  | 2,796 |
Fiduciary interest income | 131 |  |  | — |  |  | — |  |  | 131 |  |  | 40 |  |  | — |  |  | 40 |
Total Risk and Insurance Services | 3,190 |  |  | (18) |  |  | (34) |  |  | 3,138 |  |  | 2,838 |  |  | (2) |  |  | 2,836 |
Consulting |  |  |  |  |  |  |  |  |  |  |  |  |
Mercer (a) | 1,425 |  |  | (17) |  |  | (4) |  |  | 1,404 |  |  | 1,284 |  |  | 21 |  |  | 1,305 |
Oliver Wyman Group | 781 |  |  | (15) |  |  | (21) |  |  | 745 |  |  | 667 |  |  | — |  |  | 667 |
Total Consulting | 2,206 |  |  | (32) |  |  | (25) |  |  | 2,149 |  |  | 1,951 |  |  | 21 |  |  | 1,972 |
Corporate Eliminations | (14) |  |  | — |  |  | — |  |  | (14) |  |  | (19) |  |  | — |  |  | (19) |
Total Revenue | $ | 5,382 |  |  | $ | (50) |  |  | $ | (59) |  |  | $ | 5,273 |  |  | $ | 4,770 |  |  | $ | 19 |  |  | $ | 4,789 |

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

| 2023 |  | 2022
Three Months Ended September 30, (In millions) | GAAP Revenue |  | Currency Impact |  | Acquisitions/ Dispositions/ Other Impact |  | Non-GAAP Revenue |  | GAAP Revenue |  | Acquisitions/ Dispositions/ Other Impact |  | Non-GAAP Revenue
Marsh: |  |  |  |  |  |  |  |  |  |  |  |  |
EMEA (b) | $ | 692 |  |  | $ | (23) |  |  | $ | (2) |  |  | $ | 667 |  |  | $ | 615 |  |  | $ | (1) |  |  | $ | 614 |
Asia Pacific (b) | 311 |  |  | 6 |  |  | (1) |  |  | 316 |  |  | 286 |  |  | — |  |  | 286 |
Latin America | 134 |  |  | (1) |  |  | 1 |  |  | 134 |  |  | 118 |  |  | — |  |  | 118 |
Total International | 1,137 |  |  | (18) |  |  | (2) |  |  | 1,117 |  |  | 1,019 |  |  | (1) |  |  | 1,018 |
U.S./Canada | 1,563 |  |  | 3 |  |  | (29) |  |  | 1,537 |  |  | 1,451 |  |  | (1) |  |  | 1,450 |
Total Marsh | $ | 2,700 |  |  | $ | (15) |  |  | $ | (31) |  |  | $ | 2,654 |  |  | $ | 2,470 |  |  | $ | (2) |  |  | $ | 2,468 |
Mercer: |  |  |  |  |  |  |  |  |  |  |  |  |
Wealth (a) | $ | 635 |  |  | $ | (11) |  |  | $ | (1) |  |  | $ | 623 |  |  | $ | 561 |  |  | $ | 21 |  |  | $ | 582 |
Health | 496 |  |  | (6) |  |  | — |  |  | 490 |  |  | 451 |  |  | — |  |  | 451 |
Career | 294 |  |  | — |  |  | (3) |  |  | 291 |  |  | 272 |  |  | — |  |  | 272 |
Total Mercer | $ | 1,425 |  |  | $ | (17) |  |  | $ | (4) |  |  | $ | 1,404 |  |  | $ | 1,284 |  |  | $ | 21 |  |  | $ | 1,305 |

(a)Acquisitions, dispositions, and other in 2022 includes revenue from the Westpac Transaction in Wealth.
(b)In the first quarter of 2023, the Company began reporting the Marsh India operations in EMEA. Prior year results for India have been reclassified from Asia Pacific to EMEA for comparative purposes.
43

| 2023 |  | 2022
Nine Months Ended September 30, (In millions) | GAAP Revenue |  | Currency Impact |  | Acquisitions/ Dispositions/ Other Impact |  | Non-GAAP Revenue |  | GAAP Revenue |  | Acquisitions/ Dispositions/ Other Impact |  | Non-GAAP Revenue
Risk and Insurance Services |  |  |  |  |  |  |  |  |  |  |  |  |
Marsh (a) | $ | 8,482 |  |  | $ | 82 |  |  | $ | (79) |  |  | $ | 8,485 |  |  | $ | 7,794 |  |  | $ | 15 |  |  | $ | 7,809 |
Guy Carpenter | 2,006 |  |  | 20 |  |  | (18) |  |  | 2,008 |  |  | 1,849 |  |  | (19) |  |  | 1,830 |
Subtotal | 10,488 |  |  | 102 |  |  | (97) |  |  | 10,493 |  |  | 9,643 |  |  | (4) |  |  | 9,639 |
Fiduciary interest income | 330 |  |  | 2 |  |  | — |  |  | 332 |  |  | 57 |  |  | — |  |  | 57 |
Total Risk and Insurance Services | 10,818 |  |  | 104 |  |  | (97) |  |  | 10,825 |  |  | 9,700 |  |  | (4) |  |  | 9,696 |
Consulting |  |  |  |  |  |  |  |  |  |  |  |  |
Mercer (b) | 4,143 |  |  | 44 |  |  | 11 |  |  | 4,198 |  |  | 4,016 |  |  | (92) |  |  | 3,924 |
Oliver Wyman Group (a) | 2,266 |  |  | (1) |  |  | (71) |  |  | 2,194 |  |  | 2,029 |  |  | 11 |  |  | 2,040 |
Total Consulting | 6,409 |  |  | 43 |  |  | (60) |  |  | 6,392 |  |  | 6,045 |  |  | (81) |  |  | 5,964 |
Corporate Eliminations | (45) |  |  | — |  |  | — |  |  | (45) |  |  | (47) |  |  | — |  |  | (47) |
Total Revenue | $ | 17,182 |  |  | $ | 147 |  |  | $ | (157) |  |  | $ | 17,172 |  |  | $ | 15,698 |  |  | $ | (85) |  |  | $ | 15,613 |

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

| 2023 |  | 2022
Nine Months Ended September 30, (In millions) | GAAP Revenue |  | Currency Impact |  | Acquisitions/ Dispositions/ Other Impact |  | Non-GAAP Revenue |  | GAAP Revenue |  | Acquisitions/ Dispositions/ Other Impact |  | Non-GAAP Revenue
Marsh: |  |  |  |  |  |  |  |  |  |  |  |  |
EMEA (a) (c) | $ | 2,482 |  |  | $ | 32 |  |  | $ | (6) |  |  | $ | 2,508 |  |  | $ | 2,264 |  |  | $ | 16 |  |  | $ | 2,280 |
Asia Pacific (c) | 980 |  |  | 35 |  |  | (4) |  |  | 1,011 |  |  | 927 |  |  | — |  |  | 927 |
Latin America | 386 |  |  | — |  |  | 1 |  |  | 387 |  |  | 340 |  |  | — |  |  | 340 |
Total International | 3,848 |  |  | 67 |  |  | (9) |  |  | 3,906 |  |  | 3,531 |  |  | 16 |  |  | 3,547 |
U.S./Canada | 4,634 |  |  | 15 |  |  | (70) |  |  | 4,579 |  |  | 4,263 |  |  | (1) |  |  | 4,262 |
Total Marsh | $ | 8,482 |  |  | $ | 82 |  |  | $ | (79) |  |  | $ | 8,485 |  |  | $ | 7,794 |  |  | $ | 15 |  |  | $ | 7,809 |
Mercer: |  |  |  |  |  |  |  |  |  |  |  |  |
Wealth (b) | $ | 1,853 |  |  | $ | 24 |  |  | $ | 19 |  |  | $ | 1,896 |  |  | $ | 1,775 |  |  | $ | 45 |  |  | $ | 1,820 |
Health (b) | 1,559 |  |  | 10 |  |  | (1) |  |  | 1,568 |  |  | 1,562 |  |  | (137) |  |  | 1,425 |
Career | 731 |  |  | 10 |  |  | (7) |  |  | 734 |  |  | 679 |  |  | — |  |  | 679 |
Total Mercer | $ | 4,143 |  |  | $ | 44 |  |  | $ | 11 |  |  | $ | 4,198 |  |  | $ | 4,016 |  |  | $ | (92) |  |  | $ | 3,924 |

(a)Acquisitions, dispositions, and other in 2022 includes the loss on deconsolidation of the Company's Russian businesses of $27 million and Oliver Wyman Group of $12 million.
(b)Acquisitions, dispositions, and other in 2022 includes revenue from the Westpac Transaction in Wealth and a gain from the sale of the Mercer U.S. affinity business of $112 million in Health. Results for 2023 in Wealth include the loss on sale of an individual financial advisory business in Canada of $17 million.
(c)In the first quarter of 2023, the Company began reporting the Marsh India operations in EMEA. Prior year results for India have been reclassified from Asia Pacific to EMEA for comparative purposes.
44

Consolidated Revenue
Consolidated revenue increased $612 million, or 13% to $5.4 billion for the three months ended September 30, 2023, compared to $4.8 billion for the three months ended September 30, 2022. Consolidated revenue increased 10% on an underlying basis, 2% from acquisitions and 1% from the impact of foreign currency translation. On an underlying basis, revenue increased 11% and 9% for the three months ended September 30, 2023 in the Risk and Insurance Services and Consulting segments, respectively.
Consolidated revenue increased $1.5 billion, or 9% to $17.2 billion for the nine months ended September 30, 2023, compared to $15.7 billion for the nine months ended September 30, 2022. Consolidated revenue increased 10% on an underlying basis, partially offset by a decrease of 1% from the impact of foreign currency translation. On an underlying basis, revenue increased 12% and 7% for the nine months ended September 30, 2023 in the Risk and Insurance Services and Consulting segments, respectively.
Underlying revenue growth in the Risk and Insurance Services and Consulting segments for the three and nine months ended September 30, 2023 was driven by the continued demand for our advice and services, as well as growth in renewal and new business. In Risk and Insurance Services, renewal growth was driven by client retention, exposure growth and higher insurance and reinsurance rates. Revenue growth also benefited from investments in talent and increased fiduciary income due to higher interest rates. In Consulting, revenue growth reflected continued demand for our product solutions and consulting services.
Consolidated Operating Expenses
Consolidated operating expenses increased $407 million, or 10% to $4.4 billion for the three months ended September 30, 2023, compared to $4.0 billion for the three months ended September 30, 2022. Expenses reflect increases of 2% from both acquisitions and the impact of foreign currency translation. Expenses, excluding the impact from acquisitions and foreign currency translation, increased 7% for the three months ended September 30, 2023, with increases of 8% and 6% in the Risk and Insurance Services and Consulting segments, respectively.
Consolidated operating expenses increased $905 million, or 7% to $13.0 billion for the nine months ended September 30, 2023, compared to $12.1 billion for the nine months ended September 30, 2022. Expenses reflect a 2% increase from acquisitions and a decrease of 1% from the impact of foreign currency translation. Expenses, excluding the impact from acquisitions and foreign currency translation, increased 7% for the nine months ended September 30, 2023, with increases of 8% and 6% in the Risk and Insurance Services and Consulting segments, respectively.
The increase in expenses for the three and nine months ended September 30, 2023 is primarily due to compensation and benefits driven by increased headcount and higher incentive compensation. Expenses for the nine months ended September 30, 2023 also reflect higher travel and entertainment, technology and outside services costs, compared to the corresponding period in the prior year.
In the fourth quarter of 2022, the Company initiated activities focused on workforce actions, rationalization of technology and functional services, and reductions in real estate. The Company anticipates total charges related to these activities to be between $425 million and $475 million. The Company has incurred approximately $325 million of restructuring costs through September 30, 2023, primarily severance and lease exit charges, of which $37 million and $109 million were incurred for the three and nine months ended September 30, 2023, respectively. The majority of the remaining costs are expected to be incurred by the end of 2023. Related estimated savings are expected to be approximately $400 million, with $225 million to be realized in 2023. The majority of the remaining savings are expected to be realized in 2024. The Company continues to refine its detailed plans for each business and location, which may change the expected timing, estimates of expected costs and related savings.
45

Risk and Insurance Services
In the Risk and Insurance Services segment, the Company’s subsidiaries and other affiliated entities act as brokers, agents or consultants for insureds, in surance underwriters and other brokers in the areas of risk management, insurance broking, insurance program management, risk consulting, analytical modeling and alternative risk financing services, primarily under the brand of Marsh, and engage in specialized reinsurance broking, strategic advisory services and analytics solutions, primarily under the brand of Guy Carpenter.
The results of operations for the Risk and Insurance Services segment are as follows:

| Three Months Ended September 30, |  | Nine Months Ended September 30,
(In millions, except percentages) | 2023 |  | 2022 |  | 2023 |  | 2022
Revenue | $ | 3,190 |  | $ | 2,838 |  | $ | 10,818 |  | $ | 9,700
Compensation and benefits | 1,900 |  | 1,688 |  | 5,703 |  | 5,239
Other operating expenses | 650 |  | 621 |  | 1,923 |  | 1,844
Operating expenses | 2,550 |  | 2,309 |  | 7,626 |  | 7,083
Operating income | $ | 640 |  | $ | 529 |  | $ | 3,192 |  | $ | 2,617
Operating income margin | 20.0 | % |  | 18.7 | % |  | 29.5 | % |  | 27.0 | %

Revenue
Revenue in the Risk and Insurance Services segment increased $352 million, or 12% to $3.2 billion for the three months ended September 30, 2023, compared to $2.8 billion for the three months ended September 30, 2022. Revenue increased 11% on an underlying basis and 1% each from acquisitions and the impact of foreign currency translation. Interest earned on fiduciary funds increased $91 million to $131 million for the three months ended September 30, 2023, compared to $40 million for the corresponding quarter in the prior year.
Revenue in the Risk and Insurance Services segment increased $1.1 billion, or 12% to $10.8 billion for the nine months ended September 30, 2023, compared to $9.7 billion for the nine months ended September 30, 2022. Revenue increased 12% on an underlying basis and 1% from acquisitions, partially offset by a decrease of 1% from the impact of foreign currency translation. Interest earned on fiduciary funds increased by $273 million to $330 million for the nine months ended September 30, 2023, compared to $57 million for the corresponding period in the prior year.
The increase in revenue on an underlying basis in the Risk and Insurance Services segment for the three and nine months ended September 30, 2023 was primarily due to strong growth in renewals and solid new business. Renewal growth was driven by solid client retention, as well as higher insurance and reinsurance rates. Results also benefited from increased fiduciary income, driven by higher interest rates compared to the corresponding periods in the prior year.
Marsh's revenue increased $230 million, or 9% to $2.7 billion for the three months ended September 30, 2023, compared to $2.5 billion for the three months ended September 30, 2022. This reflects increases of 8% on an underlying basis and 1% from both acquisitions and the impact of foreign currency translation. On an underlying basis, U.S./Canada rose 6%. International operations produced underlying revenue growth of 10%, reflecting growth of 14% in Latin America, 10% in Asia Pacific and 9% in EMEA.
Marsh's revenue increased $688 million, or 9% to $8.5 billion for the nine months ended September 30, 2023, compared to $7.8 billion for the nine months ended September 30, 2022. This reflects increases of 9% on an underlying basis and 1% from acquisitions, partially offset by a decrease of 1% from the impact of foreign currency translation. On an underlying basis, U.S./Canada rose 7%. Total International operations produced underlying revenue growth of 10%, reflecting growth of 14% in Latin America, 10% in EMEA, and 9% in Asia Pacific.
Results for the nine months ended September 30, 2022, also included a charge of approximately $27 million related to the loss on deconsolidation of the Company's Russian businesses.
Guy Carpenter's revenue increased $31 million, or 9% to $359 million for the three months ended September 30, 2023, compared to $328 million for the three months ended September 30, 2022. This reflects increases of 8% on an underlying basis and 1% each from acquisitions and the impact of foreign currency translation.
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Guy Carpenter's revenue increased $157 million, or 8% to $2.0 billion for the nine months ended September 30, 2023, compared to $1.8 billion for the nine months ended September 30, 2022. This reflects an increase of 10% on an underlying basis, partially offset by a decrease of 1% from the impact of foreign currency translation.
The Risk and Insurance Services segment completed eight acquisitions during the nine months ended September 30, 2023. Information regarding these acquisitions is included in Note 8, Acquisitions and Dispositions, in the notes to the consolidated financial statements.
Operating Expenses
Expenses in the Risk and Insurance Services segment increased $241 million, or 10% to $2.6 billion for the three months ended September 30, 2023, compared to $2.3 billion for the three months ended September 30, 2022. Expenses reflect a 1% increase from acquisitions and a 2% increase from the impact of foreign currency translation.
Expenses in the Risk and Insurance Services segment increased $543 million, or 8% to $7.6 billion for the nine months ended September 30, 2023, compared to $7.1 billion for the nine months ended September 30, 2022. Expenses reflect a 1% increase from acquisitions offset by a decrease of 1% from the impact of foreign currency translation.
The increase in expenses excluding the impact from acquisitions and foreign currency translation for the three and nine months ended September 30, 2023 is primarily due to compensation and benefits driven by increased headcount and higher incentive compensation. Expenses for the nine months ended September 30, 2023 also reflect higher travel and entertainment, technology and outside services costs compared to the corresponding period in the prior year.
For the three and nine months ended September 30, 2023, the Company incurred $26 million and $89 million of restructuring costs in the Risk and Insurance Services segment, respectively, of which $16 million and $49 million, respectively, were primarily for severance and lease exit charges related to the Company's activities focused on workforce actions, rationalization of technology and functional services, and reductions in real estate.
Consulting
The Company conducts business in its Consulting segment through Mercer and Oliver Wyman Group. Mercer delivers advice and technology-driven solutions that help organizations redefine the future of work, shape retirement and investment outcomes, and advance health and well-being for a changing workforce. Oliver Wyman Group serves as critical strategic, economic and brand advisor to private sector and governmental clients.
The results of operations for the Consulting segment are as follows:

| Three Months Ended September 30, |  | Nine Months Ended September 30,
(In millions, except percentages) | 2023 |  | 2022 |  | 2023 |  | 2022
Revenue | $ | 2,206 |  | $ | 1,951 |  | $ | 6,409 |  | $ | 6,045
Compensation and benefits | 1,251 |  | 1,107 |  | 3,690 |  | 3,416
Other operating expenses | 531 |  | 494 |  | 1,496 |  | 1,412
Operating expenses | 1,782 |  | 1,601 |  | 5,186 |  | 4,828
Operating income | $ | 424 |  | $ | 350 |  | $ | 1,223 |  | $ | 1,217
Operating income margin | 19.2 | % |  | 17.9 | % |  | 19.1 | % |  | 20.1 | %

Revenue
Consulting revenue increased $255 million, or 13% to $2.2 billion for the three months ended September 30, 2023, compared to $2.0 billion for the three months ended September 30, 2022. This reflects increases of 9% on an underlying basis and 2% each from acquisitions and the impact of foreign currency translation.
Consulting revenue increased $364 million, or 6% to $6.4 billion for the nine months ended September 30, 2023, compared to $6.0 billion for the nine months ended September 30, 2022. This reflects an increase of 7% on an underlying basis, partially offset by a decrease of 1% from the impact of foreign currency translation.
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Mercer's revenue increased $141 million, or 11% to $1.4 billion for the three months ended September 30, 2023, compared to $1.3 billion for the three months ended September 30, 2022. This reflects increases of 8% on an underlying basis, 2% from acquisitions and 1% from the impact of foreign currency translation. On an underlying basis, revenue increased 8% for Health and 7% each for Career and Wealth, compared to the corresponding quarter in the prior year.
Mercer's revenue increased $127 million, or 3% to $4.1 billion for the nine months ended September 30, 2023, compared to $4.0 billion for the nine months ended September 30, 2022. This reflects an increase of 7% on an underlying basis, offset by decreases of 3% primarily from the disposition of businesses and 1% from the impact of foreign currency translation. On an underlying basis, revenue for Health, Career and Wealth increased 10%, 8%, and 4%, respectively, as compared to the corresponding period in the prior year.
The increase in revenue on an underlying basis at Mercer for the three and nine months ended September 30, 2023 was primarily due to the continued demand for our advice and services. Health continued to benefit from growth in new business, higher retention, enrolled lives, and medical inflation. The increase in Career products and services was due to continued demand in rewards and talent strategy. Revenue in Wealth on an underlying basis grew in defined benefit consulting and investment management fees due to a rebound in capital markets and positive net flows.
Results for the nine months ended September 30, 2023 included a loss of $17 million related to the sale of an individual financial advisory business in Canada. Results for the nine months ended September 30, 2022 also included a gain of $112 million from the sale of the Mercer U.S. affinity business.
Oliver Wyman Group's revenue increased $114 million, or 17% to $781 million for the three months ended September 30, 2023, compared to $667 million for the three months ended September 30, 2022. This reflects increases of 12% on an underlying basis, 3% from acquisitions and 2% from the impact of foreign currency translation.
Oliver Wyman Group's revenue increased $237 million, or 12% to $2.3 billion for the nine months ended September 30, 2023, compared to $2.0 billion for the nine months ended September 30, 2022. This reflects an increase of 8% on an underlying basis and 4% from acquisitions.
The increase in underlying revenue at Oliver Wyman Group for the three and nine months ended September 30, 2023 was driven by growth across all practice groups. Results for the nine months ended September 30, 2022, also included a charge of approximately $12 million related to the loss on the deconsolidation of the Company's Russian businesses.
The Consulting segment completed four acquisitions during the nine months ended September 30, 2023. Information regarding these acquisitions are included in Note 8, Acquisitions and Dispositions, in the notes to the consolidated financial statements.
Operating Expenses
Expenses in the Consulting segment increased $181 million, or 11% to $1.8 billion for the three months ended September 30, 2023, compared to $1.6 billion for the three months ended September 30, 2022. Expenses reflect increases of 3% from acquisitions and 2% from the impact of foreign currency translation.
Expenses in the Consulting segment increased $358 million, or 7% to $5.2 billion for the nine months ended September 30, 2023, compared to $4.8 billion for the nine months ended September 30, 2022. Expenses reflect an increase of 2% from acquisitions offset by a decrease of 1% from the impact of foreign currency translation.
The increase in expenses excluding the impact from acquisitions and foreign currency translation for the three and nine months ended September 30, 2023 is primarily due to compensation and benefits driven by increased headcount. The increase in expenses for the nine months ended September 30, 2023 is partially offset by $51 million of insurance recoveries for a legacy JLT E&O matter relating to suitability of advice provided to individuals for defined benefit pension transfers in the U.K.
For the three and nine months ended September 30, 2023, the Company incurred $17 million and $33 million of restructuring costs in the Consulting segment, respectively, of which $16 million and $28 million, respectively, were primarily for severance and lease exit charges, related to the Company's activities focused on workforce actions, rationalization of technology and functional services, and reductions in real estate. The remaining restructuring costs relate primarily to adjustments to restructuring liabilities for future rent under non-cancellable leases.
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Corporate and Other
Corporate expenses decreased $20 million, or 23% to $68 million for the three months ended September 30, 2023, compared to $88 million for the three months ended September 30, 2022.
Corporate expenses increased $2 million, or 1% to $236 million for the nine months ended September 30, 2023, compared to $234 million for the nine months ended September 30, 2022.
The decrease in expenses for the three months ended September 30, 2023 is driven primarily by lower compensation and benefits costs and outside services, as compared to the corresponding period in the prior year.
Interest
Interest expense was $145 million for the three months ended September 30, 2023, compared to $118 million for the three months ended September 30, 2022. Interest expense was $427 million for the nine months ended September 30, 2023, compared to $342 million for the nine months ended September 30, 2022.
Interest expense for the three and nine months ended September 30, 2023, increased $27 million and $85 million, respectively, due to an increase in long term debt and higher interest rates. Interest expense for the nine months ended September 30, 2023 also reflects higher interest rates on the Company's short term borrowings in 2023, compared to the corresponding period in the prior year.
Investment Income
The caption "Investment income (loss)" in the consolidated statements of income comprises realized and unrealized gains and losses from investments. It includes, when applicable, other than temporary declines in the value of securities, mark-to-market increases or decreases in equity investments with readily determinable fair values and equity method gains or losses on its investments in private equity funds. The Company's investments may include direct investments in insurance, consulting or other strategically linked companies and investments in private equity funds.
The Company recorded net investment income of $1 million and $6 million for the three and nine months ended September 30, 2023, respectively, compared to net investment loss of $1 million and net investment income of $27 million, respectively, for the corresponding periods in the prior year. The decrease in the nine months ended results in 2023 is primarily driven by lower mark-to-market gains from the Company's private equity investments compared to the corresponding period in the prior year.
Income and Other Taxes
The Company's effective tax rate for the three months ended September 30, 2023 was 20.6%, compared with 24.6% for the corresponding quarter of 2022. The effective tax rate for the nine months ended September 30, 2023 and 2022 were 23.7% and 24.6%, respectively.
The tax rate in each period reflects the impact of discrete tax items such as excess tax benefits related to share-based compensation, enacted tax legislation, changes in uncertain tax positions, deferred tax adjustments and non-taxable adjustments related to contingent consideration for acquisitions, and valuation allowances for certain tax credits and attributes. The rate for the three and nine months ended September 30, 2023 reflects the previously enacted change in the U.K. corporate income tax rate from 19% to 25%, effective April 1, 2023. The blended U.K. statutory tax rate for 2023 is 23.5%.
During the third quarter of 2023, the Company released a valuation allowance related to the realizability of deferred tax assets for its non-U.S. operations of $48 million as a discrete tax benefit, primarily due to the sustained profitability of its operations. This was the most significant discrete item for the quarter, reducing the effective tax rate by 4.8%. For the three months ended September 30, 2023, the effective tax rate was also reduced by 1.0% from the impact of the excess tax benefit related to share-based payments. For the nine months ended September 30, 2023, the valuation allowance release and the excess tax benefit related to share-based payments were the most significant discrete items, reducing the effective tax rate by 1.1% and 1.2%, respectively.
The excess tax benefit related to share-based payments was the most significant discrete item for the three and nine months ended September 30, 2022, reducing the effective tax rate by 0.9% and 1.2%, respectively.
The effective tax rate may vary significantly from period to period. The effective tax rate is sensitive to the geographic mix and repatriation of the Company's earnings, which may result in higher or lower effective tax rates. Therefore, a shift in the mix of profits among jurisdictions, or changes in the Company's repatriation strategy to access offshore cash, can affect the effective tax rate.
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In addition, losses in certain jurisdictions cannot be offset by earnings from other operations and may require valuation allowances that affect the rate in a particular period, depending on estimates of the value of associated deferred tax assets which can be realized. A valuation allowance was recorded to reduce deferred tax assets to the amount that the Company believes is more likely than not to be realized. The effective tax rate is also sensitive to changes in unrecognized tax benefits, including the impact of settled tax audits and expired statutes of limitations.
The Company has established liabilities for uncertain tax positions in relation to potential assessments in the jurisdictions in which it operates. The Company believes the resolution of tax matters will not have a material effect on the consolidated financial position of the Company, although a resolution of tax matters could have a material impact on the Company's net income or cash flows and on its effective tax rate in a particular future period. It is reasonably possible that the total amount of unrecognized tax benefits could decrease up to approximately $79 million within the next twelve months due to settlement of audits and expiration of statutes of limitations.
Changes in tax laws, rulings, policies, or related legal and regulatory interpretations occur frequently and may have significant favorable or adverse impacts on our effective tax rate.
As a U.S. domiciled parent holding company, the Company is the issuer of essentially all the Company's external indebtedness, and incurs the related interest expense in the U.S. The Company’s interest expense deductions are not currently limited. Further, most senior executive and oversight functions are conducted in the U.S. and the associated costs are incurred primarily in the U.S. Some of these expenses may not be deductible in the U.S., which may impact the effective tax rate.
Changes to the U.S. tax law in recent years have allowed the Company to repatriate foreign earnings without incurring additional U.S. federal income tax costs as foreign income is generally already taxed in the U.S. However, permanent reinvestment continues to be a component of the Company's global capital strategy. The Company continues to evaluate its global investment and repatriation strategy in light of our capital requirements and potential costs of repatriation, which are generally limited to local country withholding taxes.
In addition to U.S. tax law changes, the Company's global operations make the tax rate sensitive to significant foreign tax law changes. A number of countries have begun to enact legislation to implement the Organization for Economic Cooperation and Development's ("OECD") international tax framework, including the Pillar 2 minimum tax regime with effect from January 1, 2024.
In July 2023, the U.K. enacted legislation to implement Pillar 2 of the OECD framework, effective from January 1, 2024. The implementation of the OECD framework in the U.K. will impose additional reporting and compliance obligations. This minimum tax will be treated as a period cost in future years and will not impact operating results for 2023. The Company is continuing to monitor legislative developments, especially in the European Union (E.U.) countries, and is in the process of evaluating the potential impact of the U.K. and other legislation on its results of future operations.
On August 16, 2022, the Inflation Reduction Act of 2022 ("IRA") was enacted into law. The Company evaluated the provisions of the new legislation, the most significant of which are the corporate alternative minimum tax and the share repurchase tax. The IRA was effective as of January 1, 2023, and does not have a significant impact on the Company's financial results of operations.
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Liquidity and Capital Resources
The Company is organized as a legal entity separate and distinct from its operating subsidiaries. As the Company does not have significant operations of its own, the Company is dependent upon dividends and other payments from its operating subsidiaries to pay principal and interest on its outstanding debt obligations, pay dividends to stockholders, repurchase its shares and pay corporate expenses. The Company can also provide financial support to its operating subsidiaries for acquisitions, investments and certain parts of their business that require liquidity, such as the capital markets business of Guy Carpenter. Other sources of liquidity include borrowing facilities discussed in financing cash flows.
The Company derives a significant portion of its revenue and operating profit from operating subsidiaries located outside of the U.S. Funds from those operating subsidiaries are regularly repatriated to the U.S. out of annual earnings. At September 30, 2023, the Company had approximat ely $1.6 billion of c ash and cash equivalents in its foreign operations, which includes $425 million of operating funds required to be maintained for regulatory requirements or as collateral under certain captive insurance arrangements. The Company expects to continue its practice of repatriating available funds from its non-U.S. operating subsidiaries out of current annual earnings. Where appropriate, a portion of the current year earnings will continue to be permanently reinvested.
For the nine months ended September 30, 2023, the Company recorded foreign currency translation adjustments which decreased net equit y by $151 million. Contin ued strengthening of the U.S. dollar against foreign currencies would further decrease the translated U.S. dollar value of the Company’s net investments in its non-U.S. subsidiaries, as well as the translated U.S. dollar value of cash repatriations from those subsidiaries.
Cash and cash equivalents on our consolidated balance sheets includes funds available for general corporate purposes. Fiduciary assets are shown separately in the consolidated balance sheets as cash and cash equivalents held in a fiduciary capacity, with a corresponding amount in current liabilities. Fiduciary assets cannot be used for general corporate purposes, and should not be considered as a source of liquidity for the Company.
Operating Cash Flows
The Company provided $2.5 billion of cash from operations for the nine months ended September 30, 2023, compared to $2.0 billion provided by operations in the first nine months of 2022. These amounts reflect the net income of the Company during those periods, excluding gains or losses from investments, adjusted for non-cash charges and changes in working capital which relate primarily to the timing of payments of accrued liabilities, including incentive compensation, or receipts of receivables and pension plan contributions. The Company used cash of $215 million and $124 million related to its restructuring activities for the nine months ended September 30, 2023 and 2022, respectively.
Pension Related Items
Contributions
The Company's policy for funding its tax-qualified defined benefit plans is to contribute amounts at least sufficient to meet the funding requirements set forth in accordance with applicable law. For the three and nine months ended September 30, 2023, the Company contributed $8 million and $23 million, respectively, to its U.S. defined benefit pension plans and $18 million and $50 million to its non-U.S. defined benefit pension plans, respectively. For the three and nine months ended September 30, 2022, the Company contributed $8 million and $23 million to its U.S. defined benefit pension plans, respectively, $20 million and $118 million to its non-U.S. defined benefit pension plans, respectively.
In the U.S., contributions to the tax-qualified defined benefit plans are based on Employee Retirement Income Security Act ("ERISA") guidelines and the Company generally expects to maintain a funded status of 80% or more of the liability determined in accordance with the ERISA guidelines. During the three and nine months ended September 30, 2023, the Company made $8 million and $23 million, respectively, of contributions to its non-qualified plans and expects to fund approximately an additional $8 million over the remainder of 2023. The Company is not required to make any contributions to its U.S. qualified plans in 2023.
Outside the U.S., the Company has a large number of non-U.S. defined benefit pension plans, the largest of which are in the U.K., which comprise approximately 79% of non-U.S. plan assets at December 31, 2022. Contribution rates for non-U.S. plans are generally based on local funding practices and statutory requirements, which may differ significantly from measurements in accordance with U.S. GAAP.
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In the U.K., the assumptions used to determine pension contributions are the result of legally-prescribed negotiations between the Company and the plans' trustee that typically occur every 3 years in conjunction with the actuarial valuation of the plans. Currently, this results in a lower funded status compared to U.S. GAAP and may result in contributions irrespective of the U.S. GAAP funded status.
In 2021, the JLT Pension Scheme was merged into the MMC UK Pension Fund with a new segregated JLT section created. During the first nine months of 2023, the Company made deficit contributions of $31 million to its U.K. plans, all in respect of the JLT section, and is expected to make $10 million of contributions in the remainder of 2023.
For the MMC UK Pension Fund, excluding the JLT section, an agreement was reached with the trustee in the fourth quarter of 2022 based on the surplus funding position at December 31, 2021. In accordance with the agreement, no deficit funding is required until 2026 at the earliest. The funding level will be re-assessed during 2025 as part of the December 31, 2024 actuarial valuation to determine if contributions are required in 2026. As part of a long term strategy which depends on having greater influence over asset allocation and overall investment decisions, in December 2022, the Company renewed its agreement to support annual deficit contributions by the U.K. operating companies under certain circumstances, up to £450 million (or $546 million) over a seven-year period.
The Company expects to fund an additional $27 million to its non-U.S. defined benefit plans over the remainder of 2023, comprising approximately $10 million to the U.K. plans and $17 million to plans outside of the U.K.
Financing Cash Flows
Net cash provided by financing activities was $1.2 billion for the nine months ended September 30, 2023, compared with $28 million provided by financing activities for the corresponding period in 2022.
Credit Facilities
In October 2023, the Company increased its multi-currency unsecured $2.8 billion five-year revolving credit facility capacity to $3.5 billion and extended the expiration to October 2028 (the "Credit Facility"). The interest rate on the Credit Facility was initially based on LIBOR plus a fixed margin which varied with the Company's credit rating. In the second quarter of 2023, the Credit Facility was amended that borrowings under the Credit Facility bear interest at a rate per annum equal, at the borrower's option, either at (a) SOFR benchmark rate for U.S. dollar borrowings, or (b) a currency specific benchmark rate, plus an applicable margin which varies with the Company's credit ratings. The Company is required to maintain certain coverage and leverage ratios for the Credit Facility, which are tested quarterly.
The Credit Facility includes provisions for determining a benchmark replacement rate in the event existing benchmark rates are no longer available or in certain other circumstances, in which an alternative rate may be required. As of September 30, 2023 and December 31, 2022, the Company had no borrowings under this facility.
In October 2023, the Company terminated its one-year $200 million uncommitted revolving credit facility ("Uncommitted Credit Facility"). In the third quarter of 2023, the Company repaid $200 million borrowings outstanding under the Uncommitted Credit Facility with a weighted average interest rate of 5.50%. There were no borrowings outstanding under the Uncommitted Credit Facility at September 30, 2023 and December 31, 2022.
The Company also maintains other credit and overdraft facilities with various financial institutions aggregating $112 million at September 30, 2023. There were no outstanding borrowings under these facilities at September 30, 2023 and December 31, 2022. The Company also has outstanding guarantees and letters of credit with various banks aggregating $131 million at September 30, 2023.
Debt
The Company has a short-term commercial paper financing program of $2.8 billion. The program was increased from $2.0 billion in October 2022. The Company had no commercial paper outstanding at September 30, 2023.
In October 2023, the Company repaid $250 million of 4.05% senior notes that matured.
In September 2023, the Company issued $600 million of 5.400% senior notes due 2033 and $1 billion of 5.700% senior notes due 2053. The Company intends to use the net proceeds from these issuances for general corporate purposes.
In March 2023, the Company issued $600 million of 5.450% senior notes due 2053. The Company used the net proceeds from this issuance for general corporate purposes.
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In October 2022, the Company issued $500 million of 5.75% senior notes due 2032 and $500 million of 6.25% senior notes due 2052. The Company used the net proceeds from these issuances for general corporate purposes, and repaid $350 million of 3.30% senior notes in November 2022, with an original maturity date of March 2023.
The Company's senior debt is currently rated A- by Standard & Poor's ("S&P"), A3 by Moody's and A- by Fitch. The Company's short-term debt is currently rated A-2 by S&P, P-2 by Moody's and F-2 by Fitch. The Company carries a Stable outlook with S&P, Moody's and Fitch.
Share Repurchases
During the first nine months of 2023, the Company repurchased 5.1 million shares of its common stock for $900 million. As of September 30, 2023, the Company remained authorized to repurchase up to approximately $3.4 billion in shares of its common stock. There is no time limit on the authorization.
During the first nine months of 2022, the Company repurchased 10.1 million shares of its common stock for $1.6 billion.
Dividends
The Company paid dividends on its common stock shares of $944 million ($1.89 per share) during the first nine months of 2023, as compared with $840 million ($1.66 per share) during the first nine months of 2022. In September 2023, the Board of Directors of the Company declared a quarterly dividend of $0.71 per share on outstanding common stock, payable in November of 2023.
Contingent and Deferred Payments Related to Acquisitions
The classification of contingent consideration in the consolidated statements of cash flows is dependent upon whether the receipt, payment, or adjustment was part of the initial liability established on the acquisition date (financing) or an adjustment to the acquisition date liability (operating).
The following amounts are included in the consolidated statements of cash flows as operating and financing activities:

For the Nine Months Ended September 30
(In millions) | 2023 |  | 2022
Operating: |  |  |
Contingent consideration payments for prior year acquisitions | $ | (41) |  |  | $ | (38) |
Receipt of contingent consideration for dispositions | 1 |  |  | — |
Acquisition/disposition related net charges for adjustments | 21 |  |  | 38 |
Adjustments and payments related to contingent consideration | $ | (19) |  |  | $ | — |
Financing: |  |  |
Contingent consideration for prior year acquisitions | $ | (135) |  |  | $ | (28) |
Deferred consideration related to prior year acquisitions | (52) |  |  | (116) |
Payments of deferred and contingent consideration for acquisitions | $ | (187) |  |  | $ | (144) |
Receipt of contingent consideration for dispositions | $ | 2 |  |  | $ | 3 |

For acquisitions completed during the first nine months of 2023 and in prior years, remaining estimated future contingent payments of $231 million and deferred consideration payments of $107 million, are recorded in accounts payable and accrued liabilities or other liabilities in the consolidated balance sheet at September 30, 2023.
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Derivatives - Net Investment Hedge
The Company has investments in various subsidiaries with Euro functional currencies. As a result, the Company is exposed to the risk of fluctuations between the Euro and U.S. dollar exchange rates. As part of its risk management program, the Company issued €1.1 billion Senior Notes, and designated the debt instruments as a net investment hedge of its Euro denominated subsidiaries. The hedge is re-assessed each quarter to confirm that the designated equity balance at the beginning of each period continues to equal or exceed 80% of the outstanding balance of the Euro debt instrument and that all the critical terms of the hedging instrument and the hedged net investment continue to match. If the hedge is highly effective, the change in the debt balance related to foreign exchange fluctuations is recorded in accumulated other comprehensive loss in the consolidated balance sheets.
The U.S. dollar value of the Euro notes decreased by $12 million through September 30, 2023, related to the change in foreign exchange rates. The Company concluded that the hedge was highly effective and recorded a decrease to accumulated other comprehensive loss for the nine months ended September 30, 2023.
Purchase of remaining non-controlling interest
In the second quarter of 2023, the Company purchased the remaining interest in a subsidiary for $139 million.
Fiduciary Liabilities
Since fiduciary assets are not available for corporate use, they are shown separately in the consolidated balance sheets as cash and cash equivalents held in a fiduciary capacity, with a corresponding amount in current liabilities. Financing cash flows reflect an increase of $1.2 billion and $2.1 billion for the nine months ended September 30, 2023 and 2022, respectively, related to fiduciary liabilities.
Investing Cash Flows
Net cash used for investing activities amounted t o $943 million for the first nine months of 2023, compared with $363 million used for investing activities for the corresponding period in 2022.
The Company p aid $619 million and $213 million, ne t of cash, cash equivalents and cash and cash equivalents held in a fiduciary capacity acquired, for acquisitions it made during the first nine months of 2023 and 2022, respective ly. The outflow of funds in 2023 primarily relates to the completion of the Westpac Transaction for $233 million and the Graham Company acquisition for $307 million.
In connection with the disposition of Mercer's U.S. affinity business in 2022, the Company transferred to the buyer an additional $20 million of cash and cash equivalents held in a fiduciary capacity during the first quarter of 2023.
During the first nine months of 2022, the Company sold certain businesses, primarily Mercer's U.S. affinity business, for cash proceeds of approximately $147 million.
In the third quarter of 2022, the Company sold certain investments, primarily the investment in the common stock of Alexander Forbes, for cash proceeds of approximately $62 million.
The Company's additions to fixed assets and capitalized software, which amounted to $296 million during the first nine months of 2023, and $367 million during the first nine months of 2022, related primarily to computer equipment purchases, the refurbishing and modernizing of office facilities, and software development costs.
Cash used for long term investments in the first nine months of 2023 is due to investments in private equity funds. As of September 30, 2023, the Company has commitments for potential future investments of approximately $131 million in private equity funds that invest primarily in financial services companies, including a $80 million commitment to invest in a private equity fund entered into on April 1, 2022.
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Commitments and Obligations
The following sets forth the Company’s future contractual obligations by the type as of September 30, 2023:

| Payment due by Period
(In millions) | Total |  | Within 1 Year |  | 1-3 Years |  | 4-5 Years |  | After 5 Years
Current portion of long-term debt | $ | 1,869 |  |  | $ | 1,869 |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Long-term debt | 11,879 |  |  | — |  |  | 1,717 |  |  | 42 |  |  | 10,120 |
Interest on long-term debt | 8,630 |  |  | 555 |  |  | 978 |  |  | 915 |  |  | 6,182 |
Net operating leases | 2,206 |  |  | 360 |  |  | 639 |  |  | 485 |  |  | 722 |
Service agreements | 317 |  |  | 148 |  |  | 153 |  |  | 16 |  |  | — |
Other long-term obligations (a) | 369 |  |  | 195 |  |  | 152 |  |  | 22 |  |  | — |
Total | $ | 25,270 |  |  | $ | 3,127 |  |  | $ | 3,639 |  |  | $ | 1,480 |  |  | $ | 17,024 |

(a)Primarily reflects the future payments of deferred and contingent purchase consideration.
The table does not include the liability for unrecognized tax benefits of $134 million as the Company is unable to reasonably predict the timing of settlement of these liabilities, other than approximately $71 million that may become payable within one year. The table also does not include the remaining transitional tax payments related to the Tax Cuts and Jobs Act ("the TCJA") of $58 million, which will be paid in installments from 2024 through 2026.
Management’s Discussion of Critical Accounting Policies and Estimates
The Company’s discussion of critical accounting policies and estimates that place the most significant demands on management’s judgment and requires management to make significant estimates about matters that are inherently uncertain are discussed in the MD&A in the 2022 Form 10-K.
New Accounting Guidance
Note 20, New Accounting Guidance, in the notes to the consolidated financial statements in this report, contains a discussion of recently issued accounting guidance and their impact or potential future impact on the Company’s financial results, if determinable.
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Item 3.Quantitative and Qualitative Disclosures About Market Risk.
Market Risk and Credit Risk
Certain of the Company’s revenues, expenses, assets and liabilities are exposed to the impact of interest rate changes and fluctuations in foreign currency exchange rates and equity markets.
Interest Rate Risk and Credit Risk
Interest income generated from the Company's cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity will vary with the general level of interest rates.
The Company had the following investments subject to variable interest rates:

(In millions) | September 30, 2023 | December 31, 2022
Cash and cash equivalents | $ | 2,901 |  | $ | 1,442 |
Cash and cash equivalents held in a fiduciary capacity | $ | 11,828 |  | $ | 10,660 |

Based on the above balances at September 30, 2023, if short-term interest rates increased or decreased by 10%, or 41 basis points, for the year, annual interest income, including interest earned on cash and cash equivalents held in a fiduciary capacity, would increase or decrease by approximately $15 million. At December 31, 2022, a change in short-term interest rates of 10% or 25 basis points would have increased or decreased interest income by approximately $30 million. The change in interest rate risk at September 30, 2023 is due to higher short-term interest rates compared to the prior year.
Changes in interest rates can also affect the discount rate and assumed rate of return on plan assets, two of the assumptions among several others used to measure net periodic pension expense. The assumptions used to measure plan assets and liabilities are typically assessed at the end of each year, and determine the expense for the subsequent year. Assumptions used to determine net periodic cost for 2023 are discussed in Note 8, Retirement Benefits, in the notes to the consolidated financial statements included in our most recently filed Annual Report on Form 10-K. For a discussion on pension expense sensitivity to changes in these rates, see the "Management’s Discussion and Analysis of Financial Condition and Results of Operations - Management’s Discussion of Critical Accounting Policies and Estimates - Retirement Benefits" section of our most recently filed Annual Report on Form 10-K.
In addition to interest rate risk, our cash investments and fiduciary cash investments are subject to potential loss of value due to counter-party credit risk. To minimize this risk, the Company and its subsidiaries invest pursuant to a Board-approved investment policy. The policy mandates the preservation of principal and liquidity and requires broad diversification with counter-party limits assigned based primarily on credit rating and type of investment. The Company carefully monitors its cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity, and will further restrict the portfolio as appropriate to market conditions. The majority of cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity are invested in bank or short-term time deposits and liquid money market funds.
Foreign Currency Risk
The translated values of revenue and expense from the Company’s international operations are subject to fluctuations due to changes in currency exchange rates. The non-U.S. based revenue that is exposed to foreign exchange fluctuations is approximately 52% of total revenue. We periodically use forward contracts and options to limit foreign currency exchange rate exposure on net income and cash flows for specific, clearly defined transactions arising in the ordinary course of business. Although the Company has significant revenue generated in foreign locations which is subject to foreign exchange rate fluctuations, in most cases both the foreign currency revenue and expense are in the functional currency of the foreign location. As such, under normal circumstances, the U.S. dollar translation of both the revenue and expense, as well as the potentially offsetting movements of various currencies against the U.S. dollar, generally tend to mitigate the impact on net operating income of foreign currency risk.
However, there have been periods where the impact was not mitigated due to external market factors, and external macroeconomic events may result in greater foreign exchange rate fluctuations in the future. If foreign exchange rates of major currencies (Euro, British Pound, Australian dollar and Canadian dollar) moved 10% in the same direction against the U.S. dollar that held constant over the course of the year, the Company estimates that full year net operating income would increase or decrease by approximately $80 million. The Company has
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exposure to over 80 foreign currencies. If exchange rates at September 30, 2023, hold constant for the rest of 2023, the Company estimates the year-over-year impact from the conversion of foreign currency earnings will decrease full year net operating income by approximately $40 million.
In Continental Europe, the largest amount of revenue from renewals for the Risk and Insurance Services segment occurs in the first quarter.
Equity Price Risk
The Company holds investments at September 30, 2023 in both public and private companies as well as private equity funds, including investments of approximately $16 million that are valued using readily determinable fair values and approximately $36 million of investments without readily determinable fair values. The Company also has investments of approximately $260 million that are accounted for using the equity method. The investments are subject to risk of decline in market value, which, if determined to be other than temporary for assets without readily determinable fair values, could result in realized impairment losses. The Company periodically reviews the carrying value of such investments to determine if any valuation adjustments are appropriate under the applicable accounting pronouncements.
Other
A number of lawsuits and regulatory proceedings are pending. See Note 17, Claims, Lawsuits and Other Contingencies, in the notes to the consolidated financial statements included in this report.
Item 4. Controls & Procedures.
a. Evaluation of Disclosure Controls and Procedures
Based on their evaluation, as of the end of the period covered by this report, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Securities Exchange Act of 1934) are effective.
b. Changes in Internal Control
There were no changes in the Company’s internal control over financial reporting identified in connection with the evaluation required by Rules 13a-15(d) or 15d-15(d) under the Securities Exchange Act of 1934 that occurred during the Company’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
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PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
The Company and its subsidiaries are also party to a variety of other legal, administrative, regulatory and government proceedings, claims and inquiries arising in the normal course of business. Additional information regarding certain legal proceedings and related matters as set forth in Note 17, Claims, Lawsuits and Other Contingencies, in the notes to the consolidated financial statements provided in Part I of this report is incorporated herein by reference.
Item 1A. Risk Factors.
The Company and its subsidiaries face a number of risks and uncertainties. In addition to the other information in this report and our other filings with the SEC, readers should consider carefully the risk factors discussed in "Part I, Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2022.
If any of the risks described in our Annual Report on Form 10-K or such other risks actually occur, our business, results of operations or financial condition could be materially adversely affected.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Issuer Repurchases of Equity Securities
During the nine months ended September 30, 2023, the Company repurchased 5.1 million shares of its common stock for $900 million. As of September 30, 2023, the Company remained authorized to repurchase up to approximately $3.4 billion in shares of its common stock. There is no time limit on the authorization.

Period | (a) Total Number of Shares (or Units) Purchased |  | (b) Average Price Paid per Share (or Unit) |  | (c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs |  | (d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs
July 1-31, 2023 | 666,300 |  |  | $ | 188.0695 |  |  | 666,300 |  |  | $ | 3,588,739,767 |
August 1-31, 2023 | 485,026 |  |  | $ | 191.3326 |  |  | 485,026 |  |  | $ | 3,495,938,466 |
September 1-30, 2023 | 417,968 |  |  | $ | 195.8852 |  |  | 417,968 |  |  | $ | 3,414,064,701 |
Total | 1,569,294 |  |  | $ | 191.1597 |  |  | 1,569,294 |  |  | $ | 3,414,064,701 |

Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosure.
Not Applicable.
Item 5. Other Information.
None.
Item 6. Exhibits.
See the Exhibit Index immediately following the signature page of this report, which is incorporated herein by reference.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: | October 19, 2023 | /s/ Mark C. McGivney |
|  | Mark C. McGivney |
|  | Chief Financial Officer |
Date: | October 19, 2023 | /s/ Stacy M. Mills |
|  | Stacy M. Mills |
|  | Vice President & Controller |
|  | (Chief Accounting Officer) |

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EXHIBIT INDEX

Exhibit No. |  | Exhibit Name |
4.1 |  | Seventeenth Supplemental Indenture, dated September 11, 2023, between Marsh & McLennan Companies, Inc. and The Bank of New York Mellon, as trustee (incorporated by reference to Company’s Current Report on Form 8-K dated September 6, 2023) |
10.1 |  | Amended and Restated 5 Year Credit Agreement dated as of October 11, 2023 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 |
31.1 |  | Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer |
31.2 |  | Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer |
32.1 |  | Section 1350 Certifications |
101.INS |  | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
101.SCH |  | XBRL Taxonomy Extension Schema |
101.CAL |  | XBRL Taxonomy Extension Calculation Linkbase |
101.DEF |  | XBRL Taxonomy Extension Definition Linkbase |
101.LAB |  | XBRL Taxonomy Extension Label Linkbase |
101.PRE |  | XBRL Taxonomy Extension Presentation Linkbase |

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