Marsh & McLennan Companies(US:MMC)2025-07-17 11:51PART I. FINANCIAL INFORMATION Financial Statements This section presents unaudited consolidated financial statements for the three and six months ended June 30, 2025, including income, balance sheet, cash flow, and equity statements Consolidated Statements of Income Highlights (Q2 & H1 2025 vs 2024) | (In millions, except per share data) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $6,974 | $6,221 | $14,035 | $12,694 | | Operating Income | $1,829 | $1,642 | $3,834 | $3,567 | | Net Income Attributable to the Company | $1,211 | $1,125 | $2,592 | $2,525 | | Diluted EPS | $2.45 | $2.27 | $5.23 | $5.08 | - Total assets increased to $58.6 billion as of June 30, 2025, from $56.5 billion at December 31, 2024. Total equity grew to $16.0 billion from $13.5 billion over the same period1517 - Net cash provided by operations for the first six months of 2025 was $1,049 million, a significant increase from $434 million in the corresponding period of 202419 Notes to Consolidated Financial Statements This section details accounting principles, key estimates, operating segments, acquisition impacts, debt structure, and significant legal contingencies - The company operates through two segments: Risk and Insurance Services (RIS), comprising Marsh and Guy Carpenter, and Consulting, comprising Mercer and Oliver Wyman Group222324 Disaggregated Revenue by Segment (Q2 2025 vs Q2 2024) | (In millions) | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Total Risk and Insurance Services | $4,625 | $4,022 | | Total Consulting | $2,371 | $2,216 | - For the six months ended June 30, 2025, the company completed 7 acquisitions for a total consideration of $148 million. Acquisition-related expenses were $137 million, including $114 million for the integration of McGriff7683 - The company is involved in ongoing litigation related to Greensill Capital. A settlement was reached with White Oak in May 2025, covered by E&O insurance, but potential loss from other claims by Credit Suisse and Greensill Bank AG is not estimable152153156 - Total debt outstanding was $19.7 billion as of June 30, 2025. In March 2025, the company repaid $500 million of 3.50% senior notes at maturity134138 Management's Discussion and Analysis (MD&A) Management discusses financial performance, highlighting Q2 2025 consolidated revenue growth driven by RIS and Consulting segments, and reviews liquidity, capital resources, and capital return activities Q2 2025 Revenue Growth Breakdown | Metric | Percentage Change | | :--- | :--- | | Consolidated Revenue (GAAP) | 12% | | Underlying Revenue (Non-GAAP) | 4% | | Contribution from Acquisitions | 8% | | Impact of Foreign Currency | 1% | - Risk and Insurance Services (RIS) revenue grew 15% in Q2 2025 (4% underlying), with Marsh up 18% (5% underlying) and Guy Carpenter up 7% (5% underlying), primarily driven by the McGriff acquisition204207209 - Consulting revenue increased 7% in Q2 2025 (3% underlying), with Mercer growing 9% (3% underlying) driven by Health and Wealth, and Oliver Wyman Group growing 5% (3% underlying)217219222 - Interest expense increased significantly to $243 million in Q2 2025 from $156 million in Q2 2024, primarily due to increased long-term debt for the McGriff acquisition and higher interest rates230231 - In H1 2025, the company returned $1.41 billion to shareholders through $600 million in share repurchases (2.7 million shares) and $810 million in dividends266267 Quantitative and Qualitative Disclosures About Market Risk This section outlines the company's exposure to market risks, including interest rate, foreign currency, and equity price risks, and details its sensitivity and risk management strategies - A 10% change (32 basis points) in short-term interest rates would impact annual interest income, including from fiduciary funds, by approximately $22 million286 - Approximately 51% of total revenue is exposed to foreign currency risk. A 10% adverse movement of major currencies against the U.S. dollar would decrease full-year net operating income by an estimated $105 million289290 - The company holds over $325 million in equity investments (public, private, and private equity funds) that are subject to market value declines292 Controls & Procedures The CEO and CFO concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures are effective as of June 30, 2025294 - No material changes to the company's internal control over financial reporting were identified during the second quarter of 2025295 PART II. OTHER INFORMATION Legal Proceedings This section incorporates by reference detailed legal proceedings from Note 17, confirming the company's involvement in various normal course legal, administrative, and regulatory actions - Information regarding legal proceedings is incorporated by reference from Note 17, "Claims, Lawsuits and Other Contingencies," in Part I of the report297 Risk Factors This section states no material changes to risk factors from the Annual Report on Form 10-K for the year ended December 31, 2024, directing readers to that filing for comprehensive details - There are no material changes from the risk factors discussed in the Annual Report on Form 10-K for the year ended December 31, 2024298 Issuer Repurchases of Equity Securities This section details the company's share repurchase activities, including Q2 2025 repurchases of 1.33 million shares for $300 million, and the remaining authorization Share Repurchases in Q2 2025 | Period | Total Shares Purchased | Average Price Paid per Share | Total Cost (approx.) | | :--- | :--- | :--- | :--- | | April 2025 | 461,401 | $226.56 | $104.5 million | | May 2025 | 428,882 | $227.92 | $97.7 million | | June 2025 | 441,583 | $221.28 | $97.7 million | | Total Q2 | 1,331,866 | $225.25 | $300.0 million | - As of June 30, 2025, the company had approximately $1.7 billion remaining under its share repurchase authorization, which has no time limit300301