Marsh & McLennan Companies(US:MMC)2021-07-21 16:00Financial Performance - Net income before non-controlling interests for Q2 2021 was $827 million, up 42.5% from $580 million in Q2 2020[13] - Comprehensive income attributable to the Company for the first half of 2021 was $1,760 million, compared to $799 million in the same period of 2020, representing a 120.3% increase[13] - For the three months ended June 30, 2021, net income attributable to the Company was $820 million, compared to $572 million for the same period in 2020, representing a 43.3% increase[21] - The total equity of the Company as of June 30, 2021, was $10,264 million, up from $8,392 million as of June 30, 2020, reflecting a 22.3% year-over-year growth[21] - Net income attributable to the Company for the same period was $820 million, up 42.1% from $577 million in 2020[79] - Basic net income per share attributable to the Company increased to $1.61, compared to $1.14 in the prior year, reflecting a 41.2% growth[79] Revenue Growth - The Company experienced strong revenue growth in the first six months of 2021, benefiting from the recovery of the global economy despite ongoing COVID-19 impacts[28] - Total revenue for the three months ended June 30, 2021, was $2,650 million, an increase of 22.6% compared to $2,161 million for the same period in 2020[49] - Total revenue for the six months ended June 30, 2021, was $4,975 million, up 17.8% from $4,222 million in the prior year[49] - Revenue for the three months ended June 30, 2021, was $5,017 million, a 18.6% increase from $4,231 million in 2020[79] - Total operating segments revenue for Q2 2021 was $5,017 million, up 19.8% from $4,189 million in Q2 2020[144] - For the first half of 2021, total operating segments revenue reached $10,100 million, a 14.2% increase compared to $8,840 million in the first half of 2020[144] Assets and Liabilities - Total current assets decreased to $7,573 million as of June 30, 2021, from $8,155 million at the end of 2020, a decline of 7.1%[15] - Cash and cash equivalents at the end of Q2 2021 were $888 million, down from $2,089 million at the end of 2020, a decrease of 57.6%[15] - Long-term debt decreased to $10,257 million as of June 30, 2021, from $10,796 million at the end of 2020, a reduction of 5%[16] - The Company’s total equity increased to $10,264 million as of June 30, 2021, from $9,260 million at the end of 2020, an increase of 10.8%[16] - The balance of retained earnings at the end of the second quarter of 2021 was $17,597 million, up from $16,060 million at the end of the second quarter of 2020, indicating a 9.6% increase[21] - The Company’s goodwill increased to $15,775 million as of June 30, 2021, compared to $15,517 million at the end of 2020, an increase of 1.7%[15] Cash Flow and Investments - Operating cash flows for the first half of 2021 were $750 million, compared to $578 million in the same period of 2020, an increase of 29.7%[19] - The Company reported a net cash used for investing activities of $437 million in the first half of 2021, compared to $564 million in the same period of 2020, a decrease of 22.6%[19] - The net cash outflow for current year acquisitions was $363 million for the six months ended June 30, 2021, compared to $562 million in 2020[60] - The total purchase consideration for acquisitions made during the six months ended June 30, 2021, was $505 million, consisting of $367 million in cash and $138 million in deferred and contingent consideration[69] - The estimated fair value of intangible assets acquired during 2021 was $188 million, with client relationships valued at $169 million and an amortization period of 14.0 years[73] Dividends and Shareholder Returns - The Company paid dividends totaling $478 million in the first half of 2021, slightly up from $466 million in the same period of 2020[19] - The Company declared dividends of $0.465 per share for the second quarter of 2021, compared to no dividends declared in the same quarter of 2020[21] - The Company remains authorized to repurchase up to approximately $2 billion in shares of its common stock as of June 30, 2021[128] - The Company repurchased 3.4 million shares of its common stock for $445 million during the first six months of 2021, with approximately $434 million paid through June 30, 2021[128] Tax and Regulatory Matters - The effective tax rate for the second quarter of 2021 was 31.6%, an increase from 26.2% in the second quarter of 2020, primarily due to a $100 million charge related to U.K. tax legislation[40] - The Company recorded a net charge of $100 million in the second quarter of 2021 due to the re-measurement of U.K. deferred tax assets and liabilities following the increase in the corporate income tax rate[39] - The Company is subject to various lawsuits and regulatory proceedings, which may impact future financial results[248] Pension and Lease Obligations - The Company’s U.S. defined benefit pension plans had an actual asset allocation of 65% in equities and equity alternatives as of June 30, 2021[108] - The net periodic benefit credit cost for the six months ended June 30, 2021, was $(123) million, compared to $(110) million for the same period in 2020[109] - Total future lease payments for operating leases amount to $2.643 billion as of June 30, 2021, with current lease liabilities of $342 million[106] - The net lease cost for the three months ended June 30, 2021, was $118 million, slightly down from $120 million in the same period of 2020[104] Acquisitions and Restructuring - The Company incurred integration and restructuring costs of $628 million related to the acquisition of Jardine Lloyd Thompson Group plc (JLT) through June 30, 2021[122] - For the three months ended June 30, 2021, the Company recognized $19 million in integration and restructuring costs related to JLT, compared to $57 million for the same period in the prior year[122] - The Company completed two acquisitions in the Risk and Insurance Services segment during the first six months of 2021[69] Market and Economic Conditions - Approximately 53% of total revenue is exposed to foreign currency fluctuations, with potential impacts on net operating income estimated at $65 million for a 10% change in major currencies[244] - Interest income from cash investments could vary by approximately $1 million with a 10% change in short-term interest rates[241] - The adoption of new accounting standards did not have a material impact on the company's financial position or results of operations[145][146][147][150]