MMC - Marsh & McLennan Companies Inc.

04/16/2026 | Press release | Distributed by Public on 04/16/2026 06:12

Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations.
References in this report are to Marsh & McLennan Companies, Inc. and its consolidated subsidiaries (the "Company" or "Marsh"), unless the context otherwise requires. Effective January 14, 2026, the Company updated its brand name from Marsh McLennan to Marsh and the brand names of Marsh and Oliver Wyman Group businesses to Marsh Risk and Marsh Management Consulting, respectively. References to the Company and its businesses in this report reflect these changes. Mercer and Guy Carpenter will continue to report under their current brands through a transition period.
The changes to the brand names had no impact on the Company's operating and reporting segments.
General
Marsh is a global professional services firm in the areas of risk, reinsurance and capital, people and investments, and management consulting, advising clients in 130 countries. With an annual revenue of $27.0 billion and more than 95,000 colleagues, Marsh helps build the confidence to thrive through the power of perspective.
The Company conducts business through two segments:
•Risk and Insurance Services: risk management activities and insurance/reinsurance broking and services, conducted through Marsh Risk and Guy Carpenter.
•Consulting: health, wealth and career advice, solutions and products, and specialized management, strategic, economic and brand consulting services conducted through Mercer and Marsh Management Consulting.
The results of operations in the Management Discussion & Analysis ("MD&A") include an overview of the Company's consolidated results for the three months ended March 31, 2026, compared to the corresponding period in 2025, 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 reportable 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 months ended March 31, 2025, 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 March 31, 2025.
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.
Financial Highlights
•Consolidated revenue for the three months ended March 31, 2026 was $7.6 billion, an increase of 8%, or 4% on an underlying basis.
•Consolidated operating income for the three months ended March 31, 2026 was $1.8 billion, a decrease of 12%, compared to the corresponding period in the prior year. Net income attributable to the Company was $1.1 billion. Earnings per share on a diluted basis was $2.36, a decrease of 15%, compared to the corresponding period in the prior year.
•Risk and Insurance Services revenue for the three months ended March 31, 2026 was $5.1 billion, an increase of 6%, or 3% on an underlying basis. Operating income was $1.3 billion, compared with $1.6 billion for the corresponding period in the prior year.
•Marsh Risk's revenue for the three months ended March 31, 2026 was $3.7 billion, an increase of 8%, or 4% on an underlying basis. Guy Carpenter's revenue for the three months ended March 31, 2026 was $1.2 billion, an increase of 3%, or 2% on an underlying basis.
•Consulting revenue for the three months ended March 31, 2026 was $2.6 billion, an increase of 11%, or 5% on an underlying basis. Operating income was $525 million, compared with $456 million for the corresponding period in the prior year.
•Mercer's revenue for the three months ended March 31, 2026 was $1.7 billion, an increase of 11%, or 5% on an underlying basis. Marsh Management Consulting's revenue for the three months ended March 31, 2026 was $897 million, an increase of 10%, or 6% on an underlying basis.
•In the first quarter of 2026, the Company recorded an estimated liability and legal expenses of $425 million related to the Greensill litigation. Additional information on this matter is included in Note 17, Claims, Lawsuits and Other Contingencies, in the notes to the consolidated financial statements.
•The Company's results of operations for the three months ended March 31, 2026 included restructuring costs of $45 million related primarily to severance, lease exit charges, and consulting and outside services.
•The Company completed 2 acquisitions in the first quarter of 2026 for a total purchase consideration of $45 million.
•The Company's effective tax rate for the three months ended March 31, 2026 was 25.0%.
•For the three months ended March 31, 2026, the Company repurchased 4.2 million shares for $750 million.
•In March 2026, the Company repaid $600 million of 3.750% senior notes at maturity.
•In February 2026, the Company issued $600 million of 4.950% senior notes due 2036.
•In February 2026, the Board of Directors of the Company declared a quarterly dividend of $0.900 per share on outstanding common stock, payable in May 2026.
* * * * *
The macroeconomic and geopolitical environment including from the conflict in the Middle East and other wars and global conflicts, social unrest, tariffs or changes in trade policies, slower GDP growth or recession, fluctuations in foreign exchange rates, lower interest rates, capital markets volatility, inflation and changes in insurance premium rates could impact our business, financial condition, results of operations and cash flows. For more information about these risks, please see "Part I, Item 1A. Risk Factors" in our annual Report on Form 10-K for the year ended December 31, 2025.
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.
Consolidated Results of Operations
Three Months Ended
March 31,
(In millions, except per share data) 2026 2025
Revenue $ 7,597 $ 7,061
Expense:
Compensation and benefits 4,130 3,850
Other operating expenses 1,713 1,206
Operating expenses 5,843 5,056
Operating income $ 1,754 $ 2,005
Income before income taxes $ 1,581 $ 1,827
Net income before non-controlling interests $ 1,186 $ 1,412
Net income attributable to the Company $ 1,146 $ 1,381
Net income per share attributable to the Company:
- Basic $ 2.37 $ 2.81
- Diluted $ 2.36 $ 2.79
Average number of shares outstanding:
- Basic 484 492
- Diluted 486 495
Shares outstanding at March 31, 482 493
Consolidated operating income decreased $251 million, or 12% to $1.8 billion for the three months ended March 31, 2026, compared to $2.0 billion for the corresponding period in the prior year, reflecting an 8% increase in revenue and a 16% increase in expenses. Revenue growth was driven by increases in the Risk and Insurance Services and Consulting segments of 6% and 11%, respectively. The increase in expenses was driven primarily by the recording of an estimated liability and legal expenses of $425 million related to the Greensill litigation.
For the three months ended March 31, 2026, foreign exchange movements associated with the weakening of the U.S. dollar, increased consolidated revenue, expenses and operating income by approximately 3%.
Diluted earnings per share decreased to $2.36 from $2.79, or 15% from the prior year, reflecting a decrease in operating income.
Consolidated Revenue and Expense
Revenue - Non-GAAP Revenue and Components of Change
The Company advises clients in 130 countries. As a result, foreign exchange rate movements may impact period over 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 months ended March 31, 2026 and 2025, and the related non-GAAP underlying revenue change:
Three Months Ended March 31,
(In millions, except percentages)
GAAP Revenue % Change
GAAP Revenue* 		Non-GAAP Revenue Non-GAAP Underlying Revenue*
2026 2025 2026 2025
Risk and Insurance Services
Marsh Risk $ 3,726 $ 3,453 8 % $ 3,582 $ 3,435 4 %
Guy Carpenter 1,240 1,206 3 % 1,214 1,194 2 %
Subtotal 4,966 4,659 7 % 4,796 4,629 4 %
Fiduciary interest income 85 103 84 103
Total Risk and Insurance Services 5,051 4,762 6 % 4,880 4,732 3 %
Consulting
Mercer 1,661 1,496 11 % 1,562 1,494 5 %
Marsh Management Consulting 897 818 10 % 870 818 6 %
Total Consulting 2,558 2,314 11 % 2,432 2,312 5 %
Corporate Eliminations (12) (15) (12) (15)
Total Revenue $ 7,597 $ 7,061 8 % $ 7,300 $ 7,029 4 %
The following table provides more detailed revenue information for certain of the components presented in the previous table:
Three Months Ended March 31,
(In millions, except percentages)
GAAP Revenue % Change
GAAP Revenue* 		Non-GAAP Revenue Non-GAAP Underlying Revenue*
2026 2025 2026 2025
Marsh Risk:
EMEA $ 1,208 $ 1,059 14 % $ 1,117 $ 1,057 6 %
Asia Pacific 369 335 10 % 352 334 5 %
Latin America 136 124 10 % 127 124 2 %
Total International 1,713 1,518 13 % 1,596 1,515 5 %
U.S./Canada 2,013 1,935 4 % 1,986 1,920 3 %
Total Marsh Risk $ 3,726 $ 3,453 8 % $ 3,582 $ 3,435 4 %
Mercer:
Wealth $ 752 $ 670 12 % $ 702 $ 666 5 %
Health 661 608 9 % 639 603 6 %
Career 248 218 13 % 221 225 (2) %
Total Mercer $ 1,661 $ 1,496 11 % $ 1,562 $ 1,494 5 %
(*) Rounded to whole percentages.
Revenue - Reconciliation of Non-GAAP Measures
The following tables provide the reconciliation of GAAP revenue to Non-GAAP revenue for the three months ended March 31, 2026 and 2025:
2026 2025
Three Months Ended March 31,
(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 Risk $ 3,726 $ (108) $ (36) $ 3,582 $ 3,453 $ (18) $ 3,435
Guy Carpenter 1,240 (26) - 1,214 1,206 (12) 1,194
Subtotal 4,966 (134) (36) 4,796 4,659 (30) 4,629
Fiduciary interest income 85 (1) - 84 103 - 103
Total Risk and Insurance Services 5,051 (135) (36) 4,880 4,762 (30) 4,732
Consulting
Mercer 1,661 (68) (31) 1,562 1,496 (2) 1,494
Marsh Management Consulting 897 (26) (1) 870 818 - 818
Total Consulting 2,558 (94) (32) 2,432 2,314 (2) 2,312
Corporate Eliminations (12) - - (12) (15) - (15)
Total Revenue $ 7,597 $ (229) $ (68) $ 7,300 $ 7,061 $ (32) $ 7,029
The following table provides more detailed revenue information for certain of the components presented in the previous table:
2026 2025
Three Months Ended March 31,
(In millions)
GAAP Revenue Currency Impact Acquisitions/
Dispositions/
Other Impact 		Non-GAAP Revenue GAAP Revenue Acquisitions/
Dispositions/
Other Impact 		Non-GAAP Revenue
Marsh Risk:
EMEA $ 1,208 $ (82) $ (9) $ 1,117 $ 1,059 $ (2) $ 1,057
Asia Pacific 369 (13) (4) 352 335 (1) 334
Latin America 136 (9) - 127 124 - 124
Total International 1,713 (104) (13) 1,596 1,518 (3) 1,515
U.S./Canada 2,013 (4) (23) 1,986 1,935 (15) 1,920
Total Marsh Risk $ 3,726 $ (108) $ (36) $ 3,582 $ 3,453 $ (18) $ 3,435
Mercer:
Wealth $ 752 $ (38) $ (12) $ 702 $ 670 $ (4) $ 666
Health 661 (20) (2) 639 608 (5) 603
Career 248 (10) (17) 221 218 7 225
Total Mercer $ 1,661 $ (68) $ (31) $ 1,562 $ 1,496 $ (2) $ 1,494
Note: Amounts in the tables above are rounded to whole numbers.
Consolidated Revenue
Consolidated revenue increased $536 million, or 8%, to $7.6 billion for the three months ended March 31, 2026, compared to $7.1 billion for the three months ended March 31, 2025. Consolidated revenue increased 4% on an underlying basis, 3% from the impact of foreign currency translation, and 1% from acquisitions. On an underlying basis, revenue increased 3% and 5% for the three months ended March 31, 2026, in the Risk and Insurance Services and Consulting segments, respectively.
Consolidated revenue growth for the three months ended March 31, 2026 reflects the continued demand for our advice and solutions.
Consolidated Operating Expenses
Consolidated operating expenses increased $787 million, or 16%, to $5.8 billion for the three months ended March 31, 2026, compared to $5.1 billion for the three months ended March 31, 2025. Expenses also reflect a 3% increase from the impact of foreign currency translation and 1% from acquisitions.
Consolidated operating expenses for the three months ended March 31, 2026 reflect the recording of an estimated liability and legal expenses of $425 million related to the Greensill litigation. Consolidated operating expenses also reflect increased compensation and benefits, driven by higher base salaries and incentive compensation.
Restructuring Activities
The Company incurred a total of $45 million for restructuring costs for the three months ended March 31, 2026.
In the third quarter of 2025, the Company launched a three-year program, Thrive (the "Program"), which focuses on brand strategy, delivering greater value to clients, accelerating growth and improving efficiency. The Company also announced the formation of Business Client Services ("BCS"), to accelerate innovation and centralize investments in operational excellence, data, artificial intelligence and other analytics. BCS brings together operations and technology teams across the Company to improve client service through enhancing our technology and effective deployment of resources.
The Program will generate savings from process and automation efficiencies and optimization of our global operating model.
Based on current Program estimates, the Company expects to incur approximately $500 million of cost over the three years. Costs will primarily relate to severance, technology and outside services. Total annualized savings are expected to be approximately $400 million. The Company expects savings realized and charges incurred to be evenly distributed over the Program period.
The Company incurred $187 million of restructuring costs in connection with the Program through March 31, 2026, primarily severance, of which $37 million were incurred for the three months ended March 31, 2026.
The Company continues to refine its detailed plans for the Program which may change the timing, expected costs, and related savings.
For the three months ended March 31, 2025, the Company incurred a total of $32 million for restructuring activities related primarily to severance and lease exit charges.
Additional details are included in Note 14, Restructuring Costs, in the notes to the consolidated financial statements.
Risk and Insurance Services
The Company conducts business in its Risk and Insurance Services segment through Marsh Risk and Guy Carpenter. Marsh Risk is an insurance broker and risk advisor, offering risk management, insurance broking, insurance program management, risk consulting, analytical modeling and alternative risk financing services to a wide range of businesses, government entities, professional service organizations and individuals in over 130 countries. Guy Carpenter, the Company's reinsurance intermediary and advisor, provides specialized reinsurance broking, strategic advisory and actuarial services, and analytics solutions.
The results of operations for the Risk and Insurance Services segment are as follows:
Three Months Ended
March 31,
(In millions, except percentages) 2026 2025
Revenue $ 5,051 $ 4,762
Compensation and benefits
2,606 2,451
Other operating expenses
1,134 698
Operating expenses 3,740 3,149
Operating income $ 1,311 $ 1,613
Operating income margin 26.0 % 33.9 %
Revenue
Revenue in the Risk and Insurance Services segment increased $289 million, or 6%, to $5.1 billion for the three months ended March 31, 2026, compared to $4.8 billion for the three months ended March 31, 2025. Revenue increased 3% on both an underlying basis and from the impact of foreign currency translation.
Interest earned on fiduciary funds decreased $18 million to $85 million for the three months ended March 31, 2026, compared to $103 million for the three months ended March 31, 2025, due to lower average interest rates compared to the corresponding period in the prior year.
In Risk and Insurance Services, underlying revenue growth for the three months ended March 31, 2026 was driven by higher new business and renewal revenue at Marsh Risk, partially offset by declining insurance premium rates.
Marsh Risk's revenue increased $273 million, or 8%, to $3.7 billion for the three months ended March 31, 2026, compared to $3.5 billion for the three months ended March 31, 2025. This reflects an increase of 4% on an underlying basis, 3% from the impact of foreign currency translation and 1% from acquisitions. U.S./Canada rose 3% on an underlying basis. Total International produced underlying revenue growth of 5%, reflecting growth of 6% in EMEA, 5% in Asia Pacific and 2% in Latin America.
Guy Carpenter's revenue increased $34 million, or 3%, to $1.2 billion for the three months ended March 31, 2026, compared to the corresponding period in the prior year. This reflects an increase of 2% on both an underlying basis and from the impact of foreign currency translation, partially offset by a decrease of 1% from acquisitions.
Guy Carpenter's underlying revenue growth for the three months ended March 31, 2026 was driven by new business growth across most regions and global specialties, partially offset by declining reinsurance premium rates.
The Risk and Insurance Services segment completed one acquisition for the three months ended March 31, 2026. 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 Insurances Services segment increased $591 million, or 19%, to $3.7 billion for the three months ended March 31, 2026, compared to $3.1 billion for the three months ended March 31, 2025. Expenses reflect an increase of 3% from the impact of foreign currency translation and 1% from acquisitions.
Expenses for the three months ended March 31, 2026 reflect the recording of an estimated liability and legal expenses of $425 million related to the Greensill litigation. Expenses also reflect increased compensation and benefits, driven by higher base salaries and incentive compensation.
Consulting
The Company conducts business in its Consulting segment through Mercer and Marsh Management Consulting. Mercer is a provider in delivering advice, solutions and products that help organizations meet the health, wealth and career needs of a changing workforce. Marsh Management Consulting offers management consulting and advisory services across various industries.
The results of operations for the Consulting segment are as follows:
Three Months Ended
March 31,
(In millions, except percentages) 2026 2025
Revenue $ 2,558 $ 2,314
Compensation and benefits
1,475 1,363
Other operating expenses
558 495
Operating expenses 2,033 1,858
Operating income $ 525 $ 456
Operating income margin 20.5 % 19.7 %
Revenue
Consulting revenue increased $244 million, or 11%, to $2.6 billion for the three months ended March 31, 2026, compared to $2.3 billion for the three months ended March 31, 2025. This reflects an increase of 5% on an underlying basis, 4% from the impact of foreign currency translation, and 1% from acquisitions.
In Consulting, underlying revenue growth for the three months ended March 31, 2026 was driven by growth in both Mercer and Marsh Management Consulting.
Mercer's revenue increased $165 million, or 11%, to $1.7 billion for the three months ended March 31, 2026, compared to $1.5 billion for the three months ended March 31, 2025. This reflects an increase of 5% on an underlying basis, 5% from the impact of foreign currency translation, and 2% from acquisitions.
On an underlying basis, revenue for Health and Wealth increased 6% and 5%, respectively, and decreased 2% in Career, as compared to the corresponding period in the prior year.
Underlying revenue growth at Mercer was driven by solid growth in Health and Wealth, offset by a contraction in Career. Health reflected growth across all regions. Wealth growth was driven by investment management, primarily reflecting positive net flows and the impact of capital markets. Career reflected a decline in project-related work in the U.S. and Canada.
Marsh Management Consulting's revenue increased $79 million, or 10%, to $897 million for the three months ended March 31, 2026, compared to $818 million for the three months ended March 31, 2025. This reflects an increase of 6% on an underlying basis and 3% from the impact of foreign currency translation.
The increase in underlying revenue growth at Marsh Management Consulting for the three months ended March 31, 2026 was driven by growth in most regions.
The Consulting segment completed one acquisition for the three months ended March 31, 2026. 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 Consulting segment increased $175 million, or 9%, to $2.0 billion for the three months ended March 31, 2026, compared to $1.9 billion for the three months ended March 31, 2025. Expenses reflect an increase of 4% from the impact of foreign currency translation and 1% from acquisitions.
Expenses for the three months ended March 31, 2026 reflect increased compensation and benefits, driven by higher base salaries and incentive compensation.
Corporate and Other
Corporate expenses increased $18 million, or 28%, to $82 million for the three months ended March 31, 2026, compared to $64 million for the three months ended March 31, 2025, reflecting primarily increased compensation and benefits and restructuring costs in the current period compared to the prior year.
Interest Income
Interest income was $11 million for the three months ended March 31, 2026, compared to $19 million for the three months ended March 31, 2025. Interest income decreased $8 million for the three months ended March 31, 2026 due to lower average interest rates compared to the corresponding period in the prior year.
Interest Expense
Interest expense was $240 million for the three months ended March 31, 2026, compared to $245 million for the three months ended March 31, 2025.
Investment Income
The caption "Investment income" 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 the Company's 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 $6 million for the three months ended March 31, 2026, compared to net investment income of $5 million for the three months ended March 31, 2025.
Income and Other Taxes
The Company's effective tax rate for the three months ended March 31, 2026 was 25.0%, compared with 22.7% for the corresponding period of 2025.
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, non-taxable adjustments related to contingent consideration for acquisitions, and valuation allowances for certain tax credits and attributes.
Purchases of U.S. tax credits are the most significant discrete item for the three months ended March 31, 2026, reducing the effective tax rate by 0.3%. For the three months ended March 31, 2025, the most significant discrete item was the excess tax benefit related to share-based payments, which reduced the effective tax rate by 2.1%.
The effective tax rate may vary significantly from period to period. The effective tax rate is sensitive to the geographic mix of earnings and the cost to repatriate 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.
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.
In 2024, the Company received closure notices and assessments from the U.K. tax authority in relation to its 2016-2020 examinations which disallowed certain interest expense deductions. The Company has appealed the assessments and resolving this matter through litigation or alternative dispute resolution may take several years. The Company believes the resolution of tax matters will not have a material effect on the consolidated financial position of the Company. However, an adverse 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.
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.
On July 4, 2025, U.S tax legislation was signed into law (known as the "One Big Beautiful Bill Act" or "OBBBA") which made permanent many of the tax provisions enacted in 2017 as part of the Tax Cuts and Jobs Act. In addition, the OBBBA made changes to certain U.S. corporate tax provisions, which are effective beginning in 2026. The enactment of the OBBBA does not have a material impact on the results from operations for the current year or future years.
The Organization for Economic Cooperation and Development ("OECD") provided model rules for a 15% global minimum tax, known as Pillar Two. Pillar Two has now been enacted by most key non-U.S. jurisdictions where the Company operates, including the U.K. and Ireland. Parts of the minimum tax rules were applicable for 2024, with the remaining provisions becoming fully effective for 2025. This minimum tax is treated as a period cost and does not have a material impact on the Company's financial results of operations for the current period.
While the U.S. has negotiated a "side-by-side" arrangement for the existing U.S. minimum taxes with the intent to exempt U.S. multinational companies from certain of the Pillar Two provisions, uncertainty remains related to the implementation of this arrangement. The Company continues to monitor legislative developments, as well as additional guidance from countries that have enacted Pillar Two legislation, and will ensure it complies with any changes.
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. However, the Company may not be able to fully deduct intercompany interest on loans used to finance the Company's foreign operations.
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.
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 the Financing Cash Flows section.
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 March 31, 2026, the Company had approximately $1.5 billion of cash and cash equivalents in its foreign operations, which includes $511 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 three months ended March 31, 2026, the Company recorded foreign currency translation adjustments which decreased net equity by $150 million. Continued 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 the 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 used $688 million of cash from operations for the three months ended March 31, 2026, compared to $622 million for the first three months of 2025. 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 $79 million and $57 million related to its restructuring activities for the three months ended March 31, 2026 and 2025, 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 months ended March 31, 2026, the Company contributed $9 million to its U.S. defined benefit pension plans and $6 million to its non-U.S. defined benefit pension plans. For the three months ended March 31, 2025, the Company contributed $11 million to its U.S. defined benefit pension plans and $7 million to its non-U.S. defined benefit pension plans.
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. For the three months ended March 31, 2026, the Company made contributions of $9 million to its non-qualified plans. The Company expects to contribute approximately $33 million to its U.S. qualified plan and an additional $25 million to its U.S. non-qualified plans over the remainder of 2026.
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 78% of non-U.S. plan assets at December 31, 2025. 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.
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 three 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.
The MMC U.K. Pension Fund has four segregated defined benefit sections, all in a surplus funding position at December 31, 2024. Based on that funding position, an agreement was reached with the trustee in the fourth quarter of 2025 that no deficit funding will be required to any of the defined benefit sections until 2029 at the earliest, following the completion in 2028 of the December 31, 2027 valuation. The Company's prior agreement to support certain annual deficit contributions that may have been required by U.K. operating companies under certain circumstances, expiring on December 31, 2025, was not renewed in January 2026 due to the improved surplus funding position.
The Company expects to fund an additional $33 million to its non-U.S. defined benefit plans over the remainder of 2026, comprising approximately $1 million to the U.K. non-qualified plan and $32 million to plans outside of the U.K.
Financing Cash Flows
Net cash provided by financing activities was $114 million for the three months ended March 31, 2026, compared with $138 million used for financing activities for the corresponding period in 2025.
Credit Facilities
The Company has a $3.5 billion multi-currency unsecured five-year revolving credit facility (the "Credit Facility") expiring October 2028. Borrowings under the Credit Facility bear interest at a rate per annum, equal, at the Company's option, either at (a) the Secured Overnight Financing Rate ("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 evaluated 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. At March 31, 2026 and December 31, 2025, the Company had no borrowings under this facility.
The Company maintains other credit and overdraft facilities with various financial institutions aggregating $121 million and $122 million at March 31, 2026 and December 31, 2025, respectively. There were no outstanding borrowings under these facilities at March 31, 2026 and December 31, 2025.
The Company also has outstanding guarantees and letters of credit with various banks aggregating $155 million and $150 million at March 31, 2026 and December 31, 2025, respectively.
Debt
The Company has a $3.5 billion short-term debt financing program through the issuance of commercial paper. The proceeds from the issuance of commercial paper are used for general corporate purposes. The Company had $1.0 billion of commercial paper outstanding at March 31, 2026, at an average effective interest rate of 4.06%. The Company did not have any commercial paper outstanding at December 31, 2025.
In March 2026, the Company repaid $600 million of 3.750% senior notes at maturity.
In February 2026, the Company issued $600 million of 4.950% senior notes due 2036. The Company used the net proceeds from these issuances for general corporate purposes.
In March 2025, the Company repaid $500 million of 3.500% senior notes at maturity.
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
The Company has a share repurchase program authorized by the Board of Directors.
In November 2025, the Board of Directors authorized the Company to repurchase up to $6 billion of the Company's common stock, which superseded any prior authorizations.
For the three months ended March 31, 2026, the Company repurchased 4.2 million shares of its common stock for $750 million. At March 31, 2026, the Company remained authorized by the Board of Directors to repurchase up to approximately $4.9 billion in shares of its common stock. There is no time limit on the authorization.
For the three months ended March 31, 2025, the Company repurchased 1.3 million shares of its common stock for $300 million.
Dividends
The Company paid dividends on its common stock shares of $440 million ($0.900 per share) for the three months ended March 31, 2026, compared with $405 million ($0.815 per share) for the first three months of 2025.
In February 2026, the Board of Directors of the Company declared a quarterly dividend of $0.900 per share on outstanding common stock, payable in May 2026. In February 2026, the Company also paid the quarterly dividend declared in January 2026 by the Company's Board of Directors of $0.900 per share on outstanding common stock.
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 Three Months Ended March 31,
(In millions) 2026 2025
Operating:
Contingent consideration payments for prior year acquisitions $ (1) $ (14)
Acquisition/disposition related net charges for adjustments 11 9
Adjustments and payments related to contingent consideration $ 10 $ (5)
Financing:
Contingent consideration for prior year acquisitions $ (17) $ (5)
Deferred consideration for prior year acquisitions (14) (27)
Payments of deferred and contingent consideration for acquisitions $ (31) $ (32)
Receipt of deferred and contingent consideration for dispositions $ 12 $ -
For acquisitions completed during the first three months of 2026 and in prior years, remaining estimated future contingent payments of $266 million and deferred consideration payments of $149 million, are recorded in accounts payable and accrued liabilities or other liabilities in the consolidated balance sheets at March 31, 2026.
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 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 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 $29 million through March 31, 2026, due 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 three months ended March 31, 2026.
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 increases of $361 million and $86 million for the three months ended March 31, 2026 and 2025, respectively, related to fiduciary liabilities.
Investing Cash Flows
Net cash used for investing activities amounted to $104 million for the first three months of 2026, compared with $26 million provided by investing activities for the corresponding period in 2025.
The Company paid $41 million and $18 million, net of cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity acquired, for acquisitions it made in the first three months of 2026 and 2025, respectively.
In the first quarter of 2025, the Company sold Marsh McLennan Agency's ("MMA") Technology Consulting and Administrative Solutions ("TCAS") business for approximately $25 million, and recorded a gain of $15 million, which is included in revenue in the consolidated statements of income.
The Company's additions to fixed assets and capitalized software for the three months ended March 31, 2026 and 2025, amounted to $62 million and $55 million, respectively, related primarily to software development costs, the refurbishing and modernizing of office facilities, and technology equipment purchases.
Cash from the sale of long-term investments for the three months ended March 31, 2025 is primarily due to the disposal of an investment in a unit trust fund.
Cash used for long-term investments for the three months ended March 31, 2026 is due to investments in private equity funds. At March 31, 2026, the Company has commitments for potential future investments of approximately $102 million in private equity funds that invest primarily in financial services companies.
Commitments and Obligations
The following sets forth the Company's future contractual obligations by the type at March 31, 2026:
Payment due by Period
(In millions)
Total Within
1 Year 		1-3 Years 4-5 Years After
5 Years
Commercial paper $ 1,049 $ 1,049 $ - $ - $ -
Current portion of long-term debt 653 653 - - -
Long-term debt 19,057 - 2,793 2,431 13,833
Interest on long-term debt 12,946 913 1,740 1,491 8,802
Net operating leases 2,106 387 628 434 657
Service agreements 595 282 201 112 -
Other long-term obligations (a) 504 237 202 65 -
Total $ 36,910 $ 3,521 $ 5,564 $ 4,533 $ 23,292
(a)Primarily reflects the future payments of deferred and contingent purchase consideration.
The table does not include the liability for unrecognized tax benefits of $114 million as the Company is unable to reasonably predict the timing of settlement of these liabilities, other than approximately $63 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 $13 million, which will be paid in April 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 2025 Form 10-K.
New Accounting Pronouncements
Note 19, New Accounting Pronouncements, 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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