Item 7A. 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) December 31, 2021

Cash and cash equivalents $ 1,752
Cash and cash equivalents held in a fiduciary capacity $ 9,622

Based on the above balances, if short-term interest rates increased or decreased by 10%, or 1 basis
point, over the course of the year, annual interest income, including interest earned on cash and cash
equivalents held in a fiduciary capacity, would increase or decrease by approximately $1 million.
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 short-term bank 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 53% 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 expenses are in the functional currency
of the foreign location. As such, under normal circumstances, the U.S. dollar translation of both the
revenues and expenses, 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, Sterling, Australian dollar and Canadian dollar)
moved 10% in the same direction against the U.S. dollar compared with the foreign exchange rates in
2021, the Company estimates net operating income would increase or decrease by approximately $57
million. The Company has exposure to approximately 80 foreign currencies overall. 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 in both public and private companies as well as private equity funds,
including investments of approximately $75 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 $207 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

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Company periodically reviews the carrying value of such investments to determine if any valuation
adjustments are appropriate under the applicable accounting pronouncements.
At December 31, 2021, the Company owns approximately 14% of the common stock of Alexander Forbes
("AF"), a South African company listed on the Johannesburg Stock Exchange. The investment in AF is
accounted at fair value, with unrealized gains and losses recorded as investment income (loss) in the
consolidated statement of income. The fair value of this investment at December 31, 2021 was
approximately $57 million.
Other
A number of lawsuits and regulatory proceedings are pending. See Note 16, Claims, Lawsuits and Other
Contingencies, in the notes to the consolidated financial statements included in this report.

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Item 8. Financial Statements and Supplementary Data.

MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

For the Years Ended December 31,

(In millions, except per share data) 2021 2020 2019
Revenue $ 19,820 $ 17,224 $ 16,652
Expense:
Compensation and benefits 11,425 10,129 9,734
Other operating expenses 4,083 4,029 4,241
Operating expenses 15,508 14,158 13,975
Operating income 4,312 3,066 2,677
Other net benefits credits 277 257 265
Interest income 2 7 39
Interest expense (444) (515) (524)
Cost of extinguishment of debt — — (32)
Investment income (loss) 61 (22) 22
Acquisition related derivative contracts — — (8)
Income before income taxes 4,208 2,793 2,439
Income tax expense 1,034 747 666
Net income before non-controlling interests 3,174 2,046 1,773
Less: Net income attributable to non-controlling interests 31 30 31
Net income attributable to the Company $ 3,143 $ 2,016 $ 1,742
Net income per share attributable to the Company
– Basic $ 6.20 $ 3.98 $ 3.44
– Diluted $ 6.13 $ 3.94 $ 3.41
Average number of shares outstanding
– Basic 507 506 506
– Diluted 513 512 511
Shares outstanding at December 31, 504 508 504

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

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

For the Years Ended December 31,

(In millions) 2021 2020 2019
Net income before non-controlling interests $ 3,174 $ 2,046 $ 1,773
Other comprehensive income (loss), before tax:
Foreign currency translation adjustments (389) 559 148
Gain (loss) related to pension and post-retirement plans 1,229 (784) (702)
Other comprehensive income (loss), before tax 840 (225) (554)
Income tax expense (credit) on other comprehensive loss 305 (170) (146)
Other comprehensive income (loss), net of tax 535 (55) (408)
Comprehensive income 3,709 1,991 1,365
Less: Comprehensive income attributable to non-controlling
interests 31 30 31
Comprehensive income attributable to the Company $ 3,678 $ 1,961 $ 1,334

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

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MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31,
(In millions, except share data) 2021 2020
ASSETS
Current assets:
Cash and cash equivalents $ 1,752 $ 2,089
Receivables
Commissions and fees 5,093 4,679
Advanced premiums and claims 136 112
Other 523 677
5,752 5,468
Less-allowance for credit losses (166) (142)
Net receivables 5,586 5,326
Other current assets 926 740
Total current assets 8,264 8,155
Goodwill 16,317 15,517
Other intangible assets 2,810 2,699
Fixed assets, net 847 856
Pension related assets 2,270 1,768
Right of use assets 1,868 1,894
Deferred tax assets 551 702
Other assets 1,461 1,458
$ 34,388 $ 33,049
LIABILITIES AND EQUITY
Current liabilities:
Short-term debt $ 17 $ 517
Accounts payable and accrued liabilities 3,165 3,050
Accrued compensation and employee benefits 2,942 2,400
Current lease liabilities 332 342
Accrued income taxes 198 247
Total current liabilities 6,654 6,556
Fiduciary liabilities 9,622 8,585
Less - cash and cash equivalents held in a fiduciary capacity (9,622) (8,585)
— —
Long-term debt 10,933 10,796
Pension, postretirement and postemployment benefits 1,632 2,662
Long-term lease liabilities 1,880 1,924
Liability for errors and omissions 355 366
Other liabilities 1,712 1,485
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 December 31, 2021 and 2020 561 561
Additional paid-in capital 1,112 943
Retained earnings 18,389 16,272
Accumulated other comprehensive loss (4,575) (5,110)
Non-controlling interests 213 156
15,700 12,822
Less – treasury shares, at cost, 57,105,619 shares at December 31, 2021 and 52,914,550 shares
at December 31, 2020 (4,478) (3,562)
Total equity 11,222 9,260
$ 34,388 $ 33,049
The accompanying notes are an integral part of these consolidated statements.

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