Goodwill and Other Intangibles

3 Months Ended

Mar. 31, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

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. 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 2021, the Company elected to perform a qualitative impairment assessment. As part of its assessment, the Company considered numerous factors, including:

•that the fair value of each reporting unit exceeds its carrying value by a substantial margin based on its most recent quantitative assessment in 2019;

•whether significant acquisitions or dispositions occurred which might alter the fair value of its reporting units;

•macroeconomic conditions and their potential impact on reporting unit fair values;

•actual performance compared with budget and prior projections used in its estimation of reporting unit fair values;

•industry and market conditions; and

•the year-over-year change in the Company’s share price.

The Company completed its qualitative assessment in the third quarter of 2021 and concluded that goodwill was not impaired.

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 does not have any indefinite lived intangible assets.

Changes in the carrying amount of goodwill are as follows:


March 31,
(In millions)	2022		2021
Balance as of January 1,	$	16,317	$	15,517
Goodwill acquired	17		—
Other adjustments(a)	(80)		(59)
Balance at March 31,	$	16,254	$	15,458

(a) Primarily reflects the impact of foreign exchange.

The goodwill arising from the acquisitions in 2022 and 2021 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 2022 was $17 million, of which approximately $1.6 million is deductible for tax purposes, and is primarily related to the Risk and Insurance Services segment.

Goodwill allocable to the Company’s reportable segments at March 31, 2022 is as follows: Risk and Insurance Services, $12.5 billion and Consulting, $3.8 billion.

The gross cost and accumulated amortization of identified intangible assets at March 31, 2022 and December 31, 2021 are as follows:


	March 31, 2022						December 31, 2021
(In millions)	Gross Cost		Accumulated Amortization		Net Carrying Amount		Gross Cost		Accumulated Amortization		Net Carrying Amount
Client relationships	$	4,041	$	1,389	$	2,652	$	4,066	$	1,334	$	2,732
Other (a)	362		294		68		365		287		78
Amortized intangibles	$	4,403	$	1,683	$	2,720	$	4,431	$	1,621	$	2,810

(a) Primarily non-compete agreements, trade names and developed technology.

Aggregate amortization expense for the three months ended March 31, 2022 and 2021 was $91 million and $100 million, respectively. The estimated future aggregate amortization expense is as follows:


For the Years Ending December 31,
(In millions)	Estimated Expense
2022 (excludes amortization through March 31, 2022)	$	261
2023	328
2024	308
2025	269
2026	248
Subsequent years	1,306
Total future amortization	$	2,720