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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Introduction

The following discussion and analysis should be read in conjunction with our consolidated financial statements and the related notes included in Item 8 of this annual report. In addition, please see “Information Regarding Non-GAAP Measures and Other” beginning on page 40 for a reconciliation of the non-GAAP measures for adjusted total revenues, organic commission, fee and supplemental revenues and adjusted EBITDAC to the comparable GAAP measures, as well as other important information regarding these measures.

We are engaged in providing insurance brokerage, reinsurance brokerage, consulting services, and third-party property/casualty claims settlement and administration services to entities and individuals around the world. We believe that one of our major strengths is our ability to deliver comprehensively structured insurance and risk management services to our clients. Our brokers, agents and administrators act as intermediaries between underwriting enterprises and our clients and we do not assume net underwriting risks. We are headquartered in Rolling Meadows, Illinois, and provide brokerage, risk management and consulting services in approximately 130 countries around the world through our owned operations and a network of correspondent brokers and consultants and third-party property/casualty claims settlement and administration services through a network of offices located throughout Australia, Canada, New Zealand, the U.K. and the U.S. In 2024, we expanded, and expect to continue to expand, our international operations through both acquisitions and organic growth. We generate approximately 64% of our revenues for the combined brokerage and risk management segments domestically, with the remaining 36% generated internationally, primarily in Australia, Canada, New Zealand and the U.K. (based on 2024 revenues). We have three reportable segments: brokerage, risk management and corporate. Brokerage and risk management contributed approximately 86% and 14%, respectively, to 2024 revenues. Our major sources of operating revenues are commissions, fees and supplemental and contingent revenues from brokerage operations and fees from risk management operations. Interest income, premium finance revenues and other income is generated from invested cash and fiduciary funds and revenue from premium financing.

Prior Year Discussion of Results and Comparisons

For information on fiscal 2023 results and similar comparisons, see "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" of our Form 10-K for the fiscal year ended December 31, 2023.

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Summary of Financial Results - Year Ended December 31,

See the reconciliations of non-GAAP measures on page 38.

(In millions, except per share data)

Brokerage Segment

Adjusted EBITDAC margin 35.2 % 34.2 % +95 bpts

Risk Management Segment

Net earnings margin (before reimbursements) 12.0 % 12.0 % +7 bpts

Adjusted EBITDAC margin (before reimbursements) 20.7 % 20.0 % +65 bpts

Corporate Segment

Diluted net loss per share $ (1.74 ) $ (1.61 ) $ (1.58 ) $ (1.37 )

Total Company

Total Brokerage and Risk Management Segment

In our corporate segment, net after-tax (loss) earnings from our clean energy investments was $(4.4) million and $(11.5) million in 2024 and 2023, respectively. At this time, we anticipate our clean energy investments will produce after-tax losses in 2025.

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The following provides information that management believes is helpful when comparing revenues before reimbursements, net earnings, EBITDAC and diluted net earnings per share for 2024 and 2023. In addition, these tables provide reconciliations to the most comparable GAAP measures for adjusted revenues, adjusted EBITDAC and adjusted diluted net earnings per share. Reconciliations of EBITDAC for the brokerage and risk management segments are provided on pages 44 and 50 of this filing.

Year Ended December 31 Reported GAAP to Adjusted Non-GAAP Reconciliation:

(In millions, except per share data)

Effective income tax rate impact — — — (4.9 ) — — — (0.02 )

Levelized foreign currency translation — 3.5 — (8.3 ) — (9.8 ) — (0.04 )

Net (gains) on divestures (0.1 ) (0.4 ) (0.1 ) (0.3 ) (0.1 ) (0.4 ) — —

Acquisition related adjustments — — 0.2 0.4 0.3 0.5 — —

Amortization of intangibles assets — — 9.9 5.6 — — 0.04 0.03

Levelized foreign currency translation — (1.0 ) — (0.2 ) — (0.5 ) — —

Total Brokerage and Risk

Total Brokerage and Risk

* For the year ended December 31, 2024, the pretax impact of the brokerage segment adjustments totals $1,021.4 million, mostly due to non-cash period expenses related to intangible amortization and acquisition earnout payable adjustments, with a corresponding adjustment to the provision for income taxes of $259.2 million relating to these items. For the year ended December 31, 2024, the pretax impact of the risk management segment adjustments totals $25.0 million, with a corresponding adjustment to the provision for income taxes of $7.0 million relating to these items. For the year ended December 31, 2024, the pretax impact of the corporate segment adjustments totals $29.9 million, with a corresponding adjustment to the benefit for income taxes of $1.8 million relating to these items and other tax items noted on page 56. For the corporate segment, the clean energy related adjustments are described on page 56.

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Reconciliation of Non-GAAP Measures - Pre-tax Earnings and Diluted Net Earnings per Share

(In millions except share and per share data)

Net (gains) on divestitures (0.1 ) — (0.1 ) — (0.1 ) —

Acquisition related adjustments 0.3 0.1 0.2 — 0.2 —

Clean energy related (2.3 ) (0.6 ) (1.7 ) — (1.7 ) (0.01 )

Net (gains) on divestitures (9.6 ) (2.4 ) (7.2 ) — (7.2 ) (0.03 )

Effective income tax rate impact — 4.9 (4.9 ) — (4.9 ) (0.02 )

Levelized foreign currency translation (10.9 ) (2.6 ) (8.3 ) — (8.3 ) (0.04 )

Net (gains) on divestitures (0.4 ) (0.1 ) (0.3 ) — (0.3 ) —

Acquisition integration 1.0 0.3 0.7 — 0.7 —

Acquisition related adjustments 0.5 0.1 0.4 — 0.4 —

Amortization of intangible assets 7.7 2.1 5.6 — 5.6 0.03

Levelized foreign currency translation (0.3 ) (0.1 ) (0.2 ) — (0.2 ) —

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Acquisition of AssuredPartners

On December 7, 2024, we signed a definitive agreement to acquire all of the issued and outstanding stock of Dolphin Topco, Inc., the holding company of AssuredPartners, Inc., a Delaware corporation (together with its subsidiaries, “AssuredPartners”) for gross consideration of $13.45 billion. The transaction is subject to customary regulatory approval, standard closing conditions and is expected to close during first quarter 2025. AssuredPartners is a leading U.S. insurance broker with client capabilities across commercial property/casualty, specialty, employee benefits and personal lines with operations in the U.K. and Ireland. We expect to fund the transaction using $8.5 billion of cash raised in our December 11, 2024 follow-on common stock offering and $5.0 billion of cash borrowed in our December 19, 2024 senior notes issuance (which we refer to, together with the follow-on common stock offering, as the AssuredPartners Financing). On January 7, 2025, we received an additional $1.28 billion of cash due to the exercise by the underwriters of the overallotment provision related to the follow-on common stock offering.

Insurance Market Overview

Fluctuations in premiums charged by property/casualty underwriting enterprises have a direct and potentially material impact on the insurance brokerage industry. Commission revenues are generally based on a percentage of the premiums paid by insureds and normally follow premium levels. Insurance premiums are cyclical in nature and may vary widely based on market conditions. Various factors, including competition for market share among underwriting enterprises, increased underwriting capacity and improved economies of scale following consolidations, can result in flat or reduced property/casualty premium rates (a “soft” market). A soft market tends to put downward pressure on commission revenues. Various countervailing factors, such as greater than anticipated loss experience, unexpected loss exposure and capital shortages, can result in increasing property/casualty premium rates (a “hard” market). A hard market tends to favorably impact commission revenues. Hard and soft markets may be broad-based or more narrowly focused across individual product lines or geographic areas. As markets harden, buyers of insurance (such as our brokerage clients), have historically tried to mitigate premium increases and the higher commissions these premiums generate, including by raising their deductibles and/or reducing the overall amount of insurance coverage they purchase. As the market softens, or costs decrease, these trends have historically reversed. During a hard market, buyers may switch to negotiated fee in lieu of commission arrangements to compensate us for placing their risks, or may consider the alternative insurance market, which includes self-insurance, captives, rent-a-captives, risk retention groups and capital market solutions to transfer risk. Our brokerage units are very active in these markets as well. While increased use by insureds of these alternative markets historically has reduced commission revenue to us, such trends generally have been accompanied by new sales and renewal increases in the areas of risk management, claims management, captive insurance and self-insurance services and related growth in fee revenue. Inflation tends to increase the levels of insured values and risk exposures, resulting in higher overall premiums and higher commissions. However, the impact of hard and soft market fluctuations has historically had a greater impact on changes in premium rates, and therefore on our revenues, than inflationary pressures.

We use the Council of Insurance Agents & Brokers (which we refer to as the CIAB) insurance pricing quarterly survey as an indicator of the insurance rate environment. The CIAB represents the leading domestic and international insurance brokers, who write approximately 85% of the commercial property/casualty premiums in the U.S. The fourth quarter 2024 survey had not been published as of the filing date of this report. The first three 2024 quarterly surveys indicated that U.S. commercial property/casualty rates increased by 7.7%, 5.2%, and 5.1% on average, for the first, second and third quarters of 2024, respectively. We expect a similar trend to be noted when the CIAB fourth quarter 2024 survey report is issued, which would indicate overall continued price firming and hardening in most lines of business.

We believe increases in property/casualty rates will continue throughout 2025 due to rising loss costs, increased frequency of natural catastrophe and weather related losses, prior year reserve volatility and social inflation. We estimate global insured natural catastrophe losses were approximately $150 billion during 2024, and first quarter 2025 insured losses are likely to be elevated due to the California wildfires and, may cause insurance and/or reinsurance carriers to increase property pricing upon renewal. Additionally, if loss trends deteriorate over the coming quarters, or if profitability concerns on casualty lines increase, it could lead to a more difficult rate and conditions environment in certain lines. The combination of increasing insurable values (due to inflation, including wage inflation), a tight labor market and low unemployment is likely contributing to increases in client insured exposures. Additionally, we expect that our history of strong new business generation, solid retentions and enhanced value-added services for our carrier partners should all result in further organic growth opportunities around the world. Overall, we believe that in a positive rate environment with increasing exposures, our professionals can demonstrate their expertise and high-quality, value-added capabilities by strengthening our clients’ insurance portfolios and delivering insurance and risk management solutions within our clients’ budget. Based on our experience, insurance and reinsurance carriers appear to be making rational pricing decisions and are providing adequate capacity in the market for nearly all lines of coverage.

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Business Combinations and Dispositions

See Note 3 to our 2024 consolidated financial statements for a discussion of our 2024 business combinations.

Results of Operations

Information Regarding Non-GAAP Measures and Other

In the discussion and analysis of our results of operations that follows, in addition to reporting financial results in accordance with GAAP, we provide information regarding EBITDAC, EBITDAC margin, adjusted EBITDAC, adjusted EBITDAC margin, diluted net earnings per share, as adjusted (adjusted EPS), adjusted revenue, adjusted compensation and operating expenses, adjusted compensation expense ratio, adjusted operating expense ratio and organic revenue. These measures are not in accordance with, or an alternative to, the GAAP information provided in this report. We believe that these presentations provide useful information to management, analysts and investors regarding financial and business trends relating to our results of operations and financial condition or because they provide investors with measures that our chief operating decision maker uses when reviewing the Company’s performance. See further below for definitions and additional reasons each of these measures is useful to investors. Our industry peers may provide similar supplemental non-GAAP information with respect to one or more of these measures, although they may not use the same or comparable terminology and may not make identical adjustments. For example, our organic revenue is calculated differently than some of our industry peers. The non-GAAP information we provide should be used in addition to, but not as a substitute for, the GAAP information provided. We make determinations regarding certain elements of executive officer incentive compensation, performance share awards and annual cash incentive awards, partly on the basis of measures related to adjusted EBITDAC.

Adjusted Non-GAAP presentation - We believe that the adjusted non-GAAP presentation of our 2024 and 2023 information, presented on the following pages, provides stockholders and other interested persons with useful information regarding certain financial metrics that may assist such persons in analyzing our operating results as they develop a future earnings outlook for us. The after-tax amounts related to the adjustments were computed using the normalized effective tax rate for each respective period.

•

Adjusted measures - We define these measures as revenues (for the brokerage segment), revenues before reimbursements (for the risk management segment), net earnings, compensation expense and operating expense, respectively, each adjusted to exclude the following, as applicable:

o

Net gains (losses) on divestitures, which are primarily net proceeds received related to sales of books of business and other divestiture transactions, such as the disposal of a business through sale or closure.

o

Acquisition integration costs, which include costs related to certain large acquisitions (including the acquisitions of the Willis Towers Watson plc treaty reinsurance brokerage operations (which we refer to as Willis Re), Buck, Cadence Insurance, Eastern Insurance and My Plan Manager), outside the scope of our usual tuck-in strategy, not expected to occur on an ongoing basis in the future once we fully assimilate the applicable acquisition. These costs are typically associated with redundant workforce, compensation expense related to amortization of certain retention bonus arrangements, extra lease space, duplicate services and external costs incurred to assimilate the acquisition into our IT related systems.

o

Transaction-related costs, which are associated with completed, future and terminated acquisitions. Costs primarily relate to the acquisitions of Willis Re, Buck, Cadence Insurance, Eastern Insurance and My Plan Manager and the pending acquisition of AssuredPartners. These include costs related to regulatory filings, legal and accounting services, insurance and incentive compensation.

o

Workforce related charges, which primarily include severance costs (either accrued or paid) related to employee terminations and other costs associated with redundant workforce.

o

Lease termination related charges, which primarily include costs related to terminations of real estate leases and abandonment of leased space.

o

Acquisition related adjustments principally relate to changes in estimated acquisition earnout payables adjustments and acquisition related compensation charges. In addition, from time to time may include changes in balance sheet estimates arising from conforming accounting principles, purchase-related true-ups and other balance sheet adjustments made after the closing date; the net impact on the results for first quarter 2024 was approximately $26 million of revenues and approximately $28 million of compensation expense.

o

Amortization of intangible assets which reflects the amortization of customer/expiration lists, non-compete agreements, trade names and other intangible assets acquired through our merger and acquisition strategy, the

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impact to amortization expense of acquisition valuation adjustments to these assets as well as non-cash impairment charges.

o

The impact of foreign currency translation, as applicable. The amounts excluded with respect to foreign currency translation are calculated by applying current year foreign exchange rates to the same period in the prior year.

o

Effective income tax rate impact, which levelizes the prior year for the change in current year tax rates.

o

Legal and tax related, which represents the impact of (a) adjustments in 2024 and 2023 related to costs associated with legal and tax matters as well as costs associated with the impact of tax items associated with 2022 tax returns filed in October 2023, (b) adjustments in 2023 related to additional U.K. income tax expense related to the non‐deductibility of acquisition-related adjustments made in the quarter and costs associated with legal and tax matters.

•

Adjusted ratios - Adjusted compensation expense and adjusted operating expense, respectively, each divided by adjusted revenues.

Non-GAAP Earnings Measures

We believe that the presentation of EBITDAC, EBITDAC margin, adjusted EBITDAC, adjusted EBITDAC margin, adjusted EPS and adjusted net earnings for the brokerage and risk management segment, each as defined below, provides a meaningful representation of our operating performance. Adjusted EPS is a performance measure and should not be used as a measure of our liquidity. We also consider EBITDAC and EBITDAC margin as ways to measure financial performance on an ongoing basis. In addition, adjusted EBITDAC, adjusted EBITDAC margin and adjusted EPS for the brokerage and risk management segments are presented to improve the comparability of our results between periods by eliminating the impact of the items that have a high degree of variability.

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EBITDACand EBITDAC Margin - EBITDAC is net earnings before interest, income taxes, depreciation, amortization and the change in estimated acquisition earnout payables and EBITDAC margin is EBITDAC divided by total revenues (for the brokerage segment) and revenues before reimbursements (for the risk management segment). These measures for the brokerage and risk management segments provide a meaningful representation of our operating performance for the overall business and provide a meaningful way to measure our financial performance on an ongoing basis.

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Adjusted EBITDACand Adjusted EBITDAC Margin - Adjusted EBITDAC is EBITDAC adjusted to exclude net gains on divestitures, acquisition integration costs, workforce related charges, lease termination related charges, acquisition related adjustments, transaction related costs, legal and tax related costs, and the period-over-period impact of foreign currency translation, as applicable and Adjusted EBITDAC margin is Adjusted EBITDAC divided by total adjusted revenues (defined above). These measures for the brokerage and risk management segments provide a meaningful representation of our operating performance, and are also presented to improve the comparability of our results between periods by eliminating the impact of the items that have a high degree of variability.

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Adjusted EPS and Adjusted Net Earnings - Adjusted net earnings have been adjusted to exclude the after-tax impact of net gains on divestitures, acquisition integration costs, the impact of foreign currency translation, workforce related charges, lease termination related charges, acquisition related adjustments, transaction related costs, amortization of intangible assets, legal and tax related costs and effective income tax rate impact, as applicable. Adjusted EPS is Adjusted Net Earnings divided by diluted weighted average shares outstanding. This measure provides a meaningful representation of our operating performance (and as such should not be used as a measure of our liquidity), and for the overall business is also presented to improve the comparability of our results between periods by eliminating the impact of the items that have a high degree of variability.

Organic Revenues (a non-GAAP measure) - For the brokerage segment, organic change in base commission and fee revenues, supplemental revenues and contingent revenues excludes the first twelve months of such revenues generated from acquisitions and such revenues related to divested operations which include disposals of a business through sale or closure, run-off of a business and the restructuring and/or repricing of programs and products in each year presented. These revenues are excluded from organic revenues in order to help interested persons analyze the revenue growth associated with the operations that were a part of our business in both the current and prior year. In addition, organic change in base commission and fee revenues, supplemental revenues and contingent revenues exclude the period-over-period impact of foreign currency translation to improve the comparability of our results between periods. For the risk management segment, organic change in fee revenues excludes the first twelve months of such revenues generated from acquisitions and such revenues related to divested operations in each year

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presented. In addition, change in organic growth in fee revenues excludes the period-over-period impact of foreign currency translation to improve the comparability of our results between periods.

These revenue items are excluded from organic revenues in order to determine a comparable, but non-GAAP, measurement of revenue growth that is associated with the revenue sources that are expected to continue in the current year and beyond as well as eliminating the impact of the items that have a high degree of variability. We have historically viewed organic revenue growth as an important indicator when assessing and evaluating the performance of our brokerage and risk management segments. We also believe that using this non-GAAP measure allows readers of our financial statements to measure, analyze and compare the growth from our brokerage and risk management segments in a meaningful and consistent manner.

Reconciliation of Non-GAAP Information Presented to GAAP Measures - This report includes tabular reconciliations to the most comparable GAAP measures, as follows: for EBITDAC (on pages 44 and 50), for adjusted revenues, adjusted EBITDAC and adjusted diluted net earnings per share (on page 37), for organic revenue measures (on pages 45 and 50), respectively, for the brokerage and risk management segments, for adjusted compensation and operating expenses and adjusted EBITDAC margin (on page 46), respectively, for the brokerage segment and (on page 51) for the risk management segment.

Brokerage

The brokerage segment accounted for 86% of our revenue in 2024. Our brokerage segment is primarily comprised of retail, wholesale and reinsurance brokerage operations. Our brokerage segment generates revenues by:

(i)

Identifying, negotiating and placing all forms of insurance coverage, as well as providing data analytics, risk-shifting, risk-sharing and risk-mitigation consulting services, principally related to property/casualty, life, health, welfare and disability insurance. We also provide these services through, or in conjunction with, other unrelated agents and brokers, consultants and management advisors;

(ii)

Identifying, negotiating and placing all forms of reinsurance coverage, as well as providing capital markets services, including acting as underwriter, with respect to insurance linked securities, weather derivatives, capital raising and selected merger and acquisition advisory activities;

(iii)

Acting as an agent or broker for multiple underwriting enterprises by providing services such as sales, marketing, selecting, negotiating, underwriting, servicing and placing insurance coverage on their behalf;

(iv)

Providing consulting services related to health and welfare benefits, voluntary benefits, executive benefits, compensation, retirement planning, institutional investment and fiduciary, actuarial, compliance, private insurance exchange, human resources technology, communications and benefits administration; and

(v)

Providing management and administrative services to captives, pools, risk-retention groups, healthcare exchanges, small underwriting enterprises, such as accounting, claims and loss processing assistance, feasibility studies, actuarial studies, data analytics and other administrative services.

The primary source of revenues for our brokerage services is commissions from underwriting enterprises, based on a percentage of premiums paid by our clients, or fees received from clients based on an agreed level of service usually in lieu of commissions. Commissions are fixed at the contract effective date and generally are based on a percentage of premiums for insurance coverage or employee headcount for employer sponsored benefit plans. Commissions depend upon a large number of factors, including the type of risk being placed, the particular underwriting enterprise’s demand, the expected loss experience of the particular risk of coverage, and historical benchmarks surrounding the level of effort necessary for us to place and service the insurance contract. Rather than being tied to the amount of premiums, fees are most often based on an expected level of effort to provide our services. In addition, under certain circumstances, both retail brokerage and wholesale brokerage services receive supplemental and contingent revenues. Supplemental revenue is revenue paid by an underwriting enterprise that is above the base commission paid, is determined by the underwriting enterprise and is established annually in advance of the contractual period based on historical performance criteria. Contingent revenue is revenue paid by an underwriting enterprise based on the overall profit and/or volume of the business placed with that underwriting enterprise during a particular calendar year and is determined after the contractual period.

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Financial information relating to our brokerage segment results for 2024 and 2023 (in millions, except per share, percentages and workforce data):

Interest income, premium finance revenues and other income 420.4 337.7 82.7

Change in estimated acquisition earnout payables 25.6 376.8 (351.2 )

Net earnings attributable to noncontrolling interests 7.7 6.3 1.4

Net earnings attributable to controlling interests $ 1,678.0 $ 1,163.1 $ 514.9

Diluted net earnings per share $ 7.46 $ 5.30 $ 2.16

Other Information

Change in diluted net earnings per share 41 % (5 )%

Growth in revenues 15 % 18 %

Organic change in commissions and fees 7 % 9 %

Compensation expense ratio 55 % 55 %

Operating expense ratio 14 % 15 %

Effective income tax rate 25 % 26 %

Workforce at end of period (includes acquisitions) 42,091 39,337

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The following provides information that management believes is helpful when comparing EBITDAC and adjusted EBITDAC for 2024 and 2023 (in millions):

Change in estimated acquisition earnout payables 25.6 376.8

Net (gains) on divestitures (24.2 ) (9.6 )

Workforce and lease termination related charges 118.9 63.4

Acquisition related adjustments 121.2 69.3

Levelized foreign currency translation — (9.8 )

Net earnings margin, as reported * 17.0 % 13.5 % +343 bpts

EBITDAC margin, as adjusted * 35.2 % 34.2 % +95 bpts

* 2024 adjusted EBITDAC margin would be 35.0% excluding approximately $20.0 million of interest income revenues earned on the proceeds received in December 2024 related to the AssuredPartners Financing.

Commissions and fees - The aggregate increase in base commissions and fees for 2024 was due to revenues associated with acquisitions that were made during 2024 and 2023 ($618.2 million) and organic revenue growth. Commission revenues increased 14% and fee revenues increased 16% in 2024 compared to 2023. The organic change in base commission and fee revenues was 7% in 2024 and 9% in 2023.

In our property/casualty brokerage operations, during the twelve-month period ended December 31, 2024, we saw continued strong customer retention, higher new business generation and increasing renewal premiums (premium rates and exposures). We believe these favorable trends should continue in 2025; however, if economic conditions worsen or premium rate increases slow, we could see our revenue growth moderate.

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Items excluded from organic revenue computations yet impacting revenue comparisons for 2024 and 2023 include the following (in millions):

Year Ended December 31,

Base Commissions and Fees

Less commission and fee revenues from acquisitions (618.2 ) —

Less divested operations — (57.9 )

Levelized foreign currency translation — 5.2

Supplemental revenues

Supplemental revenues, as reported $ 359.4 $ 314.2 14.4 %

Less supplemental revenues from acquisitions (9.4 ) —

Levelized foreign currency translation — 1.1

Contingent revenues

Less contingent revenues from acquisitions (25.2 ) —

Less divested operations — (3.0 )

Levelized foreign currency translation — (0.2 )

Less divested operations — (60.9 )

Levelized foreign currency translation — 6.1

Number of acquisitions closed 46 50

Estimated annualized revenues acquired (in millions) $ 362.6 $ 826.0

For 2024 and 2023, we issued 512,000 and 1,612,000, shares, respectively, of our common stock at the request of sellers and/or in connection with tax-free exchange acquisitions.

On December 19, 2024, we closed and funded an offering of $5,000.0 million of unsecured senior notes in five tranches. The $750.0 million aggregate principal amount of 4.60% Senior Notes is due in 2027, $750.0 million aggregate principal amount of 4.85% Senior Notes is due in 2029, $500.0 million aggregate principal amount of 5.00% Senior Notes is due in 2032, $1,500.0 million aggregate principal amount of 5.15% Senior Notes is due in 2035, $1,500.0 million aggregate principal amount 5.55% Senior Notes is due in 2055. The weighted average interest rate is 5.25% per annum after giving effect to underwriting costs and a net hedge gain. During 2024, we entered into a pre-issuance interest rate hedging transaction related to these notes. We realized a net cash gain of approximately $4.1 million on the hedging transactions that will be recognized on a pro rata basis as a decrease to our reported interest expense over ten years. We expect to use the net proceeds of this offering to fund a portion of the cash consideration payable in connection with the AssuredPartners transaction and, to the extent that any proceeds remain thereafter, or if the AssuredPartners transaction is not completed, for general corporate purposes, including other acquisitions.

On February 12, 2024, we closed and funded an offering of $1,000.0 million of unsecured senior notes in two tranches. The $500.0 million aggregate principal amount of 5.45% Senior Notes is due in 2034 and $500.0 million aggregate principal amount of 5.75% Senior Notes is due in 2054. The weighted average interest rate is 5.71% per annum after giving effect to underwriting costs and a net hedge loss. During 2023, we entered into a pre-issuance interest rate hedging transaction related to these notes. We realized a net cash loss of approximately $1.4 million on the hedging transactions that will be recognized on a pro rata basis as an increase to our reported interest expense over ten years. We used the proceeds of these offerings to fund acquisitions, earnout payments related to acquisitions and general corporate purposes.

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Supplemental and contingent revenues - Reported supplemental and contingent revenues recognized in 2024 and 2023 by quarter are as follows (in millions):

Q1 Q2 Q3 Q4 Full Year

Interest income, premium finance revenues and other income - This primarily represents interest income earned on cash, cash equivalents and fiduciary cash and revenues from premium financing, income from equity investments and net gains related to divestitures and sales of books of business.

Interest income, premium finance revenues and other income in 2024 increased compared to 2023 primarily due to increases in interest income earned on our own and fiduciary funds, including the $20.0 million interest income earned in December 2024 related to the proceeds from the AssuredPartners Financing.

The following table provides a reconciliation of brokerage segment interest income, premium finance revenues and other income, as reported in our consolidated financial statements to interest income earned on cash, cash equivalents and fiduciary cash (in millions):

Interest income, premium finance revenues and other income $ 420.4 $ 337.7

Less:

Net (gains) on divestitures (24.2 ) (9.6 )

Interest income from cash, cash equivalents and fiduciary cash $ 287.6 $ 221.6

Compensation expense - The following provides non-GAAP information that management believes is helpful when comparing 2024 and 2023 compensation expense (in millions):

Compensation expense, as reported $ 5,501.4 $ 4,769.1

Acquisition integration (106.4 ) (146.6 )

Workforce related charges (108.1 ) (56.0 )

Acquisition related adjustments (147.2 ) (69.3 )

Levelized foreign currency translation — 11.9

Compensation expense, as adjusted $ 5,139.7 $ 4,509.1

Reported compensation expense ratios 55.4 % 55.2 %

Adjusted compensation expense ratios 52.0 % 52.2 %

The $732.3 million increase in compensation expense in 2024 compared to 2023 was primarily due to compensation associated with the acquisitions completed in the twelve month period ended December 31, 2024 - $350.8 million, increases in base compensation related to the hiring of producers and other roles to service and support organic growth and higher benefit costs - $291.7 million in the aggregate, increases in acquisition earnout related adjustments - $77.9 million and workforce related charges - $52.1 million, partially offset by reduced acquisition integration costs ‐ $40.2 million.

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Operating expense - The following provides non-GAAP information that management believes is helpful when comparing 2024 and 2023 operating expense (in millions):

Acquisition integration (83.8 ) (97.1 )

Workforce and lease termination related charges (10.8 ) (7.4 )

Levelized foreign currency translation — 1.4

Reported operating expense ratios 13.7 % 14.7 %

Adjusted operating expense ratios 12.8 % 13.6 %

The $91.1 million increase in operating expense in 2024 compared to 2023, was primarily due to expenses associated with the acquisitions completed in the twelve-month period ended December 31, 2024 - $78.9 million, underlying inflation of travel and entertainment costs and additional investments in technology - $22.1 million, increases in workforce related charges - $3.4 million, partially offset by reduced acquisition integration costs - $13.3 million.

Depreciation - The increase in depreciation expense in 2024 compared to 2023 was due primarily to the impact of purchases of furniture, equipment and leasehold improvements related to office consolidations and moves, and expenditures related to upgrading computer systems. Also contributing to the increases in depreciation expense in 2024 was the depreciation expense associated with acquisitions completed in 2024 and the latter part of 2023.

Amortization - The increase in amortization in 2024 compared to 2023 was primarily due to the impact of amortization expense of intangible assets associated with acquisitions completed in 2024 and 2023, partially offset by the impact of acquisition valuation true-ups recorded in 2024 relating to acquisitions made in 2023. Expiration lists, non‐compete agreements and trade names are amortized using the straight-line method over their estimated useful lives (two to fifteen years for expiration lists, two to six years for non-compete agreements and two to fifteen years for trade names). Based on the results of impairment reviews performed on amortizable intangible assets in 2024 and 2023, we wrote off $19.4 million and $3.5 million, respectively, of amortizable intangible assets related to the brokerage segment. We review all of our intangible assets for impairment periodically (at least annually for goodwill) and whenever events or changes in business circumstances indicate that the carrying value of the assets may not be recoverable. We perform such impairment reviews at the division (i.e., reporting unit) level with respect to goodwill and at the business unit level for amortizable intangible assets. In reviewing intangible assets, if the undiscounted future cash flows were less than the carrying amount of the respective (or underlying) asset, an indicator of impairment would exist and further analysis would be required to determine whether or not a loss would need to be charged against current period earnings as a component of amortization expense. In October 2024, we performed a qualitative impairmentreview oncarrying value of our goodwill for all of our reporting units and no indicators of impairment were noted as of December 31, 2024.

Change in estimated acquisition earnout payables - The change in the expense from the change in estimated acquisition earnout payables in 2024 compared to 2023 was due primarily to adjustments made to the estimated fair value of earnout obligations related to revised assumptions due to rising interest rates and increased market volatility and projections of future performance. During 2024 and 2023, we recognized $61.3 million and $76.1 million, respectively, of expense related to the accretion of the discount recorded for earnout obligations in connection with our acquisitions made from 2021 to 2024. During 2024 and 2023, we recognized $35.7 million of income and $300.7 million of expense, respectively, related to net adjustments in the estimated fair market values of earnout obligations in connection with revised projections of future performance for 91 and 80 acquisitions, respectively. The net adjustments in 2024 include changes made to the estimated fair value of the Willis Re acquisition earnout and reflect updated assumptions as of December 31, 2024 and are based on actual 2024 recognized revenues. The net adjustments in 2023, primarily included changes made to the estimated fair value of the Willis Re acquisition earnout and reflected updated assumptions as of December 31, 2023, including forecasted 2024 revenue projections based on January 1, 2024 reinsurance renewals.

The amounts initially recorded as earnout payables for our 2021 to 2024 acquisitions were measured at fair value as of the acquisition date and are primarily based upon the estimated future operating results of the acquired entities over a two- to three‐year period subsequent to the acquisition date. The fair value of these earnout obligations is based on the present value of

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the expected future payments to be made to the sellers of the acquired entities in accordance with the provisions outlined in the respective purchase agreements. In determining fair value, we estimate the acquired entity’s future performance using financial projections developed by management for the acquired entity and market participant assumptions that were derived for revenue growth and/or profitability. We estimate future earnout payments using the earnout formula and performance targets specified in each purchase agreement and these financial projections. Subsequent changes in the underlying financial projections or assumptions will cause the estimated earnout obligations to change and such adjustments are recorded in our consolidated statement of earnings when incurred. Increases in the earnout payable obligations will result in the recognition of expense and decreases in the earnout payable obligations will result in the recognition of income.

Provision for income taxes - The brokerage segment’s effective tax rate in 2024 and 2023 was 25.4% and 25.6%, respectively. As of April 1, 2023, a U.K. corporate tax rate of 25% went into effect making the 2023 full year effective rate in the U.K. 23.5%. We anticipate reporting an effective tax rate of approximately 24.5% to 26.5% in our brokerage segment based on known changes in tax rates in future periods.

Net earnings attributable to noncontrolling interests - The amounts reported in this line for 2024 and 2023 include noncontrolling interest earnings of $7.7 million and $6.3 million, respectively.

Litigation, Regulatory and Taxation Matters -We routinely are involved in legal proceedings, claims, disputes, regulatory matters and governmental inspections or investigations arising in the ordinary course of or incidental to our business, including relating to E&O claims and those noted below in this section. We record accruals in the consolidated financial statements for pending litigation when we determine that an unfavorable outcome is probable and the amount of the loss can be reasonably estimated. For the matters we disclose that do not include an estimate of the amount of loss or range of losses, such an estimate is not possible or is immaterial, and we may be unable to estimate the possible loss or range of losses that could potentially result from the application of non-monetary remedies, unless disclosed below. We currently believe that the ultimate outcome of these proceedings, individually and in the aggregate, will not materially harm our financial position, results of operations or cash flows. However, legal proceedings and government investigations are subject to inherent uncertainties, and unfavorable rulings or other events could occur, including the payment of substantial monetary damages or an injunction or other order prohibiting us from selling one or more products at all or in particular ways, precluding particular business practices or requiring other remedies, which may result in a material adverse impact on our business, results of operations or financial position.

As previously disclosed, our IRC 831(b) (or “micro-captive”) advisory services business has been under a promoter investigation by the IRS since 2013. Among other matters, the IRS is investigating whether we have been acting as a tax shelter promoter in connection with these operations. Additionally, the IRS is conducting a criminal investigation related to IRC 831(b) micro-captive underwriting enterprises. We have been advised that we are not a target of the criminal investigation. We are fully cooperating with both matters.

Risk Management

The risk management segment accounted for 14% of our revenue in 2024. Our risk management segment operations provide contract claim settlement, claim administration, loss control services and risk management consulting for commercial, nonprofit, captive and public sector entities, and various other organizations that choose to self-insure property/casualty coverages or choose to use a third‐party claims management organization rather than the claim services provided by underwriting enterprises. Revenues for our risk management segment are comprised of fees generally negotiated (i) on a per-claim or per-service basis, (ii) on a cost-plus basis, or (iii) as performance-based fees. We also provide risk management consulting services that are recognized as the services are delivered.

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Financial information relating to our risk management segment results for 2024 and 2023 (in millions, except per share, percentages and workforce data):

Interest income and other income 36.5 27.9 8.6

Change in estimated acquisition earnout payables 0.4 0.5 (0.1 )

Net earnings attributable to noncontrolling interests — — —

Net earnings attributable to

Diluted earnings per share $ 0.78 $ 0.70 $ 0.08

Other information

Change in diluted earnings per share 11 % 30 %

Growth in revenues (before reimbursements) 13 % 18 %

Organic change in fees (before reimbursements) 8 % 16 %

Compensation expense ratio (before reimbursements) 61 % 60 %

Operating expense ratio (before reimbursements) 19 % 20 %

Effective income tax rate 27 % 26 %

Workforce at end of period (includes acquisitions) 10,339 9,747

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The following provides non-GAAP information that management believes is helpful when comparing 2024 and 2023 EBITDAC and adjusted EBITDAC (in millions):

Provision for income taxes 63.1 55.3

Change in estimated acquisition earnout payables 0.4 0.5

Net (gains) on divestitures (0.1 ) (0.4 )

Acquisition integration 2.9 1.0

Workforce and lease termination related charges 7.2 3.4

Acquisition related adjustments 0.3 0.5

Levelized foreign currency translation — (0.5 )

Net earnings margin, before reimbursements, as reported 12.0 % 12.0 % +7 bpts

EBITDAC margin, before reimbursements, as adjusted 20.7 % 20.0 % +65 bpts

Reported revenues before

Adjusted revenues - before reimbursements - see page 37 $ 1,450.4 $ 1,286.2

Fees - In 2024, our risk management operations, new core workers’ compensation and general liability claims arising improved from new clients coming on board in 2024 and 2023. We believe these favorable trends should continue for 2025, however, worsening economic conditions or a reversal in the number of workers employed, could cause fewer new liability and core workers’ compensation claims to arise in future quarters. Organic change in fee revenues was 8% in 2024 and 16% in 2023.

Items excluded from organic fee computations yet impacting revenue comparisons in 2024 and 2023 include the following (in millions):

Year Ended December 31,

International performance bonus fees 8.4 13.6

Less fees from acquisitions (58.2 ) —

Less divested operations — (4.5 )

Levelized foreign currency translation — (1.0 )

Number of acquisitions closed 2 1

Estimated annualized revenues acquired (in millions) $ 23.9 $ 59.1

Reimbursements - Reimbursements represent amounts received from clients reimbursing us for certain third-party costs associated with providing our claims management services. In certain service partner relationships, we are considered a principal because we direct the third party, control the specified service and combine the services provided into an integrated solution. Given this principal relationship, we are required to recognize revenue on a gross basis and service partner vendor fees in the operating expense line in our consolidated statement of earnings. The increase in reimbursements in 2024 compared to 2023 was primarily due to a change in business mix that is processed internally versus using outside service partners.

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Interest income and other income - Interest income and other income primarily represents interest income earned on cash, cash equivalents and fiduciary cash. Interest income and other income in 2024 increased compared to 2023 primarily due to increases in interest income from increases in interest rates earned on fiduciary cash and increased levels of fiduciary cash.

Compensation expense- The following provides non-GAAP information that management believes is helpful when comparing 2024 and 2023 compensation expense compensation expense (in millions):

Compensation expense, as reported $ 882.4 $ 776.8

Acquisition integration (1.6 ) (1.0 )

Workforce and lease termination related charges (4.4 ) (2.0 )

Acquisition related adjustments (0.3 ) (0.5 )

Levelized foreign currency translation — (0.4 )

Compensation expense, as adjusted $ 876.1 $ 772.9

Reported compensation expense ratios (before reimbursements) 60.8 % 60.3 %

Adjusted compensation expense ratios (before reimbursements) 60.4 % 60.1 %

Reported revenues (before reimbursements) $ 1,450.5 $ 1,287.6

Adjusted revenues (before reimbursements) - see page 37 $ 1,450.4 $ 1,286.2

The $105.6 million increase in compensation expense in 2024 compared to 2023 was primarily due to increases in base compensation to service and support organic growth and higher benefit costs - $73.2 million in the aggregate, compensation associated with the acquisitions completed in the twelve month period ended December 31, 2024 - $29.6 million, increases in workforce related charges - $2.4 million and acquisition integration related costs - $0.6 million, partially offset by reduced acquisition earnout related adjustments - $0.2 million.

Operating expense - The following provides non-GAAP information that management believes is helpful when comparing 2024 and 2023 operating expense operating expense (in millions):

Operating expense, as reported $ 278.7 $ 257.4

Acquisition integration (1.3 ) —

Workforce and lease termination related charges (2.8 ) (1.4 )

Levelized foreign currency translation — (0.1 )

Operating expense, as adjusted $ 274.6 $ 255.9

Reported operating expense ratios (before reimbursements) 19.2 % 20.0 %

Adjusted operating expense ratios (before reimbursements) 18.9 % 19.9 %

Reported revenues (before reimbursements) $ 1,450.5 $ 1,287.6

Adjusted revenues - (before reimbursements) see page 37 $ 1,450.4 $ 1,286.2

The $21.3 million increase in operating expense in 2024 compared to 2023 was primarily due to expenses associated with the acquisitions completed in the twelve month period ended December 31, 2024 - $10.3 million, additional investments in technology and business insurance - $8.3 million, increases in workforce related charges - $1.4 million and acquisition integration costs - $1.3 million.

Depreciation - Depreciation expense increased in 2024 compared to 2023, which reflects the impact of expenditures related to upgrading computer systems. partially offset by office consolidations that occurred as leases expired in 2024 (less depreciation associated with furniture, equipment and leasehold improvements). Also contributing to the increase in depreciation expense in 2024 was the depreciation expense associated with the acquisitions completed in 2024 and the latter part of 2023.

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Amortization - Amortization expense increased in 2024 compared to 2023. The increase in amortization in 2024 compared to 2023 was primarily due to the impact of amortization expense of intangible assets associated with the acquisitions completed in 2024 and the later part of 2023 (My Plan Manager was completed in December 2023). Based on the results of impairment reviews performed on amortizable intangible assets during 2024 and 2023, there were no impairments of amortizable assets related to the risk management segment.

Change in estimated acquisition earnout payables - The change in estimated acquisition earnout payables in 2024 and 2023, primarily relates to accretion of discount in 2024 and 2023 relates to the estimated fair value of the earnout obligations. During 2024 and 2023, we recognized $0.4 million and $0.5 million, respectively, of expense related to the accretion of the discount recorded for earnout obligations in connection with our 2021 to 2024 acquisitions, respectively. During 2024 and 2023, there were no net adjustments in the estimated fair value of earnout obligations related to projections of future performance for acquisitions.

Provision for income taxes - We allocate the provision for income taxes to the risk management segment using local statutory rates. As of April 1, 2023, a U.K. corporate tax rate of 25% went into effect, making the 2023 full year effective rate 23.5%. The risk management segment’s effective tax rate in 2024 and 2023 was 26.6% and 26.4%, respectively. We anticipate reporting an effective tax rate on adjusted results of approximately 25% to 27% in our risk management segment based on known changes in tax rates in future periods.

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Corporate

The corporate segment reports the financial information related to our debt, external acquisition-related expenses, other corporate costs and the impact of foreign currency remeasurement. See Note 7 to our 2024 consolidated financial statements for a summary of our debt at December 31, 2024 and 2023.

Financial information relating to our corporate segment results for 2024 and 2023 (in millions, except per share and percentages):

Net loss attributable to noncontrolling interests — (9.8 ) 9.8

Net loss attributable to controlling interests $ (389.8 ) $ (347.6 ) $ (42.2 )

Diluted net loss per share $ (1.74 ) $ (1.58 ) $ (0.16 )

EBITDAC

Revenues - Revenues in the corporate segment consist of other income related to the run-off of clean energy and legacy investments, and in 2024, some interest income related to the proceeds from the AssuredPartners financing.

Compensation expense - Compensation expense for 2024 and 2023 includes salary, incentive compensation, and associated benefit expenses of $138.5 million and $135.3 million, respectively. The change in 2024 compensation expense compared to 2023 was primarily due to increased incentive compensation, which includes transaction‐related costs as described on page 56 in note (2) and increased costs associated with stock-based compensation, partially offset by savings in base compensation.

Operating expense - Operating expense for 2024 includes banking and related fees of $3.1 million, external professional fees and other due diligence costs related to 2024 acquisitions of $38.5 million, which includes $22.8 million of transaction-related costs as described on page 56 in note (2), other corporate and clean energy related expenses, including litigation matters, technology and other professional fees of $70.1 million in aggregate, and a net unrealized foreign exchange remeasurement loss of $0.1 million.

Operating expense for 2023 includes banking and related fees of $3.1 million, external professional fees and other due diligence costs related to 2023 acquisitions of $33.8 million, which includes $17.6 million of transaction-related costs as described on page 56 in note (2), other corporate and clean energy related expenses, including litigation matters, technology and other professional fees of $113.3 million in aggregate, and a net unrealized foreign exchange remeasurement loss of $9.8 million.

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Interest expense - The increase in interest expense in 2024 compared to 2023 was due to the following (in millions):

Change in interest expense related to: 2024 / 2023

Interest on borrowings from our Credit Agreement $ (8.1 )

Interest on the maturity of the Series H notes (12.4 )

Interest on the maturity of the Series E notes (0.3 )

Interest on the maturity of the Series N notes (4.1 )

Interest on the maturity of the Series CC notes (1.6 )

Interest on the maturity of the Series HH notes (4.1 )

Interest on the $950.0 million senior notes funded on March 2, 2023 9.2

Interest on the $1,000.0 million senior notes funded on November 2, 2023 56.4

Interest on the $1,000.0 million senior notes funded on February 15, 2024 49.8

Interest on the $5,000.0 million senior notes funded on December 19, 2024 9.2

Amortization of hedge gains (9.4 )

Net change in interest expense $ 84.6

Depreciation - Depreciation expense in 2024 increased compared to 2023, due to capital improvements made at our corporate headquarters and Gallagher Centers of Excellence in 2024 and 2023 and to the acquisition of other corporate related fixed assets in 2024.

Net losses attributable to noncontrolling interests- The amounts reported in this line for 2024 and 2023 primarily include noncontrolling interest of zero and ($9.8) million, respectively, related to our investment in Chem-Mod LLC. As of December 31, 2024 and 2023, we held a 46.5% controlling interest in Chem-Mod LLC, which ceased operations in 2023.

Benefit for income taxes - We allocate the provision for income taxes to the brokerage and risk management segments using local statutory rates. Our consolidated effective tax rate was 21.6% and 18.5%, for 2024 and 2023, respectively. The tax rate for 2024 was lower than the statutory rate primarily due to the income tax benefit of stock-based awards. The tax rate for 2023 was lower than the statutory rate primarily due to the income tax benefit of stock-based awards, revaluation of deferred tax assets in Bermuda to the new 15% corporate tax rate as well as updates to the U.S. tax attributes associated with the U.K. loss deferral reported on the 2022 tax return. As of April 1, 2023, a U.K. corporate tax rate of 25% went into effect, making the 2023 full year effective rate in the U.K. 23.5%. There were no IRC Section 45 tax credits generated in 2024 and 2023. In 2023, we recognized an unfavorable U.K. tax impact related to earnout liability adjustments. The income tax benefit of stock based awards that vested or were settled in the years ended December 31, 2024 and 2023 was $89.4 million and $76.1 million, respectively.

Significant Future Income Tax Law Changes- Although no new significant tax legislation was enacted in 2024, several previous law and administrative changes, particularly the scheduled sunset of numerous provisions of the Tax Cuts and Jobs Act (TCJA), P.L. 115-97, at the end of this year are being reviewed. In addition, the implications of the November 2024 U.S. elections on the tax environment are still being evaluated, with possible new or renewed initiatives going forward,

On December 27, 2023, Bermuda introduced a new corporate income tax that applies to Bermuda businesses that are part of multinational enterprise groups with annual revenues of €750.0 million and greater, taking effect in January 2025. We have adjusted our Bermuda tax deferred items to account for this rate increase. In 2022, the U.S. enacted the IRA and the Creating Helpful Incentives to Produce Semiconductors (which we refer to as CHIPS) and Science Act of 2022. We do not anticipate any significant impacts from either law change. See more discussions of those provisions below.

The OECD’s Pillar 2 framework became effective for tax years beginning January 1, 2024, and calls for implementing a minimum 15% effective corporate tax rate for multinational companies with global consolidated revenues of €750 million or more, regardless of the local tax rate. The OECD’s Pillar 2 corporate tax has been implemented in many jurisdictions worldwide in some form, including in countries where we have significant operations, including the U.K, Canada, Australia and New Zealand. Different countries have implemented the necessary rules in different ways, through their individual agreement to tax treaty changes and through changes to their own domestic tax laws.

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Depending on how the jurisdictions in which we and our subsidiaries are based, choose to implement the OECD’s approach in their tax treaties and domestic tax laws, we could be adversely affected due to our income being taxed at higher effective rates, once these new rules come into force. However, there are several transitional safe harbors available to entities subject to Pillar 2 taxes that may reduce any exposure and filing requirements. As of December 31, 2024, the U.S., which generates the majority of our revenue and profit, has not enacted or proposed draft or final legislation, nor indicated any intention to implement Pillar 2 into tax law, either now or in the future.

U.S. Federal Income Tax Law Changes Items Impacting the Company Going Forward

Alternative Minimum Tax Credit- The IRA enacted a book-based Corporate Alternative Minimum Tax (which we refer to as CAMT) for years beginning after 2022. The CAMT imposes a minimum 15% cash tax on adjusted book income before general business credits. As such, we do not currently anticipate being subject to the CAMT and even if we were to find ourselves subject to it in a particular year, we do not believe there would be an impact on our earnings.

Excise Tax On Stock Buybacks - The IRA adds a 1% surtax to corporate stock repurchases effective January 2023. Our board approved a common stock repurchase program in 2021. If we were to effectuate stock repurchases under this program, the excise tax would not have a material impact on our results of operations or cash flows.

New Tax Credits for Renewable Energy - The IRA introduced new tax credits for certain renewable energy projects and onshoring certain manufacturing activities associated with those projects. While we continue to explore additional renewable energy investments, we do not currently anticipate significant benefits from these new incentive programs.

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The following provides non-GAAP information that we believe is helpful when comparing 2024 and 2023 operating results for the corporate segment (in millions):

Net Earnings Net Earnings

(Loss) (Loss)

Income Attributable to Income Attributable to

Pretax Tax Controlling Pretax Tax Controlling

Loss Benefit Interests Loss Benefit Interests

Components of Corporate Segment, as reported

Adjustments

Components of Corporate Segment, as adjusted

(1)

Pretax losses for the years ended December 31, 2024 and 2023 are presented net of amounts attributable to noncontrolling interests of zero and $(9.8) million, respectively. Adjustments in 2024 and 2023 include items related to the resolution of various partnership matters related to our clean energy investments.

(2)

We incurred transaction-related costs, which include legal, consulting, employee compensation and other professional fees associated with completed, future and terminated acquisitions. Adjustments primarily relate to our acquisition of Willis Re, which closed in fourth quarter 2021, Buck, which closed in second quarter 2023, the acquisitions of Cadence Insurance, Eastern Insurance and My Plan Manager, all of which closed in fourth quarter 2023, and the pending acquisition of AssuredPartners.

(3)

Adjustments in 2024 and 2023 include costs associated with legal and tax matters as well as the impact of tax planning items associated with 2022 tax returns filed in 2023. Adjustments in 2023 include additional U.K. income tax expense related to the non‐deductibility of acquisition-related adjustments made during the year and costs associated with legal and tax matters.

(4)

Corporate pretax loss includes a net unrealized foreign exchange remeasurement loss of $(0.1) million in the year ended December 31, 2024 and a net unrealized foreign exchange remeasurement loss of $(9.8) million in the year ended December 31, 2023.

Interest and banking costs and debt - Interest and banking costs includes expenses related to our debt.

Clean energy related - For 2024, this consists of operating results related to our investments in new clean energy projects.

Acquisition costs - Consists mostly of external professional fees and other due diligence costs related to acquisitions. On occasion, we enter into forward currency hedges for the purchase price of committed, but not yet funded, acquisitions with funding requirements in currencies other than the U.S. dollar. The gains or losses, if any, associated with these hedge transactions are also included.

Corporate - Consists of overhead allocations mostly related to corporate staff compensation, other corporate level activities, and net unrealized foreign exchange remeasurement. In addition, corporate includes the tax expense related to partial taxation of foreign earnings, nondeductible executive compensation and entertainment expenses, the tax benefit from vesting of employee

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equity awards, as well as other permanent or discrete tax items not reflected in the provision for income taxes in the brokerage and risk management segments. The income tax benefit of stock based awards that vested or were settled in the years ended December 31, 2024 and 2023 was $89.4 million and $76.1 million, respectively, and is included in the table above in the Corporate line.

Liquidity and Capital Resources

Liquidity describes the ability of a company to generate sufficient cash flows to meet the cash requirements of its business operations. The insurance brokerage and risk management industries are not capital intensive. Historically, our capital requirements have primarily included dividend payments on our common stock, repurchases of our common stock, funding of our investments, acquisitions of brokerage and risk management operations and capital expenditures, including investments being made in IT and software development projects.

On December 7, 2024, we signed a definitive agreement to acquire AssuredPartners for gross consideration of $13.45 billion. The Transaction is subject to customary regulatory approval, standard closing conditions and is expected to close during first quarter 2025. AssuredPartners is a leading U.S. insurance broker with client capabilities across commercial property/casualty, specialty, employee benefits, and personal lines and with operations in the U.K. and Ireland. We expect to fund the Transaction using $8.5 billion of cash raised in our December 11, 2024 follow-on common stock offering and $5.0 billion of cash borrowed in our December 19, 2024 senior notes. On January 7, 2025, we received an additional $1.28 billion of cash due to the exercise by the underwriters of the overallotment provision related to the follow-on common stock offering.

On December 6, 2023, we acquired all of the issued and outstanding shares of My Plan Manager for an initial gross consideration of $301.6 million. We funded the transaction using free cash flow and funds received from an unsecured senior notes offering. The acquired My Plan Manager is the leading provider of plan management services to participants in Australia’s National Disability Insurance Scheme.

On November 30, 2023, we acquired all the issued and outstanding shares of Cadence Insurance for an initial gross consideration of $886.0 million. We funded the transaction using free cash flow and funds received from an unsecured senior notes offering. The acquired Cadence Insurance business offers a full suite of commercial property/casualty, employee benefits and personal lines products to clients from 34 offices spanning nine states across the Southeast, including Texas.

On October 31, 2023, we acquired the net assets of Eastern Insurance for an initial gross consideration of $515.1 million. We funded the transaction using free cash flow and funds received from an unsecured senior notes offering. The acquired Eastern Insurance business offers comprehensive commercial property/casualty and personal lines products as well as employee benefits consulting to clients throughout the Northeastern U.S.

On April 3, 2023, we acquired the partnership interests of Buck for an initial gross consideration of $620.8 million. We funded the transaction using free cash flow and funds received from an unsecured senior notes offering. The acquired Buck business is a leading provider of retirement, human resources and employee benefits consulting and administration services.

Operating Cash Flows

Historically, we have depended on our ability to generate positive cash flow from operations to meet a substantial portion of our cash requirements. We believe that our cash flows from operations and borrowings under our Credit Agreement (as defined below) will provide us with adequate resources to meet our liquidity needs in the foreseeable future. To fund acquisitions made during 2024 and 2023, we relied on a combination of net cash flows from operations, proceeds from borrowings under our Credit Agreement, proceeds from issuances of senior unsecured notes and issuance of our common stock.

Cash provided by operating activities was $2,582.9 million and $2,031.7 million for 2024 and 2023, respectively. The increase in cash provided by operating activities during 2024 compared to the same period in 2023 was primarily due to growth in our core broking and risk management operations and timing differences between periods with cash receipts and disbursements related to accounts receivables and accrued compensation and other current liabilities compared to 2023.

Total cash and cash equivalents, restricted cash and fiduciary cash at December 31, 2024 and December 31, 2023, include $15,371.6 million and $1,744.9 million, respectively, of income earning money market accounts. The increase in cash invested in money market accounts between years is primarily due to the proceeds received in December 2024 from the stock issuance ($8.5 billion) and senior notes ($5.0 billion). The dividend income on money market accounts was recorded in interest income, premium finance and other income in our consolidated statement of earnings, which increased $105.9 million during 2024 ($29.0 million of which related to the proceeds from the AssuredPartners financing) to $473.2 million for the year ended December 31, 2024 compared to $367.3 million for the year ended December 31, 2023.

During 2024 and 2023, employee matching contributions to the 401(k) plan of $86.0 million and $73.8 million, respectively, relating to 2023 and 2022 were funded using common stock.

Our cash flows from operating activities are primarily derived from our earnings from operations, as adjusted, for our non-cash expenses, which include depreciation, amortization, change in estimated acquisition earnout payables, deferred compensation,

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restricted stock, and stock-based and other non-cash compensation expenses. Historically, cash provided by operating activities was unfavorably impacted if the amount of IRC Section 45 tax credits generated (which is the amount we recognized for financial reporting purposes) was greater than the amount of tax credits utilized to reduce our tax cash obligations. Excess tax credits produced in 2021 and 2020 resulted in an increase to our deferred tax assets, which was a net use of cash related to operating activities. In 2023, IRC Section 45 credits were no longer generated due to the IRC Section 45 program expiring as of December 31, 2021, and therefore the IRC Section 45 credit utilization against our cash tax obligation resulted in favorable cash flow in 2023.

When assessing our overall liquidity, we believe that the focus should be on net earnings as reported in our consolidated statement of earnings, adjusted for non-cash items (i.e., EBITDAC), and cash provided by operating activities in our consolidated statement of cash flows. Consolidated EBITDAC was $3,124.4 million and $2,555.6 million for 2024 and 2023, respectively. Net earnings attributable to controlling interests were $1,462.7 million and $969.5 million for 2024 and 2023, respectively. We believe that EBITDAC items are indicators of trends in liquidity.

Defined Benefit Pension Plan

Our policy for funding our defined benefit pension plan is to contribute amounts at least sufficient to meet the minimum funding requirements under the IRC. The Employee Retirement Security Act of 1974, as amended (which we refer to as ERISA), could impose a minimum funding requirement for our plan. We were not required to make any minimum contributions to the plan for the 2024 and 2023 plan years. Funding requirements are based on the plan being frozen and the aggregate amount of our historical funding. The plan’s actuaries determine contribution rates based on our funding practices and requirements. Funding amounts may be influenced by future asset performance, the level of discount rates and other variables impacting the assets and/or liabilities of the plan. In addition, amounts funded in the future, to the extent not due under regulatory requirements, may be affected by alternative uses of our cash flows, including dividends, acquisitions and common stock repurchases. During 2024 and 2023 we did not make discretionary contributions to the legacy Company defined benefit plan.

See Note 12 to our 2024 consolidated financial statements for additional information required to be disclosed relating to our defined benefit pension plan. We are required to recognize a prepaid pension asset for our overfunded defined benefit pension plan (which we refer to together as the Plan). The offsetting adjustment to the asset required to be recognized for the Plan is recorded in “Accumulated Other Comprehensive Loss,” net of tax, in our consolidated balance sheet. We will recognize subsequent changes in the funded status of the Plan through the income statement and as a component of comprehensive earnings, as appropriate, in the year in which they occur. Numerous items may lead to a change in funded status of the Plan, including actual results differing from prior estimates and assumptions, as well as changes in assumptions to reflect information available at the respective measurement dates.

The net change in the funded status of the Plan in 2024 resulted in an increase in noncurrent assets in 2024 of $3.6 million. In 2024, the funded status of the Plan was favorably impacted by an increase in the discount rates used in the measurement of the pension liabilities at December 31, 2024 and other assumption changes, the net impact of which was approximately $3.7 million. In addition, the funded status was unfavorably impacted by returns on the plan’s assets being lower in 2024 than anticipated by approximately $(0.1) million. The net change in the funded status of the Plan in 2023 resulted in an increase in noncurrent assets in 2023 of $12.3 million. In 2023, the funded status of the Plan was unfavorably impacted by a decrease in the discount rates used in the measurement of the pension liabilities at December 31, 2023 and other assumption changes, the net impact of which was approximately $8.6 million. In addition, the funded status was favorably impacted by returns on the plan’s assets being significantly higher in 2023 than anticipated by approximately $20.9 million.

Through the acquisition of Buck, we acquired the assets and assumed the liabilities associated with three frozen defined benefit pension plans that provide postretirement benefits to their participants located in the U.S., U.K. and Canada (which we refer to as the Buck Pension Plans). The Buck Pension Plans were amended to freeze benefit plan accruals for all participants (closed to new entrants and existing participants do not accrue any additional benefits) effective December 31, 2014. Effective December 31, 2024, the U.S. Buck Pension Plan was merged into our defined benefit pension plan. In January 2025, we notified plan participants that we will fully terminate such plan. In first quarter 2025, we will initiate the wind down of the plan and we expect to complete such wind down by settling all future obligations under the plan through a combination of lump sum payments to eligible, electing participants and transferring the remaining liability through the purchase of a group annuity contract to a highly-rated third-party insurance company. We expect that the wind down will be completed in fourth quarter 2025. Based on estimates as of December 31, 2024, we anticipate recognizing a non-cash, pre-tax loss of approximately $34.2 million in fourth quarter 2025 to compensation expense in the consolidated statement of earnings that may be offset by an approximately $12.8 million adjustment to consolidated statement of comprehensive earnings, a $16.5 million write-down of a prepaid pension asset and a $4.6 million reversal of a deferred tax asset.

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Investing Cash Flows

Capital Expenditures - Capital expenditures were $141.9 million and $193.6 million for 2024 and 2023, respectively. In 2024 and 2023 capital expenditures include amounts incurred related to office moves, investments made in IT and software development projects. Relating to the development of our corporate headquarters, we received property tax related credits under a tax-increment financing note from Rolling Meadows, Illinois and an Illinois state EDGE tax credit. Incentives from these two programs could total between $50.0 million and $80.0 million over a fifteen-year period. In 2025, we expect total expenditures for capital improvements to be approximately $150.0 million, (includes impact of acquisitions closed through December 31, 2024) part of which is related to expenditures on office moves and investments being made in IT and software development projects. The increase in the expected capital expenditures in 2025 compared to 2024 is primarily due to such projects.

Acquisitions - Cash paid for acquisitions, net of cash and restricted cash acquired, was $1,462.3 million and $3,041.9 million in 2024 and 2023, respectively. The decreased use of cash for acquisitions in 2024 compared to 2023 was primarily due to our acquisition of Buck, Eastern Insurance, Cadence Insurance and My Plan Manager in 2023. In addition, during 2024 and 2023 we issued 0.6 million shares ($140.8 million) and 2.5 million shares ($525.8 million), respectively, of our common stock as payment for a portion of the total consideration paid for acquisitions and earnout payments. We completed 48 and 51 acquisitions in 2024 and 2023, respectively. Annualized revenues of businesses acquired in 2024 and 2023 totaled approximately $386.5 million and $885.1 million, respectively. In 2025, we expect to use new debt, our Credit Agreement (as defined below), cash from operations and our common stock, or a combination thereof to fund all of the acquisitions we complete.

In order to maintain leverage ratios and investment grade credit ratings or if liquidity concerns arise, we may be more likely to use common stock to fund acquisitions.

Dispositions - During 2024 and 2023, we sold several books of business and recognized one-time gains of $24.3 million and $10.0 million, respectively. We received cash proceeds of $19.7 million and $9.9 million for 2024 and 2023, respectively, related to these transactions.

Financing Cash Flows

At December 31, 2024, we had $9,550.0 million of Senior Notes, $3,523.0 million of corporate‐related borrowings outstanding under separate note purchase agreements entered into during the period from 2014 to 2021, there were no borrowings outstanding under our Credit Agreement, $225.2 million outstanding under our Premium Financing Debt Facility and a cash and cash equivalent balance of $14,987.3 million. See Note 7 to our 2024 consolidated financial statements for a discussion of the terms of the Senior Notes, Note purchase agreements, the Credit Agreement (as defined below) and the Premium Financing Debt Facility.

Consistent with past practice, as of December 31, 2024 we had no pre-issuance hedges open for 2024. During the three months ended December 31, 2024, we settled approximately $4.1 million of interest rate contracts hedges with a notional value of $200.0 million that will be amortized into interest expense in future periods.

The Senior Notes, Note Purchase Agreements, the Credit Agreement and the Premium Financing Debt Facility contain various financial covenants that require us to maintain specified financial ratios. We were in compliance with these covenants as of December 31, 2024.

Senior Notes - On December 19, 2024, we closed and funded an offering of $5,000.0 million of unsecured senior notes in five tranches. The $750.0 million aggregate principal amount of 4.60% Senior Notes is due in 2027, $750.0 million aggregate principal amount of 4.85% Senior Notes is due in 2029, $500.0 million aggregate principal amount of 5.00% Senior Notes is due in 2032, $1,500.0 million aggregate principal amount of 5.15% Senior Notes is due in 2035, $1,500.0 million aggregate principal amount 5.55% Senior Notes is due in 2055. The weighted average interest rate is 5.25% per annum after giving effect to underwriting costs and a net hedge gain. During 2024, we entered into a pre-issuance interest rate hedging transaction related to these notes. We realized a net cash gain of approximately $4.1 million on the hedging transactions that will be recognized on a pro rata basis as a decrease to our reported interest expense over ten years. We expect to use the net proceeds of this offering to fund a portion of the cash consideration payable in connection with the AssuredPartners transaction and, to the extent that any proceeds remain thereafter, or if the AssuredPartners transaction is not completed, for general corporate purposes including other acquisitions.

On February 12, 2024, we closed and funded an offering of $1,000.0 million of unsecured senior notes in two tranches. The $500.0 million aggregate principal amount of 5.45% Senior Notes is due in 2034 and $500.0 million aggregate principal amount of 5.75% Senior Notes is due in 2054. The weighted average interest rate is 5.71% per annum after giving effect to underwriting

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costs and a net hedge loss. During 2023, we entered into a pre-issuance interest rate hedging transaction related to these notes. We realized a net cash loss of approximately $1.4 million on the hedging transactions that will be recognized on a pro rata basis as an increase to our reported interest expense over ten years. We used the proceeds of these offerings to fund acquisitions, earnout payments related to acquisitions and general corporate purposes.

On November 2, 2023, we closed and funded an offering of $1,000.0 million of unsecured senior notes in two tranches. The $400.0 million aggregate principal amount of 6.50% Senior Notes are due 2034 and $600.0 million aggregate principal amount of 6.75% Senior Notes are due 2054. The weighted average interest rate is 5.97% per annum after giving effect to underwriting costs and a net hedge gain. During 2021 through 2023, we entered into a pre-issuance interest rate hedging transaction related to these notes. We realized a net cash gain of approximately $128.0 million on the hedging transactions that will be recognized on a pro rata basis as a decrease to our reported interest expense over ten years. We used the proceeds of these offerings to fund acquisitions, earnout payments related to acquisitions and general corporate purposes.

On March 2, 2023, we closed and funded an offering of $950.0 million of unsecured senior notes in two tranches. The $350.0 million aggregate principal amount of 5.50% Senior Notes are due 2033 and $600.0 million aggregate principal amount of 5.75% Senior Notes are due 2053. The weighted average interest rate is 5.05% per annum after giving effect to underwriting costs and a net hedge gain. During 2019 through 2022, we entered into a pre‐issuance interest rate hedging transaction related to these notes. We realized a net cash gain of approximately $112.7 million on the hedging transactions that will be recognized on a pro rata basis as a decrease to our reported interest expense over ten years. We used the proceeds of these offerings to fund acquisitions, earnout payments related to acquisitions and general corporate purposes.

Note Purchase Agreement - During February 2024, we used operating cash to fund the $100.0 million Series HH note maturity that had a fixed rate of 4.72% that was due February 13, 2024 and the $325.0 million Series H note maturity that had a fixed rate of 4.58% that was due February 27, 2024.

During June 2023, we used operating cash to fund the $200.0 million Series N note maturity that had a fixed rate of 4.13% that was due June 24, 2023 and the prepayment of the $50.0 million Series CC note floating rate of 90 day LIBOR plus 1.40%, balloon that was originally due June 13, 2024.

During February 2023, we used operating cash to fund the $50.0 million Series E note maturity that had a fixed rate of 5.49% that was due February 10, 2023.

Credit Agreement - On June 22, 2023, we entered into the new Credit Agreement (which we refer to as the Credit Agreement) with an administrative agent and a group of other lenders. The Credit Agreement provides for a five-year unsecured revolving credit facility in the amount of $1,200.0 million (including a $75.0 million letter of credit sub-facility), which is also available in Pounds Sterling, Canadian Dollars, Australian Dollars, New Zealand Dollars, Euros, Japanese Yen and any other currencies agreed by the lenders. On November 7, 2023, we entered into the First Amendment to the Credit Agreement, pursuant to which we increased the commitments under the Credit Agreement to $1,700.0 million. The Credit Agreement permits us to designate wholly-owned subsidiaries located in certain jurisdictions as additional borrowers, the obligations of which under the Credit Agreement will be guaranteed by the Company, subject to the terms and conditions set forth in the Credit Agreement. Any subsidiary that guarantees any notes under the Company’s existing note purchase agreements is required to guarantee the obligations under the Credit Agreement. There are currently no subsidiary borrowers or guarantors under the Credit Agreement.

Loans borrowed under the Credit Agreement bear interest at a variable annual rate based on a customary benchmark rate for each available currency including Secured Overnight Financing Rate (which we refer to as SOFR) for loans in U.S. Dollars, or at our election solely for loans in U.S. Dollars, the base rate, plus in each case an applicable margin. Interest rates on base rate loans and outstanding drawings on letters of credit under the Credit Agreement will be based on the Base Rate, as defined in the Credit Agreement, plus a margin of 0.00% to 0.375%, depending on the rating of our long-term senior unsecured debt. Interest rates for SOFR loans and loans in currencies other than U.S. dollars under the Credit Agreement will be based on, as applicable, a SOFR Daily Floating Rate, Term SOFR, Alternative Currency Daily Rate or Alternative Currency Term Rate, as defined in the Credit Agreement, plus a margin of 0.775% to 1.375%, depending on the rating of our long-term senior unsecured debt. The annual facility fee related to the Credit Agreement is between 0.100% and 0.250% of the revolving credit commitment, depending on the rating of our long-term senior unsecured debt. Subject to certain conditions stated in the Credit Agreement, we may borrow, prepay and reborrow amounts under the Credit Agreement at any time during the term of the Credit Agreement. Funds borrowed under the Credit Agreement may be used for general corporate and working capital purposes of the Company and its subsidiaries.

The Credit Agreement also contains customary representations and warranties and affirmative and negative covenants, including financial covenants, as well as customary events of default, with corresponding grace periods, including, without limitation,

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payment defaults, cross-defaults to other agreements evidencing indebtedness and bankruptcy-related defaults. We were in compliance with these covenants as of December 31, 2024.

Concurrently, on June 22, 2023, we paid off and terminated all of our obligations under the Second Amended and Restated Multicurrency Credit Agreement, dated as of June 7, 2019.

There were no borrowings outstanding under the Credit Agreement at December 31, 2024. Due to the outstanding borrowing and letters of credit, $1,689.1 million remained available for potential borrowings under the Credit Agreement at December 31, 2024.

We use the Credit Agreement to post letters of credit and to borrow funds to supplement our operating cash flows from time to time. During 2024, we borrowed an aggregate of $1,663.2 million and repaid $1,906.9 million under our Credit Agreement. During 2023, we borrowed an aggregate of $3,795.0 million and repaid $3,610.0 million under our Credit Agreement and under the Second Amended and Restated Multicurrency Credit Agreement. Principal uses of the 2024 and 2023 borrowings under the Credit Agreement were to fund acquisitions, earnout payments related to acquisitions and general corporate purposes.

Premium Financing Debt Facility - On October 30, 2024, we entered into an amendment to our revolving loan facility (which we refer to as the Premium Financing Debt Facility) that provides funding for the three Australian (AU) and New Zealand (NZ) premium finance subsidiaries. The Premium Financing Debt Facility is comprised of: (i) Facility B is separated into AU$410.0 million and NZ$25.0 million tranches (the AU$ tranche has been decreased as of February 1, 2025 to AU$390.0 million and the NZ$ tranche will be decreased as of May 1, 2025 to NZ$10.0 million), (ii) Facility C, an AU$60.0 million equivalent multi‐currency overdraft tranche and (iii) Facility D, a NZ$15.0 million equivalent multi-currency overdraft tranche.

The interest rates on Facility B are Interbank rates, which vary by tranche, duration and currency, plus a margin of 1.400% and 1.850% for the AU$ and NZ$ tranches, respectively. The interest rates on Facilities C and D are 30 day Interbank rates, plus a margin of 0.830% and 0.990% for the AU$ and NZ$ tranches, respectively. The annual fee for Facility B is 0.56% and 0.8325% for the undrawn commitments for the AU$ and NZ$ tranches, respectively. The annual fee for Facility C is 0.77% and for Facility D is 0.90% of the total commitments of the facilities.

The terms of our Premium Financing Debt Facility include various financial covenants, including covenants that require us to maintain specified financial ratios. We were in compliance with these covenants as of December 31, 2024. The Premium Financing Debt Facility also includes customary provisions for transactions of this type, including events of default, with corresponding grace periods and cross-defaults to other agreements evidencing our indebtedness. Facilities B, C and D are secured by the premium finance receivables of the Australian and New Zealand premium finance subsidiaries.

At December 31, 2024, AU$350.0 million and NZ$0.0 million of borrowings were outstanding under Facility B, AU$0.0 million of borrowings outstanding under Facility C and NZ$12.5 million of borrowings were outstanding under Facility D, which in aggregate amount to US$225.2 million of borrowings outstanding under the Premium Financing Debt Facility. Accordingly, as of December 31, 2024, AU$60.0 million and NZ$25.0 million remained available for potential borrowing under Facility B, and AU$60.0 million and NZ$2.5 million under Facilities C and D, respectively.

Dividends- Our board of directors determines our dividend policy. Our board of directors determines dividends on our common stock on a quarterly basis after considering our available cash from earnings, our anticipated cash needs and current conditions in the economy and financial markets.

In 2024, we declared $529.9 million in cash dividends on our common stock, or $2.40 per common share. On December 20, 2024, we paid a fourth quarter dividend of $0.60 per common share to shareholders of record as of December 1, 2024. On January 29, 2025, we announced a quarterly dividend for first quarter 2025 of $0.65 per common share. If the dividend is maintained at $0.65 per common share throughout 2025, this dividend level would result in an annualized net cash used by financing activities in 2025 of approximately $571.0 million (based on the outstanding shares as of December 31, 2024), or an anticipated increase in cash used of approximately $45.6 million compared to 2024. We can make no assurances regarding the amount of any future dividend payments.

Shelf Registration Statement - On February 12, 2024, we filed a shelf registration statement on Form S-3 with the SEC, registering the offer and sale from time to time, of an indeterminate amount of debt securities, guarantees, common stock, preferred stock, warrants, depositary shares, purchase contracts, or units. The availability of the potential liquidity under this shelf registration statement depends on investor demand, market conditions and other factors. We make no assurances regarding when, or if, we will issue any securities under this registration statement. On November 15, 2022, we filed a second shelf registration statement on Form S-4 with the SEC, registering 7.0 million shares of our common stock that we may offer and issue

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from time to time in connection with future acquisitions of other businesses, assets or securities. At December 31, 2024, 5.6 million shares remained available for issuance under this registration statement.

Common Stock Repurchases - We have in place a common stock repurchase plan approved by our board of directors in July 2021 that authorizes the repurchase of up to $1.5 billion of common stock. During the years ended December 31, 2024 and 2023, we did not repurchase shares of our common stock. The plan authorizes the repurchase of our common stock at such times and prices, as we may deem advantageous, in transactions on the open market or in privately negotiated transactions. We are under no commitment or obligation to repurchase any particular number of shares, and the plan may be suspended at any time at our discretion. Management may consider repurchasing common stock during 2025 to the extent that our available cash exceeds acquisition opportunities. Funding for share repurchases may come from a variety of sources, including cash from operations, short-term or long-term borrowings under our Credit Agreement or other sources.

Public Offering of Common Stock - On December 9, 2024, we entered into an Underwriting Agreement with Morgan Stanley & Co. LLC and BofA Securities, Inc., as representatives of the several underwriters listed thereto, pursuant to which we agreed to sell 30.4 million shares of our common stock for a public per share offering price of $280.00, for an aggregate price purchase price of $8.5 billion. The offering closed on December 11, 2024 and 30.4 million shares of our common stock were issued for net proceeds, after underwriting discounts, of $8,347.0 million. We also granted the underwriters a 30-day option to purchase up to an additional 4.6 million shares of our common stock at the same price, which was exercised in full by the underwriters on January 6, 2025. The option closed on January 7, 2025 and 4.6 million shares of our common stock were issued for net proceeds, after underwriting discounts, of $1.252.0 million of cash. We expect to use the proceeds of this offering to fund a portion of the cash consideration payable in connection with the AssuredPartners transactionand, to the extent that any proceeds remain thereafter, or if the AssuredPartners transaction is not completed, for general corporate purposes including other acquisitions.

At-the-Market Equity Program - On March 14, 2024, we entered into an Equity Distribution Agreement with Morgan Stanley & Co. LLC, pursuant to which we may offer and sell, from time to time, up to 3,000,000 shares of our common stock through Morgan Stanley as sales agent. We intend to use the net proceeds of sales under this program to fund future acquisitions from time to time or for general corporate purposes. Pursuant to the agreement, shares may be sold by means of ordinary brokers’ transactions, including on the New York Stock Exchange, at market prices prevailing at the time of sale, at prices related to the prevailing market prices, or at negotiated prices, in block transactions, or as otherwise agreed upon by us and Morgan Stanley. During the quarter ended December 31, 2024, we did not sell shares of our common stock under the program.

Common Stock Issuances- Another source of liquidity to us is the issuance of our common stock pursuant to our stock option and employee stock purchase plans. Proceeds from the issuance of common stock under these plans were $162.5 million and $120.2 million in 2024 and 2023, respectively. On May 10, 2022, our stockholders approved the 2022 Long-Term Incentive Plan (which we refer to as the LTIP), which replaced our previous stockholder-approved 2017 Long-Term Incentive Plan. All of our officers, employees and non‐employee directors are eligible to receive awards under the LTIP. Awards which may be granted under the LTIP include non‐qualified and incentive stock options, stock appreciation rights, restricted stock units and performance units, any or all of which may be made contingent upon the achievement of performance criteria. Stock options with respect to 11.1 million shares (less any shares of restricted stock issued under the LTIP - 2.5 million shares of our common stock were available for this purpose as of December 31, 2024) were available for grant under the LTIP at December 31, 2024. Our employee stock purchase plan allows our employees to purchase our common stock at 95% of its fair market value. Proceeds from the issuance of our common stock related to these plans have contributed favorably to net cash provided by financing activities in the years ended December 31, 2024 and 2023, and we believe this favorable trend will continue in the foreseeable future.

We have a qualified contributory savings and thrift 401(k) plan covering the majority of our domestic employees. For eligible employees who have met the plan’s age and service requirements to receive matching contributions, we historically have matched 100% of pre-tax and Roth elective deferrals up to a maximum of 5.0% of eligible compensation, subject to federal limits on plan contributions and not in excess of the maximum amount deductible for federal income tax purposes. Beginning with the match paid in 2021, the amount matched by the Company will be discretionary and annually determined by management. Employees must be employed and eligible for the plan on the last day of the plan year to receive a matching contribution, subject to certain exceptions enumerated in the plan document. Matching contributions are subject to a five-year graduated vesting schedule and can be funded in cash or common stock of the Company. We expensed (net of plan forfeitures) $105.4 million and $86.0 million related to the plan in 2024 and 2023, respectively. During 2023, management determined the 5.0% employer matching contributions on eligible compensation to the 401(k) plan for the 2023 plan year to be funded with our common stock, which was funded in February 2024. During 2024, management determined the 5.0% employer matching

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contributions on eligible compensation to the 401(k) plan for the 2024 plan year to be funded with our common stock, which is expected to be funded in February 2025.

Other Liquidity Matters

Letters of Credit and Other Guarantees

We have entered into a number of arrangements whereby our performance on certain obligations is guaranteed by a third party through the issuance of a letter of credit. We had total letters of credit outstanding of $23.0 million as of December 31, 2024 and $21.2 million at December 31, 2023. These letters of credit secure our self-insurance deductibles on our own insurance programs, allow certain of our captive operations to meet minimum statutory surplus requirements, lease security deposits and collateral related to premium and claim funds held in a fiduciary capacity. See Note 15 to our 2024 consolidated financial statements for additional discussion of these obligations and commitments.

Earnout Obligations

Substantially all of the purchase agreements related to the acquisitions we do contain provisions for potential earnout obligations. For all of our acquisitions made in the period from 2021 to 2024 that contain potential earnout obligations, such obligations are measured at fair value as of the acquisition date and are included on that basis in the recorded purchase price consideration for the respective acquisition. The amounts recorded as earnout payables are primarily based upon estimated future potential operating results of the acquired entities over a two- to three-year period subsequent to the acquisition date. The aggregate amount of the maximum earnout obligations related to these acquisitions was $1,998.2 million, of which $1,302.0 million was recorded in our consolidated balance sheet as of December 31, 2024 based on the estimated fair value of the expected future payments to be made, of which approximately $511.9 million can be settled in cash or common stock of the Company at our option and $790.1 million must be settled in cash.

Apart from commitments, guarantees, and contingencies, as disclosed herein and in Note 15 to our 2024 consolidated financial statements, we had no off-balance sheet arrangements that have, or are reasonably likely to have, a current or future material effect on our financial condition, results of operations or liquidity. Our cash flows from operations, borrowing availability and overall liquidity are subject to risks and uncertainties. See “Information Concerning Forward-Looking Statements” at the beginning of this report.

Contractual Obligations

Our contractual obligations and commitments as of December 31, 2024 are comprised of principal payments on debt, interest payments on debt, operating leases, pension benefit plan and purchase obligations.

Operating leases are primarily comprised of leased office space throughout the world. As leases expire, we do not anticipate difficulty in negotiating renewals or finding other satisfactory space if the premise becomes unavailable. In certain circumstances, we may have unused space and may seek to sublet such space to third parties, depending upon the demands for office space in the locations involved. See Note 13 to our 2024 consolidated financial statements for additional discussion of these operating lease obligations.

Defined benefit pension plan obligations include estimates of our minimum funding requirements pursuant to the Employee Retirement Income Security Act and other regulations. We may make additional discretionary contributions. See Note 12 to our 2024 consolidated financial statements for additional information required to be disclosed relating to our defined benefit pension plan.

Purchase obligations are defined as agreements to purchase goods and services that are enforceable and legally binding on us, and that specifies all significant terms, including the goods to be purchased or services to be rendered, the price at which the goods or services are to be rendered, and the timing of the transactions. Most of our purchase obligations are related to purchases of information technology services, marketing arrangements or other service contracts. We had no other cash requirements from known contractual obligations and commitments that have, or are reasonably likely to have, a current or future material effect on the Company’s financial condition, results of operations, or liquidity. See Note 15 to our 2024 consolidated financial statements for additional discussion of these contractual obligations.

Outlook - We believe that we have sufficient capital and access to additional capital to meet our short- and long-term cash flow needs.

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Critical Accounting Estimates

Our consolidated financial statements are prepared in accordance with U.S. GAAP, which require management to make estimates and assumptions that affect the amounts reported in our consolidated financial statements and accompanying notes. These accounting principles require us to make estimates and assumptions that affect the reported amounts of assets and liabilities and revenues and expenses, and the disclosure of contingent assets and liabilities at the date of our consolidated financial statements. We periodically evaluate our estimates and assumptions, including those relating to the valuation of goodwill and other intangible assets, right-of-use assets, investments, income taxes, revenue recognition, deferred costs, stock-based compensation, claims handling obligations, retirement plans, litigation and contingencies. We base our estimates on historical experience and various assumptions that we believe to be reasonable based on specific circumstances. Such estimates and assumptions could change in the future as more information becomes known, which could impact the amounts reported and disclosed herein. We believe the following significant accounting estimates may involve a higher degree of judgment and complexity. See Note 1 to our 2024 consolidated financial statements for other significant accounting policies. See Note 2 to our 2024 consolidated financial statements for a discussion of recently issued accounting pronouncements and their impact or potential future impact on our financial results, if determinable.

Revenue Recognition

Description

The primary source of revenues for our brokerage services is commissions from underwriting enterprises, based on a percentage of premiums paid by our clients, or fees received from clients based on an agreed level of service usually in lieu of commissions. These commissions and fees revenues are substantially recognized at a point in time on the effective date of the associated policies when control of the policy transfers to the client, as well as deferring certain revenues to reflect delivery of services over the contract period. Whether we are paid a commission or a fee, the vast majority of our services are associated with the placement of an insurance (or insurance-like) contract. Accordingly, we recognize approximately 85% of our commission and fee revenues on the effective date of the underlying insurance contract. The amount of revenue we recognize is based on our costs to provide our services up and through that effective date, including an appropriate estimate of our profit margin on a portfolio basis. Based on the proportion of additional services we provide in each period after the effective date of the insurance contract, including an appropriate estimate of our profit margin, we recognize approximately 10% of our commission and fee revenues in the first three months, and the remaining 5% thereafter.

For supplemental revenues certain underwriting enterprises may pay us additional revenues for the volume of premium placed with them and for insights into our sales pipeline, our sales capabilities or our risk selection knowledge. These amounts are in excess of the commission and fee revenues discussed above, and not all business we place with underwriting enterprises is eligible for supplemental revenues. Unlike contingent revenues, discussed below, these revenues are primarily a fixed amount or fixed percentage of premium of the underlying eligible insurance contracts. For supplemental revenue contracts based on a fixed percentage of premium, our obligation to the underwriting enterprise is substantially completed upon the effective date of the underlying insurance contract and revenue is fully earned at that time. For supplemental revenue contracts based on a fixed amount, revenue is recognized ratably over the contract period consistent with the performance of our obligations, almost always over an annual term.

For contingent revenues certain underwriting enterprises may pay us additional revenues for our sales capabilities, our risk selection knowledge, or our administrative efficiencies. These amounts are in excess of the commission or fee revenues discussed above, and not all business we place with participating underwriting enterprises is eligible for contingent revenues. Unlike supplemental revenues, also discussed above, these revenues are variable, generally based on growth, the loss experience of the underlying insurance contracts, and/or our efficiency in processing the business. We generally operate under calendar year contracts, but we do not receive these revenues from the underwriting enterprises until the following calendar year, generally in the first and second quarters, after verification of the performance indicators outlined in the contracts. Accordingly, during each reporting period, we must make our best estimate of amounts we have earned using historical averages and other factors to project such revenues.

See Revenue Recognition and Contracts with Customers in Notes 1 and 4 to our 2024 consolidated financial statements.

Judgments and Uncertainties

For commissions and fees, these periods may be different than the underlying premium payment patterns of the insurance contracts, but the vast majority of our services are fully provided within one year of the insurance contract effective date. For supplemental and contingent commissions, we base our estimates each period on a contract-by-contract basis where available. In certain cases, it is impractical to assess a very large number of smaller contingent revenue contracts, so we use a historical portfolio estimate in aggregate. Because our expectation of the ultimate contingent revenue amounts to be earned can vary from period to period, especially in contracts sensitive to loss ratios, our estimates might change significantly from quarter to quarter.

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For example, in circumstances where our revenues are dependent on a full calendar year loss ratio, adverse loss experience in the fourth quarter could not only negate revenue earnings in the fourth quarter, but also trigger the need to reverse revenues previously recognized during the prior quarters. Variable consideration is recognized when we conclude, based on all the facts and information available at the reporting date, that it is probable that a significant revenue reversal will not occur in future periods.

Effect if Actual Results Differ From Assumptions

We do not believe there is a reasonable likelihood there will be a material change in the estimates or assumptions used to recognize revenue. As noted above, estimates are made based on historical experience and other factors. The vast majority of our brokerage contracts and service understandings are for a period of one year or less, and historically, the difference between actual experience compared to estimated performance has not been significant to the quarterly or annual financial statements. We have not made any material changes in the accounting methodology used to recognize revenue during the past three fiscal years.

Income Taxes

Description

We estimate total income tax expense based on statutory tax rates and tax planning opportunities available to us in various jurisdictions in which we earn income. Income tax includes an estimate for withholding taxes on earnings of foreign subsidiaries expected to be remitted to the U.S. but does not include an estimate for taxes on earnings considered to be indefinitely invested in the foreign subsidiary. Deferred income taxes are recognized for the future tax effects of temporary differences between financial and income tax reporting using tax rates in effect for the years in which the differences are expected to reverse. Valuation allowances are recorded when it is likely a tax benefit will not be realized for a deferred tax asset. We record unrecognized tax benefit liabilities for known or anticipated tax issues based on our analysis of whether, and the extent to which, additional taxes will be due. See Income Taxes in Notes 1 and 16 to our 2024 consolidated financial statements.

Judgments and Uncertainties

Changes in projected future earnings could affect the recorded valuation allowances in the future. Our calculations related to income taxes contain uncertainties due to judgment used to calculate tax liabilities in the application of complex tax regulations across the tax jurisdictions where we operate. Our analysis of unrecognized tax benefits contains uncertainties based on judgment used to apply the more likely than not recognition and measurement thresholds.

Effect if Actual Results Differ From Assumptions

Changes in tax laws and rates could affect recorded deferred tax assets and liabilities in the future. Other than those potential impacts, we do not believe there is a reasonable likelihood there will be a material change in the tax related balances or valuation allowances. However, due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from the current estimate of the tax liabilities. To the extent we prevail in matters for which unrecognized tax benefit liabilities have been established, or are required to pay amounts in excess of our recorded unrecognized tax benefit liabilities, our effective tax rate in a given financial statement period could be materially affected. An unfavorable tax settlement would require use of our cash and generally result in an increase in our effective tax rate in the period of resolution. A favorable tax settlement would generally be recognized as a reduction in our effective tax rate in the period of resolution.

Impairment of Goodwill

Description

Goodwill is evaluated for impairment by first performing a qualitative assessment to determine whether a quantitative goodwill test is necessary. If it is determined, based on qualitative factors, the fair value of the reporting unit may be more likely than not less than its carrying amount or if significant changes to macro-economic factors related to the reporting unit have occurred that could materially impact fair value, a quantitative goodwill impairment test would be required. The quantitative test compares the fair value of a reporting unit with its carrying amount. Additionally, we can elect to forgo the qualitative assessment and perform the quantitative test. Upon performing the quantitative test, if the carrying value of the reporting unit exceeds its fair value, an impairment loss is recognized in an amount equal to that excess, not to exceed the carrying amount of goodwill. We have elected to make the first day of the fourth quarter the annual impairment assessment date for goodwill. However, we could be required to evaluate the recoverability of goodwill outside of the required annual assessment if, among other things, we experience disruptions to the business, unexpected significant declines in operating results, divestiture of a significant component of the business or a sustained decline in market capitalization.

Judgments and Uncertainties

We estimate the fair value of our reporting units considering the use of various valuation techniques, with the primary technique being an income approach (discounted cash flow method) and another technique being a market approach (guideline public

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company method), which use significant unobservable inputs, or Level 3 inputs, as defined by the fair value hierarchy. We include assumptions about revenue growth, operating margins, discount rates and valuation multiples which consider our budgets, business plans, economic projections and marketplace data, and are believed to reflect market participant views which would exist in an exit transaction. Assumptions are also made for varying perpetual growth rates for periods beyond the long-term business plan period. Generally, we utilize operating margin assumptions based on future expectations, operating margins historically realized in the reporting units’ industries and industry marketplace valuation multiples. See Intangible Assets in Notes 1 and 6 to our 2024 consolidated financial statements.

Our impairment analysis contains uncertainties due to uncontrollable events that could positively or negatively impact the anticipated future economic and operating conditions.

Effect if Actual Results Differ From Assumptions

We have not made material changes in the accounting methodology used to evaluate impairment of goodwill during the last three years. During fiscal 2024, 2023 and 2022, all of our material reporting units passed the impairment analysis.

Some of the inherent estimates and assumptions used in determining fair value of the reporting units and indefinite life intangible assets are outside the control of management, including interest rates, cost of capital, tax rates, market EBITDAC comparables and credit ratings. While we believe we have made reasonable estimates and assumptions to calculate the fair value of the reporting units and indefinite life intangibles, it is possible a material change could occur. If our actual results are not consistent with our estimates and assumptions used to calculate fair value, it could result in material impairments of our goodwill.

Impairment of Amortizable Intangible Assets

Description

Amortizable intangible assets are evaluated for impairment whenever events or changes in circumstances indicate the carrying value may not be recoverable. Examples include a significant adverse change in the extent or manner in which we use the asset, a change in its physical condition, or an unexpected change in financial performance.

When evaluating amortizable intangible assets for impairment, we compare the carrying value of the asset to the asset’s estimated undiscounted future cash flows. An impairment is indicated if the estimated future cash flows are less than the carrying value of the asset. The impairment is the excess of the carrying value over the fair value of the asset.

We recorded impairment charges related to amortizable intangible assets of $19.4 million, $3.5 million and $2.0 million in 2024, 2023 and 2022, respectively. See Intangible Assets in Notes 1 and 6 to our 2024 consolidated financial statements.

Judgments and Uncertainties

Our impairment analysis contains uncertainties due to judgment in assumptions, including useful lives and intended use of assets, observable market valuations, forecasted revenue growth, operating margins and discount rates based on budgets, business plans, economic projections, anticipated future cash flows and marketplace data that reflects the risk inherent in future cash flows to determine fair value.

Effect if Actual Results Differ From Assumptions

We have not made any material changes in the accounting methodology used to evaluate the impairment of amortizable intangible assets during the last three fiscal years. We do not believe there is a reasonable likelihood there will be a material change in the estimates or assumptions used to calculate impairments or useful lives of amortizable intangible assets. However, if actual results are not consistent with our estimates and assumptions used to calculate estimated future cash flows, we may be exposed to impairment losses that could be material.

Earnout Obligations

Description

Substantially all of the purchase agreements related to the acquisitions we do contain provisions for potential earnout obligations. The amounts recorded as earnout payables, which are primarily based uponthe terms of the purchase agreements and the estimated future operating results of the acquired entities over a two- to three-year period subsequent to the acquisition date, are measured at fair value as of the acquisition date and are included on that basis in the recorded purchase price consideration. We will record subsequent changes in these estimated earnout obligations, including the accretion of discount, in our consolidated statement of earnings when incurred.

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Judgments and Uncertainties

The fair value of these earnout obligations is based on the present value of the expected future payments to be made to the sellers of the acquired entities in accordance with the provisions outlined in the respective purchase agreements, which is a Level 3 fair value measurement. In determining fair value, we estimate the acquired entity’s future performance using financial projections developed by management for the acquired entity and market participant assumptions that were derived for revenue growth and/or profitability. Revenue growth rates generally ranged from 3.0% to 19.0% for our 2024 acquisitions. We estimated future payments using the earnout formula and performance targets specified in each purchase agreement and the financial projections just described. We then discounted these payments to present value using a risk-adjusted rate that takes into consideration market based rates of return that reflect the ability of the acquired entity to achieve the targets. The discount rates generally ranged from 7.1% to 9.0% for our 2024 acquisitions.

Effect if Actual Results Differ From Assumptions

While management believes those expectations and assumptions are reasonable, they are inherently uncertain. Changes in financial projections, market participant assumptions for revenue growth and/or profitability, or the risk-adjusted discount rate, would result in a change in the fair value of recorded earnout obligations. See Note 3 to our 2024 consolidated financial statements for additional discussion on our 2024 business combinations.

Business Combinations

Description

We account for acquired businesses using the acquisition method of accounting, which requires that once control of a business is obtained, 100% of the assets acquired and liabilities assumed, including amounts attributed to noncontrolling interests, be recorded at the date of acquisition at their respective fair values. Any excess of the purchase price over the estimated fair values of the net assets acquired is recorded as goodwill.

We use various models to determine the value of assets acquired and liabilities assumed such as discounted cash flow to value amortizable intangible assets.

For significant acquisitions we may use independent third-party valuation specialists to assist us in determining the fair value of assets acquired and liabilities assumed. See Note 3 to our 2024 consolidated financial statements for additional discussion on our 2024 business combinations.

Judgments and Uncertainties

Significant judgment is often required in estimating the fair value of assets acquired and liabilities assumed, particularly intangible assets. We make estimates and assumptions about projected future cash flows including sales growth, operating margins, attrition rates, and discount rates based on historical results, business plans, expected synergies, perceived risk and marketplace data considering the perspective of marketplace participants.

Determining the useful life of an intangible asset also requires judgment as different types of intangible assets will have different useful lives.

Effect if Actual Results Differ From Assumptions

While management believes those expectations and assumptions are reasonable, they are inherently uncertain. Unanticipated market or macroeconomic events and circumstances may occur, which could affect the accuracy or validity of the estimates and assumptions, which could result in subsequent impairments.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk.

We are exposed to various market risks in our day to day operations. Market risk is the potential loss arising from adverse changes in market rates and prices, such as interest and foreign currency exchange rates and equity prices. The following analyses present the hypothetical loss in fair value of the financial instruments held by us at December 31, 2024 that are sensitive to changes in interest rates. The range of changes in interest rates used in the analyses reflects our view of changes that are reasonably possible over a one‐year period. This discussion of market risks related to our consolidated balance sheet includes estimates of future economic environments caused by changes in market risks. The effect of actual changes in these market risk factors may differ materially from our estimates. In the ordinary course of business, we also face risks that are either nonfinancial or unquantifiable, including credit risk and legal risk. These risks are not included in the following analyses.

Our invested assets are primarily held as cash and cash equivalents, which are subject to various market risk exposures such as interest rate risk. The fair value of our portfolio of cash and cash equivalents as of December 31, 2024 approximated its carrying value due to its short-term duration. We estimated market risk as the potential decrease in fair value resulting from a hypothetical one-percentage point increase in interest rates for the instruments contained in the cash and cash equivalents investment portfolio. The resulting fair values were not materially different from their carrying values at December 31, 2024.

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As of December 31, 2024, we had $13,073.0 million of borrowings outstanding under our various senior notes and note purchase agreements. The aggregate estimated fair value of these borrowings at December 31, 2024 was $12,072.7 million due to the long-term duration and fixed interest rates associated with these debt obligations. No active or observable market exists for our private placement long‐term debt. Therefore, the estimated fair value of this debt is based on the income valuation approach, which is a valuation technique that converts future amounts (for example, cash flows or income and expenses) to a single current (that is, discounted) amount. The fair value measurement is determined on the basis of the value indicated by current market expectations about those future amounts. Because our debt issuances generate a measurable income stream for each lender, the income approach was deemed to be an appropriate methodology for valuing the private placement long-term debt. The methodology used calculated the original deal spread at the time of each debt issuance, which was equal to the difference between the yield of each issuance (the coupon rate) and the equivalent benchmark treasury yield at that time. The market spread as of the valuation date was calculated, which is equal to the difference between an index for investment grade insurers and the equivalent benchmark treasury yield today. An implied premium or discount to the par value of each debt issuance based on the difference between the origination deal spread and market as of the valuation date was then calculated. The index we relied on to represent investment graded insurers was the Bloomberg Valuation Services (BVAL) U.S. Insurers BBB index. This index is comprised primarily of insurance brokerage firms and was representative of the industry in which we operate. For the purpose of our analysis, the average BBB rate was assumed to be the appropriate borrowing rate for us.

We estimated market risk as the potential impact on the value of the debt recorded in our consolidated balance sheet based on a hypothetical one-percentage point change in our weighted average borrowing rate as of December 31, 2024. A one-percentage point decrease would result in an estimated fair value of $13,118.6 million, or $45.6 million more than their current carrying value. A one‐percentage point increase would result in an estimated fair value of $11,169.7 million, or $1,903.3 million less than their current carrying value.

As of December 31, 2024, there were no borrowings outstanding under our Credit Agreement and $225.2 million of borrowings outstanding under our Premium Financing Debt Facility. The fair value of these borrowings approximate their carrying value due to their short-term duration and variable interest rates associated with these debt obligations. Market risk is estimated as the potential increase in fair value resulting from a hypothetical one-percentage point decrease in our weighted average short-term borrowing rate at December 31, 2024and the resulting fair values are not materially different from their carrying value.

We are subject to foreign currency exchange rate risk primarily from one of our larger U.K. based brokerage subsidiaries that incurs expenses denominated primarily in British pounds while receiving a substantial portion of its revenues in U.S. dollars. In addition, we are subject to foreign currency exchange rate risk from our Australian, Canadian, Indian, Jamaican, New Zealand, Norwegian, Singaporean and various Caribbean and Latin American operations because we transact business in their local denominated currencies. Foreign currency gains (losses) related to this market risk are recorded in earnings before income taxes as transactions occur. Assuming a hypothetical adverse change of 10% in the average foreign currency exchange rate for 2024 (a weakening of the U.S. dollar), earnings before income taxes would have increased by approximately $64.8 million. Assuming a hypothetical favorable change of 10% in the average foreign currency exchange rate for 2024 (a strengthening of the U.S. dollar), earnings before income taxes would have decreased by approximately $55.5 million. We are also subject to foreign currency exchange rate risk associated with the translation of local currencies of our foreign subsidiaries into U.S. dollars. We manage the balance sheets of our foreign subsidiaries, where practical, such that foreign liabilities are matched with equal foreign assets, maintaining a “balanced book” which minimizes the effects of currency fluctuations. However, our consolidated financial position is exposed to foreign currency exchange risk related to intra-entity loans between our U.S. based subsidiaries and our non-U.S. based subsidiaries that are denominated in the respective local foreign currency. A transaction that is in a foreign currency is first remeasured at the entity’s functional (local) currency, where applicable, (which is an adjustment to consolidated earnings) and then translated to the reporting (U.S. dollar) currency (which is an adjustment to consolidated stockholders’ equity) for consolidated reporting purposes. If the transaction is already denominated in the foreign entity’s functional currency, only the translation to U.S. dollar reporting is necessary. The remeasurement process required by U.S. GAAP for such foreign currency loan transactions will give rise to a consolidated unrealized foreign exchange gain or loss, which could be material, that is recorded in accumulated other comprehensive loss.

Historically, we have not entered into derivatives or other similar financial instruments for trading or speculative purposes. However, with respect to managing foreign currency exchange rate risk in India, Norway and the U.K., we have periodically purchased financial instruments to minimize our exposure to this risk. During 2024, 2023 and 2022, we had several monthly put/call options in place with an external financial institution that were designed to hedge a significant portion of our future Norway and the U.K. currency revenues through various future payment dates. In addition, during 2024, 2023 and 2022, we had several monthly put/call options in place with an external financial institution that were designed to hedge a significant portion of our Indian currency disbursements through various future payment dates. Although these hedging strategies were designed to protect us against significant India, Norway and the U.K. currency exchange rate movements, we are still exposed to some foreign currency exchange rate risk for the portion of the payments and currency exchange rate that are unhedged. All of these hedges are accounted for in accordance with ASC Topic 815, “Derivatives and Hedging”, and periodically are tested for effectiveness in accordance with such guidance. In the scenario where such hedge does not pass the effectiveness test, the hedge

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will be re-measured at the stated point and the appropriate loss, if applicable, would be recognized. For the year ended December 31, 2024 there has been no such effect on our consolidated financial presentation. The impact of these hedging strategies was not material to our consolidated financial statements for 2024, 2023 and 2022. See Note 18 to our 2024 consolidated financial statements for the changes in fair value of these derivative instruments reflected in comprehensive earnings in 2024, 2023 and 2022.

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Item 8. Financial Statements and Supplementary Data.

Arthur J. Gallagher & Co.

Consolidated Statement of Earnings

(In millions, except per share data)

Year Ended December 31,

Interest income, premium finance revenues and other income 473.2 367.3 150.0

Revenues from clean coal activities — — 23.0

Cost of revenues from clean coal activities — — 22.9

Change in estimated acquisition earnout payables 26.0 377.3 83.0

Net earnings (loss) attributable to noncontrolling interests 7.7 (3.5 ) 1.8

Net earnings attributable to controlling interests $ 1,462.7 $ 969.5 $ 1,114.2

Basic net earnings per share $ 6.63 $ 4.51 $ 5.30

Dividends declared per common share 2.40 2.20 2.04

See notes to consolidated financial statements.

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Arthur J. Gallagher & Co.

Consolidated Statement of Comprehensive Earnings

(In millions)

Year Ended December 31,

Change in pension liability, net of taxes 13.9 12.3 (12.3 )

Foreign currency translation, net of taxes (365.4 ) 257.8 (511.8 )

Change in fair value of derivative instruments, net of taxes (7.5 ) 78.2 109.8

See notes to consolidated financial statements.

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Arthur J. Gallagher & Co.

Consolidated Balance Sheet

(In millions)

December 31,

Amortizable intangible assets - net 4,530.1 4,633.3

Accrued compensation and other current liabilities 3,586.3 2,553.1

Corporate related borrowings - current 200.0 670.0

Corporate related borrowings - noncurrent 12,731.9 7,006.0

Deferred revenue - noncurrent 67.1 61.5

Lease liabilities - noncurrent 328.1 352.2

Stockholders' equity:

Accumulated other comprehensive loss (1,151.1 ) (792.1 )

Stockholders' equity attributable to controlling interests 20,153.5 10,775.3

Stockholders' equity attributable to noncontrolling interests 26.1 40.0

Total liabilities and stockholders' equity $ 64,255.2 $ 51,615.8

See notes to consolidated financial statements.

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Arthur J. Gallagher & Co.

Consolidated Statement of Cash Flows

(In millions)

Year Ended December 31,

Cash flows from operating activities:

Net gain on investments and other (22.7 ) (8.4 ) (11.0 )

Change in estimated acquisition earnout payables 26.0 377.3 83.0

Amortization of deferred compensation and restricted stock 117.5 105.1 85.4

Stock-based and other noncash compensation expense 41.9 31.4 24.4

Effect of changes in foreign exchange rates 0.4 10.3 (34.0 )

Net change in accounts receivable, net (65.0 ) (503.5 ) (319.6 )

Net change in other current assets (114.3 ) (107.3 ) (71.7 )

Net change in income taxes payable (41.8 ) (77.7 ) 49.9

Net change in other noncurrent assets and liabilities 14.8 55.4 10.4

Cash flows from investing activities:

Net proceeds from sales of operations/books of business 19.7 9.9 11.0

Net funding of investment transactions 6.0 5.5 1.0

Net funding of premium finance loans (8.9 ) (72.9 ) (69.2 )

Cash flows from financing activities:

Payments on acquisition earnouts (142.8 ) (97.8 ) (106.5 )

Payments to noncontrolling interests (3.7 ) (2.4 ) (3.6 )

Net change in fiduciary assets and liabilities (1.4 ) 1,296.5 735.4

Net borrowings on premium financing debt facility (40.9 ) 41.7 25.3

Net borrowings of corporate related long-term debt 5,552.6 1,634.0 (201.5 )

Debt acquisition costs (51.6 ) (17.7 ) 2.2

Settlements on terminated interest rate swaps 2.8 188.0 52.7

See notes to consolidated financial statements.

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Arthur J. Gallagher & Co.

Consolidated Statement of Stockholders’ Equity

(In millions)

Capital in Accumulated Other

Common Stock Excess of Retained Comprehensive Noncontrolling

Shares Amount Par Value Earnings Loss Interests Total

Dividends paid to noncontrolling interests — — — — — (3.5 ) (3.5 )

Foreign currency translation — — — — (511.8 ) (0.2 ) (512.0 )

Compensation expense related to stock option plan grants — — 27.9 — — — 27.9

Common stock issued in:

Employee stock purchase plan 0.3 0.3 47.3 — — — 47.6

Shares issued to benefit plans 0.5 0.5 73.9 — — — 74.4

Deferred compensation and restricted stock 0.3 0.3 (22.2 ) — — — (21.9 )

Cash dividends declared on common stock — — — (434.3 ) — — (434.3 )

Dividends paid to noncontrolling interests — — — — — (1.0 ) (1.0 )

Foreign currency translation — — — — 257.8 1.0 258.8

Compensation expense related to stock option plan grants — — 33.5 — — — 33.5

Common stock issued in:

Employee stock purchase plan 0.3 0.3 54.7 — — — 55.0

Shares issued to benefit plans 0.4 0.4 84.2 — — — 84.6

Deferred compensation and restricted stock 0.4 0.4 28.2 — — — 28.6

Cash dividends declared on common stock — — — (478.8 ) — — (478.8 )

See notes to consolidated financial statements.

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Arthur J. Gallagher & Co.

Consolidated Statement of Stockholders’ Equity (continued)

(In millions)

Capital in Accumulated Other

Common Stock Excess of Retained Comprehensive Noncontrolling

Shares Amount Par Value Earnings Loss Interests Total

Dividends paid to noncontrolling interests — — — — — (3.8 ) (3.8 )

Foreign currency translation — — — — (365.4 ) 0.1 (365.3 )

Compensation expense related to stock option plan grants — — 47.8 — — — 47.8

Common stock issued in:

Employee stock purchase plan 0.3 0.3 69.5 — — — 69.8

Shares issued to benefit plans 0.4 0.4 98.1 — — — 98.5

Deferred compensation and restricted stock 0.3 0.3 10.1 — — — 10.4

Cash dividends declared on common stock — — — (529.9 ) — — (529.9 )

See notes to consolidated financial statements.

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Arthur J. Gallagher & Co.

Notes to Consolidated Financial Statements

December 31, 2024

1. Summary of Significant Accounting Policies

Terms Used in Notes to Consolidated Financial Statements

ASC - Accounting Standards Codification.

ASU - Accounting Standards Update.

FASB - The Financial Accounting Standards Board.

GAAP - United States (U.S.) generally accepted accounting principles.

IRC - Internal Revenue Code.