Marsh & McLennan Companies 8K MMC Reports Fourth Quarter and Year-end 2006 Results | MMC 13 Feb 07

EXHIBIT 99.1

News Release

MMC REPORTS FOURTH QUARTER AND YEAR-END 2006 RESULTS

NEW YORK, NEW YORK, February 13, 2007—Marsh & McLennan Companies, Inc. (MMC) today reported financial results for the fourth quarter and year ended December 31, 2006. Consolidated revenues in the fourth quarter were $3.1 billion, an increase of 9 percent from 2005. Consolidated net income was $226 million, an increase of over 500 percent from the fourth quarter of 2005, and earnings per share grew to $.40 from $.06. Earnings per share from continuing operations rose to $.39 in the fourth quarter from $.03 last year.

Full-year consolidated revenues were $11.9 billion, an increase of 3 percent from $11.6 billion in 2005. Consolidated net income was $990 million, or $1.76 per share, compared with $404 million, or $.74 per share, in 2005. Results from discontinued operations, net of tax, were $172 million, or $.31 per share, resulting primarily from MMC’s sale of its investment in Sedgwick Claims Management in early 2006. Results from discontinued operations in 2005 were $37 million, or $.07 per share. Income from continuing operations was $818 million, or $1.45 per share, compared with $367 million, or $.67 per share, in 2005. Stock option expense in 2006 was $116 million. Stock option expense in 2005 was $64 million, and related only to the last two quarters of 2005 since MMC adopted SFAS No. 123(R), “Share-Based Payment,” on July 1, 2005.

A number of noteworthy items affected financial results, including restructuring costs and credits; legal and regulatory costs primarily related to market service agreements; and other items indicated in the attached supplemental information. In the fourth quarter of 2006, noteworthy items were a credit of $5 million, including the realized gain of $74 million on the sale of five floors in MMC’s corporate headquarters, while noteworthy items in 2005 reduced earnings per share from continuing operations by $.18. For the full year, noteworthy items reduced earnings per share by $.19 in 2006, compared with $.76 in 2005.

“MMC had another good quarter, reporting its strongest revenue growth in three years,” said Michael G. Cherkasky, president and chief executive officer of MMC. “The progress we saw at Marsh in the first nine months of 2006 continued in the fourth quarter, including improved revenue trends and increased profitability. Revenues from new business at Marsh were the highest they have been since the first half of 2004. In light of this, we are encouraged about Marsh’s prospects in 2007. Throughout the year, Guy Carpenter rose to the challenges of a complex reinsurance marketplace, producing increased revenues driven by double-digit growth in new business. Kroll’s increased revenues in the quarter were driven by solid results in its technology business. In the quarter, Mercer Human Resource Consulting improved margins and produced strong revenue growth, and Mercer Specialty Consulting continued its exceptional performance, reporting double-digit revenue growth. Putnam’s net flows were neutral in the quarter, achieving a long-standing goal.

“The announced sale of Putnam will enhance our financial flexibility and allow us to concentrate on our market-leading risk and human capital businesses. We have reignited MMC’s engines of growth, and we look forward to the future with confidence,” Mr. Cherkasky concluded.

Risk and Insurance Services

Risk and insurance services revenues in the fourth quarter increased 4 percent to $1.4 billion, or 5 percent on an underlying basis. Operating income more than doubled to $127

million, compared with $62 million in the fourth quarter of 2005, reflecting gains from private equity investments, operating efficiencies, cost discipline, and restructuring efforts.

Marsh’s underlying revenues grew 3 percent, excluding the impact of market service revenues, the second consecutive quarter of revenue growth by this measure and the largest in over two years. Strong new business growth across all geographies drove Marsh’s performance. For the full year, new business increased a robust 10 percent, with accelerating growth as the year progressed, including 9 percent growth in the Americas. As reported, Marsh's revenues declined 1 percent to $1.1 billion in the fourth quarter.

Guy Carpenter’s revenues increased 9 percent in the fourth quarter to $171 million, or 8 percent on an underlying basis, driven by 13 percent growth in new business. These results were achieved despite a reinsurance marketplace where increases in U.S. property catastrophe rates were mitigated by reduced reinsurance capacity and higher client risk retentions, and where rates in most other lines of business were stable to down globally.

Risk Capital Holdings generated revenues of $74 million in the fourth quarter, compared with $27 million in the same period of 2005. This increase was entirely due to mark-to-market gains in private equity investments. Full-year revenues were $193 million, compared with $189 million in 2005.

Risk Consulting and Technology

Kroll’s revenues increased 12 percent in the fourth quarter to $241 million, or 4 percent on an underlying basis. Kroll’s technology enabled solutions business produced 17 percent growth in revenues, including double-digit growth in background screening and technology services. Kroll’s profitability in the quarter increased significantly, due to revenue growth, expense control, and the early termination of a licensing agreement. Results reflect the sale of Kroll’s international security business, which has been included in MMC’s discontinued operations.

Consulting

Revenues for consulting increased 15 percent to $1.1 billion in the fourth quarter, or 10 percent on an underlying basis. Operating income grew 24 percent. Full-year revenues increased 11 percent to $4.2 billion, or 9 percent on an underlying basis.

Mercer Human Resource Consulting increased revenues 12 percent to $769 million in the fourth quarter, or 8 percent on an underlying basis. This strong growth was driven by the retirement and investment business and the talent business. Full-year revenues increased 8 percent to $3 billion, or 7 percent on an underlying basis.

Mercer Specialty Consulting’s revenues grew 23 percent to $341 million in the fourth quarter, or 15 percent on an underlying basis. Full-year revenues increased 19 percent to $1.2 billion, or 16 percent on an underlying basis. Each of the Mercer Specialty companies contributed to this exceptional performance, led by Mercer Oliver Wyman, which increased underlying revenues 22 percent.

Investment Management

Putnam’s revenues of $359 million were flat, compared with the fourth quarter last year. Ending assets on December 31, 2006 were $192 billion, comprising $124 billion in mutual fund assets and $68 billion in institutional assets. Average assets under management were $189 billion, compared with $188 billion in the fourth quarter of 2005.

Operating income increased on a year-over-year basis, due to lower expenses. With the announced sale of Putnam on February 1, Putnam will be classified as a discontinued operation in 2007.

Other Items

MMC’s net debt position, which is total debt less cash and cash equivalents, was $2.9 billion at year-end 2006, a decrease of $520 million in the fourth quarter and $640 million in the year, driven by strong operating cash flows. The company increased its quarterly dividend by 12 percent, from $.17 to $.19, payable in the first quarter of 2007.

During the fourth quarter, MMC made a discretionary contribution of its investment position in Trident III of $182 million to its U.K. defined benefits plans.

Conference Call

A conference call to discuss fourth quarter and year-end 2006 results will be held today at 10:00 a.m. Eastern Time. To participate in the teleconference, please dial 866 564 7444 or 719 234 0008 (international). The access code for both numbers is 2424845. The audio webcast may be accessed at www.mmc.com. A replay of the webcast will be available approximately two hours after the event at the same web address.

MMC is a global professional services firm with annual revenues of approximately $12 billion. It is the parent company of Marsh, the world's leading risk and insurance services firm; Guy Carpenter, the world’s leading risk and reinsurance specialist; Kroll, the world’s leading risk consulting company; Mercer, a major global provider of human resource and specialty consulting services; and Putnam Investments, one of the largest investment management companies in the United States. Approximately 55,000 employees provide analysis, advice, and transactional capabilities to clients in over 100 countries. Its stock (ticker symbol: MMC) is listed on the New York, Chicago, and London stock exchanges. MMC's website address is www.mmc.com.

This press release contains “forward-looking statements,” as defined in the Private Securities Litigation Reform Act of 1995. These statements, which express management’s current views concerning future events or results, use words like “anticipate,” “assume,” “believe,” “continue,” “estimate,” “expect,” “intend,” “plan,” “project” and similar terms, and future or conditional tense verbs like “could,” “should,” “will” and “would.” For example, we may use forward-looking statements when addressing topics such as: the impact of acquisitions and dispositions; future actions by our management or regulators; the outcome of contingencies; changes in our business strategy; changes in our business practices and methods of generating revenue; the development and performance of our services and products; market and industry conditions, including competitive and pricing trends; changes in the composition or level of MMC’s revenues; our cost structure and the outcome of restructuring and other cost-saving initiatives; and MMC’s cash flow and liquidity.

Forward-looking statements are subject to inherent risks and uncertainties. Factors that could cause actual results to differ materially from those expressed or implied in our forward-looking statements include:

•	the economic and reputational impact of litigation and regulatory proceedings concerning our insurance and reinsurance brokerage and investment management operations;

•

the fact that MMC's agreement to sell Putnam, announced on February 1, 2007, is subject to a number of closing conditions, some of which are outside of MMC's control, and we cannot be certain that the transaction will close as planned or that the announced sale price will not be adjusted pursuant to the terms of the sale agreement;

•	Putnam’s performance between now and the closing of the announced sale later in 2007, including the actual and relative investment performance of Putnam’s mutual funds and institutional and other advisory accounts, Putnam’s net fund flows and the level of Putnam’s assets under management;

•	our ability to effectively deploy MMC’s proceeds from the sale of Putnam, and the timing of our use of those proceeds;

•	the fact that our estimate of the dilutive impact of the sale of Putnam on MMC’s future earnings per share is necessarily based on a set of current management assumptions, including assumptions about MMC’s use of sale proceeds and the operating results of Putnam and MMC’s other subsidiaries;

•	our ability to achieve profitable revenue growth in our risk and insurance services segment by providing both traditional insurance brokerage services and additional risk advisory services;

•	our ability to retain existing clients and attract new business, and our ability to retain key employees;

•	revenue fluctuations in risk and insurance services relating to the net effect of new and lost business production and the timing of policy inception dates;

•	the impact on risk and insurance services commission revenues of changes in the availability of, and the premiums insurance carriers charge for, insurance and reinsurance products, including the impact on premium rates and market capacity attributable to catastrophic events such as hurricanes;

•	the impact on renewals in our risk and insurance services segment of pricing trends in particular insurance markets, fluctuations in the general level of economic activity and decisions by insureds with respect to the level of risk they will self-insure;

•	the impact on our consulting segment of pricing trends, utilization rates, legislative changes affecting client demand, and the general economic environment;

•	our ability to implement our restructuring initiatives and otherwise reduce or control expenses and achieve operating efficiencies, including our ability to generate anticipated savings and operational improvements from the actions we announced in September 2006;

•	the impact of competition, including with respect to pricing and the emergence of new competitors;

•	fluctuations in the value of Risk Capital Holdings’ investments;

•	our ability to make strategic acquisitions and dispositions and to integrate, and realize expected synergies, savings or strategic benefits from, the businesses we acquire;

•	our exposure to potential liabilities arising from errors and omissions claims against us;

•	our ability to meet our financing needs by generating cash from operations and accessing external financing sources, including the potential impact of rating agency actions on our cost of financing or ability to borrow;

•	the impact on our operating results of foreign exchange fluctuations; and

•	changes in the tax or accounting treatment of our operations and the impact of other legislation and regulation, including as to licensing matters, in the jurisdictions in which we operate, particularly given the global scope of our businesses.

The factors identified above are not exhaustive. MMC and its subsidiaries operate in a dynamic business environment in which new risks may emerge frequently. Accordingly, MMC cautions readers not to place undue reliance on its forward-looking statements, which speak only as of the dates on which they are made. MMC undertakes no obligation to update or revise any forward-looking statement to reflect events or circumstances arising after the date on which it is made. Further information concerning MMC and its businesses, including information about factors that could materially affect our results of operations and financial condition, is contained in MMC’s filings with the Securities and Exchange Commission.

	Three Months Ended December 31,				Twelve Months Ended December 31,
Marsh & McLennan Companies, Inc. Consolidated Statements of Income (In millions, except per share figures) (Unaudited)
	2006		2005		2006		2005
Revenue:
Service Revenue	$ 2,982		$ 2,784		$ 11,699		$ 11,395
Investment Income	81		27		222		183

Total Revenue	3,063		2,811		11,921		11,578

Expense:
Compensation and Benefits	1,843		1,588		7,113		6,897
Other Operating Expenses	823		1,107		3,350		3,828

Total Expense	2,666		2,695		10,463		10,725

Operating Income	397		116		1,458		853
Interest Income	19		14		64		47
Interest Expense	(72	)	(79	)	(303	)	(332	)

Income Before Income Taxes and Minority Interest Expense	344		51		1,219		568
Income Taxes	117		30		388		191

Minority Interest Expense, Net of Tax	4		4		13		10

Income from Continuing Operations	223		17		818		367
Discontinued Operations, Net of Tax	3		18		172		37

Net Income	$ 226		$ 35		$ 990		$ 404

Basic Net Income Per Share - Continuing Operations	$ 0.41		$ 0.03		$ 1.49		$ 0.68

- Net Income	$ 0.41		$ 0.06		$ 1.80		$ 0.75

Diluted Net Income Per Share - Continuing Operations	$ 0.39		$ 0.03		$ 1.45		$ 0.67

- Net Income	$ 0.40		$ 0.06		$ 1.76		$ 0.74

Average Number of Shares Outstanding - Basic	551		546		549		538

- Diluted	561		555		557		543

Shares Outstanding at 12/31	552		546		552		546

	Three Months Ended						Components of Revenue Change
Marsh & McLennan Companies, Inc. Supplemental Information - Revenue Analysis Three and Twelve Months Ended (Millions) (Unaudited)

	December 31,				%Change GAAP		Currency		Acquisitions/ Dispositions		Underlying
	2006		2005		Revenue		Impact		Impact		Revenue
Risk and Insurance Services
Insurance Services	$ 1,129		$1,135		(1	)%	2	%	(3	)%	—
Reinsurance Services	171		155		9	%	1	%	—		8	%
Risk Capital Holdings	74		27		174	%	—		—		174	%

Total Risk and Insurance Services	1,374		1,317		4	%	2	%	(3	)%	5	%

Risk Consulting & Technology	241		215		12	%	3	%	5	%	4	%


Consulting
Human Resource Consulting	769		690		12	%	4	%	—		8	%
Specialty Consulting	341		276		23	%	3	%	5	%	15	%

Total Consulting	1,110		966		15	%	3	%	2	%	10	%

Investment Management	359		360		—		—		—		—

Total Operating Segments	3,084		2,858		8	%	2	%	—		6	%
Corporate Eliminations	(21	)	(47	)

Total Revenue	$ 3,063		$ 2,811		9	%	2	%	—		7	%


	Twelve Months Ended						Components of Revenue Change
	December 31,				%Change GAAP		Currency		Acquisitions/ Dispositions		Underlying
	2006		2005		Revenue		Impact		Impact		Revenue
Risk and Insurance Services
Insurance Services	$ 4,390		$4,567		(4	)%	—		(2	)%	(2	)%
Reinsurance Services	880		836		5	%	—		—		5	%
Risk Capital Holdings	193		189		2	%	—		(5	)%	7	%

Total Risk and Insurance Services	5,463		5,592		(2	)%	—		(2	)%	—

Risk Consulting & Technology	979		872		12	%	—		3	%	9	%


Consulting
Human Resource Consulting	3,021		2,794		8	%	1	%	—		7	%
Specialty Consulting	1,204		1,008		19	%	1	%	2	%	16	%

Total Consulting	4,225		3,802		11	%	1	%	1	%	9	%

Investment Management	1,385		1,506		(8	)%	—		—		(8	)%

Total Operating Segments	12,052		11,772		2	%	—		—		2	%
Corporate Eliminations	(131	)	(194	)

Total Revenue	$ 11,921		$ 11,578		3	%	—		—		3	%

Notes

Underlying revenue measures the change in revenue, before the impact of acquisitions and dispositions, using consistent currency exchange rates.

Interest income on fiduciary funds amounted to $45 and $37 million for the three months ended December 31, 2006 and 2005, respectively and $180 and $151 million for the twelve months ended December 31, 2006 and 2005, respectively.

Revenue includes net investment income (loss) of $72 and $29 million for Risk and Insurance Services and $9 and $(2) million for Investment Management for the three months ended December 31, 2006 and 2005, respectively. Net investment income (loss) was $196 and $180 million for Risk and Insurance Services, $1 and $0 million for Consulting, and $25 and $3 million for Investment Management for the twelve months ended December 31, 2006 and 2005, respectively.

Risk Capital Holdings owns investments in private equity funds and insurance and financial services firms.

Effective January 1, 2007, Risk Consulting and Technology transferred to Insurance Services certain businesses which had revenue of approximately $25 million in 2006.

Insurance Services revenue includes market service revenue of $0 and $29 million for the three months ended December 31, 2006 and 2005, respectively and $43 million and $114 million for the twelve months ended December 31, 2006 and 2005, respectively.

	Three Months Ended December 31,				Twelve Months Ended December 31,
Marsh & McLennan Companies, Inc. Supplemental Information (Millions) (Unaudited)
	2006		2005		2006		2005
Revenue:
Risk and Insurance Services	$ 1,374		$ 1,317		$ 5,463		$ 5,592
Risk Consulting & Technology	241		215		979		872
Consulting	1,110		966		4,225		3,802
Investment Management	359		360		1,385		1,506

	3,084		2,858		12,052		11,772
Corporate/Eliminations	(21	)	(47	)	(131	)	(194	)

	$ 3,063		$ 2,811		$ 11,921		$ 11,578

Operating Income (Loss):
Risk and Insurance Services	$ 127		$ 62		$ 677		$ 305
Risk Consulting & Technology	45		16		149		121
Consulting	117		94		466		451
Investment Management	86		59		303		263
Corporate	22		(115	)	(137	)	(287	)

	$ 397		$ 116		$ 1,458		$ 853

Segment Operating Margins:
Risk and Insurance Services	9.2	%	4.7	%	12.4	%	5.5	%
Risk Consulting & Technology	18.7	%	7.4	%	15.2	%	13.9	%
Consulting	10.5	%	9.7	%	11.0	%	11.9	%
Investment Management	24.0	%	16.4	%	21.9	%	17.5	%
Consolidated Operating Margin	13.0	%	4.1	%	12.2	%	7.4	%
Pretax Margin	11.2	%	1.8	%	10.2	%	4.9	%
Effective Tax Rate	34.0	%	58.8	%	31.8	%	33.7	%
Potential Minority Interest Associated with the Putnam
Equity Partnership Plan Net of Dividend Equivalent
Expense Related to MMC Common Stock Equivalents	$ 4		$ 3		$ 13		$ 4

Marsh & McLennan Companies, Inc.
Supplemental Information - Continuing Operations
(Millions) (Unaudited)

Significant Items Impacting the Comparability of Financial Results:
The year-over-year comparability of MMC's fourth quarter and twelve-month financial results is affected by a number of noteworthy items and stock option expense. The following table identifies the impact of noteworthy items on operating income for the periods indicated.

	Risk & Insurance Services		Risk Consulting & Technology	Consulting	Investment Management	Corporate		Total


Three Months Ended December 31, 2006

Restructuring Charges (a)	$ 37		$ —	$ 10	$ —	$ (72	)	$ (25	)
Accelerated Amortization/Depreciation	5		—	—	—	4		9
Settlement, Legal and Regulatory (b)	11		—	—	—	—		11


Total Impact in 2006	$ 53		$ —	$ 10	$ —	$ (68	)	$ (5	)



Three Months Ended December 31, 2005

Restructuring Charges (a)	$ 62		$ —	$ 1	$ —	$ 4		$ 67
Employee Retention Awards	(10	)	—	7	—	—		(3	)
Settlement, Legal and Regulatory (b)	19		—	—	10	28		57
Other	1		—	—	—	11		12


Total Impact in 2005	$ 72		$ —	$ 8	$ 10	$ 43		$ 133


Twelve Months Ended December 31, 2006
Restructuring Charges (a)	$ 100	$ 1	$ 27	$ —		$ (41	)	$ 87
Accelerated Amortization/Depreciation	28	—	—	—		10		38
Settlement, Legal and Regulatory (b)	43	—	—	(7	)	—		36


Total Impact in 2006	$ 171	$ 1	$ 27	$ (7	)	$ (31	)	$ 161



Twelve Months Ended December 31, 2005

Restructuring Charges (a)	$ 257	$ —	$ 1	$ —		$ 59		$ 317
Employee Retention Awards	78	—	37	—		—		115
Settlement, Legal and Regulatory (b)	88	—	—	(2	)	4		90
Estimated Mutual Fund Reimbursement (c)	—	—	—	35		—		35
Other	12	—	—	4		9		25


Total Impact in 2005	$ 435	$ —	$ 38	$ 37		$ 72		$ 582

Notes:

(a) Primarily includes severance and related charges, costs for future rent and other costs for real estate resulting from cost reduction initiatives and the gain on the sale of certain floors in MMC's headquarters building (see MMC's Form 10-Q for the period ended March 31, 2005 and Form 8-K dated September 20, 2006 for more information).

(b) Reflects costs of certain legal and regulatory matters, including legal fees and settlement costs arising out of the civil complaint relating to market service agreements and other issues filed against MMC and Marsh by the New York State Attorney General in October 2004 and settled in January 2005; and market-timing and other issues at Putnam. Regulatory expenses in Risk and Insurance Services include fees for professional services provided by other MMC companies; the resulting inter-company balances are eliminated in Corporate. The credits for Investment Management represent insurance recoveries relating to previously expensed legal fees.

(c) Reflects costs to address issues relating to the calculation of certain amounts paid by the Putnam mutual funds in previous years. The previous payments were cost reimbursements by the Putnam mutual funds to Putnam for transfer agency services related to defined contribution operations.

Interest Expense. A noteworthy item affecting 2005 net income was the $34 million prepayment penalty related to a mortgage refinancing of MMC's headquarters building in New York, recorded as interest expense.

Stock Option Expense. The year-over-year comparability of MMC's fourth quarter and twelve-month financial results is affected by MMC's adoption, effective July 1, 2005, of SFAS 123(R) ("Share Based Payment"). Stock option expense for the three months ended December 31, 2006 was $23 million: Risk and Insurance Services - $9 million, Risk Consulting & Technology - $0 million, Consulting - $9 million, Investment Management - $3 million, Corporate - $2 million. Stock option expense for the twelve months ended December 31, 2006 was $116 million: Risk and Insurance Services - $47 million, Risk Consulting & Technology - $2 million, Consulting - $41 million, Investment Management - $14 million, Corporate - $12 million. A charge of $33 million and $64 million for the quarter and twelve months ended December 31, 2005, respectively, is reflected in Corporate results.

Impact on Operating Income and Margins in Risk and Insurance Services. In Risk and Insurance Services, noteworthy items and stock option expense together totaled $218 million for the twelve months of 2006, affecting segment operating margin by 4 percentage points. Noteworthy items totaled $435 million for twelve months of 2005, affecting segment operating margin by 7.7 percentage points. Adjusting for these impacts, the segment's adjusted operating income was $895 million and adjusted operating margin was 16.4 percent for the twelve months of 2006, compared to adjusted operating income of $740 million and an adjusted operating margin of 13.2 percent for the twelve months of 2005. The adjusted operating income and adjusted segment operating margin are non-GAAP financial measures within the meaning of Regulation G promulgated by the Securities and Exchange Commission. MMC believes that presenting these measures may help investors and others understand aspects of Risk and Insurance Services operating performance that may not be apparent from MMC's reported GAAP results. However, non-GAAP financial measures are not a substitute for MMC's reported GAAP information, and may not be comparable to similar information provided by industry peers.

	Dec. 31, 2006	Sept. 30, 2006	June 30, 2006		Mar. 31, 2006	Dec. 31, 2005
Marsh & McLennan Companies, Inc. Supplemental Information - Putnam Assets Under Management (Billions) (Unaudited)

Mutual Funds:
Growth Equity	$ 26	$ 26	$ 27		$ 31	$ 31
Value Equity	37	36	36		37	37
Blend Equity	28	26	26		27	26
Fixed Income	33	30	30		31	32

Total Mutual Fund Assets	124	118	119		126	126

Institutional:
Equity	36	34	32		34	34
Fixed Income	32	30	29		29	29

Total Institutional Assets	68	64	61		63	63

Total Ending Assets	$ 192	$ 182	$ 180		$ 189	$ 189


The asset information above includes the following:

Assets from Non-US Investors	$ 36	$ 34	$ 31		$ 32	$ 32

Assets in Prime Money Market Funds	$ 4.3	$ .5	$ .6		$ .2	$ .5

Average Assets Under Management:
Quarter	$ 189	$ 179	$ 185		$ 190	$ 188

Year-to-Date	$ 186	$ 185	$ 188		$ 190	$ 196

Net Flows including Dividends Reinvested:
Quarter	$ (0.1)	$ (3.1)	$ (6.0)*		$ (6.6)	$ (6.4)

Year-to-Date	$ (15.8)	$ (15.7)	$ (12.6)		$ (6.6)	$ (31.7)


Impact of Market/Performance on Ending
Assets Under Management	$ 9.9	$ 5.5	$ (3.5	)	$ 7.0	$ 2.8

* Net redemptions in the quarter ended June 30, 2006 include $2.8 billion of redemptions in institutional equity resulting from ending Putnam's alliance with an Australian partner.

Categories of mutual fund assets reflect style designations aligned with Putnam's various prospectuses. All quarter-end assets conform with the current investment mandate for each product.

Marsh & McLennan Companies, Inc. Consolidated Balance Sheets (Millions) (Unaudited)
	December 31, 2006			December 31, 2005
ASSETS
Current assets:
Cash and cash equivalents	$	2,089		$	2,020
Net receivables		3,008			2,730
Assets of discontinued operations		—			153
Other current assets		737			359

Total current assets		5,834			5,262
Goodwill and intangible assets		7,775			7,773
Fixed assets, net		1,043			1,178
Long-term investments		597			277
Pension Related Asset		613			1,596
Other assets		2,275			1,806

TOTAL ASSETS	$	18,137		$	17,892

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term debt	$	1,111		$	498
Accounts payable and accrued liabilities		2,477			1,733
Regulatory settlements - current portion		238			333
Accrued compensation and employee benefits		1,507			1,413
Liabilities of discontinued operations		—			89
Accrued income taxes		216			192
Dividends payable		—			93

Total current liabilities		5,549			4,351
Fiduciary liabilities		3,704			3,795
Less - cash and investments held in a fiduciary capacity		(3,704	)		(3,795	)

		-			-
Long-term debt		3,860			5,044
Regulatory settlements		173			348
Pension, postretirement and postemployment benefits		1,089			1,180
Other liabilities		1,647			1,609

Total stockholders' equity		5,819			5,360

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	18,137		$	17,892

Marsh & McLennan Companies, Inc.
Supplemental Information - Revenue Analysis - Discontinued Operations Reclassification
(Millions) (Unaudited)

The following table provides reclassified prior period reported amounts to reflect discontinued operations classification for Kroll Security International, which was sold in December 2006.


	Three Months Ended								Twelve Months Ended
2006	March 31,		June 30,		Sept. 30,		Dec. 31,		Dec. 31,
Risk and Insurance Services
Insurance Services	$ 1,146		$ 1,106		$ 1,009		$ 1,129		$ 4,390
Reinsurance Services	281		214		214		171		880
Risk Capital Holdings	46		28		45		74		193

Total Risk and Insurance Services	1,473		1,348		1,268		1,374		5,463

Risk Consulting &Technology	234		265		239		241		979

Consulting
Human Resource Consulting	739		751		762		769		3,021
Specialty Consulting	262		297		304		341		1,204

Total Consulting	1,001		1,048		1,066		1,110		4,225

Investment Management	345		339		342		359		1,385

Total Operating Segments	3,053		3,000		2,915		3,084		12,052
Corporate Eliminations	(37	)	(30	)	(43	)	(21	)	(131	)

Total Revenue	$ 3,016		$ 2,970		$ 2,872		$ 3,063		$ 11,921


	Three Months Ended								Twelve Months Ended
2005	March 31,		June 30,		Sept. 30,		Dec. 31,		Dec. 31,
Risk and Insurance Services
Insurance Services	$ 1,232		$ 1,172		$ 1,028		$ 1,135		$ 4,567
Reinsurance Services	282		192		207		155		836
Risk Capital Holdings	63		54		45		27		189

Total Risk and Insurance Services	1,577		1,418		1,280		1,317		5,592

Risk Consulting &Technology	216		219		222		215		872

Consulting
Human Resource Consulting	695		718		691		690		2,794
Specialty Consulting	229		254		249		276		1,008

Total Consulting	924		972		940		966		3,802

Investment Management	398		377		371		360		1,506

Total Operating Segments	3,115		2,986		2,813		2,858		11,772
Corporate Eliminations	(62	)	(31	)	(54	)	(47	)	(194	)

Total Revenue	$ 3,053		$ 2,955		$ 2,759		$ 2,811		$ 11,578

Marsh & McLennan Companies, Inc.
Supplemental Information - Revenue Analysis - Discontinued Operations Reclassification
(Millions) (Unaudited)

The following table provides reclassified prior period reported amounts to reflect discontinued operations classification for Kroll Security International, which was sold in December 2006.


	Three Months Ended								Twelve Months Ended
2006	March 31,		June 30,		Sept. 30,		Dec. 31,		Dec. 31,
Operating Income (Loss):
Risk and Insurance Services	$ 268		$ 139		$ 143		$ 127		$ 677
Risk Consulting &Technology	24		42		38		45		149
Consulting	113		124		112		117		466
Investment Management	64		76		77		86		303
Corporate	(68	)	(42	)	(49	)	22		(137	)

	401		339		321		397		1,458

Interest Income	16		13		16		19		64

Interest Expense	(78	)	(78	)	(75	)	(72	)	(303	)

Income Before Income Taxes and Minority Interest, Net of Tax	339		274		262		344		1,219
Income Taxes	96		97		78		117		388
Minority Interest Expense, Net of Tax	2		3		4		4		13

Income from Continuing Operations	241		174		180		223		818
Discontinued Operations, Net of Tax	175		(2	)	(4	)	3		172

Net Income	$ 416		$ 172		$ 176		$ 226		$ 990

Basic Income Per Share - Continuing Operations	$0.44		$0.32		$0.33		$0.41		$1.49

Diluted Income Per Share - Continuing Operations	$0.43		$0.31		$0.32		$0.39		$1.45


	Three Months Ended								Twelve Months Ended
2005	March 31,		June 30,		Sept. 30,		Dec. 31,		Dec. 31,
Operating Income (Loss):
Risk and Insurance Services	$ 137		$ 86		$ 20		$ 62		$ 305
Risk Consulting &Technology	37		34		34		16		121
Consulting	110		130		117		94		451
Investment Management	50		71		83		59		263
Corporate	(73	)	(30	)	(69	)	(115	)	(287	)

	261		291		185		116		853

Interest Income	9		11		13		14		47

Interest Expense	(69	)	(73	)	(111	)	(79	)	(332	)

Income Before Income Taxes and Minority Interest, Net of Tax	201		229		87		51		568
Income Taxes	70		68		23		30		191
Minority Interest Expense, Net of Tax	2		2		2		4		10

Income from Continuing Operations	129		159		62		17		367
Discontinued Operations, Net of Tax	5		7		7		18		37

Net Income	$ 134		$ 166		$ 69		$ 35		$ 404

Basic Income Per Share - Continuing Operations	$0.24		$0.30		$0.11		$0.03		$0.68

Diluted Income Per Share - Continuing Operations	$0.24		$0.29		$0.11		$0.03		$0.67

Marsh & McLennan Companies (MMC) 8-KMMC Reports Fourth Quarter and Year-end 2006 Results