MMC Reports Fourth Quarter and Full-Year 2009 Results – Marsh & McLennan Companies, Inc.

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Marsh & McLennan Companies, Inc. (MMC) reported financial results for the fourth quarter and year ended December 31, 2009.

Brian Duperreault, MMC President and CEO said: "I am very pleased with our company's performance in 2009 and the excellent progress we made executing our goals for the year. MMC is much stronger today than it was a year ago. Our marked improvement in adjusted operating income in 2009 was driven by very strong performance in Risk and Insurance Services, with substantial margin improvement.

"I am particularly pleased with our fourth quarter results since each of our operating segments achieved double-digit growth in adjusted operating income.

"Marsh had an outstanding year, implementing operational improvements to enhance profitability. Guy Carpenter also had an excellent year, as solid new business development and expense discipline resulted in strong growth in revenue and profitability.

"While our Consulting segment was most directly affected by the economic environment in 2009, our businesses were well-managed during the period. Mercer took appropriate steps throughout the year to protect profitability and had an excellent fourth quarter with very strong growth in adjusted operating income. Oliver Wyman saw sequential improvement in quarterly profitability as a result of management actions taken during the year.

"Kroll also made excellent progress streamlining its business in 2009 and achieved stronger operating performance over the second half of the year. The improvement was driven primarily by Kroll's largest business, Ontrack. It had a particularly good fourth quarter; as a result, Kroll's adjusted operating income grew substantially compared with the prior year.

"MMC's operations are very well-positioned entering 2010. We have confidence in the ability of our business leaders and their teams to continue to provide our clients with the best service and solutions and to grow profitability for our shareholders," Mr. Duperreault concluded. MMC Consolidated Results MMC's consolidated revenue in the fourth quarter of 2009 was $2.7 billion, an increase of 3 percent from the fourth quarter of 2008, or a decline of 2 percent on an underlying basis. Underlying revenue measures the change in revenue before the impact of acquisitions and dispositions, using consistent currency exchange rates. For 2009, MMC's consolidated revenue was $10.5 billion, a decline of 9 percent from $11.5 billion in 2008, or 5 percent on an underlying basis.

Due to the settlement in the fourth quarter of 2009 of the securities and ERISA class action lawsuits filed in 2004, MMC's net income declined to $38 million, or $.07 per share, compared with net income of $80 million, or $.15 per share, in 2008. Earnings per share on an adjusted basis, which excludes noteworthy items as presented in the attached supplemental schedules, increased 6 percent to $.38, compared with $.36 in 2008. For the year, net income was $242 million, compared with a net loss of $73 million in 2008. Adjusted earnings per share increased 13 percent to $1.58, compared with $1.40 in 2008.

As part of court-approved settlements, without admitting wrongdoing, MMC paid a total of $435 million to settle both the securities and related ERISA class action lawsuits and received $230 million from its insurance carriers. The net settlement of $205 million is tax deductible. Risk and Insurance Services Risk and Insurance Services segment revenue in the fourth quarter of 2009 was $1.3 billion, an increase of 5 percent from the fourth quarter of 2008, or a decline of 2 percent on an underlying basis. Operating income in the fourth quarter rose 22 percent to $127 million, compared with $104 million in the fourth quarter of 2008. Adjusted operating income in the quarter increased 13 percent to $213 million, compared with $189 million last year. For the year, segment revenue declined 3 percent to $5.3 billion, or 1 percent on an underlying basis. Operating income increased to $796 million, compared with $460 million in 2008. Adjusted operating income increased 35 percent to $985 million, compared with $729 million in 2008.

Marsh's revenue in the fourth quarter of 2009 was $1.2 billion, an increase of 4 percent from the same period last year, or a decline of 1 percent on an underlying basis. For the year, Marsh reported revenue of $4.3 billion, a decline of 5 percent, or 1 percent on an underlying basis. Underlying revenue growth of 2 percent in international operations was led by Latin America with 9 percent growth and Asia Pacific with 5 percent growth. Underlying revenue was flat in EMEA and declined 4 percent in the U.S./ Canada region.

In the fourth quarter of 2009, Marsh announced an agreement to acquire HSBC Insurance Brokers Ltd, an international provider of risk intermediary and risk advisory services headquartered in London. The transaction is expected to close early in the second quarter. In addition, Marsh also announced the acquisition of three U.S. insurance agencies: The NIA Group, Insurance Alliance, and Haake Companies.

Guy Carpenter's fourth quarter 2009 revenue increased 23 percent to $180 million, including the acquisitions of Collins and Rattner Mackenzie in 2009. Revenue increased 4 percent on an underlying basis. For the year, Guy Carpenter's revenue increased to $911 million from $803 million, an increase of 13 percent, or 8 percent on an underlying basis. Consulting Consulting segment revenue increased 3 percent to $1.2 billion in the fourth quarter of 2009, or a decline of 2 percent on an underlying basis. Operating income was $131 million in the fourth quarter of 2009, up from $82 million in the fourth quarter of 2008. Adjusted operating income rose 17 percent to $142 million, compared with $121 million in the fourth quarter of 2008. For 2009, segment revenue was $4.6 billion, a decline of 11 percent, or 7 percent on an underlying basis.

Mercer's revenue increased 7 percent to $861 million in the fourth quarter of 2009 and was flat on an underlying basis. Mercer's consulting operations produced revenue of $609 million, a decline of 2 percent on an underlying basis from the fourth quarter of 2008; outsourcing, with revenue of $167 million, increased 3 percent; and investment consulting and management, with revenue of $85 million, grew 9 percent. Oliver Wyman's revenue declined 3 percent to $378 million in the fourth quarter of 2009, or 7 percent on an underlying basis. Risk Consulting and Technology Risk Consulting and Technology segment revenue decreased 6 percent to $170 million in the fourth quarter of 2009 and was flat on an underlying basis. Adjusted operating income in the quarter rose to $19 million from $6 million in the prior year's quarter.

Kroll's revenue of $169 million in the fourth quarter of 2009 increased 1 percent from a year ago and was flat on an underlying basis. Ontrack, Kroll's litigation support and data recovery business, had a 19 percent increase in underlying revenue; risk mitigation and response declined 21 percent; and background screening declined 7 percent. Other Items MMC had investment income in the fourth quarter of 2009 of $23 million, up from $19 million in the 2008 fourth quarter. This was largely due to mark-to-market gains in private equity investments. Conference Call A conference call to discuss fourth quarter and full-year 2009 results will be held today at 8:30 a.m. Eastern Time. To participate in the teleconference, please dial 800 946 0774. Callers from outside the United States should dial 719 325 2146. The access code for both numbers is 9297814. The live 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 providing advice and solutions in the areas of risk, strategy and human capital. It is the parent company of a number of the world's leading risk experts and specialty consultants, including Marsh, the insurance broker and risk advisor; Guy Carpenter, the risk and reinsurance specialist; Mercer, the provider of HR and related financial advice and services; Oliver Wyman, the management consultancy; and Kroll, the risk consulting firm. With approximately 52,000 employees worldwide and annual revenue exceeding $10 billion, MMC provides analysis, advice and transactional capabilities to clients in more than 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.