MMC REPORTS FIRST QUARTER 2009 RESULTS Strong Performance in Risk and Insurance Services NEW YORK, May 6, 2009 — Marsh & McLennan Companies, Inc. (MMC) today reported financial results for the first quarter ended March 31, 2009. “I am pleased with MMC’s overall results in the first quarter of 2009 despite a difficult economic environment,” said MMC President and CEO Brian Duperreault. “Results for Risk and Insurance Services were outstanding, with underlying revenue rising 1%, excluding fiduciary income, and significantly improved margins. Marsh continued to achieve a substantial increase in profitability through expense discipline. Significantly improved profitability at Guy Carpenter was a result of strong new business and continued focus on expenses. As a result, operating margin in the segment increased to 21.6% from 15.6% and adjusted operating margin increased to 25% from 17.6%. “In the Consulting segment, Mercer’s major consulting practices of retirement and health and benefits achieved revenue growth in the first quarter; however, operating income was negatively impacted by foreign currency translation. Oliver Wyman saw a substantial decline in business activity due to the ongoing economic downturn. “Overall, growth in profitability in Risk and Insurance Services offset the decline in Consulting,” Mr. Duperreault concluded.
In the quarter, consolidated revenue was $2.6 billion, a decline of 13 percent from the first quarter of 2008, or 4 percent on an underlying basis. Underlying revenue measures the change in revenue before the impact of acquisitions and dispositions, using consistent currency exchange rates. In the first quarter of 2009, net income attributable to MMC was $176 million, or $.33 per share. This compared with a net loss of $210 million, or $.40 per share, in the first quarter of 2008, which included a non-cash goodwill impairment charge of $425 million in the Risk Consulting and Technology segment. Earnings per share on an adjusted basis, which excludes noteworthy items as presented in the attached supplemental schedules, was $.40 in the first quarter of 2009, compared with $.45 in the same quarter last year. In the first quarter of 2009, MMC adopted FASB Staff Position EITF 03-6-1, which relates to the two-class method of calculating earnings per share. The application of this new accounting pronouncement reduced GAAP earnings per share in the first quarter of 2009 by $0.01 and reduced adjusted earnings per share in the first quarters of both 2009 and 2008 by $0.01, as presented on pages 12 and 13 of the supplemental schedules. Additionally, in response to IRS Regulation 409(A) involving deferred compensation, MMC modified the vesting conditions of deferred bonus awards for retirement eligible employees. This resulted in accelerated amortization in the quarter of $17 million, reducing both GAAP and adjusted earnings per share by $0.02. Risk and Insurance Services Risk and Insurance Services segment revenue in the first quarter of 2009 was $1.4 billion, a decline of 8 percent from the first quarter of 2008, or 1 percent on an underlying basis. Excluding fiduciary interest, underlying revenue in Risk and Insurance Services rose 1 percent. Operating income in the first quarter increased 27 percent to $297 million from $234 million last year, despite a dramatic decline in fiduciary interest income. Adjusted operating income rose 30 percent to $343 million from $264 million, reflecting substantially improved performance at both Marsh and Guy Carpenter.
Marsh’s revenue in the first quarter was $1.1 billion, a decrease of 10 percent from last year, or 1 percent on an underlying basis. International operations increased 4 percent: Latin America rose 15 percent; Asia Pacific was up 9 percent; and EMEA increased 2 percent. The United States and