MMC Reports Second Quarter 2006 Results

Marsh & McLennan Companies, Inc. (NYSE: MMC) todayreported financial results for the second quarter and six months endedJune 30, 2006. Consolidated revenues for the quarter were $3 billion,unchanged from the 2005 second quarter. Net income was $172 million,or $.31 per share, compared with $166 million, or $.31 per share, lastyear. Income from continuing operations was $173 million, or $.31 pershare, compared with $160 million, or $.30 per share, in the secondquarter of 2005. Stock option expense was $27 million, or $.03 pershare, in the second quarter of 2006. Stock option expense was notrecorded in the first half of 2005 due to MMC's adoption of SFAS No.123(R) entitled "Share-Based Payment" on July 1, 2005.

For the first six months of 2006, consolidated revenues of $6billion were essentially flat, compared with last year. Net income was$588 million, or $1.05 per share, compared with $300 million, or $.56per share, in 2005. Results from discontinued operations, net of tax,were $177 million, or $.32 per share, compared with $11 million, or$.02 per share, in 2005. Income from continuing operations was $411million, or $.73 per share, compared with $289 million, or $.54 pershare, last year. Stock option expense for the first six months of2006 was $67 million, or $.08 per share.

A number of noteworthy items affected second quarter and sixmonths results in 2006 and 2005. Second quarter 2006 noteworthy itemstotaled $46 million, or $.05 per share. These items includedrestructuring and related costs; legal and regulatory costs primarilyrelated to market service agreements; and other items indicated in theattached supplemental schedules. For the first six months of 2006,these noteworthy items totaled $109 million, or $.12 per share. In thesecond quarter of 2005 and first six months of the year, noteworthyitems reduced earnings per share from continuing operations by $.12and $.39, respectively.

Michael G. Cherkasky, president and chief executive officer ofMMC, said: "Results for the quarter were mixed. Marsh achievedsignificant improvement in both operating margin and new businessdevelopment, particularly in North America, which had improvedretention rates from last year. However, underlying revenues in Europedid not meet expectations, due primarily to lower client retentionlevels. Guy Carpenter, Kroll, and Mercer Specialty Consulting allreported excellent results, with double-digit growth in revenues andprofitability. Mercer Human Resource Consulting increased revenues,but profitability was disappointing. Putnam performed as expected. Weare encouraged about the positive trends in all of our businesses,except for profitability in Mercer HR, which we are addressing."

Risk and Insurance Services

Risk and insurance services revenues declined 5 percent in thesecond quarter to $1.3 billion, or 3 percent on an underlying basis.Half of this decline was due to the planned reduction in sales ofinvestments held through Risk Capital Holdings, which had secondquarter revenues of $28 million, compared with $54 million in theprior year period.

Operating income increased markedly throughout the first half ofthe year, primarily reflecting expense savings from previouslyannounced restructuring efforts. The operating margin for the firsthalf of 2006 improved to 14.4 percent from 7.4 percent last year.Adjusting for the impact of noteworthy items and 2006 stock optionexpense, segment operating margin was 18.5 percent in the first halfof 2006, compared with 15.7 percent in the same period of 2005. Pleasesee the attached supplemental schedules for a reconciliation of thesenon-GAAP financial measures to reported GAAP results.

Marsh revenues declined 6 percent in the second quarter to $1.1billion, or 4 percent on an underlying basis. Marsh's new businessgrew 8 percent globally, led by 18 percent growth in the UnitedStates. In Europe, new business development was essentially flat,compared with last year's strong second quarter. European underlyingrevenues declined, primarily in Continental Europe. Despite the sharpincrease in U.S. property insurance rates in coastal areas, overallproperty and casualty insurance rates continued to decline in thequarter.

Guy Carpenter revenues rose to $214 million in the second quarter,an increase of 12 percent. This reflected strong new business levelsin the quarter, continuing the performance of the first quarter. Thesubstantial increase in U.S. coastal property catastrophe premiumrates was offset by limited market capacity and higher risk retentionby clients.

Risk Consulting and Technology

Kroll revenues increased 14 percent to $275 million in the secondquarter, or 12 percent on an underlying basis. This strong performancewas led by the corporate advisory and restructuring business, whichincreased revenues due to client success fees on completedengagements. Technology services, Kroll's largest business unit,reported a 5 percent increase in underlying revenues. This unitincludes Kroll Ontrack's electronic discovery business, whichresponded successfully to the pricing pressures experienced in thefirst quarter. Kroll's operating income for the quarter increased 11percent over 2005.

Consulting

Consulting revenues increased 8 percent to $1 billion in thesecond quarter. Mercer Human Resource Consulting increased revenues 4percent to $751 million. Mercer HR's largest business, retirementconsulting, increased underlying revenues 2 percent in the quarter.Human capital grew revenues 15 percent and HR Services 5 percent.Health and benefits revenues declined 4 percent. Despite Mercer HR'srevenue growth, an increase in compensation expenses, includingincreased staff levels, contributed to a decline in segmentprofitability for the quarter.

Mercer Specialty Consulting revenues grew 17 percent to $297million in the second quarter, reflecting continued excellentperformance in all businesses. Mercer Oliver Wyman's financialservices and risk consulting increased underlying revenues 19 percent,Mercer Management Consulting's strategy and operations grew revenues11 percent, and economic consulting rose 14 percent. Based on thisstrong revenue growth, Mercer Specialty Consulting reported a markedincrease in profitability.

Investment Management

Putnam revenues declined 10 percent to $339 million in the secondquarter. Average assets under management were $185 billion, comparedwith $196 billion in the second quarter of 2005. Ending assets on June30, 2006 were $180 billion, comprising $119 billion in mutual fundassets and $61 billion in institutional assets. Net redemptions were$6 billion, which included $2.8 billion due to the ending of Putnam'salliance with its Australian partner.

Other Items

MMC's financial position remains strong. During the secondquarter, MMC made its second scheduled payment, in the amount of $255million, for restitution to policyholder clients. Despite this, totalnet debt, which is total debt less cash and cash equivalents, was $3.9billion at the end of the second quarter, essentially the same amountas at the end of the first quarter.

MMC's consolidated effective tax rate in the second quarter was35.3 percent, compared with 29.9 percent in the second quarter of2005. The rate in last year's second quarter reflected the favorableresolution of certain tax return audit issues.

Conference Call

A conference call to discuss second quarter 2006 results will beheld today at 10:00 a.m. Eastern Time. To participate in theteleconference, please dial 800 240 8621 or 303 205 0033(international). The access code for both numbers is 1634903. Theaudio webcast may be accessed at www.mmc.com. A replay of the webcastwill be available beginning approximately two hours after the event atthe same web address.

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

This press release contains "forward-looking statements," asdefined in the Private Securities Litigation Reform Act of 1995. Thesestatements, which express management's current views concerning futureevents or results, use words like "anticipate," "assume," "believe,""continue," "estimate," "expect," "intend," "plan," "project" andsimilar terms, and future or conditional tense verbs like "could,""should," "will" and "would." For example, we may use forward-lookingstatements when addressing topics such as: future actions by ourmanagement or regulators; the outcome of contingencies; changes in ourbusiness strategy; changes in our business practices and methods ofgenerating revenue; the development and performance of our servicesand products; market and industry conditions, including competitiveand pricing trends; changes in the composition or level of MMC'srevenues; our cost structure; the impact of acquisitions anddispositions; and MMC's cash flow and liquidity.

Forward-looking statements are subject to inherent risks anduncertainties. Factors that could cause actual results to differmaterially from those expressed or implied in our forward-lookingstatements include:

-- the economic and reputational impact of: litigation and regulatory proceedings brought by federal and state regulators and law enforcement authorities concerning our insurance and reinsurance brokerage and investment management operations (including the complaints relating to market service agreements and other matters filed by, respectively, the New York Attorney General's office in October 2004, the Connecticut Attorney General's office in January 2005 and the Florida Attorney General's office and Department of Financial Services in March 2006, and proceedings relating to market-timing matters at Putnam); and class actions, derivative actions and individual suits filed by policyholders and shareholders in connection with the foregoing;

-- in light of Marsh's elimination of contingent commission arrangements in late 2004, 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, particularly in our risk and insurance services segment, and our ability to retain key employees;

-- period-to-period 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 premiums 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 and utilization rates;

-- the actual and relative investment performance of Putnam's mutual funds and institutional and other advisory accounts, and the extent to which Putnam reverses its recent net redemption experience, increases assets under management and maintains management and administrative fees at historical levels;

-- our ability to implement our restructuring initiatives and otherwise reduce or control expenses and achieve operating efficiencies;

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

-- the impact of increasing focus by regulators, clients and others on potential conflicts of interest, particularly in connection with the provision of consulting and investment advisory services;

-- fluctuations in the value of Risk Capital Holdings' investments in individual companies and investment funds;

-- our ability to make strategic acquisitions 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 in the jurisdictions in which we operate.

The factors identified above are not exhaustive. MMC and itssubsidiaries operate in a dynamic business environment in which newrisks may emerge frequently. Accordingly, MMC cautions readers not toplace undue reliance on its forward-looking statements, which speakonly as of the dates on which they are made.

MMC undertakes no obligation to update or revise anyforward-looking statement to reflect events or circumstances arisingafter the date on which it is made. Further information concerning MMCand its businesses, including information about factors that couldmaterially affect our results of operations and financial condition,is contained in MMC's filings with the Securities and ExchangeCommission.

MMC and its operating companies use their websites to conveymeaningful information about their businesses, including theanticipated release of quarterly financial results and the posting ofupdates of assets under management at Putnam. Monthly updates of totalassets under management at Putnam will be posted to the MMC websitethe first business day following the end of each month. Putnam postsmutual fund and performance data to its website regularly. Assets formost Putnam retail mutual funds are posted approximately two weeksafter each month-end. Mutual fund net asset value (NAV) is posteddaily. Historical performance and Lipper rankings are also provided.Investors can link to MMC and its operating company websites throughwww.mmc.com.

Marsh & McLennan Companies, Inc.
Consolidated Statements of Income
(In millions, except per share figures)
(Unaudited)

Three Months Six Months
Ended Ended
June 30, June 30,
--------------- ---------------
2006 2005 2006 2005
------ ------ ------ ------
Revenue:
Service Revenue $2,952 $2,926 $5,921 $5,939
Investment Income (Loss) 28 51 84 108
------ ------ ------ ------
Total Revenue 2,980 2,977 6,005 6,047
------ ------ ------ ------

Expense:
Compensation and Benefits 1,802 1,760 3,551 3,617
Other Operating Expenses 841 924 1,719 1,876
------ ------ ------ ------
Total Expense 2,643 2,684 5,270 5,493
------ ------ ------ ------

Operating Income 337 293 735 554

Interest Income 13 11 29 20

Interest Expense (78) (73) (156) (142)
------ ------ ------ ------

Income Before Income Taxes and Minority
Interest Expense 272 231 608 432

Income Taxes 96 69 192 139

Minority Interest Expense, Net of Tax 3 2 5 4
------ ------ ------ ------

Income from Continuing Operations 173 160 411 289

Discontinued Operations, Net of Tax (1) 6 177 11
------ ------ ------ ------

Net Income $ 172 $ 166 $ 588 $ 300
====== ====== ====== ======

Basic Net Income Per Share - Continuing
Operations $ 0.32 $ 0.30 $ 0.75 $ 0.54
====== ====== ====== ======
Net Income $ 0.31 $ 0.31 $ 1.07 $ 0.56
====== ====== ====== ======

Diluted Net Income Per Share -
Continuing Operations $ 0.31 $ 0.30 $ 0.73 $ 0.54
====== ====== ====== ======
- Net Income$ 0.31 $ 0.31 $ 1.05 $ 0.56
====== ====== ====== ======

Average Number of Shares Outstanding
- Basic 549 535 548 533
====== ====== ====== ======
- Diluted 555 538 555 537
====== ====== ====== ======

Shares Outstanding at 6/30 550 534 550 534
====== ====== ====== ======

Marsh & McLennan Companies, Inc.
Supplemental Information - Revenue Analysis
Three Months Ended
(Millions) (Unaudited)



Three Months Components of Revenue Change
Ended ------------------------------
June 30, % Change Acquisitions/
GAAP Currency Dispositions Underlying
---------------
2006 2005 Revenue Impact Impact Revenue
------ ------ ------- ------------------------------
Risk and
Insurance
Services
Insurance
Services $1,106 $1,172 (6)% - (2)% (4)%
Reinsurance
Services 214 192 12% - - 12%
Risk Capital
Holdings 28 54 (47)% - (7)% (40)%
------ ------
Total Risk and
Insurance
Services 1,348 1,418 (5)% - (2)% (3)%
------ ------

Risk Consulting
& Technology 275 241 14% - 2% 12%
------ ------

Consulting
Human Resource
Consulting 751 718 4% - - 4%
Specialty
Consulting 297 254 17% - - 17%
------ ------
Total
Consulting 1,048 972 8% - - 8%
------ ------

Investment
Management 339 377 (10)% - - (10)%
------ ------

Total Operating
Segments 3,010 3,008 - - (1)% 1%

Corporate
Eliminations (30) (31)
------ ------

Total Revenue $2,980 $2,977 - - (1)% 1%
====== ======

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 $44 million and $36
million for the three months ended June 30, 2006 and 2005,
respectively.

Revenue includes investment income (loss) of $28 million and $50
million for Risk and Insurance Services and $0 and $1 million for
Investment Management for the three months ended June 30, 2006 and
2005, respectively.

Risk Capital Holdings owns MMC's investments in insurance and
financial services firms such as Ace Ltd., XL Capital Ltd. and Axis
Capital Holdings Ltd. as well as the Trident Funds.

Marsh & McLennan Companies, Inc.
Supplemental Information - Revenue Analysis
Six Months Ended
(Millions) (Unaudited)

Six Months Components of Revenue Change
Ended ------------------------------
June 30, % Change Acquisitions/
GAAP Currency Dispositions Underlying
---------------
2006 2005 Revenue Impact Impact Revenue
------ ------ ------- ------------------------------
Risk and
Insurance
Services
Insurance
Services $2,252 $2,404 (6)% (1)% (2)% (3)%
Reinsurance
Services 495 474 5% (1)% - 6%
Risk Capital
Holdings 74 117 (37)% - (8)% (29)%
------ ------
Total Risk and
Insurance
Services 2,821 2,995 (6)% (1)% (2)% (3)%
------ ------

Risk Consulting
& Technology 518 474 9% (1)% 1% 9%
------ ------

Consulting
Human Resource
Consulting 1,490 1,413 5% (1)% - 6%
Specialty
Consulting 559 483 16% (1)% - 17%
------ ------
Total
Consulting 2,049 1,896 8% (1)% - 9%
------ ------

Investment
Management 684 775 (12)% - - (12)%
------ ------

Total Operating
Segments 6,072 6,140 (1)% (1)% (1)% 1%

Corporate
Eliminations (67) (93)
------ ------

Total Revenue $6,005 $6,047 (1)% (1)% (1)% 1%
====== ======

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 $85 million and $71
million for the six months ended June 30, 2006 and 2005,
respectively.

Revenue includes investment income (loss) of $78 million and $106
million for Risk and Insurance Services and $1 million and $0 for
Consulting and $5 million and $2 million for Investment Management
for the six months ended June 30, 2006 and 2005, respectively.

Risk Capital Holdings owns MMC's investments in insurance and
financial services firms such as Ace Ltd., XL Capital Ltd. and Axis
Capital Holdings Ltd. as well as the Trident Funds.

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

Three Months Six Months
Ended Ended
June 30, June 30,
--------------- ---------------
2006 2005 2006 2005
------ ------ ------ ------

Revenue:
Risk and Insurance Services $1,348 $1,418 $2,821 $2,995
Risk Consulting & Technology 275 241 518 474
Consulting 1,048 972 2,049 1,896
Investment Management 339 377 684 775
------ ------ ------ ------
3,010 3,008 6,072 6,140
Eliminations (30) (31) (67) (93)
------ ------ ------ ------
$2,980 $2,977 $6,005 $6,047
------ ------ ------ ------
Operating Income (Loss) including
Minority Interest Expense:
Risk and Insurance Services $ 139 $ 86 $ 407 $ 223
Risk Consulting & Technology 40 36 61 73
Consulting 124 130 237 240
Investment Management 76 71 140 121
Corporate (42) (30) (110) (103)
------ ------ ------ ------
$ 337 $ 293 $ 735 $ 554
------ ------ ------ ------

Segment Operating Margins:
Risk and Insurance Services 10.3% 6.1% 14.4% 7.4%
Risk Consulting & Technology 14.5% 14.9% 11.8% 15.4%
Consulting 11.8% 13.4% 11.6% 12.7%
Investment Management 22.4% 18.8% 20.5% 15.6%

Consolidated Operating Margin 11.3% 9.8% 12.2% 9.2%
Pretax Margin 9.1% 7.8% 10.1% 7.1%
Effective Tax Rate 35.3% 29.9% 31.6% 32.2%

Potential Minority Interest Associated
with the Putnam
Equity Partnership Plan Net of
Dividend Equivalent
Expense Related to MMC Common
Stock Equivalents $ (3) $ - $ (5) $ -

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 second quarter and six-month
financial results, and of operating margins in Risk & Insurance
services, is affected by a number of noteworthy items and by stock
option expense.

Noteworthy Items. The schedules below identify noteworthy items for
the three- and six-month periods ended June 30, 2006 and 2005. These
items reflect certain direct and indirect costs of legal and
regulatory matters involving MMC, 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.

Marsh's elimination of market service agreements in late 2004 has
resulted in significant changes to MMC's business operations.
Accordingly, noteworthy items include: restructuring charges in Risk
& Insurance Services; restructuring charges in Corporate, relating in
2006 to future rent on non-cancelable leases in MMC's New York
headquarters building, and in 2005 to the consolidation of office
space in London; accelerated amortization of leasehold improvements,
relating primarily to vacating office space at MMC's headquarters
prior to the end of the lease term; and expense relating to employee
retention awards in 2005.

Noteworthy items also include certain settlement costs and legal
expenses attributable to the legal and regulatory matters described
above. In 2005, regulatory expenses in Risk & Insurance Services
include fees for professional services provided by other MMC
companies; the resulting inter-company balances are eliminated in
Corporate. Noteworthy items also include an insurance recoverable at
Putnam in 2006 relating to previously expensed legal fees, and costs
at Putnam in 2005 to address issues relating to the calculation of
certain amounts paid by the Putnam mutual funds in previous years.

Risk
Risk & Consulting
Insurance &
Services Technology Consulting
---------- ----------- ----------
Three Months Ended June 30,
2006
---------------------------

Restructuring Charges $26 $- $(1)
Accelerated
Amortization/Depreciation 16 - -
Settlement, Legal and
Regulatory 11 - -
Insurance Recoverable - - -
---------- ----------- ----------
Total Impact in 2006 $53 $- $(1)
---------- ----------- ----------

Three Months Ended June 30,
2005
---------------------------

Restructuring Charges $48 $- $-
Employee Retention Awards 23 - 10
Settlement, Legal and
Regulatory 10 - -
Estimated Mutual Fund
Reimbursement - - -
Other 7 - -
---------- ----------- ----------
Total Impact in 2005 $88 $- $10
---------- ----------- ----------

Six Months Ended June 30,
2006
-------------------------

Restructuring Charges $45 $- $(1)
Accelerated
Amortization/Depreciation 21 - -
Settlement, Legal and
Regulatory 21 - -
Insurance Recoverable - - -
---------- ----------- ----------
Total Impact in 2006 $87 $- $(1)
---------- ----------- ----------
Six Months Ended June 30,
2005
-------------------------

Restructuring Charges $144 $- $-
Employee Retention Awards 38 - 20
Settlement, Legal and
Regulatory 53 - -
Estimated Mutual Fund
Reimbursement - - -
Other 10 - -
---------- ----------- ----------
Total Impact in 2005 $245 $- $20
---------- ----------- ----------

Three Months Ended June 30, Investment Corporate &
2006 Management Eliminations Total
--------------------------- ---------- ----------- ----------


Restructuring Charges $ - $1 $26
Accelerated
Amortization/Depreciation - 3 19
Settlement, Legal and
Regulatory - - 11
Insurance Recoverable (10) - (10)
---------- ----------- ----------
Total Impact in 2006 $(10) $4 $46
---------- ----------- ----------
Three Months Ended June 30,
2005
---------------------------

Restructuring Charges $- $5 $53
Employee Retention Awards - - 33
Settlement, Legal and
Regulatory - (2) 8
Estimated Mutual Fund
Reimbursement 4 - 4
Other - - 7
---------- ----------- ----------
Total Impact in 2005 $4 $3 $105
---------- ----------- ----------

Six Months Ended June 30, Investment Corporate &
2006 Management Eliminations Total
------------------------- ---------- ----------- ----------

Restructuring Charges $- $27 $71
Accelerated
Amortization/Depreciation - 3 24
Settlement, Legal and
Regulatory 3 - 24
Insurance Recoverable (10) - (10)
Total Impact in 2006 $(7) $30 $109

Six Months Ended June 30,
2005
-------------------------

Restructuring Charges $- $54 $198
Employee Retention Awards - - 58
Settlement, Legal and
Regulatory - (19) 34
Estimated Mutual Fund -
Reimbursement 34 - 34
Other - (3) 7
---------- ----------- ----------
Total Impact in 2005 $34 $32 $331
---------- ----------- ----------

Stock-Option Expense. The year-over-year comparability of MMC's
second quarter and six-month financial results is also affected by
MMC's adoption, effective July 1, 2005, of SFAS 123 (R) ("Share Based
Payment"). Beginning in the third quarter of 2005, MMC has
recognized costs under SFAS 123 (R), primarily related to stock
options, which it did not recognize in prior periods. Stock option
expense for the three months ended June 30, 2006 was $27 million, as
follows: Risk & Insurance Services - $9, Risk Consulting &
Technology - $1, Consulting - $10, Investment Management - $2,
Corporate - $5. Stock option expense for the six months ended June
30, 2006 was $67 million, as follows: Risk & Insurance Services -
$27, Risk Consulting & Technology - $2, Consulting - $23, Investment
Management - $7, Corporate - $8.

Impact on Operating Margins in Risk & Insurance Services. In Risk &
Insurance Services, noteworthy items and stock option expense
together totaled $114 million in the first half of 2006, affecting
segment operating margin by 4.1 points. Noteworthy items totaled
$245 million in the first half of 2005, affecting segment operating
margin by 8.3 points. Adjusting for these impacts, segment operating
margin for the first half of 2006 was 18.5 percent, compared to 15.7
percent for the first half of 2005. This adjusted segment operating
margin is a non-GAAP financial measure within the meaning of
Regulation G promulgated by the Securities and Exchange Commission.
MMC believes that presenting this measure may help investors and
others understand aspects of Risk & Insurance Services operating
performance that may not be apparent from MMC's reported GAAP
results. However, this non-GAAP financial measure is not a
substitute for MMC's reported GAAP information, and may not be
comparable to similar information provided by industry peers.

Marsh & McLennan Companies, Inc.
Supplemental Information - Putnam Assets Under Management
(Billions) (Unaudited)


June March Dec. Sept. June
30, 31, 31, 30, 30,
2006 2006 2005 2005 2005
------ ----- ------ ------ ------
Mutual Funds:
Growth Equity $ 27 $ 31 $ 31 $ 32 $ 33
Value Equity 36 37 37 38 39
Blend Equity 26 27 26 26 26
Fixed Income 30 31 32 33 34
------ ----- ------ ------ ------
Total Mutual Fund Assets 119 126 126 129 132
------ ----- ------ ------ ------

Institutional:
Equity 32 34 34 33 33
Fixed Income 29 29 29 30 30
------ ----- ------ ------ ------
Total Institutional Assets 61 63 63 63 63
------ ----- ------ ------ ------
Total Ending Assets $ 180 $ 189 $ 189 $ 192 $ 195
====== ===== ====== ====== ======

Assets from Non-US Investors $ 31 $ 32 $ 32 $ 33 $ 34
====== ===== ====== ====== ======

Average Assets Under Management:
Quarter $ 185 $ 190 $ 188 $ 195 $ 196
====== ===== ====== ====== ======
Year-to-Date $ 188 $ 190 $ 196 $ 198 $ 200
====== ===== ====== ====== ======

Net Redemptions including
Dividends Reinvested:
Quarter * $ (6.0) $(6.6) $ (6.4) $ (8.5) $ (7.1)
====== ===== ====== ====== ======
Year-to-Date * $(12.6) $(6.6) $(31.7) $(25.3) $(16.8)
====== ===== ====== ====== ======

Impact of Market/Performance on
Ending
Assets Under Management $ (3.5) $ 7.0 $ 2.8 $ 5.6 $ 3.1
====== ===== ====== ====== ======




* Net Redemptions in the three month and year-to-date periods 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)
June 30, December 31,
2006 2005
-------- --------
ASSETS

Current assets:
Cash and cash equivalents $ 1,375 $ 2,020
Net receivables 2,921 2,730
Assets of discontinued operations 53 153
Other current assets 353 359
-------- -------

Total current assets 4,702 5,262

Goodwill and intangible assets 7,816 7,773

Fixed assets, net 1,122 1,178
Long-term investments 329 277
Prepaid pension 1,647 1,596
Other assets 1,821 1,806
------- --------
TOTAL ASSETS $ 17,437$ 17,892
======= ========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Short-term debt $ 699 $ 498
Accounts payable and accrued liabilities 1,704 1,733
Regulatory settlements-current portion 236 333
Accrued compensation and employee benefits 928 1,413
Liabilities of discontinued operations 170 89
Accrued income taxes 39 192
Dividends payable 94 93
------- ------

Total current liabilities 3,870 4,351

Fiduciary liabilities 4,228 3,795
Less - cash and investments held in a fiduciary
capacity (4,228) (3,795)
------- ------
- -
Long-term debt 4,533 5,044
Regulatory settlements 172 348
Pension, postretirement and postemployment benefits 1,228 1,180
Other liabilities 1,618 1,609

Total stockholders' equity 6,016 5,360
------ -----
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 17,437 $ 17,892
====== =====