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Marsh & McLennan Companies Reports Fourth Quarter 2012 Results

  Marsh & McLennan Companies Reports Fourth Quarter 2012 Results

   GAAP EPS Increases to $.47 for the Fourth Quarter and $2.13 for the Year

Adjusted EPS Grows 13% to $.52 for the Fourth Quarter and 21% to $2.15 for the
                                     Year

  Excellent Full-Year Results Reflect Growth Across All Operating Companies

Business Wire

NEW YORK -- February 12, 2013

Marsh & McLennan Companies, Inc. (NYSE: MMC), a global professional services
firm providing advice and solutions in risk, strategy and human capital, today
reported financial results for the fourth quarter and year ended December 31,
2012.

Dan Glaser, President and CEO, said: “We are pleased with Marsh & McLennan
Companies' performance. Adjusted operating income rose 10% in the fourth
quarter. For the third consecutive year, both Risk and Insurance Services and
Consulting achieved double-digit growth in adjusted operating income,
contributing to overall growth of 12%.

“Marsh's results in 2012 were excellent. Underlying revenue grew 5%. This
performance was driven by growth in new business and continued high client
revenue retention rates. Guy Carpenter's underlying revenue growth of 6%
marked its highest increase in several years. In Consulting, both Mercer and
Oliver Wyman contributed to the segment's growth in revenue and profitability
in 2012.

“We look forward to the next chapter in our journey to become one of the
world's elite enterprises. We will strive to provide outstanding, innovative
services to clients, make Marsh & McLennan Companies a great place to work for
our colleagues and deliver long-term profitable growth for shareholders,”
concluded Mr. Glaser.

Consolidated Results

Consolidated revenue in the fourth quarter of 2012 was $3 billion, an increase
of 3% on both a reported and underlying basis compared with the fourth quarter
of 2011. Underlying revenue measures the change in revenue using consistent
currency exchange rates, excluding the impact of certain items such as
acquisitions, dispositions and transfers among businesses. Operating income
rose 4% to $406 million, compared with $391 million in the prior year period.
Adjusted operating income, which excludes noteworthy items as presented in the
attached supplemental schedules, rose 10% in the fourth quarter to $450
million.

Income from continuing operations was $265 million, or $.47 per share, in the
fourth quarter. This compares with $244 million, or $.44 per share, in the
fourth quarter of 2011. Net income was $259 million, compared with $256
million in the fourth quarter of 2011. Adjusted earnings per share in the
quarter was $.52, an increase of 13% from $.46 in the fourth quarter of 2011.

For the full year 2012, revenue increased 3% to $11.9 billion, or 4% on an
underlying basis. Operating income rose 12% to $1.8 billion, compared with
$1.6 billion in the prior year. Adjusted operating income also grew 12%, to
$1.9 billion. Income from continuing operations was $1.2 billion, or $2.13 per
share, compared with $982 million, or $1.73 per share, in 2011. Adjusted
earnings per share for 2012 increased 21% to $2.15, or 16% excluding the
impact of $72 million of expense from the early extinguishment of debt in
2011.

Risk and Insurance Services

Risk and Insurance Services revenue increased 3% to $1.6 billion in the fourth
quarter of 2012. Operating income increased 6% to $322 million, compared with
$304 million. Adjusted operating income in the quarter increased 8% to $312
million from $290 million. For the year, Risk and Insurance Services revenue
was $6.6 billion, an increase of 4% from the prior year, or 5% on an
underlying basis. Adjusted operating income rose 12% to $1.3 billion from $1.2
billion.

Marsh's revenue in the fourth quarter of 2012 was $1.4 billion, an increase of
4%, or 3% on an underlying basis. International operations had underlying
revenue growth of 5% in the fourth quarter, reflecting growth of 13% in Latin
America and 3% in both EMEA and Asia Pacific. In the United States/Canada
division, underlying revenue was flat. For the year, Marsh's revenue was $5.5
billion, an increase of 5% on both a reported and underlying basis. Guy
Carpenter's fourth quarter revenue was $198 million, an increase of 3% on both
a reported and underlying basis from the fourth quarter of 2011. For the year,
Guy Carpenter's revenue was $1.1 billion, an increase of 4%, or 6% on an
underlying basis.

Consulting

Consulting segment revenue was $1.4 billion in the fourth quarter, an increase
of 3% on both a reported and underlying basis from the fourth quarter of 2011.
Operating income was $128 million in the fourth quarter, compared with $147
million in the prior year, and adjusted operating income was $179 million, an
increase of 8% from $166 million. For the year, segment revenue increased 2%
from the prior year period to $5.4 billion, or 4% on an underlying basis.
Adjusted operating income rose 14% to $707 million, compared with $619 million
in 2011.

Mercer's revenue increased 7% to $1 billion in the fourth quarter of 2012, an
increase of 6% on an underlying basis. Investments, with revenue of $133
million, had underlying revenue growth of 10%; Health & Benefits, with revenue
of $247 million, rose 9%; Outsourcing, with revenue of $187 million, increased
8%; Retirement, with revenue of $269 million, was up 3%; and Talent, Rewards &
Communications, with revenue of $168 million, was unchanged from the fourth
quarter of 2011. For the year, Mercer's revenue was $3.9 billion, an increase
of 4% on both a reported and underlying basis. Oliver Wyman's revenue was $378
million in the fourth quarter of 2012, or a decrease of 3% on an underlying
basis. For the year, revenue was $1.5 billion, or an increase of 3% on an
underlying basis.

Other Items

The Company had investment income of $4 million in the fourth quarter of 2012,
compared with an investment loss of $4 million in the fourth quarter of 2011.
At the end of 2012, cash and cash equivalents was $2.3 billion, compared with
$2.1 billion at the end of 2011. Net debt, which is total debt less cash and
cash equivalents, was $617 million, compared with $815 million at the end of
2011. In the fourth quarter, the Company repurchased 1.4 million shares of its
common stock for $50 million.

Conference Call

A conference call to discuss fourth quarter 2012 results will be held today at
8:30 a.m. Eastern time. To participate in the teleconference, please dial +1
888 296 4206. Callers from outside the United States should dial +1 719 325
4827. The access code for both numbers is 8107749. 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.

About Marsh & McLennan Companies

Marsh & McLennan Companies (NYSE: MMC) is a global team of professional
services companies offering clients advice and solutions in the areas of risk,
strategy, and human capital. Marsh is a global leader in insurance broking
andrisk management; Guy Carpenter is a global leader in providing risk and
reinsurance intermediary services; Mercer is a global leader in talent,
health, retirement, and investment consulting; and Oliver Wyman is a global
leader in management consulting. Marsh & McLennan Companies' over 53,000
colleagues worldwide provide analysis, advice and transactional capabilities
to clients in more than 100 countries. The Company prides itself on being a
responsible corporate citizen and making a positive impact in the communities
in which it operates. Visit www.mmc.com for more information.

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,” “future,” “intend,” “plan,” “project” and similar terms, and future
or conditional tense verbs like “could,” “may,” “might,” “should,” “will” and
“would.” For example, we may use forward-looking statements when addressing
topics such as: the outcome of contingencies; the expected impact of
acquisitions and dispositions; pension obligations; market and industry
conditions; the impact of foreign currency exchange rates; our effective tax
rates; the impact of competition; changes in our business strategies and
methods of generating revenue; the development and performance of our services
and products; changes in the composition or level of our revenues; our cost
structure, dividend policy, cash flow and liquidity; future actions by
regulators; and the impact of changes in accounting rules.

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, among other
things:

  *our exposure to potential liabilities arising from errors and omissions
    claims against us, particularly in our Marsh and Mercer businesses in the
    U.S. and the U.K.;
  *our ability to make strategic acquisitions and dispositions and to
    integrate, and realize expected synergies, savings or strategic benefits
    from the businesses we acquire;
  *changes in the funded status of our global defined benefit pension plans
    and the impact of any increased pension funding resulting from those
    changes;
  *the impact of any regional, national or global political, economic,
    regulatory or market conditions on our results of operations and financial
    condition, including the European debt crisis and market perceptions
    concerning the stability of the Euro;
  *the impact of changes in interest rates and deterioration of counterparty
    credit quality on our results related to our cash balances and investment
    portfolios, including corporate and fiduciary funds;
  *the impact on our net income caused by fluctuations in foreign currency
    exchange rates;
  *the impact on our net income or cash flows and our effective tax rate in a
    particular period caused by settled tax audits and expired statutes of
    limitation;
  *the extent to which we retain existing clients and attract new business,
    and our ability to incentivize and retain key employees;
  *our exposure to potential criminal sanctions or civil remedies if we fail
    to comply with foreign and U.S. laws and regulations that are applicable
    to our international operations, including trade sanctions laws such as
    the Iran Threat Reduction and Syria Human Rights Act of 2012,
    anti-corruption laws such as the U.S. Foreign Corrupt Practices Act and
    the UK Bribery Act 2010, local laws prohibiting corrupt payments to
    government officials, as well as import and export restrictions;
  *the impact of competition, including with respect to our geographic reach,
    the sophistication and quality of our services, our pricing relative to
    competitors, our customers' option to self-insure or utilize internal
    resources instead of consultants, and our corporate tax rates relative to
    our competitors;
  *the potential impact of rating agency actions on our cost of financing and
    ability to borrow, as well as on our operating costs and competitive
    position;
  *our ability to successfully recover should we experience a disaster or
    other business continuity problem;
  *our ability to maintain adequate physical, technical and administrative
    safeguards to protect the security of our data;
  *changes in applicable tax or accounting requirements; and
  *potential income statement effects from the application of FASB's ASC
    Topic No. 740 (“Income Taxes”) regarding accounting treatment of uncertain
    tax benefits and valuation allowances, including the effect of any
    subsequent adjustments to the estimates we use in applying this accounting
    standard.

The factors identified above are not exhaustive. Marsh & McLennan Companies
and its subsidiaries operate in a dynamic business environment in which new
risks may emerge frequently. Accordingly, we caution readers not to place
undue reliance on the above forward-looking statements, which speak only as of
the dates on which they are made. The Company 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 Marsh & McLennan Companies and its businesses, including
information about factors that could materially affect our results of
operations and financial condition, is contained in the Company's filings with
the Securities and Exchange Commission, including the “Risk Factors” section
of our most recently filed Annual Report on Form 10-K.

                                               
Marsh & McLennan Companies, Inc.
Consolidated Statements of Income
(In millions, except per share figures)
(Unaudited)
                                                      
                      Three Months Ended              Twelve Months Ended
                      December 31,                    December 31,
                      2012         2011            2012          2011
Revenue               $ 3,002        $ 2,908        $ 11,924        $ 11,526 
Expense:
Compensation          1,802           1,767           7,134            6,969
and Benefits
Other Operating       794            750            2,961           2,919    
Expenses
Operating             2,596          2,517          10,095          9,888    
Expenses
Operating             406             391             1,829            1,638
Income
Interest Income       6               7               24               28
Interest              (46     )       (50     )       (181     )       (199     )
Expense
Cost of Early
Extinguishment        —               —               —                (72      )
of Debt
Investment            4              (4      )       24              9        
Income (Loss)
Income Before         370             344             1,696            1,404
Income Taxes
Income Tax            105            100            492             422      
Expense
Income from
Continuing            265             244             1,204            982
Operations
Discontinued
Operations, Net       (2      )       16             (3       )       33       
of Tax
Net Income
Before                263             260             1,201            1,015
Non-Controlling
Interests
Less: Net
Income
Attributable to       4              4              25              22       
Non-Controlling
Interest
Net Income
Attributable to       $ 259          $ 256          $ 1,176         $ 993    
the Company
Basic Net
Income Per
Share
- Continuing          $ 0.48         $ 0.44         $ 2.16          $ 1.76   
Operations
- Net Income
Attributable to       $ 0.48         $ 0.47         $ 2.16          $ 1.82   
the Company
Diluted Net
Income Per
Share
- Continuing          $ 0.47         $ 0.44         $ 2.13          $ 1.73   
Operations
- Net Income
Attributable to       $ 0.47         $ 0.46         $ 2.13          $ 1.79   
the Company
Average Number
of Shares
Outstanding
- Basic               545            538            544             542      
- Diluted             554            548            552             551      
Shares
Outstanding at        545            539            545             539      
12/31
                                                                                

                                                       
Marsh & McLennan Companies, Inc.
Supplemental Information - Revenue Analysis
Three Months Ended
(Millions) (Unaudited)
                                                                                                          
                                                                 Components of Revenue Change*            
                   Three Months Ended              %                            Acquisitions/
                   December 31,                    Change        Currency    Dispositions     Underlying
                                                   GAAP          Impact         Impact              Revenue
                   2012         2011            Revenue
Risk and
Insurance
Services
Marsh              $ 1,420         $ 1,368         4   %         (1   )%        2      %            3     %
Guy                198            193            3   %         —              (1     )%           3     %
Carpenter
Subtotal           1,618           1,561           4   %         (1   )%        2      %            3     %
Fiduciary
Interest           8              11      
Income
Total Risk
and                1,626          1,572          3   %         (1   )%        2      %            2     %
Insurance
Services
Consulting
Mercer             1,004           940             7   %         —              1      %            6     %
Oliver Wyman       378            406            (7  )%        (1   )%        (3     )%           (3    )%
Group
Total              1,382          1,346          3   %         —              —                   3     %
Consulting
Corporate /        (6      )       (10     )
Eliminations
Total              $ 3,002        $ 2,908        3   %         —              1      %            3     %
Revenue
                                                                                                          

Revenue Details

The following table provides more detailed revenue information for certain of
the components presented above:

                                                         
                                                                   Components of Revenue Change*            
                     Three Months Ended              %                            Acquisitions/
                     December 31,                    Change        Currency    Dispositions     Underlying
                                                     GAAP          Impact         Impact              Revenue
                     2012         2011            Revenue
Marsh:
EMEA                 $ 452           $ 433           5    %        (1   )%        3      %            3     %
Asia Pacific         168             160             4    %        1    %         —                   3     %
Latin America        111            106            5    %        (8   )%        —                   13    %
Total                731             699             5    %        (2   )%        2      %            5     %
International
U.S. / Canada        689            669            3    %        —              2      %            —
Total Marsh          $ 1,420        $ 1,368        4    %        (1   )%        2      %            3     %
Mercer:
Retirement           $ 269           $ 258           4    %        (1   )%        2      %            3     %
Health and           247             223             11   %        —              2      %            9     %
Benefits
Talent,
Rewards &            168             159             5    %        (1   )%        5      %            —
Communications
Outsourcing          187             183             2    %        1    %         (7     )%           8     %
Investments          133            117            14   %        1    %         3      %            10    %
Total Mercer         $ 1,004        $ 940          7    %        —              1      %            6     %
                                                                                                            

Notes

Underlying revenue measures the change in revenue using consistent currency
exchange rates, excluding the impact of certain items such as: acquisitions,
dispositions and transfers among businesses.

* Components of revenue change may not add due to rounding.


                                                           
Marsh & McLennan Companies, Inc.
Supplemental Information - Revenue Analysis
Twelve Months Ended
(Millions) (Unaudited)
                                                                  
                                                                  Components of Revenue Change*
                   Twelve Months Ended               %                           Acquisitions/
                                                  Change       Currency    Dispositions     Underlying
                   December 31,                      GAAP         Impact         Impact              Revenue
                   2012          2011             Revenue
Risk and
Insurance
Services
Marsh              $ 5,463          $ 5,213          5   %        (2   )%        2      %            5     %
Guy                1,079           1,041           4   %        (1   )%        (1     )%           6     %
Carpenter
Subtotal           6,542            6,254            5   %        (2   )%        2      %            5     %
Fiduciary
Interest           39              47       
Income
Total Risk
and                6,581           6,301           4   %        (2   )%        2      %            5     %
Insurance
Services
                                                                                                     
Consulting
Mercer             3,916            3,782            4   %        (2   )%        1      %            4     %
Oliver Wyman       1,466           1,483           (1  )%       (2   )%        (2     )%           3     %
Group
Total              5,382           5,265           2   %        (2   )%        —                   4     %
Consulting
                                                                                                     
Corporate /        (39      )       (40      )
Eliminations
                                                                                                     
Total              $ 11,924        $ 11,526        3   %        (2   )%        1      %            4     %
Revenue
                                                                                                           

Revenue Details

The following table provides more detailed revenue information for certain of
the components presented above:

                                            
                                                                  Components of Revenue Change*
                     Twelve Months Ended             %                           Acquisitions/
                     December 31,                 Change     Currency    Dispositions     Underlying
                                                     GAAP         Impact         Impact              Revenue
                     2012         2011            Revenue
Marsh:
EMEA                 $ 1,860         $ 1,796         4   %        (5   )%        3      %            5     %
Asia Pacific         656             612             7   %        (1   )%        —                   7     %
Latin America        353            334            6   %        (7   )%        —                   13    %
Total                2,869           2,742           5   %        (4   )%        2      %            6     %
International
U.S. / Canada        2,594          2,471          5   %        —              2      %            3     %
Total Marsh          $ 5,463        $ 5,213        5   %        (2   )%        2      %            5     %
                                                                                                     
Mercer:
Retirement           $ 1,066         $ 1,071         —            (2   )%        1      %            1     %
Health and           1,011           940             8   %        (2   )%        2      %            7     %
Benefits
Talent,
Rewards &            604             576             5   %        (2   )%        5      %            1     %
Communications
Outsourcing          721             733             (2  )%       —              (5     )%           4     %
Investments          514            462            11  %        (1   )%        4      %            8     %
Total Mercer         $ 3,916        $ 3,782        4   %        (2   )%        1      %            4     %
                                                                                                           

Notes

Underlying revenue measures the change in revenue using consistent currency
exchange rates, excluding the impact of certain items such as: acquisitions,
dispositions and transfers among businesses.

* Components of revenue change may not add due to rounding.



Marsh & McLennan Companies, Inc.
Non-GAAP Measures
Three Months Ended December 31
(Millions) (Unaudited)

The Company presents below certain additional financial measures that are
"non-GAAP measures," within the meaning of Regulation G under the Securities
Exchange Act of 1934. These measures are: adjusted operating income (loss);
adjusted operating margin; and adjusted income, net of tax.

The Company presents these non-GAAP measures to provide investors with
additional information to analyze the Company's performance from period to
period. Management also uses these measures to assess performance for
incentive compensation purposes and to allocate resources in managing the
Company's businesses. However, investors should not consider these non-GAAP
measures in isolation from, or as a substitute for, the financial information
that the Company reports in accordance with GAAP. The Company's non-GAAP
measures reflect subjective determinations by management, and may differ from
similarly titled non-GAAP measures presented by other companies.

Adjusted Operating Income (Loss) and Adjusted Operating Margin

Adjusted operating income (loss) is calculated by excluding the impact of
certain noteworthy items from the Company's GAAP operating income or (loss).
The following tables identify these noteworthy items and reconcile adjusted
operating income (loss) to GAAP operating income or (loss), on a consolidated
and segment basis, for the three months ended December 31, 2012 and 2011. The
following tables also present adjusted operating margin, which is calculated
by dividing adjusted operating income by consolidated or segment GAAP revenue.

                                                           
                    Risk &                           Corporate/
                    Insurance       Consulting       Eliminations       Total
                    Services
Three Months
Ended
December 31,
2012
Operating           $  322         $  128          $   (44   )        $ 406 
income (loss)
Add (deduct)
impact of
noteworthy
items:
Restructuring       2               51               4                  57
charges (a)
Adjustments
to
acquisition         (12     )       —                —                  (12   )
related
accounts (b)
Other               —              —               (1        )        (1    )
Operating
income              (10     )       51              3                 44    
adjustments
Adjusted
operating           $  312         $  179          $   (41   )        $ 450 
income (loss)
Operating           19.8    %       9.3     %        N/A                13.5  %
margin
Adjusted
operating           19.2    %       13.0    %        N/A                15.0  %
margin
                                                                        
Three Months
Ended
December 31,
2011
Operating           $  304         $  147          $   (60   )        $ 391 
income (loss)
Add (deduct)
impact of
noteworthy
items:
Restructuring       —               19               16                 35
charges (a)
Adjustments
to
acquisition         2               —                —                  2
related
accounts (b)
Settlement,
legal and           (16     )       —                —                  (16   )
regulatory
(c)
Other               —              —               (1        )        (1    )
Operating
income              (14     )       19              15                20    
adjustments
Adjusted
operating           $  290         $  166          $   (45   )        $ 411 
income (loss)
Operating           19.3    %       10.9    %        N/A                13.4  %
margin
Adjusted
operating           18.4    %       12.3    %        N/A                14.1  %
margin
                                                                              

(a) Includes severance from restructuring activities and related charges,
costs for future rent and other real estate costs, and fees and consulting
costs related to recent acquisitions and cost reduction activities, including
charges of $16 million in the fourth quarter of 2012 for exit activities
related to Mercer's Canadian outsourcing business. The fourth quarter of 2012
and 2011 includes charges of $2 million and $29 million, respectively, for
cost reduction activities related to recent acquisitions.

(b) Reflects the change resulting from the re-measurement to fair value each
quarter of contingent consideration related to acquisitions.

(c) Reflects settlements of and legal fees arising out of the regulatory
actions relating to market service agreements and other issues including
indemnification of former employees and legal fees. The three months ended
December 31, 2011 includes $17 million of insurance recoveries.



Marsh & McLennan Companies, Inc.
Non-GAAP Measures
Twelve Months Ended December 31
(Millions) (Unaudited)

The Company presents below certain additional financial measures that are
“non-GAAP measures,” within the meaning of Regulation G under the Securities
Exchange Act of 1934. These measures are: adjusted operating income (loss);
adjusted operating margin; and adjusted income, net of tax.

The Company presents these non-GAAP measures to provide investors with
additional information to analyze the Company's performance from period to
period. Management also uses these measures to assess performance for
incentive compensation purposes and to allocate resources in managing the
Company's businesses. However, investors should not consider these non-GAAP
measures in isolation from, or as a substitute for, the financial information
that the Company reports in accordance with GAAP. The Company's non-GAAP
measures reflect subjective determinations by management, and may differ from
similarly titled non-GAAP measures presented by other companies.

Adjusted Operating Income (Loss) and Adjusted Operating Margin

Adjusted operating income (loss) is calculated by excluding the impact of
certain noteworthy items from the Company's GAAP operating income or (loss).
The following tables identify these noteworthy items and reconcile adjusted
operating income (loss) to GAAP operating income or (loss), on a consolidated
and segment basis, for the twelve months ended December 31, 2012 and 2011. The
following tables also present adjusted operating margin, which is calculated
by dividing adjusted operating income by consolidated or segment GAAP revenue.

                                                           
                    Risk &                           Corporate/
                    Insurance       Consulting       Eliminations       Total
                    Services
Twelve Months
Ended
December 31,
2012
Operating           $ 1,374        $  652          $   (197  )        $ 1,829 
income (loss)
Add (deduct)
impact of
noteworthy
items:
Restructuring       8               58               12                 78
charges (a)
Adjustments
to
acquisition         (32     )       (3      )        —                  (35     )
related
accounts (b)
Other               (2      )       —               (6        )        (8      )
Operating
income              (26     )       55              6                 35      
adjustments
                                                                        
Adjusted
operating           $ 1,348        $  707          $   (191  )        $ 1,864 
income (loss)
Operating           20.9    %       12.1    %        N/A                15.3    %
margin
Adjusted
operating           20.5    %       13.2    %        N/A                15.6    %
margin
                                                                        
Twelve Months
Ended
December 31,
2011
Operating           $ 1,229        $  588          $   (179  )        $ 1,638 
income (loss)
Add (deduct)
impact of
noteworthy
items:
Restructuring       1               31               19                 51
charges (a)
Adjustments
to
acquisition         (1      )       —                —                  (1      )
related
accounts (b)
Settlement,
legal and           (21     )       —                —                  (21     )
regulatory
(c)
Other               —              —               (7        )        (7      )
Operating
income              (21     )       31              12                22      
adjustments
                                                                        
Adjusted
operating           $ 1,208        $  619          $   (167  )        $ 1,660 
income (loss)
Operating           19.5    %       11.2    %        N/A                14.2    %
margin
Adjusted
operating           19.2    %       11.8    %        N/A                14.4    %
margin
                                                                                

(a) Includes severance from restructuring activities and related charges,
costs for future rent and other real estate costs, and fees and consulting
costs related to recent acquisitions and cost reduction activities, including
charges of $16 million in 2012 for exit activities related to Mercer's
Canadian outsourcing business. The twelve months of 2012 and 2011 includes
charges of $9 million and $5 million, respectively, for cost reduction
activities related to recent acquisitions.

(b) Reflects the change resulting from the re-measurement to fair value each
quarter of contingent consideration related to acquisitions, net of an $8
million impairment charge of an identifiable intangible asset in 2012.

(c) Reflects settlements of and legal fees arising out of the regulatory
actions relating to market service agreements and other issues including
indemnification of former employees and legal fees. The twelve months ended
December 31, 2011 includes $31 million of insurance recoveries.



Marsh & McLennan Companies, Inc.
Non-GAAP Measures
Three and Twelve Months Ended December 31
(Millions) (Unaudited)

Adjusted income, net of tax

Adjusted income, net of tax is calculated as: the Company's GAAP income from
continuing operations, adjusted to reflect the after-tax impact of the
operating income adjustments set forth in the preceding table. The related
adjusted diluted earnings per share as calculated under the two-class method,
reflects reductions for the portion of each item attributable to
non-controlling interests and participating securities so that the calculation
is based only on the amounts attributable to common shareholders.


Reconciliation of the Impact of Non-GAAP Measures on diluted earnings per
share - Three and Twelve Months Ended December 31, 2012 and 2011:


                                                Amount       Diluted EPS
Three Months Ended December 31,   
2012
Income from continuing                             $ 265
operations
Less: Non-controlling interest,                    4
net of tax
Amount attributable to                             1       
participating securities
Subtotal                                           $ 260           $    0.47
Add operating income                  $ 44
adjustments
Deduct impact of income taxes         (17  )
                                                   27             0.05
Adjusted income, net of tax                        $ 287          $    0.52
                                                                   
                                                   Amount          Diluted EPS
Twelve Months Ended December
31, 2012
Income from continuing                             $ 1,204
operations
Less: Non-controlling interest,                    25
net of tax
Amount attributable to                             2       
participating securities
Subtotal                                           $ 1,177         $    2.13
Add operating income                  $ 35
adjustments
Deduct impact of income taxes         (24  )
                                                   11             0.02
Adjusted income, net of tax                        $ 1,188        $    2.15
                                                                        

                                                            
                                                     Amount        Diluted EPS
Three Months Ended December 31,     
2011
Income from continuing operations                    $ 244
Less: Non-controlling interest,                      4
net of tax
Amount attributable to                               1     
participating securities
Subtotal                                             $ 239         $    0.44
Add operating income adjustments        $ 20
Deduct impact of income taxes           (4   )
                                                     16               0.02
Adjusted income, net of tax                          $ 255        $    0.46
                                                                   
                                                     Amount        Diluted EPS
Twelve Months Ended December 31,
2011
Income from continuing operations                    $ 982
Less: Non-controlling interest,                      22
net of tax
Amount attributable to                               6     
participating securities
Subtotal                                             $ 954         $    1.73
Add operating income adjustments        $ 22
Deduct impact of income taxes           (3   )
                                                     19           0.04
Adjusted income, net of tax                          $ 973        $    1.77


The results in the table above are not adjusted for debt extinguishment costs
of $72 million, which reduced earnings for the twelve months ended December
31, 2011.

                                                    
Marsh & McLennan Companies, Inc.
Supplemental Information
(Millions) (Unaudited)
                                                           
                                  Three Months Ended       Twelve Months Ended
                                  December 31,             December 31,
                                  2012      2011        2012       2011
Depreciation and                  $  95        $ 82        $  349        $ 332
amortization expense
Stock option expense              $  3         $ 5         $  26         $ 21
Capital expenditures              $  71        $ 75        $  320        $ 280
                                                                           

                                                           
Marsh & McLennan Companies, Inc.
Consolidated Balance Sheets
(Millions) (Unaudited)
                                                                  
                                               December 31,       December 31,
                                               2012               2011
ASSETS
                                                                  
Current assets:
Cash and cash equivalents                      $  2,301           $  2,113
Net receivables                                3,058              2,906
Other current assets                           664               629        
Total current assets                           6,023              5,648
                                                                  
Goodwill and intangible assets                 7,261              6,963
Fixed assets, net                              809                804
Pension related assets                         260                39
Deferred tax assets                            1,182              1,205
Other assets                                   772               795        
TOTAL ASSETS                                   $  16,307         $  15,454  
                                                                  
LIABILITIES AND EQUITY
                                                                  
Current liabilities:
Short-term debt                                $  260             $  260
Accounts payable and accrued liabilities       1,721              2,016
Accrued compensation and employee              1,473              1,400
benefits
Accrued income taxes                           111               63         
Total current liabilities                      3,565              3,739
                                                                  
Fiduciary liabilities                          3,992              4,082
Less - cash and investments held in a          (3,992     )       (4,082     )
fiduciary capacity
                                               —                  —
Long-term debt                                 2,658              2,668
Pension, post-retirement and                   2,094              1,655
post-employment benefits
Liabilities for errors and omissions           460                468
Other liabilities                              920                984
                                                                  
Total equity                                   6,610             5,940      
                                                                  
TOTAL LIABILITIES AND EQUITY                   $  16,307         $  15,454  
                                                                             

Contact:

Marsh & McLennan Companies
Media:
Laura Cora, +1-212-345-2731
laura.cora@mmc.com
or
Investors:
Keith Walsh, +1-212-345-0057
keith.walsh@mmc.com
 
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