2MMC’s Vision Statement Our vision is to be the world’s leading globaladvice and solutions firm.Through our expertise and commitment to excellence, we are dedicated to managing risk, maximizing growth, and creating value for our clients and shareholders.
3MMC Revenue $11.6 Billion Risk and Insurance Services 55,000 employees Mercer HumanResource Consulting24%Risk Capital Holdings2%Mercer SpecialtyConsulting9%Guy Carpenter7%Risk andInsuranceServicesPutnam12%Kroll8%Marsh38%$11.6 Billion55,000 employees100 countriesLast 4 quarters through 3/31/06
4Growth Opportunities Global competitive forces Legislative, regulatory, societal changesIncreased complexity of riskDemographic changes
510-Year Compound Growth: 11% MMC Revenue Growth10-Year Compound Growth: 11%BillionsLast 4 quarters through 3/31/06is reclassified to exclude $470 million in revenues from sold operations
6MMC Today KROLL World’s leading risk and insurance services firm Risk management, consulting and transferDesign and administration of insurance programsManaging general agencyClaims managementKROLLWorld’s leading risk consulting companyLegal technologiesBackground screeningCredit screeningSubstance abuse testingCorporate investigationsCompetitive intelligenceForensic accountingRestructuring adviceSecurity consulting and trainingWorld’s leading risk and reinsurance specialistReinsurance placementRisk quantification and assessmentRun-off administrationGlobal leader for trusted HR and related financial advice, products, and servicesPension and retirement account adminInvestment consultingTalent managementHealth cost managementAsset managementGlobal provider of specialty consulting servicesStrategy and operations adviceFinancial services consultingBrand strategyOrganizational design adviceEconomic consultingExpert testimonyOne of the largest investment management companies in the U.S.Mutual fundsTax advantaged accountsCustomized institutional managementQuantitative investment strategiesPrivate equity investments
81984-2004 CAGR of P&C Insurance Premiums & GDP Source: Industry data, MMC estimates, and IMF
92005 P&C Insurance Industry Premiums Canada3%United States36%Asia Pacific18%JapanLatin America2%SpainUnited KingdomGermanyItalyFranceOther1%Europe40%$1.3 TrillionSource: Industry data and MMC estimates
10Risk & Insurance Services Risk Consulting & Technology RevenuesBillions10-Year Compound Growth: 13%Last 4 quarters through 3/31/06is reclassified to exclude $470 million in revenues from sold operations
11Marsh World’s leading risk & insurance services firm Maximize global capabilities and provide thought leadership in the commercial risk spaceEncourage collaboration to provide advice and solutions that address the complex needs of our clientsFacilitate regional optimization by reorganizing local office structures through zone management, risk specialties, and industry expertiseFocus on improved profitability and long-term vitality through streamlined account management systems, tools and practices
12Risk & Insurance Services 2005 Revenue Risk Capital Holdings3%Guy Carpenter15%U.S.37%Rest of World15%MarshEurope30%$5.6 Billion
16Guy Carpenter World’s leading risk & reinsurance specialist Deliver best-in-class bundled offerings of risk advisory services, program analytics, and placement capabilitiesInvest in reinsurance catastrophe analysis and risk transferFocus on specialized technical, market, and quantitative expertiseLeverage existing capabilities to maximize opportunities in alternative markets
17Kroll World’s leading risk consulting company Broaden global infrastructure capabilities and develop integrated solutions to address the needs of corporate clientsExpand capabilities to address the proliferation of electronic data and meet the demand for compliance-based document management solutionsExpand service offering to achieve broad spectrum, high threat environment capabilities including logistical support (medical, evacuation) and crisis response capabilitiesContinue to build technology-based businesses
20Mercer Human Resource Consulting Global leader in HR advice, products, and services Maximize global capabilities and address the complex needs of our clientsDevelop and enhance bundled solutions in retirement, health and benefits, HR outsourcing, and global investment productsEmphasize lines of business--retirement, healthcare, HR services, and human capital--through a global geographic footprintFill in capabilities to meet increasing client demand for HR BPOIncrease capabilities in all service segments to address the growing globalization of companies
21Worldwide Demographics Declining Ratio of Workers per Retiree U.S.U.K.FranceGermanySwedenItalyJapanSource: IMF, MMC
22Health Care Spending as a Percent of GDP U.S.GermanyFranceCanadaAustraliaItalyJapanU.K.Sources: Centers for Medicare & Medicaid Services, Office of the Actuary, National Health Statistics Group; Organization for Economic Cooperation and Development
24Mercer Specialty Consulting Mercer Oliver Wyman is a leader in financial services and risk management consulting.Mercer Management Consulting helps enterprises develop, build and operate strong businesses.NERA Economic Consulting advises on the economics of competition, regulation, and finance.Mercer Delta Organizational Consulting works on issues of leadership, organization, and change.
28Putnam Business Model Broad range of investment choices Marketing through intermediaries and to pension advisorsIndustry-leading client serviceIntegrated research and team-based portfolio managementCultural changes to build entrepreneurial environment
29Broad product mix $189 Billion 3/31/06 Institutional $63 Billion 33% of AUM200 clientsFixedIncome15%Fixed Income17%Equity18%Blend 14%Mutual Funds$126 Billion67% of AUM100 mutual funds11 million accountsValue19%Growth17%$189 Billion3/31/06
30Information Concerning Forward-Looking Statements This presentation contains “forward-looking statements,” as defined in the Private Securities Litigation Reform Act of These statements, which use words like “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” “project,” “should” and similar terms, express management’s current views concerning future events or results. For example, we may use forward-looking statements when addressing topics such as: 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; the impact of acquisitions and dispositions; 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 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; the extent to which we are able to replace the revenues we previously derived from contingent commissions, which we eliminated in late 2004; our ability to retain existing clients and attract new business, particularly in our risk and insurance services segment, and our ability to continue employment of key revenue producers and managers; period-to-period revenue fluctuations relating to the net effect of new and lost business production and the timing of policy inception dates; the impact on our commission revenues of changes in the availability of, and the premiums insurance carriers charge for, insurance products, including the degree and timing of the impact of 2005 hurricanes on reinsurance premium 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 expenses; 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; changes in the value of MMC’s 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, acquired businesses; 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.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.MMC and its operating companies use their websites to convey meaningful information about their businesses, including the anticipated release of quarterly financial results and the posting of updates of assets under management at Putnam. Monthly updates of total assets under management at Putnam will be posted to the MMC website the first business day following the end of each month. Putnam posts mutual fund and performance data to its website regularly. Assets for most Putnam retail mutual funds are posted approximately two weeks after each month-end. Mutual fund net asset value (NAV) is posted daily. Historical performance and Lipper rankings are also provided. Investors can link to MMC and its operating company websites throughRegulation G Disclosure: This presentation may include certain non-GAAP financial measures as defined under rules promulgated by the Securities and Exchange Commission. As required by SEC rules, reconciliations are provided of those measures to the most directly comparable GAAP measures.