Exhibit 99.1
Merrill Lynch & Co., Inc.
Reconciliation of “Non-GAAP” Measures
Merrill Lynch adopted Statement of Financial Accounting Standards No. 123 (as revised in 2004) for stock-based employee compensation during the first quarter 2006. Additionally, as a result of a comprehensive review of the retirement provisions in its stock-based compensation plans, Merrill Lynch also modified the retirement eligibility requirements of existing stock awards in order to facilitate transition to more stringent retirement eligibility requirements for future stock awards. These modifications and the adoption of the new accounting standard required Merrill Lynch to accelerate the recognition of compensation expenses for affected stock awards, resulting in the “one-time compensation expenses.” These changes represent timing differences and are not economic in substance. Management believes that while the results excluding the one-time expenses are considered “non-GAAP” measures, they depict the operating performance of the company more clearly and enable more appropriate period-to-period comparisons.
Preliminary Unaudited Earnings Summary
                             
(dollars in millions, except per share amounts)
 
    For the Three Months Ended March 31, 2006
     
    Excluding the Impact of   First Quarter Impact of    
    One-time Compensation   One-time    
    Expenses   Compensation Expenses   GAAP Basis
 
Net Revenues
   $ 7,962     $ -     $ 7,962  
                   
Non-Interest Expenses
                        
   
Compensation and benefits
     3,991       1,759       5,750  
   
Non-compensation expenses
     1,619       -       1,619  
                   
   
Total Non-Interest Expenses
     5,610       1,759       7,369  
                   
Earnings Before Income Taxes
     2,352       (1,759 )     593  
Income Tax Expense
     700       (582 )     118  
                   
Net Earnings
   $ 1,652     $ (1,177 )   $ 475  
                   
Preferred Stock Dividends
   $ 43     $ -     $ 43  
                   
Net Earnings Applicable to Common Stockholders
   $ 1,609     $ (1,177 )   $ 432  
                   
Earnings Per Common Share
                        
 
Basic
   $ 1.83     $ (1.34 )   $ 0.49  
 
Diluted
   $ 1.65     $ (1.21 )   $ 0.44  
Average Shares Used in Computing Earnings Per Common Share
                        
   
Basic
     878.0       5.7       883.7  
   
Diluted
     975.4       5.7       981.1  
 

 

Financial Ratios
                   
(dollars in millions)   For the Three Months Ended March 31, 2006 
 
    Excluding the Impact    
    of One-time    
    Compensation Expenses   GAAP Basis
 
Compensation and benefits(a)
     $  3,991     $ 5,750  
Net Revenues(b)
       7,962       7,962  
Ratio of compensation and benefits to net revenues(a)/(b)
       50.1 %     72.2 %
 
Income Tax Expense(a)
     $  700     $ 118  
Earnings Before Income Taxes(b)
       2,352       593  
Effective Tax Rate(a)/(b)
       29.8 %     19.9 %
 
Earnings Before Income Taxes(a)
     $  2,352     $ 593  
Net Revenues(b)
       7,962       7,962  
Pre-tax Profit Margin(a)/(b)
       29.5 %     7.4 %
 
Average Common Equity
     $  33,800     $ 33,800  
Average impact of one-time compensation expenses
       (145 )     -  
               
Average Common Equity(a)
       33,655       33,800  
Annualized Net Earnings Applicable to Common Stockholders(b)
       6,436       1,728  
Annualized Return on Average Common Equity(b)/(a)
       19.1 %     5.1 %
 
Business Segment Data
                         
(dollars in millions)   For the Three Months Ended
 
    March 31,   April 1,    
    2006   2005   % Inc/ (Dec)
 
Global Markets & Investment Banking
                        
Total net revenues(a)
   $ 4,553     $ 3,317       37%  
Pre-tax earnings
     212       1,124       (81 )
Impact of one-time compensation expenses
     1,369       -       N/M  
                   
Pre-tax earnings excluding one-time compensation expenses(b)
     1,581       1,124       41  
Pre-tax profit margin
     4.7 %     33.9 %        
Pre-tax profit margin excluding one-time compensation expenses(b)/(a)
     34.7 %     33.9 %        
 
Global Private Client
                        
Total net revenues(a)
   $ 2,939     $ 2,603       13  
Pre-tax earnings
     365       510       (28 )
Impact of one-time compensation expenses
     281       -       N/M  
                   
Pre-tax earnings excluding one-time compensation expenses(b)
     646       510       27  
Pre-tax profit margin
     12.4 %     19.6 %        
Pre-tax profit margin excluding one-time compensation expenses(b)/(a)
     22.0 %     19.6 %        
 
Merrill Lynch Investment Managers
                        
Total net revenues(a)
   $ 570     $ 413       38  
Pre-tax earnings
     113       127       (11 )
Impact of one-time compensation expenses
     109       -       N/M  
                   
Pre-tax earnings excluding one-time compensation expenses(b)
     222       127       75  
Pre-tax profit margin
     19.8 %     30.8 %        
Pre-tax profit margin excluding one-time compensation expenses(b)/(a)
     38.9 %     30.8 %        
 
N/M = Not Meaningful