FORM 8-K 1Q03 4/16/03 NARRATIVE

Exhibit 99.1


News
Merrill Lynch & Co., Inc.

World Headquarters
4 World Financial Center

New York, NY 10080


Release date: April 16, 2003

For information contact:
Media Relations: Investor Relations:
Timothy Cobb Tina Madon
(212) 449-9205 (866) 607-1234
timothy_cobb@ml.com investor_relations@ml.com


MERRILL LYNCH REPORTS FIRST QUARTER 2003 NET EARNINGS
OF $685 MILLION, OR $0.72 PER DILUTED SHARE

YEAR-ON-YEAR EARNINGS INCREASE OF 6% REFLECTS STRONG
DEBT MARKETS RESULTS, CONTINUED MOMENTUM FIRMWIDE

NEW YORK, April 16 - Merrill Lynch (NYSE: MER) today reported net
earnings of $685 million for the first quarter of 2003, 6% higher than the $647
million earned in the first quarter of 2002. First quarter 2003 earnings per
diluted share were $0.72, compared with $0.67 for the year-ago period. These
results demonstrate Merrill Lynch's continued progress in diversifying revenues
and improving efficiency.

The pre-tax profit margin for the first quarter of 2003 rose to 21.1%,
an increase of 1.2 percentage points over the 19.9% reported for the year-ago
quarter, despite a decrease in net revenues. First quarter 2003 net revenues
were $4.9 billion, 5% lower than the first quarter of 2002 but 15% higher than
the fourth quarter of 2002. The 2002 first quarter included aggregate pre-tax
gains of approximately $100 million related to sales of businesses. The
year-over-year margin improvement was driven by a $246 million, or 6%, decline
in non-interest expenses. First quarter 2003 annualized return on equity was
11.8%.



5

Exhibit 99.1


"These results demonstrate progress in broadening our revenue sources
despite a persistently difficult equity market environment," said Stan O'Neal,
chief executive officer. "Building on the operating leverage and margin
improvement established in 2002, we are placing considerable emphasis on
managing Merrill Lynch as an integrated, balanced portfolio of businesses. We
have increased the contribution from businesses where Merrill Lynch already has
comparative strength and for which the current environment is favorable, and we
are also making good progress in building our capabilities in key growth areas.
We believe that over time these actions will further increase the stability of
our earnings and returns, both in the near term and across market cycles. Our
employees deserve enormous credit for making operating discipline an integral
part of the Merrill Lynch culture."

BUSINESS SEGMENT REVIEW:

Global Markets and Investment Banking (GMI)
- -------------------------------------------
The strength of GMI's results underscores the benefits of diverse revenue
streams across product lines and regions. In an environment that remained
challenging for equities and investment banking, GMI's strong results were
driven by its debt markets franchise. Debt markets' strong trading and
distribution capabilities and product breadth took advantage of a favorable
market environment, generating record revenues and profits for the first quarter
of 2003. GMI also benefited from strong operating leverage, created through
effective expense management and focus on capacity, as well as a selective
approach to risk-taking.

o GMI's first quarter pre-tax earnings were $785 million, 22% higher than the
2002 first quarter and 41% higher than the fourth quarter. Net revenues
were $2.5 billion, a 3% increase from the year-ago period and 37% higher
than the fourth quarter. GMI's pre-tax margin was 31.9%, five percentage
points higher than the 2002 first quarter, as the revenue increase was
complemented by ongoing operating discipline that drove a 4% decline in
non-interest expenses. These pre-tax earnings and margin are the highest
GMI has achieved since the first quarter of 2001.

o The increase in GMI's net revenues from the 2002 fourth quarter
was principally driven by a near doubling of debt markets trading
revenues. The increase was balanced among the trading of interest rate
and credit products, with particular strength in derivatives,
as well as secured financing activities. European debt trading also
contributed strongly to the increase, as revenues and profits were up
substantially from the 2002 first quarter. Equity trading and commissions
revenues increased slightly from the fourth quarter, as stronger
equity-linked results more than offset reduced cash trading. Overall,
the equity markets business remains solidly profitable. Investment
banking revenues declined sequentially, as industry-wide completed
mergers and acquisitions and equity origination activity continued to
contract.


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Exhibit 99.1


Global Private Client (GPC)
- ---------------------------
The stability of GPC's results in the first quarter of 2003 underscores the
strength of its individual client relationships. Merrill Lynch Financial
Advisors deliver high-quality products, services and advice, all of which are
essential in helping clients manage their assets and liabilities amid the
ongoing uncertainty of the current market environment. GPC continues to build
upon its actions of the past three years to not only refine and grow the core
wealth management business, but also to add additional revenue sources and
improve productivity.

o GPC's first quarter pre-tax earnings were $269 million, essentially
unchanged from the 2002 first quarter, despite a 9% decline in net
revenues. GPC's 2002 first quarter results included a residual pre-tax gain
on the sale of its Canadian business. In the 2003 first quarter GPC's
pre-tax profit margin was 12.8%, one percentage point higher than the
year-ago quarter, as non-interest expenses were reduced by 10%. Revenues
from fee-based and recurring sources provided stability as transaction
activity eroded.

o GPC also continues to make progress in building scale in products and
services that are important to increasing revenue diversity, such as Beyond
Banking(R). Also, mortgage and small business loan originations and sales
of annuities increased year-over-year. Further, net flows of assets into
annuitized products were $5 billion during the first quarter, driven
principally by flows into professionally managed products from both new and
existing client assets.

Merrill Lynch Investment Managers (MLIM)
- ----------------------------------------
MLIM continues to leverage its strong relative investment performance and
product array across a variety of distribution channels, which is essential to
increasing and diversifying its sources of revenue. MLIM is focused on
increasing its penetration of the GPC distribution channel and expanding its
European institutional business. MLIM is also working to increase distribution
through third-party channels and further develop its U.S. institutional
capabilities.

o MLIM's year-over-year financial performance was adversely affected by lower
equity market levels. MLIM's net revenues were $337 million, 24% lower than
the 2002 first quarter, and pre-tax earnings were $47 million. MLIM's 2002
first quarter results included a pre-tax gain on the sale of its Canadian
asset management business. MLIM's pre-tax margin was 14.0%, as expense
improvements were outpaced by the revenue decline.

o MLIM continued to generate strong relative investment performance, beating
external benchmarks for 70% or more of its assets under management for the
1-, 3-, and 5-year periods ending February 2003.


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Exhibit 99.1


FIRST QUARTER INCOME STATEMENT REVIEW:

Revenues
- --------
Net revenues were $4.9 billion, 5% lower than the 2002 first quarter,
but up 15% from the 2002 fourth quarter.

Commissions revenues were $1.1 billion, 14% below the 2002 first
quarter, due primarily to a global decline in client transaction volumes,
particularly in listed equities and mutual funds.

Principal transactions revenues increased 15% from the first quarter of
2002, to $1.0 billion, due to increased debt trading revenues, partially offset
by lower equity trading revenues. Principal transactions and net interest
revenues in GMI are closely related and need to be analyzed in aggregate to
understand the changes in net trading revenues.

Net interest profit was $950 million, up 17% from the 2002 first
quarter, due primarily to a favorable yield curve environment.

Underwriting revenues were $368 million, 21% lower than the 2002 first
quarter. Strategic advisory revenues declined 32% from the 2002 first quarter,
to $125 million. These decreases reflect an industry-wide decline in activity
levels, as reduced equity underwriting and completed mergers and acquisitions
were partially offset by increased debt underwriting.

Asset management and portfolio service fees were $1.1 billion, down 13%
from the first quarter of 2002. This decrease is primarily the result of a
market-driven decline in equity assets under management and a reduction in
portfolio servicing fees, which are calculated on beginning-of-period asset
values.


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Exhibit 99.1


Other revenues were $205 million, down 6% from the year-ago quarter.
The 2002 first quarter included aggregate pre-tax gains of approximately $100
million related to the sales of the Securities Pricing Services business and the
Canadian private client and asset management businesses, partially offset by
increased realized gains related to sales of mortgages in the 2003 first
quarter.

Expenses
- --------
Compensation and benefits expenses were $2.5 billion, a decrease of
$150 million, or 6%, from the 2002 first quarter. The decrease is due primarily
to lower incentive compensation accruals and reduced staffing levels.
Compensation and benefits expenses were 51.4% of net revenues for the first
quarter of 2003, compared to 52.0% in the year-ago quarter.

Non-compensation expenses of $1.3 billion decreased $96 million, or 7%,
from the 2002 first quarter and are now almost $500 million below the 2001 first
quarter. With the exception of expenses related to increased legal fees and
litigation provisions, non-compensation expenses declined over 10% compared with
the prior-year period.

Details of the significant changes in non-compensation expenses from
the first quarter of 2002 are as follows:

o communications and technology costs were $403 million, down 15% due
primarily to reduced communications costs and systems consulting costs;

o occupancy and related depreciation was $216 million, a decline of 9% due
primarily to lower rental and occupancy costs resulting from actions taken
in the 2002 fourth quarter to consolidate office space;

o brokerage, clearing, and exchange fees were $170 million, down 14%;

o advertising and market development expenses were $121 million, down 19% due
primarily to reduced spending on travel due to lower business activity and
travel concerns, as well as lower levels of advertising;

o professional fees increased 11%, to $144 million, due principally to
increased legal expenses;


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Exhibit 99.1


o office supplies and postage decreased 16% to $58 million due to lower
levels of business activity and efficiency initiatives; and

o other expenses were $224 million, up principally due to a $50 million
provision for litigation relating to various business matters, which is
included in the Corporate segment.

Merrill Lynch's effective tax rate was 28.3% for the quarter. The full
year 2002 effective tax rate was 28.0%.

Staffing
Merrill Lynch's full-time employees totaled 49,600 at the end of the
quarter, a decline of 1,300 since year-end 2002 as the company continues to
actively align resources to improve productivity and efficiency.

* * * *

Tom Patrick, executive vice chairman, finance and administration, and
Ahmass Fakahany, chief financial officer, will host a conference call today at
10:00 a.m. EDT to discuss the company's first quarter 2003 results. The
conference call can be accessed via a live audio webcast available through the
Investor Relations website at www.ir.ml.com or by dialing (888) 810-0245 (U.S.
callers) or (706) 634-0180 (international callers). On-demand replay of the
webcast will be available from approximately 1:00 p.m. EDT today at the same web
address.

* * * *

Merrill Lynch is one of the world's leading financial management and
advisory companies with offices in 36 countries and private client assets of
approximately $1.1 trillion. As an investment bank, it is a leading global
underwriter of debt and equity securities and strategic advisor to corporations,
governments, institutions, and individuals worldwide. Through Merrill Lynch
Investment Managers, the company is one of the world's largest managers of
financial assets, with assets under management of $442 billion. For more
information on Merrill Lynch, please visit www.ml.com.

* * * *


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Exhibit 99.1


Merrill Lynch may make or publish forward-looking statements about
management expectations, strategic objectives, business prospects, anticipated
expense savings and financial results, anticipated results of litigation and
regulatory proceedings, and other similar matters. A variety of factors, many of
which are beyond Merrill Lynch's control, affect the operations, performance,
business strategy and results of Merrill Lynch and could cause actual results
and experiences to differ materially from the expectations and objectives
expressed in these statements. These factors include, but are not limited to,
financial market volatility, actions and initiatives by current and potential
competitors, the effect of current and future legislation or regulation, and
certain other additional factors described in Merrill Lynch's 2002 Annual Report
on Form 10-K and subsequent reports on Form 8-K and Form 10-Q, which are
available on the Merrill Lynch Investor Relations website at www.ir.ml.com and
at the SEC's website, www.sec.gov.

Accordingly, readers are cautioned not to place undue reliance on
forward-looking statements, which speak only as of the date on which they are
made. Merrill Lynch does not undertake to update such statements to reflect the
impact of circumstances or events that arise after the date these statements
were made. Readers should, however, consult any further disclosures Merrill
Lynch may make in its reports filed with the SEC.

* * * *

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