August 4, 2006 - EX-99.1: RECONCILIATION OF "NON-GAAP" MEASURES - 10-Q: Quarterly report pursuant to Section 13 or 15(d)

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 of 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.

Unaudited Earnings Summary


(in millions, except per share amounts)

		For the Three Months Ended March 31, 2006							For the Six Months Ended June 30, 2006

		Excluding		Impact of					Excluding		Impact of
		One-time		One-time					One-time		One-time
		Compensation		Compensation			GAAP		Compensation		Compensation			GAAP
		Expenses		Expenses			Basis		Expenses⁽¹⁾		Expenses⁽¹⁾			Basis

Net Revenues		$	7,962	$	-		$	7,962	$	16,120	$	-		$	16,120

Non-Interest Expenses
	Compensation and benefits		3,991		1,759			5,750		7,971		1,759			9,730
	Non-compensation expenses		1,619		-			1,619		3,448		-			3,448

	Total Non-Interest Expenses		5,610		1,759			7,369		11,419		1,759			13,178

Earnings Before Income Taxes			2,352		(1,759	)		593		4,701		(1,759	)		2,942
Income Tax Expense			700		(582	)		118		1,416		(582	)		834

Net Earnings		$	1,652	$	(1,177	)	$	475	$	3,285	$	(1,177	)	$	2,108

Preferred Stock Dividends		$	43	$	-		$	43	$	88	$	-		$	88

Net Earnings Applicable to Common Stockholders		$	1,609	$	(1,177	)	$	432	$	3,197	$	(1,177	)	$	2,020

Earnings Per Common Share
	Basic	$	1.83	$	(1.34	)	$	0.49	$	3.63	$	(1.35	)	$	2.28
	Diluted	$	1.65	$	(1.21	)	$	0.44	$	3.28	$	(1.21	)	$	2.07
Average Shares Used in Computing Earnings Per Common Share
	Basic		878.0		5.7			883.7		881.7		2.9			884.6
	Diluted		975.4		5.7			981.1		974.4		2.8			977.2

Financial Ratios (unaudited)


(in millions)

	For the Three Months Ended						For the Six Months Ended
	March 31, 2006						June 30, 2006

	Excluding						Excluding
	One-time						One-time
	Compensation			GAAP			Compensation			GAAP
	Expenses			Basis			Expenses⁽¹⁾			Basis

Compensation and benefits(a)	$	3,991		$	5,750		$	7,971		$	9,730
Net Revenues(b)		7,962			7,962			16,120			16,120
Ratio of compensation and benefits to net revenues(a)/(b)		50.1	%		72.2	%		49.4	%		60.4	%

Income Tax Expense(a)	$	700		$	118		$	1,416		$	834
Earnings Before Income Taxes(b)		2,352			593			4,701			2,942
Effective Tax Rate(a)/(b)		29.8	%		19.9	%		30.1	%		28.3	%

Earnings Before Income Taxes(a)	$	2,352		$	593		$	4,701		$	2,942
Net Revenues(b)		7,962			7,962			16,120			16,120
Pre-tax Profit Margin(a)/(b)		29.5	%		7.4	%		29.2	%		18.3	%

Average Common Equity	$	33,800		$	33,800		$	33,831		$	33,831
Average impact of one-time compensation expenses		(145	)		-			(145	)		-

Average Common Equity(a)		33,655			33,800			33,686			33,831
Annualized Net Earnings Applicable to Common Stockholders(b)		6,436			1,728			6,394			4,040
Annualized Return on Average Common Equity(b)/(a)		19.1	%		5.1	%		19.0	%		11.9	%


(1)	For purposes of comparison with previously published results, data excluding the impact of the one-time compensation expenses for the first six months of 2006 assumes the impact of the one-time compensation expenses is limited to the first quarter of 2006.

Segment Data (unaudited)


(dollars in millions)

																		For the Six
			For the Three Months Ended									Percent Inc/ (Dec)						Months Ended

			June 30,			March 31,			July 1,			2Q06 vs.			2Q06 vs.			June 30,			July 1,			Percent
			2006			2006			2005			1Q06			2Q05			2006			2005			Inc/ (Dec)

Global Markets & Investment Banking Global Markets
		Debt Markets	$	1,725		$	2,091		$	1,606			(18	)%		7	%	$	3,816		$	3,268			17	%
		Equity Markets		1,877			1,573			1,022			19			84			3,450			1,993			73

		Total Global Markets net revenues		3,602			3,664			2,628			(2	)		37			7,266			5,261			38
Investment Banking⁽¹⁾
	Origination:
		Debt		367			395			374			(7	)		(2	)		762			656			16
		Equity		315			237			223			33			41			552			465			19
	Strategic Advisory Services			296			257			214			15			38			553			374			48

	Total Investment Banking net revenues			978			889			811			10			21			1,867			1,495			25

	Total net revenues(a)			4,580			4,553			3,439			1			33			9,133			6,756			35

	Pre-tax earnings			1,493			212			1,098			604			36			1,705			2,222			(23	)
	Impact of one-time compensation expenses			-			1,369			-			(100	)		N/M			1,369			-		N/M

	Pre-tax earnings excluding one-time compensation expenses(b)			1,493			1,581			1,098			(6	)		36			3,074			2,222			38
	Pre-tax profit margin			32.6	%		4.7	%		31.9	%								18.7	%		32.9	%
	Pre-tax profit margin excluding one-time compensation expenses(b)/(a)			32.6	%		34.7	%		31.9	%								33.7	%		32.9	%

Global Private Client
	Fee-based revenues		$	1,533		$	1,458		$	1,286			5			19		$	2,991		$	2,557			17
	Transactional and origination revenues			902			899			786			0			15			1,801			1,643			10
	Net interest profit and related hedges⁽²⁾			554			527			420			5			32			1,081			821			32
	Other revenues			56			55			76			2			(26	)		111			150			(26	)

	Total net revenues(a)			3,045			2,939			2,568			4			19			5,984			5,171			16

	Pre-tax earnings			701			365			457			92			53			1,066			967			10
	Impact of one-time compensation expenses			-			281			-			(100	)		N/M			281			-		N/M

	Pre-tax earnings excluding one-time compensation expenses(b)			701			646			457			9			53			1,347			967			39
	Pre-tax profit margin			23.0	%		12.4	%		17.8	%								17.8	%		18.7	%
	Pre-tax profit margin excluding one-time compensation expenses(b)/(a)			23.0	%		22.0	%		17.8	%								22.5	%		18.7	%

Merrill Lynch Investment Managers
	Total net revenues(a)		$	630		$	570		$	405			11			56		$	1,200		$	818			47
	Pre-tax earnings			240			113			121			112			98			353			248			42
	Impact of one-time compensation expenses			-			109			-			(100	)		N/M			109			-		N/M

	Pre-tax earnings excluding one-time compensation expenses(b)			240			222			121			8			98			462			248			86
	Pre-tax profit margin			38.1	%		19.8	%		29.9	%								29.4	%		30.3	%
	Pre-tax profit margin excluding one-time compensation expenses(b)/(a)			38.1	%		38.9	%		29.9	%								38.5	%		30.3	%

Corporate
	Total net revenues		$	(97	)	$	(100	)	$	(93	)		3			(4	)	$	(197	)	$	(194	)		(2	)
	Pre-tax earnings			(85	)		(97	)		(81	)		12			(5	)		(182	)		(173	)		(5	)

Total
	Total net revenues(a)		$	8,158		$	7,962		$	6,319			2			29		$	16,120		$	12,551			28
	Pre-tax earnings			2,349			593			1,595			296			47			2,942			3,264			(10	)
	Impact of one-time compensation expenses			-			1,759			-			(100	)		N/M			1,759			-		N/M

	Pre-tax earnings excluding one-time compensation expenses(b)			2,349			2,352			1,595			(0	)		47			4,701			3,264			44
	Pre-tax profit margin			28.8	%		7.4	%		25.2	%								18.3	%		26.0	%
	Pre-tax profit margin excluding one-time compensation expenses(b)/(a)			28.8	%		29.5	%		25.2	%								29.2	%		26.0	%

N/M = Not Meaningful


(1)	A portion of Origination revenue is recorded in the Global Private Client segment.
(2)	Includes interest component of non-qualifying derivatives which are included in Other Revenues.

Form: 10-Q

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