EX-99.1: RECONCILIATION OF NON-GAAP MEASURES
Published on May 7, 2007
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.
Unaudited
Earnings Summary
| (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 Compensation |
|||||||||||
| Expenses | Expenses | GAAP Basis | ||||||||||
|
Net Revenues(a) |
$ | 7,972 | $ | - | $ | 7,972 | ||||||
|
Non-Interest Expenses
|
||||||||||||
|
Compensation and benefits(b)
|
3,991 | 1,759 | 5,750 | |||||||||
|
Non-compensation expenses(c)
|
1,629 | - | 1,629 | |||||||||
|
Total Non-Interest
Expenses
|
5,620 | 1,759 | 7,379 | |||||||||
|
Earnings Before Income
Taxes(d)
|
2,352 | (1,759 | ) | 593 | ||||||||
|
Income Tax Expense(e)
|
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 | |||||||||
108
Financial
Ratios
|
For the Three Months Ended |
||||||||
| March 31, 2006 | ||||||||
|
Excluding the Impact of One- |
||||||||
| time Compensation Expenses | GAAP Basis | |||||||
|
Ratio of compensation and benefits
to net revenues(b)/(a)
|
50.1 | % | 72.1 | % | ||||
|
Ratio of non-compensation expenses
to net revenues(c)/(a)
|
20.4 | % | 20.4 | % | ||||
|
Effective Tax Rate(e)/(d)
|
29.8 | % | 19.9 | % | ||||
|
Pre-tax Profit Margin(d)/(a)
|
29.5 | % | 7.4 | % | ||||
|
Average Common Equity
|
$ | 33,800 | $ | 33,800 | ||||
|
Average impact of one-time
compensation expenses
|
(145 | ) | - | |||||
|
Average Common Equity
|
33,655 | 33,800 | ||||||
|
Annualized Return on Average
Common Equity
|
19.1 | % | 5.1 | % | ||||
109
Exhibit 99.1
Merrill
Lynch & Co., Inc.
Reconciliation
of Non-GAAP Measures Segment Data
(unaudited)
| (dollars in millions) | ||||
|
For the Three |
||||
|
Months Ended |
||||
|
March 31, |
||||
| 2006 | ||||
|
Global Markets &
Investment Banking
|
||||
|
Total net revenues(a)
|
$ | 4,567 | ||
|
Pre-tax earnings
|
216 | |||
|
Impact of one-time compensation
expenses
|
1,369 | |||
|
Pre-tax earnings excluding
one-time compensation expenses(b)
|
1,585 | |||
|
Pre-tax profit margin
|
4.7 | % | ||
|
Pre-tax profit margin excluding
one-time compensation expenses(b)/(a)
|
34.7 | % | ||
|
Global Wealth
Management
|
||||
|
Total net revenues(a)
|
$ | 2,935 | ||
|
Pre-tax earnings
|
361 | |||
|
Impact of one-time compensation
expenses
|
281 | |||
|
Pre-tax earnings excluding
one-time compensation expenses(b)
|
642 | |||
|
Pre-tax profit margin
|
12.3 | % | ||
|
Pre-tax profit margin excluding
one-time compensation expenses(b)/(a)
|
21.9 | % | ||
|
Merrill Lynch Investment
Managers
|
||||
|
Total net revenues(a)
|
$ | 570 | ||
|
Pre-tax earnings
|
113 | |||
|
Impact of one-time compensation
expenses
|
109 | |||
|
Pre-tax earnings excluding
one-time compensation expenses(b)
|
222 | |||
|
Pre-tax profit margin
|
19.8 | % | ||
|
Pre-tax profit margin excluding
one-time compensation expenses(b)/(a)
|
38.9 | % | ||
110