MERRILL LYNCH & CO., INC. EXHIBIT 99.2
Published on April 13, 2004
Exhibit 99.2
Merrill Lynch & Co., Inc. Attachment I
Preliminary Unaudited Earnings Summary
For the Three Months Ended Percent Inc/(Dec)
-------------------------------- -------------------
(in millions,
except per March 26, December 26, March 28, 1Q04 vs. 1Q04 vs.
share amounts) 2004 2003 2003 4Q03 1Q03
--------- ------------ --------- -------- ---------
Net Revenues
Asset management
and portfolio
service fees $1,315 $1,231 $1,127 6.8 % 16.7 %
Commissions 1,361 1,163 1,069 17.0 27.3
Principal
transactions 1,046 380 1,025 175.3 2.0
Investment
banking 837 759 493 10.3 69.8
Other 367 343 213 7.0 72.3
--------- ------------ ----------
Subtotal 4,926 3,876 3,927 27.1 25.4
Interest and
dividend
revenues 3,061 2,806 3,005 9.1 1.9
Less interest
expense 1,897 1,807 2,128 5.0 (10.9)
--------- ------------ ----------
Net interest
profit 1,164 999 877 16.5 32.7
--------- ------------ ----------
Total Net
Revenues 6,090 4,875 4,804 24.9 26.8
--------- ------------ ----------
Non-Interest Expenses
Compensation and
benefits 3,047 2,052 2,561 48.5 19.0
Communications
and technology 341 345 403 (1.2) (15.4)
Occupancy and
related
depreciation 217 226 216 (4.0) 0.5
Brokerage,
clearing, and
exchange fees 204 195 170 4.6 20.0
Advertising and
market development 122 106 121 15.1 0.8
Professional fees 177 151 144 17.2 22.9
Office supplies
and postage 51 43 58 18.6 (12.1)
Other (1) 239 267 222 (10.5) 7.7
Net recoveries
related to
September 11 - (65) - (100.0) -
--------- ------------ ----------
Total
Non-Interest
Expenses 4,398 3,320 3,895 32.5 12.9
--------- ------------ ----------
Earnings Before
Income Taxes 1,692 1,555 909 8.8 86.1
Income tax expense 440 344 266 27.9 65.4
--------- ------------ ----------
Net Earnings $1,252 $1,211 $643 3.4 94.7
========= ============ ==========
Preferred Stock
Dividends $10 $9 $9 - -
========= ============ ==========
Earnings Per
Common Share
Basic $1.34 $1.32 $0.71 1.5 88.7
Diluted $1.22 $1.19 $0.67 2.5 82.1
Average Shares
Used in Computing
Earnings Per
Common Share
Basic 930.2 913.3 887.6 1.9 4.8
Diluted 1,019.7 1,009.9 941.9 1.0 8.3
Annualized Return
on Average Common
Equity 17.0% 17.4% 10.5%
- ---------------------------------------------------------------------
Note: Prior period amounts have been restated to reflect stock option
expensing under SFAS No. 123 and the deconsolidation of
TOPrS(SM).
(1) Includes $45 million expense related to guaranteed minimum death
benefits.
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Merrill Lynch & Co., Inc. Attachment II
Preliminary Segment Data (unaudited)
For the Three Months Ended
---------------------------------
March 26, December 26, March 28,
(dollars in millions) 2004 2003 2003
---------- ----------- ----------
Global Markets & Investment Banking
Non-interest revenues $2,361 $1,525 $1,822
Net interest profit 874 723 635
---------- -------- ----------
Total net revenues 3,235 2,248 2,457
---------- -------- ----------
Pre-tax earnings 1,115 970 (a) 749
Pre-tax profit margin 34.5% 43.1%(a) 30.5%
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Global Private Client
Non-interest revenues $2,161 $1,975 $1,779
Net interest profit 339 350 324
---------- -------- ----------
Total net revenues 2,500 2,325 2,103
---------- -------- ----------
Pre-tax earnings 510 498 (b) 249
Pre-tax profit margin 20.4% 21.4%(b) 11.8%
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Merrill Lynch Investment Managers
Non-interest revenues $407 $380 $330
Net interest profit 5 6 7
---------- -------- ----------
Total net revenues 412 386 337
---------- -------- ----------
Pre-tax earnings 111 95 (c) 39
Pre-tax profit margin 26.9% 24.6%(c) 11.6%
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Corporate
Non-interest revenues $(3) $(4) $(4)
Net interest profit (54) (80) (89)
---------- -------- ----------
Total net revenues (57) (84) (93)
---------- -------- ----------
Pre-tax loss (44) (8) (128)
- ----------------------------------------------------------------------
Total
Non-interest revenues $4,926 $3,876 $3,927
Net interest profit 1,164 999 877
---------- -------- ----------
Total net revenues 6,090 4,875 4,804
---------- -------- ----------
Pre-tax earnings 1,692 1,555 (d) 909
Pre-tax profit margin 27.8% 31.9%(d) 18.9%
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Note: Prior period amounts have been restated to reflect stock option
expensing under SFAS No. 123 and the deconsolidation of
TOPrS(SM).
(a) Includes the impact of insurance recoveries related to September
11, which have been recorded as contra-expenses of $55 million and
net restructuring and other charges of $18 million. Excluding
these items, GMI's pre-tax earnings were $933 million ($970
million minus $37 million) and the pre-tax profit margin was 41.5%
($933 million/$2,248 million).
(b) Includes the impact of insurance recoveries related to September
11, which have been recorded as contra-expenses of $15 million
and net restructuring and other charges/(credits) of $(2) million.
Excluding these items, GPC's pre-tax earnings were $481 million
($498 million minus $17 million) and the pre-tax profit margin was
20.7% ($481 million/$2,325 million).
(c) Includes the impact of net restructuring and other charges of $4
million. Excluding these items, MLIM's pre-tax earnings were $99
million ($95 million plus $4 million) and the pre-tax profit
margin was 25.6% ($99 million/$386 million).
(d) Excluding the impact of insurance recoveries related to September
11 and restructuring related items, total pre-tax earnings were
$1,510 million ($1,555 million minus $45 million) and the pre-tax
profit margin was 31.0% ($1,510 million/$4,875 million).
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Merrill Lynch & Co., Inc. Attachment III
Consolidated Quarterly Earnings (unaudited) (in millions)
1Q03 2Q03 3Q03 4Q03 1Q04
------ ------- ------- ------- ----------
Net Revenues
Asset management and
portfolio service fees
Asset management fees $385 $394 $401 $429 $448
Portfolio service
fees 476 469 511 534 578
Account fees 135 136 128 128 133
Other fees 131 155 144 140 156
------ ------- ------- ------- ----------
Total 1,127 1,154 1,184 1,231 1,315
Commissions
Listed and
over-the-counter
securities 618 617 634 626 817
Mutual funds 266 234 291 314 340
Other 185 193 195 223 204
------ ------- ------- ------- ----------
Total 1,069 1,044 1,120 1,163 1,361
Principal transactions 1,025 1,127 704 380 1,046
Investment banking
Underwriting 368 565 545 599 672
Strategic advisory 125 133 133 160 165
------ ------- ------- ------- ----------
Total 493 698 678 759 837
Other 213 279 308 343 367
------ ------- ------- ------- ----------
Subtotal 3,927 4,302 3,994 3,876 4,926
Interest and dividend
revenues 3,005 2,999 2,872 2,806 3,061
Less interest expense 2,128 2,032 1,851 1,807 1,897
------ ------- ------- ------- ----------
Net interest profit 877 967 1,021 999 1,164
------ ------- ------- ------- ----------
Total Net Revenues 4,804 5,269 5,015 4,875 6,090
------ ------- ------- ------- ----------
Non-Interest Expenses
Compensation and
benefits 2,561 2,749 2,448 2,052 3,047
Communications and
technology 403 357 352 345 341
Occupancy and related
depreciation 216 221 226 226 217
Brokerage, clearing, and
exchange fees 170 169 188 195 204
Advertising and market
development 121 113 89 106 122
Professional fees 144 140 146 151 177
Office supplies and
postage 58 50 46 43 51
Other 222 183 135 267 239
Net recoveries related to
September 11 - (61) (21) (65) -
------ ------- ------- ------- ----------
Total Non-Interest
Expenses 3,895 3,921 3,609 3,320 4,398
------ ------- ------- ------- ----------
Earnings Before
Income Taxes 909 1,348 1,406 1,555 1,692
Income tax expense 266 371 403 344 440
------ ------- ------- ------- ----------
Net Earnings $643 $977 $1,003 $1,211 $1,252
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Per Common Share Data
1Q03 2Q03 3Q03 4Q03 1Q04
------ ------- ------- ------- ----------
Earnings - Basic $0.71 $1.08 $1.10 $1.32 $1.34
Earnings - Diluted 0.67 1.00 1.00 1.19 1.22
Dividends paid 0.16 0.16 0.16 0.16 0.16
Book value(1) 26.35 27.44 28.59 30.03 30.75 est.
---------------------------------------------------------------------
Note: Prior period amounts have been restated to reflect stock option
expensing under SFAS No. 123 and the deconsolidation of
TOPrS(SM).
(1) At 1Q04, the adoption of SFAS No. 123 resulted in a cumulative
increase to stockholders' equity of $1.4 billion.
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Merrill Lynch & Co., Inc. Attachment IV
Percentage of Quarterly Net Revenues (unaudited)
1Q03 2Q03 3Q03 4Q03 1Q04
------ ------ ------ -------- -------
Net Revenues
Asset management and
portfolio service fees
Asset management fees 8.0% 7.5% 8.0% 8.8% 7.4%
Portfolio service fees 9.9% 8.9% 10.2% 11.0% 9.5%
Account fees 2.8% 2.6% 2.6% 2.6% 2.2%
Other fees 2.8% 2.9% 2.8% 2.9% 2.5%
------ ------ ------ -------- -------
Total 23.5% 21.9% 23.6% 25.3% 21.6%
Commissions
Listed and
over-the-counter
securities 12.9% 11.7% 12.6% 12.8% 13.4%
Mutual funds 5.5% 4.4% 5.8% 6.4% 5.6%
Other 3.9% 3.7% 3.9% 4.7% 3.3%
------ ------ ------ -------- -------
Total 22.3% 19.8% 22.3% 23.9% 22.3%
Principal transactions 21.3% 21.4% 14.0% 7.8% 17.2%
Investment banking
Underwriting 7.7% 10.7% 10.9% 12.3% 11.0%
Strategic advisory 2.6% 2.5% 2.7% 3.3% 2.7%
------ ------ ------ -------- -------
Total 10.3% 13.2% 13.6% 15.6% 13.7%
Other 4.3% 5.3% 6.1% 6.9% 6.1%
------ ------ ------ -------- -------
Subtotal 81.7% 81.6% 79.6% 79.5% 80.9%
Interest and dividend
revenues 62.6% 57.0% 57.3% 57.6% 50.3%
Less interest expense 44.3% 38.6% 36.9% 37.1% 31.2%
------ ------ ------ -------- -------
Net interest profit 18.3% 18.4% 20.4% 20.5% 19.1%
------ ------ ------ -------- -------
Total Net Revenues 100.0% 100.0% 100.0% 100.0% 100.0%
------ ------ ------ -------- -------
Non-Interest Expenses
Compensation and benefits 53.3% 52.2% 48.8% 42.1% 50.0%
Communications and technology 8.4% 6.8% 7.0% 7.1% 5.6%
Occupancy and related
depreciation 4.5% 4.2% 4.5% 4.6% 3.6%
Brokerage, clearing, and
exchange fees 3.5% 3.2% 3.7% 4.0% 3.3%
Advertising and market
development 2.5% 2.1% 1.8% 2.2% 2.0%
Professional fees 3.0% 2.7% 2.9% 3.1% 2.9%
Office supplies and postage 1.2% 0.9% 0.9% 0.9% 0.8%
Other 4.7% 3.5% 2.8% 5.4% 4.0%
Net recoveries related to
September 11 - -1.2% -0.4% -1.3% -
------ ------ ------ -------- -------
Total Non-Interest Expenses 81.1% 74.4% 72.0% 68.1% 72.2%
------ ------ ------ -------- -------
Earnings Before Income Taxes 18.9% 25.6% 28.0% 31.9% 27.8%
Income tax expense 5.5% 7.1% 8.0% 7.1% 7.2%
Net Earnings 13.4% 18.5% 20.0% 24.8% 20.6%
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Common shares outstanding (in millions):
1Q03 2Q03 3Q03 4Q03 1Q04
------ ------ ------ -------- ------
Weighted-average - basic 887.6 897.2 904.8 913.3 930.2
Weighted-average - diluted 941.9 967.4 991.9 1,009.9 1,019.7
Period-end 929.8 935.2 942.6 949.9 967.7
---------------------------------------------------------------------
Note: Prior period amounts have been restated to reflect stock
option expensing under SFAS No. 123 and the deconsolidation of
TOPrS(SM).
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Merrill Lynch & Co., Inc. Attachment V
Supplemental Data (unaudited) (dollars in billions)
1Q03 2Q03 3Q03 4Q03 1Q04
-------- ------- ------- ------- -------
Client Assets
Private Client
U.S. $1,009 $1,076 $1,093 $1,165 $1,187
Non - U.S. 86 92 92 97 105
-------- ------- ------- ------- -------
Total Private Client Assets 1,095 1,168 1,185 1,262 1,292
MLIM direct sales (1) 193 205 202 222 229
-------- ------- ------- ------- -------
Total Client Assets $1,288 $1,373 $1,387 $1,484 $1,521
======== ======= ======= ======= =======
Assets in
Asset-Priced Accounts $181 $200 $206 $226 $235
Assets Under Management $442 $471 $473 $500 $513
Retail 187 195 194 207 212
Institutional 220 239 241 253 259
Private Investors 35 37 38 40 42
U.S. 303 320 327 337 349
Non-U.S. 139 151 146 163 164
Equity 183 209 202 225 229
Fixed Income 108 108 125 132 146
Money Market 151 154 146 143 138
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Net New Money
Private Client Accounts
U.S. $(4) $(2) $4 $5 $5
Non-U.S. (1) 1 1 1 1
-------- ------- ------- ------- -------
Total (5) (1) 5 6 6
-------- ------- ------- ------- -------
Assets Under Management $(11) $4 $(4) $- $7
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Balance Sheet Information (estimated)
Commercial Paper and
Other Short-term
Borrowings $3.5 $5.5 $3.0 $5.0 $4.6
Deposits 81.9 80.5 79.3 79.5 78.1
Long-term Borrowings 77.0 79.1 80.7 83.3 96.9
Long-term debt issued
to TOPrS(SM) 3.2 3.2 3.2 3.2 3.2
Total Stockholders'
Equity (2) 24.9 26.1 27.4 29.0 30.2
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Global Equity and Equity-Linked Underwriting(3)(4)
Volume $4 $8 $8 $11 $12
Market Share 8.0% 7.8% 7.7% 8.4% 8.8%
Ranking 5 6 6 5 4
Global Debt Underwriting(3)(4)
Volume $96 $88 $90 $82 $117
Market Share 7.1% 6.5% 7.8% 7.3% 8.1%
Ranking 3 4 4 2 2
Global Completed Mergers and Acquisitions(3)(4)
Volume $39 $31 $63 $66 $39
Market Share 15.2% 9.9% 20.9% 20.2% 18.4%
Ranking 3 8 3 3 2
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Full-Time Employees(5) 49,500 48,200 47,800 48,100 48,200
Private Client Financial
Advisors 13,600 13,300 13,400 13,500 13,700
- ----------------------------------------------------------------------
Note: Prior period amounts have been restated to reflect stock option
expensing under SFAS No. 123 and the deconsolidation of
TOPrS(SM).
(1) Reflects funds managed by MLIM not sold through Private Client
channels.
(2) At 1Q04, the adoption of SFAS 123 resulted in a cumulative
increase to stockholders' equity of $1.4 billion.
(3) Certain prior period amounts have been restated to conform to the
current period presentation.
(4) Full credit to book manager. Market shares derived from Thomson
Financial Securities Data statistics.
(5) Excludes 100, 200, 300, 500 and 500 full-time employees on
salary continuation severance at the end of 1Q04, 4Q03, 3Q03, 2Q03
and 1Q03, respectively.
For more information, please contact:
Investor Relations Phone: 866-607-1234
Merrill Lynch & Co., Inc. Fax: 212-449-7461
investor_relations@ml.com
www.ir.ml.com
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