MERRILL LYNCH & CO., INC. EXHIBIT 99.2
Published on October 12, 2004
Exhibit 99.2
Merrill Lynch & Co., Inc. Attachment I
Preliminary Unaudited Earnings Summary
For the Three Months Ended Percent Inc / (Dec)
--------------------------- -------------------
(in millions, 3Q04 3Q04
except per Sept. 24, June 25, Sept. 26, vs. vs.
share amounts) 2004 2004 2003 2Q04 3Q03
-------- -------- -------- -------- --------
Net Revenues
Asset
management
and portfolio
service fees $ 1,340 $ 1,357 $ 1,184 (1.3)% 13.2 %
Commissions 1,092 1,177 1,099 (7.2) (0.6)
Principal
transactions 390 630 704 (38.1) (44.6)
Investment
banking 666 764 678 (12.8) (1.8)
Other 438 312 311 40.4 40.8
-------- -------- --------
Subtotal 3,926 4,240 3,976 (7.4) (1.3)
Interest and
dividend
revenues 3,669 3,128 2,872 17.3 27.8
Less interest
expense 2,755 2,079 1,850 32.5 48.9
-------- -------- --------
Net interest
profit 914 1,049 1,022 (12.9) (10.6)
-------- -------- --------
Total Net
Revenues 4,840 5,289 4,998 (8.5) (3.2)
-------- -------- --------
Non-Interest
Expenses
Compensation
and benefits 2,273 2,587 2,448 (12.1) (7.1)
Communications
and technology 363 357 352 1.7 3.1
Occupancy and
related
depreciation 219 202 226 8.4 (3.1)
Brokerage,
clearing, and
exchange fees 213 214 188 (0.5) 13.3
Professional
fees 163 163 146 - 11.6
Advertising
and market
development 127 132 89 (3.8) 42.7
Office
supplies and
postage 47 49 46 (4.1) 2.2
Other 231 186 118 24.2 95.8
Net recoveries
related to
September 11 - - (21) - (100.0)
-------- -------- --------
Total Non-
Interest
Expenses 3,636 3,890 3,592 (6.5) 1.2
-------- -------- --------
Earnings Before
Income Taxes 1,204 1,399 1,406 (13.9) (14.4)
Income tax
expense 284 321 403 (11.5) (29.5)
-------- -------- --------
Net Earnings $ 920 $ 1,078 $ 1,003 (14.7) (8.3)
======== ======== ========
Preferred Stock
Dividends $ 10 $ 9 $ 10 - -
======== ======== ========
Earnings Per
Common Share
Basic $ 1.01 $ 1.16 $ 1.10 (12.9) (8.2)
Diluted $ 0.93 $ 1.06 $ 1.00 (12.3) (7.0)
Average Shares
Used in
Computing
Earnings Per
Common Share
Basic 903.2 923.0 904.8 (2.1) (0.2)
Diluted 981.8 1,012.8 991.9 (3.1) (1.0)
Annualized Return
on Average
Common Equity 12.4% 14.5% 15.2%
- ----------------------------------------------------------------------
Note: Certain prior period amounts have been reclassified to
conform to the current period presentation.
13
Merrill Lynch & Co., Inc. Attachment II
Preliminary Unaudited Earnings Summary
For the Nine Months Ended
----------------------- --------
September September Percent
(in millions, except per 24, 26, Inc/
share amounts) 2004 2003 (Dec)
-------- -------- --------
Net Revenues
Asset management and portfolio
service fees $ 4,012 $ 3,465 15.8 %
Commissions 3,619 3,185 13.6
Principal transactions 2,066 2,856 (27.7)
Investment banking 2,267 1,869 21.3
Other 1,120 810 38.3
-------- --------
Subtotal 13,084 12,185 7.4
Interest and dividend revenues 9,858 8,876 11.1
Less interest expense 6,731 6,011 12.0
-------- --------
Net interest profit 3,127 2,865 9.1
-------- --------
Total Net Revenues 16,211 15,050 7.7
-------- --------
Non-Interest Expenses
Compensation and benefits 7,907 7,758 1.9
Communications and technology 1,061 1,112 (4.6)
Occupancy and related depreciation 638 663 (3.8)
Brokerage, clearing, and exchange
fees 631 527 19.7
Professional fees 503 430 17.0
Advertising and market development 381 323 18.0
Office supplies and postage 147 154 (4.5)
Other 648 502 29.1
Net recoveries related to
September 11 - (82) (100.0)
-------- --------
Total Non-Interest Expenses 11,916 11,387 4.6
-------- --------
Earnings Before Income Taxes 4,295 3,663 17.3
Income tax expense 1,045 1,040 0.5
-------- --------
Net Earnings $ 3,250 $ 2,623 23.9
======== ========
Preferred Stock Dividends $ 29 $ 29 -
======== ========
Earnings Per Common Share
Basic $ 3.51 $ 2.89 21.5
Diluted $ 3.21 $ 2.68 19.8
Average Shares Used in Computing
Earnings Per Common Share
Basic 918.8 896.5 2.5
Diluted 1,004.7 967.1 3.9
Annualized Return on Average Common
Equity 14.6% 13.7%
- ----------------------------------------------------------------------
Note: Certain prior period amounts have been reclassified to
conform to the current period presentation.
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Merrill Lynch & Co., Inc. Attachment III
Preliminary Segment Data (unaudited)
For the Three Months For the Nine Months
Ended Ended
--------------------------- -------------------
September June September September September
24, 25, 26, 24, 26,
(dollars in 2004 2004 2003 2004 2003
millions) -------- -------- -------- -------- ----------
Global Markets &
Investment
Banking
Global Markets
Debt Markets $ 1,023 $ 1,242 $ 1,151 $ 3,878 $ 4,034
Equity Markets 652 737 769 2,329 2,247
-------- -------- -------- -------- -------
Total Global
Markets net
revenues 1,675 1,979 1,920 6,207 6,281
Investment
Banking(a)
Origination:
Debt 252 304 190 792 594
Equity 195 244 232 715 531
Strategic
Advisory
Services 128 141 133 432 395
-------- -------- -------- -------- -------
Total
Investment
Banking net
revenues 575 689 555 1,939 1,520
-------- -------- -------- -------- -------
Total net
revenues 2,250 2,668 2,475 8,146 7,801
-------- -------- -------- -------- -------
Pre-tax
earnings 771 989 986 (b) 2,876 2,807(b)
Pre-tax
profit
margin 34.3% 37.1% 39.8%(b) 35.3% 36.0%(b)
- ----------------------------------------------------------------------
Global Private
Client
Fee-based
revenues $ 1,187 $ 1,208 $ 1,039 $ 3,555 $ 2,958
Transactional
and
origination
revenues 713 765 778 2,392 2,239
Net interest
profit 303 298 352 941 1,009
Other revenues 110 131 145 337 353
-------- -------- -------- -------- -------
Total net
revenues 2,313 2,402 2,314 7,225 6,559
-------- -------- -------- -------- -------
Pre-tax
earnings 409 447 455 1,367 1,025
Pre-tax
profit
margin 17.7% 18.6% 19.7% 18.9% 15.6%
- --------------------------------------------------------------------
Merrill Lynch
Investment
Managers
Total net
revenues $ 373 $ 381 $ 338 $ 1,155 $ 984
Pre-tax
earnings 110 112 69 331 165
Pre-tax profit
margin 29.5% 29.4% 20.4% 28.7% 16.8%
- --------------------------------------------------------------------
Corporate
Total net
revenues $ (96)$ (162) $ (129) $ (315) $ (294)
Pre-tax loss (86) (149) (104)(c) (279) (334)(c)
- ----------------------------------------------------------------------
Total
Total net
revenues $ 4,840 $ 5,289 $ 4,998 $ 16,211 $ 15,050
Pre-tax
earnings 1,204 1,399 1,406 (d) 4,295 3,663(d)
Pre-tax profit
margin 24.9% 26.5% 28.1%(d) 26.5% 24.3%(d)
- --------------------------------------------------------------------
Note: Certain prior period amounts have been reclassified to
conform to the current period presentation.
(a) A portion of origination revenue is recorded in the Global Private
Client segment.
(b) Includes the impact of insurance recoveries related to September
11, which have been recorded as a contra-expense of $25 million
for the quarter and $100 million for the year-to-date period.
Excluding this item, GMI's pre-tax earnings were $961 million
($986 million minus $25 million) and the pre-tax profit margin was
38.8% ($961 million/$2,475 million). For the year-to-date period,
excluding this item, GMI's pre-tax earnings were $2,707 million
($2,807 million minus $100 million) and the pre-tax profit margin
was 34.7% ($2,707 million/$7,801 million).
(c) Includes September 11-related expenses of $4 million. Year-to-
date period includes September 11-related expenses of $18 million.
(d) Excluding the impact of net insurance recoveries related to
September 11, total pre-tax earnings were $1,385 million ($1,406
million minus $21 million) and the pre-tax profit margin was 27.7%
($1,385 million/$4,998 million). For the year-to-date period,
excluding these items, pre-tax earnings were $3,581 million
($3,663 million minus $82 million) and the pre- tax profit margin
was 23.8% ($3,581 million/$15,050 million).
15
Merrill Lynch & Co., Inc. Attachment IV
Consolidated Quarterly Earnings (Unaudited) (in millions)
3Q03 4Q03 1Q04 2Q04 3Q04
------ ------ ------ ------ ------
Net Revenues
Asset management and
portfolio service fees
Asset management fees $ 401 $ 429 $ 448 $ 440 $ 443
Portfolio service
fees 511 534 578 606 611
Account fees 128 128 133 144 124
Other fees 144 140 156 167 162
------ ------ ------ ------ ------
Total 1,184 1,231 1,315 1,357 1,340
Commissions
Listed and
over-the-counter
securities 634 626 817 611 570
Mutual funds 291 314 340 322 306
Other 174 207 193 244 216
------ ------ ------ ------ ------
Total 1,099 1,147 1,350 1,177 1,092
Principal transactions 704 380 1,046 630 390
Investment banking
Underwriting 545 599 672 622 537
Strategic advisory 133 160 165 142 129
------ ------ ------ ------ ------
Total 678 759 837 764 666
Other 311 346 370 312 438
------ ------ ------ ------ ------
Subtotal 3,976 3,863 4,918 4,240 3,926
Interest and dividend
revenues 2,872 2,806 3,061 3,128 3,669
Less interest expense 1,850 1,806 1,897 2,079 2,755
------ ------ ------ ------ ------
Net interest profit 1,022 1,000 1,164 1,049 914
------ ------ ------ ------ ------
Total Net Revenues 4,998 4,863 6,082 5,289 4,840
------ ------ ------ ------ ------
Non-Interest Expenses
Compensation and
benefits 2,448 2,052 3,047 2,587 2,273
Communications and
technology 352 345 341 357 363
Occupancy and related
depreciation 226 226 217 202 219
Brokerage, clearing,
and exchange fees 188 195 204 214 213
Professional fees 146 151 177 163 163
Advertising and market
development 89 106 122 132 127
Office supplies and
postage 46 43 51 49 47
Other 118 255 231 186 231
Net recoveries related
to September 11 (21) (65) - - -
------ ------ ------ ------ ------
Total Non-Interest
Expenses 3,592 3,308 4,390 3,890 3,636
------ ------ ------ ------ ------
Earnings Before Income
Taxes 1,406 1,555 1,692 1,399 1,204
Income tax expense 403 344 440 321 284
------ ------ ------ ------ ------
Net Earnings $1,003 $1,211 $1,252 $1,078 $ 920
Per Common Share Data
3Q03 4Q03 1Q04 2Q04 3Q04
------ ------ ------ ------ ------
Earnings - Basic $ 1.10 $ 1.32 $ 1.34 $ 1.16 $ 1.01
Earnings - Diluted 1.00 1.19 1.22 1.06 0.93
Dividends paid 0.16 0.16 0.16 0.16 0.16
Book value 28.59 30.03 30.75 31.04 31.83 est.
- ----------------------------------------------------------------------
Note: Certain prior period amounts have been reclassified to
conform to the current period presentation.
16
Merrill Lynch & Co., Inc. Attachment V
Percentage of Quarterly Net Revenues (unaudited)
3Q03 4Q03 1Q04 2Q04 3Q04
------ ------ ------ ------ ------
Net Revenues
Asset management and
portfolio service
fees
Asset management fees 8.0% 8.8% 7.4% 8.3% 9.2%
Portfolio service
fees 10.2% 11.0% 9.5% 11.5% 12.6%
Account fees 2.6% 2.6% 2.2% 2.7% 2.6%
Other fees 2.9% 2.9% 2.5% 3.2% 3.3%
------ ------ ------ ------ ------
Total 23.7% 25.3% 21.6% 25.7% 27.7%
Commissions
Listed and over-the-
counter securities 12.7% 12.9% 13.4% 11.6% 11.8%
Mutual funds 5.8% 6.5% 5.6% 6.1% 6.3%
Other 3.5% 4.2% 3.2% 4.6% 4.5%
------ ------ ------ ------ ------
Total 22.0% 23.6% 22.2% 22.3% 22.6%
Principal transactions 14.1% 7.8% 17.2% 11.9% 8.1%
Investment banking
Underwriting 11.0% 12.3% 11.0% 11.8% 11.1%
Strategic advisory 2.7% 3.3% 2.7% 2.7% 2.7%
------ ------ ------ ------ ------
Total 13.7% 15.6% 13.7% 14.5% 13.8%
Other 6.1% 7.1% 6.2% 5.8% 8.9%
------ ------ ------ ------ ------
Subtotal 79.6% 79.4% 80.9% 80.2% 81.1%
Interest and dividend
revenues 57.5% 57.7% 50.4% 59.1% 75.8%
Less interest expense 37.1% 37.1% 31.3% 39.3% 56.9%
------ ------ ------ ------ ------
Net interest profit 20.4% 20.6% 19.1% 19.8% 18.9%
------ ------ ------ ------ ------
Total Net Revenues 100.0% 100.0% 100.0% 100.0% 100.0%
------ ------ ------ ------ ------
Non-Interest Expenses
Compensation and
benefits 49.0% 42.2% 50.1% 48.9% 47.0%
Communications and
technology 7.0% 7.1% 5.6% 6.7% 7.5%
Occupancy and related
depreciation 4.5% 4.6% 3.6% 3.8% 4.5%
Brokerage, clearing,
and exchange fees 3.8% 4.0% 3.4% 4.0% 4.4%
Professional fees 2.9% 3.1% 2.9% 3.1% 3.4%
Advertising and market
development 1.8% 2.2% 2.0% 2.5% 2.6%
Office supplies and
postage 0.9% 0.9% 0.8% 0.9% 1.0%
Other 2.4% 5.2% 3.8% 3.6% 4.7%
Net recoveries related
to September 11 -0.4% -1.3% - - -
------ ------ ------ ------ ------
Total Non-Interest
Expenses 71.9% 68.0% 72.2% 73.5% 75.1%
------ ------ ------ ------ ------
Earnings Before Income
Taxes 28.1% 32.0% 27.8% 26.5% 24.9%
Income tax expense 8.0% 7.1% 7.2% 6.1% 5.9%
Net Earnings 20.1% 24.9% 20.6% 20.4% 19.0%
- ----------------------------------------------------------------------
Common shares outstanding
(in millions):
3Q03 4Q03 1Q04 2Q04 3Q04
------ ------ ------ ------ ------
Weighted-average -
basic 904.8 913.3 930.2 923.0 903.2
Weighted-average -
diluted 991.9 1,009.9 1,019.7 1,012.8 981.8
Period-end 942.6 949.9 967.7 948.9 932.9
- ----------------------------------------------------------------------
17
Merrill Lynch & Co., Inc. Attachment VI
Supplemental Data (dollars in billions)
(unaudited) 3Q03 4Q03 1Q04 2Q04 3Q04
------ ------ ------ ------ ------
Client Assets
Private Client
U.S. $1,093 $1,165 $1,187 $1,176 $1,180
Non - U.S. 92 97 105 105 108
------ ------ ------ ------ ------
Total Private Client
Assets 1,185 1,262 1,292 1,281 1,288
MLIM direct sales(1) 202 222 229 213 199
------ ------ ------ ------ ------
Total Client
Assets(2) $1,387 $1,484 $1,521 $1,494 $1,487
====== ====== ====== ====== ======
Assets in Asset-
Priced Accounts $ 206 $ 226 $ 235 $ 237 $ 244
Assets Under
Management $ 473 $ 500 $ 513 $ 488 $ 478
Retail 194 207 212 211 208
Institutional 241 253 259 235 228
Private Investors 38 40 42 42 42
U.S. 327 337 349 330 322
Non-U.S. 146 163 164 158 156
Equity 202 225 229 229 223
Fixed Income 125 132 146 137 134
Money Market 146 143 138 122 121
- ---------------------------------------------------------------------
Net New Money
Private Client
Accounts(2)(4) $ 6 $ 4 $ 5 $ 4 $ 9
Assets Under
Management (4) - 7 (22) (10)
- ---------------------------------------------------------------------
Balance Sheet Information
(estimated)
Commercial Paper and Other
Short-term Borrowings $ 3.0 $ 5.0 $ 4.6 $ 3.2 $ 6.0
Deposits 79.3 79.5 78.1 76.1 77.3
Long-term Borrowings 80.7 83.3 96.9 93.4 102.6
Long-term debt issued to
TOPrS(SM) 3.2 3.2 3.2 3.2 3.1
Total Stockholders'
Equity 27.4 29.0 30.2 29.9 30.1
- ---------------------------------------------------------------------
Global Equity and Equity-
Linked Underwriting(2)(3)
Volume $ 8 $ 11 $ 12 $ 7 $ 11
Market Share 7.7% 8.3% 8.4% 6.0% 11.2%
Ranking 6 5 4 6 1
Global Debt
Underwriting(2)(3)
Volume $ 90 $ 82 $ 122 $ 75 $ 62
Market Share 7.9% 7.3% 7.9% 6.0% 5.4%
Ranking 4 2 2 7 7
Global Completed Mergers
and Acquisitions(2)(3)
Volume $ 61 $ 66 $ 41 $ 49 $ 111
Market Share 20.7% 20.5% 17.4% 12.6% 25.8%
Ranking 3 3 2 6 4
Full-Time
Employees(5) 47,800 48,100 48,200 49,300 49,900
Private Client
Financial Advisors 13,400 13,500 13,700 14,000 14,100
- ---------------------------------------------------------------------
(1) Reflects funds managed by MLIM not sold through Private Client
channels.
(2) Certain prior period amounts have been restated to conform to the
current period presentation.
(3) Full credit to book manager. Market shares derived from Thomson
Financial Securities Data statistics.
(4) GPC net new money excludes flows associated with the Institutional
Advisory Division which serves certain small and middle market
companies.
(5) Excludes 100, 100, 100, 200, and 300 full-time employees on salary
continuation severance at the end of 3Q04, 2Q04, 1Q04, 4Q03, and
3Q03, 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
CONTACT: Merrill Lynch
Media Relations:
Michael O'Looney, 212-449-9205
michael_olooney@ml.com
or
Investor Relations:
Tina Madon, 866-607-1234
investor_relations@ml.com
18