Merrill Lynch Reports First Quarter 2005 Net Earnings of $1.2 Billion;

    Business Editors

    NEW YORK--(BUSINESS WIRE)--April 19, 2005--Merrill Lynch (NYSE: MER) today reported quarterly net earnings of $1.21 billion, down 3% from the record earnings of $1.25 billion in the 2004 first quarter but up 2% from the fourth quarter. Earnings per diluted share were $1.21, unchanged from the year-ago quarter. First quarter net revenues were $6.2 billion, up 3% from the first quarter of 2004 and up 6% from the fourth quarter, and the highest the firm has generated since the first quarter of 2001. The first quarter pre-tax profit margin was 26.8%, and the annualized return on average common equity was 15.5%.

    "We are very pleased with our performance in the quarter," said Stan O'Neal, chairman and chief executive officer of Merrill Lynch. "We posted solid revenue growth over the strong performance in the previous quarter, and, despite increasingly challenging market conditions in March, we produced net earnings of more than $1 billion again this quarter.

    "We are executing well against our plans to deliver meaningful top line growth by building out key asset classes in our institutional business, including mortgages, principal investing, cash equities, commodities, and investment banking. In our Wealth Management businesses, we continue to experience strong net inflows into annuitized private client products and strong investment performance in our managed-money products. While we are mindful of the increasingly challenging operating environment, we will continue to invest to grow our business while maintaining strong operating discipline."

    Business Segment Review:

Global Markets and Investment Banking (GMI) -------------------------------------------

    GMI demonstrated the benefits of its more diversified sources of revenue and strong client relationships during the quarter. After a solid fourth quarter, GMI generated strong sequential increases in first quarter net revenues despite more challenging market conditions in March. In Global Markets, Debt Markets posted its highest-ever quarterly net revenues, and Equity Markets generated its strongest net revenues in the last 15 quarters.

Global Private Client (GPC) ---------------------------

    GPC maintained its strong performance in the first quarter of 2005, despite a decline in transactional activity as the quarter progressed. The depth and breadth of GPC's product platform gives its Financial Advisors (FAs) more opportunities to meet their clients' needs for investment, credit and banking products. This advantage was reflected in strong net asset flows into annuitized products and strong net new money during the quarter.

Merrill Lynch Investment Managers (MLIM) ----------------------------------------

    MLIM continued to leverage its strong investment performance to grow the distribution of its products, while maintaining an efficient operating platform. MLIM generated strong net inflows from its European third-party retail distribution efforts, driven in part by record sales of the Merrill Lynch International Fund product range.

Compensation Expenses ---------------------

    Compensation and benefits expenses were $3.1 billion, or 49.6% of net revenues for the first quarter of 2005, compared to 50.3% in the year-ago quarter.

Non-compensation Expenses -------------------------

    Overall, non-compensation costs, including $85 million of expenses related to consolidated investments, were $1.47 billion in the first quarter of 2005, up $144 million from the year-ago quarter. Excluding expenses related to consolidated investments, non-compensation expenses were $1.38 billion, or up $101 million, running in line with targeted levels.

    Details of the significant changes in non-compensation costs, excluding expenses related to consolidated investments, from the first quarter of 2004 are as follows:

Income Taxes ------------

    Merrill Lynch's year-to-date effective tax rate was 27.4%, up from the 2004 full-year rate of 24%. The 2004 effective tax rate reflected the utilization of remaining Japanese tax loss carry-forwards. The first quarter 2005 effective tax rate included a net benefit related to settlements with various taxing authorities.

Staffing --------

    Merrill Lynch's full-time employees totaled 50,900 at the end of the first quarter of 2005, a net increase of 300 during the quarter.

Share Repurchase Program ------------------------

    As part of its active management of equity capital, Merrill Lynch repurchased 17.3 million shares of its common stock during the first quarter at an average price of $59.52 per share, completing the $2 billion program authorized in July 2004. The Board of Directors has authorized the repurchase of an additional $4 billion of Merrill Lynch's outstanding common shares.

Dividend on Common Shares -------------------------

    The Board of Directors has declared a 25% increase in the regular quarterly dividend to 20 cents per common share, payable May 25, 2005, to shareholders of record on May 6, 2005.

    Ahmass Fakahany, vice chairman and chief administrative officer, and Jeff Edwards, senior vice president and chief financial officer, will host a conference call today at 10:00 a.m. ET to discuss the company's 2005 first quarter 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 (non-U.S. callers). On-demand replay of the webcast will be available from approximately 1:00 p.m. ET 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 total client assets of approximately $1.6 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. Firmwide, assets under management total $479 billion. For more information on Merrill Lynch, please visit www.ml.com.

    Merrill Lynch may make forward-looking statements, including, for example, statements about management expectations, strategic objectives, growth opportunities, business prospects, investment banking backlog, anticipated financial results, the impact of off balance sheet arrangements, significant contractual obligations, anticipated results of litigation and regulatory investigations and proceedings, and other similar matters. These forward-looking statements are not statements of historical facts and represent only Merrill Lynch's beliefs regarding future performance, which are inherently uncertain. There are a variety of factors, many of which are beyond Merrill Lynch's control, which affect the operations, performance, business strategy and results and could cause its actual results and experience to differ materially from the expectations and objectives expressed in any forward-looking statements. These factors include, but are not limited to, financial market volatility; actions and initiatives by current and potential competitors; general economic conditions; the effect of current, pending and future legislation, regulation, and regulatory actions; and the other risks detailed in Merrill Lynch's Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, 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 forward-looking statements to reflect the impact of circumstances or events that arise after the date the forward-looking statements are made. Readers should, however, consult any further disclosures Merrill Lynch may make in its reports on Form 10-K, Form 10-Q and Form 8-K.

Merrill Lynch & Co., Inc. Attachment I

Preliminary Unaudited Earnings Summary Percent Inc For the Three Months Ended / (Dec) -------------------------- -------------- April December March 1Q05 1Q05 1, 31, 26, vs. vs. (in millions, except per 2005 2004 2004 4Q04 1Q04 share amounts) ------- -------- ------- ------ ------ (13 (14 (13 weeks) weeks) weeks) Net Revenues Asset management and portfolio service fees $1,435 $1,439 $1,313 (0.3)% 9.3% Commissions 1,345 1,302 1,339 3.3 0.4 Principal transactions 879 296 1,029 197.0 (14.6) Investment banking 811 994 837 (18.4) (3.1) Revenues from consolidated investments 127 139 57 (8.6) 122.8 Other 345 272 332 26.8 3.9 ------- -------- ------- Subtotal 4,942 4,442 4,907 11.3 0.7

Interest and dividend revenues 5,541 5,175 3,056 7.1 81.3 Less interest expense 4,262 3,728 1,902 14.3 124.1 ------- -------- ------- Net interest profit 1,279 1,447 1,154 (11.6) 10.8 ------- -------- -------

Total Net Revenues 6,221 5,889 6,061 5.6 2.6 ------- -------- -------

Non-Interest Expenses Compensation and benefits 3,084 2,689 3,047 14.7 1.2 Communications and technology 396 400 340 (1.0) 16.5 Occupancy and related depreciation 233 255 217 (8.6) 7.4 Brokerage, clearing, and exchange fees 219 208 185 5.3 18.4 Professional fees 178 203 177 (12.3) 0.6 Advertising and market development 126 152 122 (17.1) 3.3 Expenses of consolidated investments 85 103 42 (17.5) 102.4 Office supplies and postage 52 56 51 (7.1) 2.0 Other 179 271 190 (33.9) (5.8) ------- -------- -------

Total Non-Interest Expenses 4,552 4,337 4,371 5.0 4.1 ------- -------- -------

Earnings Before Income Taxes 1,669 1,552 1,690 7.5 (1.2)

Income tax expense 457 359 439 27.3 4.1 ------- -------- -------

Net Earnings $1,212 $1,193 $1,251 1.6 (3.1) ======= ======== =======

Preferred Stock Dividends $7 $13 $10 (46.2) (30.0) ======= ======== =======

Earnings Per Common Share Basic $1.33 $1.31 $1.33 1.5 0.0 Diluted $1.21 $1.19 $1.21 1.7 0.0

Average Shares Used in Computing Earnings Per Common Share Basic 907.8 896.6 930.2 1.2 (2.4) Diluted 993.3 992.7 1,022.8 0.1 (2.9)

Annualized Return on Average Common Equity 15.5% 15.7% 17.0%

Merrill Lynch & Co., Inc. Attachment II

Preliminary Segment Data (unaudited) For the Three Months Ended --------------------------- April December March 1, 31, 26, (dollars in millions) 2005 2004 2004 ------- -------- ---------- (13 (14 (13 weeks) weeks) weeks)

Global Markets & Investment Banking Global Markets Debt Markets $1,643 $1,249 $1,613 Equity Markets 990 822 921 ------- -------- ---------- Total Global Markets net revenues 2,633 2,071 2,534 Investment Banking(a) Origination: Debt 342 346 236 Equity 180 279 276 Strategic Advisory Services 160 247 163 ------- -------- ---------- Total Investment Banking net revenues 682 872 675 ------- -------- ---------- Total net revenues 3,315 2,943 3,209 ------- -------- ----------

Pre-tax earnings 1,124 990 1,119

Pre-tax profit margin 33.9% 33.6% 34.9% ----------------------------------------------------------------------

Global Private Client Fee-based revenues $1,268 $1,256 $1,158 Transactional and origination revenues 852 878 914 Net interest profit 398 382 340 Other revenues 75 100 96 ------- -------- ---------- Total net revenues 2,593 2,616 2,508 ------- -------- ----------

Pre-tax earnings 510 519 507

Pre-tax profit margin 19.7% 19.8% 20.2% ----------------------------------------------------------------------

Merrill Lynch Investment Managers Total net revenues $414 $426 $401

Pre-tax earnings 127 130 108

Pre-tax profit margin 30.7% 30.5% 26.9% ----------------------------------------------------------------------

Corporate Total net revenues $(101) $(96) $(57)

Pre-tax earnings (loss) (92) (87) (44) ----------------------------------------------------------------------

Total Total net revenues $6,221 $5,889 $6,061

Pre-tax earnings 1,669 1,552 1,690

Pre-tax profit margin 26.8% 26.4% 27.9% ----------------------------------------------------------------------

(a) A portion of Origination revenue is recorded in the Global Private Client segment.

Merrill Lynch & Co., Inc. Attachment III

Consolidated Quarterly Earnings (in millions) (unaudited)

1Q04 2Q04 3Q04 4Q04 1Q05 -------------------------------------- (13 (13 (13 (14 (13 weeks) weeks) weeks) weeks) weeks) Net Revenues Asset management and portfolio service fees Asset management fees $448 $440 $443 $522 $481 Portfolio service fees 578 606 611 614 650 Account fees 131 131 128 126 124 Other fees 156 167 162 177 180 -------------------------------------- Total 1,313 1,344 1,344 1,439 1,435 Commissions Listed and over-the- counter securities 816 605 563 705 727 Mutual funds 340 322 306 343 364 Other 183 233 207 254 254 -------------------------------------- Total 1,339 1,160 1,076 1,302 1,345 Principal transactions 1,029 634 341 296 879 Investment banking Underwriting 672 622 537 747 650 Strategic advisory 165 142 129 247 161 -------------------------------------- Total 837 764 666 994 811 Revenues from consolidated investments 57 46 104 139 127 Other 332 274 392 272 345 -------------------------------------- Subtotal 4,907 4,222 3,923 4,442 4,942 Interest and dividend revenues 3,056 3,112 3,630 5,175 5,541 Less interest expense 1,902 2,084 2,730 3,728 4,262 -------------------------------------- Net interest profit 1,154 1,028 900 1,447 1,279

-------------------------------------- Total Net Revenues 6,061 5,250 4,823 5,889 6,221 --------------------------------------

Non-Interest Expenses Compensation and benefits 3,047 2,587 2,273 2,689 3,084 Communications and technology 340 358 363 400 396 Occupancy and related depreciation 217 202 219 255 233 Brokerage, clearing, and exchange fees 185 187 193 208 219 Professional fees 177 163 162 203 178 Advertising and market development 122 132 127 152 126 Expenses of consolidated investments 42 39 47 103 85 Office supplies and postage 51 49 47 56 52 Other 190 147 184 271 179

-------------------------------------- Total Non-Interest Expenses 4,371 3,864 3,615 4,337 4,552 --------------------------------------

Earnings Before Income Taxes 1,690 1,386 1,208 1,552 1,669 Income tax expense 439 316 286 359 457 --------------------------------------

Net Earnings $1,251 $1,070 $922 $1,193 $1,212

---------------------------------------------------------------------- Per Common Share Data 1Q04 2Q04 3Q04 4Q04 1Q05 --------------------------------------

Earnings - Basic $1.33 $1.15 $1.01 $1.31 $1.33 Earnings - Diluted 1.21 1.05 0.93 1.19 1.21 Dividends paid 0.16 0.16 0.16 0.16 0.16 Book value 30.68 30.97 31.75 32.99 32.91 Est.

Merrill Lynch & Co., Inc. Attachment IV

Percentage of Quarterly Net Revenues (unaudited)

1Q04 2Q04 3Q04 4Q04 1Q05 ---------------------------------------- (13 (13 (13 (14 (13 weeks) weeks) weeks) weeks) weeks) Net Revenues Asset management and portfolio service fees Asset management fees 7.4% 8.4% 9.2% 8.9% 7.7% Portfolio service fees 9.5% 11.5% 12.7% 10.4% 10.4% Account fees 2.2% 2.5% 2.7% 2.1% 2.0% Other fees 2.6% 3.2% 3.3% 3.0% 3.0% ---------------------------------------- Total 21.7% 25.6% 27.9% 24.4% 23.1% Commissions Listed and over-the- counter securities 13.5% 11.5% 11.7% 12.0% 11.7% Mutual funds 5.6% 6.1% 6.3% 5.8% 5.9% Other 3.0% 4.5% 4.3% 4.3% 4.0% ---------------------------------------- Total 22.1% 22.1% 22.3% 22.1% 21.6% Principal transactions 17.0% 12.1% 7.1% 5.0% 14.1% Investment banking Underwriting 11.1% 11.8% 11.1% 12.7% 10.4% Strategic advisory 2.7% 2.7% 2.7% 4.2% 2.6% ---------------------------------------- Total 13.8% 14.5% 13.8% 16.9% 13.0% Revenues from consolidated investments 0.9% 0.9% 2.2% 2.4% 2.0% Other 5.5% 5.2% 8.0% 4.6% 5.6% ---------------------------------------- Subtotal 81.0% 80.4% 81.3% 75.4% 79.4% Interest and dividend revenues 50.4% 59.3% 75.3% 87.9% 89.1% Less interest expense 31.4% 39.7% 56.6% 63.3% 68.5% ---------------------------------------- Net interest profit 19.0% 19.6% 18.7% 24.6% 20.6%

---------------------------------------- Total Net Revenues 100.0% 100.0% 100.0% 100.0% 100.0% ----------------------------------------

Non-Interest Expenses Compensation and benefits 50.3% 49.3% 47.1% 45.7% 49.6% Communications and technology 5.6% 6.8% 7.5% 6.8% 6.4% Occupancy and related depreciation 3.6% 3.8% 4.5% 4.3% 3.7% Brokerage, clearing, and exchange fees 3.1% 3.6% 4.0% 3.5% 3.5% Professional fees 2.9% 3.1% 3.4% 3.4% 2.9% Advertising and market development 2.0% 2.5% 2.6% 2.6% 2.0% Expenses of consolidated investments 0.7% 0.7% 1.0% 1.7% 1.4% Office supplies and postage 0.8% 0.9% 1.0% 1.0% 0.8% Other 3.1% 2.9% 3.9% 4.6% 2.9% ---------------------------------------- Total Non-Interest Expenses 72.1% 73.6% 75.0% 73.6% 73.2% ----------------------------------------

Earnings Before Income Taxes 27.9% 26.4% 25.0% 26.4% 26.8%

Income tax expense 7.3% 6.0% 5.9% 6.1% 7.3% ----------------------------------------

Net Earnings 20.6% 20.4% 19.1% 20.3% 19.5% ----------------------------------------------------------------------

Common shares outstanding (in millions): 1Q04 2Q04 3Q04 4Q04 1Q05 ---------------------------------------- Weighted-average - basic 930.2 923.0 903.2 896.6 907.8 Weighted-average - diluted 1,022.8 1,015.9 985.0 992.7 993.3 Period-end 967.7 948.9 932.9 931.8 948.7 ----------------------------------------------------------------------

Merrill Lynch & Co., Inc. Attachment V

Supplemental Data (dollars in billions) (unaudited)

1Q04 2Q04 3Q04 4Q04 1Q05 --------------------------------------

Client Assets Private Client U.S. $1,187 $1,176 $1,179 $1,244 $1,226 Non - U.S. 105 105 109 115 116 -------------------------------------- Total Private Client Assets 1,292 1,281 1,288 1,359 1,342 MLIM direct sales (1) 249 235 225 237 233 -------------------------------------- Total Client Assets $1,541 $1,516 $1,513 $1,596 $1,575 ======================================

Assets in Asset-Priced Accounts $235 $237 $243 $257 $256

Assets Under Management $513 $488 $478 $501 $479

Retail 212 212 208 218 218 Institutional 259 235 228 240 217 Retail Separate Accounts 42 41 42 43 44

U.S. 349 330 322 332 312 Non-U.S. 164 158 156 169 167

Equity 229 229 223 245 244 Retail Money Market 58 56 53 50 49 Institutional Liquidity Funds 117 97 91 90 70 Fixed Income 109 106 111 116 116 ---------------------------------------------------------------

Net New Money

Private Client Accounts (2) $5 $4 $9 $6 $11

Assets Under Management $7 $(22) $(10) $(5) $(16) ---------------------------------------------------------------

Balance Sheet Information (estimated)

Commercial Paper and Other Short-term Borrowings $4.6 $3.2 $6.0 $4.0 $2.7 Deposits 78.1 76.1 77.3 79.7 80.0 Long-term Borrowings 96.9 93.4 102.6 116.5 112.3 Long-term debt issued to TOPrSSM Partnerships 3.2 3.2 3.1 3.1 3.1 Total Stockholders' Equity 30.1 29.8 30.0 31.4 32.9 ---------------------------------------------------------------

Global Equity and Equity- Linked Underwriting (3)

Volume $12 $7 $12 $12 $12 Market Share 8.3% 6.1% 11.1% 8.5% 10.8% Ranking 4 6 1 3 1

Global Debt Underwriting (3)

Volume $123 $78 $66 $75 $66 Market Share 7.9% 6.2% 5.4% 6.3% 4.4% Ranking 2 7 7 6 10

Global Completed Mergers and Acquisitions (3)

Volume $41 $50 $115 $114 $54 Market Share 16.8% 11.9% 24.0% 26.1% 15.9% Ranking 2 7 4 3 6 ---------------------------------------------------------------

Full-Time Employees (4) 48,200 49,300 49,900 50,600 50,900

Private Client Financial Advisors 13,700 14,000 14,100 14,100 14,100 ------------------------------------------------------------------

Note: Certain prior period amounts have been restated to conform to the current period presentation.

(1) Reflects funds managed by MLIM not sold through Private Client channels.

(2) GPC net new money excludes flows associated with the Institutional Advisory Division which serves certain small- and middle-market companies.

(3) Full credit to book manager. Market shares derived from Thomson Financial Securities Data statistics.

(4) Excludes 100 full-time employees on salary continuation severance at the end of each period.

Merrill Lynch & Co., Inc. Investor Relations Phone: 866-607-1234 Fax: 212-449-7461 investor_relations@ml.com www.ir.ml.com

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CONTACT: Merrill Lynch & Co., Inc. Media Relations: Jessica Oppenheim, 212-449-2107 jessica_oppenheim@ml.com or Investor Relations: Tina Madon, 866-607-1234 investor_relations@ml.com

KEYWORD: NEW YORK INDUSTRY KEYWORD: BANKING CONFERENCE CALLS EARNINGS SOURCE: Merrill Lynch & Co., Inc.

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