NYSE Group Announces First Quarter 2006 Financial Results

First quarter 2006 GAAP results include the operations of the NewYork Stock Exchange, Inc. (NYSE, Inc.) for the full quarter and theoperations of NYSE Arca (formerly known as the Archipelago Exchange,or ArcaEx(R), and the Pacific Exchange) since the March 7, 2006 mergerbetween NYSE, Inc. and Archipelago Holdings, Inc. Included in thefirst quarter 2006 GAAP results are a $37.7 million charge relatedprimarily to a one-time compensation award granted to NYSE employeesat the time of the merger as well as a $20.9 million gain on the saleof an equity investment. Fiscal 2005 results only included theoperations of NYSE Inc., the predecessor of NYSE Group.

Giving effect to the merger as if it occurred on January 1, 2006,but excluding the compensation charges and gain on sale of aninvestment described above, the net income of NYSE Group for the threemonths ended March 31, 2006 was $52.7 million, or $0.34 per dilutedshare, a $15.4 million or 41% increase compared to net income of $37.3million, or $0.23 per diluted share, for the same period a year ago. Afull reconciliation of these non-GAAP results is included in theattached tables entitled "Condensed consolidated statements of incomeincluding non-GAAP financial measures for the three months ended March31, 2006", "Condensed consolidated statements of income includingnon-GAAP financial measures for the three months ended March 31, 2006and 2005" and "Reconciliation of non-GAAP financial measures to GAAPmeasures."

"A year ago when we announced the merger of NYSE and ArchipelagoHoldings, we laid out integration targets for annualized cost savingsof $100 million by the end of 2006 with additional savings of $100million by the end of 2007," said Nelson Chai, Chief Financial Officerand Executive Vice President, NYSE Group, Inc. "Our first quarterresults reflect our continued focus on integrating our businesses andachieving those cost savings."

Other Financial Highlights

-- As part of the merger, NYSE Group made a $506.2 million cash distribution to its former members.

-- In January 2006, NYSE completed its inaugural "SEATS" (Stock Exchange Auction Trading System) auction, which produced 1,274 successful bids for annual trading licenses at a price of $49,290 each.

-- In March 2006, NYSE Group realized a $20.9 million gain in connection with the sale of common shares of The Depository Trust and Clearing Corporation (DTCC).

-- As of March 31, 2006, NYSE Group had $866.9 million of cash, cash equivalents, investment and other securities (including $183.3 million related to Section 31 fees collected from market participants and due to the Securities and Exchange Commission) and no debt obligation.

-- As of March 31, 2006, the stockholders' equity of NYSE Group was $1.4 billion.

First Quarter Business Highlights

-- On March 7, 2006, NYSE Group successfully completed the merger between NYSE, Inc. and Archipelago Holdings, creating the world's largest publicly held stock exchange.

-- The total number of NYSE-listed issuers at March 31, 2006 rose to 2,682 compared to 2,672 at December 31, 2005 and 2,630 at March 31, 2005.

-- For the three months ended March 31, 2006, the NYSE added 29 new issuer listings representing 83.5% of new qualified domestic proceeds and 79.1% of new qualified international proceeds.

-- For the three months ended March 31, 2006, NYSE Group handled 115.7 billion shares of NYSE listed issues, or 76.7% of the trading in NYSE listed issues, versus 112.0 billion shares and 102.5 billion shares for the three months ended December 31, 2005 and March 31, 2005, respectively.

-- NYSE Group's share of trading in NYSE Arca and Amex listed issues was 33.2% for the three months ended March 31, 2006, a decrease from 34.7% for the three months ended December 31, 2005 and an increase from 27.5% for the three months ended March 31, 2005.

-- NYSE Group's share of trading in Nasdaq listed issues was 23.0% for the three months ended March 31, 2006, an increase from 22.1% for the three months ended December 31, 2005 and a decrease from 23.6% for the three months ended March 31, 2005.

-- NYSE Group's share of trading in exchange-traded funds (ETF) increased to 42.8% for the three months ended March 31, 2006 compared to 40.5% for the three months ended December 31, 2005 and 32.9% for the three months ended March 31, 2005.

-- For the three months ended March 31, 2006, NYSE Group's share of trading in equity options contracts decreased to 10.9% from 11.5% for both the three months ended December 31, 2005 and March 31, 2005.

-- On March 22, 2006, NYSE Group received approval from the Securities and Exchange Commission to begin full implementation of the NYSE Hybrid Market(SM) initiative, and on April 5, 2006, NYSE Group announced the completion of the first phase of the NYSE Hybrid Market implementation program. Designed to offer customers greater choice in order-execution services, the NYSE Hybrid Market expands customer ability to trade instantaneously with certainty and anonymity while preserving the price improvement and market quality of the floor-based NYSE auction.

-- On April 4, 2006, NYSE Group received approval from the Securities and Exchange Commission to introduce NYSE OpenBook Real-Time(R), a new information tool for investors and market professionals designed to offer customers immediate access to market information, increase the transparency of the NYSE market, and support the implementation of the NYSE Hybrid Market.

To supplement NYSE Group's consolidated financial statementsprepared in accordance with GAAP and to better reflectperiod-over-period comparisons, NYSE Group uses non-GAAP financialmeasures of operating performance. A non-GAAP financial measure is anumerical measure of performance, financial position, or cash flowsthat either excludes or includes amounts that are not normallyexcluded or included in the most directly comparable measure,calculated and presented in accordance with GAAP. Non-GAAP financialmeasures do not replace and are not superior to the presentation ofGAAP financial results, but are provided to (i) present the effects ofcertain compensation expense and gains on sale of businesses and otherinvestments and (ii) to improve overall understanding of NYSE Group'scurrent financial performance and its prospects for the future.Specifically, NYSE Group believes the non-GAAP financial resultsprovide useful information to both management and investors regardingcertain additional financial and business trends relating to financialcondition and operating results. In addition, management uses thesemeasures for reviewing financial results and evaluating financialperformance.

About NYSE Group, Inc.

NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: theNew York Stock Exchange (the "NYSE") and NYSE Arca (formerly known asthe Archipelago Exchange, or ArcaEx(R), and the Pacific Exchange).NYSE Group is a leading provider of securities listing, trading andmarket data products and services.

The NYSE is the world's largest and most liquid cash equitiesexchange. The NYSE provides a reliable, orderly, liquid and efficientmarketplace where investors buy and sell listed companies' commonstock and other securities. Our listed operating companies represent atotal global market capitalization of over $22.9 trillion. For theperiod from January 2006 through March 2006, on an average tradingday, over 1.7 billion shares, valued at over $65 billion, were tradedon the NYSE.

NYSE Arca is an open, all-electronic stock exchange in the UnitedStates and has a leading position in trading exchange-traded funds andexchange-listed securities. NYSE Arca is also an exchange for tradingequity options. NYSE Arca's trading platform links traders to multipleU.S. market centers and provides customers with fast electronicexecution and open, direct and anonymous market access.

NYSE Regulation, an independent, not-for-profit subsidiary,regulates member organizations through the enforcement of marketplacerules and federal securities laws.

NYSE Regulation also ensures that companies listed on the NYSE andNYSE Arca meet their financial and corporate governance listingstandards.

For more information on NYSE Group, go to: www.nyse.com.

Cautionary Note Regarding Forward-Looking Statements

Certain statements in this press release may containforward-looking statements within the meaning of the PrivateSecurities Litigation Reform Act of 1995. These statements are basedon NYSE Group's current expectations and involve risks anduncertainties that could cause NYSE Group's actual results to differmaterially from those set forth in the statements. There can be noassurance that such expectations will prove to be correct. Actualresults may differ materially from those expressed or implied in theforward-looking statements. Factors that could cause NYSE Group'sresults to differ materially from current expectations include, butare not limited to: NYSE Group's ability to implement its strategicinitiatives, economic, political and market conditions andfluctuations, government and industry regulation, interest rate riskand U.S. and global competition, and other factors detailed in NYSEGroup's Annual Report on Form 10-K and other periodic reports filedwith the U.S. Securities and Exchange Commission. In addition, thesestatements are based on a number of assumptions that are subject tochange. Accordingly, actual results may be materially higher or lowerthan those projected. The inclusion of such projections herein shouldnot be regarded as a representation by NYSE Group that the projectionswill prove to be correct. We undertake no obligation to release anyrevisions to any forward-looking statements.

NYSE Group, Inc.
Condensed consolidated statements of income
in accordance with GAAP (unaudited)
(in thousands, except per share data)

Three months ended
March 31,
----------------------
2006 2005
--------- --------

Revenues
Activity assessment fees $139,209 $92,940
Transaction 76,151 37,953
Listing 88,468 85,995
Market data 48,215 44,150
Data processing 39,349 44,900
Regulatory 57,363 50,498
Licensing, facility and other 30,186 18,583
--------- --------
Total revenues 478,941 375,019
--------- --------

Expenses
Section 31 fees 139,209 92,940
Compensation 167,301 127,769
Liquidity payments 18,970 -
Routing and clearing fees 6,203 -
Systems and communications 29,902 31,742
Professional services 31,438 28,050
Depreciation and amortization 28,163 26,173
Occupancy 18,820 17,036
Marketing and other 19,107 14,085
--------- --------
Total expenses 459,113 337,795
--------- --------

Operating income 19,828 37,224
Investment and other income, net 9,862 6,739
Gain on sale of equity investment 20,925 -
--------- --------
Income before income tax provision and
minority interest 50,615 43,963
Income tax provision 19,723 18,809
Minority interest 544 (865)
--------- --------
Net income $30,348 $26,019
========= ========

Basic earnings per share $0.24 $0.22
========= ========
Diluted earnings per share $0.24 $0.22
========= ========

Basic weighted average shares outstanding 125,958 115,699 (a)
========= ========
Diluted weighted average shares outstanding 127,194 115,699 (a)
========= ========


(a) Adjusted to reflect the merger with Archipelago on March 7,
2006 giving retroactive effect to the issuance of shares to
former NYSE members.


NYSE Group, Inc.
Condensed consolidated statements of income including non-GAAP
financial measures for the three months ended March 31, 2006
(unaudited)
(in thousands, except per share data)


Stand alone Pro Forma Non-GAAP
------------------ ------------------- ----------------------
NYSE
Group Con-
Archi- Adjus- Combined Adjust- solidated
NYSE pelago tments (a) ments Results
--------- -------- ------- --------- -------- -----------

Revenues
Activity
assess-
ment
fees $126,864 $43,200 $- $170,064 $- $170,064
Trans-
action 35,880 136,344 - 172,224 - 172,224
Listing 88,440 109 - 88,549 - 88,549
Market
data 43,745 17,270 - 61,015 - 61,015
Data
pro-
cessing 39,349 - - 39,349 - 39,349
Reg-
ulatory 56,607 3,173 - 59,780 - 59,780
Licensing,
facility
and
other 29,507 2,719 - 32,226 - 32,226
--------- -------- ------- --------- -------- -----------
Total
revenues 420,392 202,815 - 623,207 - 623,207
--------- -------- ------- --------- -------- -----------

Expenses
Section
31 fees 126,864 43,200 - 170,064 - 170,064
Merger
expenses 2,613 696 (3,309)(b) - - -
Compen-
sation 162,688 19,767 - 182,455 (37,690)(e) 142,387
(2,378)(f)
Liquidity
payments - 62,911 - 62,911 - 62,911
Routing
and
clearing
fees - 21,001 - 21,001 - 21,001
Systems
and
commun-
ications 28,135 6,412 - 34,547 - 34,547
Pro-
fessional
services 28,427 3,477 - 31,904 - 31,904
Depre-
ciation
and
amort-
ization 25,756 7,520 1,314 (c) 34,590 - 34,590
Occupancy 17,986 3,289 - 21,275 - 21,275
Marketing
and
other 17,859 3,739 - 21,598 - 21,598
--------- -------- ------- --------- -------- -----------
Total
expenses 410,328 172,012 (1,995) 580,345 (40,068) 540,277
--------- -------- ------- --------- -------- -----------

Operating
income 10,064 30,803 1,995 42,862 40,068 82,930
Investment
and
other
income,
net 9,495 1,070 - 10,565 - 10,565
Gain on
sale of
businesses - 26,034 - 26,034 (26,034)(g) -
Gain on
sale of
equity
invest-
ment 20,925 - - 20,925 (20,925)(h) -
--------- -------- ------- --------- -------- -----------
Income
before
income
tax
provision
and
minority
interest 40,484 57,907 1,995 100,386 (6,891) 93,495
Income
tax
provision 15,367 23,687 809 (d) 39,863 340 (i) 40,203
Minority
interest 544 - - 544 - 544
--------- -------- ------- --------- -------- ---------
Net
income $24,573 $34,220 $1,186 $59,979 $(7,231) $52,748
========= ======== ======= ========= ======== =========

Basic
earnings
per
share $0.38 $0.34
========= =========
Diluted
earnings
per
share $0.38 $0.34
========= =========

Basic weighted
average shares
outstanding 155,817 155,817(j)
========= =========
Diluted weighted
average shares
outstanding 157,081 157,081(j)
========= =========



(a) As if the disposition of Wave Securities by Archipelago and the
merger between Archipelago and NYSE had been completed on January
1, 2006.

(b) To eliminate the merger expenses as they represent nonrecurring
charges directly attributable to the merger.

(c) To account for the amortization expense related to the fair value
of identifiable intangible assets, primarily trade names and
customer relationships.

(d) To adjust the income tax provision for the effect of the pro forma
adjustments based upon a combined income tax rate of 40%.

(e) To reverse the following one-time charges recorded by NYSE Group
at the time of the merger:

Compensation expense for immediate vesting of
600,000 restricted stock units granted to NYSE
employees $ 33,254
Compensation expense for immediate vesting of
other compensation arrangements with NYSE
Regulation employees 4,436
---------
$ 37,690

(f) To reverse the one-time compensation expense recorded as a result
of the acceleration of vesting of certain Archipelago stock
options immediately prior to the merger.

(g) To reverse the gains recorded prior to the merger by Archipelago
in connection with the following transactions:

Sale of Wave
Securities $ 23,099
Sale of
Archipelago
Brokerage
Services 2,935
---------
$ 26,034

(h) To reverse the gain recorded by NYSE Group in connection with the
sale of DTCC common shares to certain DTCC participants.

(i) To adjust the consolidated income tax provision to a 43% estimated
effective tax rate.

(j) To adjust the weighted average number of shares outstanding giving
retroactive effect to the issuance of 109.5 million shares of
common stock to former members in the merger.


NYSE Group, Inc.
Condensed consolidated statements of income including non-GAAP
financial measures for the three months ended March 31, 2006
and 2005 (unaudited)
(in thousands, except per share data)

The following condensed consolidated statements of income present
the results of operations of NYSE Group, Inc. as if the following
transactions had been completed at the beginning of the earliest
period presented (or January 1, 2005):


1. the acquisition of PCX Holdings and subsidiaries by Archipelago,

2. the disposition of Wave Securities by Archipelago, and
3. the merger between Archipelago and NYSE.

In addition, the non-GAAP results for the three months ended March 31,
2006 exclude a $37.7 million charge related primarily to a one-time
compensation award granted to NYSE employees at the time of the merger
as well as a $20.9 million gain on the sale of an equity investment.

Three months ended
March 31,
-------------------
2006 2005
--------- ---------

Revenues
Activity assessment fees $170,064 $122,703
Transaction 172,224 156,525
Listing 88,549 86,113
Market data 61,015 59,400
Data processing 39,349 44,900
Regulatory 59,780 53,243
Licensing, facility and equipment 32,226 20,853
--------- ---------
Total revenues 623,207 543,737
--------- ---------

Expenses
Section 31 fees 170,064 122,703
Compensation 142,387 146,557
Liquidity payments 62,911 52,481
Routing and clearing fees 21,001 19,347
Systems and communications 34,547 37,938
Professional services 31,904 31,937
Depreciation and amortization 34,590 36,607
Occupancy 21,275 19,597
Marketing and other 21,598 21,432
--------- ---------
Total expenses 540,277 488,599
--------- ---------

Operating income 82,930 55,138
Investment and other income, net 10,565 7,489
--------- ---------
Income before income tax provision and minority
interest 93,495 62,627
Income tax provision 40,203 26,222
Minority interest 544 (865)
--------- ---------
Net income $52,748 $37,270
========= =========

Basic earnings per share $0.34 $0.23
========= =========
Diluted earnings per share $0.34 $0.23
========= =========

Basic weighted average shares outstanding 155,817 161,196
========= =========
Diluted weighted average shares outstanding 157,081 161,853
========= =========


NYSE Group, Inc.
Reconciliation of non-GAAP financial measures to GAAP measures
for the three months ended March 31, 2006 (unaudited)
(in thousands, except per share data)

We use non-GAAP financial measures of operating performance.
Non-GAAP measures do not replace and are not superior to the
presentation of our GAAP financial results but are provided to improve
overall understanding of our current financial performance and our
prospects for the future.

Income before income tax provision and minority interest,
GAAP $50,615
Add:
Income before income tax provision of Archipelago Holdings
for
the period from January 1 to March 7, 2006 49,771
--------
Income before income tax provision and minority interest,
Pro Forma 100,386
Add back:
1. Merger related transactions
Compensation expense for immediate vesting of 600,000
restricted stock units granted to NYSE employees 33,254
Compensation expense for immediate vesting of other
compensation arrangements with NYSE Regulation employees 4,436
Compensation expense for acceleration of vesting of
certain Archipelago stock options 2,378
2. Other transactions
Gain on sale of DTCC common stock (20,925)
Gain on sale of Wave Securities (23,099)
Gain on sale of Archipelago Brokerage Services (2,935)
--------
Income before income tax provision and minority interest,
Non-GAAP 93,495
Income tax provision(1) 40,203
Minority interest 544
--------
Net income, Non-GAAP $52,748
========

Diluted earnings per share, GAAP $0.24
Net effect of adjustments 0.10
--------
Diluted earnings per share, Non-GAAP $0.34
========

(1) Using a 43.0% estimated consolidated effective tax rate.



NYSE Group, Inc.
Condensed Consolidated Statements of Financial Condition
(in thousands)

March December
31, 31,
2006 2005
----------- -----------
(unaudited)

Assets
Current assets:
Cash and cash equivalents $206,631 $43,492
Investment and other securities 660,314 1,108,479
Accounts receivable, net 322,684 184,185
Deferred income taxes 93,501 91,919
Other current assets 58,953 36,142
----------- -----------
Total current assets 1,342,083 1,464,217

Property and equipment, net 411,637 343,534
Goodwill 528,155 -
Other intangible assets, net 586,923 -
Deferred income taxes 320,058 290,145
Other assets 77,990 106,249
----------- -----------
Total assets $3,266,846 $2,204,145
=========== ===========

Liabilities and stockholders' equity
Current liabilities:
Accounts payable and accrued expenses $352,846 $341,886
Section 31 fees payable 183,284 232,146
Deferred revenue 283,924 85,690
Deferred income taxes 34,022 25,238
----------- -----------
Total current liabilities 854,076 684,960

Accrued employee benefits 323,337 323,373
Deferred revenue 325,996 329,197
Deferred income taxes 253,677 9,289
Other liabilities 28,757 23,037
----------- -----------
Total liabilities 1,785,843 1,369,856

Minority interest 36,268 35,164

Stockholders' equity 1,444,735 799,125

----------- -----------
Total liabilities and stockholders' equity $3,266,846 $2,204,145
=========== ===========


NYSE Group, Inc. Selected Statistical Data
(shares and contracts in millions)


Three Months Ended
------------------------
March December March
31, 31, 31,
2006 2005 2005
------------------------
(unaudited)
NYSE Company listings:
NYSE listed issuers(1) 2,682 2,672 2,630
Number of new issuer listings(2) 29 80 38
NYSE share (%) of domestic qualified new
operating company listings proceeds
(IPOs)(3) 83.5% 81.3% 95.8%
NYSE share (%) of international qualified new
operating company listings proceeds
(IPOs)(4) 79.1% 100.0% 100.0%

NYSE Listed Issues (5):
NYSE Group Matched Volume (6) 113,654 110,299 100,990
NYSE Group Handled Volume (7) 115,689 111,969 102,507
Total NYSE Listed Consolidated Volume 150,840 142,319 125,193
NYSE Group Share of Total Consolidated
Volume:
Matched Volume (6) 75.3% 77.5% 80.7%
Handled Volume (7) 76.7% 78.7% 81.9%

NYSE Arca and Amex Listed Issues:
NYSE Group Matched Volume (6) 6,015 6,077 3,684
NYSE Group Handled Volume (7) 6,917 7,023 4,238
Total NYSE Arca and Amex Listed Consolidated
Volume 20,853 20,257 15,393
NYSE Group Share of Total Consolidated
Volume:
Matched Volume (6) 28.8% 30.0% 23.9%
Handled Volume (7) 33.2% 34.7% 27.5%

Nasdaq Listed Issues:
NYSE Group Matched Volume (6) 24,236 19,593 22,723
NYSE Group Handled Volume (7) 30,072 24,488 28,650
Total Nasdaq Listed Consolidated Volume 130,693 110,568 121,508
NYSE Group Share of Total Consolidated
Volume:
Matched Volume (6) 18.5% 17.7% 18.7%
Handled Volume (7) 23.0% 22.1% 23.6%

Exchange-Traded Funds (5),(8):
NYSE Group Matched Volume (6) 8,553 7,486 4,828
NYSE Group Handled Volume (7) 9,570 8,405 5,390
Total ETF Consolidated Volume 22,370 20,751 16,406
NYSE Group Share of Total Consolidated
Volume:
Matched Volume (6) 38.2% 36.1% 29.4%
Handled Volume (7) 42.8% 40.5% 32.9%

Equity Options (9):
NYSE Group Options Contracts 48.4 46.4 36.6
Total Consolidated Options Contracts 446.5 402.4 318.6
NYSE Group Share of Total 10.9% 11.5% 11.5%

Market Information: (10)
Tape A share of trades (%) 87.0% 91.2% 91.7%
Tape B share of trades (%) 41.9% 45.7% 47.1%
Tape C share of trades and shares (%) 21.9% 20.8% 21.0%
Professional subscribers 415,612 413,458 411,086

Regulatory Fees:
Gross FOCUS revenues ($ billions)(11) 61.1 53.3 37.8

Data Processing Fees:
% SIAC revenues from customers other than
NYSE 40.6% 42.2% 42.0% (1) Number of listed operating companies, closed-end funds and ETFs on NYSE, Inc. as of period end. Does not include information for NYSE Arca for the periods presented.(2) Includes initial public offerings and transfers of common stocks from other markets(3) Proceeds raised by NYSE-listed domestic IPOs/Total proceeds raised by qualified domestic IPOs. Qualified domestic IPOs represent initial public offerings of U.S. issuers that meet the NYSE's initial listing criteria. (4) Proceeds raised by NYSE-listed international IPOs/Total proceeds raised by qualified international IPOs. Qualified international IPOs represent the initial capital-raising event in the United States involving a listing by non-U.S. issuers that meet the NYSE's initial listing criteria.(5) Includes NYSE Crossing Sessions 1,2,3 and 4.(6) Represents the total number of shares of equity securities and exchange-traded funds (ETFs) executed on the NYSE Group's exchanges. (7) Represents the total number of shares of equity securities and ETFs internally matched on the NYSE Group's exchanges or routed to andexecuted at an external market center. NYSE Arca routing includes odd-lots.(8) Data included in previously identified categories.(9) Includes trading in U.S. equity options contracts, not equity-index options.(10) Represents the NYSE Group share of qualifying trades for Tapes Aand B reported by the NYSE Group to the consolidated tape, as comparedto the total number of qualifying trades for Tapes A and B reported tothe consolidated tape by all other participating market centers. NYSE Group share of Tape C represents the average of: (i) the share ofqualifying trades for Tape C reported by the NYSE Group to theconsolidated tape, as compared to the total number of qualifying trades for Tape C reported to the consolidated tape by all other participating market centers; and (ii) the share of qualifying share volume for Tape C reported by the NYSE Group to the consolidated tape,as compared to the total qualifying share volume for Tape C reported by all other participating market centers. The consolidated tape refers to the collection of market data that multiple markets make available on a consolidated basis. (11) Gross FOCUS revenues represent revenues generated by member broker-dealers as reported on their "FOCUS" report (as required by theSEC). A member broker-dealer's regulatory fee is based on the revenuesreported. The NYSE records revenue on a six-month lag; the data is provided on this basis.