Corporate Vision

Table of Contents
Corporate Overview


Dual Franchise In Financial Management
Private Client-Asset Management
Corporate and Institutional Client Group

Facts at a Glance
1st Quarter 1997 Results
End of 1st Quarter 1997
Corporate Overview
Merrill Lynch & Co., Incorporated is a Delaware based holding company formed in 1973. Through its subsidiaries and affiliates, Merrill Lynch provides to its clients a range of financial services such as investments, financing, and insurance on a worldwide level. Known as the Bull, Merrill Lynch is the leading brokerage firm in the United States and the world's largest underwriter of securities. It is one of the few financial service companies to have achieved strength in both the retail and institutional markets at home and abroad. With headquarters located in New York City, the firm operates in 45 countries worldwide and employs an estimated 50,000 individuals.

Since its inception over 25 years ago, the firm has broadened and diversified its activities in the realms of geography, products, and customer respect. The firm maintains a dual franchise consisting of the Corporate and Institutional Client Group and the Private Client Group to fill the demands of institutions and individuals alike. The Bull's independent and highly regarded investment research expertise has been a key component in successfully managing their wide variety of clientele ranging from individuals and small businesses to large world corporations and governments.

Merrill Lynch has gained the reputation as the leading retail brokerage through the philosophy of 'bringing Wall Street to Main Street.' While emphasis on internal growth is a major key to its market leadership, Merrill Lynch also has diversified its dual franchise strengths through several strategic acquisitions to gain the advantage of economies of scale. In 1978, Merrill Lynch expanded its market presence in investment banking by acquiring White Weld & Company. In 1984, the firm expanded its underwriting strength and expertise by acquiring A.G. Becker. These acquisitions helped strengthen the Bull's solid foundation as a world leader in investment banking. In 1995, Merrill Lynch acquired Smith New Court PLC out of the United Kingdom. The acquisition of this major European equity market-maker and agency trader strengthened Merrill Lynch's position in equity sales, trading, and research capabilities on the European frontier.

In 1996, Merrill Lynch continued to grow its market share through acquisitions and expansion into ventures in foreign markets. This past year Merrill Lynch has escalated its efforts in South Africa, France, Brazil, and Argentina. To provide services of appraisal, title, and other real estate services in the United States, the firm acquired Lender's Service, Incorporated. In Australia, the firm acquired McIntosh Securities Limited, a leading Australian securities firm. In Italy, the firm acquired the Milan-based Carnegie Italia. In Spain, it acquired FG Inversiones Bursatiles, a leading Spanish securities firm. For its institutional investments portfolio, the Bull acquired Hotchkis and Wiley.

The Bull has maintained an Executive Management Committee consisting of 16 members with an average of 23 years at the firm. The committee directs the firm's overall policies, management processes, and corporate governance. Compensatory programs have been designed to keep employees in line with shareholder interests.

Since its inception, Merrill Lynch has maintained a consistent level of growth over the years. Since 1971, the Bull's net revenues have increased at a compound annual rate of 13% compared to the S&P 400 average rate of 8%. In the recent five years, net revenues expanded from $7 billion in 1991 to over $13 billion in 1996. In the same time period, net earnings increased from $696 million to $1 billion, while peaking at $1.6 billion in 1996. In the past five years, the Bull has earned consistent high returns on equity. Through the period of 1992 to 1996, the firm's ROE average 23%. Last year's ROE reached 26.8%.

In the past five years, the Bull has earned consistent high returns on equity. Through the period of 1992 to 1996, the firm's ROE average 23%. Last year's ROE reached 26.8%.

Corporate Vision

Merrill Lynch is focused upon five strategic aspects of its firm to create expand its leadership position in the financial service market. The focus of Merrill Lynch is to be Singularly Positioned and Strategically Committed to Global Leadership as the Preeminent Financial Management and Advisory Company.

In becoming their clients' trusted global advisor, the Bull has focused its integrity, depth of talents, balance, financial strength,