SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 28, 1998
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Merrill Lynch & Co., Inc.
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(Exact Name of Registrant as Specified in its Charter)
Delaware 1-7182 13-2740599
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(State or Other (Commission (I.R.S. Employer
Jurisdiction of File Number) Identification No.)
Incorporation)
World Financial Center, North Tower, New York, New York 10281-1332
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (212) 449-1000
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(Former Name or Former Address, if Changed Since Last Report.)
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Item 5. Other Events
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Filed herewith is the Preliminary Unaudited Consolidated Balance Sheet as of
September 25, 1998 for Merrill Lynch & Co., Inc. and subsidiaries ("Merrill
Lynch"). Also filed herewith is a statement setting forth the computation of
certain Merrill Lynch financial ratios for the periods presented.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
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(c) Exhibits
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(12) Computation of Ratios of Earnings to Fixed Charges and
Combined Fixed Charges and Preferred Stock Dividends
(99) Additional Exhibits
(i) Preliminary Unaudited Consolidated Balance Sheet of
Merrill Lynch as of September 25, 1998
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<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
MERRILL LYNCH & CO., INC.
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(Registrant)
By: /s/ E. Stanley O'Neal
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E. Stanley O'Neal
Executive Vice President and
Chief Financial Officer
Date: October 28, 1998
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<PAGE>
EXHIBIT INDEX
Exhibit No. Description Page
- ----------- ----------- ----
(12) Computation of Ratios of Earnings to Fixed Charges and 5
Combined Fixed Charges and Preferred Stock Dividends
(99) Additional Exhibits
(i) Preliminary Unaudited Consolidated Balance Sheet of 6-7
Merrill Lynch as of September 25, 1998
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EXHIBIT 12
MERRILL LYNCH & CO., INC. AND SUBSIDIARIES
COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES AND
COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
(dollars in millions)
<TABLE>
<CAPTION>
For the Three Months For the Nine Months
Ended Ended
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Sept. 25, Sept. 26, Sept.25, Sept. 26,
1998 1997 1998 1997
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<S> <C> <C> <C> <C>
Pretax earnings (loss) from
continuing operations $ (206) $ 789 $ 1,602 $ 2,376
Add: Fixed charges 4,954 4,249 14,448 12,106
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Pretax earnings before fixed
charges $ 4,748 $5,038 $16,050 $14,482
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Fixed charges:
Interest $ 4,860 $4,190 $14,199 $11,929
Other (A) 94 59 249 177
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Total fixed charges $ 4,954 $4,249 $14,448 $12,106
======= ====== ======= =======
Preferred stock dividend `
requirements $ 15 $ 15 $ 46 $ 47
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Total combined fixed charges and
preferred stock dividends $ 4,969 $4,264 $14,494 $12,153
======= ====== ======= =======
Ratio of earnings to fixed
charges (B) .96 1.19 1.11 1.20
Ratio of earnings to combined
fixed charges and preferred
stock dividends (B) .96 1.18 1.11 1.19
</TABLE>
(A) Other fixed charges consist of the interest factor in rentals,
amortization of debt expense, and preferred stock dividend requirements of
majority-owned subsidiaries.
(B) The ratio calculations indicate a less than one-to-one coverage for the
three months ended September 25, 1998. Pretax loss from continuing
operations for the three months ended September 25, 1998 is inadequate to
cover fixed charges. The deficient amounts for the respective ratios are
$206 and $221.
Note: Prior periods have been restated for the Midland Walwyn acquisition, as
required under pooling-of-interests accounting.
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EXHIBIT 99(i)
MERRILL LYNCH & CO., INC. AND SUBSIDIARIES
PRELIMINARY UNAUDITED CONSOLIDATED BALANCE SHEET
(dollars in millions, except per share amount)
SEPTEMBER 25,
ASSETS 1998
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CASH AND CASH EQUIVALENTS .................................... $ 8,965
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CASH AND SECURITIES SEGREGATED FOR REGULATORY PURPOSES
OR DEPOSITED WITH CLEARING ORGANIZATIONS ................... 12,583
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MARKETABLE INVESTMENT SECURITIES ............................. 4,213
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TRADING ASSETS, AT FAIR VALUE
Corporate debt and preferred stock ........................... 26,908
Equities and convertible debentures .......................... 28,326
Contractual agreements ....................................... 25,491
U.S. Government and agencies ................................. 14,139
Non-U.S. governments and agencies ............................ 9,001
Mortgages, mortgage-backed, and asset-backed ................. 10,529
Other ........................................................ 3,542
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117,936
Securities received as collateral, net of securities
pledged as collateral ...................................... 5,202
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Total ........................................................ 123,138
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SECURITIES PLEDGED AS COLLATERAL ............................. 18,386
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RECEIVABLES UNDER RESALE AGREEMENTS .......................... 73,125
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RECEIVABLES UNDER SECURITIES BORROWED TRANSACTIONS ........... 43,176
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OTHER RECEIVABLES
Customers (net of allowance for doubtful accounts of $55) .... 29,881
Brokers and dealers .......................................... 7,319
Interest and other ........................................... 9,096
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Total ........................................................ 46,296
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INVESTMENTS OF INSURANCE SUBSIDIARIES ........................ 4,507
LOANS, NOTES, AND MORTGAGES (net of allowance for
loan losses of $148) ....................................... 7,161
OTHER INVESTMENTS ............................................ 2,144
PROPERTY, LEASEHOLD IMPROVEMENTS, AND EQUIPMENT
(net of accumulated depreciation and amortization
of $3,338) ................................................. 2,570
GOODWILL (net of accumulated amortization of $284) .............. 5,413
OTHER ASSETS ................................................. 1,742
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TOTAL ASSETS ................................................. $353,419
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<PAGE>
EXHIBIT 99(i)
MERRILL LYNCH & CO., INC. AND SUBSIDIARIES
PRELIMINARY UNAUDITED CONSOLIDATED BALANCE SHEET
(dollars in millions, except per share amount)
LIABILITIES, PREFERRED SECURITIES ISSUED BY SEPTEMBER 25,
SUBSIDIARIES, AND STOCKHOLDERS' EQUITY 1998
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LIABILITIES
PAYABLES UNDER REPURCHASE AGREEMENTS AND SECURITIES
LOANED TRANSACTIONS ........................................ $ 100,174
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COMMERCIAL PAPER AND OTHER SHORT-TERM BORROWINGS ............. 43,409
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TRADING LIABILITIES, AT FAIR VALUE
Contractual agreements ....................................... 22,733
U.S. Government and agencies ................................. 10,572
Equities and convertible debentures .......................... 19,677
Non-U.S. governments and agencies ............................ 10,893
Corporate debt, preferred stock, and other ................... 6,049
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Total ........................................................ 69,924
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OBLIGATION TO RETURN SECURITIES RECEIVED AS COLLATERAL ....... 23,588
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OTHER PAYABLES
Customers .................................................... 20,727
Brokers and dealers .......................................... 5,772
Interest and other ........................................... 18,785
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Total ........................................................ 45,284
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LIABILITIES OF INSURANCE SUBSIDIARIES ........................ 4,404
LONG-TERM BORROWINGS ......................................... 55,064
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TOTAL LIABILITIES ............................................ 341,847
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PREFERRED SECURITIES ISSUED BY SUBSIDIARIES .................. 1,777
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STOCKHOLDERS' EQUITY
PREFERRED STOCKHOLDERS' EQUITY ............................... 425
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COMMON STOCKHOLDERS' EQUITY
Exchangeable Shares, issued: 4,831,224 shares ................ 71
Common stock, par value $1.33 1/3 per share;
authorized: 1,000,000,000 shares;
issued: 472,660,324 shares ................................. 630
Paid-in capital .............................................. 1,405
Accumulated other comprehensive loss (net of tax) ............ (59)
Retained earnings ............................................ 10,227
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12,274
Less: Treasury stock, at cost: 119,242,755 shares ............ 2,190
Employee stock transactions ............................ 714
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TOTAL COMMON STOCKHOLDERS' EQUITY ............................ 9,370
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TOTAL STOCKHOLDERS' EQUITY ................................... 9,795
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TOTAL LIABILITIES, PREFERRED SECURITIES ISSUED BY
SUBSIDIARIES, AND STOCKHOLDERS' EQUITY ..................... $ 353,419
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