MERRILL LYNCH PREFERRED FUNDING I LP
Merrill Lynch Preferred Capital Trust I          ---------------------------------------  Merrill Lynch Preferred Capital Trust I (the "Trust") is a statutory business trust formed under the Delaware Business Trust Act, as amended, pursuant to a declaration of trust and the filing of a certificate of trust with the Secretary of State on November 20, 1996, which was subsequently amended by an amended and restated declaration of trust dated as of December 11, 1996. Merrill Lynch & Co., Inc. (the "Company" or "Merrill Lynch") is the sole owner of the Trust common securities. The Trust exists for the exclusive purposes of (i) issuing trust securities, consisting of 7-3/4% Trust Originated Preferred Securities (the "TOPrS") and trust common securities (the "Trust Common Securities"), representing undivided beneficial ownership interests in the assets of the Trust, (ii) investing the gross proceeds of the trust securities in 7-3/4% Partnership Preferred Securities (the "Partnership Preferred Securities") issued by Merrill Lynch Preferred Funding I, L.P. (the "Partnership"), and (iii) engaging in only those other activities necessary or incidental thereto.           Merrill Lynch Preferred Funding I, L.P.          ---------------------------------------  The Partnership is a limited partnership formed under the Delaware Revised Uniform Limited Partnership Act, as amended, pursuant to an agreement of limited partnership and the filing of a certificate of limited partnership with the Secretary of State of the State of Delaware on November 20, 1996, which was subsequently amended by an amended and restated agreement of limited partnership dated December 17, 1996. The Company is the sole general partner of the Partnership. The Partnership is managed by the general partner and exists for the exclusive purposes of (i) issuing its partnership interests, consisting of the Company's general partner interest and the Partnership Preferred Securities, (ii) investing the proceeds thereof in certain eligible securities of the Company and wholly-owned subsidiaries of the Company (the "Affiliate Investment Instruments") and certain eligible debt securities, and (iii) engaging in only those other activities necessary or incidental thereto.  The information set forth under the headings "Merrill Lynch Preferred Capital Trust I", "Merrill Lynch Preferred Funding I, L.P.", "Description of the Trust Preferred Securities", "Description of the Trust Guarantee", "Description of the Partnership Preferred Securities", "Description of the Partnership Guarantee", and "Use of Proceeds" in the Prospectus dated December 11, 1996, of the Trust and the Partnership is incorporated by reference herein.  Available Information - ---------------------  The Registrants and Merrill Lynch file annual, quarterly and current reports, proxy statements and other information with the Securities and Exchange Commission (the "SEC"). You may read and copy any document we file with the SEC at the SEC's Public Reference Room at 100 F Street, NE, Room 1580, Washington, DC 20549. Please call the SEC at 1-800-SEC-0330 for information on the Public Reference Room. The SEC maintains an internet site that contains annual, quarterly and current reports, proxy and information statements and other information that issuers (including the Registrants and Merrill Lynch & Co., Inc.) file electronically with the SEC. The SEC's internet site is www.sec.gov.  Merrill Lynch's internet address is www.ml.com. Merrill Lynch makes available, free of charge, its proxy statements, annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934. In addition, the website includes information concerning beneficial ownership of Merrill Lynch's equity securities by its executive officers and directors. Investors can find this information under "SEC Reports" through the investor relations section of the website which can be accessed directly at www.ir.ml.com. These reports are available through the website as soon as reasonably practicable after such reports are electronically filed with, or furnished to, the SEC. Additionally, Merrill Lynch's Guidelines for Business Conduct, Code of Ethics for Financial Professionals and charters for the committees of its Board of Directors have been filed as exhibits to SEC reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934. These documents, along with Merrill Lynch's Corporate Governance Guidelines, are also available on the investor relations section of the website. The information on Merrill Lynch's websites is not incorporated by reference into this Report. Holders of the Registrants' securities may obtain copies of these reports and documents, free of charge, upon written request to Judith A. Witterschein, Corporate Secretary, by mail at Merrill Lynch & Co., Inc., 222 Broadway, 17th Floor, New York, NY 10038 or by email at corporate_secretary@ml.com.
The Company also is the sole general partner of the Partnership. The Partnership is managed by the general partner and exists for the exclusive purposes of (i) issuing its partnership interests, consisting of the Company's general partner interest and the Partnership Preferred Securities,(ii) investing the proceeds thereof in certain eligible securities of the Company and wholly-owned subsidiaries of the Company and certain eligible debt securities, and (iii) engaging in only those other activities necessary or incidental thereto.  In the course of conducting its business operations, the Company could be exposed to a variety of risks that are inherent to the financial services business. A summary of some of the significant risks that could affect the Company's financial condition and results of operations is included in the Company's Annual Report on Form 10-K for the fiscal year ended December 30, 2005 and is incorporated by reference from Exhibit 99.1 to this report.
ITEM 2.  PROPERTIES          ----------  The Registrants do not own or lease any real property.
The Registrants know of no material legal proceedings involving the Trust, the Partnership or the assets of either of them.
No disclosure is required for this Item pursuant to General Instruction I of Form 10-K.                                         PART II                                      -------
There is no established public market for the Trust Common Securities or the general partnership interest in the Partnership.  All of the Trust Common Securities and the entire general partnership interest in the Partnership are owned of record and beneficially by the Company.  The Company, as holder of the Trust Common Securities, is entitled to receive cumulative cash distributions accumulating from December 17, 1996 and payable quarterly in arrears on each March 30, June 30, September 30 and December 30, commencing December 30, 1996, at an annual rate of 7-3/4% of the liquidation amount per annum. Distributions not paid on the scheduled payment date will accumulate and compound quarterly at a rate per annum equal to 7-3/4%. The certificate of limited partnership of the Partnership does not require any regular periodic distributions to be made to the general partner; however, to the extent that aggregate payments to the Partnership on the Affiliate Investment Instruments and on certain eligible debt securities exceed distributions accumulated or payable with respect to the Partnership Preferred Securities, the Partnership may at times have excess funds which shall be allocated to and may, in the general partner's sole discretion, be distributed to the general partner.
No disclosure is required for this Item pursuant to General Instruction I of Form 10-K.
No disclosure is required for this Item pursuant to General Instruction I of Form 10-K. There are no material changes in the amount of revenue and expense items between the most recent fiscal year presented and the fiscal year immediately preceding it.
On December 17, 1996, the Trust invested the gross proceeds from the sale of the Trust Common Securities and the TOPrS in the Partnership Preferred Securities (the "Trust Assets"). The Partnership, in turn, invested the proceeds from the sale of the Partnership Preferred Securities and a capital contribution from the Company in certain Affiliate Investment Instruments and eligible securities (the "Partnership Assets"). To the extent the Partnership has funds available from the Partnership Assets, the general partner of the Partnership may declare distributions to the Trust, as holder of the Partnership Preferred Securities. The Trust's ability to pay distributions to the holders of the TOPrS is dependent on its receipt of distributions on the Trust Assets from the Partnership. Therefore, upon the receipt by the Partnership of payments from the Partnership Assets and the distribution thereof to the Trust, the Trust will pass through such payments to the holders of the TOPrS.
In response to this ITEM 8, the financial statements and notes thereto and the Reports of Independent Registered Public Accounting Firm set forth on pages F-1 through F-17 are incorporated by reference herein.
None.
The persons who function as the equivalent of the chief executive officer and chief financial officer of the Trust and the Partnership have evaluated the effectiveness of the Trust's and the Partnership's disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934) as of the end of the period covered by this Form 10-K. Based on this evaluation, the persons who function as the equivalent of the chief executive officer and chief financial officer of the Trust and the Partnership have concluded that the Trust's and the Partnership's disclosure controls and procedures are effective as of the end of the period covered by this report.  In addition, no change in the Trust's or the Partnership's internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934) occurred during the fourth fiscal quarter of 2005 that has materially affected, or is reasonably likely to materially affect, the Trust's or the Partnership's internal control over financial reporting.
None.                                      PART III                                     --------
No disclosure is required for this Item pursuant to General Instruction I of Form 10-K.
No disclosure is required for this Item pursuant to General Instruction I of Form 10-K.
No disclosure is required for this Item pursuant to General Instruction I of Form 10-K.
No disclosure is required for this Item pursuant to General Instruction I of Form 10-K.
The following table presents aggregate fees for audits of the Trust's and the Partnership's financial statements by Deloitte & Touche LLP for the fiscal years ended December 30, 2005 and December 31, 2004. There were no other services rendered by Deloitte & Touche LLP to the Trust and the Parnership in fiscal years ended December 30, 2005 and December 31, 2004.                                                 2005                  2004                                             -------               -------               Audit Fee(1)                  $12,200               $12,200  The Audit Committee of the Board of Directors of the Company is responsible for the approval of audit fees for its subsidiaries, which includes the Trust and the Partnership. The Company is the sole owner of the Trust's common securities and the sole general partner of the Partnership. Consistent with SEC rules regarding auditor independence, the Audit Committee of the Company has established a policy governing the provision of audit and non-audit services to the Company and its subsidiaries (Pre-Approval Policy). The description of the Pre-Approval Policy found on page 33 of the Company's 2006 Proxy Statement filed on March 10, 2006 is incorporated herein by reference. You may obtain a copy of the 2006 Proxy Statement on the Company's Investor Relations website at www.ir.ml.com or by written request to Judith A. Witterschein, Corporate Secretary, Merrill Lynch & Co., Inc., 222 Broadway, 17th Floor, New York, New York 10038-2510.  - -------------- (1) Audit Fees consisted of fees for the audit and reviews of the Trust's and the Partnership's financial statements filed with the SEC on Forms 10-K and 10-Q, as well as work generally only the independent registered public accounting firm can be reasonably expected to provide, such as comfort letters, consents and review of documents filed with the SEC.                                        PART IV                                      -------
Documents filed as part of this Report:            1.       Financial Statements           The  contents of the financial statements are listed on page F-1          hereof, and the financial  statements and  accompanying  Reports of          Independent  Registered Public Accounting Firm appear on pages F-2          through F-17.            2.       Financial Statement Schedules           None.           3.       Exhibits           Certain of the following exhibits were previously filed as exhibits to          other reports or registration statements filed by the Registrants and          are incorporated herein by reference to such reports or registration          statements as indicated parenthetically below by the appropriate report          reference date or registration statement number.           4.1      Certificate of Trust dated November 20, 1996, of the Trust                   (incorporated by reference to Exhibit 4.1 to the Registration                   Statement on Form S-3 (No. 333-16603) (the "Registration                   Statement")).           4.2      Amended and Restated Declaration of Trust of the Trust, dated                   as of December 11, 1996 (incorporated by reference to Exhibit                   4.2 to the Trust's Annual Report on Form 10-K for the fiscal                   year ended December 27, 1996 (File No. 1-7182-01)).           4.3      Certificate of Limited Partnership,  dated as of November 20,                   1996, of the Partnership  (incorporated by reference to                   Exhibit 4.3 to the Registration Statement).           4.4      Amended and Restated Agreement of Limited Partnership of the                   Partnership (incorporated by reference to Exhibit 4.4 to the                   Partnership's Annual Report on Form 10-K for the fiscal year                   ended December 27, 1996 (File No. 1-7182-02)).           4.5      Form of Trust Preferred Securities Guarantee Agreement between                   the Company and JPMorgan Chase Bank, N.A.(1), as guarantee                   trustee (incorporated by reference to Exhibit 4.5 to the                   Registration Statement).           4.6      Form of Partnership Preferred Securities Guarantee Agreement                   between the Company and JPMorgan Chase Bank, N.A., as                   guarantee trustee (incorporated by reference to Exhibit 4.6 to                   the Registration Statement).           4.7      Form of Subordinated Debenture Indenture between the Company                   and JPMorgan Chase Bank, N.A., as trustee (incorporated by                   reference to Exhibit 4.7 to the Registration Statement).           4.8      Form of Affiliate Debenture Guarantee Agreement between the                   Company and JPMorgan Chase Bank, N.A., as guarantee trustee                   (incorporated by reference to Exhibit 4.8 to the Registration                   Statement).           4.9      Form of Trust Preferred Security (included in Exhibit 4.2                   above).           4.10     Form of Partnership Preferred Security (included in Exhibit                   4.4 above).           4.11     Form of Subordinated Debenture (incorporated by reference to                   Exhibit 4.11 to the Registration Statement).           12*      Statement re:  Computation of Ratios of Earnings to Combined                   Fixed Charges and Preferred Securities Distributions.           23*      Consent of Deloitte & Touche LLP.           31.1*    Rule 13a-14(a) Certification.           31.2*    Rule 13a-14(a) Certification.           32.1*    Certification Pursuant to 18 U.S.C. Section 1350, as Adopted                   Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.           32.2*    Certification Pursuant to 18 U.S.C. Section 1350, as Adopted                   Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.           99.1*    Excerpt of Merrill Lynch & Co., Inc. Annual Report on                   Form 10-K for the fiscal year ended December 30, 2005.    - --------------- (1) As used in Item 15 and the Exhibit Index of this Report, "JPMorgan Chase     Bank, N.A." shall mean the entity formerly known as JPMorgan Chase and The     Chase Manhattan Bank. * Filed herewith                                 INDEX TO FINANCIAL STATEMENTS                           -----------------------------                                    ITEM 15(1)  FINANCIAL STATEMENTS                                                      PAGE - --------------------                                                      ----  MERRILL LYNCH PREFERRED CAPITAL TRUST I       Balance Sheets, December 30, 2005 and December 31, 2004               F-2       Statements of Earnings, Years Ended December 30, 2005,            December 31, 2004, and December 26, 2003                        F-3       Statements of Changes in  Stockholders' Equity,  Years            Ended  December 30, 2005, December 31, 2004,            and December 26, 2003                                           F-4       Statements of Cash Flows, Years Ended December 30, 2005,            December 31, 2004, and December 26, 2003                        F-5       Notes to Financial Statements                                         F-6       Report of Independent Registered Public Accounting Firm               F-8       Supplemental Financial Information (Unaudited)                        F-9   MERRILL LYNCH PREFERRED FUNDING I, L.P.       Balance Sheets, December 30, 2005 and December 31, 2004               F-10       Statements of Earnings, Years Ended December 30, 2005,            December 31, 2004, and December 26, 2003                        F-11       Statements of Changes in Partners' Capital, Years Ended            December 30, 2005, December 31, 2004,            and December 26, 2003                                           F-12       Statements of Cash Flows, Years Ended December 30, 2005,            December 31, 2004, and December 26, 2003                        F-13       Notes to Financial Statements                                         F-14       Report of Independent Registered Public Accounting Firm               F-16       Supplemental Financial Information (Unaudited)                        F-17                                           F-1      MERRILL LYNCH PREFERRED CAPITAL TRUST I BALANCE SHEETS (dollars in thousands, except per security amounts) - -----------------------------------------------------------------------------------------------------------------------                                                                                       December 30, 2005  December 31, 2004                                                                                    -----------------  -----------------    ASSETS  Investment in affiliate partnership preferred securities                                  $  283,505         $  283,505                                                                                           ----------         ---------- Total Assets                                                                              $  283,505         $  283,505                                                                                           ==========         ==========  STOCKHOLDERS' EQUITY  Stockholders' equity:     Preferred  securities (7 3/4% Trust Originated Preferred Securities;       11,000,000 authorized, issued, and outstanding; $25 liquidation       amount per security)                                                                   275,000            275,000     Common securities (7 3/4% Trust Common Securities;       340,208 authorized, issued, and outstanding;       $25 liquidation amount per security)                                                     8,505              8,505                                                                                           ----------         ----------    Total Stockholders' equity                                                                283,505            283,505                                                                                           ----------         ----------  Total Stockholders' Equity                                                                $  283,505         $  283,505                                                                                           ==========         ==========   See Notes to Financial Statements                                         F-2     MERRILL LYNCH PREFERRED CAPITAL TRUST I STATEMENTS OF EARNINGS (dollars in thousands) - -------------------------------------------------------------------------------------------------------------------------------                                                                                              FOR THE YEAR ENDED                                                                      ----------------------------------------------------------                                                                        December 30, 2005   December 31, 2004   December 26, 2003                                                                       -----------------   -----------------   -----------------      EARNINGS  Interest on affiliate partnership preferred securities                         $ 21,972            $ 21,972            $ 21,972                                                                                ========            ========            ========     See Notes to Financial Statements                                          F-3     MERRILL LYNCH PREFERRED CAPITAL TRUST I STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (dollars in thousands) - -----------------------------------------------------------------------------------------------------------------------                                                                                   FOR THE YEAR ENDED                                                            ------------------------------------------------------------                                                             December 30, 2005    December 31, 2004     December 26, 2003                                                            -----------------    -----------------     -----------------     PREFERRED SECURITIES  Balance, beginning and end of period                              $  275,000           $  275,000            $  275,000                                                                   ----------           ----------            ----------  COMMON SECURITIES  Balance, beginning and end of period                                   8,505                8,505                 8,505                                                                   ----------           ----------            ----------    UNDISTRIBUTED EARNINGS  Balance, beginning of period                                               -                    -                     - Earnings                                                              21,972               21,972                21,972 Distributions                                                        (21,972)             (21,972)              (16,479) Distributions payable                                                      -                    -                (5,493)                                                                   ----------           ----------            ---------- Balance, end of period                                                     -                    -                     -                                                                   ----------           ----------            ----------   Total Stockholders' Equity                                        $  283,505           $  283,505            $  283,505                                                                   ==========           ==========            ==========   See Notes to Financial Statements                                         F-4     MERRILL LYNCH PREFERRED CAPITAL TRUST I STATEMENTS OF CASH FLOWS (dollars in thousands) - ----------------------------------------------------------------------------------------------------------------------------------                                                                                           FOR THE YEAR ENDED                                                                     --------------------------------------------------------------                                                                       December 30, 2005    December 31, 2004      December 26, 2003                                                                     ------------------    -----------------      -----------------     CASH FLOWS FROM OPERATING ACTIVITIES:    Earnings                                                                  $  21,972            $  21,972              $  21,972    Decrease in interest receivable from affiliate                                    -                5,493                      -                                                                              ---------            ---------              ---------       Cash provided by operating activities                                     21,972               27,465                 21,972                                                                              ---------            ---------              ---------  CASH FLOWS FROM FINANCING ACTIVITIES:    Distributions                                                               (21,972)             (27,465)               (21,972)                                                                              ---------            ---------              ---------       Cash used for financing activities                                       (21,972)             (27,465)               (21,972)                                                                              ---------            ---------              ---------  NET CHANGE IN CASH                                                                   -                    -                      -  CASH, BEGINNING OF PERIOD                                                            -                    -                      -                                                                              ---------            ---------              --------- CASH, END OF PERIOD                                                          $       -            $       -              $       -                                                                              =========            =========              =========    SUPPLEMENTAL DISCLOSURE OF CASH FLOWS:  No distributions were accrued at December 30, 2005 and December 31, 2004.    See Notes to Financial Statements                                         F-5     MERRILL LYNCH PREFERRED CAPITAL TRUST I NOTES TO FINANCIAL STATEMENTS December 30, 2005 - -------------------------------------------------------------------------------  1. ORGANIZATION AND PURPOSE  Merrill Lynch Preferred Capital Trust I (the "Trust") is a statutory business trust formed under the Delaware Business Trust Act, as amended, pursuant to a declaration of trust and the filing of a certificate of trust with the Secretary of State on November 20, 1996, which was subsequently amended by an amended and restated declaration of trust dated as of December 11, 1996. Merrill Lynch & Co., Inc. (the "Company") is the sole owner of the Trust common securities. The Trust exists for the exclusive purposes of (i) issuing trust securities, consisting of 7-3/4% Trust Originated Preferred Securities (the "Trust Preferred Securities") and trust common securities (the "Trust Common Securities"), representing undivided beneficial ownership interests in the assets of the Trust, (ii) investing the gross proceeds of the trust securities in 7-3/4% Partnership Preferred Securities (the "Partnership Preferred Securities") issued by Merrill Lynch Preferred Funding I, L.P. (the "Partnership"), and (iii) engaging in only those other activities necessary or incidental thereto.  The Company has paid compensation to the underwriters of the offering of the Trust Preferred Securities. The Company also has agreed to (i) pay all fees and expenses related to the organization and operations of the Trust (including taxes, audit fees, duties, assessments, or government charges of whatever nature (other than withholding taxes) imposed by the United States of America or any other domestic taxing authority upon the Trust) and the offering of the Trust Preferred Securities and (ii) be responsible for all debts and other obligations of the Trust (other than with respect to the Trust Preferred Securities and the Trust Common Securities). The Company has agreed to indemnify the trustees and certain other persons.   2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  BASIS of PRESENTATION The financial statements are presented in accordance with accounting principles generally accepted in the United States of America, which require management to make estimates that affect reported amounts and disclosure of contingencies in the financial statements. As such, actual results could differ from those estimates.  INVESTMENTS The investment in the Affiliate Partnership Preferred Securities represents a limited partnership interest in the Partnership and is recorded at cost. At year end, the fair value of the investment approximates its carrying value. Income on the Partnership Preferred Securities is accrued when earned.  INCOME TAXES The Trust does not incur any income tax liabilities. Such liabilities are incurred directly by the security holders.                                         F-6    MERRILL LYNCH PREFERRED CAPITAL TRUST I NOTES TO FINANCIAL STATEMENTS December 30, 2005 - --------------------------------------------------------------------------------   3. INVESTMENT IN AFFILIATE PARTNERSHIP PREFERRED SECURITIES  The Trust holds 11,340,208 7 3/4% Partnership Preferred Securities, $25 liquidation preference per security. The interest payment dates and redemption provisions of the Partnership Preferred Securities, which are redeemable on or after December 30, 2006 at the option of the Partnership, correspond to the distribution payment dates and redemption provisions of the Trust Preferred Securities. Upon any redemption of the Partnership Preferred Securities, the Trust Preferred Securities will be redeemed. The Company has guaranteed, on a subordinated basis, the payment of distributions by the Partnership on the Partnership Preferred Securities if, as, and when declared out of funds legally available and payments upon liquidation of the Partnership or the redemption of the Partnership Preferred Securities to the extent of funds legally available.   4.  STOCKHOLDERS' EQUITY  TRUST PREFERRED SECURITIES  The Trust issued 11,000,000 7 3/4% Trust Preferred Securities, $25 liquidation amount per security in a public offering on December 17, 1996. The Trust Preferred Securities are redeemable on or after December 30, 2006 at the option of the Trust, in whole or in part, at a redemption price equal to $25 per security. Distributions on the Trust Preferred Securities are cumulative from the date of original issue and are payable quarterly if, as, and when the Trust has funds available for payment. Holders of the Trust Preferred Securities have limited voting rights and are not entitled to vote to appoint, remove, or replace, or to increase or decrease the number of, trustees, which voting rights are vested exclusively in the holder of the Trust Common Securities. Under certain circumstances, the Trust Preferred Securities have preferential rights to payment relative to the Trust Common Securities.  The Company has guaranteed, on a subordinated basis, the payment in full of all distributions and other payments on the Trust Preferred Securities to the extent that the Trust has funds legally available. This guarantee and the partnership distribution guarantee are subordinated to all other liabilities of the Company and rank equally with the most senior preferred stock of the Company.  TRUST COMMON SECURITIES  The Trust issued 340,208 7 3/4% Trust Common Securities, $25 liquidation amount per security, to the Company on December 17, 1996. The Trust Common Securities are redeemable on or after December 30, 2006 at the option of the Trust, in whole or in part, at a redemption price equal to $25 per security.                                         F-7     REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM  To the Trustees of Merrill Lynch Preferred Capital Trust I  We have audited the accompanying balance sheets of Merrill Lynch Preferred Capital Trust I (the "Trust") as of December 30, 2005 and December 31, 2004, and the related statements of earnings, changes in stockholders' equity and cash flows for each of the three years in the period ended December 30, 2005. These financial statements are the responsibility of the Trust's management. Our responsibility is to express an opinion on these financial statements based on our audits.  We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Trust is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Trust's internal contol over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.  In our opinion, such financial statements present fairly, in all material respects, the financial position of the Trust at December 30, 2005 and December 31, 2004, and the results of its operations and its cash flows for each of the three years in the period ended December 30, 2005, in conformity with accounting principles generally accepted in the United States of America.  /s/ Deloitte & Touche LLP  New York, New York March 24, 2006                                  F-8   SUPPLEMENTAL FINANCIAL INFORMATION (UNAUDITED) - ---------------------------------------------- Quarterly Information - --------------------- The unaudited quarterly results of operations of Merrill Lynch Preferred Capital Trust I for 2005 and 2004 are prepared in conformity with U.S. generally accepted accounting principles, which include industry practices, and reflect all adjustments that are, in the opinion of management, necessary for a fair presentation of the results of operations for the periods presented. Results of any interim period are not necessarily indicative of results for a full year.   (dollars in thousands) - ------------------------------------------------------------------------------------------------------------                                                           For the Quarter Ended                         ------------------------------------------------------------------------------------                         Dec. 30,   Sept. 30,    July 1,    Apr.1,   Dec. 31,   Sept. 24,   June 25,   Mar.26,                            2005        2005       2005      2005       2004        2004       2004      2004                         ------------------------------------------------------------------------------------          Total Revenues          $5,493     $5,493      $5,493     $5,493    $5,493     $5,493      $5,493     $5,493  Net Earnings            $5,493     $5,493      $5,493     $5,493    $5,493     $5,493      $5,493     $5,493                                             F-9     MERRILL LYNCH PREFERRED FUNDING I, L.P. BALANCE SHEETS (dollars in thousands) - ----------------------------------------------------------------------------------------------------------------                                                                               December 30, 2005   December 31, 2004                                                                            -----------------   -----------------    ASSETS  Investments:    Affiliate debentures                                                             $330,055            $330,055    U.S. Government and agencies                                                        3,495               3,488                                                                                     --------            --------    Total investments                                                                 333,550             333,543                                                                                     --------            -------- Total Assets                                                                        $333,550            $333,543                                                                                     ========            ========  PARTNERS' CAPITAL  Partners' capital:    Limited partnership interest                                                      283,505             283,505    General partnership interest                                                       50,045              50,038                                                                                     --------            --------    Total partners' capital                                                           333,550             333,543                                                                                     --------            --------  Total Partners' Capital                                                             $333,550            $333,543                                                                                     ========            ========   See Notes to Financial Statements                                         F-10      MERRILL LYNCH PREFERRED FUNDING I, L.P. STATEMENTS OF EARNINGS (dollars in thousands) - ------------------------------------------------------------------------------------------------------------------                                                                          FOR THE YEAR ENDED                                             ----------------------------------------------------------------------                                              December 30, 2005           December 31, 2004        December 26, 2003                                             -----------------           -----------------        -----------------       EARNINGS  Interest income:      Affiliate debentures                             $25,579                     $25,579                  $25,579      U.S. Government and agencies                         103                          49                       44                                                       -------                     -------                  ------- Earnings                                              $25,682                     $25,628                  $25,623                                                       =======                     =======                  =======     See Notes to Financial Statements                                        F-11      MERRILL LYNCH PREFERRED FUNDING I, L.P. STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (dollars in thousands) - ------------------------------------------------------------------------------------------------------------------                                                                           FOR THE YEAR ENDED                                                  -----------------------------------------------------------------                                                   December 30, 2005       December 31, 2004       December 26, 2003                                                  -----------------       -----------------       -----------------      LIMITED PARTNER'S CAPITAL Balance, beginning of period                             $ 283,505               $ 283,505               $ 283,505 Net income allocated to limited partner                     21,972                  21,972                  21,972 Distributions                                              (21,972)                (21,972)                (16,479) Distributions payable                                            -                       -                  (5,493)                                                          ---------               ---------               --------- Balance, end of period                                     283,505                 283,505                 283,505                                                          ---------               ---------               ---------  GENERAL PARTNER'S CAPITAL Balance, beginning of period                                50,038                  50,033                  50,049 Net income allocated to general partner                      3,710                   3,656                   3,651 Distributions                                               (3,703)                 (3,651)                 (2,765) Distributions payable                                            -                       -                    (902)                                                          ---------               ---------               --------- Balance, end of period                                      50,045                  50,038                  50,033                                                          ---------               ---------               --------- TOTAL PARTNERS' CAPITAL                                  $ 333,550               $ 333,543               $ 333,538                                                          =========               =========               =========     See Notes to Financial Statements                                        F-12      MERRILL LYNCH PREFERRED FUNDING I, L.P. STATEMENTS OF CASH FLOWS (dollars in thousands) - -----------------------------------------------------------------------------------------------------------------------                                                                                    FOR THE YEAR ENDED                                                         ---------------------------------------------------------------                                                          December 30, 2005        December 31, 2004    December 26, 2003                                                         -----------------        -----------------    -----------------       CASH FLOWS FROM OPERATING ACTIVITIES:      Earnings                                                    $ 25,682                 $ 25,628             $ 25,623      Accretion of U.S. Government and agencies                       (103)                     (49)                 (44)      Decrease in interest receivable from affiliates                    -                    6,395                    -                                                                   --------                 --------             --------         Cash provided by operating activities                      25,579                   31,974               25,579                                                                   --------                 --------             --------  CASH FLOWS FROM INVESTING ACTIVITIES:      Purchases of investment securities                            (6,959)                  (6,959)             (10,438)      Maturities of investment securities                            7,055                    7,003               10,498                                                                  --------                 --------             --------         Cash provided by investing activities                          96                       44                   60                                                                  --------                 --------             --------  CASH FLOWS FROM FINANCING ACTIVITIES:      Distributions to limited partner                             (21,972)                 (27,465)             (21,972)      Distributions to general partner                              (3,703)                  (4,553)              (3,667)                                                                  --------                 --------             --------         Cash used for financing activities                        (25,675)                 (32,018)             (25,639)                                                                  --------                 --------             --------  NET CHANGE IN CASH                                                      -                        -                    -  CASH, BEGINNING OF PERIOD                                               -                        -                    -                                                                  --------                 --------             -------- CASH, END OF PERIOD                                              $      -                 $      -             $      -                                                                  ========                 ========             ========     SUPPLEMENTAL DISCLOSURE OF CASH FLOWS:  No distributions were accrued at December 30, 2005 and December 31, 2004.    See Notes to Financial Statements                                        F-13     MERRILL LYNCH PREFERRED FUNDING I, L.P. NOTES TO FINANCIAL STATEMENTS December 30, 2005 - --------------------------------------------------------------------------------   1. ORGANIZATION AND PURPOSE  Merrill Lynch Preferred Funding I, L.P. (the "Partnership") is a limited partnership formed under the Delaware Revised Uniform Limited Partnership Act, as amended, pursuant to an agreement of limited partnership and the filing of a certificate of limited partnership with the Secretary of State of the State of Delaware on November 20, 1996, which was subsequently amended by an amended and restated agreement of limited partnership dated December 17, 1996. Merrill Lynch & Co., Inc. (the "Company") is the sole general partner of the Partnership. The Partnership is managed by the general partner and exists for the exclusive purposes of (i) issuing its partnership interests, consisting of the Company's general partner interest and the Partnership Preferred Securities, (ii) investing the proceeds thereof in certain eligible securities of the Company and wholly-owned subsidiaries of the Company (the "Affiliate Investment Instruments") and certain eligible debt securities, and (iii) engaging in only those other activities necessary or incidental thereto.  The Company, in its capacity as sole general partner of the Partnership, has agreed to (i) pay all fees and expenses related to the organization and operations of the Partnership (including taxes, audit fees, duties, assessments, or government charges (other than withholding taxes) imposed by the United States or any other domestic taxing authority upon the Partnership) and (ii) be responsible for all debts and other obligations of the Partnership (other than with respect to the Partnership Preferred Securities). The Company has also agreed to indemnify certain officers and agents of the Partnership.   2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  BASIS OF PRESENTATION The financial statements are presented in accordance with accounting principles generally accepted in the United States of America, which require management to make estimates that affect reported amounts and disclosure of contingencies in the financial statements. As such, actual results could differ from those estimates.  INVESTMENTS The Partnership's investment in affiliate debentures is recorded at cost, and its investment in U.S. Government and agencies, which are recorded at accreted cost and which mature within one year, are classified as available-for-sale, which both approximate fair value.  INCOME TAXES The Partnership does not incur any income tax liabilities. Such liabilities are incurred directly by the partners.                                        F-14    MERRILL LYNCH PREFERRED FUNDING I, L.P. NOTES TO FINANCIAL STATEMENTS December 30, 2005 - --------------------------------------------------------------------------------   3. INVESTMENT IN AFFILIATE DEBENTURES  The Partnership holds debentures of the Company and a wholly-owned subsidiary of the Company. The debentures have a term of approximately 20 years and bear interest at 7 3/4% per annum. The interest payment dates and redemption provisions of the debentures, which are redeemable at the option of the Company and its subsidiary on or after December 30, 2006, correspond to the distribution payment dates and redemption provisions of the Partnership Preferred Securities. Interest and redemption payments on the subsidiary debenture are guaranteed by the Company on a subordinated basis.   4. PARTNERS' CAPITAL  The Partnership issued 11,340,208 7 3/4% Partnership Preferred Securities, $25 liquidation preference per security, to the Trust on December 17, 1996. Distributions on the Partnership Preferred Securities are cumulative from the date of original issue and are payable quarterly if, as, and when declared by the general partner. The Partnership Preferred Securities are redeemable on or after December 30, 2006 at the option of the Partnership, at a redemption price equal to $25 per security. Except as provided in the Limited Partnership Agreement and Partnership Preferred Securities Guarantee Agreement, and as otherwise provided by law, the holders of the Partnership Preferred Securities have no voting rights.  The Company has guaranteed the payment of distributions by the Partnership on the Partnership Preferred Securities if, as, and when declared out of funds legally available and payments upon liquidation of the Partnership or the redemption of the Partnership Preferred Securities to the extent of funds legally available. This guarantee is subordinated to all other liabilities of the Company and ranks equally with the most senior preferred stock of the Company.  Contemporaneously with the issuance of the Partnership Preferred Securities, the Company as general partner contributed capital to the Partnership in the amount of approximately $50 million.  The Partnership may at times have excess funds which are allocated to the Company and may, in the Company's sole discretion, be distributed to the Company to the extent that aggregate payments by the Company to the Partnership exceed distributions accumulated or payable with respect to the Partnership Preferred Securities.                                        F-15    REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM  To the General Partner and Limited Partner of Merrill Lynch Preferred Funding I, L.P.  We have audited the accompanying balance sheets of Merrill Lynch Preferred Funding I, L.P. (the "Partnership") as of December 30, 2005 and December 31, 2004, and the related statements of earnings, changes in partners' capital and cash flows for each of the three years in the period ended December 30, 2005. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.  We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Partnership is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnership's internal contol over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.  In our opinion, such financial statements present fairly, in all material respects, the financial position of the Partnership at December 30, 2005 and December 31, 2004, and the results of its operations and its cash flows for each of the three years in the period ended December 30, 2005, in conformity with accounting principles generally accepted in the United States of America.   /s/ Deloitte & Touche LLP  New York, New York March 24, 2006                                  F-16   SUPPLEMENTAL FINANCIAL INFORMATION (UNAUDITED) - ---------------------------------------------- Quarterly Information - --------------------- The unaudited quarterly results of operations of Merrill Lynch Preferred Funding I, L.P., for 2005 and 2004 are prepared in conformity with U.S. generally accepted accounting principles, which include industry practices, and reflect all adjustments that are, in the opinion of management, necessary for a fair presentation of the results of operations for the periods presented. Results of any interim period are not necessarily indicative of results for a full year.   (dollars in thousands) - -------------------------------------------------------------------------------------------------------------                                                           For the Quarter Ended                         -------------------------------------------------------------------------------------                         Dec. 30,   Sept. 30,    July 1,   Apr. 1,   Dec. 31,   Sept. 24,   June 25,    Mar.26,                            2005        2005       2005      2005       2004        2004       2004       2004                         -------------------------------------------------------------------------------------          Total Revenues           $6,427     $6,422      $6,418     $6,415    $6,411     $6,406      $6,409      $6,402  Net Earnings             $6,427     $6,422      $6,418     $6,415    $6,411     $6,406      $6,409      $6,402                                    F-17                                           SIGNATURES  Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on the 24th day of March, 2006.                                  MERRILL LYNCH PREFERRED CAPITAL TRUST I*                                 By: /s/ MARLENE DEBEL                                    ---------------------------------------------                                Name:   Marlene Debel                                Title:  Regular Trustee    - ---------------------  * There is no principal executive officer(s), principal financial officer, controller, principal accounting officer or board of directors of the Registrants. The Trustees of the Trust (which include the Regular Trustees, the Property Trustee and the Delaware Trustee) together exercise all powers and perform all functions with respect to the Trust.                                        SIGNATURES   Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant, by Merrill Lynch & Co., Inc. as General Partner, has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on the 24th day of March, 2006.  Merrill Lynch Preferred Funding I, L.P. By:  Merrill Lynch & Co., Inc. as General Partner           SIGNATURE                                  TITLE         ---------                                  -----       /s/ JUDITH A. WITTERSCHEIN                   Secretary - -----------------------------------------        (Judith A. Witterschein)     Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following directors and officers of Merrill Lynch & Co., Inc., General Partner of the Registrant, in the capacities indicated on the 24th day of March, 2006.            SIGNATURE                                  TITLE         ---------                                  -----        /s/ E. STANLEY O'NEAL                   Director, Chairman of the Board and - -----------------------------------------   Chief Executive Officer        (E. Stanley O'Neal)                  (Principal Executive Officer)       /s/ JEFFREY N. EDWARDS                  Senior Vice President and Chief - -----------------------------------------   Financial Officer        (Jeffrey N. Edwards)                 (Principal Financial Officer)       /s/ LAURENCE A. TOSI                    Vice President and Finance Director - -----------------------------------------   (Principal Accounting Officer)        (Laurence A. Tosi)       /s/ ARMANDO M. CODINA                   Director - -----------------------------------------         Armando M. Codina       /s/ JILL K. CONWAY                      Director - -----------------------------------------        (Jill K. Conway)       /s/ ALBERTO CRIBIORE                    Director  ----------------------------------------        (Alberto Cribiore)       /s/ JOHN D. FINNEGAN                    Director - -----------------------------------------        (John D. Finnegan)       /s/ HEINZ-JOACHIM NEUBURGER             Director - -----------------------------------------        (Heinz-Joachim Neuburger)       /s/ DAVID K. NEWBIGGING                 Director - -----------------------------------------        (David K. Newbigging)       /s/ AULANA L. PETERS                    Director - -----------------------------------------        (Aulana L. Peters)       /s/ JOSEPH W. PRUEHER                   Director - -----------------------------------------        (Joseph W. Prueher)       /s/ ANN N. REESE                        Director - -----------------------------------------        (Ann N. Reese)        /s/ CHARLES O. ROSSOTTI                 Director - -----------------------------------------        (Charles O. Rossotti)                                        EXHIBIT INDEX  4.1      Certificate of Trust dated November 20, 1996, of the Trust          (incorporated  by reference to Exhibit 4.1 to the Registration          Statement on Form S-3 (No. 333-16603) (the "Registration Statement")).  4.2      Amended and Restated Declaration of Trust of the Trust, dated as of          December 11, 1996 (incorporated by reference to Exhibit 4.2 to the          Trust's Annual Report on Form 10-K for the fiscal year ended December          27, 1996 (File No. 1-7182-01)).  4.3      Certificate of Limited  Partnership,  dated as of November 20, 1996, of          the Partnership  (incorporated by reference to Exhibit 4.3 to the          Registration Statement).  4.4      Amended and Restated Agreement of Limited Partnership of the          Partnership (incorporated by reference to Exhibit 4.4 to the          Partnership's Annual Report on Form 10-K for the fiscal year ended          December 27, 1996 (File No. 1-7182-02)).  4.5      Form of Trust Preferred Securities Guarantee Agreement between          the Company and JPMorgan Chase Bank, N.A., as guarantee trustee          (incorporated by reference to Exhibit 4.5 to the Registration          Statement).  4.6      Form of Partnership Preferred Securities Guarantee Agreement          between the Company and JPMorgan Chase Bank, N.A., as guarantee          trustee (incorporated by reference to Exhibit 4.6 to the          Registration Statement).  4.7      Form of Subordinated Debenture Indenture between the Company          and JPMorgan Chase Bank, N.A., as trustee (incorporated by reference          to Exhibit 4.7 to the Registration Statement).  4.8      Form of Affiliate Debenture Guarantee Agreement between the          Company and JPMorgan Chase Bank, N.A., as guarantee trustee          (incorporated by reference to Exhibit 4.8 to the Registration          Statement).  4.9      Form of Trust Preferred Security (included in Exhibit 4.2 above).  4.10     Form of Partnership Preferred Security (included in Exhibit 4.4 above).  4.11     Form of Subordinated Debenture (incorporated by reference to Exhibit          4.11 to the Registration Statement).  12*      Statement re:  Computation of Ratios of Earnings to Combined Fixed          Charges and Preferred Securities Distributions.  23*      Consent of Deloitte & Touche LLP.  31.1*    Rule 13a-14(a) Certification.  31.2*    Rule 13a-14(a) Certification.  32.1*    Certification Pursuant to 18 U.S.C. Section 1350, as Adopted          Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.  32.2*    Certification Pursuant to 18 U.S.C. Section 1350, as Adopted          Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.  99.1*    Excerpt of Merrill Lynch & Co., Inc. Annual Report on Form 10-K for          the fiscal year ended December 30, 2005.   - ------------------  * Filed herewith      EX-12 2 toprs1_exhibit12.txt TOPRS 1 4Q05 12/30/05 EXHIBIT 12                                 EX-12                               RATIO OF EARNINGS TO FIXED CHARGES                                                                                                               EXHIBIT 12                                                                  MERRILL LYNCH PREFERRED CAPITAL TRUST I                                                                 MERRILL LYNCH PREFERRED FUNDING I, L.P.                                                                  COMPUTATION OF RATIOS OF EARNINGS TO                                                    COMBINED FIXED CHARGES AND PREFERRED SECURITIES DISTRIBUTIONS                                                                           (dollars in thousands)                                       FOR THE YEAR ENDED                 FOR THE YEAR ENDED                 FOR THE YEAR ENDED                                     DECEMBER 30, 2005                  DECEMBER 31, 2004                  DECEMBER 26, 2003                            ---------------------------------    --------------------------------   ---------------------------------                             MERRILL LYNCH     MERRILL LYNCH      MERRILL LYNCH    MERRILL LYNCH     MERRILL LYNCH    MERRILL LYNCH                               PREFERRED         PREFERRED          PREFERRED        PREFERRED         PREFERRED        PREFERRED                            CAPITAL TRUST I   FUNDING I, L.P.    CAPITAL TRUST I  FUNDING I, L.P.   CAPITAL TRUST I   FUNDING I, L.P.                            ---------------   ---------------    ---------------  ---------------   ---------------   ---------------          Earnings                          $ 21,972          $ 25,682           $ 21,972         $ 25,628          $ 21,972          $ 25,623                                   ========          ========           ========         ========          ========          ========   Fixed charges                     $      -          $      -           $      -         $      -          $      -          $      -  Preferred securities  distribution requirements          21,313            21,972             21,313           21,972            21,313            21,972                                   --------          --------           --------         --------          --------          --------  Total combined fixed charges  and preferred securities  distribution requirements        $ 21,313          $ 21,972           $ 21,313         $ 21,972          $ 21,313          $ 21,972                                   ========          ========           ========         ========          ========          ========  Ratio of earnings to combined  fixed charges and preferred  securities distribution  requirements                         1.03              1.17               1.03             1.17              1.03              1.17        EX-23 3 toprs1_exhibit23.txt TOPRS1 4Q05 12/30/05 EXHIBIT 23                                                                        EXHIBIT 23   CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM - --------------------------------------------------------  We consent to the incorporation by reference in Registration Statement No. 333-16603 of Merrill Lynch & Co., Inc., Merrill Lynch Preferred Capital Trust I and Merrill Lynch Preferred Funding I, L.P. on Form S-3 of our reports dated March 24, 2006, appearing in this Annual Report on Form 10-K of Merrill Lynch Preferred Capital Trust I and Merrill Lynch Preferred Funding I, L.P. for the year ended December 30, 2005.  /s/ Deloitte & Touche LLP  New York, New York March 24, 2006            EX-31 4 toprs1_exhibit31.txt TOPRS 1 4Q05 12/30/05 EXHIBIT 31                                                                      Exhibit 31.1                                    Certification                                   -------------  I, Marlene Debel, certify that:  1. I have reviewed this annual report on Form 10-K for the fiscal year ended December 30, 2005 of Merrill Lynch Preferred Capital Trust I (the "Trust") and Merrill Lynch Preferred Funding I, L.P.;  2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;  3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Trust as of, and for, the periods presented in this report;  4. The Trust's other certifying officer(s)* and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Trust and have:  (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Trust, including the Trust's consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;  (b) Evaluated the effectiveness of the Trust's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and  (c) Disclosed in this report any change in the Trust's internal control over financial reporting that occurred during the Trust's most recent fiscal quarter (the Trust's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Trust's internal control over financial reporting; and  5. The Trust's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Trust's auditors and the audit committee of the Trust's board of directors (or persons performing the equivalent functions):  (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Trust's ability to record, process, summarize and report financial information; and  (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Trust's internal control over financial reporting.                                  MERRILL LYNCH PREFERRED CAPITAL TRUST I                                  By: /s/ MARLENE DEBEL                                    ---------------------------------------------                                Name:   Marlene Debel *                                Title:  Regular Trustee     Dated:  March 24, 2006 - ----------------------  * Marlene Debel functions as the equivalent of the Chief Executive Officer and   Chief Financial Officer of the Trust for purposes of Section 302 of the   Sarbanes-Oxley Act of 2002.      EX-31 5 toprs1exhibit31_2.txt TOPRS1 4Q05 12/30/05 EXHIBIT 31.2                                                                      Exhibit 31.2                                    Certification                                   -------------  I, Kathleen Skero, certify that:  1. I have reviewed this annual report on Form 10-K for the fiscal year ended December 30, 2005 of Merrill Lynch Preferred Capital Trust I and Merrill Lynch Preferred Funding I, L.P. (the "Partnership");  2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;  3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Partnership as of, and for, the periods presented in this report;  4. The Partnership's other certifying officer(s)* and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Partnership and have:  (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Partnership, including the Partnership's consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;  (b) Evaluated the effectiveness of the Partnership's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and  (c) Disclosed in this report any change in the Partnership's internal control over financial reporting that occurred during the Partnership's most recent fiscal quarter (the Partnership's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Partnership's internal control over financial reporting; and  5. The Partnership's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Partnership's auditors and the audit committee of the Partnership's board of directors (or persons performing the equivalent functions):  (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Partnership's ability to record, process, summarize and report financial information; and  (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Partnership's internal control over financial reporting.                                MERRILL LYNCH PREFERRED FUNDING I, L.P.                               By:  MERRILL LYNCH & CO., INC., as General Partner                                By: /s/ KATHLEEN SKERO                                  ---------------------------------------------                              Name:   Kathleen Skero *                              Title:  Controller, Merrill Lynch & Co., Inc.     Dated:  March 24, 2006 - ----------------------  * Kathleen Skero functions as the equivalent of the Chief Executive Officer and   Chief Financial Officer of the Partnership for purposes of Section 302 of the   Sarbanes-Oxley Act of 2002.      EX-32 6 toprs1_exhibit32.txt TOPRS1 4Q05 12/31/05 EXHIBIT 32                                                                      Exhibit 32.1                               CERTIFICATION PURSUANT TO                              18 U.S.C. SECTION 1350,                              AS ADOPTED PURSUANT TO                   SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002  In connection with the Annual Report on Form 10-K of Merrill Lynch Preferred Capital Trust I (the "Trust") and Merrill Lynch Preferred Funding I, L.P. for the period ended December 30, 2005 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Marlene Debel, Regular Trustee of the Trust, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:  (1) The Report fully complies with the requirements of Section 13(a) or 15(d)     of the Securities Exchange Act of 1934; and  (2) The information contained in the Report fairly presents, in all material     respects, the financial condition and results of operations of the Trust.                                    MERRILL LYNCH PREFERRED CAPITAL TRUST I                                 By:  /s/ MARLENE DEBEL                                    ---------------------------------------------                               Name:    Marlene Debel *                               Title:   Regular Trustee          Dated: March 24, 2006 _____________________  * Marlene Debel functions as the equivalent of the Chief Executive Officer   and Chief  Financial  Officer of the Trust for  purposes  of Section  906   of the Sarbanes-Oxley Act of 2002.    EX-32 7 toprs1exhibit32_2.txt TOPRS1 4Q05 12/30/05 EXHIBIT 32.2                                                                      Exhibit 32.2                               CERTIFICATION PURSUANT TO                              18 U.S.C. SECTION 1350,                              AS ADOPTED PURSUANT TO                   SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002  In connection with the Annual Report on Form 10-K of Merrill Lynch Preferred Capital Trust I and Merrill Lynch Preferred Funding I, L.P. (the "Partnership") for the period ended December 30, 2005 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Kathleen Skero, Controller of Merrill Lynch & Co., Inc., the General Partner of the Partnership, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:  (1) The Report fully complies with the requirements of Section 13(a) or 15(d)     of the Securities Exchange Act of 1934; and  (2) The information contained in the Report fairly presents, in all material     respects, the financial condition and results of operations of the     Partnership.                                   MERRILL LYNCH PREFERRED FUNDING I, L.P.                                By:  MERRILL LYNCH & CO., INC., as General Partner                                 By:  /s/ KATHLEEN SKERO                                    ---------------------------------------------                               Name:    Kathleen Skero *                               Title:   Controller, Merrill Lynch & Co., Inc.         Dated: March 24, 2006 _____________________  *  Kathleen Skero functions as the equivalent of the Chief Executive Officer    and Chief Financial Officer of the Partnership for purposes of Section 906    of the Sarbanes-Oxley Act of 2002.    EX-99.1 8 toprs1exhibit99_1.txt TOPRS 1 4Q05 12/30/05 EXHIBIT 99.1                                                                      Exhibit 99.1  Risk Factors that Could Affect Our Business  In the course of conducting its business operations, Merrill Lynch could be exposed to a variety of risks that are inherent to the financial services business. A summary of some of the significant risks that could affect Merrill Lynch's financial condition and results of operations is included below. Some of these risks are managed in accordance with established risk management policies and procedures, most of which are described in the Risk Management section of the Management's Discussion and Analysis of the Merrill Lynch & Co., Inc. Annual Report on Form 10-K for the fiscal year ended December 30, 2005 (2005 Form 10-K).  Market Risk - ----------- Merrill Lynch's various businesses may be adversely impacted by global market and economic conditions that may cause fluctuations in interest rates, exchange rates, equity and commodity prices and credit spreads.  The financial services industry and the global financial markets are influenced by numerous unpredictable factors including economic conditions, monetary and fiscal policies, the liquidity of global markets, availability and cost of capital, international and regional political events, acts of war or terrorism and investor sentiment. Changes in these factors may result in volatility in interest rates, exchange rates, equity and commodity prices, and credit spreads. Merrill Lynch has a large and increasing amount of trading and investment positions, which include proprietary trading positions in fixed income, currency, commodities and equity securities, as well as in real estate, private equity and other investments. Merrill Lynch may incur losses as a result of increased market volatility, as these fluctuations may adversely impact the valuation of its trading and investment positions. Conversely, a decline in volatility may adversely affect the results in Merrill Lynch's trading businesses, which depend on market volatility to create client and proprietary trading opportunities.  Credit Risk - ----------- Merrill Lynch may incur losses from its credit exposure related to trading, lending, and other business activities.  Merrill Lynch is exposed to the potential for credit-related losses that can occur as a result of an individual, counterparty or issuer being unable or unwilling to honor its contractual obligations. These credit exposures exist within lending relationships, commitments, letters of credit, derivatives, foreign exchange and other transactions. These exposures may arise, for example, from a decline in the financial condition of a counterparty, from a decrease in the value of securities of third parties held by Merrill Lynch as collateral, from entering into swap or other derivative contracts under which counterparties have long-term obligations to make payments to Merrill Lynch, and from extending credit to clients through loans or other arrangements. An increase in Merrill Lynch's credit exposure could have an adverse effect on its business and profitability if credit losses exceed credit provisions.  Operational Risk - ---------------- Merrill Lynch may incur losses from inadequate or failed internal processes, people and systems or from external events.  Merrill Lynch may incur losses arising from its exposure to operational risk. Financial services firms, including Merrill Lynch, are exposed to the risk of loss resulting from inadequate or failed internal processes, people and systems or from external events. Such operational risks may include, for example, exposure to natural or man-made disasters, mistakes made in the confirmation or settlement of transactions or from improper recording, evaluating or accounting for transactions. Merrill Lynch could suffer financial loss, disruption of its business, liability to clients, regulatory intervention or reputational damage, which would affect its business and financial condition.  Liquidity Risk - -------------- Merrill Lynch's business and financial condition may be adversely impacted by an inability to borrow funds or sell assets to meet maturing obligations.  Financial services firms, including Merrill Lynch, are exposed to liquidity risk, which is the potential inability to repay short-term borrowings with new borrowings or assets that can be quickly converted into cash while meeting other obligations and continuing to operate as a going concern. Merrill Lynch's liquidity may be impaired due to circumstances that it may be unable to control, such as general market disruptions or an operational problem that affects its trading clients, third parties or itself. Merrill Lynch's ability to sell assets may also be impaired if other market participants are seeking to sell similar assets at the same time. The inability of Merrill Lynch to borrow funds or sell assets to meet maturing obligations, a negative change in its credit ratings, which would have an adverse effect on its ability to borrow funds, or regulatory capital restrictions imposed on the free flows of funds between Merrill Lynch and its affiliates may have a negative effect on its business and financial condition.  Litigation Risk - --------------- Legal proceedings could adversely affect Merrill Lynch's operating results and financial condition for a particular period and impact its credit ratings.  Merrill Lynch has been named as a defendant in various legal actions, including arbitrations, class actions, and other litigation arising in connection with its activities as a global diversified financial services institution. Some of the legal actions against Merrill Lynch include claims for substantial compensatory and/or punitive damages or claims for indeterminate amounts of damages. In some cases, the issuers who would otherwise be the primary defendants are bankrupt or otherwise in financial distress. Given the number of these matters, some are likely to result in adverse judgments, penalties, injunctions, fines, or other relief. Merrill Lynch is also involved in investigations and/or proceedings by governmental and self-regulatory agencies. The number of these investigations has also increased in recent years with regard to many firms, including Merrill Lynch.  Merrill Lynch may explore potential settlements before a case is taken through trial because of uncertainty and risks inherent in the litigation process. In accordance with Statement of Financial Accounting Standards ("SFAS") No. 5, Accounting for Contingencies , Merrill Lynch will accrue a liability when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. In many lawsuits and arbitrations, disclosed in Other Information (Unaudited) -- Legal Proceedings, including almost all of the class action lawsuits, it is not possible to determine whether a liability has been incurred or to estimate the ultimate or minimum amount of that liability until the case is close to resolution, in which case no accrual is made until that time. In view of the inherent difficulty of predicting the outcome of such matters, particularly in cases in which claimants seek substantial or indeterminate damages, Merrill Lynch cannot predict what the eventual loss or range of loss related to such matters will be, which may be material to its operating results or cash flows for any particular period and may impact its credit ratings.  Regulatory and Legislative Risks - -------------------------------- Many of Merrill Lynch's businesses are highly regulated and could be adversely impacted by regulatory and legislative initiatives around the world.  Merrill Lynch's businesses may be adversely affected by regulatory and legislative initiatives imposed by various U.S. and non-U.S. regulatory and exchange authorities, such as federal and state securities regulators including the SEC, the FSA, self-regulatory organizations including The New York Stock Exchange, Inc. ("NYSE") and the National Association of Securities Dealers, Inc. ("NASD"), and industry participants that continue to review and, in many cases, adopt changes to their established rules and policies. Such changes have occurred in areas such as corporate governance, anti-money laundering, privacy, research analyst conflicts of interest and qualifications, practices related to the issuance of securities, mutual fund trading, disclosure practices and auditor independence.  Competitive Environment - ----------------------- Competitive pressures in the financial services industry in which Merrill Lynch operates could adversely affect its business and results of operations.  Merrill Lynch competes globally for individual and institutional clients on the basis of price, the range of products that it offers, the quality of its services, its financial resources, and product and service innovation. The financial services industry continues to be affected by an intensifying competitive environment, as demonstrated by the introduction of new technology platforms, consolidation through mergers, increased competition from new and established industry participants and diminishing margins in many mature products and services. Merrill Lynch competes with U.S. and non-U.S. commercial banks and other broker-dealers in brokerage, underwriting, trading, financing and advisory businesses. For example, the financial services industry in general, including Merrill Lynch, has experienced intense price competition in brokerage, as the ability to execute trades electronically, through the internet and through other alternative trading systems has pressured trading commissions and spreads. Merrill Lynch competes for investment funds with mutual fund management companies, insurance companies, finance and investment advisory companies, banks, trust companies and other institutions. Many of Merrill Lynch's non-U.S. competitors may have competitive advantages in their home markets. In addition, Merrill Lynch's business is substantially dependent on its continuing ability to compete effectively to attract and retain qualified employees, including successful Financial Advisors, investment bankers, trading professionals and other revenue-producing or support personnel.  For further information on Risks refer to Note 6 to the Consolidated Financial Statements in the 2005 Form 10-K.     -----END PRIVACY-ENHANCED MESSAGE-----