During 2005, the NYSE incurred $26.1 million in expenses related to the pending merger with Archipelago Holdings, Inc., consisting of $18.5 million in litigation costs, $3.9 million in severance, and $3.7 million in integration costs. Excluding these merger-related expenses, NYSE net income for 2005 was $65.2 million, up 116.1 percent from 2004.

The NYSE had a net loss in the fourth quarter of 2005 of $20.3 million, compared to net income of $9.9 million in the year-ago quarter. The Exchange incurred $23.6 million of merger-related expenses during the fourth quarter of 2005, of which $17.5 million were litigation costs not deductible for tax purposes. Excluding these merger-related expenses, net income was $6.5 million, down 34.3 percent from fourth quarter 2004.

The results reflect the restatement of the NYSE’s financial earnings dating back to fiscal year 2002 that were announced in the NYSE Group’s S-4 Registration Statement filed with the SEC on Nov. 3, 2005.

Fourth Quarter Highlights
Revenues, less Section 31 SEC fees, for fourth quarter 2005 were $276.8 million, up $3.5 million or 1.3 percent from the same period in 2004. Listing fee revenue was $85.8 million, an increase of $3.8 million or 4.7 percent due to a larger number of outstanding shares among NYSE-listed companies. Market-information fees increased $2.1 million to $44.7 million, as compared to $42.6 million in fourth quarter 2004, due to non-recurring revenues from previously uncollected charges of $2.8 million. Regulatory fees increased $6.6 million or 23.6 percent to $34.7 million due to higher gross FOCUS revenues reported for the period. Investment and other income was $13.9 million, up $3.7 million or 37 percent from 2004. The increase in investment and other income was the result of a portfolio restructuring in December 2004 to higher-yielding investments combined with a higher interest-rate environment. Declines in data processing fees of $11.4 million or 19.8 percent were the result of decreased third-party usage of services provided by SIAC.

Excluding merger-related costs, expenses for fourth quarter 2005 were $264.0 million, an increase of $7.4 million or 2.8 percent from the year-ago quarter. Compensation expenses increased by $5.7 million or 4.5 percent due to additional NYSE headcount, primarily within Regulation, and incentive awards from the year-ago quarter offset by changes made to NYSE employee benefit plans announced during fourth quarter 2005 and reduced SIAC headcount. Professional services increased by $9.7 million as compared to fourth quarter 2004 due to additional spending on regulatory and corporate governance initiatives. Partially offsetting these increases was a decrease in depreciation and amortization expenses of $5.9 million or 19.3 percent, primarily due to a charge in fourth quarter 2004 to reflect an acceleration of certain useful lives following a review of depreciation policies.

Full-Year 2005 Highlights
Revenues for 2005, less Section 31 SEC fees, were $1,123.1 million, up 3.1 percent from $1,089.5 million in 2004.  This increase is attributable to continued growth within many of the NYSE’s key businesses. In 2005, listing fees improved by 3.9 percent or $12.9 million to $342.7 million, driven primarily by a larger number of outstanding shares among NYSE-listed companies.   Market-information fees increased by 6.3 percent or $10.6 million to $178.2 million due to additional non-professional subscribers, growth within the NYSE’s proprietary data products, and non-recurring revenue recoveries of $5.8 million. Regulatory fees of $129.8 million increased by 14.5 percent, reflecting an increase in reported gross FOCUS revenues. Offsetting this growth were decreases in data-processing and trading fees. Declines in data processing fees of $37.7 million or 17.1 percent were the result of decreased third-party usage of services provided by SIAC. In addition, despite an increase in average daily volume of 9 percent, trading fees decreased by $7.7 million, reflecting a one-time reimbursement of $2.4 million during 2005 and certain pricing caps being met by members. Investment and other income increased by $42.1 million or 92.1 percent to $87.9 million, primarily due to additional fine income and the result of a portfolio restructuring in December 2004 to higher-yielding investments combined with a higher interest-rate environment.

Expenses, excluding merger-related costs of $26.1 million for the year ended Dec. 31, 2005, fell $37.2 million or 3.6 percent from 2004. The decrease was led by reduced spending in general and administrative expenses of $14.6 million or 17.3 percent due to ongoing cost-reduction initiatives. Professional services costs decreased by $5 million or 3.8 percent, reflecting reduced legal costs somewhat offset by continuing initiatives in key areas of the NYSE including regulation and trading systems. Compensation expense decreased primarily due to lower headcount at SIAC, offset by higher incentive awards for Exchange employees in the current year. Depreciation and amortization increased $7.7 million or 8.1 percent to $103.4 million, reflecting the full-year impact of accelerated useful lives, which began in December 2004 following a review of depreciation policies.

Income Taxes and Capital
The effective consolidated income tax rate for the year ended Dec. 31, 2005, was 53.4 percent, up from 33.7 percent in the previous year. The increase is a result of non-deductible merger-related litigation costs and factors affecting the NYSE’s tax provision relating primarily to deferred tax items and other tax credits.

As of Dec. 31, 2005, total members equity was $799.1 million and equity per member having distributive rights equaled $585,000.

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Important Acquisition Information with Respect to the Merger

In connection with the proposed merger of the New York Stock Exchange, Inc. (NYSE) and Archipelago Holdings, Inc. (Archipelago), NYSE Group, Inc., has filed a registration statement on Form S-4 with the Securities and Exchange Commission (SEC) containing a joint proxy statement/prospectus regarding the proposed transaction. The parties have filed other publicly available relevant documents concerning the proposed transaction with the SEC. The SEC declared the Registration Statement effective on Nov. 3, 2005.

NYSE MEMBERS AND ARCHIPELAGO STOCKHOLDERS ARE URGED TO READ THE FINAL JOINT PROXY STATEMENT/ PROSPECTUS REGARDING THE PROPOSED TRANSACTION BECAUSE IT CONTAINS IMPORTANT INFORMATION.

NYSE members and Archipelago stockholders can obtain a free copy of the final joint proxy statement/prospectus as well as other filings containing information about the NYSE and Archipelago, without charge, at the SEC's Web site (www.sec.gov ). Copies of the final joint proxy statement/prospectus can also be obtained, without charge, by directing a request to the Office of the Corporate Secretary, NYSE, 11 Wall St., New York , N,Y. 10005, 212-656-2061 or to Archipelago, Attention: Investor Relations, 100 S. Wacker Dr., Suite 1800, Chicago, Ill. 60606, 888-514-7284.

This correspondence shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.

Forward-Looking Statements

Certain statements in this correspondence may contain forward-looking information regarding the NYSE and Archipelago and the combined company after the completion of the transactions that are intended to be covered by the safe harbor for "forward-looking statements" provided by the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, the benefits of the business combination transaction involving the NYSE and Archipelago, including future financial and operating results; the new company's plans, objectives, expectations and intentions; and other statements that are not historical facts. Such statements are based upon the current beliefs and expectations of NYSE and Archipelago management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements.

The following factors, among others, could cause actual results to differ from those set forth in the forward-looking statements: the ability to obtain governmental approvals of the transaction on the proposed terms and schedule; the risk that the businesses will not be integrated successfully; the risk that the cost savings and any other synergies from the transaction may not be fully realized or may take longer to realize than expected; disruption from the transaction, making it more difficult to maintain relationships with customers, employees or suppliers; competition and its effect on pricing, spending, third-party relationships and revenues; social and political conditions such as war, political unrest or terrorism; general economic conditions; and normal business uncertainty. Additional risks and factors are identified in Archipelago's filings with the Securities Exchange Commission, including its report on Form 10-K for the fiscal year ending Dec. 31, 2004, which is available on Archipelago's Web site (www.Archipelago.com ), and the Registration Statement on Form S-4 filed by NYSE Group, Inc., with the SEC on July 21, 2005 (and amended on Sept. 24, 2005; Oct. 24, 2005; and Nov. 3, 2005).

You should not place undue reliance on forward-looking statements, which speak only as of the date of this document. Except for any obligation to disclose material information under federal securities laws, none of the NYSE, Archipelago or the combined company after the completion of the transactions undertake any obligation to release publicly any revisions to any forward-looking statements to reflect events or circumstances after the date of this document.