Exhibit 99.1

Instinet Group

Media Release

Investor Contact

Lisa Kampf

Instinet Group Incorporated

212 231 5022

lisa.kampf@instinet.com

Media Contact

Mark Dowd

Instinet Group Incorporated

212 231 5331

mark.dowd@instinet.com

INSTINET GROUP ANNOUNCES SECOND QUARTER 2005 EARNINGS

NEW YORK, July 22, 2005 -- Instinet Group Incorporated (Nasdaq: INGP) today announced net income of $8 million or $0.02 per diluted share for the second quarter of 2005 compared to net income of $12 million or $0.04 per diluted share for the second quarter of 2004 and net income of $14 million or $0.04 per diluted share for the first quarter of 2005. Net income from continuing operations, which excludes the discontinued operations of Lynch Jones & Ryan ("LJR"), was $6 million or $0.02 per diluted share for the second quarter of 2005 compared to net income of $9 million or $0.03 per diluted share for the second quarter of 2004 and net income of $11 million or $0.03 per diluted share for the first quarter of 2005.

The second quarter 2005 results included $25 million in net investment gains, $16 million in severance charges, $5 million in advisory fees and $1 million in asset write-offs. Excluding these items and the related tax effects, pro forma net income from continuing operations for the second quarter of 2005 was $5 million, or $0.02 per diluted share compared to pro forma net income from continuing operations of $9 million or $0.03 per diluted share for the second quarter of 2004 and pro forma net income from continuing operations of $9 million, or $0.03 per diluted share for the first quarter of 2005.

Edward J. Nicoll, Chief Executive Officer of Instinet Group, commented, "This quarter, Instinet Group posted its sixth consecutive profitable quarter, once more doing so in a challenging and difficult business environment. Our progress, in the face of strong competitive pressures, is a testimony to our singular focus on serving our global customers through a commitment to value, transparency, and independence. With regard to our recently announced merger with Nasdaq, we continue to work closely with the appropriate regulatory authorities to meet all requests and provide requested information."

Financial Performance²
Instinet Group

Revenues

Total consolidated revenues for Instinet Group, net of interest, were $259 million for the second quarter of 2005, down 7% from the second quarter of 2004 and down 6% from the first quarter of 2005.

Expenses

Total expenses for the second quarter of 2005 were $247 million, down 6% from $263 million in the second quarter of 2004 and down 5% from $259 million in the first quarter of 2005. The second quarter and first quarter of 2005 included net investment gains of $25 million and $3 million, respectively. Excluding these gains, total expenses were $272 million in the second quarter of 2005, up 3% from the second quarter of 2004 and up 5% from $262 million in the first quarter of 2005. The increase compared to the first quarter of 2005 was primarily due to $16 million in severance charges and $5 million in advisory fees in the second quarter of 2005.

Cost of revenues was $161 million for the second quarter of 2005, down 3% from the first quarter of 2005 primarily due to lower transaction volumes.

Direct expenses were $110 million for the second quarter of 2005, up 15% from the first quarter of 2005.

Compensation and benefits expense was $61 million for the second quarter of 2005, up 25% from the previous quarter primarily due to severance charges. The second quarter of 2005 included a $16 million severance charge while the first quarter of 2005 included a $1 million reversal of previously recognized severance expense. The $16 million severance charge in the second quarter of 2005 is part of a cost reduction plan by which the company expects to reduce its headcount by 150 employees from the second quarter to the fourth quarter of 2005. This reduction will take place primarily at Instinet, the Institutional Broker. This cost reduction plan is not related to the pending transaction with The Nasdaq Stock Market, Inc. ("NASDAQ").
Professional fees expense was $11 million for the second quarter of 2005, up 52% from the previous quarter primarily due to $5 million in advisory expenses for the pending acquisition of the company by NASDAQ.
Other expense was $3 million for the second quarter of 2005, down $3 million from the previous quarter, primarily due to lower legal-related expenses and bad debt charges.

______________________________

²All financial information disclosed in this section of the release excludes the discontinued operations of LJR unless otherwise noted.

At June 30, 2005, Instinet Group had net cash (cash and cash equivalents and securities owned less short-term borrowings) of approximately $868 million, down $68 million from $936 million at December 31, 2004 due to an increase in firm cash used in customer settlement activities and seasonal payments related to 2004 incentive compensation. At June 30, 2005, total assets were approximately $1.8 billion and shareholders' equity was approximately $1.1 billion, of which, $63 million and $33 million, respectively, related to LJR. There were approximately 340 million shares of common stock outstanding as of June 30, 2005.

On June 30, 2005, Instinet Group's total headcount was 938 employees compared to 1,029 on March 31, 2005. Headcount at June 30, 2005 included 751 employees from Instinet, including 53 from LJR, 79 employees from INET and 108 employees from Instinet Group.

Business Segments³
Instinet, The Institutional Broker

Instinet reported a net loss from continuing operations before income taxes of $22 million for the second quarter of 2005, compared to net income from continuing operations before income taxes of $5 million in the first quarter of 2005.

Total revenues, net of interest, were $145 million for the second quarter of 2005, 8% lower than the first quarter of 2005, primarily due to lower U.S. equity market volumes and lower U.S. market share partially offset by higher revenue capture per share.

Instinet's customers traded an average of 93 million U.S. shares a day in the second quarter of 2005, down 16% from 111 million shares a day during the first quarter of 2005. Average daily consideration in non-U.S. equities for the second quarter of 2005 was $907 million, a 7% increase from the first quarter of 2005.

Cost of revenues as a percentage of total transaction fees was 53% in the second quarter of 2005 compared to 50% in the first quarter of 2005.

Gross margin of $70 million for the second quarter of 2005, was $10 million, or 13%, lower than the first quarter of 2005.

Direct expenses of $92 million for the second quarter of 2005 were up $16 million, or 21%, from the first quarter of 2005.

______________

³ See also "Earnings Releases -- Financial Tables" on our website at www.investor.instinetgroup.com

INET, The electronic marketplace

INET reported net income before income taxes of $10 million for the second quarter of 2005, comparable to the first quarter of 2005.

Total revenues, net of interest, were $118 million for the second quarter of 2005, 5% lower than the previous quarter primarily due to lower U.S. equity market volumes and lower NASDAQ-listed market share in the second quarter of 2005.

INET reported NASDAQ-listed average matched equity share volume of 453 million shares per day in the second quarter of 2005, down 13% from the previous quarter. INET's share of the total market in NASDAQ-listed equity trading was 26.0% in the second quarter of 2005, down from 26.3% in the previous quarter.

INET reported U.S. exchange-listed average matched equity share volume of 85 million shares per day in the second quarter of 2005, up from 70 million in the previous quarter. INET's share of the total market in U.S. exchange-listed equity trading was 3.9% in the second quarter of 2005, up from 3.1% in the previous quarter.

Cost of revenues as a percentage of total transaction fees was 79% in the second quarter of 2005 compared to 78% in the first quarter of 2005.

Gross margin was $25 million for the second quarter of 2005, 11% lower than the previous quarter.

Direct expenses of $15 million for the second quarter of 2005 were down 16% from the first quarter of 2005.

Company Announcements and Updates

Instinet Group announced on April 22, 2005 that it has entered into a definitive agreement pursuant to which NASDAQ will acquire Instinet Group. NASDAQ will acquire all outstanding shares of Instinet Group for an aggregate purchase price of approximately $1.88 billion in cash, or $5.10 per share (on a fully diluted basis)(reflecting a reduction of the purchase price for the special cash dividend) subject to certain adjustments.

In April and May 2005, four purported class action lawsuits were filed in the Court of Chancery in the State of Delaware against Instinet Group, each of our directors and Reuters alleging, among other things, that defendants breached their fiduciary duties as to our public stockholders in connection with the proposed merger by approving the transaction at an allegedly unfair and inadequate price. On June 22, 2005, plaintiffs filed a consolidated amended complaint consolidating three of the lawsuits while voluntarily dismissing the fourth lawsuit. The amended complaint seeks, among other things, class action status, an injunction against consummation of the transaction, invalidation of certain provisions of the Merger Agreement, damages in an unspecified amount, rescission in the event the transaction is consummated and attorney's fees. Plaintiffs filed for expedited proceedings and the Court has scheduled a preliminary injunction hearing for September 13, 2005. We believe we have substantial meritorious defenses with respect to the consolidated action.

On June 17, 2005 the Department of Justice ("DOJ") issued a Request for Additional Information and Documentary Materials (a "second request") to Instinet Group and NASDAQ in connection with the DOJ's investigation under the Hart-Scott Rodino Antitrust Improvements Act of the pending acquisition of Instinet Group by NASDAQ. The parties anticipated receiving this request and continue to work with the DOJ.

Instinet Group completed the sale of LJR on July 1, 2005 to the Bank of New York for $174 million in cash. In the third quarter of 2005, we expect to record a net after tax gain related to this sale.

Instinet Group's Board of Directors approved on July 12, 2005 the payment of a special cash dividend of $0.32 per common share to Instinet Group stockholders, based upon the net after-tax proceeds of the sale of LJR. The record date for the dividend will be July 29, 2005 and the payment will be made on or about August 15, 2005. Instinet Group stock will trade ex-dividend for two days prior to the record date, starting on July 27, 2005.

Webcast

Instinet Group will webcast a conference call to discuss its second quarter results at 10:00 a.m. New York time on July 22 at http://www.investor.instinetgroup.com. A replay will be available at the same address following the call.

About Instinet Group

Instinet Group, through affiliates, is the largest global electronic agency securities broker and has been providing investors with electronic trading solutions and execution services for more than 30 years. We operate our two major businesses through Instinet, LLC, The Institutional Broker, and Inet ATS, Inc., The electronic marketplace.

Instinet, The Institutional Broker, gives its customers the opportunity to use its sales-trading expertise and advanced technology tools to interact with global securities markets, improve trading performance and lower overall transaction costs. Through Instinet's electronic platforms, customers can access other U.S. trading venues, including NASDAQ and the NYSE, and almost 30 securities markets throughout the world. Instinet acts solely as an agent for its customers, including institutional investors, such as mutual funds, pension funds, insurance companies and hedge funds

INET, The electronic marketplace, represents the consolidation of the order flow of the former Instinet ECN and former Island ECN, providing its U.S. broker-dealer customers one of the largest liquidity pools in NASDAQ-listed securities.

Where to Find Additional Information about Instinet, NASDAQ and the Merger

Instinet Group has filed a proxy statement of Instinet Group in connection with the proposed merger. Instinet Group stockholders should read the proxy statement and other relevant materials when they become available, because they will contain important information about Instinet Group, NASDAQ and the proposed merger. In addition to the documents described above, Instinet Group and NASDAQ file annual, quarterly and current reports, proxy statements and other information with the SEC. The proxy statement and other relevant materials (when they become available), and any other documents filed with the SEC by Instinet Group or NASDAQ are available without charge at the SEC's website, at www.sec.gov, or from the companies' websites at http://www.instinetgroup.com and http://www.nasdaq.com, respectively.

Instinet Group, NASDAQ and their respective officers and directors may be deemed to be participants in the solicitation of proxies from Instinet Group stockholders in connection with the proposed merger. A description of certain interests of the directors and executive officers of Instinet Group is set forth in the Instinet Group proxy statement for its 2005 annual meeting which was filed with the SEC on April 15, 2005. A description of certain interests of the directors and officers of NASDAQ is set forth in NASDAQ's proxy statement for its 2005 annual meeting, which was filed with the SEC on April 11, 2005. Additional information regarding the interests of such potential participants will be included in the definitive proxy statement and other relevant documents to be filed with the SEC in connection with the proposed merger.

This news release may be deemed to include forward-looking statements relating to Instinet Group. Certain important factors that could cause actual results to differ materially from those disclosed in such forward-looking statements are included in Instinet Group's Annual Report on Form 10-K for the fiscal year ended December 31, 2004, and other documents filed with the SEC and available on the Company's
website at www.investor.instinetgroup.com.

©2005 Instinet Group Incorporated and its affiliated companies. All rights reserved. INSTINET and INET are service marks in the United States. Instinet, LLC, member NASD/SIPC, branded as Instinet, The Institutional Broker, Inet ATS, Inc., member NASD/NSX/SIPC, branded as INET, The electronic marketplace and Bridge Trading Company, member NASD/SIPC are subsidiaries of Instinet Group Incorporated which is a member of the Reuters family of companies.

Instinet Group Incorporated
Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
			Three Months Ended			Six Months Ended
			Jun 30,	Mar 31,	Jun 30,	Jun 30,	Jun 30,
			2005	2005	2004	2005	2004
Revenue
	Transaction fees		$ 252,960	$ 271,591	$ 273,756	$ 524,551	$ 582,689

		Interest income	7,073	6,035	4,363	13,108	8,862
		Interest expense	(739)	(817)	(773)	(1,556)	(1,822)
	Interest income, net		6,334	5,218	3,590	11,552	7,040

		Total revenues, net	259,294	276,809	277,346	536,103	589,729

Cost of Revenues
	Soft dollar and commission recapture		36,904	40,453	43,936	77,357	91,721
	Broker-dealer rebates		67,992	73,020	62,388	141,012	130,535
	Brokerage, clearing and exchange fees		56,141	52,687	51,807	108,828	112,216
		Total cost of revenues	161,037	166,160	158,131	327,197	334,472

	Gross margin		98,257	110,649	119,215	208,906	255,257

Direct Expenses
	Compensation and benefits		61,047	48,876	53,454	109,923	109,853
	Communications and equipment		14,092	13,268	16,989	27,360	38,789
	Depreciation and amortization		10,382	10,128	16,301	20,510	31,776
	Occupancy		9,769	10,155	9,449	19,924	18,846
	Professional fees		10,815	7,112	8,161	17,927	13,158
	Marketing and business development		1,559	1,111	4,845	2,670	7,930
	Other		2,768	5,598	2,541	8,366	5,191
		Total direct expenses	110,432	96,248	111,740	206,680	225,543

	Contractual settlement		-	-	(7,250)	-	(7,250)
	Investments		(24,690)	(2,915)	-	(27,605)	(4,674)
	Insurance recovery		-	-	-	-	(5,116)
		Total expenses	246,779	259,493	262,621	506,272	542,975

	Income from continuing operations before income taxes		12,515	17,316	14,725	29,831	46,754
		Income tax provision	6,132	5,890	5,647	12,022	19,521
	Income from continuing operations before discontinued operations		6,383	11,426	9,078	17,809	27,233
	Discontinued operations:
		Income from operations of LJR, net of tax	2,001	2,476	3,031	4,477	6,681
		Net income	$ 8,384	$ 13,902	$ 12,109	$ 22,286	$ 33,914

BASIC AND DILUTED EARNINGS PER SHARE
	Income from continuing operations before discontinued operations		$ 0.02	$ 0.03	$ 0.03	$ 0.05	$ 0.08
	Discontinued operations:
		Income from operations of LJR, net of tax	-	0.01	0.01	0.02	0.02
		Net income	$ 0.02	$ 0.04	$ 0.04	$ 0.07	$ 0.10

Weighted average shares outstanding - basic			339,765	338,277	336,034	339,025	335,517
Weighted average shares outstanding - diluted			341,505	340,558	338,871	340,890	338,465

	NOTE :	All periods presented have been restated to include LJR as a discontinued operation.

Instinet Group Incorporated
Operating Data
(Unaudited)
				Three Months Ended
				Jun 30,	Mar 31,	Dec 31,	Sep 30,	Jun 30,	Mar 31,
				2005	2005	2004	2004	2004	2004
U.S. Market
	Trade Days			64	61	64	64	62	62

	Average daily NASDAQ-listed equity share volume (millions)			1,746	1,981	1,865	1,542	1,735	2,030
	Average daily U.S. exchange-listed equity share volume (millions)			2,193	2,252	2,119	1,853	2,072	2,255
	Average daily U.S. equity share volume (millions)			3,939	4,233	3,984	3,395	3,807	4,285

	Total U.S. equity share volume (millions)			252,113	258,190	254,969	217,305	236,023	265,685

Instinet, The Unconflicted Institutional Broker
	*A. U.S. Equities ¹*

		Our total average daily volume (million shares)		93	111	106	92	101	111
		Our share of total market		2.4%	2.6%	2.7%	2.7%	2.7%	2.6%

		Our average daily volume (million shares) - Institutional and Crossing		61	77	77	67	77	89
		Average amount charged to client per share (cents per share) ² - Institutional and Crossing		1.38	1.34	1.40	1.52	1.49	1.46

		Our average daily volume (million shares) - Institutional Correspondents		32	34	29	25	24	22
		Average amount charged to client per share (cents per share) ² - Institutional Correspondents		0.05	0.05	0.06	0.06	0.08	0.11

	*B. Non-US Equities ³*
		Our average daily consideration (millions)		$ 907	$ 844	$ 742	$ 678	$ 901	$ 932
		Average basis points charged to client per consideration traded		4.5	5.0	5.3	5.4	5.2	5.3

INET, The electronic marketplace
	*A. Our Matched Average Daily Volume ⁴*

		Our NASDAQ-listed equity share volume (million shares)		453	521	459	401	433	505
			Our share of total market	26.0%	26.3%	24.6%	26.0%	25.0%	24.9%

		Our U.S. exchange-listed equity share volume (million shares)		85	70	73	72	71	64
			Our share of total market	3.9%	3.1%	3.4%	3.9%	3.4%	2.8%

		Our total U.S. equity share volume (million shares)		538	591	532	473	504	569
			Our share of total market	13.6%	14.0%	13.4%	13.9%	13.2%	13.3%

	*B. Our Routed Average Daily Volume (million shares) ⁵*			180	143	119	115	115	91

Headcount ⁶				938	1,029	1,049	1,128	1,138	1,176


1	Instinet average daily U.S. equity share volume is counted as the sum of our customers' share volume per side related to a trade. For example a matched trade where one customer buys 100 shares and the other sells 100 shares is counted as 200 shares; if the buy or sell order were routed out, we would count 100 shares on the customer side.
	Institutional and Crossing comprise certain U.S. buy-side clients, hedge funds and other clients. Crossing includes order flow from both buy-side and sell-side clients who execute though our after hours cross. Institutional Correspondents represent our direct market access U.S. buy-side clients.
	All periods presented have been restated to exclude Lynch, Jones & Ryan which is a discontinued operation.
2	The amount charged per share is the average cents per share charged net of soft dollar and commission recapture expenses.
3	Commissions on international transactions are presented as basis points (one hundred of one percent) of the total value (consideration) of the transaction.
4	In computing our U.S. share volume for INET in either NASDAQ-listed or U.S. exchange-listed equities, we count the customer share volume on one side of the matched trade. Matched volume reflects transactions where the buyer and seller are matched on INET.
	For example, where a customer sells 100 shares to another customer as a matched trade, we count 100 shares. INET share volume includes transactions sent to it by Instinet, the Institutional Broker and prior quarters have been recalculated to include this volume.
	In computing our total market share, our numerator share volume is counted as described above for each market where we disclose a market share statistic. The denominator for NASDAQ market share is total NASDAQ share volume as published by NASDAQ. For U.S. exchange-listed market share, the denominator is the total share volume of U.S. listed markets obtained from a widely recognized market data vendor. Listed markets include the New York Stock Exchange, American Stock Exchange, Boston Stock Exchange, Philadelphia Stock Exchange, National Stock Exchange, Chicago Stock Exchange and Pacific Stock Exchange. Historical amounts may be restated due to updates of volume information from these sources.
5	Routed volume reflects transactions where the trade was not matched on INET.
6	Instinet Group headcount is as of the end of the reporting period and includes LJR for all periods presented.

Instinet Group Incorporated
Consolidated Statement of Operations - Three Months Ended June 30, 2005
(In thousands)
(Unaudited)
			Three Months Ended June 30, 2005
			Instinet	INET	Eliminations	Corporate	Total
Revenue
	Transaction fees		$ 142,297	$ 117,650	$ (6,987)	$ -	$ 252,960

	Interest income, net		2,383	517	-	3,434	6,334
		Total revenue, net	144,680	118,167	(6,987)	3,434	259,294

Cost of revenues
	Soft dollar and commission recapture		36,904	-	-	-	36,904
	Broker-dealer rebates		-	67,992	-	-	67,992
	Brokerage, clearing and exchange fees		37,898	25,230	(6,987)	-	56,141
		Total cost of revenues	74,802	93,222	(6,987)	-	161,037

		Gross margin	69,878	24,945	-	3,434	98,257

Direct Expenses
	Compensation and benefits		47,385	4,116	-	9,546	61,047
	Communications and equipment		12,217	1,556	-	319	14,092
	Depreciation and amoritization		8,187	1,977	-	218	10,382
	Occupancy		7,296	518	-	1,955	9,769
	Professional fees		3,550	443	-	6,822	10,815
	Marketing and business development		1,194	234	-	131	1,559
	Other		2,454	(200)	-	514	2,768
	Technology service company charges		(1,344)	1,344	-	-	-
	Corporate overhead charges		10,709	5,362	-	(16,071)	-
		Total direct expenses	91,648	15,350	-	3,434	110,432

	Investments		-	-	-	(24,690)	(24,690)

		Total expenses	166,450	108,572	(6,987)	(21,256)	246,779

		Income (loss) from continuing operations before income taxes	$ (21,770)	$ 9,595	$ -	$ 24,690	$ 12,515

		See also table titled "Statements of Operations - Segments" on our website at www.investor.instinetgroup.com under
		the heading "Investor Relations" for historical data.

	NOTE :	All periods presented have been restated to include LJR as a discontinued operation.

Instinet Group Incorporated
Consolidated Statement of Operations - Six Months Ended June 30, 2005
(In thousands)
(Unaudited)
			Six Months Ended June 30, 2005
			Instinet	INET	Eliminations	Corporate	Total
Revenue
	Transaction fees		$ 296,849	$ 241,988	$ (14,286)	$ -	$ 524,551

	Interest income, net		4,920	920	-	5,712	11,552
		Total revenue, net	301,769	242,908	(14,286)	5,712	536,103

Cost of revenues
	Soft dollar and commission recapture		77,357	-	-	-	77,357
	Broker-dealer rebates		-	141,012	-	-	141,012
	Brokerage, clearing and exchange fees		74,127	48,987	(14,286)	-	108,828
		Total cost of revenues	151,484	189,999	(14,286)	-	327,197

		Gross margin	150,285	52,909	-	5,712	208,906

Direct Expenses
	Compensation and benefits		80,941	8,489	-	20,493	109,923
	Communications and equipment		23,725	2,829	-	806	27,360
	Depreciation and amoritization		16,063	3,971	-	476	20,510
	Occupancy		14,739	954	-	4,231	19,924
	Professional fees		7,435	569	-	9,923	17,927
	Marketing and business development		2,163	363	-	144	2,670
	Other		5,705	1,125	-	1,536	8,366
	Technology service company charges		(4,773)	4,773	-	-	-
	Corporate overhead charges		21,389	10,508	-	(31,897)	-
		Total direct expenses	167,387	33,581	-	5,712	206,680

	Investments		-	-	-	(27,605)	(27,605)

		Total expenses	318,871	223,580	(14,286)	(21,893)	506,272

		Income (loss) from continuing operations before income taxes	$ (17,102)	$ 19,328	$ -	$ 27,605	$ 29,831

		See also table titled "Statements of Operations - Segments" on our website at www.investor.instinetgroup.com under
		the heading "Investor Relations" for historical data.

	NOTE :	All periods presented have been restated to include LJR as a discontinued operation.

Instinet Group Incorporated
Statements of Operations - Instinet, The Unconflicted Institutional Broker
(In thousands)
(Unaudited)
			Three Months Ended			Six Months Ended
			Jun 30,	Mar 31,	Jun 30,	Jun 30,	Jun 30,
			2005	2005	2004	2005	2004
Revenue
	Transaction fee		$ 135,310	$ 147,253	$ 160,061	$ 282,563	$ 344,490
	Clearing revenue		6,987	7,299	6,731	14,286	17,121
		Total transaction fees	142,297	154,552	166,792	296,849	361,611

	Interest income, net		2,383	2,537	3,147	4,920	6,382
		Total revenues, net	144,680	157,089	169,939	301,769	367,993

Cost of Revenues
	Soft dollar and commission recapture		36,904	40,453	43,936	77,357	91,721
	Brokerage, clearing and exchange fees		37,898	36,229	36,311	74,127	80,961
		Total cost of revenues	74,802	76,682	80,247	151,484	172,682

		Gross margin	69,878	80,407	89,692	150,285	195,311

Direct Expenses
	Compensation and benefits		47,385	33,556	45,257	80,941	87,264
	Communications and equipment		12,217	11,508	14,996	23,725	31,685
	Depreciation and amortization		8,187	7,876	13,652	16,063	26,130
	Occupancy		7,296	7,443	8,051	14,739	16,347
	Professional fees		3,550	3,885	4,914	7,435	7,910
	Marketing and business development		1,194	969	2,611	2,163	5,163
	Other		2,454	3,251	2,510	5,705	4,689
	Technology service company charges		(1,344)	(3,429)	(6,664)	(4,773)	(14,810)
	Corporate overhead charges		10,709	10,680	8,058	21,389	18,532
		Total direct expenses	91,648	75,739	93,385	167,387	182,910

		Total expenses	166,450	152,421	173,632	318,871	355,592

		Income (loss) from continuing operations before income taxes	$ (21,770)	$ 4,668	$ (3,693)	$ (17,102)	$ 12,401

	NOTE :	All periods presented have been restated to include LJR as a discontinued operation.

Instinet Group Incorporated
Statements of Operations - INET, The electronic marketplace
(In thousands)
(Unaudited)
			Three Months Ended			Six Months Ended
			Jun 30,	Mar 31,	Jun 30,	Jun 30,	Jun 30,
			2005	2005	2004	2005	2004
Revenue
	Transaction fees		$ 117,650	$ 124,338	$ 111,059	$ 241,988	$ 230,858

	Interest income, net		517	403	443	920	658
		Total revenues, net	118,167	124,741	111,502	242,908	231,516

Cost of Revenues
	Broker-dealer rebates		67,992	73,020	62,388	141,012	130,535
	Brokerage, clearing and exchange fees		25,230	23,757	19,591	48,987	41,035
		Total cost of revenues	93,222	96,777	81,979	189,999	171,570

		Gross margin	24,945	27,964	29,523	52,909	59,946

Direct Expenses
	Compensation and benefits		4,116	4,373	3,072	8,489	6,880
	Communications and equipment		1,556	1,273	1,501	2,829	5,844
	Depreciation and amortization		1,977	1,994	2,411	3,971	4,994
	Occupancy		518	436	384	954	953
	Professional fees		443	126	603	569	880
	Marketing and business development		234	129	1,346	363	2,068
	Other		(200)	1,325	(502)	1,125	(625)
	Technology service company charges		1,344	3,429	6,664	4,773	14,810
	Corporate overhead charges		5,362	5,146	2,876	10,508	6,829
		Total direct expenses	15,350	18,231	18,355	33,581	42,633

		Total expenses	108,572	115,008	100,334	223,580	214,203

		Income (loss) from continuing operations before income taxes	$ 9,595	$ 9,733	$ 11,168	$ 19,328	$ 17,313

Instinet Group Incorporated
Statements of Operations - Corporate
(In thousands)
(Unaudited)
			Three Months Ended			Six Months Ended
			Jun 30,	Mar 31,	Jun 30,	Jun 30,	Jun 30,
			2005	2005	2004	2005	2004

Interest income, net			$ 3,434	$ 2,278	$ -	$ 5,712	$ -

Direct Expenses
	Compensation and benefits		9,546	10,947	5,125	20,493	15,709
	Communications and equipment		319	487	492	806	1,260
	Depreciation and amortization		218	258	238	476	652
	Occupancy		1,955	2,276	1,014	4,231	1,546
	Professional fees		6,822	3,101	2,644	9,923	4,368
	Marketing and business development		131	13	888	144	699
	Other		514	1,022	533	1,536	1,127
	Technology service company charges		-	-	-	-	-
	Corporate overhead charges		(16,071)	(15,826)	(10,934)	(31,897)	(25,361)
		Total direct expenses	3,434	2,278	-	5,712	-

		Income (loss) from operations before investments and income taxes	$ -	$ -	$ -	$ -	$ -

Instinet Group Incorporated
Reconciliation of Pro Forma Operating Results for 2Q05
(In thousands, except per share amounts)
(Unaudited)

In evaluating our financial performance and results of operations, management reviews certain financial measures that are not in accordance with generally accepted accounting principles in the United States ("non-GAAP"). Non-GAAP measurements do not have any standardized meaning and are therefore unlikely to be comparable to similar measures presented by other companies. Management uses non-GAAP financial measures in evaluating our operating performance. In light of the use by management of these non-GAAP measurements to assess our operational performance, we believe it is useful to provide information with respect to these non-GAAP measurements so as to share this perspective of management. These non-GAAP financial measures should be considered in context with our GAAP results. A reconciliation of our non-GAAP measurements is provided below.

Management reviews adjusted operating income, in addition to GAAP financial results. This non-GAAP financial measurement excludes non-operating items, which by their nature, management does not consider to be a true reflection of the operating results and financial performance of our business. These non-operating charges are investment gains and losses, charges related to our cost reduction initiatives, fixed asset write-offs, contractual settlements, goodwill and intangible asset impairment, insurance recoveries, advisory fees and the related tax effects of those items. The following schedule reconciles our pro forma net income to our GAAP financial results:

			Three Months Ended			Six Months Ended
			Jun 30,	Mar 31,	Jun 30,	Jun 30,	Jun 30,
			2005	2005	2004	2005	2004

Total revenues, net, as reported			$ 259,294	$ 276,809	$ 277,346	$ 536,103	$ 589,729

Total expenses, as reported			246,779	259,493	262,621	506,272	542,975
	Severance included in compensation and benefits		(15,886)	737	(3,668)	(15,149)	(3,668)
	Advisory fees in professional fees		(5,093)	(1,186)	-	(6,279)	-
	Asset write-offs in depreciation and amortization		(804)	-	(2,018)	(804)	(2,018)
	Contractual settlements		-	-	7,250	-	7,250
	Investments		24,690	2,915	-	27,605	4,674
	Insurance recovery		-	-	-	-	5,116
		Pro forma operating expenses	249,686	261,959	264,185	511,645	554,329

	Pro forma income from continuing operations before income taxes		9,608	14,850	13,161	24,458	35,400

Income tax provision, as reported			6,132	5,890	5,647	12,022	19,521
	Tax effect of pro forma adjustments		(1,758)	(150)	(1,495)	(1,908)	(5,803)
		Pro forma provision for income taxes	4,374	5,740	4,152	10,114	13,718

Income from continuing operations, as reported			6,383	11,426	9,078	17,809	27,233
	Net effect of pro forma adjustments		(1,149)	(2,316)	(69)	(3,465)	(5,551)
		Pro forma income from continuing operations	$ 5,234	$ 9,110	$ 9,009	$ 14,344	$ 21,682

Earnings per share from continuing operations - basic and diluted, as reported			$ 0.02	$ 0.03	$ 0.03	$ 0.05	$ 0.08
	Net effect of pro forma adjustments		-	-	-	(0.01)	(0.02)
		Pro forma earnings per share from continuing operations - basic and diluted	$ 0.02	$ 0.03	$ 0.03	$ 0.04	$ 0.06

Weighted average shares outstanding - basic			339,765	338,277	336,034	339,025	335,517
Weighted average shares outstanding - diluted			341,505	340,558	338,871	340,890	338,465

INSTINET GROUP INC 8-K/A