Bear Stearns Reports 2005 Second Quarter Results; Net Income up 5% to $365 Million, Earnings Per Share of $2.56; Net Revenues up 9% to a Record $1.9 Billion.NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- Institutional Equities Net Revenues up 59% to $390 Million; Global Clearing Services Net Revenues up 17% to $276 Million from $235 Million The Bear Stearns The Bear Stearns Companies, Inc. (NYSE: BSC) is the parent company of Bear, Stearns & Co. Inc., one of the largest global investment banks and securities trading and brokerage firms in the world. Companies Inc. (NYSE NYSE See: New York Stock Exchange :BSC (Binary Synchronous Communications) See bisync. ) today reported earnings per share (diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. ) of $2.56 for the second quarter ended May 31, 2005, up 3% from $2.49 per share for the second quarter of 2004. Net income for the second quarter of 2005 was $365 million, up 5% from $348 million for the second quarter of 2004. Net revenues for the 2005 second quarter were a record $1.9 billion, up 9% from $1.7 billion for the 2004 second quarter. The annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. return on common stockholders' equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. for the second quarter of 2005 was 16.5%, and 17.3% for the trailing 12-month period ended May 31, 2005. "Bear Stearns produced excellent results for the second quarter and record results for the first half of 2005," said James James, person in the Bible James, in the Gospel of St. Luke, kinsman of St. Jude. The original does not specify the relationship. James, rivers, United States James. E. Cayne, chairman and chief executive officer. "Our continued success highlights the diversity of our business mix and our ability to adapt to challenging market conditions. Our fixed income business remains a dominant player in the marketplace while our equity franchise continues to capture market share. In addition to the robust activity we saw in the credit derivatives Credit Derivative Privately held negotiable bilateral contracts that allow users to manage their exposure to credit risk. Credit derivatives are financial assets like forward contracts, swaps, and options for which the price is driven by the credit risk of economic agents (private and leveraged finance businesses, the strength of our Global Clearing Services Division was evident in its consistent and meaningful contribution to earnings." A brief discussion of the firm's business segments follows: CAPITAL MARKETS Capital Markets net revenues for the second quarter of 2005 were $1.4 billion, up 7% from $1.3 billion for the quarter ended May 31, 2004. --Institutional Equities net revenues were $390 million, up 59% from $246 million for the second quarter of 2004. Increased quarterly revenues were driven primarily by the equity derivatives In finance, an equity derivative is a class of financial instruments whose value is at least partly derived from one or more underlying equity securities. Market participants trade equity derivatives in order to transfer or transform certain risks associated with the and the domestic and international equity sales and trading areas. In addition, principal gains on the company's investment in the ISE Ise (ē`sā), city (1990 pop. 104,164), Mie prefecture, S Honshu, Japan, on Ise Bay. It is one of the foremost religious centers of Shinto, the site of the shrines of Ise. and certain energy-related ventures contributed to the increase. Revenues rose substantially in the equity derivatives area as origination Origination The process through which a mortgage lender creates a mortgage secured by some amount of the mortgagor's real property. Notes: Also known as loan origination, everyone must go through the origination process when securing a mortgage for a piece of real volumes and customer activity increased. Greater revenues in the equity sales and trading areas reflected domestic market share gains, higher customer volumes and the continued growth of the international sales and trading franchise. --Fixed Income net revenues were $808 million, down 6% from record net revenues of $860 million in the second quarter of 2004. The continued strength in the fixed income results was led by record revenues in credit derivatives and robust activity in leveraged finance. The interest rate and mortgage product areas continued to perform well in increasingly difficult market conditions. The mortgage franchise remains a dominant market force and was ranked number one for the first half of 2005. --Investment Banking net revenues of $232 million in the second quarter of 2005 were effectively unchanged when compared with the $234 million in the prior year period. Although industry-completed M&A activity declined, the company's merger and acquisition advisory fees increased reflecting market-share gains. Municipal underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. revenues increased and high yield underwriting declined in line with industry activity. GLOBAL CLEARING SERVICES Global Clearing Services net revenues were $276 million for the second quarter 2005, up 17% from $235 million in the year ago quarter. Net interest revenue increases were driven by higher customer balances and improved net interest margins, while commission revenues declined due to competitive market conditions. Average customer margin debt balances for the quarter ended May 31, 2005 were $58.7 billion, up 26% from $46.7 billion in the prior year quarter. Customer short balances averaged $86.8 billion during the second quarter of 2005, up 12% from $77.2 billion in the prior year period. WEALTH MANAGEMENT Wealth Management net revenues for the quarter ended May 31, 2005 were $156 million, down 12% from $177 million in the second quarter of 2004. --Private Client Services net revenues were $106 million, a decrease of 10% from $117 million in the 2004 second quarter, driven primarily by reduced investor activity. --Asset Management net revenues declined 15% to $50 million for the second quarter of 2005 from $59 million in the prior year's quarter. The second quarter of 2004 included one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. revenues of $21.5 million from the sale of certain mutual funds assets. Excluding these revenues, Asset Management net revenues increased 33% on higher management and performance fees. Assets under management Assets Under Management (AUM) is a term used by financial services companies in the mutual fund and money management or investment management business to gauge how much money they are managing. increased 35% to $36.9 billion on May 31, 2005 from $27.3 billion on May 31, 2004. EXPENSES --Compensation as a percentage of net revenues was 49.3% in the second quarter of 2005 as compared with 49.9% for the second quarter of 2004. Year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. compensation to net revenues was 49.3% for 2005 versus 49.5% for the six months ended May 31, 2004. --Non-compensation expenses were $393 million for the quarter ended May 31, 2005, an increase of 12% from $352 million in the 2004 quarter. The ratio of non-compensation expenses to net revenues was 21.0% in the second quarter 2005 versus 20.4% in the prior year quarter. The increase in non-compensation expenses is attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk primarily to higher communications and technology costs, occupancy Gaining or having physical possession of real property subject to, or in the absence of, legal right or title. In a fire insurance policy, for example, the term occupancy and professional fees. The pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta profit margin increased to 29.8% in the quarter ended May 31, 2005 from 29.7% in the 2004 second quarter. As of May 31, 2005, total capital, including stockholders' equity and long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. borrowings, was approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $49.4 billion. Book value as of May 31, 2005 was $65.12 per share, based on 145.9 million shares outstanding. RECLASSIFICATIONS During the quarter the company changed the income statement presentation of certain servicing fees and asset-based retail investor Retail Investor Individual investors who buy and sell securities for their personal account, and not for another company or organization. Notes: Retail investors buy in much smaller quantities than larger institutional investors. advisory fees. All net servicing fees are included in the Investment Banking line on the income statement. Asset-based retail investor advisory fees are included in the Asset Management and Other Income line on the income statement. In the segment reporting segment reporting A type of financial reporting in which the firm discloses information by identifiable industry segments. For example, Union Pacific Corporation reports revenues, income, assets, depreciation, and capital expenditures for each of four , within the Capital Markets segment, certain servicing fees have been reclassified from Investment Banking to Fixed Income. These reclassifications in both the income statement and the segment reporting were made to prior period amounts to conform to Verb 1. conform to - satisfy a condition or restriction; "Does this paper meet the requirements for the degree?" fit, meet coordinate - be co-ordinated; "These activities coordinate well" the current period's presentation. Founded in 1923, The Bear Stearns Companies Inc. (NYSE: BSC) is the parent company of Bear, Stearns & Co. Inc., a leading investment banking and securities trading securities trading, financial activity involving transactions of property such as stocks, bonds, commodities, and currency (see securities). Although the trading of stocks and bonds dates back several centuries in many Western nations, the development of the and brokerage BROKERAGE, contracts. The trade or occupation of a broker; the commissions paid to a broker for his services. firm. With approximately $49.4 billion in total capital, Bear Stearns serves governments, corporations, institutions and individuals worldwide. The company's business includes corporate finance and mergers and acquisitions, institutional equities and fixed income sales and trading, securities research, private client services, derivatives derivatives In finance, contracts whose value is derived from another asset, which can include stocks, bonds, currencies, interest rates, commodities, and related indexes. Purchasers of derivatives are essentially wagering on the future performance of that asset. , foreign exchange and futures sales and trading, asset management and custody The care, possession, and control of a thing or person. The retention, inspection, guarding, maintenance, or security of a thing within the immediate care and control of the person to whom it is committed. The detention of a person by lawful authority or process. services. Through Bear, Stearns Securities Corp., it offers financing, securities lending Securities Lending When a brokerage lends securities owned by its clients to short sellers. Notes: This allows brokers to create additional revenue (commissions) on the short sale transaction. , clearing and technology solutions to hedge funds hedge fund, in finance, a highly speculative, largely unregulated investment device. Originating in the 1950s, the funds "hedge" by offsetting "short" positions (borrowing a security and then selling it at a higher price before repaying the lender) against "long" , broker-dealers and investment advisors Investment Advisor 1. A person making investment recommendations in return for a flat fee or percentage of assets managed, known as a commission. 2. For mutual fund companies, it is the individual who has the day-to-day responsibility of investing and monitoring the cash and . Headquartered in New York City New York City: see New York, city. New York City City (pop., 2000: 8,008,278), southeastern New York, at the mouth of the Hudson River. The largest city in the U.S. , the company has approximately 11,000 employees worldwide. For additional information about Bear Stearns, please visit the firm's website at http://www.bearstearns.com. Certain statements contained in this discussion are "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ materially from those discussed in the forward-looking statements. For a discussion of the risks and uncertainties that may affect the company's future results, please see "Management's Discussion and Analysis Management's discussion and analysis (MD&A) A report from management to shareholders that accompanies the firm's financial statements in the annual report. It explains the period's financial results and enables management to discuss topics that may not be apparent in the financial of Financial Condition and Results of Operations" and "Risk Management" in the company's 2004 Annual Report to Stockholders and similar sections of the company's quarterly reports on Form 10-Q Form 10-Q See 10-Q. which have been filed with the Securities and Exchange Commission. A conference call to discuss the company's results will be held on Wednesday Wednesday: see week. , June June: see month. 15, 2005, at 10 a.m., EST EST electroshock therapy. EST abbr. electroshock therapy . The call will be open to the public. Those wishing to listen to the conference call should dial 1-800-374-2412 (or 1-706-634-7253 for international callers) at least 15 minutes prior to the commencement of the call to ensure connection. The conference call will also be accessible through our website at http://www.bearstearns.com. For those unable to listen to the live broadcast of the call, a replay will be available on our website or by dialing 1-800-642-1687 (or 1-706-645-9291 for international callers) at approximately 1 p.m. EST P.M. also p.m. or p.m. abbr. post meridiem Usage Note: By definition, 12 a.m. . The pass code for the replay is 6717445. The replay will be available until midnight on Friday Friday: see Sabbath; week. Friday young Indian rescued by Crusoe and kept as servant and companion. [Br. Lit.: Robinson Crusoe] See : Servant , June 24, 2005. If you have any questions on how to obtain access to the conference call, please contact Joanne Joanne is a common given name for females, being a variant of Joanna, the feminine form of John and is derived from the Latin name Johanna and has a hebrew meaning of "God is Gracious" People with the given name Joanne:
THE BEAR STEARNS COMPANIES INC.
SEGMENT DATA
(UNAUDITED)
Three Months Ended % Change From
---------------------------------- ---------------
May May February May February
31, 31, 28, 31, 28,
2005 2004 2005 2004 2005
---------- ---------- ---------- ------- -------
(In thousands)
NET REVENUES
Capital Markets
Institutional
Equities $ 390,453 $ 245,752 $ 312,940 58.9% 24.8%
Fixed Income 808,013 860,443 865,507 (6.1%) (6.6%)
Investment
Banking 231,935 233,597 217,394 (0.7%) 6.7%
---------- ---------- ----------
Total Capital
Markets 1,430,401 1,339,792 1,395,841 6.8% 2.5%
Global Clearing
Services 276,160 235,196 270,392 17.4% 2.1%
Wealth Management
Private Client
Services (1) 105,637 117,272 113,875 (9.9%) (7.2%)
Asset
Management 50,148 59,244 55,315 (15.4%) (9.3%)
---------- ---------- ----------
Total Wealth
Management 155,785 176,516 169,190 (11.7%) (7.9%)
Other (2)
11,206 (27,966) 2,237 nm nm
---------- ---------- ----------
Total net
revenues $1,873,552 $1,723,538 $1,837,660 8.7% 2.0%
========== ========== ==========
PRE-TAX INCOME
Capital Markets $ 455,776 $ 479,482 $ 481,683 (4.9%) (5.4%)
Global Clearing
Services 142,989 98,225 137,774 45.6% 3.8%
Wealth Management 6,054 25,719 14,979 (76.5%) (59.6%)
Other (2) (47,380) (91,950) (56,108) 48.5% 15.6%
---------- ---------- ----------
Total pre-tax
income $ 557,439 $ 511,476 $ 578,328 9.0% (3.6%)
========== ========== ==========
(1) Private Client
Services Detail:
Gross Revenues,
before
transfer to
Capital
Markets
Segment $ 130,284 $ 139,266 $ 133,295
Revenue
transferred
to Capital
Markets
segment (24,647) (21,994) (19,420)
---------- ---------- ----------
Private
Client
Services
net
revenues $ 105,637 $ 117,272 $ 113,875
========== ========== ==========
(2) Includes consolidation and elimination entries, unallocated
revenues (predominantly interest) and certain corporate
administrative functions, including certain legal costs and costs
related to the Capital Accumulation Plan for Senior Managing
Directors ("CAP Plan").
Note: Certain reclassifications have been made to prior period
amounts to conform to the current period's presentation.
nm - not meaningful
Six Months Ended % Change
------------------------ ---------
May 31, May 31,
2005 2004
----------- -----------
(In thousands)
NET REVENUES
Capital Markets
Institutional
Equities $ 703,393 $ 538,963 30.5%
Fixed Income 1,673,520 1,699,742 (1.5%)
Investment Banking 449,329 466,215 (3.6%)
----------- -----------
Total Capital Markets 2,826,242 2,704,920 4.5%
Global Clearing Services 546,552 460,529 18.7%
Wealth Management
Private Client
Services (1) 219,512 228,169 (3.8%)
Asset Management 105,463 101,134 4.3%
----------- -----------
Total Wealth
Management 324,975 329,303 (1.3%)
Other (2) 13,443 (45,291) nm
----------- -----------
Total net revenues $ 3,711,212 $ 3,449,461 7.6%
=========== ===========
PRE-TAX INCOME
Capital Markets $ 937,459 $ 988,132 (5.1%)
Global Clearing Services 280,763 184,446 52.2%
Wealth Management 21,033 46,586 (54.9%)
Other (2) (103,488) (176,710) 41.4%
----------- -----------
Total pre-tax income $ 1,135,767 $ 1,042,454 9.0%
=========== ===========
(1) Private Client
Services Detail:
Gross Revenues, before
transfer to Capital
Markets Segment $ 263,579 $ 276,895
Revenue transferred
to Capital Markets
segment (44,067) (48,726)
----------- -----------
Private Client
Services net
revenues $ 219,512 $ 228,169
=========== ===========
(2) Includes consolidation and elimination entries, unallocated
revenues (predominantly interest) and certain corporate
administrative functions, including certain legal costs and costs
related to the Capital Accumulation Plan for Senior Managing
Directors ("CAP Plan").
Note: Certain reclassifications have been made to prior period
amounts to conform to the current period's presentation.
nm - not meaningful
THE BEAR STEARNS COMPANIES INC.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
Three Months Ended % Change From
------------------------------------- ---------------
May May February May February
31, 31, 28, 31, 28,
2005 2004 2005 2004 2005
----------- ----------- ----------- ------- -------
(In thousands, except share and per
share data)
REVENUES
Commissions $ 313,608 $ 307,150 $ 297,377 2.1% 5.5%
Principal
transactions 980,179 930,525 978,633 5.3% 0.2%
Investment
banking 250,426 231,257 233,710 8.3% 7.2%
Interest and
dividends 1,191,785 498,469 1,021,619 139.1% 16.7%
Asset
management
and other
income 87,582 96,397 91,030 (9.1%) (3.8%)
----------- ----------- -----------
Total
revenues 2,823,580 2,063,798 2,622,369 36.8% 7.7%
Interest
expense 950,028 340,260 784,709 179.2% 21.1%
----------- ----------- -----------
Revenues,
net of
interest
expense 1,873,552 1,723,538 1,837,660 8.7% 2.0%
----------- ----------- -----------
NON-INTEREST
EXPENSES
Employee
compensation
and benefits 922,908 860,053 906,775 7.3% 1.8%
Floor
brokerage,
exchange and
clearance fees 57,262 59,647 57,318 (4.0%) (0.1%)
Communications
and technology 100,343 88,321 98,939 13.6% 1.4%
Occupancy 40,756 34,768 39,594 17.2% 2.9%
Advertising
and market
development 34,577 29,315 28,572 17.9% 21.0%
Professional
fees 61,278 42,370 46,719 44.6% 31.2%
Other expenses 98,989 97,588 81,415 1.4% 21.6%
----------- ----------- -----------
Total non-
interest
expenses 1,316,113 1,212,062 1,259,332 8.6% 4.5%
----------- ----------- -----------
Income before
provision for
income taxes 557,439 511,476 578,328 9.0% (3.6%)
Provision for
income taxes 192,317 163,673 199,523 17.5% (3.6%)
----------- ----------- -----------
Net income $ 365,122 $ 347,803 $ 378,805 5.0% (3.6%)
=========== =========== ===========
Net income
applicable to
common shares $ 358,679 $ 340,609 $ 372,327 5.3% (3.7%)
=========== =========== ===========
Adjusted net
income used
for diluted
earnings per
share (1) $ 379,528 $ 366,027 $ 394,032 3.7% (3.7%)
=========== =========== ===========
Basic earnings
per share $ 2.84 $ 2.77 $ 2.94 2.5% (3.4%)
=========== =========== ===========
Diluted
earnings per
share $ 2.56 $ 2.49 $ 2.64 2.8% (3.0%)
=========== =========== ===========
Weighted
average common
shares
outstanding:
Basic 130,663,337 129,071,295 131,261,212
=========== =========== ===========
Diluted 148,037,979 146,921,897 149,193,402
=========== =========== ===========
Cash dividends
declared per
common share $ 0.25 $ 0.20 $ 0.25
=========== =========== ===========
(1) Represents net income reduced for preferred stock dividends and
increased for costs related to the CAP Plan. For earnings per
share, the costs related to the CAP Plan (net of tax) are added
back as the shares related to the CAP Plan are included in
weighted average common shares outstanding.
Note: Certain reclassifications have been made to prior period
amounts to conform to the current period's presentation.
THE BEAR STEARNS COMPANIES INC.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
% Change
Six Months Ended From
-------------------------- --------
May 31, May 31, May 31,
2005 2004 2004
------------ ------------ --------
(In thousands, except
share and per share data)
REVENUES
Commissions $ 610,985 $ 615,253 (0.7%)
Principal transactions 1,958,812 1,880,061 4.2%
Investment banking 484,136 477,059 1.5%
Interest and dividends 2,213,404 1,018,933 117.2%
Asset management and other
income 178,612 153,937 16.0%
------------ ------------
Total revenues 5,445,949 4,145,243 31.4%
Interest expense 1,734,737 695,782 149.3%
------------ ------------
Revenues, net of
interest expense 3,711,212 3,449,461 7.6%
------------ ------------
NON-INTEREST EXPENSES
Employee compensation and
benefits 1,829,683 1,709,201 7.0%
Floor brokerage, exchange and
clearance fees 114,580 116,547 (1.7%)
Communications and technology 199,282 182,149 9.4%
Occupancy 80,350 68,383 17.5%
Advertising and market
development 63,149 55,216 14.4%
Professional fees 107,997 84,170 28.3%
Other expenses 180,404 191,341 (5.7%)
------------ ------------
Total non-interest
expenses 2,575,445 2,407,007 7.0%
------------ ------------
Income before provision for
income taxes 1,135,767 1,042,454 9.0%
Provision for income taxes 391,840 333,586 17.5%
------------ ------------
Net income $ 743,927 $ 708,868 4.9%
------------ ------------
Net income applicable to
common shares $ 731,006 $ 694,255 5.3%
============ ============
Adjusted net income used
for diluted earnings per
share (1) $ 773,560 $ 744,805 3.9%
============ ============
Basic earnings per share $ 5.78 $ 5.65 2.3%
============ ============
Diluted earnings per share $ 5.21 $ 5.07 2.8%
============ ============
Weighted average common
shares outstanding:
Basic 130,960,364 129,029,761
============ ============
Diluted 148,612,374 146,945,015
============ ============
Cash dividends declared per
common share $ 0.50 $ 0.40
============ ============
(1) Represents net income reduced for preferred stock dividends
and increased for costs related to the CAP Plan. For earnings
per share, the costs related to the CAP Plan (net of tax) are
added back as the shares related to the CAP Plan are included
in weighted average common shares outstanding.
Note: Certain reclassifications have been made to prior period
amounts to conform to the current period's presentation.
THE BEAR STEARNS COMPANIES INC.
SELECTED FINANCIAL INFORMATION
(UNAUDITED)
Three Months Ended
---------------------------------
May 31, February 28,
2005 2005
---------------------------------
(In thousands, except common share data,
financial ratios and other data)
Results
-------
Revenues, net of interest expense $ 1,873,552 $ 1,837,660
Net income $ 365,122 $ 378,805
Net income applicable to common
shares $ 358,679 $ 372,327
Adjusted net income used for diluted
earnings per share (1) $ 379,528 $ 394,032
Financial Position
------------------
Stockholders' equity, at period end $ 9,708,526 $ 9,518,898
Total capital, at period end $ 49,397,155 $ 48,491,012
Common Share Data
-----------------
Basic earnings per share $ 2.84 $ 2.94
Diluted earnings per share $ 2.56 $ 2.64
Book value per common share, at
period end $ 65.12 $ 62.88
Weighted average common shares
outstanding:
Basic 130,663,337 131,261,212
Diluted 148,037,979 149,193,402
Common shares outstanding, at
period end (2) 145,928,440 146,012,775
Financial Ratios
----------------
Return on average common equity
(annualized) 16.5% 17.8%
Adjusted pre-tax profit margin (3) 31.7% 33.5%
Pre-tax profit margin (4) 29.8% 31.5%
After-tax profit margin (5) 19.5% 20.6%
Compensation & benefits / Revenues,
net of interest expense 49.3% 49.3%
Other Data (in billions, except
employees)
-------------------------------
Margin debt balances, at period end $ 53.9 $ 61.3
Margin debt balances, average for
period $ 58.7 $ 58.0
Customer short balances, at period
end $ 82.5 $ 93.9
Customer short balances, average
for period $ 86.8 $ 88.5
Securities borrowed, at period end $ 59.7 $ 67.8
Securities borrowed, average for
period $ 65.1 $ 69.6
Free credit balances, at period end $ 31.6 $ 30.2
Free credit balances, average for
period $ 30.6 $ 31.1
Assets under management, at period
end $ 36.9 $ 37.0
Employees, at period end 11,141 11,019
Three Months Ended
----------------------------------------------------
November 30, August 31, May 31, February 29,
2004 2004 2004 2004
----------------------------------------------------
(In thousands, except common share data,
financial ratios and other data)
Results
-------
Revenues, net of
interest expense $ 1,828,657 $ 1,534,765 $ 1,723,538 $ 1,725,923
Net income $ 352,606 $ 283,259 $ 347,803 $ 361,065
Net income
applicable to
common shares $ 345,990 $ 276,416 $ 340,609 $ 353,646
Adjusted net
income used for
diluted earnings
per share (1) $ 372,632 $ 300,984 $ 366,027 $ 378,778
Financial Position
------------------
Stockholders'
equity, at period
end $ 8,990,872 $ 8,067,519 $ 8,006,834 $ 7,817,777
Total capital, at
period end $45,834,149 $41,567,718 $39,973,413 $39,970,906
Common Share Data
-----------------
Basic earnings per
share $ 2.91 $ 2.31 $ 2.77 $ 2.88
Diluted earnings
per share $ 2.61 $ 2.09 $ 2.49 $ 2.57
Book value per
common share, at
period end $ 59.13 $ 55.13 $ 53.38 $ 51.19
Weighted average
common shares
outstanding:
Basic 125,346,024 127,014,483 129,071,295 129,118,964
Diluted 142,672,823 144,201,755 146,921,897 147,108,483
Common shares
outstanding, at
period end (2) 144,484,099 144,052,137 144,285,667 144,320,701
Financial Ratios
----------------
Return on average
common equity
(annualized) 19.5% 15.9% 19.6% 21.3%
Adjusted pre-tax
profit margin (3) 31.8% 31.7% 32.3% 33.3%
Pre-tax profit
margin (4) 29.3% 28.9% 29.7% 30.8%
After-tax profit
margin (5) 19.3% 18.5% 20.2% 20.9%
Compensation &
benefits /
Revenues, net of
interest expense 43.8% 48.4% 49.9% 49.2%
Other Data (in
billions, except
employees)
-----------------
Margin debt
balances, at
period end $ 57.3 $ 49.6 $ 44.4 $ 47.9
Margin debt
balances, average
for period $ 52.0 $ 46.6 $ 46.7 $ 46.6
Customer short
balances, at
period end $ 85.4 $ 73.7 $ 74.9 $ 77.0
Customer short
balances, average
for period $ 78.2 $ 75.6 $ 77.2 $ 74.3
Securities
borrowed, at
period end $ 65.2 $ 58.9 $ 59.7 $ 62.0
Securities
borrowed, average
for period $ 64.1 $ 63.3 $ 65.3 $ 62.6
Free credit
balances, at
period end $ 30.8 $ 29.3 $ 28.8 $ 26.1
Free credit
balances, average
for period $ 28.8 $ 30.8 $ 28.1 $ 26.5
Assets under
management, at
period end $ 34.9 $ 28.1 $ 27.3 $ 29.1
Employees, at
period end 10,961 10,715 10,469 10,431
(1) Represents net income reduced for preferred stock dividends and
increased for costs related to the CAP Plan and the redemption of
preferred stock. For earnings per share, the costs related to the
CAP Plan (net of tax) are added back as the shares related to the
CAP Plan are included in weighted average common shares
outstanding.
(2) Represents shares used to calculate book value per common share.
Common shares outstanding include units issued under certain stock
compensation plans which will be distributed as shares of common
stock.
(3) Represents the ratio of income before both CAP Plan costs and
provision for income taxes to revenues, net of interest expense.
(4) Represents the ratio of income before provision for income taxes
to revenues, net of interest expense.
(5) Represents the ratio of net income to revenues, net of interest
expense.
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