Bear Stearns Reports Third Consecutive Record Quarter; Earnings Per Share Rose 78% to a Record $3.72; Record Net Income of $539 Million, an 81% Increase; Record Net Revenues of $2.5 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, Fixed Income and Global Clearing Services Post Record Quarterly Net Revenues 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 $3.72 for the second quarter ended May 31, 2006, up 78% from $2.09 per share for the second quarter of 2005. Net income for the second quarter of 2006 was $539 million, up 81% from $298 million for the second quarter of 2005. Net revenues for the 2006 second quarter were a record $2.5 billion, up 33% from $1.9 billion for the 2005 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 2006 was 20.1%, and 18.7% for the trailing 12-month period ended May 31, 2006. "We are very pleased to report our third consecutive quarter of record setting results. The first half of 2006 has proven to be our best ever," 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 success in increasing the depth and breadth Breadth The percentage of assets or stocks advancing relative to those unchanged or declining. Also the number of independent forecasts available per year. A stock picker forecasting returns to 100 stocks every quarter exhibits a breadth of 400, assuming each forecast is of our business both domestically and internationally has fueled our enthusiasm and appetite ap·pe·tite n. An instinctive physical desire, as for food or sex. Appetite The natural instinctive desire for food. for further growth. We will continue to explore ways to expand our business through launching new products, gaining market share in existing product areas, and increasing our presence internationally." A brief discussion of the firm's business segments follows: CAPITAL MARKETS Capital Markets net revenues for the second quarter of 2006 were $2.0 billion, up 40% from $1.4 billion for the quarter ended May 31, 2005. --Institutional Equities net revenues were a record $554 million, up 42% from $390 million for the second quarter of 2005. Higher customer activity levels and favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. market conditions across the equity franchise drove these record results. 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 international sales and trading produced record net revenues this quarter. --Fixed Income net revenues were a record $1.2 billion, up 45% from $808 million in the second quarter of 2005. The mortgage franchise retained its number one industry ranking for the first half of fiscal 2006. Securitization Securitization The process of creating a financial instrument by combining other financial assets and then marketing them to investors. Notes: Mortgage backed securities are a perfect example of securitization. May also be spelled as "securitisation. and trading volumes Trading volume The number of shares transacted every day. As there is a seller for every buyer, one can think of the trading volume as half of the number of shares transacted. That is, if A sells 100 shares to B, the volume is 100 shares. remained high, and 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 flow from the vertical integration of the mortgage platform rose producing record net revenues. Interest rate derivatives An interest rate derivative is a derivative where the underlying asset is the right to pay or receive a (usually notional) amount of money at a given interest rate. The interest rate derivatives market is the largest derivatives market in the world. and foreign exchange produced record net revenues contributing to a record quarter in the interest rate products area. Robust customer activity levels led to record net revenues in both the distressed debt distressed debt Debt with low junk status and a market price substantially below par value, often pennies on the dollar. Investors sometimes buy distressed debt on the possibility that management can renegotiate loan agreements and keep the issuer out of and leverage finance areas driving record net revenues in the credit businesses this quarter. --Investment Banking net revenues were $278 million, up 20% from the $232 million in the prior year quarter. Merger and acquisition advisory fees increased significantly this quarter as a number of previously announced transactions were completed during the quarter. 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. net revenues were up as equity new issuance volumes increased compared with the year-ago quarter. These gains were partially offset by decreases in merchant banking net revenues compared with the prior year quarter. GLOBAL CLEARING SERVICES Global Clearing Services net revenues were $290 million for the second quarter 2006, up 5% from $276 million in the year ago quarter. Net interest revenue increases were driven by higher average customer margin balances and improved net interest margins. Average customer margin debt balances for the quarter ended May 31, 2006 were a record $68.4 billion, up 6% from $64.7 billion in the prior year quarter. Customer short balances averaged $80.2 billion during the second quarter of 2006 down from $86.8 billion in the prior year period. WEALTH MANAGEMENT Wealth Management net revenues for the quarter ended May 31, 2006 were $151 million, down 3% from $156 million in the second quarter of 2005. --Private Client Services net revenues were $129 million, an increase of 22% from $106 million in the 2005 second quarter. Increased investor activity and management fees from an increase in fee-based assets were the primary drivers of these results. --Asset Management net revenues were $22 million for the second quarter of 2006 a decrease of 56% from $50 million in the prior year's quarter mainly due to a decline in performance fees on proprietary 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" . 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 20% to $48 billion on May 31, 2006, from $40 billion on May 31, 2005. EXPENSES --Compensation as a percentage of net revenues was 48.8% in the second quarter of 2006 as compared with 49.3% for the second quarter of 2005. 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 48.4% for 2006 versus 49.3% for the six months ended May 31, 2005. --Non-compensation expenses were $445 million for the quarter ended May 31, 2006, a decrease of 9% from $488 million in the 2005 quarter. The decline in non-compensation related expenses is primarily due to a reduction in litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. related costs partially offset by increased communications and technology and occupancy costs Occupancy costs are the whole life costs of buildings and their associated land from occupancy until disposal. These costs may be incurred on a regular or irregular basis. Occupancy costs are those costs related to occupying a space including; rent, real estate taxes, personal associated with increased headcount head count or head·count n. 1. The act of counting people in a particular group. 2. The number of people counted in this way. Noun 1. . In addition, CAP plan related expenses and minority interest expense increased in conjunction conjunction, in astronomy conjunction, in astronomy, alignment of two celestial bodies as seen from the earth. Conjunction of the moon and the planets is often determined by reference to the sun. with increased profitability. 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 33.4% in the quarter ended May 31, 2006 from 24.7% in the 2005 second quarter. As of May 31, 2006, 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. $58.4 billion. Book value as of May 31, 2006 was $79.30 per share, based on 147.0 million shares outstanding. 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 $58.4 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, 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 12,500 employees worldwide. For additional information about Bear Stearns, please visit the firm's website at http://www.bearstearns.com. Financial Tables Attached 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 2005 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 Thursday Thursday: see week. , June June: see month. 15, 2006, 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 1325358. 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 30, 2006. 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 31, May 31, February 28, May 31, February 28,
2006 2005 2006 2005 2006
----------- ----------- ------------ ------- ------------
(In thousands)
NET REVENUES
Capital
Markets
Institutional
Equities $ 554,469 $ 390,453 $ 488,494 42.0% 13.5%
Fixed
Income 1,167,308 808,013 888,738 44.5% 31.3%
Investment
Banking 278,405 231,935 296,594 20.0% (6.1%)
----------- ----------- ------------
Total Capital
Markets 2,000,182 1,430,401 1,673,826 39.8% 19.5%
Global
Clearing
Services 289,523 276,160 263,992 4.8% 9.7%
Wealth
Management
Private
Client
Services(1) 128,889 105,637 128,794 22.0% 0.1%
Asset
Management 22,182 50,148 94,475 (55.8%) (76.5%)
----------- ----------- ------------
Total Wealth
Management 151,071 155,785 223,269 (3.0%) (32.3%)
Other(2) 58,666 11,206 24,116 nm nm
----------- ----------- ------------
Total net
revenues $2,499,442 $1,873,552 $2,185,203 33.4% 14.4%
=========== =========== ============
PRE-TAX
INCOME
Capital
Markets $ 702,005 $ 455,776 $ 634,751 54.0% 10.6%
Global
Clearing
Services 139,045 142,989 129,572 (2.8%) 7.3%
Wealth
Management (13,317) 6,054 32,173 nm nm
Other(2) 6,466 (142,380) (44,143) nm nm
----------- ----------- ------------
Total pre-
tax income $ 834,199 $ 462,439 $ 752,353 80.4% 10.9%
=========== =========== ============
(1) Private
Client
Services
Detail:
Gross
Revenues,
before
transfer
to
Capital
Markets
Segment $ 153,014 $ 130,284 $ 153,078
Revenue
transferred
to
Capital
Markets
Segment (24,125) (24,647) (24,284)
----------- ----------- ------------
Private
Client
Services
net
revenues $ 128,889 $ 105,637 $ 128,794
=========== =========== ============
Six Months Ended % Change
-------------------------- --------
May 31, May 31,
2006 2005
---------- ----------
(In thousands)
NET REVENUES
Capital Markets
Institutional Equities $1,042,963 $ 703,393 48.3%
Fixed Income 2,056,046 1,673,520 22.9%
Investment Banking 574,999 449,329 28.0%
---------- ----------
Total Capital Markets 3,674,008 2,826,242 30.0%
Global Clearing Services 553,515 546,552 1.3%
Wealth Management
Private Client
Services(1) 257,683 219,512 17.4%
Asset Management 116,657 105,463 10.6%
---------- ----------
Total Wealth Management 374,340 324,975 15.2%
Other(2) 82,782 13,443 nm
---------- ----------
Total net revenues $4,684,645 $3,711,212 26.2%
========== ==========
PRE-TAX INCOME
Capital Markets $1,336,756 $ 937,459 42.6%
Global Clearing Services 268,617 280,763 (4.3%)
Wealth Management 18,856 21,033 (10.4%)
Other(2) (37,677) (198,488) 81.0%
---------- ----------
Total pre-tax income $1,586,552 $1,040,767 52.4%
========== ==========
(1) Private Client
Services Detail:
Gross Revenues, before
transfer to Capital
Markets Segment $ 306,092 $ 263,579
Revenue transferred to
Capital Markets Segment (48,409) (44,067)
---------- ----------
Private Client
Services net revenues $ 257,683 $ 219,512
========== ==========
(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").
nm - not meaningful
THE BEAR STEARNS COMPANIES INC.
-------------------------------
CONSOLIDATED STATEMENTS OF INCOME
---------------------------------
(UNAUDITED)
-----------
Three Months Ended
-----------------------------------------
May 31, May 31, February 28,
2006 2005 2006
------------- ------------- -------------
(In thousands, except share and per
share data)
REVENUES
Commissions $ 305,251 $ 313,608 $ 286,071
Principal transactions 1,492,478 980,179 1,150,432
Investment banking 318,150 250,426 337,853
Interest and dividends 2,110,876 1,191,785 1,723,989
Asset management and
other income 76,994 87,582 140,073
------------- ------------- -------------
Total revenues 4,303,749 2,823,580 3,638,418
Interest expense 1,804,307 950,028 1,453,215
------------- ------------- -------------
Revenues, net of
interest expense 2,499,442 1,873,552 2,185,203
------------- ------------- -------------
NON-INTEREST EXPENSES
Employee compensation and
benefits 1,220,216 922,908 1,046,850
Floor brokerage, exchange
and clearance fees 58,621 57,262 51,243
Communications and
technology 118,169 100,343 104,034
Occupancy 45,422 40,756 44,627
Advertising and market
development 35,093 34,577 34,673
Professional fees 65,468 61,278 53,873
Other expenses 122,254 193,989 97,550
------------- ------------- -------------
Total non-interest
expenses 1,665,243 1,411,113 1,432,850
------------- ------------- -------------
Income before provision
for income taxes 834,199 462,439 752,353
Provision for income
taxes 294,866 164,329 238,197
------------- ------------- -------------
Net income $ 539,333 $ 298,110 $ 514,156
============= ============= =============
Net income applicable to
common shares $ 533,957 $ 291,667 $ 508,742
============= ============= =============
Adjusted net income used
for diluted earnings per
share (1) $ 558,233 $ 309,660 $ 529,332
============= ============= =============
Basic earnings per share $ 4.12 $ 2.32 $ 3.92
============= ============= =============
Diluted earnings per
share $ 3.72 $ 2.09 $ 3.54
============= ============= =============
Weighted average common
shares outstanding:
Basic 132,810,062 130,663,337 132,738,565
============= ============= =============
Diluted 149,945,896 148,037,979 149,417,369
============= ============= =============
Cash dividends declared
per common share $ 0.28 $ 0.25 $ 0.28
============= ============= =============
% Change From
--------------------
May 31, February 28,
2005 2006
------- ------------
REVENUES
Commissions (2.7%) 6.7%
Principal transactions 52.3% 29.7%
Investment banking 27.0% (5.8%)
Interest and dividends 77.1% 22.4%
Asset management and other income (12.1%) (45.0%)
Total revenues 52.4% 18.3%
Interest expense 89.9% 24.2%
Revenues, net of interest expense 33.4% 14.4%
NON-INTEREST EXPENSES
Employee compensation and benefits 32.2% 16.6%
Floor brokerage, exchange and clearance fees 2.4% 14.4%
Communications and technology 17.8% 13.6%
Occupancy 11.4% 1.8%
Advertising and market development 1.5% 1.2%
Professional fees 6.8% 21.5%
Other expenses (37.0%) 25.3%
Total non-interest expenses 18.0% 16.2%
Income before provision for income taxes 80.4% 10.9%
Provision for income taxes 79.4% 23.8%
Net income 80.9% 4.9%
Net income applicable to common shares 83.1% 5.0%
Adjusted net income used for diluted earnings
per share (1) 80.3% 5.5%
Basic earnings per share 77.6% 5.1%
Diluted earnings per share 78.0% 5.1%
Weighted average common shares outstanding:
Basic
Diluted
Cash dividends declared per common share
(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.
THE BEAR STEARNS COMPANIES INC.
-------------------------------
CONSOLIDATED STATEMENTS OF INCOME
---------------------------------
(UNAUDITED)
-----------
Six Months Ended % Change
--------------------------- ---------
May 31, May 31,
2006 2005
------------- -------------
(In thousands, except share
and per share data)
REVENUES
Commissions $ 591,322 $ 610,985 (3.2%)
Principal transactions 2,642,910 1,958,812 34.9%
Investment banking 656,003 484,136 35.5%
Interest and dividends 3,834,865 2,213,404 73.3%
Asset management and other
income 217,067 178,612 21.5%
------------- -------------
Total revenues 7,942,167 5,445,949 45.8%
Interest expense 3,257,522 1,734,737 87.8%
------------- -------------
Revenues, net of interest
expense 4,684,645 3,711,212 26.2%
------------- -------------
NON-INTEREST EXPENSES
Employee compensation and
benefits 2,267,066 1,829,683 23.9%
Floor brokerage, exchange and
clearance fees 109,864 114,580 (4.1%)
Communications and technology 222,203 199,282 11.5%
Occupancy 90,049 80,350 12.1%
Advertising and market
development 69,766 63,149 10.5%
Professional fees 119,341 107,997 10.5%
Other expenses 219,804 275,404 (20.2%)
------------- -------------
Total non-interest expenses 3,098,093 2,670,445 16.0%
------------- -------------
Income before provision for
income taxes 1,586,552 1,040,767 52.4%
Provision for income taxes 533,063 363,852 46.5%
------------- -------------
Net income $ 1,053,489 $ 676,915 55.6%
============= =============
Net income applicable to
common shares $ 1,042,699 $ 663,994 57.0%
============= =============
Adjusted net income used for
diluted earnings per share
(1) $ 1,087,565 $ 703,692 54.6%
============= =============
Basic earnings per share $ 8.04 $ 5.26 52.9%
============= =============
Diluted earnings per share $ 7.26 $ 4.74 53.2%
============= =============
Weighted average common
shares outstanding:
Basic 132,778,755 130,960,364
============= =============
Diluted 149,780,912 148,612,374
============= =============
Cash dividends declared per
common share $ 0.56 $ 0.50
============= =============
(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.
THE BEAR STEARNS COMPANIES INC.
-------------------------------
SELECTED FINANCIAL INFORMATION
------------------------------
(UNAUDITED)
-----------
Three Months Ended
--------------------------
May 31, February 28,
2006 2006
--------------------------
(In thousands, except
common share data and
other data)
Results
-------
Revenues, net of interest expense $ 2,499,442 $ 2,185,203
Net income $ 539,333 $ 514,156
Net income applicable to common shares $ 533,957 $ 508,742
Adjusted net income used for diluted
earnings per share (1) $ 558,233 $ 529,332
Financial Position
------------------
Stockholders' equity, at period end $ 11,707,594 $ 11,165,592
Total capital, at period end $ 58,354,738 $ 57,589,034
Common Share Data
-----------------
Basic earnings per share $ 4.12 $ 3.92
Diluted earnings per share $ 3.72 $ 3.54
Book value per common share, at period end $ 79.30 $ 75.46
Weighted average common shares outstanding:
Basic 132,810,062 132,738,565
Diluted 149,945,896 149,417,369
Common shares outstanding, at period end (2) 147,021,508 145,163,510
Financial Ratios
----------------
Return on average common equity (annualized) 20.1% 20.1%
Adjusted pre-tax profit margin (3) 35.1% 36.1%
Pre-tax profit margin (4) 33.4% 34.4%
After-tax profit margin (5) 21.6% 23.5%
Compensation & benefits / Revenues, net of
interest expense 48.8% 47.9%
Other Data (in billions, except employees)
------------------------------------------
Margin debt balances, at period end $ 72.7 $ 64.5
Margin debt balances, average for period $ 68.4 $ 64.5
Customer short balances, at period end $ 81.7 $ 78.1
Customer short balances, average for period $ 80.2 $ 78.2
Securities borrowed, at period end $ 52.1 $ 52.4
Securities borrowed, average for period $ 54.8 $ 52.9
Free credit balances, at period end $ 34.1 $ 30.6
Free credit balances, average for period $ 30.8 $ 29.9
Assets under management, at period end $ 47.9 $ 45.4
Employees, at period end 12,519 12,061
Three Months Ended
---------------------------
November 30, August 31,
2005 2005
--------------------------
(In thousands, except
common share data and
other data)
Results
-------
Revenues, net of interest expense $ 1,887,302 $ 1,812,280
Net income $ 406,957 $ 378,305
Net income applicable to common shares $ 401,505 $ 372,357
Adjusted net income used for diluted
earnings per share (1) $ 421,496 $ 394,919
Financial Position
------------------
Stockholders' equity, at period end $ 10,791,432 $ 9,881,046
Total capital, at period end $ 54,281,048 $ 52,070,689
Common Share Data
-----------------
Basic earnings per share $ 3.21 $ 2.96
Diluted earnings per share $ 2.90 $ 2.69
Book value per common share, at period end $ 71.08 $ 67.18
Weighted average common shares outstanding:
Basic 128,999,257 130,194,452
Diluted 145,534,789 147,051,538
Common shares outstanding, at period end(2) 146,431,767 146,341,980
Financial Ratios
----------------
Return on average common equity
(annualized) 17.7% 16.9%
Adjusted pre-tax profit margin (3) 32.9% 34.2%
Pre-tax profit margin (4) 31.1% 32.0%
After-tax profit margin (5) 21.6% 20.9%
Compensation & benefits / Revenues, net of
interest expense 46.2% 47.0%
Other Data (in billions, except employees)
------------------------------------------
Margin debt balances, at period end $ 66.6 $ 65.9
Margin debt balances, average for period $ 67.4 $ 63.4
Customer short balances, at period end $ 79.9 $ 80.6
Customer short balances, average for period $ 81.2 $ 81.3
Securities borrowed, at period end $ 49.9 $ 50.0
Securities borrowed, average for period $ 52.8 $ 56.1
Free credit balances, at period end $ 31.0 $ 29.6
Free credit balances, average for period $ 28.4 $ 28.6
Assets under management, at period end $ 41.9 $ 40.3
Employees, at period end 11,843 11,498
Three Months Ended
--------------------------
May 31, February 28,
2005 2005
--------------------------
Results
-------
Revenues, net of interest expense $ 1,873,552 $ 1,837,660
Net income $ 298,110 $ 378,805
Net income applicable to common shares $ 291,667 $ 372,327
Adjusted net income used for diluted
earnings per share (1) $ 309,660 $ 394,032
Financial Position
------------------
Stockholders' equity, at period end $ 9,641,514 $ 9,518,898
Total capital, at period end $ 49,330,143 $ 48,491,012
Common Share Data
-----------------
Basic earnings per share $ 2.32 $ 2.94
Diluted earnings per share $ 2.09 $ 2.64
Book value per common share, at period end $ 64.67 $ 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) 13.5% 17.8%
Adjusted pre-tax profit margin (3) 26.4% 33.5%
Pre-tax profit margin (4) 24.7% 31.5%
After-tax profit margin (5) 15.9% 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 $ 59.8 $ 67.3
Margin debt balances, average for period $ 64.7 $ 64.0
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 $ 56.6 $ 64.6
Securities borrowed, average for period $ 61.9 $ 66.6
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 $ 39.9 $ 40.0
Employees, at period end 11,141 11,019
(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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