Bear Stearns Reports Third Quarter 2003 Earnings of $2.30 Per Share, Up 87.0% from Third Quarter 2002.Business Editors NEW YORK--(BUSINESS WIRE)--Sept. 18, 2003
Net Income up 90.6% to $313.4 Million, Nearly Doubling from $164.4
Million in Third Quarter 2002
Pre-Tax Profit Margin Hits 32.5%
Quarterly ROE 21.3% : Trailing 12-Month ROE 19.0%
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. ) reported today 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 $2.30 for the third quarter ended August 31, 2003, up 87.0% from $1.23 per share (diluted) for the quarter ended August 31, 2002. Net income for the third quarter of 2003 was $313.4 million, up 90.6% from $164.4 million for the third quarter of 2002. Net revenues were $1.49 billion for the third quarter, up 28.6% from $1.15 billion for the third quarter of 2002. 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. after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. return on average 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 current quarter was 21.3% and for the trailing 12-month period ended August 31, 2003 was 19.0%. 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 of Bear Stearns, commented, "Our firm takes great pride in its ability to prosper through the recent business cycles and our third quarter earnings illustrate our ability to do just that. A significant increase in revenues, combined with continued rigorous cost control measures, resulted in substantial improvement in our year-over-year profitability. Our solid and diverse fixed income franchise continued to perform remarkably well, while our equity businesses demonstrated improved results as those markets recover. The equity market recovery is also evident in Global Clearing Services net interest revenues, as margin debt balances and customer short balances increased. Progress in the development of the Wealth Management segment can be seen in a number of initiatives, including our successful recruiting effort of Private Client Services brokers and the significant steps we have taken in Bear Stearns Asset Management to diversify diversify To acquire a variety of assets that do not tend to change in value at the same time. To diversify a securities portfolio is to purchase different types of securities in different companies in unrelated industries. its alternative investment product range." Details of the firm's three major business segments with comparative information follow: CAPITAL MARKETS Net revenues for the Capital Markets segment were $1.2 billion for the quarter ended August 31, 2003, up 42.0% from $859.5 million for the third quarter of last year. -- Institutional Equities net revenues were $200.5 million for the third quarter of 2003, a 30.5% decrease from $288.6 million for the comparable prior year quarter. A decline in market volatility Volatility 1. A statistical measure of the tendency of a market or security to rise or fall sharply within a period of time. 2. A variable in option pricing formulas that denotes the extent to which the return of the underlying asset will fluctuate between now and the and average daily 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. served to reduce institutional commission revenues and convertible arbitrage arbitrage: see foreign exchange. arbitrage Business operation involving the purchase of foreign currency, gold, financial securities, or commodities in one market and their almost simultaneous sale in another market, in order to profit from price revenues. -- Fixed Income net revenues were $720.1 million, up 76.8% from $407.3 million reported for the quarter ended August 31, 2002. A steep yield curve, tightening corporate credit spreads and a continued low interest rate environment fueled another strong quarter in the Fixed Income Division. Despite a sharp rise in treasury yields and drop in the federal funds rate Federal Funds Rate The interest rate at which a depository institution lends immediately available funds (balances at the Federal Reserve) to another depository institution overnight. , the mortgage-backed securities Mortgage-backed securities (MSBs) Securities backed by a pool of mortgage loans. , high yield and interest rate product areas continued to perform exceptionally well. -- Investment Banking net revenues were $299.7 million for the quarter ended August 31, 2003, up 83.2% from $163.6 million for the quarter ended August 31, 2002. Included in these results are Merchant Banking revenues of $92.0 million. Merchant Banking revenues in the quarter are principally attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to the secondary offering in July July: see month. 2003 of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 6.5 million shares of Aeropostale and an increase in the market value of the remaining investment of 3.8 million shares. Equity, high yield and 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. were extremely active during the quarter, even as merger and acquisition activity continued to reflect difficult market conditions. GLOBAL CLEARING SERVICES Net revenues for Global Clearing Services were $200.9 million for the quarter ended August 31, 2003, up 4.9% from $191.5 million for the quarter ended August 31, 2002. Net interest revenues increased due to higher customer margin debt balances and customer short balances. Average customer margin debt balances were $42.1 billion during the quarter ended August 31, 2003, up from $33.7 billion in the comparable quarter of fiscal 2002. Customer short balances averaged $67.3 billion for the third quarter of 2003, as compared with $52.1 billion for the third quarter of 2002. Commission activity declined reflecting reduced trading activity levels of prime brokerage Prime Brokerage A special group of services that many brokerages give to special clients. The services provided under prime brokering are securities lending, leveraged trade executions, and cash management, among other things. customers. WEALTH MANAGEMENT Wealth Management net revenues for the quarter ended August 31, 2003 were $126.4 million, an increase of 1.9% from $124.0 million for the quarter ended August 31, 2002. -- Private Client Services revenues were $98.4 million in the third quarter of 2003, an increase of 7.9% from $91.2 million in the prior year quarter. The increase was primarily due to improved customer activity levels and the increase in broker 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. due to the success of the ongoing recruiting efforts. -- Asset Management net revenues were down 15.0% to $27.9 million for the third quarter of 2003, from $32.9 million in the prior year quarter, reflecting reduced performance fees on proprietary hedge fund 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" products. -- Total 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. stood at $25.7 billion on August 31, 2003, up 10.8% from $23.2 billion on August 31, 2002. EXPENSES Non-interest expenses rose 10.3% to $1.0 billion during the August 2003 quarter from $909.2 million in the August 2002 quarter. Compensation as a percentage of net revenues was 45.9% for the third quarter as compared with 51.6% in the quarter ended August 31, 2002. Non-compensation expenses were $321.1 million for the quarter ended August 31, 2003, up 2.4% from $313.6 million for the comparable prior year period. The significant increase in revenues combined with a stable cost base resulted in an increase in the third quarter 2003 pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta profit margin to 32.5% from 21.2% in the third quarter of 2002. As of August 31, 2003, 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 $34.4 billion. Book value as of August 31, 2003 was $45.46 per share, based on 146,662,752 shares outstanding. QUARTERLY COMMON STOCK CASH DIVIDEND DECLARED de·clare v. de·clared, de·clar·ing, de·clares v.tr. 1. To make known formally or officially. See Synonyms at announce. 2. To state emphatically or authoritatively; affirm. 3. The Board of Directors of The Bear Stearns Companies Inc. declared a regular, quarterly cash dividend of 20 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. on the outstanding shares of common stock payable October October: see month. 31, 2003, to stockholders of record on October 17, 2003. QUARTERLY PREFERRED CASH DIVIDENDS DECLARED The Board of Directors of The Bear Stearns Companies Inc. declared a quarterly cash dividend of 68.75 cents per share on the outstanding shares of Adjustable Rate Adjustable rate Applies mainly to convertible securities. Refers to interest rate or dividend that is adjusted periodically, usually according to a standard market rate outside the control of the bank or savings institution, such as that prevailing on Treasury bonds or notes. Cumulative Preferred Stock Cumulative preferred stock Preferred stock whose dividends accrue, should the issuer not make timely dividend payments. Related: Non-cumulative preferred stock. , Series A, payable October 15, 2003 to stockholders of record on September September: see month. 30, 2003. In addition, other regular dividends declared by the Board of Directors include: (i) a cash dividend of $3.075 per share on the outstanding shares of 6.15% Cumulative Preferred Stock, Series E (which is equivalent to 76.875 cents per related depositary DEPOSITARY, contracts. He with whom a deposit is confided or made. 2. It is, the essence of the contract of deposits that it should be gratuitous on the part 'of the depositary. 9 M. R. 470. share); (ii) a cash dividend of $2.86 per share on the outstanding shares of 5.72% Cumulative Preferred Stock, Series F (which is equivalent to 71.50 cents per related depositary share); and (iii) a cash dividend of $2.745 per share on the outstanding shares of 5.49% Cumulative Preferred Stock, Series G (which is equivalent to 68.625 cents per related depositary share) all payable October 15, 2003 to stockholders of record on September 30, 2003. 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 $34.4 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, trading and 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 10,500 employees worldwide. For additional information about Bear Stearns, please visit the firm's Web site 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 2002 Annual Report to Stockholders which has 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. , September 18th, at 10:00 a.m. E.S.T. The call will be open to the public. Those wishing to listen to the conference call should dial 1-800-419-0063 (or 1-703-464-5608 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 Web site at http://www.bearstearns.com. For those unable to listen to the live broadcast of the call, a replay will be available on our Web site or by dialing 1-888-266-2081 (or 1-703-925-2533 for international callers) at approximately 1:00 p.m. E.S.T. The passcode for the replay is 261191. 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 , September 26th. If you have any questions on how to obtain access to the conference call, please contact Kerri Kelly Kel·ly , Ellsworth Born 1923. American abstract painter and sculptor whose works are characterized by flat color areas with sharply defined edges. Kelly, Emmett 1898-1979. at 1-212-272-2529 or via e-mail at kkelly@bear.com.
THE BEAR STEARNS COMPANIES INC.
SEGMENT DATA
(UNAUDITED)
Three Months Ended % Change From
----------------------------------- -----------------
August August May August May
31, 31, 31, 31, 31,
2003 2002 2003 2002 2003
----------- ----------- ----------- -------- --------
(In thousands)
NET REVENUES
Capital Markets
Institutional
Equities $200,506 $288,609 $189,346 (30.5%) 5.9%
Fixed Income 720,128 407,333 765,190 76.8% (5.9%)
Investment
Banking 299,742 163,583 223,439 83.2% 34.1%
----------- ----------- -----------
Total Capital
Markets 1,220,376 859,525 1,177,975 42.0% 3.6%
Global Clearing
Services 200,929 191,506 187,405 4.9% 7.2%
Wealth Management 126,351 124,037 124,405 1.9% 1.6%
Other (1) (62,596) (20,684) (27,065) (202.6%) (131.3%)
----------- ----------- -----------
Total net
revenues $1,485,060 $1,154,384 $1,462,720 28.6% 1.5%
=========== =========== ===========
PRE-TAX INCOME
Capital Markets $540,942 $257,716 $483,971 109.9% 11.8%
Global Clearing
Services 68,456 66,637 37,798 2.7% 81.1%
Wealth Management 9,851 (3,202) 4,948 407.7% 99.1%
Other (1) (137,072) (75,947) (98,587) (80.5%) (39.0%)
----------- ----------- -----------
Total pre-tax
income $482,177 $245,204 $428,130 96.6% 12.6%
=========== =========== ===========
Nine Months Ended % Change
----------------------- ---------
August 31, August 31,
2003 2002
----------- -----------
(In thousands)
NET REVENUES
Capital Markets
Institutional Equities $666,313 $835,351 (20.2%)
Fixed Income 2,276,535 1,474,137 54.4%
Investment Banking 710,945 790,408 (10.1%)
----------- -----------
Total Capital Markets 3,653,793 3,099,896 17.9%
Global Clearing Services 564,112 597,794 (5.6%)
Wealth Management 366,341 373,949 (2.0%)
Other (1) (121,032) (70,411) (71.9%)
----------- -----------
Total net revenues $4,463,214 $4,001,228 11.5%
=========== ===========
PRE-TAX INCOME
Capital Markets $1,490,832 $1,092,452 36.5%
Global Clearing Services 158,404 209,737 (24.5%)
Wealth Management 20,518 7,259 182.7%
Other (1) (334,248) (271,265) (23.2%)
----------- -----------
Total pre-tax income $1,335,506 $1,038,183 28.6%
=========== ===========
(1) 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.
THE BEAR STEARNS COMPANIES INC.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
Three Months Ended % Change From
-------------------------------------- ---------------
August August May August May
31, 31, 31, 31, 31,
2003 2002 2003 2002 2003
------------ ------------ ------------ ------- -------
(In thousands, except share and per
share data)
REVENUES
Commissions $279,888 $297,191 $267,682 (5.8%) 4.6%
Principal
transactions 724,023 556,892 809,915 30.0% (10.6%)
Investment
banking 298,716 136,532 212,550 118.8% 40.5%
Interest and
dividends 503,135 543,653 522,565 (7.5%) (3.7%)
Other income 36,509 47,129 37,500 (22.5%) (2.6%)
------------ ------------ ------------
Total
revenues 1,842,271 1,581,397 1,850,212 16.5% (0.4%)
Interest
expense 357,211 427,013 387,492 (16.3%) (7.8%)
------------ ------------ ------------
Revenues,
net of
interest
expense 1,485,060 1,154,384 1,462,720 28.6% 1.5%
------------ ------------ ------------
NON-INTEREST
EXPENSES
Employee
compensation
and benefits 681,745 595,616 692,181 14.5% (1.5%)
Floor
brokerage,
exchange and
clearance fees 44,830 56,644 47,540 (20.9%) (5.7%)
Communications
and technology 93,047 90,736 90,744 2.5% 2.5%
Occupancy 34,788 35,476 33,088 (1.9%) 5.1%
Advertising and
market
development 24,550 26,628 27,507 (7.8%) (10.7%)
Professional
fees 36,608 29,878 28,995 22.5% 26.3%
Other expenses 87,315 74,202 114,535 17.7% (23.8%)
------------ ------------ ------------
Total non-
interest
expenses 1,002,883 909,180 1,034,590 10.3% (3.1%)
------------ ------------ ------------
Income before
provision for
income taxes 482,177 245,204 428,130 96.6% 12.6%
Provision for
income taxes 168,762 80,786 147,719 108.9% 14.2%
------------ ------------ ------------
Net income $313,415 $164,418 $280,411 90.6% 11.8%
============ ============ ============
Net income
applicable to
common shares $305,621 $156,094 $272,616 95.8% 12.1%
============ ============ ============
Adjusted net
income used
for diluted
earnings per
share (1) $334,180 $178,994 $299,533 86.7% 11.6%
============ ============ ============
Basic earnings
per share $2.54 $1.32 $2.27 92.4% 11.9%
============ ============ ============
Diluted
earnings per
share $2.30 $1.23 $2.05 87.0% 12.2%
============ ============ ============
Weighted
average common
shares
outstanding:
Basic 128,681,694 132,436,184 128,711,363
============ ============ ============
Diluted 145,599,540 145,895,494 146,062,838
============ ============ ============
Cash dividends
declared per
common share $0.20 $0.15 $0.17
============ ============ ============
(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)
Nine Months Ended % Change
------------------------- ---------
August 31, August 31,
2003 2002
------------ ------------
(In thousands, except
share and per share
data)
REVENUES
Commissions $789,485 $834,926 (5.4%)
Principal transactions 2,502,402 1,923,433 30.1%
Investment banking 678,849 752,244 (9.8%)
Interest and dividends 1,459,859 1,726,808 (15.5%)
Other income 99,803 132,534 (24.7%)
------------ ------------
Total revenues 5,530,398 5,369,945 3.0%
Interest expense 1,067,184 1,368,717 (22.0%)
------------ ------------
Revenues, net of interest
expense 4,463,214 4,001,228 11.5%
------------ ------------
NON-INTEREST EXPENSES
Employee compensation and
benefits 2,131,815 1,942,827 9.7%
Floor brokerage, exchange and
clearance fees 137,050 144,831 (5.4%)
Communications and technology 276,531 288,828 (4.3%)
Occupancy 102,819 116,911 (12.1%)
Advertising and market
development 77,267 80,351 (3.8%)
Professional fees 94,056 95,473 (1.5%)
Other expenses 308,170 293,824 4.9%
------------ ------------
Total non-interest expenses 3,127,708 2,963,045 5.6%
------------ ------------
Income before provision for
income taxes 1,335,506 1,038,183 28.6%
Provision for income taxes 467,427 350,387 33.4%
------------ ------------
Net income $868,079 $687,796 26.2%
============ ============
Net income applicable to common
shares $844,499 $660,380 27.9%
============ ============
Adjusted net income used for
diluted earnings per share (1) $927,470 $751,266 23.5%
============ ============
Basic earnings per share $7.02 $5.51 27.4%
============ ============
Diluted earnings per share $6.34 $5.10 24.3%
============ ============
Weighted average common shares
outstanding:
Basic 129,055,575 133,661,864
============ ============
Diluted 146,316,093 147,448,398
============ ============
Cash dividends declared per
common share $0.52 $0.45
============ ============
(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
--------------------------------------
August 31, May 31, February 28,
2003 2003 2003
------------ ------------ ------------
(In thousands, except common share
data and other data)
Results
-------
Revenues, net of interest
expense $1,485,060 $1,462,720 $1,515,434
Net income $313,415 $280,411 $274,253
Net income applicable to common
shares $305,621 $272,616 $266,261
Adjusted net income used for
diluted earnings per share (1) $334,180 $299,533 $293,756
Financial Position
------------------
Stockholders' equity, at period
end $6,875,668 $6,714,397 $6,529,628
Total stockholders' equity and
trust issued preferred
securities, at period end $7,438,168 $7,276,897 $7,092,128
Total capital, at period end $34,438,022 $33,520,967 $31,987,917
Common Share Data
-----------------
Basic earnings per share $2.54 $2.27 $2.21
Diluted earnings per share $2.30 $2.05 $2.00
Book value per common share, at
period end $45.46 $43.52 $41.64
Weighted average common shares
outstanding:
Basic 128,681,694 128,711,363 129,773,603
Diluted 145,599,540 146,062,838 147,029,224
Common shares outstanding, at
period end (2) 146,662,752 146,915,258 146,659,224
Financial Ratios
----------------
Return on average common equity
(annualized) 21.3% 19.7% 19.9%
Adjusted pre-tax profit margin
(3) 35.8% 32.4% 31.2%
Pre-tax profit margin (4) 32.5% 29.3% 28.1%
After-tax profit margin (5) 21.1% 19.2% 18.1%
Compensation & benefits /
Revenues, net of interest
expense 45.9% 47.3% 50.0%
Other Data (in billions, except
employees)
-----------
Margin debt balances, at period
end $40.9 $43.4 $37.3
Margin debt balances, average
for period $42.1 $39.0 $35.9
Customer short balances, at
period end $65.7 $65.5 $55.9
Customer short balances,
average for period $67.3 $61.4 $56.3
Stock borrowed, at period end $53.4 $49.8 $41.6
Stock borrowed, average for
period $55.6 $48.5 $45.0
Free credit balances, at period
end $19.8 $18.6 $16.7
Free credit balances, average
for period $20.8 $18.8 $18.4
Assets under management, at
period end $25.7 $24.4 $23.3
Employees, at period end 10,515 10,472 10,506
Three Months Ended
---------------------------------------------------
November 30, August 31, May 31, February 28,
2002 2002 2002 2002
------------ ------------ ------------ ------------
(In thousands, except common share data and other
data)
Results
-------
Revenues, net of
interest expense $1,127,008 $1,154,384 $1,607,666 $1,239,178
Net income $190,549 $164,418 $342,852 $180,526
Net income
applicable to
common shares $182,359 $156,094 $333,538 $170,748
Adjusted net
income used for
diluted earnings
per share (1) $195,268 $178,994 $381,533 $190,739
Financial Position
------------------
Stockholders'
equity, at period
end $6,382,083 $5,954,431 $5,963,258 $5,760,905
Total
stockholders'
equity and trust
issued preferred
securities, at
period end $6,944,583 $6,516,931 $6,525,758 $6,323,405
Total capital, at
period end $30,625,982 $29,567,725 $31,038,949 $31,063,625
Common Share Data
------------------
Basic earnings per
share $1.48 $1.32 $2.80 $1.39
Diluted earnings
per share $1.36 $1.23 $2.59 $1.29
Book value per
common share, at
period end $39.94 $38.10 $37.16 $34.95
Weighted average
common shares
outstanding:
Basic 130,133,459 132,436,184 133,772,110 134,793,949
Diluted 143,798,762 145,895,494 147,592,256 148,115,050
Common shares
outstanding, at
period end (2) 145,591,496 146,478,611 146,873,990 147,040,102
Financial Ratios
------------------
Return on average
common equity
(annualized) 14.5% 13.3% 29.5% 15.2%
Adjusted pre-tax
profit margin (3) 26.2% 24.0% 36.3% 24.9%
Pre-tax profit
margin (4) 24.2% 21.2% 32.3% 22.1%
After-tax profit
margin (5) 16.9% 14.2% 21.3% 14.6%
Compensation &
benefits /
Revenues, net of
interest expense 50.2% 51.6% 44.4% 51.1%
Other Data (in
billions, except
employees)
------------------
Margin debt
balances, at
period end $36.7 $32.5 $36.7 $34.6
Margin debt
balances, average
for period $31.7 $33.7 $35.9 $35.1
Customer short
balances, at
period end $58.8 $52.6 $55.8 $54.5
Customer short
balances, average
for period $53.5 $52.1 $56.9 $55.9
Stock borrowed, at
period end $46.2 $40.6 $43.3 $39.8
Stock borrowed,
average for
period $43.4 $41.9 $45.4 $45.6
Free credit
balances, at
period end $17.1 $18.3 $16.6 $17.9
Free credit
balances, average
for period $19.8 $19.4 $18.5 $19.6
Assets under
management, at
period end $24.0 $23.2 $24.8 $25.8
Employees, at
period end 10,574 10,493 10,426 10,341
(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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