-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RQsjoGr2DplzYKipG+4RwvIh8o8XFRf0yRFz52pO/XLGDtavkBjVJHQAMw0orydO 3lYYBQzgLIs9+uH/ng6n5A== 0000777001-02-000010.txt : 20020620 0000777001-02-000010.hdr.sgml : 20020620 20020620154734 ACCESSION NUMBER: 0000777001-02-000010 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20020619 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20020620 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BEAR STEARNS COMPANIES INC CENTRAL INDEX KEY: 0000777001 STANDARD INDUSTRIAL CLASSIFICATION: SECURITY BROKERS, DEALERS & FLOTATION COMPANIES [6211] IRS NUMBER: 133286161 STATE OF INCORPORATION: DE FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-08989 FILM NUMBER: 02683259 BUSINESS ADDRESS: STREET 1: ONE METROTECH NORTH STREET 2: 9TH FL CITY: BROOKLYN STATE: NY ZIP: 11201 BUSINESS PHONE: 3476439862 MAIL ADDRESS: STREET 1: ONE METROTECH NORTH STREET 2: 9TH FL. CITY: BROOKLYN STATE: NY ZIP: 11201 8-K 1 body8k_61902.htm MAY 2002 PRESS RELEASE THE BEAR STEARNS COMPANIES INC.


SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K


Pursuant to Section 13 or 15 (d) of
The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) June 19, 2002


THE BEAR STEARNS COMPANIES INC.

Exact Name of Registrant as Specified in its Charter


         
DELAWARE
(State or Other Jurisdiction of Incorporation)		   File No. 1-8989
(Commission File Number)		    13-3286161
(IRS Employer Identification Number)


383 Madison Avenue, New York, New York            10179
(Address of Principal Executive Offices)                  (Zip Code)


Registrant's telephone number, including area code:   (212) 272-2000



Not Applicable
(Former Name or Former Address, if Changed Since Last Report)


Item 5. Other Events

Filed herewith is a copy of The Bear Stearns Companies Inc. (the “Company”) Press Release, dated June 19, 2002, announcing earnings for the Company for the three months ended May 31, 2002, which includes the Unaudited Consolidated Statements of Income of the Company for the three and six months ended May 31, 2002 and May 25, 2001, and the three months ended February 28, 2002. All normal recurring adjustments that are, in the opinion of management, necessary for a fair presentation of the results of operations for the periods presented have been included. The nature of the Company’s business is such that the results for any interim period are not necessarily indicative of the results for a full year.

Item 7. Financial Statements, Pro Forma Financial Information and Exhibits

                          (a) Financial Statements of business acquired:

                                         Not applicable.

                          (b) Pro Forma financial information:

                                         Not applicable.

                          (c) Exhibit:

                                         (99) Press Release, dated June 19, 2002.

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Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

                                                                                                    THE BEAR STEARNS COMPANIES INC.

    By: /s/ Marshall J Levinson                        
Marshall J Levinson
Controller
(Principal Accounting Officer)

Dated: June 19, 2002

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THE BEAR STEARNS COMPANIES INC.

FORM 8-K

CURRENT REPORT

EXHIBIT INDEX


Exhibit No.                               Description

(99)                                    Press Release, dated June 19, 2002

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Contact:       Elizabeth Ventura      (212) 272-9251
                      Kerri Kelly                (212) 272-2529


THE BEAR STEARNS COMPANIES INC. REPORTS SECOND
QUARTER EARNINGS OF $2.59 PER SHARE

Operating Earnings, Ex-Merchant Banking Gain, Up 31.4% to $1.55 Per Share

Investment Banking & Equities Up, Fixed Income At Near Record Levels

Expense Control Continues to Boost Margins

        NEW YORK, New York –June 19, 2002–The Bear Stearns Companies Inc. (NYSE:BSC) reported today net earnings per share (diluted) of $2.59 for the second quarter ended May 31, 2002. Net income for the second fiscal quarter of 2002 was $342.9 million. Net revenues for the second quarter of 2002 were $1.61 billion. The annualized after-tax return on common stockholders' equity for the quarter was 29.5% and for the trailing 12-month period ended May 31, 2002 was 17.9%. The results for the second quarter ended May 31, 2002 include the effect of a merchant banking gain of $260.8 million.

        On an operating basis, excluding the effect of the merchant banking gain, earnings per share (diluted) were $1.55 for the second quarter ended May 31, 2002, up 31.4% from $1.18 per share (diluted) for the quarter ended May 25, 2001. Net income for the second quarter of 2002 was $203.0 million, up 19.7% from $169.5 million for the second quarter of 2001. Net revenues were $1.35 billion for the second quarter, down 1.6% from $1.37 billion for the second quarter of 2001. Annualized return on average common stockholders' equity on an operating basis for the current quarter was 17.8%.

        Commenting on the quarter, James E. Cayne, Chairman and CEO, noted, “Bear Stearns posted excellent earnings for the quarter with our Fixed Income Division once again producing superior results. Specifically, we saw extremely strong performance from our mortgage, distressed and municipal bond areas. In addition, our investment banking and equity related businesses delivered increased revenues quarter over quarter despite extremely difficult market conditions.”

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        “These results further reflect our efforts to reduce expenses and increase operating margins. Given the challenging operating environment this effort has served us particularly well. Our top priorities remain maintaining discipline over our expenses and building and developing our core franchises.”

A brief discussion of the firm’s business segments, compared with the prior year quarter, follows:

CAPITAL MARKETS

Net revenues for the Capital Markets segment were $1.30 billion for the quarter ended May 31, 2002, up 27.9% from $1.02 billion for the second quarter last year.

  • Institutional Equities net revenues were $319.8 million for the second quarter of 2002, down 8.2% versus $348.4 million for the comparable prior year quarter. These results reflect a decline in the combined NASDAQ and NYSE daily average trading volume and reduced volatility. Sequentially, Institutional Equities net revenues for the May 2002 quarter were up 29.0% over the February 2002 quarter.

  • The steep yield curve environment continued to create favorable conditions for the Fixed Income Division. Fixed Income net revenues were $532.3 million, up 3.5% from $514.3 million reported for the quarter ended May 25, 2001. Revenues were led by a record quarter in our mortgage-backed securities area and by a very strong performance in the high yield, interest rate derivatives and municipal bond areas.

  • Investment Banking net revenues were $450.9 million for the quarter ended May 31, 2002, up a substantial 188.4% from $156.3 million for the quarter ended May 25, 2001. The increase in investment banking revenues reflects a merchant banking gain of $260.8 million from the investment in and the subsequent initial public offering of Aeropostale (NYSE:ARO). In addition, improved market conditions and gains in the company’s overall market share fueled growth in equity and municipal underwriting revenues.

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GLOBAL CLEARING SERVICES

Net revenues for Global Clearing Services were $186.1 million for the quarter ended May 31, 2002, down 10.2% from $207.4 million for the quarter ended May 25, 2001. This decline is primarily attributable to a drop in customer activity resulting in lower commission revenues. Average customer margin debt and customer short balances remain below fiscal 2001 levels. Average customer margin debt balances were $35.9 billion during the quarter ended May 31, 2002, as compared with $37.8 billion in the prior year quarter ended May 25, 2001. Customer short balances averaged $47.5 billion for the second quarter of 2002, as compared with $50.6 billion for the second quarter of 2001.

WEALTH MANAGEMENT

Wealth Management net revenues for the quarter ended May 31, 2002 were $126.7 million, down 5.4% from $133.9 million for the quarter ended May 25, 2001.

  • Private Client Services revenue declined, as retail investors remain relatively inactive.

  • As of May 31, 2002, total assets under management stood at $24.8 billion, up 9.6% from $22.6 billion at May 25, 2001. Alternative investment products under management were $6.6 billion as of May 31, 2002, a 27.4% increase from the end of the prior year’s second fiscal quarter. Mutual funds under management also increased as of May 31, 2002 to $6.1 billion, up 14.3% from the end of the same period in 2001.

EXPENSES

Compensation as a percent of net revenues was 44.4% for the quarter as compared with 53.7% in the quarter ended May 25, 2001. Non-compensation expenses were $374.6 million for the quarter ended May 31, 2002, up 2.3% from $366.2 million for the comparable prior year period. The pre-tax, pre-CAP Plan profit margin was 36.3%, as compared with 22.5% in the prior year period. Expense reduction measures taken during fiscal 2001 served to control operating costs and boost the current period results.

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        Excluding the merchant banking transaction, compensation as a percentage of net revenues was 51.8% and non-compensation expenses were $351.6 million for the quarter. The pre-tax, pre-CAP Plan profit margin was 25.2% in the current quarter, excluding the effect of the merchant banking gain.

        As of May 31, 2002 total capital, including stockholders’ equity and long-term borrowings, was $31.0 billion. Book value as of May 31, 2002 was $37.16 per share, based on 146.9 million shares outstanding.

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 Cumulative Preferred Stock, Series A, payable July 15, 2002 to stockholders of record on June 28, 2002. 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 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 July 15, 2002 to stockholders of record on June 28, 2002.

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        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 and brokerage firm serving governments, corporations, institutions and individuals worldwide. With approximately $31.0 billion in total capital, the company's business includes corporate finance and mergers and acquisitions, institutional equities and fixed income sales, trading and research, private client services, derivatives, foreign exchange and futures sales and trading, asset management and custody services. Through Bear, Stearns Securities Corp., it offers prime broker and broker dealer clearing services, including securities lending. Headquartered in New York City, the company has approximately 10,500 employees worldwide. For additional information about Bear Stearns, please visit our Web site at http://www.bearstearns.com.

***
Financial Tables Attached

Certain statements contained in this discussion are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act 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 of Financial Condition and Results of Operations” and “Risk Management” in the Company’s 2001 Annual Report to Stockholders and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Quantitative and Qualitative Disclosures about Market Risk” in the company’s Quarterly Reports on Form 10-Q, which have been filed with the Securities and Exchange Commission.

A conference call to discuss the company’s results will be held 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 1-877-282-0743 (or 1-703-871-3063 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 6045035. If you have any questions on how to obtain access to the conference call, please contact Kerri Kelly at 1-212-272-2529 or via email at kkelly@bear.com.

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 EX-99 3 financials61902.txt FINANCIAL TABLES THE BEAR STEARNS COMPANIES INC. ------------------------------- SEGMENT DATA ------------ (UNAUDITED) -----------
Three Months Ended % Change From Six Months Ended % Change -------------------------------------- ------------------------ ------------------------- -------- May 31, May 25, February 28, May 25, February 28, May 31, May 25, 2002 2001 2002 2001 2002 2002 2001 ----------- ----------- ----------- ------- ------- ----------- ----------- (In thousands) (In thousands) NET REVENUES Capital Markets Institutional Equities $ 319,793 $ 348,350 $ 247,918 (8.2%) 29.0% $ 567,711 $ 689,521 (17.7%) Fixed Income 532,298 514,286 548,194 3.5% (2.9%) 1,080,492 854,675 26.4% Investment Banking 450,850 156,349 141,318 188.4% 219.0% 592,168 276,324 114.3% ----------- ----------- ----------- ------- ------- ----------- ----------- ------ Total Capital Markets 1,302,941 1,018,985 937,430 27.9% 39.0% 2,240,371 1,820,520 23.1% Global Clearing Services 186,148 207,383 187,380 (10.2%) (0.7%) 373,528 431,283 (13.4%) Wealth Management 126,701 133,917 123,211 (5.4%) 2.8% 249,912 278,505 (10.3%) Other (a) (8,124) 8,373 (8,843) (197.0%) 8.1% (16,967) 52,137 (132.5%) ----------- ----------- ----------- ------- ------- ----------- ----------- ------- Total net revenues $ 1,607,666 $ 1,368,658 $ 1,239,178 17.5% 29.7% $ 2,846,844 $ 2,582,445 10.2% =========== =========== =========== ======= ======= ============ =========== ======= PRE-TAX INCOME Capital Markets $ 561,143 $ 276,392 $ 273,593 103.0% 105.1% $ 834,736 $ 464,673 79.6% Global Clearing Services 60,726 65,859 68,973 (7.8%) (12.0%) 129,699 144,992 (10.5%) Wealth Management 8,681 4,209 1,780 106.2% 387.7% 10,461 20,413 (48.8%) Other (a) (111,098) (79,631) (70,819) (39.5%) (56.9%) (181,917) (110,285) (65.0%) ----------- ----------- ----------- ------- ------- ----------- ----------- ------- Total pre-tax income $ 519,452 $ 266,829 $ 273,527 94.7% 89.9% $ 792,979 $ 519,793 52.6% =========== =========== =========== ======= ======= =========== =========== =======
(a) Other is comprised of consolidation/elimination entries, unallocated revenues (predominantly interest) and certain corporate administrative functions, including certain legal costs and costs related to the Capital Accumulation Plan (the "CAP Plan") for Senior Managing Directors. 10 THE BEAR STEARNS COMPANIES INC. ------------------------------- CONSOLIDATED STATEMENTS OF INCOME --------------------------------- (UNAUDITED) -----------
Three Months Ended % Change From --------------------------------------------------------------------------- May 31, May 25, February 28, May 25, February 28, 2002 2001 2002 2001 2002 ------------ ------------ ------------ ------------ ------------ (In thousands, except share and per share data) REVENUES Commissions $ 273,078 $ 290,767 $ 264,657 (6.1%) 3.2% Principal transactions 705,791 722,569 660,750 (2.3%) 6.8% Investment banking 463,818 181,389 151,894 155.7% 205.4% Interest and dividends 584,522 1,215,744 598,633 (51.9%) (2.4%) Other income 43,195 38,913 42,210 11.0% 2.3% ------------ ------------ ------------ Total revenues 2,070,404 2,449,382 1,718,144 (15.5%) 20.5% Interest expense 462,738 1,080,724 478,966 (57.2%) (3.4%) ------------ ------------ ------------ Revenues, net of interest expense 1,607,666 1,368,658 1,239,178 17.5% 29.7% ------------ ------------ ------------ NON-INTEREST EXPENSES Employee compensation and benefits 713,569 735,641 633,642 (3.0%) 12.6% Floor brokerage, exchange and clearance fees 48,438 41,092 39,749 17.9% 21.9% Communications and technology 93,419 113,504 104,673 (17.7%) (10.8%) Occupancy 37,229 37,294 44,206 (0.2%) (15.8%) Advertising and market development 30,199 33,705 23,524 (10.4%) 28.4% Professional fees 31,771 47,853 33,824 (33.6%) (6.1%) Other expenses 133,589 92,740 86,033 44.0% 55.3% ------------ ------------ ------------ Total non-interest expenses 1,088,214 1,101,829 965,651 (1.2%) 12.7% ------------ ------------ ------------ Income before provision for income taxes 519,452 266,829 273,527 94.7% 89.9% Provision for income taxes 176,600 97,336 93,001 81.4% 89.9% ------------ ------------ ------------ Net income $ 342,852 $ 169,493 $ 180,526 102.3% 89.9% ============ ============ ============ Net income applicable to common shares $ 333,538 $ 159,715 $ 170,748 108.8% 95.3% ============ ============ ============ Adjusted net income used for diluted earnings per share (1) $ 381,533 $ 183,046 $ 190,739 108.4% 100.0% ============ ============ ============ Basic earnings per share $ 2.80 $ 1.23 $ 1.39 127.6% 101.4% ============ ============ ============ Diluted earnings per share $ 2.59 $ 1.18 $ 1.29 119.5% 100.8% ============ ============ ============ Weighted average common and common equivalent shares outstanding: Basic 133,772,110 145,455,590 134,793,949 ============ ============ ============ Diluted 147,592,256 154,825,604 148,115,050 ============ ============ ============ Cash dividends declared per common share $ 0.15 $ 0.15 $ 0.15 ============ ============ ============
(1) Represents net income reduced for preferred stock dividends and increased for costs related to the CAP Plan and a gain on 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 shares outstanding. Note:Certain reclassifications have been made to prior period amounts to conform to the current period's presentation. 11 THE BEAR STEARNS COMPANIES INC. ------------------------------- CONSOLIDATED STATEMENTS OF INCOME --------------------------------- (UNAUDITED) -----------
Six Months Ended % Change ------------------------------ ----------- May 31, May 25, 2002 2001 ------------ ------------- (In thousands, except share and per share data) REVENUES Commissions $ 537,735 $ 573,168 (6.2%) Principal transactions 1,366,541 1,312,140 4.1% Investment banking 615,712 319,713 92.6% Interest and dividends 1,183,155 2,302,343 (48.6%) Other income 85,405 78,194 9.2% ------------ ------------- Total revenues 3,788,548 4,585,558 (17.4%) Interest expense 941,704 2,003,113 (53.0%) ------------ ------------- Revenues, net of interest expense 2,846,844 2,582,445 10.2% ------------ ------------- NON-INTEREST EXPENSES Employee compensation and benefits 1,347,211 1,370,766 (1.7%) Floor brokerage, exchange and clearance fees 88,187 76,665 15.0% Communications and technology 198,092 228,538 (13.3%) Occupancy 81,435 68,551 18.8% Advertising and market development 53,723 67,537 (20.5%) Professional fees 65,595 85,281 (23.1%) Other expenses 219,622 165,314 32.9% ------------ ------------- Total non-interest expenses 2,053,865 2,062,652 (0.4%) ------------ ------------- Income before provision for income taxes and cumulative effect of change in accounting principle 792,979 519,793 52.6% Provision for income taxes 269,601 184,346 46.2% ------------ ------------- Income before cumulative effect of change in accounting principle 523,378 335,447 56.0% Cumulative effect of change in accounting principle, net of tax -- (6,273) -- ------------ ------------- Net income $ 523,378 $ 329,174 59.0% ============ ============= Net income applicable to common shares $ 504,286 $ 309,618 62.9% ============ ============= Adjusted net income used for diluted earnings per share (1) $ 572,272 $ 350,590 63.2% ============ ============= Basic earnings per share $ 4.18 $ 2.34(2) 78.6% ============ ============= Diluted earnings per share $ 3.87 $ 2.24(2) 72.8% ============ ============= Weighted average common and common equivalent shares outstanding: Basic 134,280,242 147,164,834 ============ ============= Diluted 148,011,523 156,749,394 ============ ============= Cash dividends declared per common share $ 0.30 $ 0.30 ============ =============
(1) Represents net income reduced for preferred stock dividends and increased for costs related to the CAP Plan and a gain on 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 shares outstanding. (2) Amount reflects earnings per share after change in accounting principle. Basic earnings per share and diluted earnings per share before the change in accounting principle were $2.38 and $2.28, respectively. Note:Certain reclassifications have been made to prior period amounts to conform to the current period's presentation. 12 THE BEAR STEARNS COMPANIES INC. ------------------------------- SELECTED FINANCIAL INFORMATION ------------------------------ (UNAUDITED) -----------
Three Months Ended -------------------------------------------- May 31, February 28, November 30, 2002 2002 2001 ------------ ------------ ------------ (In thousands, except per share amounts and Other Data) Income Statement - ---------------- Revenues, net of interest expense $ 1,607,666 $ 1,239,178 $ 1,119,832 Net income $ 342,852 $ 180,526 $ 154,946 Net income applicable to common shares $ 333,538 $ 170,748 $ 145,168 Adjusted net income used for diluted earnings per share (1) $ 381,533 $ 190,739 $ 157,118 Earnings per common share: Basic $ 2.80 $ 1.39 $ 1.14 Diluted $ 2.59 $ 1.29 $ 1.08 Financial Ratios - ---------------- Return on average common equity (annualized) 29.5% 15.2% 13.9% Adjusted pre-tax profit margin (3) 36.3% 24.9% 20.6% Pre-tax profit margin (4) 32.3% 22.1% 18.7% After-tax profit margin (5) 21.3% 14.6% 13.8% Compensation & benefits / Revenues, net of interest expense 44.4% 51.1% 46.7% Balance Sheet - ------------- Stockholders' equity, at period end $ 5,963,258 $ 5,760,905 $ 5,628,527 Total stockholders' equity and trust issued preferred securities, at period end $ 6,525,758 $ 6,323,405 $ 6,391,027 Total capital, at period end $ 31,038,949 $ 31,063,625 $ 29,820,080 Book value per common share, at period end $ 37.16 $ 34.95 $ 33.84 Other Data (in millions, except share and employee data) - -------------------------------------------------------- Margin debt balances, at period end $ 36,700 $ 34,600 $ 34,300 Margin debt balances, average for period $ 35,900 $ 35,100 $ 32,500 Customer short balances, at period end $ 55,800 $ 54,500 $ 55,000 Customer short balances, average for period $ 47,500 $ 47,300 $ 45,200 Stock borrowed, at period end $ 40,400 $ 37,300 $ 38,700 Stock borrowed, average for period $ 45,400 $ 45,600 $ 43,500 Free credit balances, at period end $ 16,600 $ 17,900 $ 18,100 Free credit balances, average for period $ 18,500 $ 19,600 $ 21,400 Assets under management, at period end $ 24,800 $ 25,800 $ 24,200 Employees, at period end 10,426 10,341 10,452 Common shares and common share equivalents outstanding, at period end (6) 146,873,990 147,040,102 146,465,210 Weighted average common and common equivalent shares outstanding: Basic 133,772,110 134,793,949 136,671,817 Diluted 147,592,256 148,115,050 145,040,061
Three Months Ended -------------------------------------------- August 31, May 25, February 23, 2001 2001 2001 ------------ ------------ ------------ (In thousands, except per share amounts and Other Data) Income Statement - ---------------- Revenues, net of interest expense $ 1,204,758 $ 1,368,658 $ 1,213,787 Net income $ 134,572 $ 169,493 $ 159,681 Net income applicable to common shares $ 124,794 $ 159,715 $ 149,903 Adjusted net income used for diluted earnings per share (1) $ 141,866 $ 183,046 $ 167,544 Earnings per common share: Basic $ 1.00 $ 1.23 $ 1.11 (2) Diluted $ 0.95 $ 1.18 $ 1.06 (2) Financial Ratios - ---------------- Return on average common equity (annualized) 12.2% 15.0% 13.6% Adjusted pre-tax profit margin (3) 19.5% 22.5% 23.4% Pre-tax profit margin (4) 17.0% 19.5% 20.8% After-tax profit margin (5) 11.2% 12.4% 13.2% Compensation & benefits / Revenues, net of interest expense 52.7% 53.7% 52.3% Balance Sheet - ------------- Stockholders' equity, at period end $ 5,148,394 $ 5,534,723 $ 5,621,405 Total stockholders' equity and trust issued preferred securities, at period end $ 5,910,894 6,297,223 $ 6,121,405 Total capital, at period end $ 28,655,969 $ 27,566,286 $ 25,768,270 Book value per common share, at period end $ 32.34 $ 32.57 $ 31.94 Other Data (in millions, except share and employee data) - -------------------------------------------------------- Margin debt balances, at period end $ 34,600 $ 42,200 $ 37,600 Margin debt balances, average for period $ 38,300 $ 37,800 $ 42,000 Customer short balances, at period end $ 53,000 $ 61,400 $ 53,800 Customer short balances, average for period $ 49,800 $ 50,600 $ 55,000 Stock borrowed, at period end $ 39,300 $ 45,900 $ 41,400 Stock borrowed, average for period $ 46,100 $ 45,400 $ 49,300 Free credit balances, at period end $ 20,300 $ 15,900 $ 17,300 Free credit balances, average for period $ 19,700 $ 17,900 $ 18,300 Assets under management, at period end $ 23,500 $ 22,600 $ 21,500 Employees, at period end 11,147 10,855 11,298 Common shares and common share equivalents outstanding, at period end (6) 149,669,365 156,485,942 159,125,959 Weighted average common and common equivalent shares outstanding: Basic 140,331,572 145,455,590 149,080,028 Diluted 149,056,301 154,825,604 158,617,123
(1) Represents net income reduced for preferred stock dividends and increased for costs related to the CAP Plan and a gain on 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 shares outstanding. (2) After change in accounting principle. (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. (6) Represents shares used to calculate book value per common share. 13 -----END PRIVACY-ENHANCED MESSAGE-----