EX-99 2 p092204.txt FINANCIAL STATEMENTS THE BEAR STEARNS COMPANIES INC. SEGMENT DATA (UNAUDITED)
Three Months Ended % Change From Nine Months Ended % Change ---------------------------------------------- ------------------- ------------------------- ---------- August 31, August 31, May 31, August 31, May 31, August 31, August 31, 2004 2003 2004 2003 2004 2004 2003 ----------------- --------------- ------------ ------------------- ------------------------- (In thousands) (In thousands) Capital Markets Institutional Equities $ 239,321 $ 200,506 $ 252,004 19.4% (5.0%) $ 788,725 $ 666,313 18.4% Fixed Income 751,805 720,128 844,436 4.4% (11.0%) 2,418,509 2,276,535 6.2% Investment Banking 208,865 299,742 254,872 (30.3%) (18.1%) 716,916 710,945 0.8% --------- --------- --------- --------- --------- Total Capital Markets 1,199,991 1,220,376 1,351,312 (1.7%) (11.2%) 3,924,150 3,653,793 7.4% Global Clearing Services 214,394 200,929 223,676 6.7% (4.1%) 655,684 564,112 16.2% Wealth Management Private Client Services(1) 103,498 98,410 117,272 5.2% (11.7%) 331,667 273,705 21.2% Asset Management 36,320 27,941 59,244 30.0% (38.7%) 137,454 92,636 48.4% -------- -------- -------- -------- -------- Total Wealth Management 139,818 126,351 176,516 10.7% (20.8%) 469,121 366,341 28.1% Other (2) (19,438) (62,596) (27,966) 68.9% 30.5% (64,729) (121,032) 46.5% --------- --------- --------- --------- --------- Total net revenues $ 1,534,765 $ 1,485,060 $ 1,723,538 3.3% (11.0%) $ 4,984,226 $ 4,463,214 11.7% ========== ========== ========== =========== =========== PRE-TAX INCOME Capital Markets $ 425,703 $ 540,942 $ 491,002 (21.3%) (13.3%) $ 1,433,074 $ 1,490,832 (3.9%) Global Clearing Services 83,159 68,456 86,705 21.5% (4.1%) 248,366 158,404 56.8% Wealth Management 7,667 9,851 25,719 (22.2%) (70.2%) 54,253 20,518 164.4% Other (2) (72,650) (137,072) (91,950) 47.0% 21.0% (249,360) (334,248) 25.4% --------- --------- -------- ----------- ----------- Total pre-tax income $ 443,879 $ 482,177 $ 511,476 (7.9%) (13.2%) $ 1,486,333 $ 1,335,506 11.3% ========= ========= ======== =========== =========== (1) Private Client Services Detail: Gross Revenues, before transfer to Capital Markets Segment $ 121,082 $ 129,746 $ 139,266 $ 397,977 $ 348,248 Revenue transferred to Capital Markets segment (17,584) (31,336) (21,994) (66,310) (74,543) ------------ --------------- ------------- ------------- -------------- Private Client Services net revenues $ 103,498 $ 98,410 $ 117,272 $ 331,667 $ 273,705 ============= =============== ============= ============= ============== (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").
THE BEAR STEARNS COMPANIES INC. CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
Three Months Ended % Change From ------------------------------------------ ------------------- August 31, August 31, May 31, August 31, May 31, 2004 2003 2004 2003 2004 ------------- ----------- ---------- ------------ ------- (In thousands, except common share data and other data) REVENUES Commissions $ 273,722 $ 279,888 $ 307,150 (2.2%) (10.9%) Principal transactions 848,982 724,023 915,469 17.3% (7.3%) Investment banking 190,692 298,716 261,564 (36.2%) (27.1%) Interest and dividends 528,704 503,135 498,469 5.1% 6.1% Other income 52,253 36,509 81,146 43.1% (35.6%) ------------ ------ ------ Total revenues 1,894,353 1,842,271 2,063,798 2.8% (8.2%) Interest expense 359,588 357,211 340,260 0.7% 5.7% ------------ ------ ------ Revenues, net of interest expense 1,534,765 1,485,060 1,723,538 3.3% (11.0%) ------------ ------ ------ NON-INTEREST EXPENSES Employee compensation and benefits 743,038 681,745 860,053 9.0% (13.6%) Floor brokerage, exchange and clearance fees 56,822 44,830 59,647 26.7% (4.7%) Communications and technology 92,360 93,047 88,321 (0.7%) 4.6% Occupancy 35,843 34,788 34,768 3.0% 3.1% Advertising and market development 30,030 24,550 29,315 22.3% 2.4% Professional fees 47,547 36,608 42,370 29.9% 12.2% Other expenses 85,246 87,315 97,588 (2.4%) (12.6%) ----------- ------ ------ Total non-interest expenses 1,090,886 1,002,883 1,212,062 8.8% (10.0%) ------------ ------ ------ Income before provision for income taxes 443,879 482,177 511,476 (7.9%) (13.2%) Provision for income taxes 160,620 168,762 163,673 (4.8%) (1.9%) ------ ------ ------ Net income $ 283,259 $ 313,415 $ 347,803 (9.6%) (18.6%) ============ ====== ====== Net income applicable to common shares $ 276,416 $ 305,621 $ 340,609 (9.6%) (18.8%) ============ ====== ====== Adjusted net income used for diluted earnings per share (1) $ 300,984 $ 334,180 $ 366,027 (9.9%) (17.8%) ============ ====== ====== Basic earnings per share $ 2.31 $ 2.54 $ 2.77 (9.1%) (16.6%) ============ ====== ====== Diluted earnings per share $ 2.09 $ 2.30 $ 2.49 (9.1%) (16.1%) ============ ====== ====== Weighted average common shares outstanding: Basic 127,014,483 128,681,694 129,071,295 ============ =========== =========== Diluted 144,201,755 145,599,540 146,921,897 ============ =========== =========== Cash dividends declared per common share $ 0.20 $ 0.20 $ 0.20 ============ ====== ====== (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 From --------------------------------- --------------- August 31, August 31, August 31, 2004 2003 2003 --------------------------------- --------------- (In thousands, except share and per share data) REVENUES Commissions $ 888,975 $ 789,485 12.6% Principal transactions 2,711,313 2,502,402 8.3% Investment banking 712,666 678,849 5.0% Interest and dividends 1,547,637 1,459,859 6.0% Other income 179,005 99,803 79.4% ------------ ------ Total revenues 6,039,596 5,530,398 9.2% Interest expense 1,055,370 1,067,184 (1.1%) ------------ ------ Revenues, net of interest expense 4,984,226 4,463,214 11.7% ------------ ------ NON-INTEREST EXPENSES Employee compensation and benefits 2,452,239 2,131,815 15.0% Floor brokerage, exchange and clearance fees 173,369 137,050 26.5% Communications and technology 274,509 276,531 (0.7%) Occupancy 104,226 102,819 1.4% Advertising and market development 85,246 77,267 10.3% Professional fees 131,717 94,056 40.0% Other expenses 276,587 308,170 (10.2%) ------------ ------ Total non-interest expenses 3,497,893 3,127,708 11.8% ------------ ------ Income before provision for income taxes 1,486,333 1,335,506 11.3% Provision for income taxes 494,206 467,427 5.7% ------ ------ Net income $ 992,127 $ 868,079 14.3% ============ ====== Net income applicable to common shares $ 970,671 $ 844,499 14.9% ============ ====== Adjusted net income used for diluted earnings per share (1) $ 1,045,789 $ 927,470 12.8% ============ ====== Basic earnings per share $ 7.97 $ 7.02 13.5% ============ ====== Diluted earnings per share $ 7.16 $ 6.34 12.9% ============ ====== Weighted average common shares outstanding: Basic 128,287,500 129,055,575 ============ =========== Diluted 145,992,306 146,316,093 ============ =========== Cash dividends declared per common share $ 0.60 $ 0.54 ============ ====== (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 29, November 30, August 31, May 31, February 28, 2004 2004 2004 2003 2003 2003 2003 ----------------------------------------------------------------------------------------------------------------------------------- (In thousands, except common share data and other data) Results Revenues, net of interest expense $ 1,534,765 $ 1,723,538 $ 1,725,923 $ 1,531,277 $ 1,485,060 $ 1,462,720 $ 1,515,434 Net income $ 283,259 347,803 $ 361,065 288,327 313,415 280,411 274,253 Net income applicable to common shares $ 276,416 340,609 $ 353,646 280,533 305,621 272,616 266,261 Adjusted net income used for diluted earnings per share (1) $ 300,984 366,027 $ 378,778 308,521 334,180 299,533 293,756 Financial Position Stockholders' equity, at period end $ 8,067,519 $ 8,006,834 $ 7,817,777 $ 7,470,088 $ 6,875,668 $ 6,714,397 $ 6,529,628 Total stockholders' equity and trust issued preferred securities, at period end (2) $ 8,067,519 $ 8,006,834 $ 7,817,777 $ 8,032,588 $ 7,438,168 $ 7,276,897 $ 7,092,128 Total capital, at period end $41,567,718 $39,973,413 $39,970,906 $37,463,053 $ 34,438,022 $33,520,967 $31,987,917 Common Share Data Basic earnings per share $ 2.31 $ 2.77 $ 2.88 $ 2.43 $ 2.54 $ 2.27 $ 2.21 Diluted earnings per share $ 2.09 $ 2.49 $ 2.57 $ 2.19 $ 2.30 $ 2.05 $ 2.00 Book value per common share, at period end $55.13 $ 53.38 $ 51.19 $ 48.69 $ 45.46 $ 43.52 $ 41.64 Weighted average common shares outstanding: Basic 127,014,483 129,071,295 129,118,964 124,090,961 128,681,694 128,711,363 129,773,603 Diluted 144,201,755 146,921,897 147,108,483 140,876,365 145,599,540 146,062,838 147,029,224 Common shares outstanding, at period end (3) 144,052,137 144,285,667 144,320,701 142,369,836 146,662,752 146,915,258 146,659,224 Financial Ratios Return on average common equity(annualized) 15.9% 19.6% 21.3% 19.6% 21.3% 19.7% 19.9% Adjusted pre-tax profit margin (4) 31.7% 32.3% 33.3% 31.7% 35.8% 32.4% 31.2% Pre-tax profit margin (5) 28.9% 29.7% 30.8% 28.5% 32.5% 29.3% 28.1% After-tax profit margin (6) 18.5% 20.2% 20.9% 18.8% 21.1% 19.2% 18.1% Compensation & benefits / Revenues, net of interest expense 48.4% 49.9% 49.2% 48.9% 45.9% 47.3% 50.0% Other Data (in billions, except employees) Margin debt balances, at period end $ 49.6 $ 44.4 $ 47.9 $ 45.7 $ 41.6 $ 44.1 $ 38.1 Margin debt balances, average for period $ 46.6 $ 46.7 $ 46.6 $ 42.2 $ 43.3 $ 39.5 $ 36.3 Customer short balances, at period end $ 73.7 $ 74.9 $ 77.0 $ 72.6 $ 66.3 $ 66.2 $ 56.5 Customer short balances, average for period $ 75.6 $ 77.2 $ 74.3 $ 70.1 $ 68.0 $ 62.0 $ 57.0 Stock borrowed, at period end $ 53.5 $ 53.6 $ 57.0 $ 54.3 $ 52.1 $ 48.6 $ 41.7 Stock borrowed, average for period $ 56.7 $ 58.7 $ 58.5 $ 57.4 $ 54.2 $ 47.9 $ 45.1 Free credit balances, at period end $ 29.3 $ 28.8 $ 26.1 $ 24.9 $ 22.0 $ 20.4 $ 18.7 Free credit balances, average for period $ 30.8 $ 28.1 $ 26.5 $ 22.9 $ 21.2 $ 19.3 $ 18.9 Assets under management, at period end $ 28.1 $ 27.3 $ 29.1 $ 27.1 $ 25.7 $ 24.4 $ 23.3 Employees, at period end 10,715 10,469 10,431 10,532 10,515 10,472 10,506 (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) In accordance with FASB Interpretation ("FIN") No. 46 (R), a revision of FIN No. 46, "Consolidation of Variable Interest Entities - an Interpretation of ARB No. 51," the company has deconsolidated Bear Stearns Capital Trust III effective beginning with the quarter ended February 29, 2004. As a result, the junior subordinated deferrable interest debentures issued by the company to Bear Stearns Capital Trust III are included within long-term borrowings. The $262.5 million of Guaranteed Preferred Beneficial Interests in Company Subordinated Debt Securities ("Preferred Securities") issued by Bear Stearns Capital Trust III is still outstanding, providing the funding for such junior subordinated deferrable interest debentures. The Preferred Securities issued by Bear Stearns Capital Trust III will no longer be included in the company's Condensed Consolidated Statements of Financial Condition. (3) 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. (4) Represents the ratio of income before both CAP Plan costs and provision for income taxes to revenues, net of interest expense. (5) Represents the ratio of income before provision for income taxes to revenues, net of interest expense. (6) Represents the ratio of net income to revenues, net of interest expense.