-----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, AOzqa8xbiXp9fXy+hDJS0C3940ZwESPkKs/y3mFOkEIHb0Ze1gZDKlM4SI1ftm9F M87UszyeW7w9ZTKlRBXeRg== 0000777001-05-000055.txt : 20050616 0000777001-05-000055.hdr.sgml : 20050616 20050615173316 ACCESSION NUMBER: 0000777001-05-000055 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20050531 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050616 DATE AS OF CHANGE: 20050615 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: 05898440 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 p061505-text.txt EARNINGS PRESS RELEASE 6/15/05 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) June 15, 2005 THE BEAR STEARNS COMPANIES INC. (Exact Name of Registrant as Specified in its Charter) DELAWARE File No. 1-8989 13-3286161 -------- --------------- ---------- (State or Other (Commission File (IRS Employer Jurisdiction of Number) Identification Incorporation) 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) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 2.02. Results of Operations and Financial Condition. On June 15, 2005, The Bear Stearns Companies Inc. (the "Registrant") issued a press release announcing financial results for its quarter ended May 31, 2005. A copy of the press release is filed as Exhibit 99.1 to this Form 8-K and by this reference incorporated herein and made a part hereof. During the quarter, the Registrant changed the income statement presentation of certain servicing fees and asset-based retail investor advisory fees. All net servicing fees are included in the Investment Banking line on the income statement. Asset-based retail investor advisory fees are included in the Asset Management and other income line on the income statement. Within the Capital Markets segment, certain servicing fees have been reclassified from Investment Banking to Fixed Income. These reclassifications in both the income statement and the segment reporting were made to prior period amounts to conform to the current period's presentation and have been reflected in the financial tables attached, including the financial tables for the previous two fiscal years and the previous 2004 quarters filed as Exhibit 99.2 to this form 8-K and by this reference incorporated herein and made a part hereof. Item 8.01. Other Events. The Board of Directors of the Registrant declared a regular quarterly cash dividend of 25 cents per share on the outstanding shares of common stock payable July 29, 2005 to stockholders of record on July 19, 2005. Also, the Board of Directors of the Registrant declared regular quarterly dividends on the outstanding shares of Preferred Stock, Series E, F & G all payable July 15, 2005 to stockholders of record on July 1, 2005. A copy of the press release is filed as Exhibit 99.3 to this Form 8-K and by this reference incorporated herein and made a part hereof. This information shall be considered "filed" for purposes of the Securities Exchange Act of 1934, as amended. Item 9.01. Financial Statements and Exhibits (c) Exhibit: (99.1) Press Release, dated June 15, 2005. (99.2) Reclassified Consolidated Statements of Income and segment data for the Fiscal Years Ended November 30, 2004 and 2003 and for the Quarters Ended November 30, 2004, August 31, 2004, May 31, 2004 and February 29, 2004. (99.3) Press Release, dated June 15, 2005. 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 hereunto duly authorized. THE BEAR STEARNS COMPANIES INC. By: /s/ Jeffrey M. Farber ---------------------- Jeffrey M. Farber Controller (Principal Accounting Officer) Dated: June 15, 2005 THE BEAR STEARNS COMPANIES INC. FORM 8-K CURRENT REPORT EXHIBIT INDEX Exhibit No. Description (99.1) Press Release, dated June 15, 2005 (99.2) Reclassified Consolidated Statements of Income and segment data for the Fiscal Years Ended November 30, 2004 and 2003 and for the Quarters Ended November 30, 2004, August 31, 2004, May 31, 2004 and February 29, 2004. (99.3) Press Release, dated June 15, 2005 Exhibit No. (99.1) Contact: Elizabeth Ventura (212) 272-9251 John Quinn (212) 272-5934 BEAR STEARNS REPORTS 2005 SECOND QUARTER RESULTS NET INCOME UP 5% TO $365 MILLION, EARNINGS PER SHARE OF $2.56 Net revenues up 9% to a record $1.9 billion Institutional Equities net revenues up 59% to $390 million Global Clearing Services net revenue up 17% to $276 million from $235 million NEW YORK - June 15, 2005 - The Bear Stearns Companies Inc. (NYSE:BSC) today reported earnings per share (diluted) of $2.56 for the second quarter ended May 31, 2005, up 3% from $2.49 per share for the second quarter of 2004. Net income for the second quarter of 2005 was $365 million, up 5% from $348 million for the second quarter of 2004. Net revenues for the 2005 second quarter were a record $1.9 billion, up 9% from $1.7 billion for the 2004 second quarter. The annualized return on common stockholders' equity for the second quarter of 2005 was 16.5%, and 17.3% for the trailing 12-month period ended May 31, 2005. "Bear Stearns produced excellent results for the second quarter and record results for the first half of 2005," said James E. Cayne, chairman and chief executive officer. "Our continued success highlights the diversity of our business mix and our ability to adapt to challenging market conditions. Our fixed income business remains a dominant player in the marketplace while our equity franchise continues to capture market share. In addition to the robust activity we saw in the credit derivatives and leveraged finance businesses, the strength of our Global Clearing Services Division was evident in its consistent and meaningful contribution to earnings." A brief discussion of the firm's business segments follows: CAPITAL MARKETS Capital Markets net revenues for the second quarter of 2005 were $1.4 billion, up 7% from $1.3 billion for the quarter ended May 31, 2004. o Institutional Equities net revenues were $390 million, up 59% from $246 million for the second quarter of 2004. Increased quarterly revenues were driven primarily by the equity derivatives and the domestic and international equity sales and trading areas. In addition, principal gains on the company's investment in the ISE and certain energy-related ventures contributed to the increase. Revenues rose substantially in the equity derivatives area as origination volumes and customer activity increased. Greater revenues in the equity sales and trading areas reflected domestic market share gains, higher customer volumes and the continued growth of the international sales and trading franchise. o Fixed Income net revenues were $808 million, down 6% from record net revenues of $860 million in the second quarter of 2004. The continued strength in the fixed income results was led by record revenues in credit derivatives and robust activity in leveraged finance. The interest rate and mortgage product areas continued to perform well in increasingly difficult market conditions. The mortgage franchise remains a dominant market force and was ranked number one for the first half of 2005. o Investment Banking net revenues of $232 million in the second quarter of 2005 were effectively unchanged when compared with the $234 million in the prior year period. Although industry-completed M&A activity declined, the company's merger and acquisition advisory fees increased reflecting market-share gains. Municipal underwriting revenues increased and high yield underwriting declined in line with industry activity. GLOBAL CLEARING SERVICES Global Clearing Services net revenues were $276 million for the second quarter 2005, up 17% from $235 million in the year ago quarter. Net interest revenue increases were driven by higher customer balances and improved net interest margins, while commission revenues declined due to competitive market conditions. Average customer margin debt balances for the quarter ended May 31, 2005 were $58.7 billion, up 26% from $46.7 billion in the prior year quarter. Customer short balances averaged $86.8 billion during the second quarter of 2005, up 12% from $77.2 billion in the prior year period. WEALTH MANAGEMENT Wealth Management net revenues for the quarter ended May 31, 2005 were $156 million, down 12% from $177 million in the second quarter of 2004. o Private Client Services net revenues were $106 million, a decrease of 10% from $117 million in the 2004 second quarter,driven primarily by reduced investor activity. o Asset Management net revenues declined 15% to $50 million for the second quarter of 2005 from $59 million in the prior year's quarter. The second quarter of 2004 included one-time revenues of $21.5 million from the sale of certain mutual funds assets. Excluding these revenues, Asset Management net revenues increased 33% on higher management and performance fees. Assets under management increased 35% to $36.9 billion on May 31, 2005 from $27.3 billion on May 31, 2004. EXPENSES o Compensation as a percentage of net revenues was 49.3% in the second quarter of 2005 as compared with 49.9% for the second quarter of 2004. Year-to-date compensation to net revenues was 49.3% for 2005 versus 49.5% for the six months ended May 31, 2004. o Non-compensation expenses were $393 million for the quarter ended May 31, 2005, an increase of 12% from $352 million in the 2004 quarter. The ratio of non-compensation expenses to net revenues was 21.0% in the second quarter 2005 versus 20.4% in the prior year quarter. The increase in non-compensation expenses is attributable primarily to higher communications and technology costs, occupancy and professional fees. The pre-tax profit margin increased to 29.8% in the quarter ended May 31, 2005 from 29.7% in the 2004 second quarter. As of May 31, 2005, total capital, including stockholders' equity and long-term borrowings, was approximately $49.4 billion. Book value as of May 31, 2005 was $65.12 per share, based on 145.9 million shares outstanding. RECLASSIFICATIONS During the quarter the company changed the income statement presentation of certain servicing fees and asset-based retail investor advisory fees. All net servicing fees are included in the Investment banking line on the income statement. Asset-based retail investor advisory fees are included in the Asset management and other income line on the income statement. In the segment reporting,within the Capital Markets segment, certain servicing fees have been reclassified from Investment Banking to Fixed Income. These reclassifications in both the income statement and the segment reporting were made to prior period amounts to conform to the current period's presentation. Founded in 1923, The Bear Stearns Companies Inc. (NYSE: BSC) is the parent company of Bear, Stearns & Co. Inc., a leading investment banking and securities trading and brokerage firm. With approximately $49.4 billion in total capital, Bear Stearns serves governments, corporations, institutions and individuals worldwide. The company's business includes corporate finance and mergers and acquisitions, institutional equities and fixed income sales and trading, securities research, private client services, derivatives, foreign exchange and futures sales and trading, asset management and custody services. Through Bear, Stearns Securities Corp., it offers financing, securities lending, clearing and technology solutions to hedge funds, broker-dealers and investment advisors. Headquartered in New York City, the company has approximately 11,000 employees worldwide. For additional information about Bear Stearns, please visit the firm's website at http://www.bearstearns.com. *** 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 2004 Annual Report to Stockholders and similar sections of 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 on Wednesday, June 15, 2005, at 10 a.m., EST. 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. The pass code for the replay is 6717445. The replay will be available until midnight on Friday, June 24, 2005. If you have any questions on how to obtain access to the conference call, please contact Joanne Jarema by telephone at 1-212-272-4417 or via e-mail at jjarema@bear.com. Exhibit No. (99.3) Contact: Elizabeth Ventura (212) 272-9251 John Quinn (212) 272-5934 BEAR STEARNS DECLARES QUARTERLY CASH DIVIDEND ON COMMON AND PREFERRED SHARES NEW YORK - June 15, 2005 - The Board of Directors of The Bear Stearns Companies Inc. (NYSE:BSC) declared a regular, quarterly cash dividend of 25 cents per share on the outstanding shares of common stock, payable July 29, 2005, to stockholders of record on July 19, 2005. The Board of Directors of The Bear Stearns Companies Inc. declared the following regular quarterly dividends: (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, 2005 to stockholders of record on July 1, 2005. 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. With approximately $49.4 billion in total capital, Bear Stearns serves governments, corporations, institutions and individuals worldwide. The company's business includes corporate finance and mergers and acquisitions, institutional equities and fixed income sales and trading, securities research, private client services, derivatives, foreign exchange and futures sales and trading, asset management and custody services. Through Bear, Stearns Securities Corp., it offers financing, securities lending, clearing and technology solutions to hedge funds, broker-dealers and investment advisors. Headquartered in New York City, the company has approximately 11,000 employees worldwide. For additional information about Bear Stearns, please visit the firm's website at http://www.bearstearns.com. EX-99.3 2 p061505.txt FINANCIAL STATEMENTS Exhibit No. (99.2) THE BEAR STEARNS COMPANIES INC. SEGMENT DATA (UNAUDITED)
Three Months Ended % Change From ------------------------------------------ --------------------- May 31, May 31, February 28, May 31, February 28, 2005 2004 2005 2004 2005 ----------- ----------- ----------- ------- ------------ (In thousands) NET REVENUES Capital Markets Institutional Equities $ 390,453 $ 245,752 $ 312,940 58.9% 24.8% Fixed Income 808,013 860,443 865,507 (6.1%) (6.6%) Investment Banking 231,935 233,597 217,394 (0.7%) 6.7% ----------- ----------- ----------- Total Capital Markets 1,430,401 1,339,792 1,395,841 6.8% 2.5% Global Clearing Services 276,160 235,196 270,392 17.4% 2.1% Wealth Management Private Client Services (1) 105,637 117,272 113,875 (9.9%) (7.2%) Asset Management 50,148 59,244 55,315 (15.4%) (9.3%) ----------- ----------- ----------- Total Wealth Management 155,785 176,516 169,190 (11.7%) (7.9%) Other (2) 11,206 (27,966) 2,237 nm nm ----------- ----------- ----------- Total net revenues $ 1,873,552 $ 1,723,538 $ 1,837,660 8.7% 2.0% =========== =========== =========== PRE-TAX INCOME Capital Markets $ 455,776 $ 479,482 $ 481,683 (4.9%) (5.4%) Global Clearing Services 142,989 98,225 137,774 45.6% 3.8% Wealth Management 6,054 25,719 14,979 (76.5%) (59.6%) Other (2) (47,380) (91,950) (56,108) 48.5% 15.6% ----------- ----------- ----------- Total pre-tax income $ 557,439 $ 511,476 $ 578,328 9.0% (3.6%) =========== =========== =========== (1) Private Client Services Detail: Gross Revenues, before transfer to Capital Markets Segment $ 130,284 $ 139,266 $ 133,295 Revenue transferred to Capital Markets segment (24,647) (21,994) (19,420) =========== =========== =========== Private Client Services net revenues $ 105,637 $ 117,272 $ 113,875 =========== =========== =========== Six Months Ended % Change -------------------------- ---------- May 31, May 31, 2005 2004 ----------- ----------- (In thousands) NET REVENUES Capital Markets Institutional Equities $ 703,393 $ 538,963 30.5% Fixed Income 1,673,520 1,699,742 (1.5%) Investment Banking 449,329 466,215 (3.6%) ----------- ----------- Total Capital Markets 2,826,242 2,704,920 4.5% Global Clearing Services 546,552 460,529 18.7% Wealth Management Private Client Services (1) 219,512 228,169 (3.8%) Asset Management 105,463 101,134 4.3% ----------- ----------- Total Wealth Management 324,975 329,303 (1.3%) Other (2) 13,443 (45,291) nm ----------- ----------- Total net revenues $ 3,711,212 $ 3,449,461 7.6% =========== =========== PRE-TAX INCOME Capital Markets $ 937,459 $ 988,132 (5.1%) Global Clearing Services 280,763 184,446 52.2% Wealth Management 21,033 46,586 (54.9%) Other (2) (103,488) (176,710) 41.4% ----------- ----------- Total pre-tax income $ 1,135,767 $ 1,042,454 9.0% =========== =========== (1) Private Client Services Detail: Gross Revenues, before transfer to Capital Markets Segment $ 263,579 $ 276,895 Revenue transferred to Capital Markets segment (44,067) (48,726) ----------- ----------- Private Client Services net revenues $ 219,512 $ 228,169 =========== ===========
(2) Includes consolidation and elimination entries, unallocated revenues (predominantly interest) and certain corporate administrative functions, including certain legal costs and costs related to the Capital Accumulation Plan for Senior Managing Directors ("CAP Plan"). Note: Certain reclassifications have been made to prior period amounts to conform to the current period's presentation. nm - not meaningful THE BEAR STEARNS COMPANIES INC. CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
Three Months Ended % Change From ------------------------------------------ --------------------- May 31, May 31, February 28, May 31, February 28 2005 2004 2005 2004 2005 ------------ ------------ ------------ ------- ----------- (In thousands, except share and per share data) REVENUES Commissions $ 313,608 $ 307,150 $ 297,377 2.1% 5.5% Principal transactions 980,179 930,525 978,633 5.3% 0.2% Investment banking 250,426 231,257 233,710 8.3% 7.2% Interest and dividends 1,191,785 498,469 1,021,619 139.1% 16.7% Asset management and other income 87,582 96,397 91,030 (9.1%) (3.8%) ------------ ------------ ------------ Total revenues 2,823,580 2,063,798 2,622,369 36.8% 7.7% Interest expense 950,028 340,260 784,709 179.2% 21.1% ------------ ------------ ------------ Revenues, net of interest expense 1,873,552 1,723,538 1,837,660 8.7% 2.0% ------------ ------------ ------------ NON-INTEREST EXPENSES Employee compensation and benefits 922,908 860,053 906,775 7.3% 1.8% Floor brokerage, exchange and clearance fees 57,262 59,647 57,318 (4.0%) (0.1%) Communications and technology 100,343 88,321 98,939 13.6% 1.4% Occupancy 40,756 34,768 39,594 17.2% 2.9% Advertising and market development 34,577 29,315 28,572 17.9% 21.0% Professional fees 61,278 42,370 46,719 44.6% 31.2% Other expenses 98,989 97,588 81,415 1.4% 21.6% ------------ ------------ ------------ Total non-interest expenses 1,316,113 1,212,062 1,259,332 8.6% 4.5% ------------ ------------ ------------ Income before provision for income taxes 557,439 511,476 578,328 9.0% (3.6%) Provision for income taxes 192,317 163,673 199,523 17.5% (3.6%) ------------ ------------ ------------ Net income $ 365,122 $ 347,803 $ 378,805 5.0% (3.6%) ============ ============ ============ Net income applicable to common shares $ 358,679 $ 340,609 $ 372,327 5.3% (3.7%) ============ ============ ============ Adjusted net income used for diluted earnings per share (1) $ 379,528 $ 366,027 $ 394,032 3.7% (3.7%) ============ ============ ============ Basic earnings per share $ 2.84 $ 2.77 $ 2.94 2.5% (3.4%) ============ ============ ============ Diluted earnings per share $ 2.56 $ 2.49 $ 2.64 2.8% (3.0%) ============ ============ ============ Weighted average common shares outstanding: Basic 130,663,337 129,071,295 131,261,212 ============ ============ ============ Diluted 148,037,979 146,921,897 149,193,402 ============ ============ ============ Cash dividends declared per common share $ 0.25 $ 0.20 $ 0.25 ============ ============ ============
(1) Represents net income reduced for preferred stock dividends and increased for costs related to the CAP Plan. For earnings per share, the costs related to the CAP Plan (net of tax) are added back as the shares related to the CAP Plan are included in weighted average common shares outstanding. Note: Certain reclassifications have been made to prior period amounts to conform to the current period's presentation. THE BEAR STEARNS COMPANIES INC. CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
Six Months Ended % Change From ---------------------------- ------------- May 31, May 31, May 31, 2005 2004 2004 ------------ ------------ ------------- (In thousands, except share and per share data) REVENUES Commissions $ 610,985 $ 615,253 (0.7%) Principal transactions 1,958,812 1,880,061 4.2% Investment banking 484,136 477,059 1.5% Interest and dividends 2,213,404 1,018,933 117.2% Asset management and other income 178,612 153,937 16.0% ------------ ------------ Total revenues 5,445,949 4,145,243 31.4% Interest expense 1,734,737 695,782 149.3% ------------ ------------ Revenues, net of interest expense 3,711,212 3,449,461 7.6% ------------ ------------ NON-INTEREST EXPENSES Employee compensation and benefits 1,829,683 1,709,201 7.0% Floor brokerage, exchange and clearance fees 114,580 116,547 (1.7%) Communications and technology 199,282 182,149 9.4% Occupancy 80,350 68,383 17.5% Advertising and market development 63,149 55,216 14.4% Professional fees 107,997 84,170 28.3% Other expenses 180,404 191,341 (5.7%) ------------ ------------ Total non-interest expenses 2,575,445 2,407,007 7.0% ------------ ------------ Income before provision for income taxes 1,135,767 1,042,454 9.0% Provision for income taxes 391,840 333,586 17.5% ------------ ------------ Net income $ 743,927 $ 708,868 4.9% ------------ ------------ Net income applicable to common shares $ 731,006 $ 694,255 5.3% ============ ============ Adjusted net income used for diluted earnings per share (1) $ 773,560 $ 744,805 3.9% ============ ============ Basic earnings per share $ 5.78 $ 5.65 2.3% ============ ============ Diluted earnings per share $ 5.21 $ 5.07 2.8% ============ ============ Weighted average common shares outstanding: Basic 130,960,364 129,029,761 ============ ============ Diluted 148,612,374 146,945,015 ============ ============ Cash dividends declared per common share $ 0.50 $ 0.40 ============ ============
(1) Represents net income reduced for preferred stock dividends and increased for costs related to the CAP Plan. For earnings per share, the costs related to the CAP Plan (net of tax) are added back as the shares related to the CAP Plan are included in weighted average common shares outstanding. Note: Certain reclassifications have been made to prior period amounts to conform to the current period's presentation. THE BEAR STEARNS COMPANIES INC. SELECTED FINANCIAL INFORMATION (UNAUDITED)
Three Months Ended ---------------------------------------------------------------- May 31, February 28, November 30, August 31, 2005 2005 2004 2004 ------------- ------------- ------------------------------ (In thousands, except common share data, financial ratios and other data) Results Revenues, net of interest expense $ 1,873,552 $ 1,837,660 $ 1,828,657 $ 1,534,765 Net income $ 365,122 $ 378,805 $ 352,606 $ 283,259 Net income applicable to common shares $ 358,679 $ 372,327 $ 345,990 $ 276,416 Adjusted net income used for diluted earnings per share (1) $ 379,528 $ 394,032 $ 372,632 $ 300,984 Financial Position Stockholders' equity, at period end $ 9,708,526 $ 9,518,898 $ 8,990,872 $ 8,067,519 Total capital, at period end $ 49,397,155 $ 48,491,012 $ 45,834,149 $ 41,567,718 Common Share Data Basic earnings per share $ 2.84 $ 2.94 $ 2.91 $ 2.31 Diluted earnings per share $ 2.56 $ 2.64 $ 2.61 $ 2.09 Book value per common share, at period end $ 65.12 $ 62.88 $ 59.13 $ 55.13 Weighted average common shares outstanding: Basic 130,663,337 131,261,212 125,346,024 127,014,483 Diluted 148,037,979 149,193,402 142,672,823 144,201,755 Common shares outstanding, at period end (2) 145,928,440 146,012,775 144,484,099 144,052,137 Financial Ratios Return on average common equity (annualized) 16.5% 17.8% 19.5% 15.9% Adjusted pre-tax profit margin (3) 31.7% 33.5% 31.8% 31.7% Pre-tax profit margin (4) 29.8% 31.5% 29.3% 28.9% After-tax profit margin (5) 19.5% 20.6% 19.3% 18.5% Compensation & benefits / Revenues, net of interest expense 49.3% 49.3% 43.8% 48.4% Other Data (in billions, except employees) Margin debt balances, at period end $ 53.9 $ 61.3 $ 57.3 $ 49.6 Margin debt balances, average for period $ 58.7 $ 58.0 $ 52.0 $ 46.6 Customer short balances, at period end $ 82.5 $ 93.9 $ 85.4 $ 73.7 Customer short balances, average for period $ 86.8 $ 88.5 $ 78.2 $ 75.6 Securities borrowed, at period end $ 59.7 $ 67.8 $ 65.2 $ 58.9 Securities borrowed, average for period $ 65.1 $ 69.6 $ 64.1 $ 63.3 Free credit balances, at period end $ 31.6 $ 30.2 $ 30.8 $ 29.3 Free credit balances, average for period $ 30.6 $ 31.1 $ 28.8 $ 30.8 Assets under management, at period end $ 36.9 $ 37.0 $ 34.9 $ 28.1 Employees, at period end 11,141 11,019 10,961 10,715 Three Months Ended --------------------------------------- May 31, February 29, 2004 2004 --------------------------------------- (In thousands, except common share data, financial ratios and other data) Results Revenues, net of interest expense $ 1,723,538 $ 1,725,923 Net income $ 347,803 $ 361,065 Net income applicable to common shares $ 340,609 $ 353,646 Adjusted net income used for diluted earnings per share (1) $ 366,027 $ 378,778 Financial Position Stockholders' equity, at period end $ 8,006,834 $ 7,817,777 Total capital, at period end $ 39,973,413 $ 39,970,906 Common Share Data Basic earnings per share $ 2.77 $ 2.88 Diluted earnings per share $ 2.49 $ 2.57 Book value per common share, at period end $ 53.38 $ 51.19 Weighted average common shares outstanding: Basic 129,071,295 129,118,964 Diluted 146,921,897 147,108,483 Common shares outstanding, at period end (2) 144,285,667 144,320,701 Financial Ratios Return on average common equity (annualized) 19.6% 21.3% Adjusted pre-tax profit margin (3) 32.3% 33.3% Pre-tax profit margin (4) 29.7% 30.8% After-tax profit margin (5) 20.2% 20.9% Compensation & benefits / Revenues, net of interest expense 49.9% 49.2% Other Data (in billions, except employees) Margin debt balances, at period end $ 44.4 $ 47.9 Margin debt balances, average for period $ 46.7 $ 46.6 Customer short balances, at period end $ 74.9 $ 77.0 Customer short balances, average for period $ 77.2 $ 74.3 Securities borrowed, at period end $ 59.7 $ 62.0 Securities borrowed, average for period $ 65.3 $ 62.6 Free credit balances, at period end $ 28.8 $ 26.1 Free credit balances, average for period $ 28.1 $ 26.5 Assets under management, at period end $ 27.3 $ 29.1 Employees, at period end 10,469 10,431
(1) Represents net income reduced for preferred stock dividends and increased for costs related to the CAP Plan and the redemption of preferred stock. For earnings per share, the costs related to the CAP Plan (net of tax) are added back as the shares related to the CAP Plan are included in weighted average common shares outstanding. (2) Represents shares used to calculate book value per common share. Common shares outstanding include units issued under certain stock compensation plans which will be distributed as shares of common stock. (3) Represents the ratio of income before both CAP Plan costs and provision for income taxes to revenues, net of interest expense. (4) Represents the ratio of income before provision for income taxes to revenues, net of interest expense. (5) Represents the ratio of net income to revenues, net of interest expense. THE BEAR STEARNS COMPANIES INC. SEGMENT DATA (UNAUDITED)
Three Months Ended ------------------------------------------------------------ November 30, August 31, May 31, February 29, 2004 2004 2004 2004 ------------ ------------ ------------ ------------ (In thousands) NET REVENUES Capital Markets Institutional Equities $ 299,129 $ 233,517 $ 245,752 $ 293,211 Fixed Income 713,039 773,960 860,443 839,299 Investment Banking 424,737 181,818 233,597 232,618 ------------ ------------ ------------ ------------ Total Capital Markets 1,436,905 1,189,295 1,339,792 1,365,128 Global Clearing Services 246,797 225,090 235,196 225,333 Wealth Management Private Client Services (1) 109,575 103,498 117,272 110,897 Asset Management 47,631 36,320 59,244 41,890 ------------ ------------ ------------ ------------ Total Wealth Management 157,206 139,818 176,516 152,787 Other (2) (12,251) (19,438) (27,966) (17,325) ------------ ------------ ------------ ------------ Total net revenues $ 1,828,657 $ 1,534,765 $ 1,723,538 $ 1,725,923 ============ ============ ============ ============ PRE-TAX INCOME Capital Markets $ 577,374 $ 415,007 $ 479,482 $ 508,650 Global Clearing Services 126,011 93,855 98,225 86,221 Wealth Management 12,689 7,667 25,719 20,867 Other (2) (180,253) (72,650) (91,950) (84,760) ------------ ------------ ------------ ------------ Total pre-tax income $ 535,821 $ 443,879 $ 511,476 $ 530,978 ============ ============ ============ ============ (1) Private Client Services Detail: Gross Revenues, before transfer to Capital Markets Segment $ 128,145 $ 121,082 $ 139,266 $ 137,629 Revenue transferred to Capital Markets segment (18,570) (17,584) (21,994) (26,732) ------------ ------------ ------------ ------------ Private Client Services net revenues $ 109,575 $ 103,498 $ 117,272 $ 110,897 ============ ============ ============ ============
(2) Includes consolidation and elimination entries, unallocated revenues (predominantly interest) and certain corporate administrative functions, including certain legal costs and costs related to the 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. SEGMENT DATA (UNAUDITED)
Fiscal Year Ended ----------------------------- November 30, November 30, 2004 2003 ----------------------------- (In thousands) NET REVENUES Capital Markets Institutional Equities $ 1,071,609 $ 932,567 Fixed Income 3,186,741 2,972,192 Investment Banking 1,072,770 914,558 ------------ ------------ Total Capital Markets 5,331,120 4,819,317 Global Clearing Services 932,416 784,072 Wealth Management Private Client Services (1) 441,242 378,787 Asset Management 185,085 132,520 ------------ ------------ Total Wealth Management 626,327 511,307 Other (2) (76,980) (120,205) ------------ ------------ Total net revenues $ 6,812,883 $ 5,994,491 ============ ============ PRE-TAX INCOME Capital Markets $ 1,980,513 $ 1,924,071 Global Clearing Services 404,312 245,531 Wealth Management 66,942 19,217 Other (2) (429,613) (416,550) ------------ ------------ Total pre-tax income $ 2,022,154 $ 1,772,269 ============ ============ (1) Private Client Services Detail: Gross Revenues, before transfer to Capital Markets Segment $ 526,122 $ 477,227 Revenue transferred to Capital Markets segment (84,880) (98,440) ------------ ------------ Private Client Services net revenues $ 441,242 $ 378,787 ============ ============
(2) Includes consolidation and elimination entries, unallocated revenues (predominantly interest) and certain corporate administrative functions, including certain legal costs and costs related to the 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 --------------------------------------------------------- November 30, August 31, May 31, February 29, 2004 2004 2004 2004 ------------ ------------ ------------ ------------ (In thousands, except share and per share data) REVENUES Commissions $ 289,099 $ 273,722 $ 307,150 $ 308,103 Principal transactions 848,155 867,379 930,525 949,536 Investment banking 396,211 157,781 231,257 245,802 Interest and dividends 769,678 528,704 498,469 520,464 Asset management and other income 79,163 66,767 96,397 57,540 ------------ ------------ ------------ ------------ Total revenues 2,382,306 1,894,353 2,063,798 2,081,445 Interest expense 553,649 359,588 340,260 355,522 ------------ ------------ ------------ ------------ Revenues, net of interest expense 1,828,657 1,534,765 1,723,538 1,725,923 ------------ ------------ ------------ ------------ NON-INTEREST EXPENSES Employee compensation and benefits 801,623 743,038 860,053 849,148 Floor brokerage, exchange and clearance fees 57,283 56,822 59,647 56,900 Communications and technology 94,667 92,360 88,321 93,828 Occupancy 37,690 35,843 34,768 33,615 Advertising and market development 28,554 30,030 29,315 25,901 Professional fees 65,369 47,547 42,370 41,800 Other expenses 207,650 85,246 97,588 93,753 ------------ ------------ ------------ ------------ Total non-interest expenses 1,292,836 1,090,886 1,212,062 1,194,945 ------------ ------------ ------------ ------------ Income before provision for income taxes 535,821 443,879 511,476 530,978 Provision for income taxes 183,215 160,620 163,673 169,913 ------------ ------------ ------------ ------------ Net income $ 352,606 $ 283,259 $ 347,803 $ 361,065 ============ ============ ============ ============ Net income applicable to common shares $ 345,990 $ 276,416 $ 340,609 $ 353,646 ============ ============ ============ ============ Adjusted net income used for diluted earnings per share (1) $ 372,632 $ 300,984 $ 366,027 $ 378,778 ============ ============ ============ ============ Basic earnings per share $ 2.91 $ 2.31 $ 2.77 $ 2.88 ============ ============ ============ ============ Diluted earnings per share $ 2.61 $ 2.09 $ 2.49 $ 2.57 ============ ============ ============ ============ Weighted average common shares outstanding: Basic 125,346,024 127,014,483 129,071,295 129,118,964 ============ ============ ============ ============ Diluted 142,672,823 144,201,755 146,921,897 147,108,483 ============ ============ ============ ============ Cash dividends declared per common share $ 0.25 $ 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. 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)
Fiscal Year Ended --------------------------- November 30, November 30, 2004 2003 ------------ ------------ (In thousands, except share and per share data) REVENUES Commissions $ 1,178,074 $ 1,077,926 Principal transactions 3,595,595 3,308,306 Investment banking 1,031,051 853,294 Interest and dividends 2,317,315 1,955,373 Asset management and other income 299,867 200,545 ------------ ------------ Total revenues 8,421,902 7,395,444 Interest expense 1,609,019 1,400,953 ------------ ------------ Revenues, net of interest expense 6,812,883 5,994,491 ------------ ------------ NON-INTEREST EXPENSES Employee compensation and benefits 3,253,862 2,880,695 Floor brokerage, exchange and clearance fees 230,652 180,548 Communications and technology 369,176 365,317 Occupancy 141,916 137,778 Advertising and market development 113,800 106,506 Professional fees 197,086 133,304 Other expenses 484,237 418,074 ------------ ------------ Total non-interest expenses 4,790,729 4,222,222 ------------ ------------ Income before provision for income taxes 2,022,154 1,772,269 Provision for income taxes 677,421 615,863 ------------ ------------ Net income $ 1,344,733 $ 1,156,406 ============ ============ Net income applicable to common shares $ 1,316,661 $ 1,125,031 ============ ============ Adjusted net income used for diluted earnings per share (1) $ 1,418,421 $ 1,235,991 ============ ============ Basic earnings per share $ 10.88 $ 9.44 ============ ============ Diluted earnings per share $ 9.76 $ 8.52 ============ ============ Weighted average common shares outstanding: Basic 127,468,061 127,819,514 ============ ============ Diluted 145,284,589 145,027,266 ============ ============ Cash dividends declared per common share $ 0.85 $ 0.74 ============ ============
(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. Note: Certain reclassifications have been made to prior period amounts to conform to the current period's presentation. -----END PRIVACY-ENHANCED MESSAGE-----