THE BEAR STEARNS COMPANIES INC.
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SEGMENT DATA
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(UNAUDITED)
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Three Months Ended % Change From Six Months Ended % Change
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May 31, May 25, February 28, May 25, February 28, May 31, May 25,
2002 2001 2002 2001 2002 2002 2001
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(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%
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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%)
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Total pre-tax income $ 519,452 $ 266,829 $ 273,527 94.7% 89.9% $ 792,979 $ 519,793 52.6%
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(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.
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CONSOLIDATED STATEMENTS OF INCOME
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(UNAUDITED)
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Three Months Ended % Change From
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May 31, May 25, February 28, May 25, February 28,
2002 2001 2002 2001 2002
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(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%
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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%)
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Revenues, net of interest expense 1,607,666 1,368,658 1,239,178 17.5% 29.7%
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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%
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Total non-interest expenses 1,088,214 1,101,829 965,651 (1.2%) 12.7%
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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%
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Net income $ 342,852 $ 169,493 $ 180,526 102.3% 89.9%
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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%
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Basic earnings per share $ 2.80 $ 1.23 $ 1.39 127.6% 101.4%
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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
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Diluted 147,592,256 154,825,604 148,115,050
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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.
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THE BEAR STEARNS COMPANIES INC.
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CONSOLIDATED STATEMENTS OF INCOME
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(UNAUDITED)
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Six Months Ended % Change
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May 31, May 25,
2002 2001
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(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%
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Total revenues 3,788,548 4,585,558 (17.4%)
Interest expense 941,704 2,003,113 (53.0%)
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Revenues, net of interest expense 2,846,844 2,582,445 10.2%
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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%
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Total non-interest expenses 2,053,865 2,062,652 (0.4%)
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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%
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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) --
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Net income $ 523,378 $ 329,174 59.0%
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Net income applicable to common shares $ 504,286 $ 309,618 62.9%
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Adjusted net income used for diluted earnings per share (1) $ 572,272 $ 350,590 63.2%
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Basic earnings per share $ 4.18 $ 2.34(2) 78.6%
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Diluted earnings per share $ 3.87 $ 2.24(2) 72.8%
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Weighted average common and common equivalent shares outstanding:
Basic 134,280,242 147,164,834
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Diluted 148,011,523 156,749,394
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Cash dividends declared per common share $ 0.30 $ 0.30
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(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.
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THE BEAR STEARNS COMPANIES INC.
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SELECTED FINANCIAL INFORMATION
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(UNAUDITED)
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Three Months Ended
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May 31, February 28, November 30,
2002 2002 2001
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(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
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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
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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
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August 31, May 25, February 23,
2001 2001 2001
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(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
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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
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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