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
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February 28, February 28, November 30, February 28, November 30,
2003 2002 2002 2002 2002
----------- ----------- ----------- ----------- -----------
(In thousands)
NET REVENUES
Capital Markets
Institutional Equities $ 276,461 $ 245,486 $ 282,411 12.6% (2.1%)
Fixed Income 791,217 548,194 463,908 44.3% 70.6%
Investment Banking 187,764 143,750 93,309 30.6% 101.2%
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Total Capital Markets 1,255,442 937,430 839,628 33.9% 49.5%
Global Clearing Services 175,778 204,911 180,293 (14.2%) (2.5%)
Wealth Management 115,585 123,211 124,462 (6.2%) (7.1%)
Other (1) (31,371) (26,374) (17,375) (18.9%) (80.6%)
----------- ----------- -----------
Total net revenues $ 1,515,434 $ 1,239,178 $ 1,127,008 22.3% 34.5%
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PRE-TAX INCOME
Capital Markets $ 465,919 $ 273,593 $ 251,460 70.3% 85.3%
Global Clearing Services 52,150 77,232 55,590 (32.5%) (6.2%)
Wealth Management 5,719 1,780 4,357 221.3% 31.3%
Other (1) (98,589) (79,078) (38,627) (24.7%) (155.2%)
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Total pre-tax income $ 425,199 $ 273,527 $ 272,780 55.5% 55.9%
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(1)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
for Senior Managing Directors ("CAP Plan").
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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Three Months Ended % Change From
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February 28, February 28, November 30, February 28, November 30,
2003 2002 2002 2002 2002
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(In thousands, except share and per share data)
REVENUES
Commissions $ 241,915 $ 264,657 $ 276,048 (8.6%) (12.4%)
Principal transactions 968,464 660,750 614,366 46.6% 57.6%
Investment banking 167,583 151,894 81,236 10.3% 106.3%
Interest and dividends 434,159 598,633 505,351 (27.5%) (14.1%)
Other income 25,794 42,210 43,870 (38.9%) (41.2%)
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Total revenues 1,837,915 1,718,144 1,520,871 7.0% 20.8%
Interest expense 322,481 478,966 393,863 (32.7%) (18.1%)
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Revenues, net of interest expense 1,515,434 1,239,178 1,127,008 22.3% 34.5%
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NON-INTEREST EXPENSES
Employee compensation and benefits 757,889 633,642 565,370 19.6% 34.1%
Floor brokerage, exchange and clearance fees 44,680 39,749 52,435 12.4% (14.8%)
Communications and technology 92,740 104,673 94,029 (11.4%) (1.4%)
Occupancy 34,943 44,206 35,612 (21.0%) (1.9%)
Advertising and market development 25,210 23,524 22,633 7.2% 11.4%
Professional fees 28,453 33,824 37,454 (15.9%) (24.0%)
Other expenses 106,320 86,033 46,695 23.6% 127.7%
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Total non-interest expenses 1,090,235 965,651 854,228 12.9% 27.6%
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Income before provision for income taxes 425,199 273,527 272,780 55.5% 55.9%
Provision for income taxes 150,946 93,001 82,231 62.3% 83.6%
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Net income $ 274,253 $ 180,526 $ 190,549 51.9% 43.9%
============ ============ ============
Net income applicable to common shares $ 266,261 $ 170,748 $ 182,359 55.9% 46.0%
============ ============ ============
Adjusted net income used for diluted earnings
per share (1) $ 293,756 $ 190,739 $ 195,268 54.0% 50.4%
============ ============ ============
Basic earnings per share $ 2.21 $ 1.39 $ 1.48 59.0% 49.3%
============ ============ ============
Diluted earnings per share $ 2.00 $ 1.29 $ 1.36 55.0% 47.1%
============ ============ ============
Weighted average common shares outstanding:
Basic 129,773,603 134,793,949 130,133,459
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Diluted 147,029,224 148,115,050 143,798,762
============ ============ ============
Cash dividends declared per common share $ 0.17 $ 0.15 $ 0.17
============ ============ ============
(1) Represents net income reduced for preferred stock dividends and increased
for costs related to the CAP Plan and the redemption of preferred stock. For
earnings per share, the costs related to the CAP Plan (net of tax) are added
back as the shares related to the CAP Plan are included in weighted average
common shares outstanding.
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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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February 28, November 30, August 31,
2003 2002 2002
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(In thousands, except per share amounts and Other Data)
Income Statement
- ----------------
Revenues, net of interest expense $ 1,515,434 $ 1,127,008 $ 1,154,384
Net income $ 274,253 $ 190,549 $ 164,418
Net income applicable to common shares $ 266,261 $ 182,359 $ 156,094
Adjusted net income used for diluted earnings per share (1) $ 293,756 $ 195,268 $ 178,994
Earnings per common share:
Basic $ 2.21 $ 1.48 $ 1.32
Diluted $ 2.00 $ 1.36 $ 1.23
Financial Ratios
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Return on average common equity (annualized) 19.9% 14.5% 13.3%
Adjusted pre-tax profit margin (2) 31.2% 26.2% 24.0%
Pre-tax profit margin (3) 28.1% 24.2% 21.2%
After-tax profit margin (4) 18.1% 16.9% 14.2%
Compensation & benefits / Revenues, net of interest expense 50.0% 50.2% 51.6%
Balance Sheet
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Stockholders' equity, at period end $ 6,529,628 $ 6,382,083 $ 5,954,431
Total stockholders' equity and trust issued preferred securities, at period end $ 7,092,128 $ 6,944,583 $ 6,516,931
Total capital, at period end $ 31,987,917 $ 30,625,982 $ 29,567,725
Book value per common share, at period end $ 41.64 $ 39.94 $ 38.10
Other Data (in millions, except share and employee data)
- --------------------------------------------------------
Margin debt balances, at period end $ 37,300 $ 36,700 $ 32,500
Margin debt balances, average for period $ 35,900 $ 31,700 $ 33,700
Customer short balances, at period end $ 55,900 $ 58,800 $ 52,600
Customer short balances, average for period $ 56,300 $ 53,500 $ 52,100
Stock borrowed, at period end $ 41,600 $ 46,200 $ 40,600
Stock borrowed, average for period $ 45,000 $ 43,400 $ 41,900
Free credit balances, at period end $ 16,700 $ 17,100 $ 18,300
Free credit balances, average for period $ 18,400 $ 19,800 $ 19,400
Assets under management, at period end $ 23,300 $ 24,000 $ 23,200
Employees, at period end 10,506 10,574 10,493
Common shares outstanding, at period end (5) 146,659,224 145,591,496 146,478,611
Weighted average common shares outstanding:
Basic 129,773,603 130,133,459 132,436,184
Diluted 147,029,224 143,798,762 145,895,494
----------------------------
May 31, February 28,
2002 2002
----------------------------
Income Statement
- ----------------
Revenues, net of interest expense $ 1,607,666 $ 1,239,178
Net income $ 342,852 $ 180,526
Net income applicable to common shares $ 333,538 $ 170,748
Adjusted net income used for diluted earnings per share (1) $ 381,533 $ 190,739
Earnings per common share:
Basic $ 2.80 $ 1.39
Diluted $ 2.59 $ 1.29
Financial Ratios
- ----------------
Return on average common equity (annualized) 29.5% 15.2%
Adjusted pre-tax profit margin (2) 36.3% 24.9%
Pre-tax profit margin (3) 32.3% 22.1%
After-tax profit margin (4) 21.3% 14.6%
Compensation & benefits / Revenues, net of interest expense 44.4% 51.1%
Balance Sheet
- -------------
Stockholders' equity, at period end $ 5,963,258 $ 5,760,905
Total stockholders' equity and trust issued preferred securities, at period end $ 6,525,758 $ 6,323,405
Total capital, at period end $ 31,038,949 $ 31,063,625
Book value per common share, at period end $ 37.16 $ 34.95
Other Data (in millions, except share and employee data)
- --------------------------------------------------------
Margin debt balances, at period end $ 36,700 $ 34,600
Margin debt balances, average for period $ 35,900 $ 35,100
Customer short balances, at period end $ 55,800 $ 54,500
Customer short balances, average for period $ 56,900 $ 55,900
Stock borrowed, at period end $ 43,300 $ 39,800
Stock borrowed, average for period $ 45,400 $ 45,600
Free credit balances, at period end $ 16,600 $ 17,900
Free credit balances, average for period $ 18,500 $ 19,600
Assets under management, at period end $ 24,800 $ 25,800
Employees, at period end 10,426 10,341
Common shares outstanding, at period end (5) 146,873,990 147,040,102
Weighted average common shares outstanding:
Basic 133,772,110 134,793,949
Diluted 147,592,256 148,115,050
(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 the ratio of income before both CAP Plan costs and provision for
income taxes to revenues, net of interest expense.
(3) Represents the ratio of income before provision for income taxes to
revenues, net of interest expense.
(4) Represents the ratio of net income to revenues, net of interest expense.
(5) 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.
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