THE BEAR STEARNS COMPANIES INC.
SEGMENT DATA
(UNAUDITED)
<table>
<caption>
Three Months Ended % Change From
------------------------------------------------------ -------------------------------
February 28, February 29, November 30, February 29, November 30,
2005 2004 2004 2004 2004
----------------- ---------------- --------------- --------------- ---------------
(In thousands)
<c> <c> <c> <c> <c>
NET REVENUES
Capital Markets
Institutional Equities $ 312,940 $ 293,211 $ 299,129 6.7% 4.6%
Fixed Income 823,899 818,738 679,039 0.6% 21.3%
Investment Banking 259,002 253,179 458,737 2.3% (43.5%)
----------------- ----------------- ---------------
Total Capital Markets 1,395,841 1,365,128 1,436,905 2.2% (2.9%)
Global Clearing Services 270,392 225,333 246,797 20.0% 9.6%
Wealth Management
Private Client Services (1) 113,875 110,897 109,575 2.7% 3.9%
Asset Management 55,315 41,890 47,631 32.0% 16.1%
----------------- ----------------- ---------------
Total Wealth Management 169,190 152,787 157,206 10.7% 7.6%
Other (2) 2,237 (17,325) (12,251) nm nm
----------------- ----------------- ---------------
Total net revenues $ 1,837,660 $ 1,725,923 $ 1,828,657 6.5% 0.5%
================= ================= ===============
PRE-TAX INCOME
Capital Markets $ 481,683 $ 508,650 $ 577,374 (5.3%) (16.6%)
Global Clearing Services 137,774 86,221 126,011 59.8% 9.3%
Wealth Management 14,979 20,867 12,689 (28.2%) 18.0%
Other (2) (56,108) (84,760) (180,253) 33.8% 68.9%
----------------- ---------------- --------------
Total pre-tax income $ 578,328 $ 530,978 $ 535,821 8.9% 7.9%
================= ================ ==============
(1)Private Client Services:
Gross revenues, before
transfer to Capital
Markets segment $ 133,295 $ 137,629 $ 128,145
Revenue transferred to
Capital Markets segment (19,420) (26,732) (18,570)
---------------- ----------------- ---------------
Private Client Services
net revenues $ 113,875 $ 110,897 $ 109,575
================ ================= ===============
(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
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THE BEAR STEARNS COMPANIES INC.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<table>
<caption>
Three Months Ended % Change From
------------------------------------------------------ ----------------------------------
February 28, February 29, November 30, February 29, November 30,
2005 2004 2004 2004 2004
-------------- --------------- --------------- --------------- ----------------
(In thousands, except share and per share data)
<c> <c> <c> <c> <c>
REVENUES
Commissions $ 297,377 $ 308,103 $ 289,099 (3.5%) 2.9%
Principal transactions 960,364 946,862 824,057 1.4% 16.5%
Investment banking 271,618 260,410 435,984 4.3% (37.7%)
Interest and dividends 1,021,619 520,464 769,678 96.3% 32.7%
Other income 71,391 45,606 63,488 56.5% 12.4%
-------------- --------------- ---------------
Total revenues 2,622,369 2,081,445 2,382,306 26.0% 10.1%
Interest expense 784,709 355,522 553,649 120.7% 41.7%
-------------- --------------- ---------------
Revenues, net of
interest expense 1,837,660 1,725,923 1,828,657 6.5% 0.5%
-------------- --------------- ---------------
NON-INTEREST EXPENSES
Employee compensation and benefits 906,775 849,148 801,623 6.8% 13.1%
Floor brokerage, exchange
and clearance fees 57,318 56,900 57,283 0.7% 0.1%
Communications and technology 98,939 93,828 94,667 5.4% 4.5%
Occupancy 39,594 33,615 37,690 17.8% 5.1%
Advertising and market development 28,572 25,901 28,554 10.3% 0.1%
Professional fees 46,719 41,800 65,369 11.8% (28.5%)
Other expenses 81,415 93,753 207,650 (13.2%) (60.8%)
--------------- --------------- ---------------
Total non-interest expenses 1,259,332 1,194,945 1,292,836 5.4% (2.6%)
--------------- --------------- ---------------
Income before provision for
income taxes 578,328 530,978 535,821 8.9% 7.9%
Provision for income taxes 199,523 169,913 183,215 17.4% 8.9%
--------------- --------------- ---------------
Net income $ 378,805 $ 361,065 $ 352,606 4.9% 7.4%
=============== =============== ===============
Net income applicable to
common shares $ 372,327 $ 353,646 $ 345,990 5.3% 7.6%
=============== =============== ===============
Adjusted net income used for diluted
earnings per share (1) $ 394,032 $ 378,778 $ 372,632 4.0% 5.7%
=============== =============== ===============
Basic earnings per share $ 2.94 $ 2.88 $ 2.91 2.1% 1.0%
=============== =============== ===============
Diluted earnings per share $ 2.64 $ 2.57 $ 2.61 2.7% 1.1%
=============== =============== ===============
Weighted average common shares outstanding:
Basic 131,261,212 129,118,964 125,346,024
=============== =============== ===============
Diluted 149,193,402 147,108,483 142,672,823
=============== =============== ===============
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 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.
</table>
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THE BEAR STEARNS COMPANIES INC.
SELECTED FINANCIAL INFORMATION
(UNAUDITED)
<table>
<caption>
Three Months Ended
---------------------------------------------------------------------------------------
February 28, November 30, August 31, May 31, February 29,
2005 2004 2004 2004 2004
--------------- -------------- --------------- ------------ ---------------
(In thousands, except common share data, financial ratios and other data)
<c> <c> <c> <c> <c>
Results
Revenues, net of interest expense $ 1,837,660 $ 1,828,657 $ 1,534,765 $ 1,723,538 $ 1,725,923
Net income $ 378,805 $ 352,606 $ 283,259 $ 347,803 $ 361,065
Net income applicable to common shares $ 372,327 $ 345,990 $ 276,416 $ 340,609 $ 353,646
Adjusted net income used for diluted
earnings per share (1) $ 394,032 $ 372,632 $ 300,984 $ 366,027 $ 378,778
Financial Position
Stockholders' equity, at period end $ 9,518,898 $ 8,990,872 $ 8,067,519 $ 8,006,834 $ 7,817,777
Total capital, at period end $ 48,798,807 $ 45,834,149 $ 41,567,718 $ 39,973,413 $ 39,970,906
Common Share Data
Basic earnings per share $ 2.94 $ 2.91 $ 2.31 $ 2.77 $ 2.88
Diluted earnings per share $ 2.64 $ 2.61 $ 2.09 $ 2.49 $ 2.57
Book value per common share, at period end $ 62.88 $ 59.13 $ 55.13 $ 53.38 $ 51.19
Weighted average common shares outstanding:
Basic 131,261,212 125,346,024 127,014,483 129,071,295 129,118,964
Diluted 149,193,402 142,672,823 144,201,755 146,921,897 147,108,483
Common shares outstanding, at period end (2) 146,012,775 144,484,099 144,052,137 144,285,667 144,320,701
Financial Ratios
Return on average common equity (annualized) 17.8% 19.5% 15.9% 19.6% 21.3%
Adjusted pre-tax profit margin (3) 33.5% 31.8% 31.7% 32.3% 33.3%
Pre-tax profit margin (4) 31.5% 29.3% 28.9% 29.7% 30.8%
After-tax profit margin (5) 20.6% 19.3% 18.5% 20.2% 20.9%
Compensation & benefits /
Revenues, net of interest expense 49.3% 43.8% 48.4% 49.9% 49.2%
Other Data (in billions, except employees)
Margin debt balances, at period end $ 61.3 $ 57.3 $ 49.6 $ 44.4 $ 47.9
Margin debt balances, average for period $ 58.0 $ 52.0 $ 46.6 $ 46.7 $ 46.6
Customer short balances, at period end $ 93.9 $ 85.4 $ 73.7 $ 74.9 $ 77.0
Customer short balances, average for period $ 88.5 $ 78.2 $ 75.6 $ 77.2 $ 74.3
Securities borrowed, at period end $ 67.8 $ 65.2 $ 58.9 $ 59.7 $ 62.0
Securities borrowed, average for period $ 69.6 $ 64.1 $ 63.3 $ 65.3 $ 62.6
Free credit balances, at period end $ 30.2 $ 30.8 $ 29.3 $ 28.8 $ 26.1
Free credit balances, average for period $ 31.1 $ 28.8 $ 30.8 $ 28.1 $ 26.5
Assets under management, at period end $ 37.0 $ 34.9 $ 28.1 $ 27.3 $ 29.1
Employees, at period end 11,019 10,961 10,715 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.
Note: Certain reclassifications have been made to prior period amounts to
conform to the current period's presentation.
</table>
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