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Return on Average Tangible Shareholders’ Equity ($ in millions)
Quarter Ended
Nine Months Ended
Six Months Ended November 2003
August 2003
May 2003
February 2003
Aug. 29, 2003
May 30, 2003
Annualized ROE (1) 18.6% 13.4% 14.1% 13.7% 13.8% 13.9% Annualized ROTE (2) 24.6% 17.8% 18.7% 18.3% 18.3% 18.5%
Year Ended November 2003 2002 2001
ROE (1) 15.0% 11.3% 13.0%
ROTE (2) 19.9% 15.3% 17.8%
(1) Annualized ROE is computed by dividing annualized net earnings by average monthly shareholders’ equity. ROE is computed by dividing net earnings by average monthly shareholders’ equity. (2) Annualized ROTE is computed by dividing annualized net earnings by average monthly tangible shareholders’ equity. ROTE is computed by dividing net earnings by average monthly tangible shareholders’ equity.
Average for the
Quarter Ended
Nine Months Ended
Six Months Ended November 2003
August 2003
May 2003
February 2003
Aug. 29, 2003
May 30, 2003
Shareholders’ equity $ 20,930 $ 20,193 $ 19,691 $ 19,283 $ 19,711 $ 19, Deduct: Goodwill and identifiable intangible assets (5,130) (4,980) (4,785) (4,823) (4,878) (4,803) Tangible shareholders’ equity $ 15,800 $ 15,213 $ 14,906 $ 14,460 $ 14,833 $ 14,
Average for the Year Ended November 2003 2002 2001
Shareholders’ equity $ 20,031 $ 18,659 $ 17, Deduct: Goodwill and identifiable intangible assets (4,932) (4,837) (4,727) Tangible shareholders’ equity $ 15,099 $ 13,822 $ 12,
The following table sets forth the firm’s return on average shareholders’ equity (ROE) and return on average tangible shareholders’ equity (ROTE):
Tangible shareholders’ equity equals total shareholders’ equity less goodwill and identifiable intangible assets. Management believes that tangible shareholders’ equity is a meaningful measure because it reflects the equity deployed in the firm’s businesses. The following table sets forth a reconciliation of shareholders’ equity to tangible shareholders’ equity:
Adjusted Assets, Adjusted Leveraged Ratio and Tangible Book Value Per Share ($ in millions, except per share amounts)
The following table sets forth information on our assets, shareholders’ equity, leverage ratios and book value per share:
As of As of August 2003
May 2003
February 2003
November 2003
November 2002
November 2001
Total assets $ 394,142 $ 404,698 $ 371,968 $ 403,799 $ 355,574 $312, Adjusted assets (1) 273,745 294,749 250,032 273,941 215,547 194,
Shareholders’ equity $ 20,438 $ 20,042 $ 19,514 $ 21,632 $ 19,003 $ 18, Tangible shareholders’ equity (2) 15,247 15,279 14,705 16,650 14,164 13,
Leverage ratio (3) 19.3x 20.2x 19.1x 18.7x 18.7x 17.1x Adjusted leverage ratio (4) 18.0x 19.3x 17.0x 16.5x 15.2x 14.5x
Book value per share (5) $ 41.72 $ 41.39 $ 40.05 $ 43.60 $ 38.69 $ 36. Tangible book value per share (6) 31.12 31.56 30.18 33.56 28.84 26.
(1)
As of As of August 2003
May 2003
February 2003
November 2003
November 2002
November 2001
Total assets $ 394,142 $ 404,698 $ 371,968 $ 403,799 $ 355,574 $312, Deduct: Securities purchased under agreements to resell (25,208) (22,460) (30,536) (26,856) (45,772) (27,651) Securities borrowed (120,830) (111,553) (109,085) (129,118) (113,579) (101,164) Add: Financial instruments sold, but not yet purchased, at fair value (^) 102,015 105,325 92,859 102,699 83,473 74, Less derivatives (^) (41,801) (49,761) (47,126) (41,886) (38,921) (36,660) Subtotal 60,214 55,564 45,733 60,813 44,552 38, Deduct: Cash and securities segregated in compliance with U.S. federal and other regulations (29,382) (26,737) (23,239) (29,715) (20,389) (22,134) Goodwill and identifiable intangible assets (5,191) (4,763) (4,809) (4,982) (4,839) (4,808) Adjusted assets $ 273,745 $ 294,749 $ 250,032 $ 273,941 $ 215,547 $194,
As of As of August 2003
May 2003
February 2003
November 2003
November 2002
November 2001
Shareholders’ equity $ 20,438 $ 20,042 $ 19,514 $ 21,632 $ 19,003 $ 18, Deduct: Goodwill and identifiable intangible assets (5,191) (4,763) (4,809) (4,982) (4,839) (4,808) Tangible shareholders’ equity $ 15,247 $ 15,279 $ 14,705 $ 16,650 $ 14,164 $ 13,
Adjusted assets excludes (i) low-risk collateralized assets generally associated with our matched book and securities lending businesses (which we calculate by adding our securities purchased under agreements to resell and securities borrowed, and then subtracting our nonderivative short positions), (ii) cash and securities we segregate in compliance with regulations and (iii) goodwill and identifiable intangible assets. The following table sets forth a reconciliation of total assets to adjusted assets:
Tangible shareholders’ equity equals total shareholders’ equity less goodwill and identifiable intangible assets. The following table sets forth a reconciliation of shareholders’ equity to tangible shareholders’ equity:
Leverage ratio equals total assets divided by shareholders’ equity.
