SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended June 30, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to _______________
Commission file number 1-8529
LEGG MASON, INC.
(Exact name of registrant as specified in its charter)
MARYLAND 52-1200960
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
100 Light Street - Baltimore, MD 21202
(Address of principal executive offices) (Zip code)
(410) 539-0000
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Sections 13 or 15(d)of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90
days.
Yes X No _____
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
56,804,824 shares of common stock as of the close of business
on July 31, 1999
<PAGE> 2
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
LEGG MASON, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(in thousands of dollars)
June 30,1999 March 31,1999
(Unaudited)
<S> <C> <C>
ASSETS:
Cash and cash equivalents.................. $ 353,064 $ 208,142
Cash and securities segregated for
regulatory purposes....................... 1,290,777 1,374,255
Resale agreements.......................... 114,962 141,016
Receivable from customers.................. 1,044,070 921,267
Securities borrowed........................ 497,207 308,719
Securities inventory, at market value...... 162,267 143,998
Investment securities, at market value..... 14,062 17,230
Equipment and leasehold improvements, net.. 57,051 55,807
Intangible assets, net..................... 54,851 56,127
Other...................................... 222,138 247,126
$3,810,449 $3,473,687
LIABILITIES AND STOCKHOLDERS' EQUITY:
Liabilities:
Payable to customers...................... $2,254,903 $2,170,588
Payable to brokers and dealers............ 13,194 10,430
Securities loaned......................... 472,924 311,818
Short-term borrowings..................... 113,654 49,262
Securities sold, but not yet purchased,
at market value.......................... 21,979 11,822
Accrued compensation...................... 93,268 115,480
Deferred compensation trust............... - 48,986
Other..................................... 117,740 101,448
Senior notes.............................. 99,687 99,676
3,187,349 2,919,510
Stockholders' Equity:
Common stock.............................. 5,669 5,638
Additional paid-in capital................ 224,491 215,387
Deferred compensation and employee note
receivable............................... (5,350) (5,362)
Employee stock trust...................... (21,331) (18,475)
Employee deferred compensation stock trust 21,331 (11,470)
Retained earnings......................... 397,768 368,632
Accumulated other comprehensive income,net 522 (173)
623,100 554,177
$3,810,449 $3,473,687
See notes to condensed consolidated financial statements.
</TABLE>
<PAGE>3
<TABLE>
<CAPTION>
LEGG MASON, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(in thousands, except per share amounts)
(Unaudited)
Three Months
Ended June 30,
1999 1998
<S> <C> <C>
Revenues:
Investment advisory and related fees.... $123,033 $ 90,403
Commissions............................. 82,452 64,961
Principal transactions.................. 28,470 22,410
Investment banking...................... 22,096 20,935
Interest................................ 46,686 40,185
Other................................... 11,869 9,849
314,606 248,743
Expenses:
Compensation and benefits............... 176,134 137,149
Occupancy and equipment rental.......... 18,960 15,836
Communications.......................... 12,568 12,004
Floor brokerage and clearing fees....... 2,001 1,504
Interest................................ 27,663 24,228
Other................................... 21,904 17,083
259,230 207,804
Earnings Before Income Taxes............. 55,376 40,939
Income taxes............................ 22,558 16,575
Net Earnings............................. $ 32,818 $ 24,364
Earnings per common share:
Basic................................... $ 0.59 $ 0.44
Diluted................................. $ 0.54 $ 0.41
Average number of common shares
outstanding:
Basic................................... 55,422 55,155
Diluted................................. 60,060 58,896
Dividends declared per common share...... $ 0.065 $ 0.055
Book value per common share.............. $ 10.99 $ 9.46
See notes to condensed consolidated financial statements.
</TABLE>
<PAGE> 4
<TABLE>
<CAPTION>
LEGG MASON, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands of dollars)
(Unaudited)
Three Months
Ended June 30,
1999 1998
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net earnings...................................... $ 32,818 $ 24,364
Noncash items included in earnings:
Depreciation and amortization................... 5,907 5,058
Deferred compensation........................... (1,063) -
(Increase) decrease in assets:
Cash and securities segregated for regulatory
purposes....................................... 83,478 56,233
Receivable from customers....................... (122,803) (161,108)
Securities borrowed............................. (188,488) 48,683
Securities inventory............................ (18,269) (83,932)
Other........................................... 13,783 (24,473)
Increase (decrease) in liabilities:
Payable to customers............................ 84,315 108,066
Payable to brokers and dealers.................. 2,764 5,483
Securities loaned............................... 161,106 (65,951)
Securities sold, but not yet purchased.......... 10,157 28,253
Accrued compensation............................ (22,212) (27,841)
Other........................................... 14,702 4,260
CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES.. 56,195 (82,905)
CASH FLOWS FROM INVESTING ACTIVITIES:
Payments for:
Equipment and leaseholds improvements........... (5,844) (3,197)
Intangible assets............................... (150) (404)
Net decrease in resale agreements................ 26,054 77,779
Purchases of investment securities............... (551) (20,059)
Proceeds from maturities of investment securities 4,908 4,610
CASH PROVIDED BY INVESTING ACTIVITIES............. 24,417 58,729
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in short-term borrowings............ 64,392 101,911
Issuance of common stock......................... 3,578 2,420
Dividends paid................................... (3,660) (3,025)
CASH PROVIDED BY FINANCING ACTIVITIES............. 64,310 101,306
NET INCREASE IN CASH AND CASH EQUIVALENTS......... 144,922 77,130
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD.. 208,142 206,245
CASH AND CASH EQUIVALENTS AT END OF PERIOD........ $353,064 $283,375
See notes to condensed consolidated financial statements.
</TABLE>
<PAGE> 5
<TABLE>
<CAPTION>
LEGG MASON, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands of dollars)
(Unaudited)
Three Months
Ended June 30,
1999 1998
<S> <C> <C>
Net earnings.................................... $32,818 $24,364
Other comprehensive income (loss):
Net unrealized holding gains (losses)
arising during the period................... 1,070 (824)
Deferred income taxes.......................... (375) 322
Total other comprehensive income (loss)..... 695 (502)
Comprehensive income............................ $33,513 $23,862
See notes to condensed consolidated financial statements.
</TABLE>
<PAGE> 6
LEGG MASON, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of dollars)
June 30, 1999
(Unaudited)
1. Interim Basis of Reporting:
The accompanying unaudited condensed consolidated financial
statements of Legg Mason, Inc. and its wholly-owned subsidiaries
(the "Company") have been prepared in accordance with generally
accepted accounting principles for interim financial information.
The interim financial statements have been prepared utilizing the
interim basis of reporting and, as such, reflect all adjustments
(consisting only of normal recurring adjustments) which are, in
the opinion of management, necessary for a fair presentation of
the results for the periods presented. The nature of the
Company's business is such that the results of any interim period
are not necessarily indicative of results for a full year.
The information contained in the interim financial
statements should be read in conjunction with the Company's
latest Annual Report on Form 10-K filed with the Securities and
Exchange Commission. Where appropriate, prior years' financial
statements have been reclassified to conform with the 1999
presentation.
2. Net Capital Requirements:
The Company's broker-dealer subsidiaries are subject to the
Securities and Exchange Commission's Uniform Net Capital Rule.
The Rule provides that equity capital may not be withdrawn or
cash dividends paid if resulting net capital would fall below
specified levels. As of June 30, 1999, the broker-dealer
subsidiaries had aggregate net capital, as defined, of $219,435
which exceeded required net capital by $197,328.
3. Legal Proceedings:
The Company has been named as a defendant in various legal
actions arising primarily from securities and investment banking
activities, including certain class actions which primarily
allege violations of securities laws and seek unspecified damages
which could be substantial. While the ultimate resolution of
these actions cannot currently be determined, in the opinion of
management, after consultation with legal counsel, the actions
will be resolved with no material adverse effect on the
consolidated financial statements of the Company. However, if
during any period a potential adverse contingency should become
probable, the results of operations in that period could be
materially affected.
4. Recent Accounting Developments:
In June 1998, the Financial Accounting Standards Board
("FASB") issued Statement No. 133, "Accounting for Derivative
Instruments and Hedging Activities". In May 1999, the effective
date for implementation was delayed until fiscal years beginning
<PAGE> 7
after June 15, 2000. The impact of adopting Statement No. 133
will not be material to the Company's consolidated financial
statements.
5. Deferred Compensation Employee Stock Trust:
In July 1998, the Emerging Issues Task Force ("EITF")
reached a consensus on EITF Issue 97-14, "Accounting for Deferred
Compensation Arrangements Where Amounts Earned Are Held in a
Rabbi Trust and Invested." Under EITF 97-14, assets of the Trust
must be consolidated with those of the employer, and the value of
the employer's stock held in the rabbi trust must be classified
in stockholders' equity and generally accounted for in a manner
similar to treasury stock. In certain situations, the
corresponding deferred compensation liability must be recorded at
the fair market value of the shares held in the rabbi trust and
the changes in the fair market value of the deferred compensation
liability after September 30, 1998 must be recognized in
earnings. The Company adopted EITF 97-14 to account for its
Deferred Compensation Employee Stock Trust Plan ("Plan")
effective September 30, 1998.
During the quarter ended June 30, 1999, the Company recorded
a non-cash gain of $1,063, which is included in compensation and
benefit expense. This gain represents the change in the fair
market value of the stock held in trust from April 1, 1999 to
June 2, 1999.
On June 2, 1999, the Company amended the Plan to limit
distributions of Plan assets to shares of the Company's common
stock. In accordance with the provisions of EITF 97-14, changes
in the value of the stock held by the Plan subsequent to June 2,
1999 will no longer affect the Company's earnings. In addition,
as a result of the Plan amendment, the obligation previously
recorded as a deferred compensation liability has been
reclassified to stockholders' equity. Accordingly, the Trust
shares and the corresponding liability are presented as
components of stockholders' equity in the Statements of Financial
Condition.
6. Business Segment Information:
The Company provides financial services through four
business segments: Investment Advisory; Private Client; Capital
Markets; and Other. Segment results include all direct revenues
and expenses of the operating units in each segment and
allocations of indirect expenses based on specific methodologies.
Investment Advisory provides investment advisory services to
Company-sponsored mutual funds and asset management for
institutional and individual clients. Subadvisory revenues and
expenses are eliminated in consolidated segment reporting.
Private Client distributes a wide range of financial
products through its branch distribution network, including
equity and fixed-income securities, proprietary and non-
affiliated mutual funds and annuities. Net interest profit from
<PAGE> 8
customers' margin loan and credit account balances is included in
this segment.
Capital Markets consists of the Company's equity and fixed-
income institutional sales and trading, syndicate, corporate and
public finance activities. Sales credits associated with
underwritten offerings are reported in Private Client when sold
through retail distribution channels and in Capital Markets when
sold through institutional distribution channels.
Other businesses are principally the Company's real estate
business and unallocated corporate revenues and expenses.
<TABLE>
<CAPTION>
Segment financial results are as follows:
Three months
ending June 30,
1999 1998
<S> <C> <C>
Revenues:
Investment Advisory......... $ 77,996 $ 62,342
Private Client.............. 180,396 147,092
Capital Markets............. 49,303 30,971
Other....................... 6,911 8,338
$314,606 $248,743
Earnings before income taxes:
Investment Advisory......... $ 25,295 $ 20,356
Private Client.............. 18,957 14,542
Capital Markets............. 10,444 5,170
Other....................... 680 871
$ 55,376 $ 40,939
</TABLE>
The Company's revenues and earnings presented above are
substantially derived from domestic operations. Results of
international operations are not significant.
<PAGE>9
Item 2. Management's Discussion and Analysis of Results of
Operations and Financial Condition
RESULTS OF OPERATIONS
During the first fiscal quarter ended June 30, 1999, Legg Mason,
Inc. and its subsidiaries (the "Company") continued to benefit
from favorable conditions in the securities markets. Active and
rising equity markets and higher securities transaction volume
contributed to record revenues, net earnings and basic and
diluted earnings per share.
Quarter Ended June 30, 1999 Compared to Quarter Ended June 30,
1998
For the quarter ended June 30, 1999, revenues, net earnings and
earnings per share were substantially higher than in the quarter
ended June 30, 1998. Revenues increased 26% in the quarter to
$314.6 million from $248.7 million in the corresponding quarter
of the prior year. Net earnings were $32.8 million, up 35% from
$24.4 million in the prior year's quarter. Basic earnings per
share increased by 34% to $.59 from $.44. Diluted earnings per
share increased 32% to $.54 from $.41.
Revenues:
Investment advisory and related fees increased to a record $123.0
million, 36% higher than in the corresponding quarter of the
prior year. This increase was a result of growth in assets under
management in Company-sponsored mutual funds, fixed-income
investment advisory and fee-based brokerage accounts. As of June
30, 1999, Legg Mason subsidiaries served as investment advisors
to individual and institutional accounts and mutual funds with an
asset value of $93 billion, up 26% from $74 billion at June 30,
1998.
Commission revenues of $82.5 million increased 27% from $65.0
million in the prior year's quarter due to increased sales of
listed and over-the-counter securities and variable annuities.
Revenues from principal transactions increased 27% to $28.5
million, principally as a result of increased sales of fixed-
income and over-the-counter securities.
Investment banking revenues were $22.1 million, up 6% from $20.9
million in the prior year's quarter, primarily as a result of
increased corporate banking activities, principally public
offerings of equity securities and increased advisory fees.
Offsetting these increases were decreases in public offerings of
real estate investment trusts and lower fees from municipal
banking activities.
Other revenues increased 21% to $11.9 million, from $9.8 million
in the prior year's quarter, due to a gain on the sale of a
merchant banking investment and increased customer activity,
<PAGE> 10
partially offset by a decrease in the volume of loan originations
at the Company's mortgage banking subsidiary and losses on firm
investments.
Expenses:
Compensation and benefits increased 28% to $176.1 million, from
$137.1 million in the prior year's quarter, reflecting higher
profitability-based and sales-based compensation on increased
revenues, as well as higher fixed compensation costs, primarily
attributable to an increased number of employees. Included in
compensation and benefit expense during the quarter ended June
30, 1999 was a non-cash gain of $1,063 (see Note 5 of Notes to
Condensed Consolidated Financial Statements).
Occupancy and equipment rental increased 20% to $19.0 million,
from $15.8 million in the prior year's quarter, primarily
attributable to increased investments in technology and higher
rent at new and existing branch office locations.
Communications expense rose 5% to $12.6 million from $12.0
million in the prior year's quarter as a result of an increase in
business activity, which gave rise to increased costs for
telephone usage, quote services and printed materials.
Floor brokerage and clearing fees increased 33% to $2.0 million
reflecting an increase in securities transaction volume.
Other expenses increased 28% to $21.9 million from $17.1 million
in the prior year's quarter primarily as a result of higher
litigation-related and promotional expenses.
Interest:
Interest revenue increased 16% to $46.7 million from $40.2
million because of larger firm investment (predominantly funds
segregated for regulatory purposes)and customer margin account
balances, partially offset by lower average interest rates.
Interest expense increased 14% to $27.7 million from $24.2
million in the prior year's quarter as a result of larger
interest-bearing customer credit balances, partially offset by
lower average interest rates.
Income taxes:
Income taxes rose 36% to $22.6 million as a result of the
increase in pre-tax earnings. The effective tax rate increased
to 40.7% from 40.5% as a result of increased foreign operating
losses.
Liquidity and Capital Resources
There has been no material change in the Company's financial
position since March 31, 1999. A substantial portion of the
Company's assets is liquid, consisting mainly of cash and assets
readily convertible into cash. These assets are financed
<PAGE> 11
primarily by free credit balances, equity capital, Senior Notes,
bank lines of credit and other payables.
During the three months ended June 30, 1999, cash and cash
equivalents increased $144.9 million. Cash flows from financing
activities provided $64.3 million as a result of net proceeds
from short-term borrowings. Cash flows from operating activities
provided $56.2 million, attributable to lower levels of
segregated cash and net earnings, partially offset by increases
in net customer receivables and net securities borrowed. Cash
flows from investing activities provided $24.4 million,
principally as a result of a decline in investments in resale
agreements.
Year 2000
The Year 2000 issue affects the ability of computer systems to
correctly process dates after December 31, 1999. The Company has
completed the inventory and assessment phases of its Year 2000
project plan through an evaluation of its internal and third
party software, as well as its service providers' computer
systems, to determine their ability to accurately process in the
next millennium. The Company has also assessed the Year 2000
status of its non-information technology systems and equipment
which may contain embedded hardware or software.
Having identified and assessed those computer systems and
equipment that require modification, the Company has
substantially completed the remediation and testing phases of its
project plan. The Company has also completed the remediation,
testing and implementation of its critical internal systems. In
addition to internal testing, the Company actively participated
in testing among securities brokerage firms, securities
exchanges, clearing organizations, and other vendors.
In November 1997, the Company converted its securities brokerage
processing system to a vendor that is the principal service
provider of this type to the securities brokerage industry. The
vendor has confirmed to the Company that it has substantially
completed the necessary coding modifications and completed its
Year 2000 testing in the second quarter of 1999, as scheduled.
The vendor has offered additional testing opportunities, in which
the Company will participate. The Company has received similar
confirmation of Year 2000 readiness for its proprietary mutual
funds from the vendors that are the principal service providers
to the mutual fund industry.
The Company is also continuing to communicate with its remaining
vendors and other third parties, including its landlords and
utility suppliers, to determine the likely extent to which the
Company may be affected by third parties' Year 2000 plans and
target dates. The Company has received from its critical third
party vendors assurances or certification of their Year 2000
compliance.
<PAGE> 12
The failure to correct a material Year 2000 problem could result
in an interruption in, or a failure of, certain normal business
activities or operations. While the Company does not have a
current expectation of any material loss as a result of the Year
2000 issue, there can be no assurance that the Company's internal
systems or the systems of third parties on which the Company
relies will be remediated on a timely basis, or that a failure to
remediate by another party, or a remediation or conversion that
is incompatible with the Company's systems, would not have a
material adverse effect on the Company. The Company has developed
contingency plans in the event of Year 2000 failures. However,
there can be no assurance that any such contingency plans will
fully mitigate the effects of any such failure.
Based on information currently available, including information
provided by third party vendors, the Company expects its
aggregate expenditures for its Year 2000 project plan to be
approximately $4.0 million, of which an estimated $2.2 million
has been incurred as of June 30, 1999. A significant portion of
these costs will not be incremental costs to the Company, but
rather will represent the redeployment of existing information
technology and operations resources, primarily to test the
remediation efforts of the Company's third party vendors. The
Company expects to fund all Year 2000 related costs through
operating cash flows and a reallocation of the Company's overall
information technology spending. In accordance with generally
accepted accounting principles, Year 2000 expenditures will be
expensed as incurred. The costs of the Company's Year 2000
project and the dates on which the Company plans to complete the
Year 2000 modifications are based on management's best current
estimates, which were derived utilizing numerous assumptions of
future events, including the continued availability of certain
resources, third party compliance plans and other factors.
However, there can be no assurance that these estimates will
prove correct and actual results could differ materially from
those plans.
Forward-Looking Statements
The Company has made in this report, and from time to time may
otherwise make in its public filings, press releases and
statements by Company management, "forward-looking statements"
within the meaning of the Private Securities Litigation Reform
Act of 1995 concerning the Company's operations, economic
performance and financial condition. The words or phrases "can
be", "expects", "may affect", "may depend", "believes", "estimate",
"project" and similar words and phrases are intended to identify
such forward-looking statements. Such forward-looking statements
are subject to various known and unknown risks and uncertainties
and the Company cautions readers that any forward-looking
information provided by or on behalf of the Company is not a
guarantee of future performance. Actual results could differ
materially from those anticipated in such forward-looking
statements due to a number of factors, some of which are beyond
the Company's control, in addition to those discussed elsewhere
herein and in the Company's other public filings, press releases
and statements by Company management, including (i) the volatile
<PAGE> 13
and competitive nature of the securities business, (ii) changes
in domestic and foreign economic and market conditions, (iii) the
effect of federal, state and foreign regulation on the Company's
business, (iv) market, credit and liquidity risks associated with
the Company's underwriting, securities trading, market-making and
investment management activities, (v) failure of the Company, its
vendors or other third parties to achieve Year 2000 compliance,
(vi) impairment of acquired client contracts, (vii) potential
restrictions on the business of, and withdrawal of capital from,
certain subsidiaries of the Company due to net capital
requirements, (viii) potential liability under federal and state
securities laws and (ix) the effect of any future acquisitions.
Due to such risks, uncertainties and other factors, the Company
cautions each person receiving such forward-looking information
not to place undue reliance on such statements. All such
forward-looking statements are current only as of the date on
which such statements were made. The Company does not undertake
any obligation to publicly update any forward-looking statement
to reflect events or circumstances after the date on which any
such statement is made or to reflect the occurrence of
unanticipated events.
Item 3. Quantitative and Qualitative Disclosures About Market
Risk
During the quarter ended June 30, 1999, there were no material
changes to the information contained in Part II, Item 7A of the
Company's Annual Report on Form 10-K for the fiscal year ended
March 31, 1999.
<PAGE> 14
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
3.1 Articles of Incorporation of
the Company, as amended
(incorporated by reference to
Form 10-Q for the quarter ended
September 30, 1996)
3.2 By-laws of the Company as
amended and restated April 25, 1988
(incorporated by reference to the
Company's Annual Report on Form 10-
K for the year ended March 31,
1988)
11. Statement re: computation of
per share earnings
27. Statement re: financial data
schedule
(b) A Form 8-K Report was filed on
June 3, 1999 reporting under Items
5 and 7
<PAGE> 15
SIGNATURES
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 thereunto duly
authorized.
LEGG MASON, INC.
(Registrant)
DATE: August 12, 1999 /s/Timothy C. Scheve
Timothy C. Scheve
Executive Vice President
DATE: August 12, 1999 /s/Charles J. Daley, Jr.
Charles J. Daley, Jr.
Vice President
<PAGE> 16
INDEX TO EXHIBITS
Item no. Description
3.1 Articles of Incorporation of
the Company, as amended
(incorporated by reference to
Form 10-Q for the quarter ended
September 30, 1996)
3.2 By-laws of the Company as
amended and restated April 25, 1988
(incorporated by reference to the
Company's Annual Report on Form 10-
K for the year ended March 31,
1988)
11. Statement re: computation of
per share earnings
27. Statement re: financial data
schedule
EXHIBIT 11
STATEMENT RE: COMPUTATION OF EARNINGS PER SHARE
(in thousands, except per share amounts)
For the Three Months Ended June 30,
1999 1998
Basic Diluted Basic Diluted
Weighted average shares
outstanding:
Common stock 55,422 55,422 55,155 55,155
Shares available under
options - 3,605 - 3,694
Shares related to
deferred compensation - 1,033 - -
Issuable upon conversion
of debentures - - - 47
Weighted average common
and common equivalent
shares outstanding 55,422 60,060 55,155 58,896
Net earnings $32,818 $32,818 $24,364 $24,364
Adjustment related to
deferred compensation - (638) - -
Interest expense, net,
on debentures - 4 - 4
Net earnings applicable
to common stock $32,818 $32,184 $24,364 $24,368
Per share $ 0.59 $ 0.54 $ 0.44 $ 0.41
<TABLE> <S> <C>
<ARTICLE> BD
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-2000
<PERIOD-END> JUN-30-1999
<CASH> 353,064,000
<RECEIVABLES> 1,044,070,000
<SECURITIES-RESALE> 114,962,000
<SECURITIES-BORROWED> 497,207,000
<INSTRUMENTS-OWNED> 14,062,000
<PP&E> 57,051,000
<TOTAL-ASSETS> 3,810,449,000
<SHORT-TERM> 113,654,000
<PAYABLES> 2,254,903,000
<REPOS-SOLD> 0
<SECURITIES-LOANED> 472,924,000
<INSTRUMENTS-SOLD> 21,979,000
<LONG-TERM> 99,687,000
0
0
<COMMON> 5,669,000
<OTHER-SE> 617,431,000
<TOTAL-LIABILITY-AND-EQUITY> 3,810,449,000
<TRADING-REVENUE> 28,470,000
<INTEREST-DIVIDENDS> 46,686,000
<COMMISSIONS> 82,452,000
<INVESTMENT-BANKING-REVENUES> 22,096,000
<FEE-REVENUE> 123,033,000
<INTEREST-EXPENSE> 27,663,000
<COMPENSATION> 176,134,000
<INCOME-PRETAX> 55,376,000
<INCOME-PRE-EXTRAORDINARY> 55,376,000
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 32,818,000
<EPS-BASIC> 0.59
<EPS-DILUTED> 0.54
</TABLE>
