10-K

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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_____________________

FORM 10‑K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934.

For the fiscal year ended February 28, 2001 Commission file number 1‑8527

A.G. EDWARDS, INC.

State of Incorporation: DELAWARE I.R.S. Employer Identification No.: 43‑1288229

One North Jefferson Avenue

St. Louis, Missouri 63103

Registrant's telephone number, including area code: (314) 955‑3000

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
COMMON STOCK, $1 PAR VALUE	NEW YORK STOCK EXCHANGE
RIGHTS TO PURCHASE COMMON STOCK	NEW YORK STOCK EXCHANGE

Securities registered pursuant to Section 12(g) of the Act: NONE

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 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 by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [  X  ]

The aggregate market value of voting stock held by non‑affiliates was approximately $3.3 billion at May 1, 2001.

At May 1, 2001, there were 79,869,916 shares of A.G. Edwards, Inc. Common Stock, $1 par value, outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the A.G. Edwards, Inc. Annual Report Fiscal Year 2001 (the "2001 Annual Report to Stockholders") are incorporated by reference into Parts I, II and IV hereof. Portions of the Company's Proxy Statement filed with the SEC in connection with the Company's Annual Meeting of Stockholders to be held June 21, 2001 (the "Company's 2001 Proxy Statement") are incorporated by reference into Part III hereof. Other documents incorporated by reference in this report are listed in the Exhibit Index beginning on page 19 of this Form 10-K.

PART I

ITEM 1. BUSINESS.

(a) General Development of Business

A.G. Edwards, Inc., a Delaware corporation, is a holding company incorporated in 1983 whose principal subsidiary, A.G. Edwards & Sons, Inc. (Edwards), is successor to a partnership founded in 1887. A.G. Edwards, Inc. and its directly owned and indirectly owned subsidiaries (collectively referred to as the "Company") provide securities and commodities brokerage, asset management, insurance, trust, investment banking and other related financial services to individual, corporate, governmental and institutional clients. At February 28, 2001, the Company had more than 695 offices in 49 states, the District of Columbia, and London, England, and more than 17,000 full-time employees, including more than 7,000 financial consultants.

Edwards' business, primarily with individual clients, is conducted through one of the largest retail branch office networks (based upon number of offices and financial consultants) in the United States. No single client accounts for a significant portion of Edwards' business. Edwards is a member of all major securities exchanges in the United States, the National Association of Securities Dealers, Inc. (NASD) and the Securities Investor Protection Corporation (SIPC). Additionally, Edwards has memberships on several commodity exchanges and is registered with the Commodity Futures Trading Commission (CFTC) as a futures commission merchant (FCM).

AGE Commodity Clearing Corp. (Clearing), a commodity clearing subsidiary, is registered with the CFTC as a FCM and operates exclusively as a commodity clearing company for Edwards. Clearing is a member of all major U.S. commodities exchanges and the National Futures Association (NFA). The A.G. Edwards trust companies (collectively referred to as the Trust Companies), including a federally chartered savings bank, provide investment advisory, portfolio management and trust services. A.G. Edwards  & Sons (U.K.) Limited is a securities broker-dealer located in London, England. A.G. Edwards Capital, Inc. serves as general partner to four private equity partnerships formed to invest in portfolios of venture capital and buy-out funds and direct investments.

(b) Financial Information About Industry Segments

Information regarding industry segments is set forth in Note 1 (Summary of Significant Accounting Policies) of the Notes to Consolidated Financial Statements under the caption "Basis of Financial Information" appearing on page 33 of the 2001 Annual Report to Stockholders. Such information is hereby incorporated by reference.

""(c) Narrative Description of Business

Commissions, principal transactions, investment banking, and asset management and service fees were the principal sources of consolidated revenue for the last three fiscal years. The total amount of revenue contributed by these services, including the amount of total revenue by class of products or services that accounted for 10% or more of consolidated revenues, are set forth on page 28 of the 2001 Annual Report to Stockholders under the caption "Consolidated Five-Year Financial Summary." Such information is hereby incorporated by reference.

COMMISSIONS

Commission revenue represents the most significant source of revenue for the Company, accounting for more than 46% of total revenue during the last five years. The following briefly describes the Company's sources of commission revenue.

Listed and Over-the-Counter Securities. A significant portion of the Company's revenue is derived from commissions generated on securities transactions executed by Edwards, as a broker, in common and preferred stocks and debt instruments on exchanges or in the over‑the‑counter markets. Edwards' brokerage clients are primarily individual investors; however, resources continue to be directed to further the development of its institutional business. Edwards' commission rates for brokerage transactions vary with the size and complexity of the transactions, among other factors.

Options. Edwards acts as broker in the purchase and sale of option contracts to buy or sell securities, primarily common stocks and stock indexes. Edwards holds memberships for trading on principal option exchanges.

Mutual Funds. Edwards distributes mutual fund shares in continuous offerings of open-end funds. Income from the sale of mutual funds is derived primarily from the standard dealer's discount which varies as a percentage of the client's purchase price depending upon the size of the transaction and terms of the selling agreement. Revenues derived from mutual fund sales continue to be a significant portion of overall revenues. Edwards does not sponsor its own mutual fund products.

Commodities and Financial Futures. Edwards acts as broker in the purchase and sale of commodity futures contracts, financial futures contracts and options on commodity and financial futures contracts. These contracts cover agricultural products, precious metals, currency, interest rate and stock index futures. Substantially all of Edwards' clients' futures transactions are executed and cleared through Clearing. Nearly all transactions in futures contracts are executed with a relatively low margin deposit, usually 3% to 17% of the total contract amount. Consequently, the risk to the client and resulting credit risk assumed by Edwards is substantial, generally greater than on securities transactions. To limit its exposure, Edwards requires its clients to meet minimum net worth requirements and other established credit standards, in addition to the margin deposits. Regulations of some commodity exchanges limit the allowable upward or downward price fluctuations for each commodity on a given day. These restrictions on price fluctuations may preclude purchases or sales necessary to limit losses or realize gains.

As a member of the clearing associations of the principal commodity exchanges, Clearing has potentially significant financial exposure in the event other members default on their obligations to the clearing houses of such exchanges.

Insurance. As agent for several unaffiliated life insurance companies, Edwards distributes life insurance and tax‑deferred annuities. Edwards also provides financial planning services to assist individuals in structuring financial portfolios to achieve their financial goals. In addition, A.G. Edwards Life Insurance Company is licensed to issue life insurance policies under the laws of Missouri, but has not issued any to date.

PRINCIPAL TRANSACTIONS

Client transactions in the equity and fixed income over‑the‑counter markets may be effected by Edwards acting as principal as well as agent. Principal transactions, including market making, require maintaining inventories of securities to satisfy customer order flow. These securities are valued in the Company's consolidated financial statements at fair value and unrealized gains or losses are included in the results of operations. Securities fluctuations may be sudden and sharp as a result of changes in market conditions. To the extent Edwards can correctly anticipate such changes, risks may be reduced by varying inventory levels or by use of hedging strategies.

INVESTMENT BANKING

Edwards is an underwriter of corporate and municipal securities, certificates of deposit, as well as corporate and municipal unit investment trusts and closed-end mutual funds. Edwards' municipal underwriting activities include areas of specialization in primary and secondary schools, sports and entertainment, municipal finance, housing, higher education, health care, and public utilities. Corporate finance activities are focused on seven major sectors: utilities, technology, healthcare, real estate, financial services, consumer and energy. As an underwriter, usually in conjunction with other broker-dealers and financial institutions, Edwards purchases securities for resale to its clients. Edwards acts as a consultant to corporations and municipal entities in planning their capital needs and determining the most advantageous means for raising capital. It also advises clients in merger and acquisition activities and acts as agent in private placements.

Underwriting involves risk. As an underwriter, Edwards may incur losses if it is unable to resell the securities it is committed to purchase or if it is forced to liquidate all or a part of its commitment at less than the purchase price. Under federal and state securities laws, an underwriter is exposed to substantial potential liability for material misstatements or omissions of fact in the prospectus used to describe the securities being offered. Generally, issuers agree to indemnify underwriters against such liabilities, but otherwise, underwriters are not specifically insured. In addition, the commitment of capital to underwriting may reduce Edwards' regulatory net capital position and, consequently, its underwriting participation may be limited by the requirement that it must at all times be in compliance with the net capital rules administered by the Securities and Exchange Commission (SEC).

Although it is generally more profitable to manage or co‑manage an underwriting, as opposed to being a participant, managers generally commit to underwriting a greater portion of the offering than the other members of the underwriting group and consequently, managers assume a greater risk.

ASSET MANAGEMENT AND SERVICE FEES

Asset management and service fees consist primarily of revenues earned for providing support and services in connection with assets under third-party management, including mutual funds, and revenues from assets under management by Edwards. These revenues include fees based on the amount of client assets under management and transaction-related fees, as well as fees related to the administration of custodial and other specialty accounts.

Edwards, through the Trust Companies, provides its clients with personal, ERISA and custodial trust services.

Clients desiring professional money management are offered three types of account portfolio services. Edwards, acting as investment manager, offers portfolio management strategies based on the client's investment objectives. Edwards' investment consulting service offers the Private Advisor Service, which provides clients with third-party investment management, performance measurement, management search and related consulting services. The Pathways^(SM) Spectrum, Fund Navigator and Fund Advisor investment advisory programs are personalized, fee-based asset allocation programs that utilize load and no-load mutual fund investments. Clients select from established asset allocation models, or customize their own, based on their investment objectives, risk tolerance and time horizon. In addition, under the Client Choice program, clients can execute transactions and receive ongoing personalized advice from their financial consultant for an annual fee based on the value of their assets held at Edwards.

Edwards offers the UltraAsset Account, Total Asset Account^(r) and the Cash Convenience Account, which combine a full-service brokerage account with a money market fund. These programs provide for the automatic investment of customer free credit balances in one of several money market funds. Interest is not paid on uninvested credit balances held in client accounts. In addition, the UltraAsset and Total Asset Accounts allow clients access to their margin and money market accounts through the use of debit cards and checking account services provided by a major bank. The UltraAsset Account offers additional advanced features and special investment portfolio reports.

Edwards provides custodial services to its clients for the various types of self-directed individual retirement accounts provided for under the Internal Revenue Code.

MARGIN FINANCING

Securities transactions are executed on a cash or margin basis. In margin transactions, Edwards extends credit to its clients for a portion of the purchase price, with the clients' securities held as collateral. The amount of credit is limited by the initial margin regulations issued by the Board of Governors of the Federal Reserve System. The current prescribed minimum initial margin for equity securities is equal to 50% of the value of equity securities purchased. The regulations of the various exchanges require minimum maintenance margins, which are below the initial margin. Edwards' maintenance requirements generally exceed the exchanges' requirements. Such requirements are intended to reduce the risk that a market decline will reduce the value of the collateral below that of the client's indebtedness before the collateral can be liquidated.

A substantial portion of the Company's assets and obligations result from transactions with clients who have provided financial instruments as collateral. The Company manages its risk associated with these transactions through position and credit limits, and the continuous monitoring of collateral. Additional information regarding risks associated with client transactions is set forth in Note 10 (Financial Instruments) of the Notes to Consolidated Financial Statements under the caption "Off-Balance Sheet Risk and Concentration of Credit Risk" appearing on page 38 of the 2001 Annual Report to Stockholders. Such information is hereby incorporated by reference.

A client, borrowing in a margin account, is charged an interest rate based on the broker call loan rate plus up to an additional 2 1/2%, depending on the amount of the client's borrowings during each interest period. Interest earned on these balances represents an important source of revenue for Edwards.

The Company utilizes a variety of sources to finance client margin accounts, including its stockholders' equity, cash received from loans of the clients' collateral securities to other brokers, customer free credit balances, and to the extent permitted by regulations, borrowings from banks, either unsecured or secured by the clients' collateral securities.

PRIVATE CLIENT SERVICES

Edwards' Private Client Services group assists individuals and businesses with a wide range of financial and investment needs. Individual investors can receive tailored asset allocation, tax- and risk-reduction strategies, portfolio reviews of stocks, bonds and mutual funds (including concentrated equity strategies) and comprehensive estate planning recommendations. Closely-held and publicly-traded business clients can access services for risk management, employee benefit programs (retirement plans and key employee compensation), capital formation and management and ownership succession.

CPI Qualified Plan Consultants, Inc., a wholly owned subsidiary of the Company, provides third-party administration services for employee benefit plans to closely held businesses and corporations.

INVESTMENT ACTIVITIES

The Company's investment activities include, among other things, making investments in equity and equity-related securities in connection with private investment transactions, either for the accounts of private investment funds in which the Company participates or, to a lesser extent, for its own account. These activities include venture capital investments and investments in portfolio and operating companies. The fair value of these investments is subject to a high degree of volatility and may include significant risks of loss while attempting to obtain higher returns than those available from publicly traded securities..

RESEARCH

Edwards provides both technical market and fundamental analysis of numerous industries and individual securities for use by its financial consultants and clients. In addition, review and analysis of general economic conditions, along with asset allocation recommendations, are also available. These services are provided by Edwards' research analysts, economists and market strategists. Revenues from research activities are derived principally through resulting transactions on an agency or principal basis.

COMPETITION

All aspects of the Company's business are highly competitive. Edwards competes with numerous broker-dealers, including on-line services, some of whom possess greater financial resources than the Company. Edwards competes for clients on the basis of price, quality of service, financial resources and reputation. There is constant competition to attract and retain personnel within the securities industry.

The 1999 Gramm-Leach-Bliley Act, which repealed United States Laws that separated commercial banking, investment banking and insurance activities, has increased the number of companies competing for a similar client base, including the client base serviced by the Company. Thus, competition for the investment dollar and for clients has increased from other sources, such as commercial banks, savings institutions, mutual fund management companies, investment advisory companies as well as from other companies offering insurance, real estate, private equity investments, and other investment services both in the United States and globally. In addition, the financial services industry has experienced consolidation and convergence in recent years, as financial institutions involved in a broad range of financial services industries have merged and different types of financial companies have begun offering a broader array of securities and other investment products. These trends are expected to continue and could result in the Company's competitors gaining greater capital and other resources, such as a broader range of products and services and geographic diversity.

REGULATION

Edwards, as a broker‑dealer and FCM, is subject to various federal and state laws which specifically regulate its activities as a broker‑dealer in securities and commodities, as an investment advisor and as an insurance agent. Clearing, as a FCM, is regulated as a broker in commodities. Edwards and Clearing are also subject to various regulatory requirements imposed by the securities and commodities exchanges and the NASD. The primary purpose of these requirements is to enhance the protection of customer assets. Under certain circumstances, these rules may limit the ability of the Company to make withdrawals of capital from Edwards and Clearing. These laws and regulatory requirements generally subject Edwards and Clearing to standards of solvency with respect to capital requirements, financial reporting requirements, approval of qualifications of personnel engaged in various aspects of its business, record keeping and business practices, the handling of their clients' funds resulting from securities and commodities transactions and the extension of credit to clients on margin transactions. Infractions of these rules and regulations may include suspension of individual employees or their supervisors, termination of employees, limitations on certain aspects of Edwards' and Clearing's regulated businesses, as well as censures and fines, or proceedings of a civil or criminal nature which could result in a temporary or permanent suspension of a part or all of Edwards' and Clearing's activities. Information regarding regulatory minimum net capital is set forth in Note 5 of the Notes to Consolidated Financial Statements under the caption "Net Capital Requirements" appearing on page 36 of the 2001 Annual Report to Stockholders. Such information is hereby incorporated by reference.

A.G. Edwards & Sons (U.K.) Limited is registered under the laws of the United Kingdom and is regulated as a securities broker-dealer by the Securities and Futures Authority. A.G. Edwards Trust Company FSB, a federal savings bank, is regulated by the Office of Thrift Supervision (OTS), the Federal Deposit Insurance Corporation (FDIC) and by the SEC as an investment advisor. A.G. Edwards Trust Company (Missouri) is regulated by the State of Missouri Division of Finance. A.G. Edwards Life Insurance Company is regulated by the insurance laws of the State of Missouri. A.G. Edwards Capital, Inc. is registered with the SEC as an investment advisor.

ITEM 2. PROPERTIES.

The Company's headquarters are located at One North Jefferson Avenue, St. Louis, Missouri. It consists of several buildings owned by the Company which contain approximately 1,700,000 square feet of general office space, as well as underground and surface parking and a five-story parking garage. The buildings are located on approximately 18 acres of land owned by the Company. In addition, the Company owns four additional office buildings in the St. Louis area, which are used for information technology facilities, contingency planning facilities and a trust company office. The Company is currently expanding its headquarters with the construction of an additional office building, a learning center and a parking garage. The Company owns an additional 22 acres of land adjacent to its headquarters and is using this property principally for this expansion as well as additional employee parking areas.

The Company's branch offices occupy leased premises throughout the United States, as well as an office in London, England. Aggregate annual rental for branch office premises for the year ended February 28, 2001, was $62,883,000.

ITEM 3. LEGAL PROCEEDINGS.

(a) Litigation

The Company is a defendant in lawsuits and arbitrations, in some of which plaintiffs claim substantial amounts, relating primarily to its securities and commodities business. While results of litigation cannot be predicted with certainty, management, after consultation with counsel, believes that resolution of all such litigation will have no material adverse effect on the consolidated financial statements of the Company.

""(b) Proceedings Terminated during the Fourth Quarter of the Fiscal Year

""Covered by This Report.

Not applicable.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

There were no matters submitted to a vote of security holders during the fourth quarter of the fiscal year ended February 28, 2001.

EXECUTIVE OFFICERS OF THE COMPANY

The following table sets forth the executive officers of the Company as of May 1, 2001. Executive officers are appointed by the Board of Directors to hold office until their successors are appointed and qualified.

Name	Age	Office & Title	Year First Appointed Executive Officer of the Company
Robert L. Bagby	57	Chairman of the Board and Chief Executive Officer of the Company and Edwards since March 2001. Vice Chairman of the Board, Executive Vice President and Director of the Branch Division of Edwards prior to March 2001. Employee of Edwards for 26 years. Director of Edwards since 1979.	1991
Benjamin F. Edwards IV	45	Vice Chairman of the Board of the Company and Edwards since 1999. President of the Company and Edwards since March 2001. Executive Vice President and Director of the Sales and Marketing Division of Edwards since 1997. Director of the Investment Banking Division of Edwards from 1999 to 2000. Regional Manager of Edwards from 1995 to 1997. Employee of Edwards for 23 years. Director of Edwards since 1994.	1996
Ronald J. Kessler	53	Vice Chairman of the Board of the Company and Edwards since March 2001. Executive Vice President of Edwards. Director of the Operations Division since 1998. Assistant Director of Operations prior to 1998. Employee of Edwards for 33 years. Director of Edwards since 1989.	1996
Mary V. Atkin	46	Executive Vice President of Edwards. President of A.G. Edwards Technology Group, Inc. since 2001.  Director of the Information Technology Division of Edwards from 1999 to 2001. Manager of Corporate Communications of Edwards prior to 1999. Employee of Edwards for 23 years. Director of Edwards since 1993.	1999
Donnis L. Casey	53	Executive Vice President of Edwards. Director of the Staff Division of Edwards since 1996. Assistant Director of the Staff Division of Edwards prior to 1996. Employee of Edwards for 34 years. Director of Edwards since 1993.	1996
Charles J. Galli	60	Senior Vice President of Edwards. Regional Manager since 1988 and Branch Manager. Employee of Edwards for 22 years. Director of Edwards since 1990.	2001
Alfred E. Goldman	67	Executive Vice President, Director of Market Analysis of Edwards. Employee of Edwards for 41 years. Director of Edwards since 1967.	1991
Richard F. Grabish	52	Chairman and Chief Executive Officer of A.G. Edwards Trust Company since March 2001. President of A.G. Edwards Trust Company from 1987 to February 2001. Senior Vice President of Edwards. Assistant Director of Sales and Marketing Division of Edwards. Employee of Edwards for 20 years. Director of Edwards since 1988.	2001
Douglas L. Kelly	52	Vice President and Secretary and, since March 2001, Chief Financial Officer and Treasurer of the Company. Executive Vice President, Secretary, Director of Law and Compliance, and, since March 2001, Chief Financial Officer and Treasurer of Edwards. Employee of Edwards for 7 years. Director of Edwards since 1994.	1994
Thomas H. Martin Jr.	41	Assistant Treasurer of the Company since 1999. Vice President of Edwards. Controller of the Company and Edwards since 1999. Accounting Manager prior to 1999. Employee of Edwards for 20 years.	1999
Paul F. Pautler	56	Executive Vice President of Edwards. Director of Investment Banking since 2000. Director of Corporate Finance since 1999. Managing Director of Mergers and Acquisitions 1997 to 1999. Employee of Edwards for 4 years. Partner at the law firm of Thompson Coburn LLC for 16 years prior to joining Edwards. Director of Edwards since 2000.	2000
Robert A. Pietroburgo	44	Executive Vice President and Director of the Branch Division of Edwards since March 2001. Regional Manager of Edwards from March 2000 to February 2001. Branch Manager of Edwards prior to 2000. Employee of Edwards for 14 years. Director of Edwards since March 2001.	2001
Joseph G. Porter	40	Assistant Treasurer of the Company since 1999. Senior Vice President and Assistant Director of Administration of Edwards since 2000. Principal Accounting Officer of the Company and Edwards since 1999. Accounting Manager prior to 1999. Employee of Edwards for 18 years. Director of Edwards since March 2001.	1999

PART II

TEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED

STOCKHOLDER MATTERS.

The information required by this item is contained in the 2001 Annual Report to Stockholders on page 8 under the caption "Quarterly Financial Information" and on page 49 under the caption "Shareholder Information." Such information is hereby incorporated by reference. The approximate number of equity security holders of record includes customers who hold the Company's stock in their accounts on the books of Edwards.

ITEM 6. SELECTED FINANCIAL DATA.

The information required by this item is contained on page 28 of the 2001 Annual Report to Stockholders under the caption "Consolidated Five-Year Financial Summary." Such information is hereby incorporated by reference.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS.

The information required by this item is contained on pages 23 through 27 of the 2001 Annual Report to Stockholders under the caption "Management's Financial Discussion." Such information is hereby incorporated by reference.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT

MARKET RISK

The information required by this item is contained in Management's Financial Discussion under the caption "Risk Management" on page 27 of the 2001 Annual Report to Stockholders. Such information is hereby incorporated by reference.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

The information required by this item is contained in the Consolidated Financial Statements and Notes thereto, together with the Independent Auditors' Report thereon of Deloitte & Touche LLP dated April 18, 2001, and under the caption "Quarterly Financial Information" on page 8 and pages 29 through 39, respectively, of the 2001 Annual Report to Stockholders. Such information is hereby incorporated by reference.

Additional Information:

Edwards maintains a Stockbrokers Blanket Bond insuring various loss contingencies. Under the terms of the current policy, Edwards is responsible for the first $1,000,000 of each such occurrence.

The securities held by Edwards for client accounts are protected up to $500,000, including up to $100,000 for cash claims, by SIPC. In addition to the SIPC coverage, securities and cash held in client accounts are provided additional protection up to the full value of the accounts (as determined by SIPC) by a commercial insurance company.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON

ACCOUNTING AND FINANCIAL DISCLOSURE.

None.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

The information required by this item is included under the caption "Election of Directors ‑ Nominees for Directors" on pages 3 through 6 of the Company's 2001 Proxy Statement and in Part I of this Form 10-K on pages 10 through 12 under the caption "Executive Officers of the Company." Such information is hereby incorporated by reference.

ITEM 11. EXECUTIVE COMPENSATION.

The information required by this item is included under the captions "Director Compensation," "Executive Compensation" and "Performance Graph" on pages 8 through 19 of the Company's 2001 Proxy Statement. Such information is hereby incorporated by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND

MANAGEMENT.

The information required by this item is contained on pages 7 and 8 of the Company's 2001 Proxy Statement under the caption "Ownership of the Company's Common Stock." Such information is hereby incorporated by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

The information required by this item is contained on page 20 of the Company's 2001 Proxy Statement under the caption "Certain Transactions." Such information is hereby incorporated by reference.

PART IV

ITEM 14. FINANCIAL STATEMENTS, FINANCIAL STATEMENT SCHEDULES,

EXHIBITS AND REPORTS ON FORM 8‑K .

		INDEX	PAGE NUMBER
(a)	1.	Financial Statements
		Independent Auditors' Report	(X)
		Consolidated balance sheets	(X)
		Consolidated statements of earnings	(X)
		Consolidated statements of stockholders' equity	(X)
		Consolidated statements of cash flows	(X)
		Notes to consolidated financial statements	(X)

(X) The consolidated financial statements, together with the Independent Auditors' Report thereon of Deloitte & Touche LLP included on pages 29 through 39 of the Company's 2001 Annual Report to Stockholders, are hereby incorporated by reference.

2. Financial Statement Schedules

All schedules are omitted due to the absence of conditions under which they are required or because the required information is provided in the consolidated financial statements or notes thereto.

3. Exhibits*

Some of the following exhibits were previously filed as exhibits to other reports or registration statements filed by the Registrant and are incorporated by reference as indicated below.

3(i)	Certificate of Incorporation filed as Exhibit 3(i) to the Registrant's Form 10-K for the fiscal year ended February 28, 1993.
3(ii)	By‑laws filed as Exhibit 3(ii) to the Registrant's Form 10-K for the fiscal year ended February 28, 1994.
4(i)	Reference is made to Articles IV, V, X, XII, XIII and XV of the Certificate of Incorporation filed as Exhibit 3(i) to this Form 10-K.
4(ii)	Reference is made to Article II, Article III Sections 1 and 15, Article IV Sections 1 and 3, Article VI and Article VII Sections 1-3 of the By-laws filed as Exhibit 3(ii) to this Form 10-K.
4(iii)	Rights Agreement dated as of December 30, 1988 between A.G. Edwards, Inc. and Boatmen's Trust Company as Rights Agent filed as Exhibit 4 to the Registrant's Form 8-K Report dated December 30, 1988.
4(iv)	Amendment No. 1 to the Rights Agreement dated December 30, 1988, between A.G. Edwards, Inc. and Boatmen's Trust Company as Rights Agent, dated May 24, 1991 filed as Exhibit 4.4 to Registrant's Form 10-K for the fiscal year ended February 29, 1992.
4(v)	Amendment No. 2 to the Rights Agreement dated December 30, 1988, between A.G. Edwards, Inc. and Boatmen's Trust Company as Rights Agent, dated June 22, 1995 filed with the Registrant's Form 8-A/A on August 17, 1995.
4(vi)	Amendment No. 3 to the Rights Agreement dated December 30, 1988, between A.G. Edwards, Inc. and Boatmen's Trust Company as Rights Agent, dated July 11, 1997, filed as Exhibit 4.6 to Registrant's Form 10-K for the fiscal year ended February 28, 1998
4(vii)	Amendment No. 4 dated December 15, 2000, to the Rights Agreement dated December 30, 1988 filed as Exhibit 4.7 to Registrant's Form 8 A/A on December 19, 2000.
10	A.G. Edwards, Inc. 1988 Incentive Stock Plan (as amended and restated) filed as Exhibit 10 to this Form 10-K.
11	Computation of per share earnings is set forth in Note 8 (Stockholders' Equity) of the Notes to Consolidated Financial Statements under the caption "Earnings Per Share" appearing on page 37 of the 2001 Annual Report to Stockholders and incorporated herein by reference.
13	The 2001 Annual Report to Stockholders. Except for those portions of pages expressly incorporated by reference, the 2001 Annual Report to Stockholders is not deemed filed as part of this Annual Report on Form 10-K.
21	Registrant's Subsidiaries.
23	Independent Auditors' Consent.
24	Power of Attorney

*Numbers correspond to document numbers in Exhibit Table of Item 601 of Regulation S-K.

(b) Reports on Form 8-K

No reports on Form 8-K were filed during the fourth quarter of the year ended February 28, 2001.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

A.G. EDWARDS, INC.

(Registrant)

Date: May 24, 2001 By /s/ Robert L. Bagby                                                          Robert L. Bagby
        Chairman of the Board and
        Chief Executive Officer

POWER OF ATTORNEY EXHIBIT 24

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Robert L. Bagby, and Douglas L. Kelly and each of them, his true and lawful attorneys‑in‑fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign this Report, any and all amendments to this Report, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys‑in‑fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys‑in‑fact and agents or either of them, or their or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

/s/ Robert L. Bagby                        Robert L. Bagby	Chairman of the Board, Chief Executive Officer and Director	May 24, 2001
/s/ Benjamin F. Edwards IV           Benjamin F. Edwards IV	Vice Chairman of the Board, President and Director	May 24, 2001
/s/ Ronald J. Kessler                       Ronald J. Kessler	Vice Chairman of the Board and Director	May 24, 2001
/s/ Dr. E. Eugene Carter                 Dr. E. Eugene Carter	Director	May 24, 2001
/s/ Charmaine S. Chapman             Charmaine S. Chapman	Director	May 24, 2001
/s/ Samuel C. Hutchinson Jr.          Samuel C. Hutchinson Jr.	Director	May 24, 2001
/s/ Mark S. Wrighton                      Mark S. Wrighton	Director	May 24, 2001
/s/ Douglas L. Kelly                        Douglas L. Kelly	Treasurer and Chief Financial Officer	May 24, 2001
/s/ Thomas H. Martin Jr.                Thomas H. Martin Jr.	Controller	May 24, 2001
/s/ Joseph G. Porter                        Joseph G. Porter	Principal Accounting Officer	May 24, 2001

EXHIBIT INDEX

Exhibit	Description
10	1988 Incentive Stock Plan (as amended and restated)
13	2001 Annual Report to Stockholders.
21	Registrant's Subsidiaries.
23	Independent Auditors' Consent.
24	Power of Attorney. Included on Signature Page 18.

EX-10

A.G. EDWARDS, INC.

1988 INCENTIVE STOCK PLAN

2001 Restatement

Recitals

         This Plan originally became effective in April 1988. It was amended in (1) June 1990 by the stockholders of the Company to increase the number of shares of Common Stock available under the Plan to 4,060,000 shares (which number has since been adjusted to 7,612,500 shares to reflect a 50% and a 25% stock dividend, treated as a stock split), (2) April 1992 by the Board of Directors to comply with changes under Section 16(b) of the Exchange Act; (3) June 1992 by the stockholders of the Company to increase the number of shares of Common Stock available under the Plan to 13,862,500 shares (which number has since been adjusted to 17,328,125 to reflect a 25% stock dividend, treated as a stock split); (4) June 1995 by the stockholders of the Company to increase the number of shares of Common Stock available under the Plan to 26,328,125 shares (which number has since been adjusted to 39,492,188 to reflect a 50% stock dividend, treated as a stock split); (5) June 1999 by the stockholders of the Company to increase the number of shares of Common Stock available under the Plan to 54,492,188 shares; and (6) September, 1999 by the Board of Directors to modify the eligibility requirements and restate the Plan.

          The Company now wishes to amend the Plan to modify (1) the definition of Market Value; (2) the provisions governing elections between Options and Restricted Stock; (3) the provisions governing awards to Senior Participants for Options and Restricted Stock under the Plan; and (4) to comply with changes under Section 16(b) of the Exchange Act.

         NOW, THEREFORE, effective March 1, 2001, the Plan is hereby amended and restated in its entirety as follows:

1.     Purpose.

        The purpose of the A.G. Edwards, Inc. 1988 Incentive Stock Plan (the "Plan") is to motivate employees of A.G. Edwards, Inc. (the "Company") and its subsidiaries through added incentives to make a maximum contribution to Company objectives.

2.     Definitions.

        As used in the Plan, the following words shall have the following meanings:

        "Administrator" has the meaning ascribed to it in Section 3(a) of the Plan.

        "Award Amount" has the meaning ascribed to it in Section 5(b) of the Plan.

        "Benefits" means the benefits awarded to Participants as described in Sections 5 through 9 of the Plan. Benefits may be awarded separately or in any combination.

        "Board of Directors" means the Board of Directors of the Company.

        "Business Day" means any day on which the New York Stock Exchange is open for business.

          "Change in Control" means the occurrence of any of the following events without the prior approval of the Board of Directors: (a) a merger, consolidation or reorganization of the Company in which the Company does not survive as an independent entity; (b) a sale of all or substantially all of the assets of the Company; (c) the first purchase of shares of Common Stock of the Company pursuant to a tender or exchange offer for more than 20% of the Company's outstanding shares of Common Stock; or (d) any change in control of a nature that, in the opinion of the Board of Directors, would be required to be reported under the federal securities laws; provided that such a change in control shall be deemed to have occurred if (i) any person is or becomes the beneficial owner, directly or indirectly, of securities of the Company representing 40% or more of the combined voting power of the Company's then outstanding securities; or (ii) during any period of two consecutive years, individuals who at the beginning of such period constitute the Board of Directors of the Company cease for any reason to constitute a majority thereof unless the election of any director, who was not a director at the beginning of the period, was approved by a vote of at least 70% of the directors then still in office who were directors at the beginning of the period.

        "Code" means the Internal Revenue Code of 1986, as amended. Reference to a section of the Code shall include: (a) that section and any comparable section or sections of any future legislation that amends, supplements or supersedes that section, and (b) any rules or regulations promulgated under such section.

        "Common Stock" means the $1.00 par value common stock of the Company, together with the Common Stock Purchase Rights (as described in the Rights Agreement dated December 30, 1988 by and between the Company and Boatmen's Trust Company, as Rights Agent, as amended) associated with such common stock.

        "Company" has the meaning ascribed to it in Section 1 of the Plan.

        "Competition with the Company" means, with respect to any individual, owning, managing, controlling, participating in or becoming connected with, as an officer, employee, partner, stockholder, consultant or otherwise, any business, individual, partnership or corporation that is engaged significantly, or is planning to become engaged significantly, in a business which, directly or indirectly, competes with a business of the Company or a Subsidiary; provided, merely acquiring or holding shares of any business entity that has its securities listed on a national securities exchange or quoted in the daily listing of over-the-counter market securities shall not constitute such competition so long as such individual and members of such individual's family do not own more than 1% of the voting securities of such an entity.

          "Corporate Executive Bonus" has the meaning ascribed to it in Section 4 of the Plan.

        "Corporate Executive Bonus Plan" has the meaning ascribed to it in Section 4 of the Plan.

        "Date of Grant" has the meaning ascribed to it in Section 7(b) of the Plan.

        "Deferred Award Date" has the meaning ascribed to it in Section 6(e) of the Plan.

          "Disability" means a total and permanent disability that renders a Participant unable to engage in any, substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or that has lasted or can be expected to last for a continuous period of not less than three years.

        "Disinterested Administrator" means an Administrator comprised of the Board of Directors or a committee of two or more directors of the Company, each of whom is a a Non-Employee Director.

          "Eligible Employee" has the meaning ascribed to it in Section 4 of the Plan.

        "Employee" means any individual who is employed by the Employer.

        "Employee Stock Purchase Plan" has the meaning ascribed to it in Section 7 of the Plan.

        "Employer" means the Company and its Subsidiaries, while a Subsidiary.

           "Exchange Act" means the Securities Exchange Act of 1934, as amended. Reference to a section of the Exchange Act shall include: (a) that section and any comparable section or sections of any future legislation that amends, supplements or supersedes that section, and (b) any rules or regulations promulgated under such section.

        "Exercise Price" has the meaning ascribed to it in Section 5(d) of the Plan.

        "Incentive Stock Options" has the meaning ascribed to it in Section 8 of the Plan.

        "Market Value" means, with respect to a share of Common Stock on a particular date, the average of the highest and lowest quoted selling prices on the particular date. If there are no sales on that date, the Market Value shall be the average of the highest and lowest quoted selling prices on the next trading date.

       "Non-Employee Director" has the meaning set forth in Rule 16b-3(b)(3)(i) promulgated under Section 16 of the Exchange Act or any successor rule thereto.

        "Offered Shares" has the meaning ascribed to it in Section 7(b) of the Plan.

        "Offering" has the meaning ascribed to it in Section 7 of the Plan.

          "Offering Period" has the meaning ascribed to it in Section 7(e) of the Plan.

        "Option Award Date" has the meaning ascribed to it in Section 5(a) of the Plan.

        "Option Award Amount" has the meaning ascribed to it in Section 5(c) of the Plan.

        "Option Awards" has the meaning ascribed to it in Section 5(a) of the Plan.

        "Option Determination Date" has the meaning ascribed to it in Section 5(a) of the Plan.

        "Options" has the meaning ascribed to it in Section 5(a) of the Plan.

          "Over 60 Participant" has the meaning ascribed to it in Section 6(e) of the Plan.

        "Participant" means each Eligible Employee who receives a Benefit or an award of Benefits under the Plan.

        "Phantom Stock Credits" has the meaning ascribed to it in Section 6(e) of the Plan.

        "Plan" has the meaning ascribed to it in Section 1 of the Plan.

        "Purchase Price" has the meaning ascribed to it in Section 7(d) of the Plan.

          "Reporting Person" means any person who is a director of the Company or any officer of the Company as that term is defined in Rule 16a-1(f), promulgated under Section 16 of the Exchange Act or any successor rule thereto.

        "Restricted Period" has the meaning ascribed to it in Section 6(c)(1) of the Plan.

       "Restricted Share Award Amount" has the meaning ascribed to it in Section 6(b) of the Plan.

       "Restricted Share Award Date" has the meaning ascribed to it in Section 6(a) of the Plan.

       "Restricted Share Awards" has the meaning ascribed to it in Section 6(a) of the Plan.

       "Restricted Share Determination Date" has the meaning, ascribed to it in Section 6(a) of the Plan.

       "Restricted Shares" has the meaning ascribed to it in Section 6(a) of the Plan.

       "Rule l6b-3" means Rule 16b‑3 promulgated under Section 16 of the Exchange Act, or any successor rule thereto.

       "Section 423 Options" has the meaning ascribed to it in Section 7(a) of the Plan.

       "Senior Participant" has the meaning ascribed to it in Section 5(f) of the Plan.

       "Stock Purchase Plan Eligible Employee" has the meaning ascribed to it in Section 7(a) of the Plan.

       "Subsidiary" means any corporation, partnership, joint venture or business trust, control of which is owned, directly or indirectly, by the Company; provided, for the purpose of any Incentive Stock Options and options granted pursuant to the Employee Stock Purchase Plan. "Subsidiary" shall have the same meaning as the term "subsidiary corporation" as defined in Section 424 of the Code.

       "Termination of Employment," whether or not capitalized when used herein, or any other similar phrase used herein to refer to the employment of an Employee with the Employer being terminated means the Employee ceases to be employed by the Employer whether the cessation of employment is voluntary or involuntary and regardless of whether the employment of the Employee with the Employer ceases because the Employee quits, is discharged, retires, is disabled or dies.

       "Termination for Aggravated Cause" means a Termination of Employment (whether voluntary or involuntary) because any of the following acts or events have occurred: any action or failure to act by a Participant that results in or is likely to result in detriment to the Employer,, employees or customers; violation of any securities law; dishonesty whether or not resulting in a direct or indirect monetary loss; insubordination; drunkenness; use of harmful drugs; willful destruction of property; provocation or continuous agitation of the Employer's customers or employees; or conviction of a felony or a misdemeanor.

       "Vesting Period" has the meaning ascribed to it in Section 5(d) of the Plan.

3.    Administration.

         (a)     Appointment. The Plan shall be administered by the Board of Directors of the Company or by one or more committees the members of which need not be members of the Board of Directors (collectively, the "Administrator") appointed by the Board of Directors. Such a committee may be appointed by designating another committee, such as the Compensation Committee of A.G. Edwards & Sons, Inc., to serve as Administrator. All of the duties of the Administrator may be assigned to one committee or, if the Board of Directors appoints more than one committee to serve as Administrator, the Board of Directors may allocate the specific duties of the Administrator among such committees. A particular committee to whom a specific duty is so allocated shall have the sole responsibility and authority for carrying out such duty. A committee shall continue to serve in its appointed role until its role is terminated or changed by the Board of Directors.

       (b)     Duties. Subject to the provisions of the Plan, the Administrator shall have exclusive authority to interpret and administer the Plan (including, without limitation, developing or approving forms to implement all or any part of the Plan), to delegate its authority and duties under the Plan, and to take all such steps and make all such rules or determinations in connection with the Plan and any of the Benefits provided by the Plan as it may deem necessary or advisable (including, without limitation, rules relating to any tax withholding requirements, designation of beneficiaries, ownership of shares in joint names and restoration of awards for rehired Participants); provided, however, the Administrator shall not have the authority to change the amount, price or timing of any Benefits awarded by the terms of any formula contained in the Plan; provided, further, with respect to the forfeiture of any Benefits, only a Disinterested Administrator may make a determination that a Reporting Person has incurred a Termination for Aggravated Cause.

4.    Eligibility.

       "Eligible Employee" shall include any individual who is an Employee of the Employer at the time Benefits under the Plan are awarded and who (a) is a non-Reporting Person who satisfies the eligibility requirements established by the Administrator, from time to time, taking into account such factors as the Administrator may consider relevant (which may include, but need not include, the nature of services rendered by the Employee or the capacity of the Employee to contribute to the success of the Employer), or (b) is a Reporting Person who is a participant in the "Corporate Executive Bonus Plan" as of October 1, and as of the last day, of the fiscal year of the Company for which the Benefits are awarded.

       For the purposes of this Section 4 and Section 5: (a) "Corporate Executive Bonus Plan" means the compensation plan by such name together with the Performance Plan for Executives each as adopted by the Company or a Subsidiary of the Company, and shall continue to refer to such plans even if the name or terms of such plans are changed in the future, whereby officers of the Company and Subsidiaries who are not otherwise eligible for or who do not otherwise receive variable compensation or bonuses participate in a defined bonus pool, and (b) "Corporate Executive Bonus" means a bonus received by an Eligible Employee from the Corporate Executive Bonus Plan. The terms and conditions relating to the Corporate Executive Bonus Plan with respect to Reporting Persons, including, without limitation, the requisite qualifications for Employees who are Reporting Persons, shall not be changed more frequently than is permitted for a change in the amount, price or timing of any Benefits awarded by the terms of any formula contained in the Plan, and any such change shall be deemed to be a change and amendment to the Plan.

5.    Stock Options.

         (a)   Grant and Time of Award. Subject to each Eligible Employee's election under Section 5(c), options ("Options") shall be granted to Eligible Employees to purchase shares of Common Stock from the Company on the terms specified herein. Options shall be in the form of "Nonqualified Stock Options," which are not intended to qualify as incentive stock options within the meaning of Section 422 of the Code. Awards of Options ("Option Awards") shall be made for each fiscal year of the Company during the term of the Plan as of the last day of each such fiscal year (an "Option Award Date"). The amount of the Option Awards on a specific Option Award Date shall be determined in accordance with Sections 5(b) and (c) as soon as administratively practical after the end of each such fiscal year (an "Option Determination Date").

         (b)     Amount of Award. The total amount of the award (the "Award Amount") for both Options and Restricted Shares (as hereinafter defined) to which an Eligible Employee is entitled for any specific fiscal year of the Company shall be equal to: (i) 25% of such Eligible Employee's Corporate Executive Bonus for such fiscal year if such Eligible Employee is a Reporting Person or (ii) such amount as may be determined by the Administrator if such Eligible Employee is a non‑Reporting Person. The Award Amount hereunder to an Eligible Employee is for services rendered by the Eligible Employee during the fiscal year of the Company on which such Award Amount is based. In no event shall the Award Amount for any specific Eligible Employee in any given fiscal year of the Company beginning on or after March 1, 1995 exceed $100,000. If an Eligible Employee (who is a Reporting Person) does not receive a Corporate Executive Bonus for any specific fiscal year of the Company for which awards of Benefits are to be made, he will not be entitled to an award of Options or Restricted Shares for that fiscal year.

       (c)     Election of Awards. An Eligible Employee may elect to receive his Award Amount for any fiscal year as (i) 100% Restricted Shares; (ii) 50% Restricted Shares and 50% Options, or (iii) 100% Options. Effective on or after January 1, 2000, the Administrator in its discretion, from time to time may prescribe rules and procedures, including due dates, for making such an election; and may prescribe the default option for a Participant who fails to make a valid election pursuant to such rules and procedures.

         The number of shares of Common Stock subject to Options awarded to a Participant for a specific fiscal year of the Company shall be determined by dividing such Participant's Option Award Amount for such fiscal year by the greater of (i) the Market Value of a share of Common Stock on the applicable Option Determination Date, or (ii) $16 (subject to adjustment as referred to in Section 10), and multiplying such number by 2.5. All calculations shall be rounded down to the nearest whole share.

         (d)     Exercise. Options shall entitle a Participant to purchase shares of Common Stock at a price (an "Exercise Price") per share equal to the Market Value of the Common Stock on the applicable Option Determination Date. Options shall become exercisable three (3) years after the applicable Option Award Date (a "Vesting Period"), and must be exercised no later than eight (8) years, unless extended, after the applicable Option Award Date. Any Vesting Period shall be extended by the length of any leave of absence, except a leave of absence for medical reasons approved in writing by the Administrator. Options that are not exercised within eight (8) years (unless extended) after the applicable Option Award Date will lapse. A Participant may exercise all of his vested Options in any order and at one time or at different times for less than the total amount until all of his vested Options have been exercised. A Participant may exercise his Options only by giving the Administrator written notice of his intent to exercise his Options. The written notice must be in a form acceptable by the Administrator. When a Participant exercises an Option, the applicable Exercise Price is payable to the Company in full in cash; provided, the Administrator (or a Disinterested Administrator in the case of a Reporting Person) may permit a Participant to pay for all or any part of the Common Stock purchased on exercise of an Option with shares of Common Stock (valued at their Market Value on the date of the exercise) already owned by the Participant or acquired pursuant to the exercise of his Options.

         (e)    Restrictions.

(1)   Assignment. During a Participant's lifetime, Options shall be exercisable only by the Participant. A Participant cannot transfer or assign his Options awarded under the Plan other than by will or by the laws of descent and distribution.

(2)   Forfeiture. A Participant will forfeit his unvested Options if his employment with the Employer is terminated for any reason other than death or Disability on or before the end of any applicable Vesting Period. A Termination of Employment shall not be deemed to occur if a Participant merely transfers from the Company to a Subsidiary, from one Subsidiary to another Subsidiary or from a Subsidiary to the Company.

If a Participant is reemployed by the Company within one year after a termination of employment, Options forfeited on account of such a termination of employment shall be restored. The three-year vesting period for such Options shall be extended by the length of absence from employment; but the original expiration date of such Option shall not be extended.

(3)   Termination of Restrictions.

       (A)     If a Participant's employment is terminated before the end of any applicable Vesting Period because of death or Disability, his unvested Options may be exercised by him (or his beneficiary, personal representative or distributee, as applicable) during a five‑year exercise period beginning as of the date of such Termination of Employment, but in no event later than the expiration of the applicable original exercise period.

         (B)     Any Vesting Period shall end and all unvested Options shall become exercisable immediately upon a Change in Control.

(4)   No Rights as a Stockholder. No person entitled to exercise any Option granted under the Plan shall have any of the rights or privileges of a stockholder of the Company with respect to shares issuable upon exercise of such Option until certificates representing such shares shall have been issued and delivered to such person.

       (f)    Awards for Senior Participants. The terms of this Section 5(f) shall apply to any unvested Options held by a Participant age 55 or older (a "Senior Participant"). Shares subject to any unvested Option held by a Senior Participant shall not be forfeited (but shall remain subject to any applicable Vesting Period) merely because such Senior Participant's employment with the Employer is terminated (other than a Termination for Aggravated Cause).

             Upon a Termination for Aggravated Cause, a Senior Participant shall forfeit all unvested Options. A Senior Participant who engages in Competition with the Employer within any Vesting Period shall forfeit his unvested Options at the time such Competition with the Employer commences. All of the Options of a Senior Participant shall become fully vested immediately upon a Change in Control. Any restrictions, terms or conditions in this Section 5 applicable to Options generally shall apply to a Senior Participant's Options to the extent they are not inconsistent with the provisions of this Section 5(f).

6.    Restricted Shares.

         (a)    Time of Award. "Restricted Shares" are shares of Common Stock that are subject to certain restrictions on their disposition and to the rights of the Company to reacquire such shares upon the occurrence of certain events, all on the terms specified in the Plan. Subject to an Eligible Employee's election under Section 5(c), Restricted Shares shall be awarded to Eligible Employees on the terms specified herein. Awards of Restricted Shares ("Restricted Share Awards") shall be made for each fiscal year of the Company during the term of the Plan as of the last day of each such fiscal year (a "Restricted Share Award Date"). The amounts of the Restricted Share Awards shall be determined in accordance with Section 6(b) as soon as administratively practical after the end of each such fiscal year (a "Restricted Share Determination Date").

        (b)    Amount of Award. The portion of an Award Amount in any specific fiscal year that is available for Restricted Shares (a "Restricted Share Award Amount") shall be equal to such Award Amount less any Option Award Amount elected, or deemed elected, pursuant to Section 5(c) with respect to such Award Amount. The number of Restricted Shares awarded to a Participant for any specific fiscal year of the Company is determined by dividing the Participant's Restricted Share Award Amount for such fiscal year by the greater of (i) the Market Value of the Common Stock on the applicable Restricted Share Determination Date and (ii) $16 (subject to adjustment as referred to in Section 10). All calculations shall be rounded down to the nearest whole share.

       (c)    Restrictions.

(1)     Restricted Period. Restricted Shares shall be subject to the restrictions described herein for three (3) years from their applicable Restricted Share Award Date (a "Restricted Period"). Any Restricted Period shall be extended by the length of any leave of absence, except a leave of absence for medical reasons approved in writing by the Administrator.

During any Restricted Period, a Participant will have the entire beneficial ownership and the right to vote his Restricted Shares and receive any dividends thereon; provided, however, a Participant may not sell, transfer, pledge or otherwise dispose of or encumber his Restricted Shares (other than by will or by the laws of descent and distribution) during any applicable Restricted Period. A Participant shall not be entitled to delivery of a certificate representing shares of Common Stock until the expiration of the Restricted Period applicable to such shares as Restricted Shares.

(2) e   If a Participant is reemployed by the Company within one year after a termination of employment, Restricted Shares forfeited on account of such a termination of employment shall be returned to the Participant. The restricted period for such Restricted Shares shall be extended by the length of absence from employment. The Participant shall not be entitled to any dividends, the record date of which ocurred during such absence.

(3)      Termination of Restrictions.

   (A)     If a Participant's employment with the Employer is terminated during any Restricted Period because of death or Disability, the restrictions on his Restricted Shares will end and he (or his beneficiary, personal representative or distributee, as applicable) will be entitled to receive and retain his Restricted Shares.

   (B)     A Restricted Period shall end, and Participants shall have a nonforfeitable right to their Restricted Shares, immediately upon a Change in Control.

         (d)     Awards for Senior Participants. The terms of this Section 6(d) shall apply to any Restricted Shares held by a Senior Participant, except as may be provided in Section 6(e). Restricted Shares held by a Senior Participant shall not be forfeited (but shall remain subject to their restrictions during any applicable Restricted Period) merely because such Senior Participant's employment with the Employer is terminated (other than a Termination for Aggravated Cause). Upon a Termination for Aggravated Cause, a Senior Participant shall forfeit all of his Restricted Shares still subject to a Restricted Period at the time of termination. A Senior Participant who engages in Competition with the Employer during any Restricted Period shall forfeit all of his Restricted Shares subject to a Restricted Period at the time such Competition with the Employer commences. A Restricted Period applicable to a Senior Participant's Restricted Shares shall end upon a Change in Control. Any restrictions, terms or conditions in this Section 6 applicable to Restricted Shares generally shall apply to a Senior Participant's Restricted Shares to the extent they are not inconsistent with the provisions of this Section 6(d).

       (e)     Phantom Stock Credits. An Eligible Employee who is 60 years of age or older (an "Over 60 Participant") on any Restricted Share Award Date, and who elects to receive Restricted Shares as all or part of his award, shall not be awarded Restricted Shares on that date. Instead, such an Over 60 Participant shall be awarded "Phantom Stock Credits" which will serve as the basis for an award of Restricted Shares two years after such a Restricted Share Award Date (a "Deferred Award Date"), with each Phantom Stock Credit representing the right to receive one share of Restricted Stock. An account shall be established for each Over 60 Participant to show the number of Phantom Stock Credits allocated to him. The award of Phantom Stock Credits allocated to such an account for any specific fiscal year of the Company shall be in an amount that will entitle such Over 60 Participant to the number of Restricted Shares to which such Over 60 Participant would have been entitled to receive under the applicable award formula if such Over 60 Participant had been younger than 60 years of age on the applicable Restricted Share Award Date.

         The number of Phantom Stock Credits in an Over 60 Participant's account shall be adjusted to reflect dividends on the Common Stock on each dividend record date after the applicable Restricted Share Determination Date. The number of additional Phantom Stock Credits allocated to an Over 60 Participant's account for a cash dividend shall equal the total amount of each such dividend imputed to such Over 60 Participant (the per share dividend multiplied by the number of Phantom Stock Credits in such Over 60 Participant's account before such increase) divided by the Market Value of the Common Stock on the record date of the dividend. The number of additional Phantom Stock Credits allocated to an Over 60 Participant's account for a stock dividend shall equal the number of additional shares of Common Stock to which such Over 60 Participant would have been entitled if he had been the holder of a number of shares of Common Stock equal in number to the number of Phantom Stock Credits allocated to his account as of that dividend record date before such increase. The number of Phantom Stock Credits allocated to an Over 60 Participant's account instead of dividends will be added to the total number of such Over 60 Participant's Phantom Stock Credits for calculating future amounts to be allocated in lieu of dividends.

       Over 60 Participants cannot transfer or assign their Phantom Stock Credits awarded under the Plan other than by will or by the laws of descent and distribution. If an Over 60 Participant's employment is terminated (other than a Termination for Aggravated Cause), he shall not forfeit the right to an award of Restricted Shares on any Deferred Award Date, nor shall he forfeit Restricted Shares awarded on any Deferred Award Date, merely because of such a termination. If an Over 60 Participant's employment is terminated before any Deferred Award Date because of death or Disability, such Over 60 Participant (or his beneficiary, personal representative or distributee, as applicable) shall be entitled to receive at the time of such termination a stock certificate for the whole number of shares of Common Stock equal to the number of Phantom Stock Credits then credited to his account (rounded down to the nearest whole number of shares). Any Deferred Award Date shall occur and any applicable Restricted Period for Restricted Shares awarded shall end immediately upon a Change in Control.

        If an Over 60 Participant's termination is a Termination for Aggravated Cause, he shall forfeit the right to an award of Restricted Shares based on any Phantom Stock Credits attributable to his account and shall forfeit all shares of Restricted Shares still subject to a Restricted Period at the time of his Termination for Aggravated Cause. An Over 60 Participant who engages in Competition with the Employer before any Deferred Award Date or the end of any Restricted Period shall forfeit his Phantom Stock Credits and Restricted Shares.

       As of any specific Deferred Award Date, each Over 60 Participant shall be awarded that number of shares of Restricted Shares equal to the number of Phantom Stock Credits (rounded down to the nearest whole share) then credited to his account for the applicable award year. Restricted Shares awarded as of any Deferred Award Date shall be subject to all of the previously described terms and restrictions applicable to Restricted Shares, to the extent they are not inconsistent with the provisions of this Section 6(e), except that any applicable Restricted Period shall be for only nine months unless extended during a leave of absence. Over 60 Participants have no rights as stockholders with respect to their Phantom Stock Credits until their Restricted Shares are awarded.

7.    Employee Stock Purchase Plan.

       Solely for purposes of the Code, this Section 7 shall be treated as a separate plan and referred to as the A.G. Edwards, Inc. Employee Stock Purchase Plan ("Employee Stock Purchase Plan"). Notwithstanding anything to the contrary in the Plan, the following provisions shall apply to any options ("Section 423 Options") to purchase Common Stock awarded Participants ("Offering") in accordance with this Section 7:

         (a)     Eligibility. Section 423 Options awarded in accordance with the Employee Stock Purchase Plan shall be granted only to Employees. To be eligible for an award of Section 423 Options in any specific Offering, an Employee (a "Stock Purchase Plan Eligible Employee") must be a full‑time or part-time Employee (temporary Employees are not eligible) on the Date of Grant (as hereinafter defined) for such Offering and on the first business day in October of the next year after such date.

        Irrespective of any other provision of the Plan or the Employee Stock Purchase Plan, no Section 423 Option may be granted to an Employee who owns stock possessing 5% or more of the total combined voting power or value of all classes of stock of the Company or a Subsidiary as determined in accordance with Section 423(b)(3) of the Code; and no Section 423 Option may be granted to any Employee if such option permits the Employee's rights to purchase stock under all employee stock purchase plans (as defined in Section 423 of the Code) of the Company or any Subsidiary to accrue at a rate that exceeds Twenty-Five Thousand Dollars ($25,000.00) of Market Value of such stock (determined at the time the Section 423 Option is granted) for each calendar year in which such option is outstanding at any time.

         (b)     Timing of Offerings. An Offering shall be made for each fiscal year of the Company during the term of the Plan as of the first Business Day in October of each such fiscal year. The total number of shares offered ("Offered Shares") to all Stock Purchase Plan Eligible Employees in any specific Offering shall be determined by the Administrator. Subject to a Stock Purchase Plan Eligible Employee's election to participate in an Offering pursuant to Section 7(e), Section 423 Options shall be granted to each individual who is a Stock Purchase Plan Eligible Employee on the Date of Grant of any Offering. For purposes of this Section 7, "Date of Grant" shall have the same meaning as set forth in Treasury Regulation 1.421‑7(c).

       (c)     Amount of Shares Purchasable. Section 423 Options granted to a Participant in connection with any specific Offering shall entitle such Participant to purchase individually at the end of the applicable Offering Period (as hereinafter defined) his proportionate share of the Offered Shares for such Offering, based on the percentage that his individual contributions represent of the total contributions of all Stock Purchase Plan Eligible Employees with respect to such Offering; provided, however, a Stock Purchase Plan Eligible Employee may not purchase more than $25,000 worth of Common Stock as provided in Section 7(a).

       Only full shares of Common Stock may be purchased, and no fractional shares will be issued; provided, any amounts not used to purchase Common Stock shall be refunded on terms established by the Administrator. If any Offering is oversubscribed, any amount received from any Participant that is not used to purchase Common Stock shall be refunded on terms established by the Administrator. No Section 423 Option awarded in accordance with the terms of the Employee Stock Purchase Plan shall be transferable otherwise than by will or by the laws of descent and distribution, and shall be exercisable only by the Participant to whom it is granted or by a transferee as permitted herein.

         (d)     Purchase Price. The price ("Purchase Price") per share at which Participants can purchase Common Stock pursuant to their Section 423 Options granted with respect to any specific Offering shall be the lesser of the following two amounts: (1) the greater of (A) 85% of the Market Value of the Common Stock on the applicable Date of Grant, or (B) 85% of the average of the Market Values of the Common Stock on the first Business Day of each month in the Offering Period (as hereinafter defined), including the month of the applicable Date of Grant; and (2) 85% of the Market Value on the earlier of (i) Change in Control or (ii) the first Business Day in October of the next year after the applicable Date of Grant.

       (e)     Participation and Contributions. To participate in any specific Offering, a Stock Purchase Plan Eligible Employee must elect to contribute between 1% and 10% of his total cash compensation (based on salary, commission, bonus and overtime) paid during the period from the applicable Date of Grant until the earlier of (i) Change in Control or (ii) the first Business Day in October of the next year after such date (an "Offering Period").

         During any Offering Period, a Participant may not increase or decrease his contributions; provided, he may stop future contributions for the remainder of such Offering Period and either use amounts contributed up to that date to purchase Common Stock at the end of the Offering Period, or request a refund of the total amount contributed during such Offering Period. A Participant may request a refund of all, but not less than all, of his contributions prior to the end of any specific Offering Period, in which case he would cease to be a Participant in that Offering. If a Participant's employment is terminated prior to the end of a specific Offering Period, he will not be able to continue participation in that Offering, and contributions with respect to that Offering will be automatically refunded.

       The Administrator may establish and adopt uniform rules and forms relating to how and when elections, contributions, withdrawals and refunds may be made by or paid to Participants. All employees granted Section 423 Options under the Employee Stock Purchase Plan shall have the same rights and privileges as required by Section 423(b)(5) of the Code.

         (f)     Purchase of Stock. Common Stock shall be purchased automatically for Participants using their accumulated contributions to the maximum possible extent at the end of any specific Offering Period. A Participant must be a Stock Purchase Plan Eligible Employee at the end of a specific Offering Period to purchase Common Stock in the Offering.

       (g)     Reporting Person Restrictions and Limitations. Notwithstanding any provision contained in this Section 7 to the contrary, if a Reporting Person who is a Participant in the Employee Stock Purchase Plan elects to cease participation in the Employee Stock Purchase Plan, (including by means of an election to request a refund pursuant to Section 7(e)) such Participant may not elect to participate again for at least six (6) months from the date of the prior election.

8.    Other Benefits.

         A Disinterested Administrator may award Common Stock or the right to acquire Common Stock to any Employee upon such terms and conditions as such Disinterested Administrator in its discretion shall determine. Such awards may consist of any single Benefit, or a combination of the Benefits, described in the preceding sections (in addition to the award of any such Benefits pursuant to the terms, conditions and formulae contained in such preceding sections), or any other right to acquire Common Stock (including, without limitation, options granted in the form of "Incentive Stock Options" which are intended to qualify as incentive stock options within the meaning of Section 422 of the Code or stock appreciation rights), and may be subject to any conditions such Disinterested Administrator may prescribe, such as a right of first refusal by the Company to repurchase the shares; provided, however, that any Benefit awarded in accordance with the provisions of the Plan which grants the right to purchase shares of Common Stock, except any Benefit which is subject to restrictions that in the aggregate would amount to a substantial risk of forfeiture for purposes of Section 83 of the Code, shall require that the price at which the Participant may purchase such shares shall be at least 85% of the Market Value of such shares as determined by such Disinterested Administrator at the time such benefit is awarded.

       The Administrator may make any type of awards that can be made by a Disinterested Administrator; provided, unless the Plan is amended as provided below, such awards are made only to Employees who are not Reporting Persons. The Board of Directors may amend the Plan, from time to time as provided or limited herein, (i) to change any terms, conditions or formulae pursuant to which an award of Benefits as described in the preceding sections may be awarded (either increasing or decreasing the amount of such awards); provided, such changes comply with Rule 16b‑3 and/or (ii) to provide terms, conditions and a formula (complying with Rule 16b‑3) pursuant to which any right to acquire Common Stock (including, without limitation, Incentive Stock Options and stock appreciation rights) may be awarded, in addition to the Benefits described in the preceding sections. If any such amendments are made, the awards of Benefits authorized by such amendments may be administered by the Administrator.

9.    Shares Subject to Plan.

       Subject to the provisions of Section 10 (relating to adjustment for changes in capital stock), the maximum number of shares that may be issued under the Plan (including shares to be issued under the Employee Stock Purchase Plan) shall not exceed in the aggregate fifty‑four million four hundred ninety-two thousand one hundred eighty‑eight (54,492,188) shares of Common Stock of the Company. Such shares may be unissued shares or treasury shares.

       If there is a lapse, expiration, termination or cancellation of any Benefit without the issuance of shares, or if shares are issued in connection with any Benefit and later are reacquired by the Company pursuant to rights reserved on issuance, the shares subject to or reserved for such Benefit may again be used in connection with the grant of any of the Benefits described in this Plan; provided, that in no event may the number of shares of Common Stock issued under this Plan exceed fifty‑four million four hundred ninety‑two thousand one hundred eighty‑eight (54,492,188), subject to adjustment as described in Section 10.

10.  Adjustment Upon Changes in Stock.

         If any change is made in the shares of Common Stock of the Company by reason of any merger, consolidation, reorganization, recapitalization, stock dividend, split up, combination of shares, exchange of shares, change in corporate structure, or otherwise, appropriate adjustments shall be made by the Administrator to: (a) the kind and maximum number of shares subject to the Plan, (b) the kind and number of shares and price per share of stock subject to each outstanding Benefit, (c) the number of Offered Shares referred to in Section 7(b) and (d) any other amount herein which is so indicated. Any increase in the shares, or the right to acquire shares, as the result of such an adjustment shall be subject to the same terms and conditions that apply to the Benefit for which such increase was received. No fractional shares of Common Stock shall be issued under the Plan on account of any such adjustment, and rights to shares always shall be limited after such an adjustment to the lower full share.

11.  Amendment of the Plan.

       Except as provided below, the Board of Directors of the Company may at any time amend the Plan (including the provisions of the Employee Stock Purchase Plan); provided, the Board may not, without approval (within twelve months before or after the date of such change) of such number of the stockholders as may be required by either federal income tax or securities law for any particular amendment: (a) increase the maximum number of shares of Common Stock in the aggregate which may be issued under the Plan, except as may be permitted under the adjustment provisions of Section 10, or (b) adopt any other amendment for which shareholder approval is required by federal income tax or securities laws. The Board of Directors may not alter or impair any Benefit previously granted under the Plan without the consent of the person to whom the Benefit was granted.

       If required to qualify the Plan under Rule l6b-3, no amendment to the Plan shall be made more than once every six months that would change the amount, price or timing of any Benefits awarded by the terms of any formula contained in the Plan, other than to comport with changes in the Code, the Employment Retirement Income Security Act of 1974 (as amended), or the rules thereunder.

12.  Termination of the Plan.

         The Plan shall continue in force until it is terminated by the Board of Directors. The Board of Directors may terminate or suspend the Plan (including the Employee Stock Purchase Plan) at any time. No Benefit shall be awarded after termination of the Plan. Rights and obligations under a Benefit awarded while the Plan is in effect shall not be altered or impaired by termination or suspension of the Plan except by consent of the person to whom the Benefit was awarded.

13.  Withholding Tax.

       The Company shall have the right to withhold with respect to any payments made to Participants under the Plan any taxes required by law to be withheld because of such payments.

14.  Rules of Construction.

       The terms of the Plan shall be construed in accordance with the laws of the State of Missouri; provided, that the terms of the Plan as they relate to Incentive Stock Options shall be construed first in accordance with the meaning under and in a manner that will result in the Plan satisfying the requirements of the provisions of the Code governing incentive stock options; provided, further, that the terms of Section 7 of the Plan shall be construed first in accordance with the meaning under, and in a manner that will result in the Employee Stock Purchase Plan satisfying the requirements of, the Code governing such plans. The Plan is intended to qualify under Rule 16b‑3 and shall be interpreted and administered in a manner consistent with such intention. Unless otherwise expressly provided, any calculation required by any provision of the Plan shall be rounded down to the nearest whole number. Any word contained in the text of the Plan shall be read in the singular or plural or as masculine, feminine or neuter as may be applicable or permissible in the particular context.

15.  Nontransferability.

         Each Option or similar right (including a Stock Appreciation Right) granted under this Plan shall not be transferable other than by will or by the laws of descent and distribution, and shall be exercisable during the holder's lifetime only by the holder or the holder's guardian or legal representative.

16.  Effective Date.

       The Plan originally became effective as of April 21, 1988. The Plan as currently revised and restated shall become effective on the date stated on the first page hereof.

CERTIFICATION

       The undersigned hereby certifies that the foregoing A.G. Edwards, Inc. 1988 Incentive Stock Plan (as amended and restated) is restated in a form that reflects separate amendments thereto duly adopted by the Board of Directors of A.G. Edwards, Inc. and by the stockholders of A.G. Edwards, Inc., through February 22, 2001.

       IN WITNESS WHEREOF, the undersigned has executed this Certification as of February 22, 2001.

Douglas L. Kelly, Secretary

EX-13

Annual Report Fiscal Year 2001 Table of Contents	Page		Page
Mapping Your Journey	1	Notes to Consolidated Financial Statements	33
Letter to Shareholders–Benjamin F. Edwards III	2	Note  1	33
Financial Highlights	4	Note  2	34
Company Description	5	Note  3	34
Letter to Shareholders–Robert L. Bagby	6	Note  4	36
Quarterly Financial Information	8	Note  5	36
Client Profiles	9	Note  6	36
Steve and Barbara Denker	10	Note  7	37
Jane Chiotti	12	Note  8	37
Buck and Mary Sharp	14	Note  9	38
Joe Davis	16	Note 10	38
Milestones	19	Note 11	39
Benjamin F. Edwards III Milestone	21	Independent Auditors’ Report	39
Management’s Financial Discussion	23	Corporate Organization	40
Consolidated Five-Year Financial Summary	28	Board of Directors A.G. Edwards, Inc.	40
Consolidated Financial Statements	29	Board of Directors A.G. Edwards & Sons, Inc.	41
Consolidated Balance Sheets	29	Boards of Directors	42
Consolidated Statements of Earnings	30	Regional Officers	43
Consolidated Statements of Stockholders’ Equity	31	Branch Office Management	44
Consolidated Statements of Cash Flows	32	Branch Office Management (cont.)	45
		Branch Office Management (cont.)	46
		Branch Office Management (cont.)	47
		Branch Office Management (cont.)	48
		Shareholder Information	49

Mapping Your Journey  Successful investing is more than short-term gains. It’s about long-term solutions. That’s how we’ve approached our business for 114 years.

Instead of being preoccupied with minute-to-minute swings of the market, our financial consultants focus on getting to know their clients, whether those clients are at the beginning of their financial journey or approaching their destination. They ask lots of questions and listen to what their clients are saying. They explain things in a way their clients understand. They provide a range of choices and have the freedom to recommend what makes the most sense for their clients. They act as a sounding board, sometimes advising specific actions. At other times, they recommend their clients stay the course.

Our clients trust their financial consultants to guide them on the road to their financial goals and dreams, whether it’s achieving a comfortable retirement, providing a college education or passing on wealth or a family business. A relationship built on trust is earned by acting with integrity–putting clients’ interests first. It must be this way. Not only is it the right thing to do, but our clients’ financial well-being is on the line.

Our clients want more than information. They want solutions and solid investment advice. Using all the resources available to them–objectivity, experience and the specialized knowledge of our headquarters personnel–our financial consultants develop comprehensive financial plans based on an understanding of what is important to their clients. Our financial consultants have state-of-the-art technology that lets them share information easily and quickly. Technology is a collaborative tool that our financial consultants use to enhance–not replace–the relationships they have with their clients.

They also help their clients stay on course when they may be tempted to turn back or change their route. However, unforeseen changes may require adjustments to their financial plans. Because our financial consultants know what’s going on in their clients’ lives, they are ready for any detours and are flexible enough to offer new strategies to meet their clients’ changing needs.

Building wealth is a process, not a transaction. Through customized financial planning and ongoing advice, our financial consultants help clients get where they’re going and preserve their wealth for future generations.

The journey to financial success begins with a destination. It’s our job to earn our clients’ trust so we can help them get there.

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To Our Shareholders After a long bull market and years of record net earnings, fiscal 2001 brought us one of those healthy corrections that makes you sick. Our economy looks sound, and I would look for an improvement in the market before long.

We ended our fiscal year with 696 locations, adding West Linn, Ore.; Panama City Beach, Fla.; Mount Pleasant, Iowa; Aiken, S.C.; Bernardsville, N.J.; and Huntsville, Ala. in our final quarter. With both revenues and net earnings down, we are in a cost-cutting mode. We are experiencing a record number of trainees, which I think bodes well for the future. I believe the firm is in good shape as it faces the toughest conditions since the ’80s.

This is my last letter to shareholders as I stepped completely out of management March 1, 2001. I couldn’t have scripted a better career than I have been blessed to enjoy, and I shall miss deeply the daily contact with our many wonderful people. I plan to visit branches until I run out of energy or get too fat. I’ll enjoy visiting with our folks, and I’ll bring my branch feedback to the right people in our headquarters.

As I reflect on my 45 years with Edwards, the last 36 as CEO, I am impressed less with our growth than I am with the character and integrity of the many people who have become Edwards. I think the Board of Directors chose well in selecting Bob Bagby as CEO and Tad Edwards as president to lead us on to greater heights.

I have always wanted us to be the firm our clients can trust, and we have been working toward this by having a single corporate mission: to help our clients achieve their financial goals. This allows us to serve our clients rather than to use them to achieve our corporate objectives. I think we have proved over the past 36 years that this can work, even in a very competitive environment, and it surely is more fun.

Although market conditions are humbling to all of us, God has surely blessed us over the years and allowed us to touch lives for the better, making more comfortable retirements possible and helping parents and grandparents send children to college. I’m sure the firm will continue to seek first what is right and never compromise our ethics.

Thank you, faithful shareholders, for your loyalty, and thank you, fellow Edwards employees, for your friendship and steadfast work. May we always put our clients’ interests first, and may we always enjoy our work together. I pray for God’s continued blessing.

Sincerely,


Benjamin F. Edwards III
Chairman Emeritus
April 2, 2001

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Financial Highlights (For fiscal year ended February 28 or 29) (In thousands, except per share data and other data)
	2001	2000	1999	1998	1997
Operating Results
Net Revenues	$2,741,206	$2,796,189	$2,235,171	$2,002,697	$1,694,418
Net Earnings	$0,287,477	$0,382,921	$0,292,117	$0,269,297	$0,219,057
Net Earnings
as a Percent    of Net Revenues	10.5%	13.7%	13.1%	13.4%	12.9%
Return on    Average Equity	17.2%	22.9%	18.9%	19.8%	18.6%
Per Share Data
Earnings
Diluted	$0,0003.43	$0,0004.08	$0,0003.00	$0,0002.75	$0,0002.24
Basic	$0,0003.50	$0,0004.16	$0,0003.07	$0,0002.81	$0,0002.29
Cash Dividends	$0,0000.64	$0,0000.61	$0,0000.57	$0,0000.51	$0,0000.44
Book Value	$0,0020.29	$0,0019.69	$0,0017.16	$0,0015.21	$0,0013.12
Financial Condition
Stockholders’ Equity	$1,626,344	$1,717,122	$1,627,737	$1,463,121	$1,261,303
Total Assets	$4,859,984	$5,347,587	$3,803,132	$4,193,328	$4,244,340
Other Data
Full-Time Employees	17,086	15,451	13,953	12,967	12,031
Financial Consultants	7,073	6,823	6,528	6,289	6,070
Locations	696	672	639	594	569
Per share data have been restated for stock splits and stock dividends.

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A.G. Edwards, Inc. is a holding company whose subsidiaries provide securities and commodities brokerage, investment banking, trust, asset management, and insurance services. Its principal subsidiary, A.G. Edwards & Sons, Inc., is a St. Louis-based financial services company with 696 locations in 49 states, the District of Columbia and an affiliated office in London, England. A.G. Edwards & Sons, Inc. provides a full range of financial products and services to individual and institutional investors. The firm also offers investment banking services to corporate, governmental and municipal clients through 11 regional offices and its St. Louis headquarters.

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To Fellow Shareholders, Clients and Associates: I’m sure we’d all agree that fiscal 2001 was a challenging one for our industry and A.G. Edwards. Volumes on the various exchanges grew, but market volatility made the year difficult for both our clients and financial consultants. Nearly all the major indexes fell, while the Nasdaq, which is heavily weighted in technology stocks, was down significantly. A.G. Edwards’ total revenues grew slightly to just over $2.8 billion, while net earnings slipped to $287 million or $3.43 per share on a diluted basis.

A.G. Edwards’ continued investment in technology and investment banking affected this year’s net earnings, but we believe these investments enhance our ability to serve both our individual, institutional and corporate clients. T + 1 (settlement of security transactions on the business day following trade date) and upcoming regulatory requirements will demand additional investments in technology.

This year our asset management and fee-based programs showed respectable growth, with revenues increasing 20 percent. We also expanded our talent pool of research, investment banking and sales trading professionals. We expect these areas to provide growth opportunities for us moving forward.

This past year we broke ground on a one-million-square-foot addition to our headquarters complex. When completed in fiscal 2004, an 800,000-square-foot office building will house the majority of our Information Technology and Operations Divisions and a 200,000-square-foot learning center will provide a state-of-the-art training facility that will support our training initiatives, including A.G. Edwards University.

Our new A.G. Edwards University provides three levels of continuing education courses for our financial consultants, financial associates and headquarters personnel to ensure our clients are served by the best-trained professionals in the industry. The curriculum emphasizes financial planning, enhancing our employees’ ability to develop effective financial plans for our clients based on each client’s individual needs and circumstances. We are currently rolling out A.G. Edwards University in our existing training facilities and online through our ClientOne workstations. We believe this investment in training adds value for our clients and complements our full-service approach to meeting their needs.

Fiscal 2002 looks like it will be another challenging year for Edwards as well as the securities industry. Market volatility will continue to cause investors concern, and our financial consultants must guide our clients to think long term when developing their financial plans. However, with challenge comes opportunity.

This year Edwards plans to expand our number of financial consultants to serve our ever-growing client base. We’ll increase our presence in the United States by adding branches where we can identify and recruit individuals who can support our client-first philosophy. While other firms have chosen to deny investors with less than $100,000 in assets access to a specific financial consultant, Edwards continues to serve each client individually, regardless of their financial resources.

In addition to beginning our new fiscal year, March 2001 marked an important change for A.G. Edwards as a corporation. Ben Edwards, our long-time chairman, president and chief executive officer, decided to retire. For the past 36 years, Ben has provided strong leadership to the organization by upholding two basic principles: putting the client first and living the Golden Rule.

These two principles form the foundation of A.G. Edwards’ business philosophy and will guide us as we face the future without Ben’s daily involvement.

Ben will now serve Edwards as chairman emeritus, visiting branches across the country during the next two years. Although Ben will be missed, he leaves Edwards with a strong management team that is well-prepared to meet the challenges in our future. All 18,000 employees wish Ben much happiness and good health as he retires from A.G. Edwards.

The Board of Directors selected Benjamin F. “Tad” Edwards IV to serve as president of A.G. Edwards, while continuing to serve as vice chairman and leading our Sales and Marketing Division. Ron Kessler was named vice chairman and continues to head our Operations Division. I was honored to be selected chairman and chief executive officer.

Also retiring at the end of the fiscal year was Robert Proost, our chief financial officer and the director of the Administration Division. I have asked Doug Kelly, our division director of Law and Compliance, to assume these additional responsibilities.

Rob Pietroburgo, former Great Lakes regional officer, has succeeded me as director of our Branch Division.

I have served Edwards for 25 years, and I look forward to building on our company’s strong foundation. My thanks to our Board of Directors, shareholders and employees for their confidence as we move ahead.


Robert L. Bagby
Chairman and CEO

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Quarterly Financial Information
(Unaudited)

	Dividends Declared per Share	Stock Price   Trading Range High — Low	Net Revenues  (in millions)	Earnings Before Tax (in millions)	Net Earnings (in millions)	Earnings per Share
						Diluted	Basic
Fiscal 2001 by Quarter
First	$0.16	40.81 — 31.50	$786.6	$170.7	$107.3	$1.24	$1.26
Second	$0.16	57.00 — 34.88	$680.1	$122.7	$77.0	$0.93	$0.95
Third	$0.16	57.94 — 42.18	$634.0	$89.9	$57.2	$0.69	$0.71
Fourth	$0.16	52.19 — 37.42	$640.5	$71.8	$45.9	$0.57	$0.58
Fiscal 2000 by Quarter
First	$0.15	38.19 — 30.88	$648.7	$136.9	$84.5	$0.88	$0.89
Second	$0.15	33.56 — 24.63	$630.4	$132.8	$82.3	$0.86	$0.88
Third	$0.15	34.00 — 24.25	$708.1	$184.1	$115.3	$1.23	$1.25
Fourth	$0.16	34.19 — 26.75	$809.1	$169.3	$100.8	$1.11	$1.14

Per share data have been restated for stock splits and stock dividends.

Investment Performance Overview

Stock Split History	As a result of stock splits and stock dividends, an investment of 1,000 shares of A.G. Edwards stock at the time of the firm’s initial public offering in calendar 1971 has grown to 36,270 shares today. Given the initial offering price of $12 per share, the value of a $12,000 investment would have increased 11,648 percent, or 17.63 percent compounded annually, to $1,409,810 as of February 28, 2001.
Dividend Growth History	A steadily increasing dividend has reflected A.G. Edwards’ continued revenue and earnings growth. Over the past 10-year period, the dividend has grown from $.25 per share to $.64 per share, an average 18 percent increase per year. Since the firm went public, dividend payments have totaled more than $537 million. (Per share data have been restated for stock splits and stock dividends.)
Stock Price History	A.G. Edwards stock, which trades on the New York Stock Exchange (symbol AGE), closed at 38.87 on February 28, 2001. This represents a 173 percent increase from the 14.25 closing price on February 29, 1992. (Per share data have been restated for stock splits and stock dividends.)

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It’s often easier to get where you’re going when you have a map. The same is true for reaching your financial goals. Every one of our clients — regardless of where they are on their journey — benefits from the trusted advice and guidance of their A.G. Edwards financial consultant. Our clients deserve nothing less.

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Steve and Barbara Denker enjoy tinkering
with their ’97 Mustang.

Barbara Randolph,
Associate
Vice President-
Investments,
Hartford, Connecticut At least Steve and Barbara don’t have to worry about retirement.

After working 23 years for the same company, Steve was laid off. He was out of work more than three years. He finally got back on his feet when he was hired as a project manager for Thomcast Communications. Things were looking up, and he and Barbara decided to plan a cruise. But then everything was put on hold when Barbara was diagnosed with a brain tumor. Fortunately, the tumor was benign. However, the surgery did create some physical problems for Barbara, and she had to quit her job and go on long-term disability. They are a really great couple, and their strong relationship helped them through these difficult times. Throughout these misfortunes, they continued to prepare for retirement. We periodically reviewed their portfolio to make sure they remained on track financially. As they neared retirement age, we began reallocating some of their assets into fixed-income and growth-and-income products. With the help of the retirement planning team at the firm’s headquarters, we also had prepared a Financial Horizons plan that took a comprehensive look at their entire financial situation. The plan included a net worth analysis, which showed that they faced a significant estate tax bill when passing on their wealth. A trust with a life insurance component was created to preserve the estate for their children. We have continued to review the plan periodically. Now, not only is their retirement secure, but Steve can retire early. Today they have the luxury of going on cruises at least twice a year. Steve just bought a Mustang that he drag races on Wednesday nights. Life is unpredictable—you can’t plan for everything. But planning can help smooth life’s bumps and bruises. Just ask Steve and Barbara.

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Jane Chiotti loves spending time with Kara,
one of her two granddaughters.

Annette Tylka,
Supervisor,
Trust Administration,
A.G. Edwards
Trust Company,
St. Louis, Missouri My husband, Tony, always handled the finances.

Fortunately, he worked with A.G. Edwards to set up our trusts that would take care of me after he was gone. When Tony died, I began working with Annette at the A.G. Edwards Trust Company. She was a godsend. Needless to say, I had a lot of things on my mind, and finances were the last thing I wanted to think about. Believe me, I’m very grateful that I have it as nice as I do because I have known a few ladies who’ve had some difficulties when their husbands passed away. Annette has helped tremendously in making everything go smoothly. She’s taken the time to educate me about my trust accounts and answer my questions. This has helped me make informed decisions when she calls with recommendations about how something with one of the trusts should be handled. I don’t really want to manage the trusts by myself—I don’t have that kind of knowledge. Actually, I’d rather spend time with my children and grandchildren, and I know that’s what Tony wanted. Thanks to Annette and good planning by Tony, I can do that. And now I’m going to Ireland this summer with my daughters. That’s always been a dream. Now I get to live it. Jane Chiotti, Florissant, Missouri

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Keegan Sharp helped save for college by working in the
family pharmacy with her dad Buck.

Michael Jennings,
Branch Manager,
Vice President-Investments,
La Jolla, California When our kids were born, we began saving for their college.

But when our daughter, Keegan, turned 12, we realized we weren’t saving enough. We needed a plan. Mike suggested an education cost analysis to determine how much we needed to put away to reach our goal. The analysis showed that we were going to fall short unless we began saving more and investing more aggressively. Mike sat down with us and asked a lot of questions and discussed different strategies to achieve our goals. As it turned out, we decided we would be more aggressive in our investing approach. Mike also suggested we save taxes by opening college savings accounts in our children’s names. Keegan and our son, David, helped out by saving what they earned working at our pharmacy. Every six months we sat down together to review our portfolio, and when Keegan got closer to going to college, Mike recommended we take a more conservative approach. We didn’t want to risk losing what we had earned just as she was going to need the money for school. That turned out to be a wise move. Sure, some luck was on our side. But we also give Mike a lot of the credit. He came up with a long-term plan to help us reach our goal and helped us stick to it. Keegan is planning to attend California Polytechnic Institute in the fall, and David wants to go to the University of California-Davis. Planning really does work. Buck and Mary Sharp, Lompoc, California

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Their financial plan helped Bo, Joe and Joe Bob Davis
protect the family convenience-store business.

Gerald Galbraith,
Branch Manager,
Vice President-
Investments,
Abilene, Texas Joe didn’t plan to get into the convenience-store business.

He was in construction and was going to build a convenience store and lease it to a local chain. That didn’t work out, so Joe decided he would build and operate the store himself. He called it Skinny’s, a nickname for his father-in-law. That was 1974. Today Joe and his sons own and operate more than 90 convenience stores in west and central Texas with 450 employees. We were there early on, and as the business grew, so did the complexity of their financial needs. Just as Joe’s sons joined him in his business, my son, Greg, became a financial consultant in the A.G. Edwards Dallas office, and we began working as a team for the Davises. Most of their estate was tied up in their business, and they needed to plan for the future. We started by asking lots of questions. We listened. We understood their concerns. With the help of a comprehensive Business Needs Analysis, we identified a number of issues concerning the future not only of Skinny’s, but the Davises’ personal assets as well. We implemented an asset allocation strategy and hired independent money managers to help manage corporate, personal and private foundation funds. One of the most important recommendations was establishing a succession plan so Joe could retire comfortably and leave the business to his sons. Insurance to protect the business in the event of a loss of key employees was also put into effect. Finally, we devised a strategy to prevent taxes from wiping out nearly a third of their estate. They’ve worked hard to get what they have—it is our job to help them keep it.

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The Year’s Milestones

Change in Leadership After 45 years with the firm, Benjamin F. Edwards III announced he was stepping down as chairman, chief executive officer and president of the company founded by his great-grandfather. On March 1, 2001, he became chairman emeritus. After having served as director of the Branch Division since 1995, Robert L. Bagby was appointed chairman and chief executive officer by the Board of Directors. The board also named Benjamin F. “Tad” Edwards IV president of the firm in addition to his responsibilities as vice chairman and director of the Sales and Marketing Division. In addition, Ronald J. Kessler, director of the Operations Division, was appointed vice chairman. During Ben Edwards’ tenure as chairman, he presided over the firm’s tremendous growth and reinforced the firm’s client-first philosophy.

Branch Growth A volatile year for the financial markets contributed to decreased net earnings in the fiscal year ended February 28, 2001. Meanwhile, the firm continued to reach out to more investors by adding 24 branch offices, bringing the total to 696 offices, maintaining A.G. Edwards’ ranking as one of the largest retail branch networks in the country.

Fee Revenue Fee-based revenue continued to grow, increasing to 24 percent of net revenues in fiscal 2001, up from 19 percent in fiscal 2000. Fee revenues include Client Choice, a fee-based pricing program introduced last year that has proven popular with clients. By consolidating accounts in Client Choice, investors pay one fee but receive the same services, recommendations and advice as they would under a standard commission arrangement. Features of Client Choice include virtually unlimited trades, cost-lot reporting, no-fee IRAs, a Visa® Gold debit card with travel awards and a free OnTrack Financial Analysis with annual reviews and updates.

Managed Assets Average client assets administered under the company’s management programs and third-party management increased to $17.9 billion in fiscal 2001 from $13.9 billion the previous fiscal year. These services include A.G. Edwards Asset Management; A.G. Edwards Trust Companies; Private Advisor Service; and Pathways, Spectrum, Fund Navigator and Fund Advisor mutual fund advisory services.

ClientOne The firm continued to invest heavily in technology to deliver convenience and value to clients and greater efficiencies to its business. The rollout of state-of-the-art ClientOne computer workstations was completed in all of the firm’s branch offices nationwide and enthusiastically received by the firm’s financial consultants. These new workstations provide financial consultants high-speed access to the Internet and enhanced financial planning tools that include OnTrack personal financial analyses. The OnTrack analyses let financial consultants provide their clients in-depth financial plans to assist them in setting financial goals using personal net worth statements, retirement planning analyses, education cost analyses and estate tax projections.

Internet Services Preparations continued for a major upgrade of AGe-connect, the firm’s online client-account-access service. The redesigned AGe-connect site–which began rolling out in April this year–harnesses the collaborative potential of the Internet to reinforce the relationship between financial consultants and their clients. AGe-connect offers free real-time quotes, charts and news, an expanded array of research reports, an interactive feature that provides intraday portfolio valuation, a stock watchlist, technical analysis tools, and account-data downloads into personal financial management software. All of the features will be available through financial consultants’ personalized Web pages for clients, enabling financial consultants to customize content for their clients based on each client’s particular investing profile and interests. To keep pace with changing technology and the growing needs of clients, the firm will continue to monitor the site’s effectiveness and offer further improvements and innovations in the future.

A.G. Edwards University In an effort to maintain its goal of having the best-trained financial consultants in the industry, the firm created A.G. Edwards University to deliver the broadest training curriculum possible to its financial consultants, headquarters personnel and branch office employees. A.G. Edwards offers its courses online via the new ClientOne workstation and through the firm’s internal television network.

Once fully implemented, A.G. Edwards University will offer one of the most comprehensive training curriculums in the industry. It has been designed to address the growing complexity and breadth of our clients’ financial needs and will include professional designations and internal certification programs for our financial consultants.

Headquarters Expansion To accommodate expansion of the firm’s training capabilities and company growth, ground was broken on an 800,000-square-foot office building and adjoining 200,000-square-foot learning center, which will contain more than 50 training rooms, a 600-seat auditorium and a studio for the firm’s internal satellite television network.

Mortgage Services The firm announced a strategic alliance with Nexstar Financial Corporation to be effective in the first quarter of fiscal 2002. Under the multiyear agreement, clients will be able to access home-financing solutions powered by Nexstar’s fully integrated, state-of-the-art phone-and Web-based technology via AGe-connect. In addition to applying for a mortgage, clients will be able to take advantage of additional mortgage services tailored to meet their individual needs, including prepurchase approvals, loan decisions within minutes of application, online loan status, automated pricing, online rate locks, online closing costs summary and online loan-servicing account capability. All mortgages originating under the program will be made by Nexstar, a licensed mortgage lender.

Record Institutional Sales Trading As a result of increases in orders from institutional accounts, trading volume increased dramatically at the firm’s New York City-based Institutional Sales Trading operation to 1.5 billion shares in the past year from 1 billion shares in 2000, a 50 percent increase.

National Recognition Stock research and the firm’s employee-friendly work environment again received national recognition. Twelve A.G. Edwards research analysts earned “Best on the Street” status for their stock-picking skill and/or earnings-estimate accuracy in a survey developed by First Call Investment Research and published in The Wall Street Journal. Five of this year’s 12 qualifying analysts have appeared at least twice in the eight-year-old survey–formerly known as the “All-Star Analysts’ Survey.” Since the survey’s inception, 36 A.G. Edwards analysts have earned “Best on the Street” status at least once during their careers, with 13 of them appearing two or more times.

For the fourth consecutive year, A.G. Edwards was named one of the “100 Best Companies to Work for in America” by FORTUNE magazine. The firm is one of only five companies nationwide to appear on all six versions of the list originally published as a book by best-selling authors Robert Levering and Milton Moskowitz.

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A Legacy of Leadership When Ben Edwards took over leadership of A.G. Edwards 36 years ago, the firm was a partnership employing 300 financial consultants in 44 branches and earning a profit of $757,000. To finance expansion of the branch system, Ben advocated the firm raise capital by becoming a publicly traded company. In November 1971, a total of 445,000 shares were offered for sale at $12 a share, boosting the firm’s net worth to $14.7 million from $6.9 million before the sale. Today the firm’s net worth is more than $1.6 billion, giving the firm stability and a strong foundation for further growth.

A.G. Edwards now has more than 7,000 financial consultants in 696 branches in 49 states, the District of Columbia and London. Profits have grown as well—to $287 million in fiscal 2001.

But Ben never measured the firm’s success solely by its balance sheet. In place of growth goals, budgets and sales quotas, Ben substituted his fervent belief in the Golden Rule—treating others as you would like to be treated. It’s a personal value that Ben made the cornerstone of the firm’s business philosophy.

As a result, A.G. Edwards financial consultants’ primary focus is putting their clients’ interests above all else. They do it by offering full-service advice and financial planning to clients with any level of assets, from a few thousand dollars to several million. They do it by having the freedom to recommend products and services that are best for their clients. They do it by taking time to answer clients’ questions, explain things and listen. They do it by earning clients’ trust. It’s a philosophy that has benefited clients, employees and shareholders.

But Ben didn’t just talk about treating others as you would like to be treated. He lived it.

He lived it by giving back to the community—whether it was teaching Sunday school or supporting a program at a local elementary school where employees could take time off work to mentor the school’s students in reading. He also donated his time and financial resources to numerous civic endeavors, including leadership roles in public education and the United Way.

His genuine interest in people is why he invited new employees into his office on their first day to personally welcome them to the firm. It’s why he stood for hours shaking hands with 5,000 employees at the headquarters’ holiday luncheon each year. It’s the reason why he answered his own phone, hosted monthly internal broadcasts with employees and took time to eat lunch with financial consultant trainees. It’s also why he has visited more than 100 branch offices annually and continues to do so even though he has stepped down from managing the firm’s day-to-day operations.

His approach has earned the respect and admiration of employees and also has won national recognition. On nearly a dozen occasions, Ben was named one of the top CEOs in the securities industry. He truly believes work should be fun and even wrote it into the A.G. Edwards mission statement. As a result, A.G. Edwards is one of only five companies nationwide to have been named in all six editions of the annual listing of the “100 Best Companies to Work for in America.”

Ben has always said that “A.G. Edwards is in the business of touching lives. If clients’ financial consultants do their jobs well, children will go to college, people will retire more comfortably and families will be able to pass on more of their wealth to future generations.”

It is Ben’s sincere belief that the firm will continue to live this mission in the years to come. In fact, Ben hopes he won’t be missed. He believes that if he has done his job well, the firm’s client-first mission will live on not only in practice, but in the hearts of everyone at the firm. Continuing this mission, Ben says, would be the best tribute he could ever receive. Mission accomplished.

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Management’s Financial Discussion
(Year references are to fiscal years ended February 28 (29) unless otherwise specified.)

General Business Environment
A.G. Edwards, Inc. is a holding company whose primary subsidiary is the national brokerage firm of A.G. Edwards & Sons, Inc. Through this and its other operating subsidiaries (collectively, the “Company”), A.G. Edwards, Inc. provides securities and commodities brokerage, investment banking, trust, asset management and insurance services to its clients through one of the industry’s largest retail branch distribution systems. A St. Louis-based financial services firm, the Company has more than 695 locations and 17,000 employees in 49 states, the District of Columbia and London, England. The Company’s primary business is providing a full range of financial products and services, including investment banking, to its individual, institutional, corporate, governmental and municipal clients. Many factors affect the Company’s revenues and profitability, including changes in economic conditions, the level and volatility of interest rates, inflation, political events, investor sentiment and competition from other financial institutions. Because these factors are unpredictable and beyond the Company’s control, earnings may fluctuate significantly from year to year.

In addition to competition from firms traditionally engaged in the financial services business, there has been increased competition in recent years from other sources, such as commercial banks, insurance companies, online service providers, mutual fund sponsors and other companies offering financial services both in the United States and globally. The financial services industry also has experienced consolidation and convergence in recent years, as financial institutions involved in a broad range of financial services industries have merged and different types of financial companies have begun offering a broader array of securities and other investment products. These trends are expected to continue and could result in the Company’s competitors gaining greater capital and other resources, such as a broader range of products and services and geographic diversity. The 1999 Gramm-Leach-Bliley Act, which repealed U.S. laws that separated commercial banking, investment banking and insurance activities, has increased the number of companies competing for a similar client base, including the client base serviced by the Company.

The year began with the Federal Reserve (the Fed) increasing the federal funds interest rate twice before the end of May, from 5.75 percent to 6.5 percent, for a total of six increases in the preceding twelve months. The Fed acted out of concern that the economy was “overheating” and to guard against “future inflation risk.” However, by the end of the year, the Fed had decreased the federal funds rate to 5.5 percent due to a slowing economy.

The Dow Jones Industrial Average (the Dow) began the year at 10,128 and ended at 10,495 for an increase of 3.6 percent. However, during the year the Dow closed as low as 9,796 and as high as 11,311, a range from low to high of more than 15 percent. Although the Dow has historically been the primary stock market indicator followed by investors, it was the rise and fall of the New Economy stocks, as measured by the Nasdaq Composite Index (the Nasdaq), that gained the most attention from investors during 2001. After ending 2000 with a gain of 105 percent and finishing the year at its all-time high, the Nasdaq continued to climb to a new peak of 5,049 during the first few days of 2001. However, the Nasdaq plummeted throughout the remainder of 2001 to its lowest point of 2,152, down 54 percent from the previous year end.

Many factors contributed to the market volatility, including initial lofty valuations of high-tech companies followed by rapid declines in prices, uncertainty over the direction of interest rates, inflation concerns and the slowing economy. All of these factors led to investor anxiety resulting in decreased trading activity in the latter half of the year.

Results of Operations
The Company experienced a decline in net revenues, net earnings and earnings per share from the previous year, departing from the five-year trend of year-over-year increases in each category. Net revenues declined 2 percent ($55 million) in 2001 after rising 25 percent ($561 million) in 2000. Net earnings in 2001 decreased 25 percent to $287 million from $383 million in the previous year. Net earnings in 2000 were up 31 percent from $292 million in 1999. Diluted earnings per share for the Company were $3.43 in 2001, versus $4.08 and $3.00 in 2000 and 1999, respectively. The Company’s net profit margin was 10.5 percent in 2001, compared to 13.7 percent in 2000 and 13.1 percent in 1999. The results for 2000 include a $75 million pre-tax gain from an investment in a privately held investment management company, which increased net earnings by $35 million or $0.37 per diluted share. Excluding this gain from net revenues for the prior year, net revenues increased 1 percent in 2001, while net earnings and earnings per share declined 17.3 percent and 7.5 percent, respectively.

The number of the Company’s financial consultants reached 7,073 at year end, an increase of 4 percent from the prior year end. The number of total locations at the end of 2001 was 696, up from 672 at year-end 2000. The Company intends to continue expanding its distribution system as opportunities occur.

The following table and discussion summarize the changes in the major categories of revenues and expenses for the past two years (dollars in thousands):

Increase (Decrease)	2001 vs. 2000		2000 vs. 1999
Revenues
Commissions	$(97,877)	(7)%	$246,489	21%
Principal transactions	8,057	3	82,196	41
Investment banking	(52,422)	(23)	6,718	3
Asset management and service fees	108,467	20	117,564	28
Interest	111,811	45	47,076	23
Other	(57,895)	(65)	78,165	688
Total Revenues	20,141	1	578,208	26
Interest expense	75,124	329	17,190	305
Net Revenues	(54,983)	(2)	561,018	25
Non-Interest Expenses
Compensation and benefits	(400)	—	335,014	23
Communication and technology	83,272	52	36,132	29
Occupancy and equipment	21,297	20	4,325	4
Marketing and business development	9,023	21	8,127	23
Floor brokerage and clearance	1,290	6	734	4
Other	(1,504)	(2)	24,358	46
Total Non-Interest
Expenses	$112,978	5%	$408,690	23%

Commissions
Commissions declined 7 percent, from $1.4 billion in 2000 to $1.3 billion in 2001, primarily due to equity-related commissions decreasing 10 percent ($98 million) resulting from a 9 percent decline in trading volumes in commission-based accounts. As commissions are transaction-based revenues, they are influenced by the number and size of client transactions and product mix and may vary considerably from year to year. Revenue from mutual fund sales decreased 6 percent ($20 million) in 2001 due to clients choosing lower-commission pricing alternatives and a decline in trading volumes in commission-based accounts. As an offset, insurance commissions increased 12 percent ($20 million) primarily due to increased sales of variable annuities. Although commissions declined in 2001, they remained the most significant source of revenue for the Company, accounting for more than 47 percent of total revenue in each of the last three years.

An increasing number of clients are choosing fee-based alternatives instead of the traditional commission-based trading account. In 2001, the Company launched Client Choice, a new fee-based pricing alternative available to individual investors. As a result, future revenues within the commissions and asset management and service fees categories will likely be affected by the number of clients choosing fee-based pricing alternatives.

The 21 percent ($246 million) increase in total commissions in 2000 over 1999 reflected increased retail investor activity due to higher stock prices and trading volumes as well as strong cash flows into mutual funds and variable annuities.

Principal Transactions
The Company maintains inventories of debt and equity securities to satisfy client demand and, therefore, effects certain transactions with its clients by acting as principal. Realized and unrealized gains and losses result from the sale and holding of securities positions for resale to clients and are included in principal transactions revenue.

Principal transactions revenue increased 3 percent ($8 million) in 2001 primarily as a result of a 27 percent ($24 million) rise in revenue from sales of equity products. The Company acted as a market maker in a greater number of actively traded, larger-capitalized securities than in the prior year. Revenue from debt products decreased 8 percent ($16 million) due to falling yields for much of this year, compared to rising yields in the prior year, resulting in decreased client demand for fixed income products. In addition, many bond investors were hesitant to enter the markets due to uncertainty caused by federal and state budget surpluses, the U.S. Treasury Department’s debt buyback program and the Fed’s stance on interest rates.

Revenues from principal transactions increased 41 percent ($82 million) in 2000 compared to 1999 due to increased client demand for debt securities as a result of rising yields. Municipal bonds were particularly attractive last year as yields reached levels not seen in several years. Revenues from equity products rose 49 percent ($30 million) in 2000 reflecting the strong Nasdaq equity market.

Investment Banking
The Company derives investment banking revenues from underwriting public offerings of securities for corporate and governmental entities for sale to its clients. The Company also provides advisory services to corporate and governmental entities.

In 2001, investment banking revenues decreased 23 percent ($52 million). Underwriting fees and selling concessions decreased 24 percent ($46 million), primarily resulting from a 22 percent ($29 million) decrease in revenue from corporate equity issues in 2001. IPO activity declined this year due to the volatility in the equity markets, particularly as markets declined in the latter part of the year. Distribution of equity-based unit trusts slowed in 2001 reflecting decreased client demand for these specialized products following the decline in the Nasdaq. Revenue from underwriting debt products decreased 30 percent ($16 million) primarily due to a decline in sales of certificates of deposit as a result of falling yields. In addition, sales of municipal debt fell as strong economic growth and higher tax revenues decreased the borrowing needs of state and local governments. Management fees, including fees from mergers and acquisitions, decreased 19 percent ($7 million) due to participation as manager or co-manager in fewer offerings by the Company this year following the decline in IPO activity.

In 2000, investment banking revenue increased 3 percent ($7 million) due primarily to strong sales of equity-based unit trusts following the dramatic rise in the Nasdaq. Fiscal 2000 also was positively impacted by sales of certificates of deposit as a result of rising yields.

Asset Management and Service Fees
Asset management and service fees consist primarily of revenues earned from providing support and services in connection with client assets under third-party management, including mutual funds and annuities, and the Company’s trust services. These revenues include fees based on the amount of client assets under management and transaction-related service fees, as well as fees related to the administration of custodial and other specialty accounts.

Asset management and service fees rose 20 percent ($108 million) in 2001. Fees from third-party mutual funds and annuities were 12 percent ($37 million) higher than in 2000, reflecting strong cash flows into funds and annuities. Fees resulting from the administration of client assets under third-party management and from the Company’s management services improved 41 percent ($62 million) in 2001. The average number of fee-based accounts increased 59 percent, while the average total assets in these programs grew from $14.5 billion in 2000 to $20.4 billion in 2001, an increase of 41 percent.

The 2000 increase in asset management and service fees of 28 percent ($118 million) over 1999 was primarily due to a 21 percent ($55 million) jump in service fees from third-party mutual funds and annuities. Fees from the administration of client assets under third-party management and from the Company’s management services in 2000 rose 37 percent ($41 million) as a result of the growth in the number of client accounts and higher market valuations of existing assets.

Interest Revenue
The Company earns interest revenue principally from financing its clients’ margin accounts, debt securities carried in inventory for resale and short-term investments. Interest revenue rose 45 percent ($112 million) in 2001, primarily because of a 47 percent ($107 million) increase in interest earned on margin accounts resulting from a 29 percent rise in average margin balances. In addition, the average interest rate charged on margin balances was higher in 2001 than in 2000. Interest revenue from securities owned increased 25 percent ($5 million) as a result of higher average debt inventory levels.

The increase in interest revenue of 23 percent ($47 million) in 2000 versus 1999 was principally due to a 32 percent ($54 million) increase in interest earned on margin accounts as a result of a 34 percent rise in average customer margin balances. Interest revenue from short-term investments decreased 77 percent ($9 million) as a result of a decrease in average short-term investments as funds were utilized to finance the rise in margin balances.

Other Revenues
Other revenues decreased 65 percent ($58 million) primarily due to the prior year including a gain of $75 million from the sale of one-half of the Company’s investment in a privately held investment management company and the related increase in the carrying value of the remaining investment to its fair value. This investment had been carried on the equity method of accounting, which was discontinued due to the reduction of the Company’s ownership and the terms surrounding the remaining investment.

Interest Expense
Interest expense increased 329 percent ($75 million) in 2001 due to an increase in short-term borrowings, which include short-term bank loans and securities lending arrangements, combined with higher average interest rates on borrowings. Proceeds from the additional borrowings were primarily used to finance the increase in average customer margin balances, and, to a lesser extent, capital expenditures and stock repurchases. Interest expense increased 305 percent ($17 million) in 2000 versus 1999 also due to an increase in short-term borrowings primarily used to finance increased customer margin balances.

Non-Interest Expense
Compensation and benefits was unchanged in 2001 and rose 23 percent ($335 million) in 2000. A significant portion of this expense is variable in nature and directly relates to commissionable sales and to the Company’s profitability. The year-to-year comparisons generally reflect the changes in revenue and profitability in both 2001 and 2000. General and administrative salary expense increased 29 percent ($89 million) in 2001 and 23 percent ($57 million) in 2000 because of general salary increases and a 16 percent growth in the number of support employees in both years. Incentive-related compensation fell 19 percent ($67 million) in 2001 as a result of lower earnings. Incentive-related compensation rose 25 percent ($70 million) in 2000 due to higher earnings.

In 2001, communication and technology expense increased 52 percent ($83 million). The majority of this increase was related to the development, deployment and ongoing maintenance and support of a new workstation introduced to all financial consultants during the year. The remaining increase was primarily due to branch and headquarters expansion and technology-related upgrades. Communication and technology expense increased 29 percent ($36 million) in 2000 primarily due to increased business volume and branch and headquarters expansion.

All remaining expenses increased a combined 12 percent ($30 million) in 2001 primarily due to a 20 percent ($21 million) increase in occupancy and equipment expense related to branch relocations and branch and headquarters expansion. In addition, marketing and business development expense increased 21 percent ($9 million) which includes the Company’s first national sales conference at its St. Louis headquarters. In 2000, all remaining expenses increased 18 percent ($38 million) due to general business expansion.

Income Taxes
For information regarding the provision for income taxes and information regarding the difference between effective tax rates and statutory rates, see Note 6 (Income Taxes) of the Notes to Consolidated Financial Statements.

Liquidity and Capital Resources
The Company’s assets fluctuate in the normal course of business, primarily because of the timing of certain transactions. Customer receivables decreased in 2001 reflecting the volatility experienced in the equity markets this year and clients’ decreasing use of margin borrowings.

The principal sources for financing the Company’s business are stockholders’ equity, cash generated from operations, short-term bank loans and securities lending activities. The Company has no long-term debt. Average short-term bank loans of $406 million and $218 million, and average securities lending arrangements of $1.1 billion and $200 million in 2001 and 2000, respectively, were primarily used to finance customer receivables. The Company is constructing an additional office building, a learning center and a parking garage at its headquarters campus with an estimated total cost of approximately $215 million through its projected completion in 2004. The Company expended $40 million in connection with these projects through February 28, 2001.

The Company completed a stock repurchase program under which it was authorized to repurchase 33 million shares during a 5 1/2 year period beginning in May 1996. The Company purchased 10.6 million and 11 million shares at aggregate costs of $447 million and $336 million in 2001 and 2000, respectively. These shares were used in part to offset the issuance of stock under the employee stock plans. In February 2001, the Board of Directors authorized the repurchase of up to 10 million shares during the period ending December 31, 2002. At February 28, 2001, no shares had been repurchased under this program.

Management believes the Company has adequate sources of credit available, if needed, to finance customer-trading volumes, branch expansion, stock repurchases, dividend payments and major capital expenditures.

The Company’s principal subsidiary, A.G. Edwards & Sons, Inc., is required by the Securities and Exchange Commission (SEC) to maintain specified amounts of liquid net capital to meet its obligations to clients–see Note 5 (Net Capital Requirements) of the Notes to Consolidated Financial Statements.

Risk Management

General
The business activities of the Company expose it to a variety of risks. Management of these risks is necessary for the long-term profitability of the Company. The Company manages these risks through the establishment of numerous policies, procedures and controls. The most significant risks to the Company are credit risk and market risk.

Credit Risk
Credit risk is discussed in Note 10 (Financial Instruments–Off-Balance Sheet Risk and Concentration of Credit Risk) of the Notes to Consolidated Financial Statements.

Market Risk
Market risk is the risk of loss to the Company resulting from changes in interest rates, equity prices or both. The Company is exposed to market risk to the extent it maintains positions in fixed income and equity securities. The Company primarily manages its risk through the establishment of trading policies and guidelines and through the implementation of control and review procedures. The Company’s management philosophy provides for communication among all responsible parties throughout the trading day.

The Company’s policy is to purchase inventory to provide investment products for its clients. Consequently, the Company purchases only inventory that it believes it can readily sell to its clients, thus reducing the Company’s exposure to liquidity risk but not market fluctuations. In addition, the Executive Committee of A.G. Edwards & Sons, Inc. establishes maximum inventory guidelines for fixed income and equity securities, subject to certain limited exceptions.

Capital management and control are accomplished through review (by product managers and members of management outside of the trading areas) of various reports, including reports that show current inventory profit and loss, inventory positions exceeding set limits, and aged positions. Additionally, real-time capital management data is available for intraday assessments.

The Company does not act as a dealer, trader or end-user of complex derivative products, such as swaps, collars and caps. The Company provides advice and guidance on complex derivative products to selected clients; however, this activity does not involve the Company acquiring a position or commitment in these products. The Company will occasionally hedge a position in its debt inventory through the use of financial futures contracts. These transactions are not material to the Company’s financial condition or results of operations.

Equity Price Risk. Equity price risk refers to the risk of changes in the level or volatility of the price of equity securities. The Company is exposed to this risk as a result of its market making activities. At February 28, 2001, and February 29, 2000, the potential daily loss in the fair value of equity securities was not material.

Interest Rate Risk. Interest rate risk refers to the risk of changes in the level or volatility of interest rates, the speed of payments on mortgage-backed securities, the shape of the yield curve and credit spreads. The Company is exposed to this risk as a result of maintaining inventories of interest-rate-sensitive financial instruments. This is the Company’s primary market risk.

For the purposes of the SEC’s disclosure requirements, the Company has elected to use a sensitivity approach to express the potential decrease in the fair value of the Company’s interest-rate-sensitive financial instruments. The Company calculated the potential loss in fair value of its debt inventory by calculating the change in offering price of each inventory item resulting from a 10 percent increase in either the Treasury yield curve for taxable products or the Municipal Market Data Corporation’s AAA rated yield curve for tax-exempt products. Using this method, if such a 10 percent increase were to occur, the Company calculated a potential loss in fair value of its debt inventory of $10.3 million at February 28, 2001, and $8.7 million at February 29, 2000.

Forward-Looking Statements
The Management’s Financial Discussion contains forward-looking statements within the meaning of federal securities laws. Actual results are subject to risks and uncertainties, including both those specific to the Company and those specific to the industry, which could cause results to differ materially from those contemplated. The risks and uncertainties include, but are not limited to, general economic conditions, actions of clients, actions of competitors, regulatory actions, changes in legislation and technology changes. Undue reliance should not be placed on the forward-looking statements, which speak only as of the date of this Annual Report. The Company does not undertake any obligation to publicly update any forward-looking statements.

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Consolidated Five-Year Financial Summary
Year Ended	February 28,	February 29,	February 28,	February 28,	February 28,
(In thousands,  except per share amounts)	2001	2000	1999	1998	1997
Revenues
Commissions:
Listed securities	$482,136	$537,005	$505,226	$462,276	$365,908
Options	55,883	62,708	49,830	44,188	33,850
Over-the-counter securities	295,921	331,992	199,472	190,092	178,752
Mutual funds	293,307	312,833	281,782	255,005	214,029
Commodities	16,540	17,305	15,518	16,315	16,038
Insurance	184,762	164,583	128,109	117,528	101,365
Total	1,328,549	1,426,426	1,179,937	1,085,404	909,942
Principal transactions:
Equities	114,363	90,202	60,538	61,184	58,427
Debt securities	177,912	194,016	141,484	146,768	154,580
Total	292,275	284,218	202,022	207,952	213,007
Investment banking:
Underwriting fees         and selling concessions	144,725	190,236	163,419	152,029	114,426
Management fees	28,572	35,483	55,582	38,889	41,733
Total	173,297	225,719	219,001	190,918	156,159
Asset management     and service fees	652,998	544,531	426,967	329,695	260,200
Interest:
Margin account balances	331,980	225,319	170,982	149,738	118,373
Securities owned and deposits	28,419	23,269	30,530	31,132	29,462
Total	360,399	248,588	201,512	180,870	147,835
Other	31,630	89,525	11,360	9,294	9,340
Total Revenues	2,839,148	2,819,007	2,240,799	2,004,133	1,696,483
Interest expense	97,942	22,818	5,628	1,436	2,065
Net Revenues	2,741,206	2,796,189	2,235,171	2,002,697	1,694,418
Non-Interest Expenses
Compensation and benefits	1,766,311	1,766,711	1,431,697	1,276,931	1,080,931
Communication and technology	242,530	159,258	123,126	113,556	97,845
Occupancy and equipment	126,594	105,297	100,972	82,605	74,521
Marketing and     business development	51,767	42,744	34,617	29,790	26,598
Floor brokerage and clearance	22,957	21,667	20,933	19,825	18,149
Other	75,893	77,397	53,039	42,193	41,417
Total Non-Interest Expenses	2,286,052	2,173,074	1,764,384	1,564,900	1,339,461
Earnings Before Income Taxes	455,154	623,115	470,787	437,797	354,957
Income Taxes	167,677	240,194	178,670	168,500	135,900
Net Earnings	$287,477	$382,921	$292,117	$269,297	$219,057
Per Share Data:
Diluted Earnings	$3.43	$4.08	$3.00	$2.75	$2.24
Basic Earnings	$3.50	$4.16	$3.07	$2.81	$2.29
Cash Dividends	$0.64	$0.61	$0.57	$0.51	$0.44
Book Value	$20.29	$19.69	$17.16	$15.21	$13.12
Other Data:
Total Assets	$4,859,984	$5,347,587	$3,803,132	$4,193,328	$4,244,340
Stockholders’ Equity	$1,626,344	$1,717,122	$1,627,737	$1,463,121	$1,261,303
Cash Dividends	$51,962	$55,483	$54,002	$48,740	$41,851
Pre-tax Return         on Average Equity	27.2%	37.3%	30.5%	32.1%	30.2%
Return on Average Equity	17.2%	22.9%	18.9%	19.8%	18.6%
Net Earnings as a         Percent of Net Revenues	10.5%	13.7%	13.1%	13.4%	12.9%
Average Common and         Common Equivalent
Shares Outstanding             (Diluted)	83,925	93,814	97,322	98,051	97,816
Average Common Shares         Outstanding (Basic)	82,096	92,140	95,252	95,950	95,483
Share and per share data have been restated for stock splits and stock dividends.

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Consolidated Balance Sheets	February 28,	February 29,
(Dollars in thousands, except per share amounts)	2001	2000
Assets
Cash and cash equivalents	$116,004	$154,487
Cash and government securities, segregated
under federal and other regulations	78,455	86,851
Securities purchased under agreements to resell	17,352	10,674
Securities borrowed	127,328	278,199
Receivables:
Customers	3,285,220	3,777,352
Brokers, dealers and clearing organizations	30,314	22,529
Fees, dividends and interest	70,934	62,989
Securities inventory, at fair value:
State and municipal	188,559	240,154
Government and agencies	41,024	57,943
Corporate	63,733	110,311
Investments	218,003	116,307
Property and equipment, at cost,
net of accumulated depreciation
and amortization of $362,615 and $337,602	508,970	312,942
Deferred income taxes	71,017	75,361
Other assets	43,071	41,488
	$4,859,984	$5,347,587
Liabilities and Stockholders’ Equity
Short-term bank loans	$319,800	$638,000
Checks payable	252,588	283,602
Securities loaned	780,666	637,684
Payables:
Customers	899,091	946,373
Brokers, dealers and clearing organizations	123,084	203,129
Securities sold but not
yet purchased, at fair value	31,194	24,920
Employee compensation and related taxes	673,756	740,188
Income taxes	58,871	73,557
Other liabilities	94,620	83,012
Total Liabilities	3,233,640	3,630,465
Stockholders’ Equity:
Preferred stock, $25 par value:
Authorized, 4,000,000 shares, none issued
Common stock, $1 par value:
Authorized, 550,000,000 shares
Issued, 96,463,114 shares	96,463	96,463
Additional paid-in capital	280,094	253,917
Retained earnings	1,875,379	1,645,332
	2,251,936	1,995,712
Less: Treasury stock, at cost
(16,325,828 and 9,254,005 shares)	625,592	278,590
Total Stockholders’ Equity	1,626,344	1,717,122
	$4,859,984	$5,347,587
See Notes to Consolidated Financial Statements.

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Consolidated Statements of Earnings Year Ended	February 28,	February 29,	February 28,
(Dollars in thousands,  except per share amounts)	2001	2000	1999
Revenues
Commissions	$1,328,549	$1,426,426	$1,179,937
Principal transactions	292,275	284,218	202,022
Investment banking	173,297	225,719	219,001
Asset management and service fees	652,998	544,531	426,967
Interest	360,399	248,588	201,512
Other	31,630	89,525	11,360
Total Revenues	2,839,148	2,819,007	2,240,799
Interest expense	97,942	22,818	5,628
Net Revenues	2,741,206	2,796,189	2,235,171
Non-Interest Expenses
Compensation and benefits	1,766,311	1,766,711	1,431,697
Communication and technology	242,530	159,258	123,126
Occupancy and equipment	126,594	105,297	100,972
Marketing and business development	51,767	42,744	34,617
Floor brokerage and clearance	22,957	21,667	20,933
Other	75,893	77,397	53,039
Total Non-Interest Expenses	2,286,052	2,173,074	1,764,384
Earnings Before Income Taxes	455,154	623,115	470,787
Income Taxes	167,677	240,194	178,670
Net Earnings	$287,477	$382,921	$292,117
Earnings Per Share:
Diluted	$3.43	$4.08	$3.00
Basic	$3.50	$4.16	$3.07
See Notes to Consolidated Financial Statements.

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Consolidated Statements of Stockholders’ Equity (Three Years Ended February 28, 2001)
(Dollars in thousands,  except per share amounts)	Common Stock	Additional Paid-in Capital	Retained Earnings	Treasury Stock	Total     Stockholders’ Equity
Balances, March 1, 1998	$96,463	$217,862	$1,160,532	$(11,736)	$1,463,121
Net earnings			292,117		292,117
Dividends declared       —$0.57 per share			(54,002)		(54,002)
Treasury stock acquired				(180,175)	(180,175)
Stock issued:
Employee stock          purchase/option plans		13,770	(52,177)	108,657	70,250
Restricted stock		8,366	1,624	26,436	36,426
Balances, February 28, 1999	96,463	239,998	1,348,094	(56,818)	1,627,737
Net earnings			382,921		382,921
Dividends declared      —$0.61 per share			(55,483)		(55,483)
Treasury stock acquired				(336,028)	(336,028)
Stock issued:
Employee stock          purchase/option plans		7,694	(39,532)	89,453	57,615
Restricted stock		6,225	9,332	24,803	40,360
Balances, February 29, 2000	96,463	253,917	1,645,332	(278,590)	1,717,122
Net earnings			287,477		287,477
Dividends declared       —$0.64 per share			(51,962)		(51,962)
Treasury stock acquired				(446,726)	(446,726)
Stock issued:
Employee stock          purchase/option plans		17,687	(5,464)	72,501	84,724
Restricted stock		8,490	(4)	27,223	35,709
Balances, February 28, 2001	$96,463	$280,094	$1,875,379	$(625,592)	$1,626,344
See Notes to Consolidated Financial Statements.

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Consolidated Statements of Cash Flows
Year Ended	February 28,	February 29,	February 28,
(In thousands)	2001	2000	1999
Cash Flows From Operating Activities:
Net earnings	$287,477	$382,921	$292,117
Noncash and non-operating items     included in earnings:
Depreciation and amortization	100,348	63,380	50,369
Expense of restricted stock awards	32,581	34,244	28,149
Deferred income taxes	4,344	12,951	(17,880)
Gain on investments, net	(13,406)	(75,236)	—
Decrease (increase) in operating assets:
Segregated cash and government securities	8,396	(28,892)	(665)
Securities borrowed	150,871	(34,692)	542,612
Receivable from customers	492,132	(1,151,036)	(397,188)
Receivable from brokers, dealers and         clearing organizations	(7,785)	5,326	(15,334)
Fees, dividends and interest receivable	(7,945)	(10,912)	(4,790)
Securities inventory	115,092	(141,313)	136,558
Other assets	(2,158)	(24,083)	6,461
(Decrease) increase in operating liabilities:
Checks payable	(31,044)	57,086	23,499
Securities loaned	(170,381)	106,213	(591,376)
Payable to customers	(47,282)	(2,703)	28,285
Payable to brokers,          dealers and clearing organizations	(80,045)	134,710	(117,337)
Securities sold but not yet purchased	6,274	(20,739)	26,518
Employee compensation and related taxes	(66,432)	162,115	72,342
Income taxes	(992)	60,164	28,058
Other liabilities	12,752	29,547	(5,923)
Net cash from operating activities	782,797	(440,949)	84,475
Cash Flows From Investing Activities:
Securities purchased under agreements to resell	(6,678)	4,164	189,525
Purchase of property and equipment	(295,801)	(130,912)	(62,567)
Investments	(88,290)	22,071	(22,170)
Net cash from investing activities	(390,769)	(104,677)	104,788
Cash Flows From Financing Activities:
Short-term bank loans	(318,200)	638,000	—
Securities loaned	313,363	301,929	—
Employee stock transactions	74,158	52,479	57,977
Purchase of treasury stock	(446,726)	(336,028)	(180,175)
Cash dividends paid	(53,106)	(55,766)	(52,330)
Net cash from financing activities	(430,511)	600,614	(174,528)
Net (Decrease) Increase in Cash and Cash Equivalents	(38,483)	54,988	14,735
Cash and Cash Equivalents, at Beginning of Year	154,487	99,499	84,764
Cash and Cash Equivalents, at End of Year	$116,004	$154,487	$99,499
Interest payments totaled $98,444 in 2001, $21,593 in 2000, and $5,585 in 1999. Income taxes paid totaled $165,304 in 2001, $167,340 in 2000, and $168,748 in 1999. Supplemental disclosures of noncash financing activities: Restricted stock awards, net of forfeitures, totaled $32,813 in 2001, $34,611 in 2000, and $28,602 in 1999. See Notes to Consolidated Financial Statements.

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Notes to Consolidated Financial Statements
(Three years ended February 28, 2001)
(Dollars in thousands, except per share amounts)

1. Summary of Significant Accounting Policies
Basis of Financial Information
The consolidated financial statements include the accounts of A.G. Edwards, Inc. and its wholly owned subsidiaries (collectively referred to as the “Company”) and are prepared in conformity with accounting principles generally accepted in the United States of America. In preparing these consolidated financial statements, management makes use of estimates concerning certain assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and certain revenues and expenses during the reporting period. Actual results could differ from these estimates. All material intercompany balances and transactions have been eliminated in consolidation. Prior years’ financial information has been reclassified to conform with the current-year presentation.

The Company operates and is managed as a single business segment providing investment services to its clients. The Company offers a wide range of services designed to meet clients’ individual investment needs, including securities and commodities brokerage, asset management, insurance, trust, investment banking, and other related services. These services are provided by more than 7,000 financial consultants in more than 695 locations of the Company’s principal subsidiary, A.G. Edwards & Sons, Inc. Because these services are provided using the same sales and distribution personnel, support services and facilities, and all are provided to meet the needs of its clients, the Company does not identify or manage assets, revenues or expenses resulting from any service, or class of services, as a separate business segment. With headquarters in St. Louis, the Company has offices in 49 states, the District of Columbia and London, England.

Cash and Cash Equivalents
Cash and cash equivalents consist of cash and highly liquid investments with maturities of 90 days or less at the date of acquisition.

Securities Transactions
Securities purchased under agreements to resell (Resale Agreements) and securities sold under agreements to repurchase are recorded at the contractual amounts that the securities will be resold/ repurchased, including accrued interest. The Company’s policy is to obtain possession or control of securities purchased under Resale Agreements and to obtain additional collateral when necessary to minimize the risk associated with this activity.

Securities borrowed and securities loaned are recorded at the amount of the cash collateral provided for securities borrowed transactions and received for securities loaned transactions, respectively. The adequacy of the collateral is continuously monitored and adjusted when considered necessary to minimize the risk associated with this activity. Substantially all of these transactions are executed under master netting agreements, which give the Company right of offset in the event of counterparty default.

Customer securities transactions are recorded on settlement date. Revenues and related expenses for transactions executed but unsettled are accrued on a trade-date basis. Receivables from and payables to customers include amounts due on cash and margin transactions. Securities owned by customers, including those that collateralize margin or other similar transactions, are not reflected on the consolidated balance sheets.

Securities inventory, securities sold but not yet purchased, securities segregated under federal and other regulations, and investments are recorded on a trade-date basis and are carried at fair value. Fair value is based on quoted market or dealer prices, pricing models, or management’s estimates. Among the factors considered by management in determining the fair value of investments, for which a quoted market or dealer price is not available, are the cost of the investment, terms and liquidity, developments since the acquisition of the investment, the sales price of recently issued securities, the financial condition and operating results of the issuer, earnings trends and consistency of operating cash flows, the long-term business potential of the issuer, the quoted market price of securities with similar quality and yield that are publicly traded, and other factors generally pertinent to the valuation of investments. The fair value of these investments is subject to a high degree of volatility and may be susceptible to significant fluctuations in the near term. Unrealized gains and losses are reflected in revenue.

Investment Banking
Investment banking revenues, which include underwriting fees, selling concessions and management fees, are recorded when services for the transaction are substantially completed. Transaction-related expenses are deferred and later expensed to match revenue recognition.

Stock-Based Compensation
The Company applies the provisions of Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees” (APB Opinion No. 25), and related interpretations to account for its employee stock plans. Based on the provisions of the plans, no compensation expense has been recognized for options issued under these plans. Restricted stock awards are expensed in the year granted.

Property and Equipment
Depreciation of buildings is provided using both straight-line and accelerated methods over estimated useful lives of 15 to 45 years. Leasehold improvements are amortized over the lesser of the life of the lease or estimated useful life of the improvement. Depreciation of equipment is provided over estimated useful lives of three to 10 years using both straight-line and accelerated methods. Software is depreciated over its useful life, generally not exceeding three years. The Company periodically evaluates the carrying value of its property and equipment to determine if an impairment exists.

Income Taxes
Income tax expense is provided for using the asset and liability method, under which deferred tax assets and liabilities are determined based upon the temporary differences between the financial statement and income tax bases of assets and liabilities, using current tax rates. The Company files a consolidated federal income tax return.

Comprehensive Earnings
Comprehensive earnings for each of the three years in the period ended February 28, 2001, was equal to the Company’s net earnings.

Recent Accounting Pronouncements
On March 1, 2001, the Company adopted the Statement of Financial Accounting Standards (“SFAS”) No. 133, “Accounting for Derivative Instruments and Hedging Activities,” as amended by SFAS No. 137 and SFAS No. 138. The statements establish accounting and reporting standards for derivative instruments and hedging activities. The adoption of these statements did not have a material impact on the Company’s consolidated financial statements.

In September 2000, the Financial Accounting Standards Board issued SFAS No. 140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities.” This standard replaced SFAS No. 125 of the same name. SFAS No. 140 provides accounting and reporting standards for transfers and servicing of financial assets and extinguishments of liabilities. The Company adopted SFAS No. 140 in the fourth quarter of fiscal 2001 for disclosures relating to securitization transactions and collateral and plans to adopt the remaining provisions of SFAS No. 140 in the first quarter of fiscal 2002 for transfers and servicing of financial assets and extinguishments of liabilities. The Company has not yet determined the impact that the adoption of the remainder of this statement will have on its consolidated financial statements.

Back to Table of Contents End of Note 1 (Pages 33-34)

2. Short-Term Financing
The Company’s short-term financing is generally obtained through the use of securities lending arrangements and bank loans. The interest rates on such short-term borrowings reflect market rates of interest or rebates at the time of the transactions. The average securities lending arrangements outstanding that were utilized in financing activities were $1.1 billion in 2001, $200 million in 2000 and zero in 1999, at effective interest rates of 6.5 percent in 2001 and 5.6 percent in 2000. Bank loans are short-term borrowings that are payable on demand and may be unsecured or collateralized by customer-owned securities held in margin accounts. The average of such bank loans was $406 million in 2001, $218 million in 2000 and $35 million in 1999, at effective interest rates of 6.5 percent, 5.5 percent and 5.8 percent, respectively. Firm investments in the amount of $34,854 were utilized to secure certain bank borrowings at February 28, 2001, and the banks do not have the ability to sell or repledge such investments. Substantially all other bank borrowings were secured by customer-owned securities.

Back to Table of Contents End of Note 2 (Page 34)

3. Employee Stock Plans
The Company applies the provisions of APB Opinion No. 25 to account for its employee stock plans. If compensation expense for the Company’s stock option and stock purchase plans were determined based on the estimated fair value of the options granted, consistent with SFAS No. 123, “Accounting for Stock-Based Compensation,” the Company’s net earnings and earnings per share would have been as follows:

	2001	2000	1999
Pro forma net earnings	$269,000	$371,000	$280,000
Pro forma earnings per share:
Diluted	$3.21	$3.95	$2.87
Basic	$3.28	$4.03	$2.94

The Black-Scholes option pricing model was used to calculate the estimated fair value of the options.

Employee Stock Purchase Plan
Options to purchase 1,875,000 shares of common stock granted to employees under the Company’s stock purchase plan are exercisable October 1, 2001, at 85 percent of market price based on dates specified in the plan. Employees purchased 1,870,983 shares at $32.33 per share in 2001, 1,871,284 shares at $21.89 per share in 2000 and 1,872,249 shares at $25.29 per share in 1999. Treasury shares were utilized for all of the shares purchased. The fair value of the options granted under this plan was estimated using the following assumptions for 2001, 2000 and 1999, respectively: dividend yield of 1.44 percent, 2.01 percent and 1.51 percent; an expected life of one year; expected volatility of 46 percent, 36 percent and 43 percent; and risk-free interest rates of 6.21 percent, 5.42 percent and 4.55 percent. The fair value of the options granted in 2001, 2000 and 1999 was $14.08, $5.99 and $7.52 per option, respectively.

Restricted Stock and Stock Options
Under the Company’s Incentive Stock Plan, three types of benefits may be awarded to officers and key employees: restricted stock, stock options and stock appreciation rights. Such awards are subject to forfeiture upon termination of employment during a restricted period, generally three years from the award date. Through February 28, 2001, no stock appreciation rights had been granted.

Restricted stock awards are made, and shares issued, without cash payment by the employee. Eligible employees at February 28, 2001, were awarded 967,561 shares with a market value of $34,977. At February 29, 2000, and February 28, 1999, the awards were 916,010 and 882,623 shares, respectively, with corresponding market values of $36,018 and $28,685. Treasury shares were utilized for these awards.

Nonqualified stock options are granted to purchase common stock at 100 percent of market value at date of grant. Such options are exercisable beginning three years from date of award and expire eight years from date of award, or earlier upon termination of employment. The fair value of each option grant was estimated at the date of grant using the following assumptions for 2001, 2000 and 1999, respectively: dividend yield of 1.44 percent, 2.01 percent and 1.51 percent; expected lives of 6 years; expected volatility of 46 percent, 36 percent and 43 percent; risk-free interest rates of 4.86 percent, 6.62 percent and 5.49 percent; and a forfeiture rate of 8 percent, 7 percent and 6 percent. The fair value of options granted under this plan in 2001, 2000 and 1999 was $16.04, $14.99 and $13.92, respectively.

A summary of the status of the Company’s stock options at February 28 (29) and changes during the years ended on those dates follows:

	2001		2000		1999
	Shares (000)	Weighted Average Exercise Price	Shares (000)	Weighted Average Exercise Price	Shares (000)	Weighted Average Exercise Price
Outstanding,     beginning of year	4,840	$27.52	4,597	$22.91	4,445	$18.97
Granted	901	$36.15	1,006	$39.32	968	$32.50
Exercised	(828)	$16.95	(723)	$14.41	(793)	$12.52
Forfeited	(110)	$37.12	(40)	$32.03	(23)	$28.26
Outstanding,     end of year	4,803	$30.74	4,840	$27.52	4,597	$22.91
Treasury shares     utilized for exercises	828		723		793
The following table summarizes information about outstanding stock options at February 28, 2001:

	Options Outstanding			Options Exercisable
Range of Exercise Prices	Number Outstanding (000)	Weighted Average Remaining Contractual Life (years)	Weighted Average Exercise Price	Number Exercisable (000)	Weighted Average Exercise Price
$11—$15	626	1.46	$13.05	626	$13.05
$16—$20	440	3.00	$16.59	440	$16.59
$21—$25	424	4.00	$21.21	424	$21.21
$31—$35	918	6.00	$32.50
$36—$40	1,857	7.49	$37.78
$41—$45	538	5.00	$43.06	538	$43.06
	4,803			2,028

Back to Table of Contents End of Note 3 (Pages 34-35)

4. Employee Profit Sharing Plan
The Company has a defined contribution plan [401(k)] covering substantially all employees, whereby the Company is obligated to match, in specified amounts as defined therein, portions of contributions made by eligible employees. Additional contributions may be made at the discretion of the Company and are based on the Company’s pre-tax earnings. The Company expensed $86,873 in 2001, $104,787 in 2000 and $85,308 in 1999 in connection with the 401(k).

The Company has an unfunded, nonqualified deferred compensation plan that provides benefits to participants whose contributions from the Company in the 401(k) are subject to Internal Revenue Service limitations. Participants may choose to base their return on the broker call rate or on the performance of one or more of a combination of mutual funds, as designated by the Company. Participants have no ownership in the mutual funds. Included in investments is $52,115 in mutual funds that were purchased by the Company to hedge its liability to the participants that chose to base the performance of their return on the mutual fund option. At February 28, 2001, and February 29, 2000, employee compensation and related taxes on the balance sheet included $175,595 and $151,298, respectively, related to this plan.

Back to Table of Contents End of Note 4 (Page 36)

5. Net Capital Requirements
A.G. Edwards & Sons, Inc. is subject to net capital rules administered by the Securities and Exchange Commission (SEC) and the New York Stock Exchange. Under such rules, this subsidiary must maintain net capital of not less than 2 percent of aggregate debit items, as defined, arising from customer transactions and would be restricted from expanding its business or paying cash dividends or advancing loans to affiliates if its net capital were less than 5 percent of such items. These rules also require A.G. Edwards & Sons, Inc. to notify and sometimes obtain approval from the SEC and other regulatory organizations for substantial withdrawals of capital or loans to affiliates. At February 28, 2001, the subsidiary’s net capital of $780,612 was 24 percent of aggregate debit items and $715,818 in excess of the minimum required.

Certain other subsidiaries are also subject to minimum capital requirements that may restrict the payment of cash dividends and advances to A.G. Edwards, Inc. The only restriction with regard to the payment of cash dividends by A.G. Edwards, Inc. is its ability to obtain cash dividends and advances from its subsidiaries, if needed.

Back to Table of Contents End of Note 5 (Page 36)

6. Income Taxes The provisions for income taxes consist of:
	2001	2000	1999
Current:
Federal	$144,996	$188,529	$169,286
State and local	18,337	38,714	27,264
	163,333	227,243	196,550
Deferred	4,344	12,951	(17,880)
	$167,677	$240,194	$178,670

Deferred income taxes reflect temporary differences in the bases of the Company’s assets and liabilities for income tax purposes and for financial reporting purposes, using current tax rates. These temporary differences result in taxable or deductible amounts in future years. Significant components of deferred tax assets and liabilities at February 28, 2001, and February 29, 2000, are as follows:

	2001	2000
Deferred Tax Assets:
Employee benefits	$138,341	$123,243
Other	11,252	8,120
	149,593	131,363
Deferred Tax Liabilities:
Receivables	33,386	33,127
Investments	21,042	17,887
Property and equipment	22,252	3,464
Other	1,896	1,524
	78,576	56,002
Net Deferred Tax Assets	$71,017	$75,361

The Company expects to fully realize these deferred tax assets given its historical level of earnings and related taxes paid; accordingly, no valuation allowance has been established. The Company’s effective tax rate was 37 percent in 2001, 39 percent in 2000 and 38 percent in 1999, which differed from the federal statutory rate of 35 percent. State and local taxes, net of federal benefit, increased the effective rate by 3 percent in 2001, and 4 percent in 2000 and 1999. No other single item had a material impact on the difference in the rates.

Back to Table of Contents End of Note 6 (Page 36)

7. Investments Investments consist of:
	2001	2000
Private equity	$107,202	$66,533
Mutual funds	75,724	3,479
U.S. government	25,830	37,852
Other	9,247	8,443
Total Investments	$218,003	$116,307

The Company primarily invests in U.S. government securities through its trust company subsidiaries. The Company’s mutual fund investments are primarily to hedge certain liabilities under its deferred compensation plan, and, to a lesser extent, as an approved investment by one of the trust companies. Private equity consists primarily of investments in a privately held investment management company and in a Company-sponsored private equity fund.

In 2000, the Company recognized a gain of $75,200, which is included in other revenue, from the sale of one-half of the Company’s investment in a privately held investment management company and the related increase in the carrying value of the remaining investment to its fair value. This investment had been carried on the equity method of accounting, which was discontinued due to the reduction of the Company’s ownership and the terms surrounding the remaining investment.

Back to Table of Contents End of Note 7 (Page 37)

8. Stockholders’ Equity Earnings Per Share The following table presents the computations of basic and diluted earnings per share:
	2001	2000	1999
Net earnings available to common stockholders	$287,477	$382,921	$292,117
Shares (in thousands):
Weighted average shares outstanding	82,096	92,140	95,252
Effect of dilutive common shares:
Restricted shares	375	551	423
Stock purchase plan	508	357	457
Stock option plan	946	766	1,190
Dilutive common shares	1,829	1,674	2,070
Total weighted average diluted shares	83,925	93,814	97,322
Earnings per share:
Diluted	$3.43	$4.08	$3.00
Basic	$3.50	$4.16	$3.07

Stock Repurchase Program
The Company’s May 1996 stock repurchase program, which authorized the Company to purchase up to 33 million of its outstanding shares, ended in 2001 as the share repurchase limit was attained. The Company purchased 10,640,750 shares with an aggregate cost of $446,726 in 2001, 11,032,500 shares at a cost of $336,028 in 2000 and 4,871,500 shares at a cost of $180,175 in 1999.

In February 2001, the Board of Directors authorized the repurchase of up to 10 million of the Company’s outstanding shares during a 23 month period. Repurchased shares are added to treasury stock to be used for employee stock plans and to partially offset the past, and future, effect of these plans. At February 28, 2001, the Company had not repurchased shares under this authorization.

Stockholders’ Rights Plan
The Company’s Stockholders’ Rights Plan, as amended, provides for the distribution of one Common Stock Purchase Right for each outstanding share of the Company’s common stock. The rights cannot be exercised or traded apart from the common stock until, without the prior consent of the Company, a third party acquires no less than 20 percent of the Company’s outstanding common stock or commences a tender or exchange offer that would result in the third party acquiring no less than 20 percent of the outstanding common stock. The Board of Directors may decrease the 20 percent thresholds to 10 percent of the outstanding stock. Each right, upon becoming exercisable, entitles the registered holder to purchase one share of common stock for $150 from the Company. If a person actually acquires no less than 20 percent, or 10 percent if appropriate, of the Company’s common stock without the Board of Directors’ consent, then each right will entitle the holder, other than the acquiring third party, to purchase for $150 the number of shares of the Company’s common stock (or in the event of a merger or other business combination, the number of shares of the acquirer’s stock) that has a market value of $300. The rights, which are redeemable by the Company at a price of $0.01 each prior to the person’s acquiring no less than 20 percent, or 10 percent if appropriate, of the Company’s common stock, are subject to adjustment to prevent dilution and expire June 22, 2005.

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9. Commitments and Contingent Liabilities
The Company has long-term operating leases and commitments related to office space, equipment and service agreements. Minimum commitments under all such noncancelable leases and service agreements, some of which contain escalation clauses and renewal options, at February 28, 2001, are as follows:

Year ending February 28 (29),
2002	$93,500
2003	87,500
2004	72,100
2005	53,700
2006	44,100
Later years	106,600
	$457,500

Rental expense under all operating leases and service agreements was $94,455 in 2001, $61,827 in 2000 and $52,657 in 1999.

The Company has commitments of $70 million for 2002 and $65 million for 2003 for the construction of an additional office building, a learning center and a parking garage at its headquarters campus.

In the normal course of business, the Company enters into when-issued and underwriting commitments and delayed delivery transactions. Settlement of these transactions at February 28, 2001, would not have had a material effect on the consolidated financial statements.

At February 28, 2001, and February 29, 2000, the Company had $123,849 and $144,662, respectively, of outstanding letters of credit, principally to satisfy margin deposit requirements with a clearing corporation. Of these amounts, $10,000 was collateralized by customer-owned securities held in margin accounts.

The Company is a defendant in a number of lawsuits, in some of which plaintiffs claim substantial amounts, relating primarily to its securities and commodities business. While results of litigation cannot be predicted with certainty, management, after consultation with counsel, believes that resolution of all such litigation will have no material adverse effect on the consolidated financial statements of the Company.

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10. Financial Instruments
Off-Balance Sheet Risk and Concentration of Credit Risk
The Company records customer transactions on a settlement date basis, generally three business days after trade date. The risk of loss on unsettled transactions is identical to that of settled transactions and relates to customers’ and other counterparties’ inability to fulfill their contracted obligations.

In the normal course of business, the Company also executes customer transactions involving the sale of securities not yet purchased, the purchase and sale of futures contracts, and the writing of option contracts on both securities and futures. In the event customers or other counterparties, such as broker-dealers or clearing organizations, fail to satisfy their obligations, the Company may be required to purchase or sell financial instruments in order to fulfill its obligations at prices that may differ from amounts recorded in the consolidated balance sheet.

Customer financing and securities settlement activities generally require the Company to pledge customer securities as collateral in support of various financing sources. Additionally, customer securities may be pledged as collateral to satisfy margin deposits at various clearing organizations. To the extent these counterparties are unable to fulfill their contracted obligation to return securities pledged, the Company is exposed to the risk of obtaining securities at prevailing market prices to meet its customer obligations.

Securities sold but not yet purchased represent obligations of the Company to deliver specified securities at contracted prices. Settlement of such obligations may be at amounts greater than those recorded in the consolidated balance sheet.

A substantial portion of the Company’s assets and obligations result from transactions with customers and other counterparties who have provided financial instruments as collateral. Volatile trading markets could impair the value of such collateral and affect customers’ and other counterparties’ ability to satisfy their obligations to the Company.

The Company manages its risks associated with the aforementioned transactions through position and credit limits and the continuous monitoring of collateral. Additional collateral is required from customers and other counterparties when appropriate.

The Company receives collateral in connection with resale agreements, securities borrowed transactions, customer margin loans and other loans. Under many agreements, the Company is permitted to sell or repledge these securities held as collateral and use these securities to enter into securities lending arrangements or deliver to counterparties to cover short positions. At February 28, 2001, the fair value of securities received as collateral where the Company is permitted to sell or repledge the securities was $4,474,000 and the fair value of the collateral that had been sold or repledged was $1,288,000.

Derivatives
The Company does not act as dealer, trader or end-user of complex derivatives such as swaps, collars and caps. The Company provides advice and guidance on complex derivative products to selected clients; however, this activity does not involve the Company acquiring a position or commitment in these products. The Company will occasionally hedge a portion of its debt inventory through the use of financial futures contracts. These transactions are not material to the Company’s financial condition or results of operations.

Fair Value Considerations
Substantially all of the Company’s financial instruments are carried at fair value or amounts that approximate fair value. Customer receivables, primarily consisting of floating rate loans collateralized by margin securities, are charged interest at rates similar to other such loans made throughout the industry. The Company’s remaining financial instruments are generally short-term in nature and liquidate at their carrying values.

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11. Enterprise-Wide Disclosure
The Company provides investment services to its clients through its financial consultants in more than 695 branch offices. Transaction services include commissions and sales credits earned by executing or facilitating the execution of security and commodity trades. Asset management fees are earned by providing portfolio advisory services through third-party managers, including mutual funds, annuities and insurance contracts, and the Company’s in-house portfolio managers. The Company earns interest revenue principally from financing its customer margin accounts, debt securities carried for resale and short-term investments.

The following table presents the Company’s total revenues by type of service for the years ended February 28 (29):

	2001	2000	1999
Transaction services	$1,827,049	$1,971,589	$1,623,648
Asset management services	569,373	470,125	373,413
Interest	360,399	248,588	201,512
Other	82,327	128,705	42,226
	$2,839,148	$2,819,007	$2,240,799

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Independent Auditors’ Report

To the Board of Directors and Stockholders of A.G. Edwards, Inc.:

We have audited the accompanying consolidated balance sheets of A.G. Edwards, Inc. and subsidiaries (the “Company”) as of February 28, 2001 and February 29, 2000, and the related consolidated statements of earnings, stockholders’ equity and cash flows for each of the three years in the period ended February 28, 2001. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of A.G. Edwards, Inc. and subsidiaries at February 28, 2001 and February 29, 2000, and the results of their operations and their cash flows for each of the three years in the period ended February 28, 2001, in conformity with accounting principles generally accepted in the United States of America.



April 18, 2001
St. Louis, Missouri

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Board of Directors A.G. Edwards, Inc.
		Member of A.G. Edwards, Inc.: 1 Executive Committee 2 Audit Committee 3 Compensation    Committee 4 Nominating    Committee
Robert L. Bagby 1 Chairman of the Board, Chief Executive Officer	Dr. E. Eugene Carter 2,3,4 Trustee, Charlotte R. Boschan Trust, Cambridge, Massachusetts
Charmaine S. Chapman 2,3,4 President, Chief Executive Officer, United Way of Greater St. Louis, St. Louis, Missouri	Benjamin F. Edwards IV 1 Vice Chairman of the Board, President	Samuel C. Hutchinson Jr. 2,3,4 President, Interface Construction Corp., Berkeley, Missouri
Ronald J. Kessler 1 Vice Chairman of the Board	Mark S. Wrighton 2,3,4 Chancellor, Washington University, St. Louis, Missouri

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Board of Directors A.G. Edwards & Sons, Inc.
Member of A.G. Edwards & Sons, Inc.: 5 Executive Committee 6 Finance Committee 7 Compensation   Committee Robert L. Bagby 5,6,7 Chairman of the Board, Chief Executive Officer, 26 years with A.G. Edwards Mary V. Atkin 5,6,7 Executive Vice President, Director of Information Technology, 23 years with A.G. Edwards Bill Branson Jr. Senior Vice President, Northeast Regional Officer, 7 years with A.G. Edwards Donnis L. Casey 5,7 Executive Vice President, Director of Staff, 34 years with A.G. Edwards Paul B. Coffee Senior Vice President, Western Regional Officer, 26 years with A.G. Edwards Terry J. Dessent Senior Vice President, Securities Research, 23 years with A.G. Edwards David J. Diffenauer Senior Vice President, Customer Accounting, 30 years with A.G. Edwards Benjamin F. Edwards IV 5,6,7 Vice Chairman of the Board, President, Director of Sales & Marketing, 23 years with A.G. Edwards Charles T. Forrest Senior Vice President, Public Finance, 13 years with A.G. Edwards S. Rawls Fortenberry Senior Vice President, Florida Regional Officer, 32 years with A.G. Edwards Charles J. Galli 5 Senior Vice President, Home Regional Officer, 22 years with A.G. Edwards	Alfred E. Goldman 5 Corporate Vice President, Market Analysis, 41 years with A.G. Edwards Richard F. Grabish 5 Senior Vice President, Assistant Director of Sales & Marketing, 20 years with A.G. Edwards John H. Henning Senior Vice President, Mid-Central Regional Officer, 13 years with A.G. Edwards Douglas L. Kelly 5,6,7 Executive Vice President, Secretary, Treasurer, Chief Financial Officer, Director of Law & Compliance, Director of Administration, 7 years with A.G. Edwards Ronald J. Kessler 5,6,7 Vice Chairman of the Board, Executive Vice President, Director of Operations, 33 years with A.G. Edwards Earl D. Laing Senior Vice President, Mid-Atlantic and Southeast Regional Officer, 35 years with A.G. Edwards Oliver M. Langenberg 6 Senior Vice President, Institutional Sales and Research, 40 years with A.G. Edwards John F. Lee Senior Vice President, Pacific Coast Regional Officer, 14 years with A.G. Edwards Gregory C. Menne Senior Vice President, Fixed Income, 33 years with A.G. Edwards James Michaels Senior Vice President, New York Operations, 28 years with A.G. Edwards Peter M. Miller Senior Vice President, Eastern Regional Officer, 12 years with A.G. Edwards Marlow N. Morgan Senior Vice President, Southern Regional Officer, 29 years with A.G. Edwards	Paul F. Pautler 5,7 Executive Vice President, Director of Investment Banking, 3 years with A.G. Edwards Robert A. Pietroburgo 5,6,7 Executive Vice President, Director of Branches, 14 years with A.G. Edwards Joseph G. Porter Senior Vice President, Assistant Director of Administration, 18 years with A.G. Edwards Howard R. Posner Senior Vice President, Corporate Syndicate-Equity, 19 years with A.G. Edwards John D. Quinn Senior Vice President, Securities Accounting, 32 years with A.G. Edwards Donald N. Robinson Senior Vice President, Central Regional Officer, 27 years with A.G. Edwards Michael Scafati Senior Vice President, Managed Products, 29 years with A.G. Edwards Daniel J. Schaub Senior Vice President, NASDAQ/OTC Trading, 20 years with A.G. Edwards David C. Sprowl Senior Vice President, Southwest Regional Officer, 27 years with A.G. Edwards Brian C. Underwood Senior Vice President, Compliance, 17 years with A.G. Edwards William J. Winter Sr. Senior Vice President, Assistant Treasurer, 34 years with A.G. Edwards Charles V. Zurfluh Senior Vice President, Branch Operations, 37 years with A.G. Edwards

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Boards of Directors
A.G. Edwards Technology Group, Inc. Robert L. Bagby Chairman of the Board and Chief Executive Officer Mary V. Atkin President Donnis L. Casey Benjamin F. Edwards IV Charles J. Galli Alfred E. Goldman Richard F. Grabish Douglas L. Kelly Ronald J. Kessler Paul F. Pautler Robert A. Pietroburgo A.G. Edwards Trust Company Richard F. Grabish Chairman of the Board and Chief Executive Officer Thomas O’Donnell President Terry J. Dessent Benjamin F. Edwards IV Charles J. Galli Douglas L. Kelly Michael Scafati Charles V. Zurfluh A.G. Edwards Trust Company FSB Richard F. Grabish Chairman of the Board and Chief Executive Officer Thomas O’Donnell President Terry J. Dessent Benjamin F. Edwards IV Charles J. Galli Douglas L. Kelly Michael Scafati Charles V. Zurfluh	AGE Commodity Clearing Corp. Ronald J. Kessler Chairman of the Board, President and Chief Executive Officer Douglas L. Kelly Thomas A. Petros Jr. O. Lee Reid Jr. Donald J. Summers Edwards Development Corp. Douglas L. Kelly Chairman of the Board and President Donnis L. Casey Benjamin F. Edwards IV Ronald J. Kessler Eugene J. King A.G. Edwards Life Insurance Company Douglas L. Kelly Chairman of the Board Michael Scafati President Robert L. Bagby Benjamin F. Edwards IV Michael Ferman Alfred E. Goldman Richard F. Grabish Ronald J. Kessler Gregory C. Menne A.G.E. Properties, Inc. Robert L. Bagby Chairman of the Board Douglas L. Kelly President Donnis L. Casey Ronald J. Kessler GULL-AGE Capital Group, Inc. Douglas L. Kelly Chairman of the Board, President	AGE Investments, Inc. Douglas L. Kelly Director A.G. Edwards Investment Management Consulting Services, Inc. Benjamin F. Edwards IV Chairman of the Board Richard F. Grabish President Terry J. Dessent Douglas L. Kelly A.G. Edwards Capital, Inc. Paul F. Pautler Chairman of the Board, Chief Executive Officer and President Robert L. Bagby Benjamin F. Edwards IV Douglas L. Kelly Ronald J. Kessler Michael Scafati A.G. Edwards & Sons (U.K.) Limited Benjamin F. Edwards IV Chairman of the Board Robert L. Bagby Douglas L. Kelly CPI Qualified Plan Consultants, Inc. Ronald J. Kessler Chairman of the Board Robert J. Dema President Sheryl K. Cheely Richard F. Grabish Douglas L. Kelly

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Regional Officers Number of branch offices as of March 31, 2001.
Western
Paul B. Coffee	Arizona, Colorado, Idaho, Montana, Oregon, Utah, Washington, Wyoming (61 branch offices)
Pacific Coast
John F. Lee	California, Hawaii, Nevada (70 branch offices)
Southwest
David C. Sprowl	New Mexico, Texas (65 branch offices)
Southern
Marlow N. Morgan	Arkansas, Kentucky, Louisiana, Mississippi, Tennessee (52 branch offices)
Central
Donald N. Robinson	Illinois, Indiana, Wisconsin (67 branch offices)
Mid-Central
John H. Henning	Iowa, Kansas, Minnesota, Missouri (Western), Nebraska, North Dakota, Oklahoma, South Dakota (59 branch offices)

Home
Charles J. Galli	Missouri (Eastern), Illinois (Southwest), St. Louis Area (30 branch offices)
Great Lakes
Louis A. Ginocchio Jr.	Michigan, Ohio (39 branch offices)
Florida
S. Rawls Fortenberry	Florida Peninsula (52 branch offices)
Mid-Atlantic and Southeast
Earl D. Laing	Alabama, Florida Panhandle, Georgia, North Carolina, South Carolina, Virginia, West Virginia (Southern) (82 branch offices)
Northeast
Bill Branson Jr.	Maine, Massachusetts, New Hampshire, New York (Upstate), Rhode Island, Vermont (50 branch offices)
Eastern
Peter M. Miller	Connecticut, Delaware, Maryland, New Jersey, New York (Downstate), Pennsylvania, Washington, D.C., West Virginia (Northern) (65 branch offices)

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Branch Office Management
Alabama Anniston John M. Monroe Birmingham David H. Gilchrist Dothan Earl D. Laing* Fairhope Thomas S. Lott Sr. Florence Thomas T. Ross Gadsden Troy D. Wagnon Gulf Shores Barbara S. Boutwell Huntsville Benny N. Little Inverness Center Benson R. McLendon Jr. Mobile Jere W. Marques Montgomery A. Reid Smith III Prattville Rondy K. Smith Selma Thomas R. Boyd Troy Robert K.T. Cole Jr. Arizona Carefree P. Josh Slocum Chandler-Tempe Robert L. McDonnell East Tucson Kenneth C. Jacowsky Flagstaff Clifford E. Alexander Green Valley Nolan D. Myers Mesa William R. Berg Oro Valley Ben Palazzo Phoenix Daniel L. Christy III Pinnacle Peak Robert E. Rittel Prescott Gerry M. Thornbro	Arizona (cont.) Prescott Valley Karen E. Baxter Scottsdale John S. Abbs Paul C. Ruble Jr. Sierra Vista Paula G. Beardsworth Surprise Michael J. Audisio Tucson Irving Mindes Arkansas Bella Vista John E. McLelland Berryville Allen Rogers Blytheville Shirley C. Magee Conway Curtis R.Williams El Dorado Andy E. Allen Fayetteville James D. Holladay Brian L. Keck Fort Smith Elton E. Rambin Harrison Ronald C. Richardson Holiday Island Park Paul K. Engskov Hot Springs Joseph K. Patrico J. Vernon McCarthy Hot Springs Village Thomas L. Beckman Jonesboro R. Arnold Cooper Little Rock Robert W. Tucker Vallie B. Carney Mountain Home David W. Floyd Pine Bluff Walter K. Cash Rogers Steven R. Burkhead Russellville Danny C. Stobaugh Springdale Russell D. Beck	California Arroyo Grande Nathan F. Alvarado Bakersfield Peter H. Hunt Carlsbad Gary P. Endres Chico William D. Carson Jr. Del Mar Thomas S. Green El Dorado Hills Scott M. Nelson Escondido Joseph J. Mamer J. Webb Cate Eureka Laura K. Hussey Fairfield Glenn E. Holbert Fallbrook Robert W. Kuech Fort Jones Terence L. Ross Fresno Donald A. Vincenti Gilroy Richard Silverstein Grass Valley D. Robert Frew Hemet Angela K. Sugimura Laguna Beach George H. Clohessy Laguna Hills Mark J. Robles La Jolla Michael W. Jennings Lake San Marcos Kenneth R. Klauber Lincoln Hills James C. Lee Lodi Paolo F. Marchetti Lompoc Justin T. Pollack Long Beach Rahamin Suares Curtis L. Cribbs Modesto Randall K. Anderson	California (cont.) Monterey Anthony S. Piazza Napa Gregory R. van Kesteren Newport Beach Timothy C. Metcalf Northridge Lee Bruckner-Henry Oakland Jon P. McGeath Orange Randall J. Beckman Oroville James H. Moll Oxnard George W. Ott III Palm Desert William C. Lacy Palm Springs Mark F. Blalock Palo Alto Royce L. Makishima Paradise John W. Nelson Pasadena David P. Luna Pismo Beach Juliet C. Franzen Pleasanton John P. Rohan Porterville Brett A. Schroeder Rancho Bernardo Robert R. Gonzales Redding Brian D. Gruber Redlands Robert R. Heinze Riverside Mary Carruthers Roseville Thomas P. Bjork Sacramento John F. Lee* Steven J. Hudgins San Diego Timothy P. Cronin San Francisco Paul A. Kromhout San Jose W. James O’Donoghue	California (cont.) San Juan Capistrano Robert W. Burns San Luis Obispo Nancy L. Fairchild San Rafael Tomm E. Hudson Santa Barbara Andrew R. Wilson Santa Maria John E. Puscheck Santa Monica Francis V. Bennett Santa Rosa Samuel D. Slayden Silicon Valley Kenneth W. Green Stockton Larry D. Watts Temecula Victor L. Compton Torrance William E. Smith Truckee Kenneth S. Roberts Visalia John C. Merritt James E. Wohlford Walnut Creek Richard D. Russell Jr. Westlake Village Frank D. Covely Colorado Boulder Dennis H. Kaboth Cherry Creek James B. Haass Colorado Springs Gary A. Backstrom Richard A. Murphy Denver Michael A. Pappas James A. Wiltshire Durango Scott L. Woods Estes Park Debra A. Grill Evergreen Robert C. Thompson Fort Collins John R. Bennett Grand Junction Ralph B. Sewell Linda S. Arledge	Colorado (cont.) Greeley Rick L. Runyan Greenwood Village Paul B. Coffee* Mark P. Fellows Interlocken Thomas E. Mahoney Lakewood James M. Wilday Longmont Ronald R. Billings Loveland Charles A. Bouchard Connecticut Danbury Arnold H. Rozany Darien Martin P. McLaughlin Jr. Essex Edward J. Brennan Calvin C. Coburn Farmington Peter M. Miller* Bruce C. Stenquist Glastonbury John J. McDermott III Greenwich Lawrence A. Baker Hamden Richard Pignone Hartford Patrick J. Sheehan Mystic Frederick C. Leonard New London Edwin Rachleff Southport John J. Kubica Jr. Wilton Paul A. Steffany Delaware Newark Frank A. Alteri District of Columbia Washington, D.C. William C. Mitchell Washington, D.C.-Downtown Bradford R. Coyle Loren D. Evans

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Branch Office Management (cont.)
Florida Belleair Bluffs Robert N. Chiavacci Boca Raton James D. Edge Bonita Springs Richard L. Bucher Boynton Beach Jeffrey L. Hill Bradenton Gary M. Knuckles Cape Coral Patrick S. Zych Citrus Hills Harry B. Sampson Clearwater Robert W. Hicks Clermont Frederick S. Lipp Coral Gables Alfredo Oliva Daytona Beach Ray Stephens Destin Jerry R. Ogle Englewood Burton E. Mason Eustis Tracy M. Belton Fort Lauderdale Mark D. Hawkins Fort Myers James A. Nolte Fort Pierce Francis E. Campbell Fort Walton Beach Edmond Waters Gainesville John H. Decker Jr. Holiday Francis J. Velten Indialantic Gerald B. Goodchild Jacksonville Ray Stephens Juno Beach James A. Collins Kissimmee Robert Gillespie Lake Mary John R. Snively Lake Worth Robert A. Lepa	Florida (cont.) Marco Island Terrence J. McCreanor Melbourne Thomas W. Sinclair Merritt Island Robert W. Sullivan Naples Robert E. Price North Venice Bruce W. Haltinner Ocala John Decker Jr. Orlando Robert S. Fox Ormond Beach Raymond C. Stephens Palm Coast Mario J. Ferrari Panama City August F. Yanke Panama City Beach Michael A. Protz Pensacola Eugene R. Borcz Port Charlotte Marc Novak Port Richey Ronald J. May Punta Gorda Joshua M. Howell St. Armands Key William G. McDaniel St. Petersburg David A. Ossenmacher Sarasota Paul D. Buskey Seminole Larry P. Rudolph South Venice John W. Holic Spring Hill Charles R. Morgan Stuart Robert J. Sander Sun City Center Richard W. Sheffield Tallahassee John B. Mackie Tampa Robert B. Moler Jr. Titusville David D. David	Florida (cont.) Vero Beach John D. Orcutt Jr. Viera Thomas R. Bedor The Villages Gregory E. Sutfin West Palm Beach Alex M. Bigelow Winter Haven S. Rawls Fortenberry* Zephyrhills Nancy L. Duffield-Cook Georgia Albany Frank P. O’Lear Jr. Athens Paul A. Bingham Jr. Atlanta Frederick J. Barton Augusta W. Neal Hines William F. Gibbs Sr. Columbus Jon V. Davidson Jr. Dalton Gary B. Oliver Gainesville A. Frank Wiegand Jr. Griffin Michael S. Cain Johns Creek Roland H. deLiniere Macon John A. Wood Marietta Parks H. Brown Jr. Midtown Atlanta Lake K. Boyer Robert S. Wilder Milledgeville William G. Neely III Rome David G. Hunter Cecil B. Wright III Roswell James M. Broadway Sandy Springs Tiberio P. DeJulio Savannah Thomas J. Hussey	Georgia (cont.) Thomasville William J. McCollum Tifton Yancey F. Carter III Hawaii Honolulu Tobias M. Martyn Idaho Boise Jerry L. Beto Coeur d’Alene Paul C. Barone Idaho Falls Fred T. Finlayson Ketchum James R. Everitt Pocatello Mark N. Buckalew Twin Falls Frederick C. Nelson Illinois Alton Neil R. Harrison Aurora Kevin A. Skogsberg Barrington Steven P. Fromm Belleville Rodney D. Vaught Robert D. Maurer Bloomington Charles A. Norman Burr Ridge Michael S. Ludlow Carbondale Barbara J. Blacklock Champaign Phillip B. Blankenburg Chicago Loop James H. Cox III Chicago- Union Station James A. Talley Moritz R. Hofstetter Collinsville Robert T. Stegemeier Danville Keith R. Souza Decatur Jay A. Cunningham	Illinois (cont.) Edwardsville Richard R. Sims Effingham Kent C. Schmidt Elgin Robert L. Schrieber Galesburg Sid V. Carlson Geneseo Brian J. Gernant Jacksonville Michael H. Lansden Jerseyville Anita M. Rose Joliet Warren C. DeNardo Lake Forest Robert W. Skipton Lincoln Philip M. Dehner Lisle† Michael J. Lantz Macomb Joseph A. Bartlow Mattoon Robert D. Carr Morris Ed L. Capko Mount Vernon Victoria L. Kirk Naperville Vicky S. Campbell Oakbrook Robert D. Gagnon Palos Heights David C. Heide Peoria Thomas R. Henrichs Peru David A. Claggett Quincy Richard V. Marcolla Rockford Martin L. Smith Roselle David W. Hanson St. Charles Craig S. Morgan Skokie Louis J. Welborne Springfield Craig R. Schermerhorn Anthony M. Guzzardo	Illinois (cont.) Waterloo Gary W. Hency Woodstock Virgil R. Smith Indiana Bloomington Daniel F. Davila Carmel Theodore J. Sturges Chesterton Mark S. Lazart Columbus Brent C. Verwers Evansville Stephen H. Merrick Fishers James P. Roederer Fort Wayne Richard L. Miller Greenwood Anthony C. La Rosa Indianapolis Dean J. Abplanalp Kokomo Michael V. Ricci Merrillville H. Dean Davis Muncie Katherine M. Onieal New Albany Timothy W. Newman Richmond Donald E. Bates Jr. South Bend Edward L. Patzer Terre Haute Rodney R. Heefner Iowa Burlington Linda M. Kelly Cedar Rapids Julianne E. Smith Davenport Stanley M. Reeg Des Moines Douglas A. West Dubuque Dennis J. Houlihan Keokuk Heather J. Barnett

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Branch Office Management (cont.)
Iowa (cont.) Marshalltown Jay P. Merryman Mason City Robert M. Zishka Mount Pleasant Patrick J. McCabe Sioux City Michael J. Woods Storm Lake Alan E. Bowles Waterloo Richard D. Pilipchuk Kansas Abilene Patricia M. O’Malley-Knox Garden City Sean P. Thayer Randall A. Fisher Hutchinson Roger D. Gatton Independence Robert J. Miller Lawrence Jerald L. Samp Liberal Thomas C. Mein Manhattan Jayson C. Kaus Overland Park Gene M. Diederich Steven B. Vecchio Pittsburg Jason E. McElwee Salina Kenneth M. Wedel Wichita Roger A. Buller Kentucky Ashland James E. Schroth Bowling Green Marc W. Evans Lexington Byron L. Holley Louisville John J. Wingfield Owensboro Larry H. Beisel Jr. Paducah John A. Williams	Louisiana Alexandria Lucien A. Branch Jr. Bart B. Schmolke Baton Rouge Gerald T. Goss Robert G. Hazel Franklinton Thomas M. Lewis Hammond Herbert J. Payne Frank J. VanMullem Jennings Keith J. Broussard Lafayette Thomas W. Grote Lake Charles Glenn R. Granger Mandeville Allen J. Catalanotto Monroe Marlow N. Morgan* Mary Ann Frost Natchitoches William H. Cross New Orleans Douglas A. Potter Opelousas Gregory M. Bordelon Ruston Bruce D. Cowan Shreveport Clyde B. French Maine Auburn Christopher C. Coburn Bangor Harry W. Moses Jeffrey H. Jackson Camden Glenn E. Buckingham Portland R. Bartlett Osgood III Waterville David F. Radsky Maryland Annapolis Kevin D. Brady Baltimore Richard K. Sutor Bel Air Herbert F. Otto	Maryland (cont.) Columbia Glenn A. Drake Easton R. Barry Drew Hunt Valley Stephen G. Mitchell Salisbury Brian C. Timken Massachusetts Adams Judith W. Hoyt Boston Gerald J. Buckley Boston-Back Bay Albert A. Fagan III Chelmsford Daniel S. Hanley East Harwich Jon O. Laurell Fall River Richard B. Wolfson Falmouth Francis X. Keohane Greenfield James D. Talbert Hingham John M. Koulopoulos Hyannis David J. Mason New Bedford Joseph Barry Jr. Peabody E. Alan Freeman Daniel R. Santanello Pittsfield Thomas W. Neely Plymouth Fred J. Gennelly Springfield John J. Sullivan Jr. Wellesley Hills Eric H. Burt Edward S. Heald Worcester Sarah G. Berry Michigan Ann Arbor Michael J. Fulkerson Battle Creek Charles J. Carroll Bay City Harold M. Miller	Michigan (cont.) Bloomfield Hills Sarah K. Rosner Cascade Stephen D. Bowman Clinton Township Donald J. Van De Steene Dearborn John P. Mathey Farmington Hills Randal W. Fischer Flint Edwin E. Luke Grand Rapids James E. Preston James E. Marosi Holland David J. Young Jackson James S. Grace Kalamazoo Jerry J. Cross Midland Richard L. Smith Doak R. Stolz Okemos James L. Carter Owosso Paul A. Schluckebier Port Huron Thomas K. Andison St. Joseph Craig A. Herrington Traverse City Glenn C. Hirt Troy F. Daniel Mirabella Minnesota Eden Prairie Rick K. Kendall Golden Valley John D. Hess Minneapolis Michael C. McCarty Mississippi Clarksdale Hiram L. Dilworth Columbus Dan L. Holley Gulfport J. Doug Medley	Mississippi (cont.) Hattiesburg Duane L. Raanes Jackson Hance W. McKenzie Jr. Meridian William S. Hudson Pascagoula Michael F. Odom Starkville Robert M. Crosland Missouri Blue Springs Charles S. Cooper Gerald F. Kurth Bolivar Alan B. Glor Branson Mitchell L. Walker Cameron William L. Nash Cape Girardeau Marsha M. Limbaugh Clayton Blake R. Dunlop Columbia James G. Church Festus John D. McAtee Sr. Florissant Larry D. Richardson Frontenac Charles J. Galli* Gerald H. Cooper Hannibal Kenneth W. Greger Jefferson City Jon R. Gilstrap Joplin Patrick J. Howley Kansas City Plaza John H. Henning* Brian T. Wall Kirksville Jeffrey Dudgeon Lebanon Gregory V. Sullivan Liberty James J. Ballinger Louisiana Clyde E. Penrod Moberly Jerry C. Jeffrey	Missouri (cont.) O’Fallon William H. Dillingham III Osage Beach James M. Herfurth Rolla Mark T. Riefer St. Charles Steve A. Mahler St. Joseph David M. Pickett St. Louis-Downtown Edward J. Costigan Jr. Sikeston Elmer E. Grant South Columbia Stephen H. Pease Springfield David L. Burnette Sunset Hills Cornelius W. Krentz Town & Country James K. McAtee Washington Charles J. Trankler Montana Missoula Roger T. Roy Nebraska Beatrice Thomas L. Shutts Grand Island Dan A. Govier John C. Stinson Lincoln Loy U. Olson North Platte Kevin P. Kennedy Jr. Omaha Randall C. Peck Nevada Incline Village Frederick C. Findeisen Las Vegas Gary E. Larimer Reno John C. Meadows Stateline Lori E. Zoval Summerlin Daniel R. Jackson

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Branch Office Management (cont.)
New Hampshire Claremont Gisela M. Polleys Concord William D. Chapin Hanover E. Clinton Swift Keene Terry D. Schnare Laconia Richard V. Breton Nashua Richard T. Iannacone New London Philip D. Estabrook III North Conway Henry N. Forrest Portsmouth Rohe V. Pennington III New Jersey Bernardsville Peter L. Roselle Cape May Henry S. Brzyski Cherry Hill Walter J. Schwenk East Brunswick Michael J. Doherty Green Village Brian J. McCafferty Hillsborough Patricia L. Halpern Morristown Joseph J. Bancheri Northfield Donald N. Levy Gene N. Schraeder Jr. Oradell Joseph Buono Grace M. Galvin Princeton Constantine Giviskos Rockaway Fred K. Ecke Jr. Short Hills Frank M. Taylor Spring Lake James J. Coughlin Voorhees Charles J. McAfee Watchung Walter W. Roth	New Mexico Albuquerque David M. Adams Carlsbad Constance J. Schoeld Las Cruces Bruce A. Reed Roswell Brian D. Stokes Santa Fe Barbara J. Christian New York Albany Terry L. Jandreau Binghamton Carol A. Eurillo Buffalo Karl I. Riner Cooperstown Carolyn L. Anderson Corning David W. Davies Garden City Michael J. DiSilvio Glen Cove Kevin W. Pettersen Hudson Valley Jeffrey T. Zelin Huntington Alan M. Borko Ithaca Catherine L. Mawicke Lake Placid Charles G. Cowan New York City-Midtown J. William Forrester Olean Lynn R. Johnson Oneonta Frank G. Burden Port Jefferson Jeffrey D. Thiele Rochester Joseph E. Klarberg Smithtown Kevin A. Healy Southampton Michael W. Kreimer Syracuse Randall J. Powers Bill Branson Jr.*	New York (cont.) Utica Eugene L. D’Amico Sr. White Plains Neal J. Baumann North Carolina Asheboro Joseph G. Thomas Asheville Robert R. Douglas Ballantyne Walter C. Martin Burlington James D. Mackintosh III Shannon S. Mackintosh Charlotte Donald L. Allen Fayetteville S. Lynn Legatski Greensboro Steven B. Holbrook Greenville Herbert L. Ormond III Hendersonville Scott E. Price Hickory Clifford J. Watts Highlands Steven R. Perry High Point Peter B. Wint Lake Norman Kevin D. Phillips Morehead City Phillip B. Nelson Pinehurst Walter L. McGowan Raleigh Alexander Mihajlov Rocky Mount Barden Winstead Jr. John W. Lewis Southport Albert Elrod Tryon Robert M. Tobey Wilmington Michael A. Faulkenbury	North Dakota Bismarck Irvin A. Smith III Fargo Charles E. Hanish Grand Forks Keith A. Bjerk Jamestown Rick E. Bosche Ohio Akron Samuel D. Baio Ashtabula Daniel M. Huffman Blue Ash Sue Bowman Cambridge Tommy D. Davey Chardon Terry R. Campbell Chillicothe Tom D. Hamsher Cincinnati Louis A. Ginocchio Jr.* Arthur L. Fischer Cleveland John N. Janoch Columbus Brent A. Markley Dayton Roger B. Chudde Findlay Edward F. Abbey Jr. Lancaster James R. Lewis Lima Phillip L. Trueblood Mansfield Scott A. Freund Medina Kurt A. Faulhaber Mentor Nicholas C. Tibaldi William A. Rigo Toledo Gerald L. Sliemers Westlake James P. Keane Worthington Martin E. VandenBroek	Oklahoma Bartlesville George L. Sneed El Reno Thomas H. Avant Enid Alan G. Stong Grove David L. East Lawton Charles E. Young Oklahoma City Barry D. Gangwer Ponca City George E. Ferguson Stillwater Eric W. Hodson Tulsa Frank L. Cox Jr. Oregon Bend Michael A. Groat Corvallis Andrew E. Jones Eugene Gary L. Feldman Lloyd Center William O. Hammerbeck James L. McCulley Medford David R. McDermott Portland Burton L. Beahm Roseburg Melvin G. Duncan Salem Michael J. Kitzmiller West Linn Janet M. Hudson Pennsylvania Abington George A. Porreca Jr. Beaver Gerald E. Gebbia Bethlehem Scott A. Brantingson Cranberry Nancy J. Lynches	Pennsylvania (cont.) Greensburg James L. Hergenroeder Harrisburg Richard J. Beatty Meadville Robert C. Asmus Media Timothy E. Griffith Peters Township James L. Lockerman Pittsburgh John T. Barbour David W. Spatig Scranton Keith R. Kleinman Sharon Ronald J. Koshar South Hills Rande T. Casaday Stephen P. Patrick Rhode Island Charlestown Dennis P. McGuire Newport James L. Carroll Providence Robert L. Capone South Carolina Aiken William G. Paschal Beaufort William R. Hatcher Bluffton Todd H. Crutchley Charleston William R. Hatcher Columbia Albert L. Stallings Jr. Florence Frank J. Brand II Greenville D. Michael Plemmons Hilton Head Island B. Marc Stuckart Jr. Inman Janice C. Farrell Laurens Mark A. Kelly Myrtle Beach Ruell L. Hicks Jr.

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Branch Office Management (cont.)
South Carolina (cont.) Pawleys Island Michael J. Hirsch Perrin Q. Dargan Seneca Jesse E. Wright III Spartanburg William T. Brown Sumter Charles Alessandro Sun City John C. Levy South Dakota Aberdeen Richard W. Niebuhr Craig D. Golz Huron Daniel L. Reinders Mitchell Dennis M. Martin Rapid City Patrick D. Malone Emiel E. Belzer Sioux Falls Joseph C. Wood Watertown Thomas C. Beadnell Tennessee Chattanooga Joseph E. Petty Johnson City Gregory G. Schuette Knoxville William K. West III Memphis Charles H. Long Jr. Morristown John E. Martin Nashville Richard J. Eskind Texas Abilene Gerald A. Galbraith Addison John O. Norwood Amarillo Jesse C. Miller Arlington Jack R. Alexander Jr. Austin Hollis L. Jefferies Jr.	Texas (cont.) Beaumont Michael W. Morgan Brownsville Harold T. Morrow Bryan Robert L. Allen Champion Brett A. Tynes Clear Lake Rolfe R. Young Conroe William D. Stigall Corpus Christi Matt P. Paul Dallas Lois M. Powell Denton R. Kyle Ratcliff DFW-Mid Cities Stephen T. Campbell El Paso Kent D. Mitchell Fort Worth Terry C. Hayes Galveston Marshall D. Stein Georgetown Michael D. Cooke Greenville Allison D. Tarplay Harlingen Sam T. Hahs Houston Robert L. Rogers Downtown Houston Philip D. Gundy Katy Arthur E. Harding Kerrville Franklin C. White Kingwood Mark A. Owens Lake Jackson Gary L. Foose Jr. Laredo Oscar O. Lopez Las Colinas Thomas E. Frye Lewisville Dan H. Barlow Longview Herman C. Bell	Texas (cont.) Lubbock Bill D. Lane Lufkin John P. Friesen Marble Falls Charles L. Bowen McAllen Gregory A. Douglas McKinney Ricky L. Brewer Memorial City Richard W. Ashcroft Midland Bhupendra K. Agrawal Nacogdoches John D. Montfort Odessa Sheril G. Berryhill Palestine Charles M. Bennett Pampa Richard P. Russell Paris Robert M. Smith Park Cities-Dallas Edward H. Ladd III M. Earl Hudman Plano Jimmy J. Beale Rockwall Jimmy L. Gifford San Angelo J. Greg Gray San Antonio Dennis N. Kamphoefner San Antonio- Stone Oak Jonathan F. Thrall Sherman David C. Sprowl* Gail W. Utter Sugar Land John G. James Sulphur Springs William D. Bradley Temple John R. Holmes Texarkana Scott DuBois Judy Carmeli Tyler Brent S. Lemons	Texas (cont.) Victoria William L. Holter Waco Keith A. Ferguson West Austin Peter A. Horn Wichita Falls Ralph Grantom The Woodlands William D. Stigall Utah Draper Michael C. Forbes Logan Nolan P. Gunnell Salt Lake City L. Rand Jolley Vermont Barre William M. Hedberg Burlington Paul M. Andrew Jr. Manchester Katherine W. Traver St. Johnsbury Judith A. Kendall Virginia Alexandria Frank E. Key Jr. Charlottesville James B. Neligan Gloucester Aubrey J. Ellis Harrisonburg Daniel E. Grandstaff Leesburg Katherine M. Owens Norfolk Robert J. Ballard Richmond Lee P. Dudley W. Taliaferro Thompson III Roanoke Richard W. Wertz Robert H. Kulp Tazewell Jeffrey D. Murray	Washington Bellingham Scott A. Hume Chehalis Judith G. Archibald Colville Teresa E. White-Snyder Edmonds Douglas M. Reilly Kirkland Steven L. Tracy Mount Vernon Arthur E. Larvie Seattle Kim R. Salzwedel Spokane Donald L. Cutler Chadwick C. Gladhart Tacoma Albert Sullivan Vancouver Dean G. Alsup West Virginia Bluefield Alfred E. Garrett Charleston Michael N. Barnett Huntington Garry L. McClure Morgantown Kevin K. Wilson Wisconsin Appleton Graham A. Werner Beaver Dam Calvin L. Hemling Mark Killingsworth Brookfield Robert M. Derks Burlington Michael P. Sonnichsen Eau Claire Michael D. Markin Elkhorn Tyson J. Ray Fond du Lac Jay H. Weiland Franklin Ellen M. Duhamel	Wisconsin (cont.) Green Bay Richard G. Kellogg Janesville Michelangelo J. Lamendola La Crosse Edward S. Neuman Madison John L. Meehan Mequon Richard L. Davis Milwaukee Thomas J. Caufield Oconomowoc Steven M. Cremer Oshkosh Ronald L. Gray Sturgeon Bay David L. Harris Wausau Edward C. Fox III Wyoming Cheyenne David E. Foreman Jackson Hole Kelly D. Lockhart London, England A.G. Edwards & Sons (U.K.) Limited Angus L. Carlill *Regional Officer †Branch opened after   February 28, 2001

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Shareholder Information

Annual Meeting
The 2001 Annual Meeting of Stockholders will be held at the Company’s headquarters, One North Jefferson, St. Louis, Missouri, on Thursday, June 21, 2001, at 10 a.m. The Notice of Annual Meeting, Proxy Statement and Proxy Voting Card are mailed in May to each stockholder. The Proxy Statement describes the items of business to be voted on at the Annual Meeting and provides information on the Board of Directors’ nominees for director and their principal affiliations with other organizations, as well as other information about the Company.

Dividend Payment Dates
The next four anticipated dividend payment dates are July 2 and October 1, 2001, and January 2 and April 1, 2002.

Form 10-K
The Form 10-K annual report filed with the Securities and Exchange Commission, which provides further details on A.G. Edwards’ business, is available at no charge from:

Secretary, A.G. Edwards, Inc.
One North Jefferson
St. Louis, Missouri 63103

Stock Exchange Listing
A.G. Edwards, Inc. stock is traded on the New York Stock Exchange under the symbol AGE. The approximate number of stockholders on February 28, 2001, was 25,000.

Registrar/Transfer Agent
The Bank of New York
Shareholder Relations Department–11E
P.O. Box 11258
Church Street Station
New York, New York 10286-1258
(800) 524-4458

Account Protection Package
The securities held by A.G. Edwards & Sons, Inc. for client accounts are protected up to $500,000, including up to $100,000 for cash claims, by the Securities Investor Protection Corporation (SIPC). In addition to the SIPC coverage, securities and cash held in client accounts are provided additional protection to the full value of the account (as determined by SIPC) by a commercial insurance company.

Exchange Memberships
A.G. Edwards companies are members of all major domestic stock and commodity exchanges, including the American, Boston, Chicago, New York, Pacific and Philadelphia stock exchanges; the Chicago Board Options Exchange; the Chicago Board of Trade; the Chicago Mercantile Exchange; the New York Board of Trade; the New York Mercantile Exchange; and other commodity exchanges. A.G. Edwards companies are also members of the National Futures Association and the National Association of Securities Dealers, Inc.

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A.G. Edwards, Inc.
One North Jefferson
St. Louis, Missouri 63103
(314) 955-3000
www.agedwards.com

EX-21

EXHIBIT 21

A.G. EDWARDS, INC.

REGISTRANT'S SUBSIDIARIES

The following listing includes the registrant's directly‑owned subsidiaries and indirectly-owned subsidiaries (certain subsidiaries which are not significant are omitted from the listing), all of which are included in the consolidated financial statements:

Name of Company	Place of Incorporation/ Organization	Subsidiary of
A.G. Edwards & Sons, Inc. (Edwards)	Delaware	Registrant
A.G. Edwards Technology Group, Inc.	Missouri	Edwards
AGE Commodity Clearing Corp.	Delaware	Registrant
A.G. Edwards Life Insurance Company	Missouri	Registrant
Edwards Development Corporation	Missouri	Registrant
A.G. Edwards Trust Company (Missouri)	Missouri	Registrant
A.G. Edwards Trust Company FSB	Federal Charter	Registrant
A.G.E. Properties, Inc. (Properties)	Missouri	Registrant
A.G.E. Realty Corp.	Missouri	Properties
A.G.E. Redevelopment Corporation	Missouri	Properties
GULL-AGE Capital Group, Inc.	Delaware	Registrant
AGE Investments, Inc.	Delaware	Registrant
A.G. Edwards Capital, Inc.	Delaware	Registrant
AGE Capital Holding, Inc.	Delaware	Registrant
AGE International, Inc.	Delaware	Registrant
A.G. Edwards & Sons (UK) Limited	United Kingdom	AGE International
CPI Qualified Plan Consultants, Inc.	Delaware	Registrant

EX-23 62 twenty3.htm

EXHIBIT 23

INDEPENDENT AUDITORS' CONSENT

We consent to the incorporation by reference in the Registration Statements (File Nos. 33‑61949, 33-52786, 33‑36609 and 33‑23837) of the A.G. Edwards, Inc. 1988 Incentive Stock Plan on Form S‑8 of our report dated April 18, 2001, appearing in and/or incorporated by reference in the Annual Report on Form 10‑K of A.G. Edwards, Inc. for the year ended February 28, 2001.

/s/ Deloitte & Touche LLP
May 25, 2001
St. Louis, Missouri

-----END PRIVACY-ENHANCED MESSAGE-----

EX-23

EXHIBIT 23

INDEPENDENT AUDITORS' CONSENT

We consent to the incorporation by reference in the Registration Statements (File Nos. 33‑61949, 33-52786, 33‑36609 and 33‑23837) of the A.G. Edwards, Inc. 1988 Incentive Stock Plan on Form S‑8 of our report dated April 18, 2001, appearing in and/or incorporated by reference in the Annual Report on Form 10‑K of A.G. Edwards, Inc. for the year ended February 28, 2001.

/s/ Deloitte & Touche LLP
May 25, 2001
St. Louis, Missouri