x
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF
|
||
THE
SECURITIES EXCHANGE ACT OF 1934
|
o
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF
|
||
THE
SECURITIES EXCHANGE ACT OF 1934
|
For
the transition period from
|
To
|
Florida
|
No. 59-1517485
|
|
(State
or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer
Identification No.)
|
|
RAYMOND
JAMES FINANCIAL, INC. AND SUBSIDIARIES
|
|||
Form
10-Q for the Quarter Ended March
31, 2006
|
|||
INDEX
|
|||
PART
I.
|
FINANCIAL
INFORMATION
|
PAGE
|
|
Item
1.
|
Financial
Statements (unaudited)
|
||
Condensed
Consolidated
Statement
of Financial
Condition as
of March 31, 2006 and September 30, 2005
(unaudited)
|
3
|
||
Condensed
Consolidated Statement of Operations for the three months ended March 31,
2006 and March 24, 2005 (unaudited)
|
4
|
||
Condensed
Consolidated Statement of Operations for the six months ended March
31,
2006 and March 24, 2005 (unaudited)
|
4
|
||
Condensed
Consolidated Statement of Cash Flows for the six months ended March
31,
2006 and March 24, 2005 (unaudited)
|
5
|
||
Notes
to Condensed Consolidated Financial Statements (unaudited)
|
7
|
||
Item
2.
|
Management's
Discussion and Analysis of Financial Condition and Results of
Operations
|
25
|
|
Item
3.
|
Quantitative
and Qualitative Disclosures About Market Risk
|
36
|
|
Item
4.
|
Controls
and Procedures
|
39
|
|
PART
II.
|
OTHER
INFORMATION
|
||
Item
1.
|
Legal
Proceedings
|
39
|
|
Item
2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
39
|
|
Item
4.
|
Submission
of Matters to a Vote of Security Holders
|
40
|
|
Item
6.
|
Exhibits
|
41
|
|
Signatures
|
42
|
||
Certifications
|
43
|
March
31,
|
September
30,
|
|
2006
|
2005
|
|
(in
thousands)
|
||
Assets:
|
||
Cash
and cash equivalents
|
$
850,875
|
$
998,749
|
Assets
segregated pursuant to federal regulations - cash and cash
equivalents
|
3,159,690
|
2,351,805
|
Securities
owned:
|
||
Trading
securities, at fair value
|
570,112
|
359,679
|
Available
for sale securities, at fair value
|
163,841
|
187,549
|
Other
investments
|
89,537
|
-
|
Receivables:
|
||
Brokerage
clients, net
|
1,499,999
|
1,426,096
|
Stock
borrowed
|
953,708
|
1,079,849
|
Bank
loans, net
|
1,615,029
|
1,000,281
|
Brokers-dealers
and clearing organizations
|
223,952
|
110,760
|
Other
|
244,224
|
241,527
|
Investments
in real estate partnerships- held by variable interest
entities
|
177,100
|
138,228
|
Property
and equipment, net
|
139,357
|
137,555
|
Deferred
income taxes, net
|
74,975
|
78,373
|
Deposits
with clearing organizations
|
30,918
|
31,286
|
Goodwill
|
62,575
|
62,575
|
Investment
in leveraged leases, net
|
11,589
|
11,808
|
Prepaid
expenses and other assets
|
204,723
|
142,649
|
$10,072,204
|
$8,358,769
|
|
Liabilities
and Shareholders' Equity:
|
||
Loans
payable
|
$
551,691
|
$
146,462
|
Loans
payable related to real estate- owed by variable interest
entities
|
146,338
|
144,780
|
Payables:
|
||
Brokerage
clients
|
4,536,952
|
3,767,535
|
Stock
loaned
|
1,189,621
|
1,115,595
|
Bank
deposits
|
1,244,736
|
1,076,020
|
Brokers-dealers
and clearing organizations
|
139,127
|
146,269
|
Trade
and other
|
125,144
|
140,360
|
Trading
securities sold but not yet purchased
|
174,235
|
134,595
|
Securities
sold under agreements to repurchase
|
241,825
|
33,681
|
Accrued
compensation, commissions and benefits
|
218,661
|
299,657
|
Income
taxes payable
|
13,696
|
20,961
|
8,582,026
|
7,025,915
|
|
Minority
Interests
|
110,456
|
91,031
|
Shareholders'
equity*:
|
||
Preferred
stock; $.10 par value; authorized
|
||
10,000,000
shares; issued and outstanding -0- shares
|
-
|
-
|
Common
Stock; $.01 par value; authorized
|
||
180,000,000
shares; issued 116,876,331 at
|
1,169
|
765
|
March
31, 2006 and 114,850,634 at Sept. 30, 2005
|
||
Shares
exchangeable into common stock; 386,375
|
4,959
|
5,493
|
at
March 31, 2006 and 427,988 at Sept. 30, 2005
|
||
Additional
paid-in capital
|
213,126
|
165,074
|
Retained
earnings
|
1,169,943
|
1,082,063
|
Accumulated
other comprehensive income
|
8,210
|
9,632
|
1,397,407
|
1,263,027
|
|
Less:
1,278,399 and 1,884,422 common shares
|
||
in
treasury, at cost
|
17,685
|
21,204
|
1,379,722
|
1,241,823
|
|
$10,072,204
|
$8,358,769
|
|
See
accompanying Notes to Condensed Consolidated Financial
Statements.
*
All share amounts adjusted for the March 22, 2006 3-for-2 stock
split.
|
Three
Months Ended
|
Six
Months Ended
|
||||||
March
31,
|
March
24,
|
March
31,
|
March
24,
|
||||
2006
|
2005
|
2006
|
2005
|
||||
Revenues:
|
|||||||
Securities
commissions and fees
|
$
395,009
|
$
341,373
|
$
761,485
|
$
698,842
|
|||
Investment
banking
|
38,856
|
28,387
|
68,570
|
56,892
|
|||
Investment
advisory fees
|
43,486
|
39,106
|
86,232
|
76,558
|
|||
Interest
|
106,622
|
57,392
|
194,672
|
111,808
|
|||
Net
trading profits
|
8,189
|
7,445
|
14,046
|
17,197
|
|||
Financial
service fees
|
25,101
|
21,748
|
48,153
|
44,158
|
|||
Other
|
39,555
|
16,876
|
59,007
|
31,249
|
|||
Total
Revenues
|
656,818
|
512,327
|
1,232,165
|
1,036,704
|
|||
Interest
expense
|
64,016
|
29,209
|
112,827
|
54,601
|
|||
Net
Revenues
|
592,802
|
483,118
|
1,119,338
|
982,103
|
|||
Non-Interest
Expenses:
|
|||||||
Compensation,
commissions and benefits
|
399,645
|
342,492
|
766,264
|
691,401
|
|||
Communications
and information processing
|
26,698
|
22,059
|
51,294
|
43,258
|
|||
Occupancy
and equipment costs
|
18,110
|
15,822
|
35,512
|
31,875
|
|||
Clearance
and floor brokerage
|
5,060
|
5,779
|
10,826
|
11,245
|
|||
Business
development
|
19,695
|
15,501
|
36,826
|
30,245
|
|||
Other
|
32,330
|
26,956
|
56,532
|
53,176
|
|||
Total
Non-Interest Expenses
|
501,538
|
428,609
|
957,254
|
861,200
|
|||
Income
before provision for income taxes
|
91,264
|
54,509
|
162,084
|
120,903
|
|||
Provision
for income taxes
|
33,779
|
23,432
|
60,005
|
48,994
|
|||
Minority
interest
|
(4,046)
|
(3,620)
|
(4,561)
|
(2,031)
|
|||
Net
Income
|
$
61,531
|
$
34,697
|
$
106,640
|
$
73,940
|
|||
Net
Income per share-basic
|
$ 0.54
|
$
0.31
|
$
0.95
|
$
0.66
|
|||
Net
Income per share-diluted
|
$
0.53
|
$ 0.30
|
$
0.93
|
$
0.65
|
|||
Weighted
average common shares
|
|||||||
outstanding-basic*
|
113,194
|
112,311
|
112,053
|
111,359
|
|||
Weighted
average common and common
|
|||||||
equivalent
shares outstanding-diluted*
|
116,412
|
114,458
|
115,046
|
113,433
|
|||
Six
Months Ended
|
||
March
31,
|
March
24,
|
|
2006
|
2005
|
|
Cash
Flows from operating activities:
|
||
Net
Income
|
$
106,640
|
$
73,940
|
Adjustments
to reconcile net income to net
|
||
cash
provided by operating activities:
|
||
Depreciation
and amortization
|
9,295
|
8,424
|
Excess
tax benefits from stock-based payment arrangements
|
(1,155)
|
-
|
Deferred
income taxes
|
3,398
|
(7,863)
|
Unrealized
loss (gains), premium and discount amortization
|
||
on
available for sale securities and other securities
|
247
|
(660)
|
Effectiveness
of interest rate swaps accounted for as cash flow hedges
|
-
|
(4)
|
Loss
on sale of property and equipment
|
808
|
801
|
Provision
for legal proceedings, bad debts and other accruals
|
14,817
|
18,636
|
Stock-based
compensation expense
|
11,020
|
7,878
|
(Increase)
decrease in operating assets:
|
||
Assets
segregated pursuant to federal regulations
|
(807,885)
|
(140,983)
|
Receivables:
|
||
Brokerage
clients, net
|
(74,078)
|
(58,003)
|
Stock
borrowed
|
126,141
|
380,429
|
Brokers-dealers
and clearing organizations
|
(113,192)
|
20,155
|
Other
|
11,519
|
(3,390)
|
Trading
securities, net
|
(170,793)
|
(121,847)
|
Investments
in real estate partnerships-held by variable interest
entities
|
(38,872)
|
(9,138)
|
Prepaid
expenses and other assets
|
(58,847)
|
(28,220)
|
Increase
(decrease) in operating liabilities:
|
||
Payables:
|
||
Brokerage
clients
|
769,417
|
424,069
|
Stock
loaned
|
74,026
|
(431,888)
|
Brokers-dealers
and clearing organizations
|
(7,142)
|
19,300
|
Trade
and other
|
(23,402)
|
(10,958)
|
Securities
sold under agreements to repurchase
|
208,144
|
23,400
|
Accrued
compensation, commissions and benefits
|
(80,996)
|
(46,045)
|
Income
taxes payable
|
(7,265)
|
(18,479)
|
Minority
Interest
|
19,425
|
4,042
|
Net
cash (used in) provided by operating activities
|
$ (28,730)
|
$
103,596
|
Six
Months Ended
|
||
March
31,
|
March
24,
|
|
2006
|
2005
|
|
Cash
Flows from investing activities:
|
||
Additions
to property and equipment, net
|
$
(14,821)
|
$
(12,607)
|
Loan
originations and purchases
|
(1,019,318)
|
(295,672)
|
Loan
repayments
|
398,113
|
176,753
|
Purchases
of other investments
|
(89,537)
|
-
|
Sale
of available for sale securities
|
92
|
9,251
|
Purchases
of available for sale securities
|
(9,721)
|
(14,860)
|
Available
for sale securities maturations and repayments
|
33,284
|
36,048
|
Net
cash used in investing activities
|
(701,908)
|
(101,087)
|
Cash
Flows from financing activities:
|
||
Proceeds
from borrowed funds
|
411,874
|
21,400
|
Repayments
of mortgage and borrowings
|
(6,645)
|
(3,973)
|
Financing
activity related to variable interest entities
|
8,471
|
2,273
|
Exercise
of stock options and employee stock purchases
|
23,932
|
15,365
|
Increase
in bank deposits, net
|
168,716
|
112,265
|
Purchase
of treasury stock
|
(5,027)
|
(96)
|
Cash
dividends on common stock
|
(18,371)
|
(12,065)
|
Excess
tax benefits from stock-based payment arrangements
|
1,155
|
-
|
Net
cash provided by financing activities
|
584,105
|
135,169
|
Currency
adjustment:
|
||
Effect
of exchange rate changes on cash
|
(1,341)
|
1,113
|
Net
(decrease) increase in cash and cash equivalents
|
(147,874)
|
138,791
|
Cash
and cash equivalents at beginning of period
|
998,749
|
528,823
|
Cash
and cash equivalents at end of period
|
$
850,875
|
$
667,614
|
Supplemental
disclosures of cash flow information:
|
||
Cash
paid for interest
|
$
111,054
|
$
54,397
|
Cash
paid for taxes
|
$
63,779
|
$
75,335
|
March
31, 2006
|
September
30, 2005
|
|||
Securities
|
Securities
|
|||
Sold
but
|
Sold
but
|
|||
Trading
|
Not
yet
|
Trading
|
Not
yet
|
|
Securities
|
Purchased
|
Securities
|
Purchased
|
|
(in
000's)
|
||||
Marketable:
|
||||
Equities
|
$
38,924
|
$
31,821
|
$
32,237
|
$
30,256
|
Municipal
obligations
|
212,465
|
348
|
177,984
|
17
|
Corporate
obligations
|
130,151
|
45
|
27,830
|
2,285
|
Government
obligations
|
77,212
|
76,875
|
42,009
|
99,465
|
Agencies
|
86,780
|
60,287
|
60,445
|
84
|
Derivative
Contracts
|
20,260
|
4,363
|
12,795
|
2,488
|
Other
|
3,177
|
-
|
2,019
|
-
|
Non-marketable
|
1,143
|
496
|
4,360
|
-
|
$570,112
|
$174,235
|
$359,679
|
$134,595
|
March
31,
2006
|
September
30,
2005
|
|
(in
000's)
|
||
Short-term
Borrowings:
|
||
Borrowings
on lines of credit (1)
|
$
77,340
|
$
5,338
|
Current
portion of mortgage notes payable(2)
|
2,676
|
2,604
|
Federal
home loan bank advances (3)
|
334,500
|
-
|
Total
short-term borrowings
|
414,516
|
7,942
|
Long-term
Borrowings:
|
||
Mortgage
notes payable
(2)
|
67,175
|
68,520
|
Federal
home loan bank advances (3)
|
70,000
|
70,000
|
Total
long-term borrowings
|
137,175
|
138,520
|
Total
borrowings
|
$551,691
|
$146,462
|
(1)
|
The
Company and its subsidiaries maintain one committed and several
uncommitted lines of credit denominated in U.S. dollars and one
uncommitted line of credit denominated in Canadian dollars. At March
31,
2006, the aggregate lines were $660 million and CDN $40 million,
respectively, of which $77.3 million was outstanding. The interest
rates
for the lines of credit are variable and are based on the Fed Funds
rate,
LIBOR, and Canadian prime rate. For the three months ended March
31, 2006,
interest rates on the lines of credit ranged from 4.50% to 6.25%.
For the
three months ended, March 24, 2005 interest rates on the lines of
credit
ranged from 2.50% to 4.51%.
|
(2)
|
Mortgage
notes payable is comprised of a mortgage loan for the financing of
the
Company's home office complex and a note for the financing of the
office
for a foreign subsidiary. The mortgage loan bears interest at 5.7%
and is
secured by land, buildings, and improvements with a net book value
of
$75.1 million at March 31, 2006. A new building was purchased for
$1.6
million in April 2005 for a foreign subsidiary’s office in India and was
financed with a note bearing 8.25% interest and is secured by the
land and
building.
|
(3)
|
RJBank
has $404.5 million in Federal Home Loan Bank ("FHLB") advances outstanding
at March 31, 2006, which are comprised of $334.5 million short-term,
floating rate and $70.0 million long-term, fixed rate advances. The
short-term, floating rate advances currently bear interest at rates
ranging from 4.74% to 5.10%. The long-term, fixed rate advances bear
interest at rates ranging from 2.37% to 5.67%. The outstanding FHLB
advances mature between April 2006 and October 2014. These advances
are
secured by a blanket lien on the Bank's residential loan portfolio
issued
to FHLB at March 31, 2006.
|
Three
Months Ended
|
Six
Months Ended
|
|||
March
31, 2006
|
March
24, 2005
|
March
31, 2006
|
March
24, 2005
|
|
Dividend
Yield
|
1.08%
|
1.10%
|
1.20%
|
1.10%
|
Expected
Volatility
|
29.38%
|
38.21%
|
29.38%
|
38.54%
|
Risk-free
Interest Rate
|
4.91%
|
4.18%
|
4.38%
|
3.67%
|
Expected
Lives
|
4.9
yrs
|
4.6
yrs
|
4.9
yrs
|
5.2
yrs
|
Weighted
|
||||
Weighted
|
Average
|
|||
Average
|
Remaining
|
Aggregate
|
||
Exercise
|
Contractual
|
Intrinsic
|
||
Shares
|
Price
($)
|
Term
(Years)
|
Value
($)
|
|
Outstanding
at
|
||||
October
1, 2005
|
7,050,171
|
$14.97
|
||
Granted
|
1,965,113
|
23.91
|
-
|
-
|
Exercised
|
(803,169)
|
13.45
|
-
|
-
|
Canceled
|
(32,954)
|
15.82
|
||
Expired
|
(2,250)
|
13.95
|
-
|
-
|
Outstanding
at
|
||||
December
31, 2005
|
8,176,911
|
$17.26
|
3.14
|
$64,219,903
|
Granted
|
31,350
|
30.13
|
-
|
-
|
Exercised
|
(632,979)
|
14.89
|
-
|
-
|
Canceled
|
(112,099)
|
18.80
|
||
Expired
|
(5,475)
|
16.95
|
-
|
-
|
Outstanding
at
|
||||
March
31, 2006
|
7,457,708
|
$17.49
|
3.13
|
$90,014,615
|
Options
exercisable at
|
||||
March
31, 2006
|
1,253,680
|
$14.18
|
1.02
|
$19,277,940
|
Weighted
|
||
Average
|
||
Grant
Date
|
||
Shares/Units
|
Fair
Value ($)
|
|
Nonvested
at
|
||
October
1, 2005
|
1,022,043
|
$16.02
|
Granted
|
653,243
|
21.70
|
Vested
|
(43,052)
|
13.44
|
Canceled
|
-
|
-
|
Nonvested
at
|
||
December
31, 2005
|
1,632,234
|
$18.35
|
Granted
|
219,874
|
29.41
|
Vested
|
(93,202)
|
14.81
|
Canceled
|
(22,703)
|
19.81
|
Nonvested
at
|
||
March
31, 2006
|
1,736,203
|
$19.98
|
Weighted
|
||
Average
|
||
Grant
Date
|
||
Shares
|
Fair
Value ($)
|
|
Nonvested
at
|
||
October
1, 2005
|
862,026
|
$17.38
|
Granted
|
393,135
|
24.87
|
Vested
|
(264,468)
|
13.95
|
Canceled
|
(2,377)
|
-
|
Nonvested
at
|
||
December
31, 2005
|
988,316
|
$21.32
|
Granted
|
20,019
|
28.65
|
Vested
|
(1,543)
|
11.32
|
Canceled
|
(5,158)
|
-
|
Nonvested
at
|
||
March
31, 2006
|
1,001,634
|
$21.16
|
March
31, 2006
|
September
30, 2005
|
|||
(in
000's)
|
||||
Standby
letters of credit
|
$
27,982
|
$
15,933
|
||
Consumer
lines of credit
|
23,544
|
21,326
|
||
Commercial
lines of credit
|
458,298
|
168,804
|
||
Unfunded
loan commitments - variable rate
|
207,802
|
288,169
|
||
Unfunded
loan commitments - fixed rate
|
9,624
|
11,402
|
Sources
of collateral (in 000's):
|
|
Securities
purchased under agreements to resell
|
$
303,693
|
Securities
received in securities borrowed vs. cash transactions
|
991,594
|
Collateral
received for margin loans
|
1,396,272
|
Total
|
$2,691,559
|
Uses
of collateral and trading securities (in 000's):
|
|
Securities
purchased under agreements to resell
|
$
303,693
|
Securities
received in securities borrowed vs. cash transactions
|
955,541
|
Collateral
received for margin loans
|
392,156
|
Total
|
$1,651,390
|
Number
of
|
Average
|
||
Period
|
Shares
Purchased (1)
|
Price
Per Share
|
|
January
1, 2006 - January 31, 2006
|
8,957
|
$25.98
|
|
February
1, 2006 - February 28, 2006
|
167,481
|
30.54
|
|
March
1, 2006 - March 31, 2006
|
-
|
-
|
|
Total
|
176,438
|
$30.31
|
(1)
|
The
Company does not have a formal stock repurchase plan. Shares are
repurchased at the discretion of management pursuant to prior
authorization from the Board of Directors. On May 20, 2004, the Board
of
Directors authorized purchases of up to $75 million. Since that date
387,853 shares have been repurchased for a total of $7.2 million,
leaving
$67.8 million available to repurchase shares. Historically the Company
has
considered such purchases when the price of its stock reaches or
approaches 1.5 times book value or when employees surrender shares
as
payment for option exercises. The decision to repurchase shares is
subject
to cash availability and other factors. During January 2006, the
Company
only purchased shares that were surrendered by employees as payment
for
option exercises. During the three months ended March 31, 2006, the
Company, through its wholly owned Canadian subsidiary, established
a trust
fund which is associated with the 2005 Restricted Stock Plan. This
trust
fund was established and funded to enable the trust fund to acquire
Company common stock in the open market to be used to settle restricted
stock units granted as a retention vehicle for certain employees
of the
Canadian subsidiary. The only purchases of shares during February
were for
this trust fund. (See Note 6 to the Condensed Consolidated Financial
Statements).
|
March
31,
|
September
30,
|
||
2006
|
2005
|
||
Raymond
James & Associates, Inc.:
|
($
in 000's)
|
||
(alternative
method elected)
|
|||
Net
capital as a percent of Aggregate
|
|||
Debit
Items
|
24.8%
|
27.8%
|
|
Net
capital
|
$
345,404
|
$
372,615
|
|
Less:
required net capital
|
(27,870)
|
(26,804)
|
|
Excess
net capital
|
$
317,534
|
$
345,811
|
March
31,
|
September
30,
|
||
2006
|
2005
|
||
Raymond
James Financial Services, Inc.:
|
(in
000's)
|
||
(alternative
method elected)
|
|||
Net
capital
|
$
50,604
|
$
41,851
|
|
Less:
required net capital
|
(250)
|
(250)
|
|
Excess
net capital
|
$
50,354
|
$
41,601
|
To
be well capitalized
|
||||||
Requirement
for capital
|
under
prompt
|
|||||
adequacy
|
corrective
action
|
|||||
Actual
|
purposes
|
provisions
|
||||
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
|
($
in 000's)
|
||||||
As
of March 31, 2006:
|
||||||
Total
capital (to
|
||||||
risk-weighted
assets)
|
$
183,166
|
16.4%
|
$89,366
|
8.0%
|
$111,707
|
10.0%
|
Tier I
capital (to
|
||||||
risk-weighted
assets)
|
169,203
|
15.2%
|
44,683
|
4.0%
|
67,024
|
6.0%
|
Tier I
capital (to
|
||||||
average
assets)
|
169,203
|
9.3%
|
72,925
|
4.0%
|
91,156
|
5.0%
|
To
be well capitalized
|
||||||
Requirement
for capital
|
under
prompt
|
|||||
adequacy
|
corrective
action
|
|||||
Actual
|
purposes
|
Provisions
|
||||
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
|
($
in 000's)
|
||||||
As
of September 30, 2005:
|
||||||
Total
capital (to
|
||||||
risk-weighted
assets)
|
$
173,466
|
24.9%
|
$55,685
|
8.0%
|
$69,606
|
10.0%
|
Tier I
capital (to
|
||||||
risk-weighted
assets)
|
165,874
|
23.8%
|
27,842
|
4.0%
|
41,764
|
6.0%
|
Tier I
capital (to
|
||||||
average
assets)
|
165,874
|
12.6%
|
52,628
|
4.0%
|
65,785
|
5.0%
|
Three
Months Ended
|
Six
Months Ended
|
|||
March
31,
|
March
24,
|
March
31,
|
March
24,
|
|
2006
|
2005
|
2006
|
2005
|
|
Net
income
|
$61,531
|
$34,697
|
$106,640
|
$73,940
|
Weighted
average common shares
|
||||
outstanding
during the period*
|
113,194
|
112,311
|
112,053
|
111,359
|
Dilutive
effect of stock options and awards* (1)
|
3,218
|
2,147
|
2,993
|
2,074
|
Weighted
average diluted common
|
||||
shares*
(1)
|
116,412
|
114,458
|
115,046
|
113,433
|
Net
income per share - basic
|
$0.54
|
$0.31
|
$0.95
|
$0.66
|
Net
income per share - diluted (1)
|
$0.53
|
$0.30
|
$0.93
|
$0.65
|
Securities
excluded from weighted average
|
||||
common
shares because their effect
|
||||
would
be antidulitive*
|
-
|
-
|
-
|
62
|
(1)
|
Diluted
earnings per share is computed on the basis of the weighted average
number
of shares of common stock plus the effect of dilutive potential common
shares outstanding during the period using the treasury stock method.
Dilutive potential common shares include stock options, units and
awards.
|
Three
Months Ended
|
Six
Months Ended
|
|||
March
31,
|
March
24,
|
March
31,
|
March
24,
|
|
2006
|
2005
|
2006
|
2005
|
|
Net
income
|
$
61,531
|
$
34,697
|
$106,640
|
$
73,940
|
Other
comprehensive income:
|
||||
Unrealized
(loss) gain on securities available for sale, net of tax
|
(37)
|
(32)
|
(123)
|
111
|
Unrealized
gain on interest rate swaps accounted for as cash flow hedges, net
of
tax
|
8
|
232
|
42
|
589
|
Foreign
currency translation adjustment
|
(1,270)
|
(670)
|
(1,341)
|
1,520
|
Total
comprehensive income
|
$
60,232
|
$
34,227
|
$
105,218
|
$
76,160
|
Three
Months Ended
|
Six
Months Ended
|
|||
March
31,
|
March
24,
|
March
31,
|
March
24,
|
|
2006
|
2005
|
2006
|
2005
|
|
(000's)
|
(000's)
|
|||
Revenues:
|
||||
Private
Client Group
|
$
416,905
|
$
338,520
|
$
792,650
|
$
678,468
|
Capital
Markets
|
122,188
|
106,805
|
228,792
|
223,824
|
Asset
Management
|
48,125
|
42,017
|
95,075
|
81,972
|
RJBank
|
22,664
|
9,820
|
40,518
|
18,803
|
Emerging
Markets
|
12,040
|
10,098
|
25,849
|
19,308
|
Stock
Loan/Borrow
|
14,139
|
5,764
|
25,755
|
12,589
|
Other
|
20,757
|
(697)
|
23,526
|
1,740
|
Total
|
$
656,818
|
$
512,327
|
$1,232,165
|
$
1,036,704
|
Income
Before Provision for Income
Taxes
and Minority Interest:
|
||||
Private
Client Group
|
$
38,531
|
$
32,862
|
$
75,342
|
$
63,645
|
Capital
Markets
|
22,085
|
12,985
|
36,660
|
30,294
|
Asset
Management
|
11,103
|
10,432
|
22,117
|
18,815
|
RJBank
|
2,225
|
2,826
|
5,426
|
6,078
|
Emerging
Markets
|
1,353
|
1,692
|
3,563
|
2,738
|
Stock
Loan/Borrow
|
2,324
|
1,289
|
4,548
|
2,335
|
Other
|
17,689
|
(3,957)
|
18,989
|
(971)
|
Pre-tax
Income
|
95,310
|
58,129
|
166,645
|
122,934
|
Minority
Interest
|
(4,046)
|
(3,620)
|
(4,561)
|
(2,031)
|
Total
|
$
91,264
|
$
54,509
|
$
162,084
|
$
120,903
|
March
31,
|
September
30,
|
|
2006
|
2005
|
|
(000's)
|
||
Total
Assets:
|
||
Private
Client Group *
|
$
5,291,952
|
$
4,528,048
|
Capital
Markets **
|
1,319,333
|
1,032,815
|
Asset
Management
|
63,439
|
74,418
|
RJBank
|
1,839,967
|
1,327,675
|
Emerging
Markets
|
117,855
|
91,550
|
Stock
Loan/Borrow
|
1,209,290
|
1,147,314
|
Other
|
230,368
|
156,949
|
Total
|
$
10,072,204
|
$
8,358,769
|
*
|
Includes
$46 million of goodwill allocated pursuant to SFAS No. 142, "Goodwill
and
Other Intangible Assets".
|
**
|
Includes
$17 million of goodwill allocated pursuant to SFAS No.
142.
|
Three
Months Ended
|
Six
Months Ended
|
|||
March
31,
|
March
24,
|
March
31,
|
March
24,
|
|
2006
|
2005
|
2006
|
2005
|
|
(000's)
|
(000's)
|
|||
Revenues:
|
||||
United
States
|
$
570,704
|
$
453,086
|
$
1,063,598
|
$
924,380
|
Canada
|
61,911
|
43,613
|
116,566
|
80,491
|
Europe
|
12,673
|
6,954
|
27,946
|
15,594
|
Other
|
11,530
|
8,674
|
24,055
|
16,239
|
Total
|
$
656,818
|
$
512,327
|
$
1,232,165
|
$
1,036,704
|
ITEM
2.
|
MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
|
Three
Months Ended
|
|||||
March
31,
|
March
24,
|
Percentage
|
|||
2006
|
2005
|
Change
|
|||
Revenues:
|
|||||
Private
Client Group
|
$
416,905
|
$
338,520
|
23%
|
||
Capital
Markets
|
122,188
|
106,805
|
14%
|
||
Asset
Management
|
48,125
|
42,017
|
15%
|
||
RJBank
|
22,664
|
9,820
|
131%
|
||
Emerging
Markets
|
12,040
|
10,098
|
19%
|
||
Stock
Loan/Stock Borrow
|
14,139
|
5,764
|
145%
|
||
Other
|
20,757
|
(697)
|
3,078%
|
||
Total
|
$
656,818
|
$
512,327
|
28%
|
Three
Months Ended
|
|||||
March
31,
|
March
24,
|
Percentage
|
|||
2006
|
2005
|
Change
|
|||
Income
Before Provision for Income Taxes and Minority
Interest:
|
|||||
Private
Client Group
|
$
38,531
|
$
32,862
|
17%
|
||
Capital
Markets
|
22,085
|
12,985
|
70%
|
||
Asset
Management
|
11,103
|
10,432
|
6%
|
||
RJBank
|
2,225
|
2,826
|
(21%)
|
||
Emerging
Markets
|
1,353
|
1,692
|
(20%)
|
||
Stock
Loan/Stock Borrow
|
2,324
|
1,289
|
80%
|
||
Other
|
17,689
|
(3,957)
|
547%
|
||
Pre-tax
Income
|
$
95,310
|
$
58,129
|
64%
|
||
Minority
Interest
|
(4,046)
|
(3,620)
|
12%
|
||
Total
|
$
91,264
|
$
54,509
|
67%
|
March
31,
|
December
31,
|
March
24,
|
|||
2006
|
2005
|
2005
|
|||
Private
Client Group - Financial Advisors:
|
|||||
Traditional
Branch
|
1,192
|
1,170
|
1,057
|
||
Independent
Contractor
|
3,479
|
3,491
|
3,537*
|
||
Total
Financial Advisors
|
4,671
|
4,661
|
4,594
|
Three
Months Ended
|
|||||
March
31,
|
December
31,
|
March
24,
|
|||
2006
|
2005
|
2005
|
|||
($
in millions)
|
|||||
Client
Margin Accounts:
|
|||||
Average
Balance
|
$
1,199
|
$
1,138
|
$
1,109
|
||
Average
Rate
|
7.42%
|
6.95%
|
5.32%
|
||
Assets
Segregated:
|
|||||
Average
Balance
|
$
2,968
|
$
2,571
|
$
2,193
|
||
Average
Rate
|
4.53%
|
4.04%
|
2.49%
|
||
Client
Interest Program:
|
|||||
Average
Balance
|
$
3,348
|
$
3,026
|
$
2,868
|
||
Average
Rate
|
3.74%
|
3.26%
|
1.71%
|
Three
Months Ended
|
|||
March
31,
|
March
24,
|
||
2006
|
2005
|
||
Number
of managed/co-managed public equity offerings:
|
|||
US
|
21
|
20
|
|
Canada
|
5
|
4
|
|
Total
dollars raised (in 000's):
|
|||
US
|
$4,066,000
|
$5,851,000
|
|
Canada
(in U.S. dollars)
|
816,000
|
137,000
|
March
31,
|
Dec.
31,
|
Sept.
30,
|
March
24,
|
||||
2006
|
2005
|
2005
|
2005
|
||||
Assets
Under Management
(in 000's):
|
|||||||
Eagle
Asset Management, Inc.
|
$12,727,040
|
$11,583,998
|
$11,543,181
|
$10,722,299
|
|||
Heritage
Family of Mutual Funds
|
9,581,853
|
8,587,468
|
8,593,587
|
8,517,701
|
|||
Raymond
James Consulting Services
|
7,552,451
|
6,886,746
|
6,573,448
|
5,794,133
|
|||
Awad
Asset Management
|
1,176,690
|
1,189,863
|
1,222,199
|
1,423,757
|
|||
Freedom
Accounts
|
3,832,768
|
3,052,367
|
2,496,772
|
1,523,684
|
|||
Total
Assets Under Management
|
$34,870,802
|
$31,300,442
|
$30,429,187
|
$27,981,574
|
|||
Less:
Assets Managed for other internal Asset Management
Entities
|
3,672,474
|
3,250,683
|
2,936,804
|
2,536,049
|
|||
Total
Third Party Assets Under Management
|
$31,198,328
|
$28,049,759
|
$27,492,383
|
$25,445,525
|
|||
Trust
Company Assets Under Administration
|
$
1,223,025
|
$
1,155,358
|
$
1,101,661
|
$
1,032,794
|
Six
Months Ended
|
|||||
March
31,
|
March
24,
|
Percentage
|
|||
2006
|
2005
|
Change
|
|||
Revenues:
|
|||||
Private
Client Group
|
$
792,650
|
$
678,468
|
17%
|
||
Capital
Markets
|
228,792
|
223,824
|
2%
|
||
Asset
Management
|
95,075
|
81,972
|
16%
|
||
RJBank
|
40,518
|
18,803
|
115%
|
||
Emerging
Markets
|
25,849
|
19,308
|
34%
|
||
Stock
Loan/Stock Borrow
|
25,755
|
12,589
|
105%
|
||
Other
|
23,526
|
1,740
|
1,252%
|
||
Total
|
$
1,232,165
|
$
1,036,704
|
19%
|
Six
Months Ended
|
|||||
March
31,
|
March
24,
|
Percentage
|
|||
2006
|
2005
|
Change
|
|||
Income
Before Provision for Income Taxes and Minority
Interest:
|
|||||
Private
Client Group
|
$
75,342
|
$
63,645
|
18%
|
||
Capital
Markets
|
36,660
|
30,294
|
21%
|
||
Asset
Management
|
22,117
|
18,815
|
18%
|
||
RJBank
|
5,426
|
6,078
|
(11%)
|
||
Emerging
Markets
|
3,563
|
2,738
|
30%
|
||
Stock
Loan/Stock Borrow
|
4,548
|
2,335
|
95%
|
||
Other
|
18,989
|
(971)
|
2,056%
|
||
Pre-tax
Income
|
$
166,645
|
$
122,934
|
36%
|
||
Minority
Interest
|
(4,561)
|
(2,031)
|
125%
|
||
Total
|
$
162,084
|
$
120,903
|
34%
|
March
31,
2006
|
|||
Financial
Instruments
Owned
at
Fair Value
|
Financial
Instruments
Sold
but
not yet Purchased
at
Fair Value
|
||
(in
000’s)
|
|||
Cash
trading instruments
|
$
549,852
|
$
169,872
|
|
Derivative
contracts
|
20,260
|
4,363
|
|
Available
for sale securities
|
163,841
|
-
|
|
Total
|
$
733,953
|
$
174,235
|
March
31,
2006
|
|||
Financial
Instruments
Owned at Fair Value
|
Financial
Instruments
Sold
but
not yet Purchased at Fair Value
|
||
(in
000’s)
|
|||
Fair
value based on quoted prices and independent sources
|
$
710,734
|
$
169,872
|
|
Fair
value determined by Management
|
23,219
|
4,363
|
|
Total
|
$
733,953
|
$
174,235
|
March
31, 2006
|
September
30, 2005
|
||||||
Securities
|
Securities
|
||||||
Sold
but
|
Sold
but
|
||||||
Trading
|
Not
yet
|
Trading
|
Not
yet
|
||||
Securities
|
Purchased
|
Securities
|
Purchased
|
||||
(in
000's)
|
|||||||
Marketable:
|
|||||||
Municipal
|
$
212,465
|
$
348
|
$
177,984
|
$
17
|
|||
Corporate
|
130,151
|
45
|
27,830
|
2,285
|
|||
Government
|
77,212
|
76,875
|
42,009
|
99,465
|
|||
Agency
|
86,780
|
60,287
|
60,445
|
84
|
|||
Total
debt securities
|
506,608
|
137,555
|
308,268
|
101,851
|
|||
Derivative
contracts
|
20,260
|
4,363
|
12,795
|
2,488
|
|||
Equity
securities
|
38,924
|
31,821
|
32,237
|
30,256
|
|||
Other
securities
|
4,320
|
496
|
6,379
|
-
|
|||
Total
|
$570,112
|
$174,235
|
$359,679
|
$134,595
|
Six
months ended March 31, 2006
|
VaR
at
|
||||
($
in 000's)
|
High
|
Low
|
Daily Average
|
March
31, 2006
|
September
30, 2005
|
|
|
|
|
||
Daily
VaR
|
$
1,251
|
$
312
|
$
786
|
$
789
|
$
532
|
Portfolio
Value (net)
|
303,377
|
177,669
|
278,556
|
330,804
|
169,978
|
Daily
VaR as a percent of Daily Portfolio Value
|
0.41%
|
0.18%
|
0.28%
|
0.24%
|
0.31%
|
RJBank
Financial Instruments with Market Risk (as described above, in
000's):
|
||||
March
31, 2006
|
September
30, 2005
|
|||
Mortgage-backed
securities
|
$
13,067
|
$
6,716
|
||
Municipal
obligations
|
0
|
5
|
||
Loans
receivable, net
|
1,002,598
|
648,649
|
||
Total
assets with market risk
|
$1,015,665
|
$
655,370
|
||
Certificates
of deposit
|
$
305,337
|
$
220,660
|
||
Federal
Home Loan Bank advances
|
60,000
|
70,000
|
||
Interest
rate swaps
|
2
|
72
|
||
Total
liabilities with market risk
|
$
365,339
|
$
290,732
|
|
For
|
|
Withheld
|
Biever,
Angela M.
|
70,784,042
|
|
1,501,512
|
Godbold,
Francis S.
|
56,015,044
|
|
16,270,510
|
Habermeyer,
H. William
|
68,752,400
|
|
3,533,154
|
Helck,
Chet B.
|
56,507,254
|
|
15,778,300
|
James,
Thomas A.
|
56,468,758
|
|
15,816,796
|
Marshall,
Paul W.
|
66,680,661
|
|
5,604,893
|
Reilly,
Paul
|
55,944,011
|
|
16,341,543
|
Shields,
Kenneth A.
|
52,220,742
|
|
20,064,812
|
Simmons,
Hardwick
|
70,621,561
|
|
1,663,993
|
Sink,
Adelaide
|
70,759,723
|
|
1,525,831
|
For
|
|
Against
|
|
Abstain
|
71,974,471
|
|
227,369
|
|
83,706
|
10
|
First
Amendment to 2005 Raymond James Financial, Inc. Restricted Stock
Plan as
filed with Form 8-K on February 21, 2006.
|
|
11
|
Statement
Re: Computation of per Share Earnings (The calculation of per share
earnings is included in Part I, Item 1 in the Notes to Condensed
Consolidated Financial Statements (Earnings Per Share) and is omitted
here
in accordance with Section (b)(11) of Item 601 of Regulation
S-K.).
|
|
31.1
|
Principal
Executive Officer Certification as required by Rule 13a-14(a)/15d-14(a),
filed herewith.
|
|
31.2
|
Principal
Financial Officer Certification as required by Rule 13a-14(a)/15d-14(a),
filed herewith.
|
|
32.1
|
Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section
1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002,filed
herewith.
|
|
32.2
|
Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section
1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002,filed
herewith.
|
RAYMOND
JAMES FINANCIAL, INC.
|
||
(Registrant)
|
||
Date:
May 10, 2006
|
/s/
Thomas A. James
|
|
Thomas
A. James
|
||
Chairman
and Chief
|
||
Executive
Officer
|
||
/s/
Jeffrey P. Julien
|
||
Jeffrey
P. Julien
|
||
Senior
Vice President - Finance
|
||
and
Chief Financial
|
||
Officer
|
|
1.
|
The
Report fully complies with the requirements of Section 13(a) or 15(d)
of
the Securities Exchange Act of 1934; and
|
|
2.
|
The
information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the
Company.
|
|
1.
|
The
Report fully complies with the requirements of Section 13(a) or 15(d)
of
the Securities Exchange Act of 1934; and
|
|
2.
|
The
information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the
Company.
|