|A.G. Edwards, Inc.
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|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



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|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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|Benjamin F. Edwards IIITo 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
Benjamin F. Edwards IIIChairman 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)
|------------------------------------------------------------------------------------------------------------------
|                                                                                                                  
|                                                                                                                  
|Operating Results                                                                                                 
|Net Revenues                                                                                                      
|Net Earnings                                                                                                      
|Net Earnings                                                                                                      
|as a Percent
   of Net Revenues                                                                                   
|Return on
   Average Equity                                                                                       
|                                                                                                                  
|Per Share Data                                                                                                    
|Earnings                                                                                                          
|Diluted                                                                                                           
|Basic                                                                                                             
|Cash Dividends                                                                                                    
|Book Value                                                                                                        
|                                                                                                                  
|Financial Condition                                                                                               
|Stockholders' Equity                                                                                              
|Total Assets                                                                                                      
|                                                                                                                  
|Other Data                                                                                                        
|Full-Time Employees                                                                                               
|Financial Consultants                                                                                             
|                                                                                                                  
|Locations                                                                                                         
|                                                                                                                  
|                                                                                                                  
|Per share data have been restated for stock splits and stock dividends.                                           

|Net Revenues | Net Earnings | Diluted Earnings per Share
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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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|Robert L. BagbyTo 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
Robert L. BagbyChairman 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              
|Second                 | $0.16                          | 57.00 - 34.88                            | $680.1                        | $122.7                              | $77.0                       | $0.93              
|Third                  | $0.16                          | 57.94 - 42.18                            | $634.0                        | $89.9                               | $57.2                       | $0.69              
|Fourth                 | $0.16                          | 52.19 - 37.42                            | $640.5                        | $71.8                               | $45.9                       | $0.57              
|                      
|Fiscal 2000 by Quarter
|First                  | $0.15                          | 38.19 - 30.88                            | $648.7                        | $136.9                              | $84.5                       | $0.88              
|Second                 | $0.15                          | 33.56 - 24.63                            | $630.4                        | $132.8                              | $82.3                       | $0.86              
|Third                  | $0.15                          | 34.00 - 24.25                            | $708.1                        | $184.1                              | $115.3                      | $1.23              
|Fourth                 | $0.16                          | 34.19 - 26.75                            | $809.1                        | $169.3                              | $100.8                      | $1.11              
|                      

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

|                       
|-----------------------
|Stock Split History    
|                       
|                       
|Dividend Growth History
|                       
|                       
|Stock Price History    
|                       

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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  Steve and Barbara Denker enjoy tinkering
with their '97 Mustang.Barbara RandolphBarbara 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 and granddaughter Kara  Jane Chiotti loves spending time with Kara, 
one of her two granddaughters.Annette TylkaAnnette 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 and Buck Sharp  Keegan Sharp helped save for college by working in the 
family pharmacy with her dad Buck.Michael JenningsMichael 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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|Bo, Joe and Joe Bob Davis  Their financial plan helped Bo, Joe and Joe Bob Davis 
protect the family convenience-store business. Gerald GalbraithGerald 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 MilestonesChange 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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|Ben EdwardsA 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. Ben EdwardsBut 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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|Back to Table of Contents | End of Pages 21-22 | A.G. Edwards, Inc.
|------------------------- | ------------------ | ------------------



|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):
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|Increase (Decrease)                | 2001 vs. 2000 | 2000 vs. 1999
|---------------------------------- | ------------- | -------------
|                                  
|Revenues                          
|Commissions                        | $(97,877)     | (7)%         
|Principal transactions             | 8,057         | 3            
|Investment banking                 | (52,422)      | (23)         
|Asset management and service fees  | 108,467       | 20           
|Interest                           | 111,811       | 45           
|Other                              | (57,895)      | (65)         
|                                  
|Total Revenues                     | 20,141        | 1            
|Interest expense                   | 75,124        | 329          
|                                  
|Net Revenues                       | (54,983)      | (2)          
|                                  
|                                  
|Non-Interest Expenses             
|Compensation and benefits          | (400)         | -            
|Communication and technology       | 83,272        | 52           
|Occupancy and equipment            | 21,297        | 20           
|Marketing and business development | 9,023         | 21           
|Floor brokerage and clearance      | 1,290         | 6            
|                                  
|Other                              | (1,504)       | (2)          
|Total Non-Interest                 |               |              
|Expenses                           | $112,978      | 5%           
|                                  

|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 Expenses
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 ManagementGeneral
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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|Back to Table of Contents | End of Pages 23-27 | A.G. Edwards, Inc.
|------------------------- | ------------------ | ------------------



|Consolidated Five-Year Financial Summary                                         
|---------------------------------------------------------------------------------
|Year Ended                                                                       
|(In thousands, 
 except per share amounts)                                       
|                                                                                 
|Revenues                                                                         
|Commissions:                                                                     
|Listed securities                                                                
|Options                                                                          
|Over-the-counter securities                                                      
|Mutual funds                                                                     
|Commodities                                                                      
|Insurance                                                                        
|                                                                                 
|Total                                                                            
|                                                                                 
|Principal transactions:                                                          
|Equities                                                                         
|Debt securities                                                                  
|                                                                                 
|Total                                                                            
|                                                                                 
|Investment banking:                                                              
|Underwriting fees 
        and selling concessions                               
|Management fees                                                                  
|                                                                                 
|Total                                                                            
|                                                                                 
|Asset management 
    and service fees                                           
|                                                                                 
|Interest:                                                                        
|Margin account balances                                                          
|Securities owned and deposits                                                    
|                                                                                 
|Total                                                                            
|                                                                                 
|Other                                                                            
|                                                                                 
|Total Revenues                                                                   
|                                                                                 
|Interest expense                                                                 
|                                                                                 
|Net Revenues                                                                     
|                                                                                 
|Non-Interest Expenses                                                            
|Compensation and benefits                                                        
|Communication and technology                                                     
|Occupancy and equipment                                                          
|Marketing and 
    business development                                          
|Floor brokerage and clearance                                                    
|Other                                                                            
|                                                                                 
|Total Non-Interest Expenses                                                      
|                                                                                 
|Earnings Before Income Taxes                                                     
|                                                                                 
|Income Taxes                                                                     
|                                                                                 
|Net Earnings                                                                     
|                                                                                 
|Per Share Data:                                                                  
|Diluted Earnings                                                                 
|Basic Earnings                                                                   
|Cash Dividends                                                                   
|Book Value                                                                       
|Other Data:                                                                      
|Total Assets                                                                     
|Stockholders' Equity                                                             
|Cash Dividends                                                                   
|Pre-tax Return 
        on Average Equity                                        
|Return on Average Equity                                                         
|Net Earnings as a 
        Percent of Net Revenues                               
|Average Common and 
        Common Equivalent                                    
|Shares Outstanding 
            (Diluted)                                        
|Average Common Shares 
        Outstanding (Basic)                               
|                                                                                 
|Share and per share data have been restated for stock splits and stock dividends.

|Back to Table of Contents | End of Page 28 | A.G. Edwards, Inc.
|------------------------- | -------------- | ------------------



|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                                   | 252,558      | 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 EarningsYear 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)                                  
|                                                                                    
|Balances, March 1, 1998                                                             
|Net earnings                                                                        
|Dividends declared
      -$0.57 per share                                           
|Treasury stock acquired                                                             
|Stock issued:                                                                       
|Employee stock 
         purchase/option plans                                      
|Restricted stock                                                                    
|                                                                                    
|Balances, February 28, 1999                                                         
|Net earnings                                                                        
|Dividends declared
     -$0.61 per share                                            
|Treasury stock acquired                                                             
|Stock issued:                                                                       
|Employee stock 
         purchase/option plans                                      
|Restricted stock                                                                    
|                                                                                    
|Balances, February 29, 2000                                                         
|Net earnings                                                                        
|Dividends declared
      -$0.64 per share                                           
|Treasury stock acquired                                                             
|Stock issued:                                                                       
|Employee stock 
         purchase/option plans                                      
|Restricted stock                                                                    
|                                                                                    
|Balances, February 28, 2001                                                         
|                                                                                    
|See Notes to Consolidated Financial Statements.                                     

|Back to Table of Contents | End of Page 31 | A.G. Edwards, Inc.
|------------------------- | -------------- | ------------------



|Consolidated Statements of Cash Flows                                                                                                                                                                                                                                                                                                                                                    
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Year Ended                                                                                                                                                                                                                                                                                                                                                                               
|(In thousands)                                                                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                                                                                         
|Cash Flows From Operating Activities:                                                                                                                                                                                                                                                                                                                                                    
|Net earnings                                                                                                                                                                                                                                                                                                                                                                             
|Noncash and non-operating items 
    included in earnings:                                                                                                                                                                                                                                                                                                                               
|Depreciation and amortization                                                                                                                                                                                                                                                                                                                                                            
|Expense of restricted stock awards                                                                                                                                                                                                                                                                                                                                                       
|Deferred income taxes                                                                                                                                                                                                                                                                                                                                                                    
|Gain on investments, net                                                                                                                                                                                                                                                                                                                                                                 
|Decrease (increase) in operating assets:                                                                                                                                                                                                                                                                                                                                                 
|Segregated cash and government securities                                                                                                                                                                                                                                                                                                                                                
|Securities borrowed                                                                                                                                                                                                                                                                                                                                                                      
|Receivable from customers                                                                                                                                                                                                                                                                                                                                                                
|Receivable from brokers, dealers and 
        clearing organizations                                                                                                                                                                                                                                                                                                                     
|Fees, dividends and interest receivable                                                                                                                                                                                                                                                                                                                                                  
|Securities inventory                                                                                                                                                                                                                                                                                                                                                                     
|Other assets                                                                                                                                                                                                                                                                                                                                                                             
|(Decrease) increase in operating liabilities:                                                                                                                                                                                                                                                                                                                                            
|Checks payable                                                                                                                                                                                                                                                                                                                                                                           
|Securities loaned                                                                                                                                                                                                                                                                                                                                                                        
|Payable to customers                                                                                                                                                                                                                                                                                                                                                                     
|Payable to brokers, 
         dealers and clearing organizations                                                                                                                                                                                                                                                                                                                         
|Securities sold but not yet purchased                                                                                                                                                                                                                                                                                                                                                    
|Employee compensation and related taxes                                                                                                                                                                                                                                                                                                                                                  
|Income taxes                                                                                                                                                                                                                                                                                                                                                                             
|Other liabilities                                                                                                                                                                                                                                                                                                                                                                        
|                                                                                                                                                                                                                                                                                                                                                                                         
|Net cash from operating activities                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                         
|Cash Flows From Investing Activities:                                                                                                                                                                                                                                                                                                                                                    
|Securities purchased under agreements to resell                                                                                                                                                                                                                                                                                                                                          
|Purchase of property and equipment                                                                                                                                                                                                                                                                                                                                                       
|Investments                                                                                                                                                                                                                                                                                                                                                                              
|                                                                                                                                                                                                                                                                                                                                                                                         
|Net cash from investing activities                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                         
|Cash Flows From Financing Activities:                                                                                                                                                                                                                                                                                                                                                    
|Short-term bank loans                                                                                                                                                                                                                                                                                                                                                                    
|Securities loaned                                                                                                                                                                                                                                                                                                                                                                        
|Employee stock transactions                                                                                                                                                                                                                                                                                                                                                              
|Purchase of treasury stock                                                                                                                                                                                                                                                                                                                                                               
|Cash dividends paid                                                                                                                                                                                                                                                                                                                                                                      
|                                                                                                                                                                                                                                                                                                                                                                                         
|Net cash from financing activities                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                         
|Net (Decrease) Increase in Cash and Cash Equivalents                                                                                                                                                                                                                                                                                                                                     
|Cash and Cash Equivalents, at Beginning of Year                                                                                                                                                                                                                                                                                                                                          
|                                                                                                                                                                                                                                                                                                                                                                                         
|Cash and Cash Equivalents, at End of Year                                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                         
|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.

|Back to Table of Contents | End of Page 32 | A.G. Edwards, Inc.
|------------------------- | -------------- | ------------------



|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.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------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|Back to Table of Contents | End of Note 1 (Pages 33-34) | A.G. Edwards, Inc.
|------------------------- | --------------------------- | ------------------

|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) | A.G. Edwards, Inc.
|------------------------- | ----------------------- | ------------------

|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:
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                             
|-----------------------------
|                             
|                             
|Pro forma net earnings       
|Pro forma earnings per share:
|Diluted                      
|Basic                        
|                             

|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:
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                                                                
|------------------------------------------------------------------------------------------------
|                                                                                                
|                                                                                                
|                                                                                                
|                                                                                                
|Outstanding, 
    beginning of year                                                             
|Granted                                                                                         
|Exercised                                                                                       
|Forfeited                                                                                       
|                                                                                                
|Outstanding, 
    end of year                                                                   
|                                                                                                
|Treasury shares 
    utilized for exercises                                                     
|                                                                                                
|The following table summarizes information about outstanding stock options at February 28, 2001:

|                         
|-------------------------
|                         
|                         
|Range of 
Exercise Prices
|                         
|$11-$15                  
|$16-$20                  
|$21-$25                  
|$31-$35                  
|$36-$40                  
|$41-$45                  
|                         
|                         
|                         

|Back to Table of Contents | End of Note 3 (Pages 34-35) | A.G. Edwards, Inc.
|------------------------- | --------------------------- | ------------------

|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) | A.G. Edwards, Inc.
|------------------------- | ----------------------- | ------------------

|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) | A.G. Edwards, Inc.
|------------------------- | ----------------------- | ------------------



|                                                           
|-----------------------------------------------------------
|6. Income Taxes
The provisions for income taxes consist of:
|                                                           
|                                                           
|Current:                                                   
|Federal                                                    
|State and local                                            
|                                                           
|                                                           
|Deferred                                                   
|                                                           
|                                                           
|                                                           

|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:
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                         
|-------------------------
|                         
|                         
|Deferred Tax Assets:     
|Employee benefits        
|Other                    
|                         
|                         
|                         
|                         
|Deferred Tax Liabilities:
|Receivables              
|Investments              
|Property and equipment   
|Other                    
|                         
|                         
|                         
|Net Deferred Tax Assets  
|                         

|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) | A.G. Edwards, Inc.
|------------------------- | ----------------------- | ------------------



|                                      
|--------------------------------------
|7. Investments
Investments consist of:
|                                      
|                                      
|Private equity                        
|Mutual funds                          
|U.S. government                       
|Other                                 
|                                      
|Total Investments                     
|                                      

|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) | A.G. Edwards, Inc.
|------------------------- | ----------------------- | ------------------



|                                                                                                                                
|--------------------------------------------------------------------------------------------------------------------------------
|8. Stockholders' EquityEarnings Per Share
The following table presents the computations of basic and diluted earnings per share:
|                                                                                                                                
|                                                                                                                                
|Net earnings available to common stockholders                                                                                   
|                                                                                                                                
|Shares (in thousands):                                                                                                          
|Weighted average shares outstanding                                                                                             
|                                                                                                                                
|Effect of dilutive common shares:                                                                                               
|Restricted shares                                                                                                               
|Stock purchase plan                                                                                                             
|Stock option plan                                                                                                               
|                                                                                                                                
|Dilutive common shares                                                                                                          
|                                                                                                                                
|Total weighted average diluted shares                                                                                           
|                                                                                                                                
|Earnings per share:                                                                                                             
|Diluted                                                                                                                         
|Basic                                                                                                                           
|                                                                                                                                

|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.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Back to Table of Contents | End of Note 8 (Page 37) | A.G. Edwards, Inc.
|------------------------- | ----------------------- | ------------------

|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                         
|2003                         
|2004                         
|2005                         
|2006                         
|Later years                  
|                             
|                             
|                             

|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.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Back to Table of Contents | End of Note 9 (Page 38) | A.G. Edwards, Inc.
|------------------------- | ----------------------- | ------------------

|10. Financial InstrumentsOff-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.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Back to Table of Contents | End of Note 10 (Pages 38-39) | A.G. Edwards, Inc.
|------------------------- | ---------------------------- | ------------------

|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):
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                         
|-------------------------
|                         
|                         
|Transaction services     
|Asset management services
|Interest                 
|Other                    
|                         
|                         
|                         

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|------------------------- | ------------------------ | ------------------



|Independent Auditors' Report                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Deloitt                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|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.Deloitt
April 18, 2001
St. Louis, Missouri

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|------------------------- | -------------- | ------------------



|Board of Directors 
A.G. Edwards, Inc.                                                                                 
|-----------------------------------------------------------------------------------------------------------------------
|Robert L. Bagby                                                                                                        
|Robert L. Bagby
1
Chairman of the Board, 
Chief Executive Officer                                                      
|Charmaine S. Chapman                                                                                                   
|Charmaine S. Chapman
2,3,4
President, 
Chief Executive Officer, 
United Way of 
Greater St. Louis, 
St. Louis, Missouri
|Ronald J. Kessler                                                                                                      
|Ronald J. Kessler
1
Vice Chairman of the Board                                                                         

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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

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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. PietroburgoA.G. Edwards 
Trust CompanyRichard 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. ZurfluhA.G. Edwards 
Trust Company FSBRichard 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

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|------------------------- | -------------- | ------------------



|Regional Officers
Number of branch offices as of March 31, 2001.
|----------------------------------------------------------------
|Western                                                         
|Paul B. CoffeePaul B. Coffee                                    
|Pacific Coast                                                   
|John F. LeeJohn F. Lee                                          
|Southwest                                                       
|David C. SprowlDavid C. Sprowl                                  
|Southern                                                        
|Marlow N. MorganMarlow N. Morgan                                
|Central                                                         
|Donald N. RobinsonDonald N. Robinson                            
|Mid-Central                                                     
|John H. HenningJohn H. Henning                                  

|Home                                        
|--------------------------------------------
|Charles J. GalliCharles J. Galli            
|Great Lakes                                 
|Louis A. Ginocchio Jr.Louis A. Ginocchio Jr.
|Florida                                     
|S. Rawls FortenberryS. Rawls Fortenberry    
|Mid-Atlantic and Southeast                  
|Earl D. LaingEarl D. Laing                  
|Northeast                                   
|Bill Branson Jr.Bill Branson Jr.            
|Eastern                                     
|Peter M. MillerPeter M. Miller              

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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

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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

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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

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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

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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.

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|Shareholder InformationAnnual 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 63103Stock 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) 524-4458Account 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.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Back to Table of Contents | End of Page 49 | A.G. Edwards, Inc.A.G. Edwards, Inc.
One North Jefferson
St. Louis, Missouri 63103
(314) 955-3000
www.agedwards.com
|------------------------- | -------------- | -------------------------------------------------------------------------------------------------------------------