The companys financial unit took an $11 million pre-tax charge resulting from insurance claims directly related to the terrorist attacks of Sept. 11. In addition, the firms investment unit took an additional charge of $1 billion in write-downs of its portfolio and costs associated with skewing its portfolio toward lower-risk securities.
"Our 2001 results reflected overall weakness in the economy throughout the year and the sharp slowdown in consumer spending, business travel and investment activity after the terrorist attacks of Sept. 11," said CEO Kenneth Chenault. The firm is noting "signs of improvement," Chenault said, but he added, "We are taking a cautious view and expect the economy to remain weak throughout 2002."
Meanwhile,
Stilwell attributed the declines partly to non-recurring costs, including a charge of $10.4 million to cover the purchase of additional Janus shares. The company also took a charge of $16.3 million in real estate costs that it attributed to weaker-than-expected real estate markets and the closure of the companys Austin location in April.
Revenues from management fees slid from $1.85 billion in 2000 to $1.27 billion last year, a decline of 31%, Stilwell said. And, for the last three months of the year alone, the company posted management-fee revenues of $273.2 million compared to $435.8 million for the period in 2000.
Stilwell said operating expenses had been slashed 22% between 2000 and 2001, not including its one-time charges. But with those non-recurring expenses operating costs had declined by only 15%.
