1. Annual Report Wachovia Stephanie Cagnet 080

2. Executive Summary Wachovia consists of a diverse banking system designed to benefit its shareholders by operating efficiently. This reduces the expenses and increases profits. It also has a main focus on customer service. From year 2002 to 2003 there has proven to be increasing assets and profitability, which will continue through 2004. Wachovia consists of a diverse banking system designed to benefit its shareholders by operating efficiently. This reduces the expenses and increases profits. It also has a main focus on customer service. From year 2002 to 2003 there has proven to be increasing assets and profitability, which will continue through 2004. http://www.wachovia.com/inside/page/0,,133_202_257,00.html http://www.wachovia.com/inside/page/0,,133_202_257,00.html http://www.wachovia.com/inside/page/0,,133_202_257,00.html

3. Part A. Introduction Chief Executive Officer: Ken Thompson Home Office: Charlotte, North Carolina Last Fiscal Year: Wednesday December 31, 2003 Services: Complete Banking, Retail Brokerage, Asset and Wealth Management, Corporate and Investment Banking, International Banking for Business Customers, Home Equity Lending Geographic Area: International, but mainly located along the east coast

4. Part A. Audit Report Independent Auditors: KPMG LLP Independent Auditors: KPMG LLP The auditors report states that the company’s financial The auditors report states that the company’s financial report is in compliance with the auditing standards within the United States of America and free of misstatements

5. Part A. Stock Market Information Recent Stock Price: 47.82 Recent Stock Price: 47.82 Twelve Month Trading Range: High 49.49 as of 3/11/04 Low 42.10 as of 10/3/03 Twelve Month Trading Range: High 49.49 as of 3/11/04 Low 42.10 as of 10/3/03 Dividends Per Share: 1.60 Dividends Per Share: 1.60 Date of Information: 10/01/2004 Date of Information: 10/01/2004 It would be best to hold the stock because it is It would be best to hold the stock because it is predicted to keep rising

6. Part B. Industry Situation and Company Plans The banking industry is continuing to see large bank mergers, such as the successful merger of First Union and Wachovia. Currently Wachovia is merging with SouthTrust. The banking industry is continuing to see large bank mergers, such as the successful merger of First Union and Wachovia. Currently Wachovia is merging with SouthTrust. Wachovia is the fourth largest banking company, and with the Prudential Securities merger, it is now the third largest brokerage firm in the United States. Wachovia is the fourth largest banking company, and with the Prudential Securities merger, it is now the third largest brokerage firm in the United States. Wachovia is increasing its market share by continually focusing on building new bank branches and expanding. Wachovia is currently expanding into Texas. Wachovia is increasing its market share by continually focusing on building new bank branches and expanding. Wachovia is currently expanding into Texas. http://ccbn.mobular.net/ccbn/7/418/463/ http://www.wachovia.com/corp_inst/page/0,,13_54,00.html

7. Part C. Income Statement 20022003 Net Income3,5794,264 Income From Operations23,50524,474 Gross Profit4,6736,223 Format is most like a multi-step format (numbers are in millions) The year 2003 was more profitable than 2002

8. Part C. Balance Sheet Assets=Liabilities+ Stockholders' Equity 2002341,839309,25832,078 2003401,032366,09432,428 (numbers are shown in millions) In general, from 2002 to 2003 there were only positive changes which occurred. The liabilities decreased while the assets increased in 2003.

9. Part C. Statement of Cash Flows Cash Flows from operations were less than net income in 2003, but were more than net income in 2002. The company is not growing through investing activities, but is growing through its financing activities. The company’s primary source of financing is through net deposits. Overall, cash has increased over the past two years.

10. Part D. Accounting Policies Five Main Policies Five Main Policies Allowance for loan losses Allowance for loan losses Fair value of certain financial instruments Fair value of certain financial instruments Consolidation Consolidation Goodwill impairment Goodwill impairment Contingent liabilities Contingent liabilities

11. Part E. Financial Analysis Liquidity Ratios ( numbers calculated in millions) Working Capital: 2003: 34,938 2002: 32,581 Current Ratio: 2003: 1.095 2002: 1.105 Receivable Turnover: 2003: 12.23% 2002: 12.01% Average Days Sales Uncollected: 2003:10595.24 2002: 10327.18

12. Part E. Financial Analysis Profitability Ratios Profit Margin: 2003:.21 Profit Margin: 2003:.21 2002:.20 Asset Turnover: 2003:.0505 Asset Turnover: 2003:.0505 2002:.0502 2002:.0502 Return on Assets: Return on Assets: 2003: 1.18% 2002: 1.12% Return on Equity: Return on Equity: 2003: 13.27% 2003: 13.27% 2002: 11.78%

13. Part E. Financial Analysis Solvency Ratio Debt to Equity: 2003: 11.29 2004: 9.64

14. Part E. Financial Analysis Market Strength Ratios Price/Earnings Per Share: Price/Earnings Per Share: 2003: 14.58 2002: 14.97 Dividend Yield: Dividend Yield: 2003: 2.68% 2002: 2.55%