RJA's Asset Management Services ("AMS") Department manages programs which offer investment advisory services to clients, as well as certain non-advisory programs which offer fee-based alternatives to traditional commission charges for transactions. The primary advisory service offered by AMS is the Investment Advisory Services ("IAS") program. IAS maintains an approved list of investment managers, of which all but one are unaffiliated with the Company, establishes custodial facilities, monitors performance of client accounts, provides clients with accounting and other administrative services and assists investment managers with certain trading management activities. IAS earns fees generally ranging from .50% to 1.0% of asset balances per annum, a portion of which is paid to investment managers who direct the investment of the clients' accounts. At September 28, 2001, this program had approximately $4 billion in assets under management through agreements with 31 independent investment advisors and Awad.

     Passport and a similar program, known as IMPAC, offer both a discretionary and non-discretionary advisory fee alternative that allows clients to pay a quarterly fee plus low transaction charges in lieu of commissions. Fees are based on the individual account size and are also dependent on the type of securities in the accounts. For these accounts, clients receive quarterly performance reporting and other services. As of September 28, 2001, Passport and IMPAC had approximately $5.9 billion and $2.5 billion in assets, respectively, serviced by Financial Advisors.

     In addition to the foregoing programs, AMS also offers fee based programs to clients who have contracted for portfolio management services from outside money managers that are not a part of the IAS program.

     Aside from the retail and institutional distribution, investment banking and asset management businesses, the Company operates a stock borrow/stock loan program, offers bank and trust services, and has several international joint ventures. These operations are grouped in the "other" segment.

     RJA commenced this program in 1987, involving the borrowing and lending of securities from and to other broker-dealers. RJA generally acts as an intermediary between broker-dealers and other financial institutions, where it borrows from one party and lends to another. The borrower of the securities puts up a cash deposit, commonly 102% of the market value of the securities. This deposit, which is adjusted daily to reflect changes in current market value, earns interest at a negotiated rate.

     RJBank received its federal savings bank charter in 1994. RJBank provides residential, consumer and commercial loans as well as FDIC-insured deposit accounts to clients of Raymond James Financial's broker-dealer subsidiaries and to the general public.

     Raymond James Trust Company was chartered and opened for business in 1992. This wholly owned subsidiary of RJF was formed primarily to provide personal trust services to existing clients of the broker-dealer subsidiaries. Portfolio management of trust assets is often subcontracted to the asset management operations of the Company. In October 1993, the Company acquired a second trust company, Sound Trust Company, in Tacoma, Washington. The name of Sound Trust Company was changed to Raymond James Trust Company West effective October 1, 2000. This subsidiary provides personal trust services primarily to broker-dealer clients outside the State of Florida. These two subsidiaries had a combined total of $624 million in client assets at September 28, 2001.

     Raymond James Credit Corporation ("RJCC") was formed in 1996 as a regulated finance company. To date, this subsidiary has primarily provided loans collateralized by control or restricted securities. RJCC is funded with internal capital and by a $50 million line of credit with a commercial bank. At September 28, 2001, RJCC had $11 million in outstanding loans to clients.

     Raymond James International Holdings, Inc. ("RJIH") is a Delaware corporation formed in 1994 to house some of the Company's foreign operations. RJIH now has ownership in consolidated joint ventures in Argentina, India, Turkey and France. These joint ventures operate in securities brokerage, investment banking and asset management. In addition, the Company initiated a joint venture known as Raymond James Killik, Ltd. to develop an independent contractor network in the United Kingdom.

     The Company's subsidiaries compete with many larger, better capitalized providers of financial services, including other securities firms, some of which are affiliated with major financial services companies, insurance companies, banking institutions and other organizations. They also compete with a number of firms offering discount brokerage services, usually with lower levels of service, to individual clients. The Company's subsidiaries compete principally on the basis of service, product selection, location and reputation in local markets.

     Most of the Company's operations are subject to regulatory oversight by governmental agencies and/or self regulatory organizations.

     The securities industry in the United States of America is subject to extensive regulation under federal and state laws. The SEC is the federal agency charged with administration of the federal securities laws. Much of the regulation of broker-dealers, however, has been delegated to self-regulatory organizations, principally the NASD and the NYSE. These self-regulatory organizations adopt rules (which are subject to approval by the SEC) for governing the industry and conduct periodic examinations of member broker-dealers. Securities firms are also subject to regulation by state securities commissions in the states in which they are registered. RJA and RJFS are currently registered in all 50 states.

     See Note 13 of the Notes to Consolidated Financial Statements for further description of certain SEC regulations pertaining to broker-dealer Net Capital Requirements.

     The Company's investment advisory operations, including the Company-sponsored mutual funds, are also subject to extensive regulation by the SEC.

     Raymond James Bank, FSB, is subject to regulation by various federal banking agencies, including the Office of Thrift Supervision and the Federal Deposit Insurance Corporation.

     The Company's two trust companies are subject to regulation by the states in which they are chartered.

     The Company's various overseas operations and joint ventures are subject to regulation by the authorities in the countries in which they operate.

     The Company owns a 610,000 square foot headquarters complex in St. Petersburg, FL (three mid-rise office buildings, a bank and trust headquarters building, and a five deck parking garage). The complex covers approximately fifty-five acres, and the Company has the ability to build up to another 753,000 square feet on this site. The Company has begun the construction of a fourth mid-rise office building and another parking garage. The office building is expected to be ready for occupancy in March 2003. The Company also leases 80,000 square feet in a nearby office building, and an additional 30,000 square feet in another nearby facility.  In addition, the Company acquired a 45,000 square foot, eight story building in Detroit, Michigan as part of the Roney transaction. The Company also leases 20,000 square feet in a building adjacent to the Detroit building. With the exception of a Company-owned RJA branch office building in Crystal River, FL, RJA branches are leased with various expiration dates through 2008. The RJFS Investment Management division headquarters office in Atlanta and Raymond James Trust Company West facility in Tacoma are also under lease. See Note 10 to Consolidated Financial Statements for further information regarding the Company's leases.

     Leases for branch offices of RJFS are the responsibility of the respective independent contractor registered representatives.

     On June 19, 2000 a judgment in the amount of $40.7 million was entered in the United States of America District Court for the Eastern District of Kentucky, Covington Division, against Raymond James & Associates, Inc., and RJ Mortgage Acceptance Corp., a subsidiary of the Company which has been inactive since 1995. In June, 2001, the Company paid Corporex $27.5 million in full settlement of the judgment. See discussion of financial statement impact in Management's Discussion and Analysis.

     As a result of the extensive regulation of the securities industry, the Company's broker-dealer subsidiaries are subject to regular reviews and inspections by regulatory authorities and self regulatory organizations which can result in imposition of sanctions for regulatory violations, ranging from non-monetary censure to fines and, in serious cases, temporary or permanent suspension from business. In addition, from time to time regulatory agencies and self regulatory organizations institute investigations into industry practices which can result in the imposition of such sanctions. During the course of the past fiscal year, Raymond James & Associates, Inc. resolved a number of self regulatory investigations by payment of fines that were immaterial in amount.

     None.

     The Company's common stock is traded on the NYSE under the symbol "RJF". The following table sets forth for the periods indicated the high and low trades for the common stock.

     Since the Company initiated payment of a cash dividend in 1985, there have been 19 increases in the cash dividend rate, including 7 in the form of stock splits and stock dividends.

     The payment of dividends on the Company's common stock is subject to the availability of funds from the Company's subsidiaries, including the broker-dealer subsidiaries which may be subject to restrictions under the net capital rules of the SEC and the NYSE. Such restrictions have never become applicable with respect to the Company's dividend payments. (See Note 13 of the Notes to Consolidated Financial Statements.)

     At December 14, 2001 there were approximately 12,000 holders of the Company's common stock.

     During fiscal 2001 the Company's total revenues of $1,657,844,000 were its second highest ever, trailing the prior year by 2%. However, excluding the $65 million from Raymond James Ltd. ("RJ Ltd."), which was acquired effective January 1, 2001, revenues declined 6%. Net income of $96,410,000 represented a decrease of 23% from the prior year; however, operating results (excluding the charge to reserve for the Corporex judgement in 2000 and the partial subsequent reversal of this reserve in 2001) were down 36% from the prior year. The Company continues to be successful in its focus on non-transaction dependent fee revenues, such as investment advisory fees, interest and asset-based commission alternatives. For fiscal 2001, such fee-based revenues represented approximately 48% of total revenues, up from 36% five years ago.

     The major contributors to the decline in revenues were retail commissions and reduced interest income, although the majority of operations performed below expectations as negative market conditions permeated most sectors of our business.

     In contrast to the prior year, which reflected vibrant retail activity from a combination of strong market conditions and good Financial Advisor recruiting results, fiscal 2001 was plagued by poor equity markets, leading to a decline in transaction volume. With respect to prior years' activity, the largest dollar increases occurred in mutual funds and over-the-counter equities during fiscal 2000 and in equities and annuities in fiscal 1999.

*    Includes RJ Ltd.

     Investment banking revenues, including new issue sales credits, remained well below the record levels of 1997-1998, and were relatively flat with the prior year excluding the $15 million added by RJ Ltd. During fiscal 2000 and 2001, the Company made significant personnel additions in both the technology and healthcare sectors and acquired RJ Ltd., which further strengthened the energy sector. The number of managed and co-managed underwritings, the vast majority of which were equity-related offerings, and the dollar volume of these transactions were as follows: 2001 - 25 new issues for $3.7 billion; 2000 - 23 new issues for $3.6 billion and 1999 - 23 new issues for $3.0 billion. Merger and acquisition fees, which have been a consistent revenue source during the past several years, increased to $28.2 million (including $6.6 million from RJ Ltd.) in fiscal 2001, an increase of 10% (excluding RJ Ltd.) over $19.7 million in fiscal 2000 ($16.3 million in 1999).

     Investment advisory fees were flat with the prior year. RJ Ltd. did not significantly impact this revenue line as their businesses are currently transaction oriented. Although Eagle and RJA's asset management services had positive net sales of $756 million for the year, the decline in equity asset values more than offset these sales. Asset management fees had benefited from both overall asset appreciation and net sales in fiscal 2000 and 1999. The largest increase has occurred in Investment Advisory Services (which offers the services of an approved list of predominantly unaffiliated investment advisors to the Company's clients) as a result of the strong performance of several managers in the program and the addition of client assets from the Roney acquisition in 1999.

     Interest revenues declined 3% vs. the prior year, while interest expense was flat, resulting in a 9% decline in net interest income. Even with this decline, net interest increased to 67% of pretax income, up from 57% in both fiscal 2000 and 1999. The decrease in interest income in fiscal 2001 is the result of the significantly lower margin balances as equity values have declined and retail customers became more conservative in their investing. Flat interest expense in fiscal 2001 is the result of increased CIP balances combined with decreased interest rates. As a result net interest income declined in 2001, after a significant increase in fiscal 2000 when margin balances were continuing to grow.

     Excluding $1.6 million in trading profits generated by RJ Ltd., trading profits declined slightly as over-the-counter equity trading results declined, attributable largely to decimalization of equity prices. Almost offsetting the decline in equity trading profits were record trading profit levels in fixed income, with particularly strong municipal trading profits. Fiscal 2000 trading results reflected significantly improved municipal bond and over-the-counter equity trading results, with the industry having adapted to the changes in the over-the-counter regulations made in fiscal 1998. Trading results in fiscal 1999 reflected particularly strong corporate and government bond trading results.

     Financial service fees increased 6% in fiscal 2001, consistent with the growth in the Company's client base and due to the addition of RJ Ltd. The two most significant items are IRA fees and wrap fee account transaction fees. In the past two years, there has been a 50% increase in the number of IRA accounts. Transaction fees arising from retail asset-based fee account programs declined 25% in 2001 after increasing 55% in 2000.

     Other income is comprised predominantly of postage and handling fees and floor brokerage income, both of which are related to transaction volume. Transaction volume declined in fiscal 2001 and the related fees declined similarly. In addition to increases in volume during fiscal years 2000 and 1999, the Company also increased its postage and handling fee in February 2000.

     Expenses were up 3% on an operating (ex-Corporex) basis. This increase was primarily a result of personnel added in operations (to support the previous years' volume), equity capital markets and asset management.

     Sales commission expense has varied each period at a rate approximately proportionate to the related revenues.

     Incentive compensation expenses, including contributions to qualified retirement plans, are based on departmental, subsidiary and firm-wide profitability. Effective for fiscal 2001, the Company changed the relationship of incentive compensation and base pay for employees at the assistant vice president level and below, effectively shifting approximately $8 million in compensation from incentive compensation to administrative expense. In addition, due to the addition of several teams of people in both investment banking and asset management with guaranteed compensation levels, incentive compensation did not decline ratably with income. The Company's contributions to qualified retirement plans and long term incentive plans did vary proportionately to pretax income in both 2000 and 2001.

     The increase in communications and information processing during fiscal 2001 was attributable almost entirely to the addition of RJ Ltd. While costs associated with overall growth continued to affect communications and information processing expense during fiscal 2000, there were also some significant individual items such as Y2K testing and the development of the former Roney headquarters in Detroit as a second processing center. Fiscal 1999 included costs associated with the integration of Roney, preparation for Y2K and the merger creating RJFS. The increases in communications and information processing expense in all three fiscal years include the costs of further enhancement and expansion of the Company's systems of internal communication and information dissemination.

     Increased occupancy and equipment expense in fiscal 2001 and 2000 includes expanded RJA retail and institutional offices, additional equipment and additional space in Detroit. In addition, fiscal 2001 includes approximately $6 million from the acquisition of RJ Ltd.

     Clearing and floor brokerage increased 9% in fiscal 2001, the net result of the addition of RJ Ltd. and lower transaction volume, and increased 10% in fiscal 2000, a result of increased transaction volume and higher international clearing costs. As in the past, clearing and floor brokerage expense increased at a rate lower than the growth in related revenues due to volume efficiencies and the cost saving measures implemented.

     Business development expenses increased 30% in fiscal 2001 as the Company increased its television advertising and some additional branding efforts on a trial basis under the guidance of an advertising agency. RJ Ltd. added $2.6 million in business and development expenses in fiscal 2001. Several of the Company's branding initiatives impacted business development expense in fiscal 2000 and 1999, including the stadium naming rights, general image advertising costs (primarily television), and recruiting-related programs focusing on the creation of RJFS.

     Other expense includes the decrease in legal reserves in fiscal 2001 and the increase in legal reserves in 2000 related to the Corporex judgment discussed in Note 10. In addition, this expense category includes fees paid to outside managers in the Company's investment advisory services program, bank service charges, legal expenses and provisions, and amortization of goodwill arising from the RJ Ltd. and Roney acquisitions.

     Net cash provided by operating activities during the current year was $180 million. Cash was provided by decreased stock borrow balances exceeding decreased stock loan balances, decreased balances in the client margin accounts and increased client interest balances, increased broker-dealer payables, and the fluctuations in various other asset and liability accounts net of the increased segregated cash and cash equivalents and trading account securities.

     Investing activities required $43 million during the year. The Company used $48 million to purchase Goepel McDermid Inc. and additions to fixed assets consumed $27 million, predominantly for the purchase of computers, office furniture and equipment. Net purchases, sales and maturations of investments provided $33 million during the year.

     Financing activities provided $18 million, the result of net borrowing exceeding the payment of cash dividends net of the exercise of stock options and employee stock purchases.

     The Company has loans payable consisting of a $37.9 million mortgage on its headquarters office complex, $60 million in Federal Home Loan Bank advances at RJBank, $1.3 million at Raymond James Credit Corporation and a $50 million three year term loan at RJF. In addition, RJF has a $125 million line of credit and RJ Ltd., has a $40 million Canadian line of credit. Raymond James & Associates, Inc. has uncommitted bank lines of credit aggregating $305 million with commercial banks.

     The Company's broker-dealer subsidiaries are subject to requirements of the SEC and the Investment Dealers Association of Canada relating to liquidity and capital standards (see Notes to Consolidated Financial Statements).

     In September 2000, the Financial Accounting Standards Board issued FAS No. 140, "Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities ("FAS 140"), an update to FAS No. 125 of the same name. This statement revised the standards for accounting for securitizations and other transfers of financial assets and collateral and requires certain disclosures, but it carries over most of Statement No. 125's provisions without reconsideration. The Company receives collateral in connection with resale agreements, securities borrowed transactions and customer margin 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. As a result of this statement the Company added disclosures within Note 10.

     In July 2001, the FASB issued Statement No. 141, Business Combinations, and Statement No. 142, Goodwill and Other Intangible Assets. Statement 141 requires that the purchase method of accounting be used for all business combinations initiated after June 30, 2001 as well as all purchase method business combinations completed after June 30, 2001. Statement 141 also specifies the criteria intangible assets acquired in a purchase method business combination must meet to be recognized and reported apart from goodwill. Statement 142 will require that goodwill and intangible assets with indefinite useful lives no longer be amortized, but instead be tested for impairment at least annually in accordance with the provisions of Statement 142.

     The Company has adopted the provisions of SFAS 141, and plans to adopt the provisions of SFAS 142 effective September 29, 2001.

     Statement 141 requires upon adoption of Statement 142, that the Company evaluate its existing intangible assets and goodwill that were acquired in a prior purchase business combination, and to make any necessary reclassifications in order to conform with the new criteria in Statement 141 for recognition apart from goodwill and to reassess the useful lives and residual values of all intangible assets acquired. In addition, the Company is required to test the intangible asset for impairment in accordance with the provisions of Statement 142. Any impairment loss will be measured as of the date of adoption and recognized as the cumulative effect of a change in accounting principle in the first interim period.

     As of the planned date of adoption, the Company had unamortized goodwill of approximately $62 million which will be subject to the transition provisions of Statements 141 and 142. Because of the extensive effort needed to comply with adopting these Statements 141 and 142, it is not practicable to reasonably estimate the impact of adopting these Statements on the Company's financial statements at the date of this report, including whether it will be required to recognize any transitional impairment losses as the cumulative effect of a change in accounting principle.

     In June 2001, the FASB issued SFAS No. 143 - Accounting for Asset Retirement Obligations. Statement 143 relates to the accounting for the obligations associated with the retirement of long-lived assets. In August 2001, the FASB issued SFAS No. 144 - Accounting for Impairment or Disposal of Long-lived Assets. Statement 144 establishes methods of accounting and reporting for the impairment of long-lived assets other than goodwill and intangible assets not being amortized. The Company is currently reviewing these statements and the impact of their adoption on its financial position, results of operations and cash flows. The Company will implement Statement 143 and 144 beginning in the first quarter of its fiscal year ending September 26, 2003.

     Risks are an inherent part of the Company's business and activities. Management of these risks is critical to the Company's soundness and profitability. Risk management at the Company is a multi-faceted process that requires communication, judgment and knowledge of financial products and markets. The Company's senior management takes an active role in the risk management process and requires specific administrative and business functions to assist in the identification, assessment, monitoring and control of various risks. The principal risks involved in its business activities are market, credit, operational and legal.

     The potential for changes in the value of financial instruments owned by the Company is referred to as "market risk". Market risk is inherent to both derivative and non-derivative financial instruments, and accordingly, the scope of the Company's market risk management procedures extends beyond derivatives to include all market-risk-sensitive financial instruments.

     The Company trades tax exempt and taxable debt obligations, including U.S. Treasury bills, notes, and bonds; U.S. Government agency and municipal notes and bonds; bank certificates of deposit; mortgage backed securities; and corporate obligations. The Company is also an active market-maker in over-the-counter equity securities. In connection with these activities, the Company may maintain inventories in order to ensure availability and to facilitate customer transactions. The Company also invests for its own proprietary investment account on a limited basis.

     Changes in value of the Company's financial instruments may result from fluctuations in interest rates, credit ratings, equity prices and the correlation among these factors, along with the level of volatility.

     The Company manages its trading businesses by product and has established trading divisions that have responsibility for each product. The trading inventories are managed with a view toward facilitating client transactions, considering the risk and profitability of each inventory.

     Position limits in trading inventory accounts are established and monitored on a daily basis. Management monitors inventory levels and results of the trading groups, as well as inventory aging, pricing, concentration and securities ratings.

     The Company utilizes interest rate swap contracts to hedge its debt inventory, acts in a matched book dealer capacity in these instruments, and to hedge RJBank's loan portfolio against fluctuations in interest rates. RJ Bank accounts for its swap activity under FAS 133 and monitors this activity by reviewing resulting net yields and spreads. The Company uses notional (contract) amounts and daily mark to markets among other methods to measure this derivative activity. Notional amounts are not included on the Company's balance sheet as these contract amounts are not actually paid or received. Notional amounts allow the Company to calculate the cash flows to be exchanged and are not necessarily indicative of overall market risk.

     The Company is exposed to interest rate risk as a result of maintaining inventories of interest-rate-sensitive financial instruments and from changes in the interest rates on its interest-earning assets (including client loans, stock borrow activities, investments, and inventories) and its funding sources (including client cash balances, stock lending activities, and bank borrowings), which finance these assets. The collateral underlying financial instruments at the broker-dealer is repriced daily, thus there are no unrecorded gains or losses in value. Interest rates on client balances and stock borrow and lending produce a positive spread to the Company, with the rates generally fluctuating in parallel.

     The Company manages its inventory exposure to interest rate risk by setting and monitoring limits and, where feasible, hedging with offsetting positions in securities with similar interest rate risk characteristics. While a significant portion of the Company's securities inventories have contractual maturities in excess of five years, these inventories, on average, turn over in excess of several times per year. The Company uses interest rate sensitivity analysis to monitor its exposure in the RJBank portfolio.

     The Company is exposed to equity price risk as a consequence of making markets in equity securities. The Company attempts to reduce the risk of loss inherent in its inventory of equity securities by monitoring those security positions constantly throughout each day and establishing position limits.

     The Company's equity securities inventories are repriced on a regular basis and there are no unrecorded gains or losses. The Company's activities as a dealer are client-driven, with the objective of meeting clients' needs while earning a positive spread.

     The tables above primarily represent trading inventory associated with our customer facilitation, market-making activities and RJBank investments, and include net long and short fair values, which is consistent with the way risk exposure is managed. See Notes 2 and 3 of the Notes to Consolidated Financial Statements for the related gross long and short fair values of financial instruments owned and investments.

     The Company is engaged in various trading and brokerage activities whose counterparties primarily include broker-dealer, banks and other financial institutions. In the event counterparties do not fulfill their obligations, the Company may be exposed to risk. The risk of default depends on the credit worthiness of the counterparty or issuer of the instrument. The Company manages this risk by imposing and monitoring position limits for each counterparty, monitoring trading counterparties, conducting regular credit reviews of financial counterparties, reviewing security concentrations, holding and marking to market collateral on certain transactions and conducting business through clearing organizations, which guarantee performance.

     The Company's client activities involve the execution, settlement, and financing of various transactions on behalf of its clients. Client activities are transacted on either a cash or margin basis. Credit exposure associated with the Company's retail client business consists primarily of customer margin accounts, which are monitored daily and are collateralized. The Company monitors exposure to industry sectors and individual securities and performs analysis on a regular basis in connection with its margin lending activities. The Company adjusts its margin requirements if it believes its risk exposure is not appropriate based on market conditions. In addition, RJ Bank offers a variety of loan products; including mortgage, commercial real estate, and consumer loans which are collateralized and corporate loans for which the borrower is carefully evaluated and monitored.

     The Company is subject to concentration risk if it holds large positions, extends large loans to, or has large commitments with a single counterparty, borrower, or group of similar counterparties or borrowers (i.e. in the same industry). Securities purchased under agreement to resell represent approximately 26% of the Company's total assets and consist of securities issued by the U.S. government. Receivables from and payables to clients and stock borrow and lending activities are both with a large number of clients and counterparties and any potential concentration is carefully monitored. Inventory and investment positions taken and commitments made, including underwritings, may involve exposure to individual issuers and businesses. The Company seeks to limit this risk through careful review of counterparties and borrowers and the use of limits established by senior management, taking into consideration factors including the financial strength of the counterparty, the size of the position or commitment, the expected duration of the position or commitment and other positions or commitments outstanding.

     The Company is the lessor in two leveraged commercial aircraft transactions with major domestic airlines. The Company's ability to realize its expected return is dependent upon the airlines' ability to fulfill its lease obligations. In the unlikely event that the Company was unable to re-lease or sell the plane with adequate terms the Company would suffer a loss of some or all of its investment. As of September 28, 2001, it is management's opinion that the Company's return on this investment will not be impaired.

     Operational risk generally refers to the risk of loss resulting from the Company's operations, including, but not limited to, improper or unauthorized execution and processing of transactions, deficiencies in the Company's technology or financial operating systems and inadequacies or breaches in the company's control processes. The Company operates different businesses in diverse markets and is reliant on the ability of its employees and systems to process a large number of transactions. These risks are less direct than credit and market risk, but managing them is critical, particularly in a rapidly changing environment with increasing transaction volumes. In the event of a breakdown or improper operation of systems or improper action by employees, the Company could suffer financial loss, regulatory sanctions and damage to its reputation. In order to mitigate and control operational risk, the Company has developed and continues to enhance specific policies and procedures that are designed to identify and manage operational risk at appropriate levels throughout the organization and within such departments as Accounting, Operations, Information Technology, Legal, Compliance and Internal Audit. These control mechanisms attempt to ensure that operational policies and procedures are being followed and that the Company's various businesses are operating within established corporate policies and limits. Business continuity plans exist for critical systems, and redundancies are built into the systems as deemed appropriate.

     Legal risk includes the risk of a potentially sizable adverse legal judgement and of non-compliance with applicable legal and regulatory requirements. The Company is generally subject to extensive regulation in the different jurisdictions in which it conducts its business. The Company has various procedures addressing issues such as regulatory capital requirements, sales and trading practices, use of and safekeeping of customer funds, credit granting, collection activities, money-laundering and record keeping.

     The Company's assets are primarily liquid in nature and are not significantly affected by inflation. Management believes that the replacement cost of property and equipment would not materially affect operating results. However, the rate of inflation affects the Company's expenses, including employee compensation and benefits, communications and occupancy, which may not be readily recoverable through charges for services provided by the Company.

     From time to time, the Company may publish "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended, or make oral statements that constitute forward-looking statements. These forward-looking statements may relate to such matters as anticipated financial performance, future revenues or earnings, business prospects, projected ventures, new products, anticipated market performance, and similar matters. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements. In order to comply with the terms of the safe harbor, the Company cautions readers that a variety of factors could cause the Company's actual results to differ materially from the anticipated results or other expectations expressed in the Company's forward-looking statements. These risks and uncertainties, many of which are beyond the Company's control, include, but are not limited to: (i) transaction volume in the securities markets, (ii) the volatility of the securities markets, (iii) fluctuations in interest rates, (iv) changes in regulatory requirements which could affect the cost of doing business or the profitability of certain segments of the Company's business, (v) fluctuations in currency rates, (vi) general economic conditions, both domestic and international, (vii) changes in the rate of inflation and related impact on securities markets, (viii) competition from existing financial institutions and other new participants in the securities markets, (ix) legal developments affecting the litigation experience of the securities industry, (x) changes in federal and state tax laws which could affect the popularity of products sold by the Company, (xi) natural disasters and (xii) political and military events which would affect the United States of America or world markets, which could disrupt the Company's communications and securities processing capabilities or other operations. The Company does not undertake any obligation to publicly update or revise any forward-looking statements.

1. Financial statements, schedules and exhibits filed under this item are

(b)                                              QUARTERLY FINANCIAL INFORMATION

     None.

     Executive officers of the registrant (including its significant subsidiaries) who are not Directors of the registrant are as follows:

The information required by Item 10 relating to Directors of the registrant is incorporated herein by reference to the registrant's definitive proxy statement for the 2001 Annual Meeting of Shareholders. Such proxy statement will be filed with the SEC prior to January 12, 2002.

     The information required by Items 11, 12 and 13 is incorporated herein by reference to the registrant's definitive proxy statement for the 2001 Annual Meeting of Shareholders. Such proxy statement will be filed with the SEC prior to January 12, 2002.

1. Exhibits and financial statements schedules required by this Item are either listed in the index appearing on page F-1 of this report or have been previously filed with the SEC.
2. Reports on Form 8-K required by this Item are listed in the index appearing on page F-1 of this report.

During the year, the Company filed the following Current Reports on Form 8-K

     All schedules and exhibits not included are not applicable, not required or would contain information which is included in the Consolidated Financial Statements, Summary of Significant Accounting Policies, or the Notes to the Consolidated Financial Statements.

To the Shareholders and Board of Directors

of Raymond James Financial, Inc.:

We have audited the accompanying consolidated statement of financial condition of Raymond James Financial, Inc. and subsidiaries as of September 28, 2001, and the related consolidated statements of operations and comprehensive income, changes in shareholders' equity, and cash flows for the year then ended. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. The consolidated financial statements of Raymond James Financial, Inc. and subsidiaries as of September 28, 2000 and for the years ended September 28, 2000 and September 24, 1999 were audited by other auditors, whose report dated November 17, 2000 expressed an unqualified opinion on those statements.

We conducted our audit 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 audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Raymond James Financial, Inc. and subsidiaries as of September 28, 2001 and the results of their operations and their cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

KPMG LLP

Tampa, Florida

November 16, 2001

To the Shareholders and Board of Directors

of Raymond James Financial, Inc.:

We consent to the incorporation by reference in registration statement's (No. 333-68821, 333-59449, 333-38390 and 333-74716) on Form S-8 and (No. 333-51840) on Form S-3 of Raymond James Financial, Inc. and subsidiaries of our report dated November 16, 2001, relating to the consolidated statement of financial condition of Raymond James Financial, Inc. and subsidiaries as of September 28, 2001, and the related consolidated statements of operations and comprehensive income, changes in shareholders' equity and cash flows for the year then ended, which report appears in the September 28, 2001, annual report on Form 10-K of Raymond James Financial, Inc.

KPMG LLP

Tampa, Florida

December 19, 2001

Report of Independent Certified Public Accountants

To the Board of Directors and Shareholders

of Raymond James Financial, Inc.

In our opinion, based on our audits and the report of other auditors, the consolidated statement of financial condition as of September 29, 2000 and the related consolidated statements of income, changes in shareholders' equity and cash flows for each of the two years in the period ended September 29, 2000 (appearing on pages F-5 through F-9 of the Raymond James Financial, Inc. 2001 Form 10-K) present fairly, in all material respects, the financial position, results of operations and cash flows of Raymond James Financial, Inc. and its subsidiaries at September 29, 2000 and for each of the two fiscal years in the period ended September 29, 2000, in conformity with accounting principles generally accepted in the United States of America. 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 did not audit the financial statements of Raymond James Bank, FSB, a wholly-owned subsidiary, which statements reflect total assets of $712,332,000 as of September 29, 2000 and total revenues of $45,150,000 and $29,200,000 for each of the two fiscal years in the period ended September 29, 2000. Those statements were audited by other auditors whose report thereon has been furnished to us, and our opinion expressed herein, insofar as it relates to the amounts included for Raymond James Bank, FSB, is based solely on the report of the other auditors. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of America, which 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, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP

Tampa, Florida

November 17, 2000

We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (No. 333-68821, 333-59449, 333-38390 and 333-74716) and on the Registration Statement on Form S-3 (No. 333-51840)  of Raymond James Financial, Inc. of our report dated November 17, 2000 relating to the financial statements and financial statement schedules, which appears in this Form 10-K.

PricewaterhouseCoopers LLP

Tampa, Florida

December 21, 2001