The Bear Stearns Companies Inc.

383 Madison Avenue

New York, NY 10179

212-272-2000

www.bearstearns.com

 

2003 net revenues: $5.9 billion

2003 net income: $1.1 billion

2003 revenues from investment banking: $904.6 million

2003 underwriting revenues: $456.2 million 

 

2003 total employees: 10,532

 

Chairman and Chief Executive Officer: James E. Cayne 

 

The Bear Stearns Companies Inc. is a holding company involved in investment banking, securities and derivatives trading, and clearance and brokerage activities for corporations, governments, and institutional and individual investors.

 

History

The company was started by Joseph Bear, Robert Stearns and Harold Meyer in 1923 with $500,000 in capital. The company survived the 1929 stock market crash with no layoffs and promoted government bonds during the Depression. In the 1950s and the 1960s, the company became a major Wall Street force under the leadership of Salim Cy Lewis. The company continued to grow under Alan Greenberg, who became CEO after Lewis died in 1978. The company moved into investment banking in the late 1980s, but was faced with a number of lawsuits related to junk bonds, IPOs and problematic deals. The company was hit hard by the 1994 bond market crash. It continued to face significant legal and financial difficulties in the late 1990s and the in the initial years of the new century. In 2001, James Cayne became Chairman and CEO when Greenberg stepped down after 50 years with the company.

 

Business Segments

 

The company's three primary business segments as a securities broker and dealer are:

Capital Markets

Global Clearing Services

Wealth Management

 

The Capital Markets segment includes:

Institutional equities

Fixed income securities

Investment banking areas

 

Fixed income securities include corporate and government bonds and municipal securities. The company's municipal securities underwriting business is described under its fixed income securities business segment.

 

Investment banking encompasses capital raising, strategic advice, mergers and acquisitions and merchant banking. The company's capital raising activities involve underwriting of equity, investment-grade, municipal and high yield debt products.

 

Through its Investment Banking division, the company manages and participates in public offerings and arranges the private placement of debt and equity securities directly with institutional investors. The Investment Banking division also integrates activities such as origination, structuring, underwriting, distribution and trading of loans.

 

Investment banking revenues include fees earned for underwriting public and private offerings of fixed income and equity securities and advising clients on M&A and other services, and merchant banking revenues.

 

The company is also a dealer in tax-exempt and taxable municipal securities and instruments, including general obligation and revenue bonds, notes, leases, variable-rate obligations issued by state and local governments and authorities and non-profit institutions.

 

Income/Revenues from Business Segments

 

The company's net revenues increased 16.9 percent to $5.9 billion in 2003 due to an increase in investment banking revenues as well as increases in other business segments. Net revenues in 2002 were $5.13 billion.

 

The company's 2003 net income was $1.16 billion, an increase of 31.7 percent from its net income of $878.3 million in 2002.

 

Investment banking revenues increased from $833.5 million in 2002 to $904.6 million in 2003, an increase of 8.5 percent. Underwriting revenues increased 12.6 percent, from $405.1 million in 2002 to $456.2 million in 2003, attributed to an increase in fixed income new issue activity, particularly in the high yield and high grade areas.