The capital markets were again open to transactions of all types in the second half of 2003, after a prolonged period of generally unfavorable market conditions. The convertible and high yield markets were strong throughout most of the year, while the equity market began to open up after Labor Day. Merger and acquisition activity similarly gained momentum as the year unfolded, while restructuring activity remained high. As a result, Jefferies advised on, led or co-managed more than 150 transactions for our clients. In 2003, our product and industry groups worked together more than ever to leverage our extensive trading platform to best meet client objectives—completing an unprecedented number of transactions and record net revenues of nearly $230 million, up 64 percent from 2002. Including our year-end acquisition of Broadview International, LLC, we nearly doubled our investment banking team during the year. We made key additions in several industries of focus and formed dedicated Transaction Development, Leveraged Finance, and Capital Markets Origination groups.

Equity & Equity-Linked Though off to a difficult start, Jefferies brought more IPOs, follow-on offerings and private placements to market and raised more equity and equity-linked capital for our clients in 2003 than in any other year—completing the bulk of offerings in the fourth quarter. More than $3 billion was raised for nearly 40 clients to support future growth and initiatives. Highlights included lead-managing offerings for Net2Phone, Primus and SciClone Pharmaceuticals, among others, as well as a series of financings for Allied Capital. Our equity capital markets team worked closely with our expanded equity-linked origination group to leverage the firm’s extensive middle-market relationships and expand capital-raising opportunities. The result was a focused, coordinated effort that more fully leveraged our convertible execution capabilities and further integrated our banking and trading divisions to the benefit of our clients. Convertible offerings completed included Southern Union Company, Griffon Corporation, Maverick Tube Corporation, and McMoRan Exploration Company.