Bear Stearns Initiates Coverage of Movie Theater Industry; In Good And Bad Economic Times, Moviegoers Are Drawn To The Silver Screen And Buttered Popcorn.

Business Editors

NEW YORK--(BUSINESS WIRE)--August 20, 2002

Bear, Stearns & Co. Inc. launched coverage today of two of the biggest movie theater operators. Regal Entertainment Group (RGC), with a total of 5,788 screens, was rated "Attractive", and the number two player, AMC Entertainment (AEN), was rated "Neutral". According to Jason N. Ader, senior managing director at Bear Stearns, movie theaters have positive long-term prospects even in weak economic climates. "People want diversion even when the economic headlines are bad," said Ader. "The box office has shown stability in both strong and weak economic periods."

Analyst Glen Reid, who co-initiated coverage with Ader, also notes that the theater business is not just about the box office draw. "There's no question that Hollywood fare drives the business," said Reid. "But after they get people into the theater, operators also have to manage the business to best capture consumer dollars at the concession stands." These sales produce roughly a quarter of the revenues for movie theater operators.

While sequels to Lord of the Rings and Harry Potter are due to hit the theaters late this fall, Ader and Reid note there could be some weakness in the near-term. Summer releases may be slowing down earlier than expected and the month of September doesn't appear to have much in the way of strong movie releases. "There's always a risk that Hollywood may disappoint," said Ader. "There will be years when the quantity or the quality of movie releases dips and drags box office admissions."

Founded in 1923, Bear, Stearns & Co. Inc. is a leading worldwide investment banking and securities trading and brokerage firm, and the major subsidiary of The Bear Stearns Companies Inc. (NYSE:BSC). With approximately $31.0 billion in total capital, Bear Stearns serves governments, corporations, institutions and individuals worldwide. The company's business includes corporate finance and mergers and acquisitions, institutional equities and fixed income sales, trading and research, private client services, derivatives, foreign exchange and futures sales and trading, asset management and custody services. Through Bear, Stearns Securities Corp., it offers prime broker and broker dealer services, including securities lending. Headquartered in New York City, the company has approximately 10,500 employees worldwide. For additional information about Bear Stearns, please visit the firm's Web site at http://www.bearstearns.com.

Please Note:

RGC, AEN: Within the past twelve months, Bear, Stearns & Co. Inc. or one of its affiliates was the manager or co-manager of a public offering of securities for this company.

RGC, AEN: Within the past twelve months, Bear, Stearns & Co. Inc. or one of its affiliates has performed, or is performing, investment banking services for which it has received a fee from this company.

Any recommendation contained in this report may not be suitable for all investors. Moreover, although the information contained herein has been obtained from sources believed to be reliable, its accuracy and completeness cannot be guaranteed. Bear Stearns may make markets and effect transactions, including transactions contrary to any recommendations herein, or have positions in the securities mentioned herein (or options with respect thereto) and may also have performed investment banking services for the issuers of such securities. In addition, employees of Bear Stearns may have positions and effect transactions in the securities or options of the issuers mentioned herein and may serve as directors of such issuers. Copyright (c) 2002. All rights reserved by Bear, Stearns & Co. Inc.