Investor Day March 29, 2007

Investment Banking

Alan Schwartz President and Co-Chief Operating Officer

Continuation of Strategy

Deliver intellectual value added solutions Focused industry based strategy with emphasis on core clients Seamless delivery of all the firms capabilities Leverage Strategic Finance to quickly respond to new and emerging opportunities Aggressively managing costs and productivity while expanding producer base

Banking Revenues Achieved Record Levels in 2006

$1,200

14% CAGR

$1,058 $829

millions

$617
600

$728

$823

0 2002
Prior period net revenues reclassified to conform to current reporting.

2003

2004

2005

2006
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Key Themes Driving Activity in 2006

Globalization driving liquidity creation and capital flows Rising corporate liquidity Lower interest rates and risk premiums Ample liquidity Growing size of financial sponsors Aging western populations Demand for yield and absolute return New products and investment vehicles

Providing Intellectually Value Added Solutions To Our Core Corporate Clients

We expect to be active when our clients are active For corporate clients, market forces drove significant activity in

Mergers & Acquisitions Corporate restructuring oriented M&A

We creatively addressed our clients needs though the combination of strategic insight and structuring capabilities

Marquee M&A Transactions Deal of the Year Nominees

Advised Time Warner on the joint $12.7 billion acquisition with Comcast Corp. of Adelphia Communications

Advised Viacom in its $50.8 billion separation into two publicly traded companies

Advised NRDC Equity Partners on the $1 billion acquisition of Lord & Taylor from Federated Department Stores

$12.7 Billion

$50.8 Billion

$1 Billion

Advised and rendered a fairness opinion to Verizon on the $13 billion spin-off of Idearc. $13 Billion

Advised GMAC on the sale of a 51% controlling interest to a consortium of investors led by Cerberus Capital Management $7.4 Billion

Advised Boston Scientific on its $27 billion acquisition of Guidant Corp.

Advised and rendered a fairness opinion to Fidelity National Financial and Fidelity Information Services in the merger of FIS with Certegy.

$27 Billion

$4.7 Billion

M&A Revenue Has Grown Due To Both Corporate And Financial Sponsor Activity
$600
33% CAGR

$494 $309

400
millions

$302 $159

$306

200

0 2002
Prior period net revenues reclassified to conform to current reporting.

2003

2004

2005

2006
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Financial Sponsor Business

Low risk premiums and ample liquidity are fueling a surge in sponsor activity Sponsors now account for over 20% of the total Investment Banking fee pool We have successfully delivered high intellectually value added resources to sponsors in the form of:

Industry expertise Corporate relationships Innovative financial solutions Depth of industry knowledge and management access is increasingly important to sponsors

Growth in sponsor business is felt throughout the platform

M&A Leveraged Finance Equity (IPOs and follow-on offerings) CMBS securitizations to finance company acquisitions Permanent capital vehicles

Bear Stearns Leveraged Finance Business has Grown Five Fold

600% 500% 400% 300% 200% 100% 2002 2003 2004 2005 2006
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2002 Net Revenues indexed to 100%.

Marquee Financial Sponsor Transactions

Acted as exclusive financial advisor to Apollo and has provided committed financing to Apollo on its acquisition of TNT Logistics

Acted as sole lead arranger and joint book runner on a $1.7 billion senior secured credit facility and joint book runner on a $1.0 billion senior notes offering for MetroPCS

Acted as sole book runner on a $230 million equity underwriting for Fidelity National Information Services, Inc.

$1.9 Billion

$2.7 Billion

$230 Million

Acted as joint book runner for $2.1 billion of debt financing and M&A advisor related to the acquisition of the Burlington Coat Factory Warehouse Corp. by Bain Capital

Advised Blackstone on its $36 billion acquisition of Equity Office Properties

Acted as joint book runner on a 21.6 million share IPO for J.Crew

$2.1 Billion

$36 Billion

$376 Million

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Strategic Finance Seamless Delivery of Financing Products to Our Clients

Focused expansion of equity product offerings

Initial public offerings

Focused coverage on both sponsor and industry accounts Maintained quality Grew revenues through leading larger deals Doubled our IPO revenue since 2004

Customize/Structured finance solutions to meet the demand for yield and absolute return

Structured equity products

Created to deliver attractive yields in a low yield market

Permanent capital vehicles for our alternative asset manager clients

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International Opportunities

European sales and trading platform now at critical mass

A necessary precondition for expanding banking

Growth of sponsor activity, structured products and alternative investment vehicles play to our strengths Starting to make selective key hires and transfers 2006 saw a variety of successful transactions proving we can execute significant business for clients

Arranged $925 million Phase I financing for construction of Oman's Blue City. First real estate bond financing in the Gulf

Acted as joint book-running manager on its $4.485 billion inaugural debt offering related to Sprint/Nextel merger

Advised Merck KGaA on its unsolicited public takeover offer to Schering AG Shareholders to combine the two companies and provide committed debt financing for the bridge loan facility

$925 Million

$4.485 Billion

$7.4 Billion

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Growing Producer Base Provides Capacity for Future Organic Growth

250% 200% 150% 100% 50% 0% 2002

200% 175% 140% 100% 115%

2003

2004

2005

2006
13

Investment Banking at Bear Stearns State of the Franchise

Steady, profitable growth across cycles M&A franchise continues to maintain market leadership in our focus industries Significant participation in the growth of financial sponsor activity while maintaining a healthy balance between corporate and financial sponsor clients Extremely active in new and emerging areas such as permanent capital vehicles Growing producer base from organic development and select key hires Maturation of our sales and trading platform in London provides basis for measured expansion of Investment Banking footprint in Europe
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Certain statements contained in this discussion are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ materially from those forward-looking statements. Numerous factors may affect our business, including but not limited to interest rates, market conditions, transactions included in our backlog failing to close, general economic conditions in the US or other geographic regions that may suffer economic downturns. For a fuller discussion of these risks see Managements Discussion and Analysis of Financial Condition and Results of Operations and Risk Management in the Companys Annual Report to Stockholders, which has been filed with the Securities and Exchange Commission.

The information in this document is provided by Bear Stearns for informational purposes only, and should be considered current only as of the date of its initial publication, without regard to the date on which you may actually review the information.

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Investor Day March 29, 2007

Investment Banking

Alan Schwartz President and Co-Chief Operating Officer