Investment Banking Investment Banking2122

8/12/2019 Investment Banking Investment Banking2122

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Investment BankingInvestment Banking

Alan SchwartzAlan Schwartz

President and CoPresident and Co--Chief Operating OfficerChief Operating Officer

Investor Day March 29, 2007


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Continuation of StrategyContinuation 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


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Banking Revenues Achieved Record Levels in 2006Banking Revenues Achieved Record Levels in 2006

$617$728

$823 $829

$1,058

0

600

$1,200

2002 2003 2004 2005 2006

Prior period net revenues reclassified to conform to current reporting.

millions

14% CAGR

Investment Banking Segment Revenue

(excluding Merchant Banking)


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Key Themes Driving Activity in 2006Key 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


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Providing Intellectually Value Added SolutionsTo Our Core Corporate ClientsProviding Intellectually Value Added SolutionsTo 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


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Advised Time Warner on the

joint $12.7 billion acquisitionwith Comcast Corp. of

Adelphia Communications

$12.7 Billion

Advised NRDC Equity Partnerson the $1 billion acquisition ofLord & Taylor from Federated

Department Stores

$1 Billion

Advised and rendered a

fairness opinion to Verizon onthe $13 billion spin-off of

Idearc.

$13 Billion

Advised GMAC on the sale of a51% controlling interest to a

consortium of investors led byCerberus Capital Management

$7.4 Billion

Advised Boston Scientific on its

$27 billion acquisition ofGuidant Corp.

$27 Billion

Advised and rendered a fairnessopinion to Fidelity National

Financial and Fidelity Information

Services in the merger of FIS with

Certegy.

$4.7 Billion

Marquee M&A Transactions Deal of the Year Nominees

Marquee M&A Transactions Deal of the Year Nominees

Advised Viacom in its $50.8billion separation into twopublicly traded companies

$50.8 Billion


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M&A Revenue Has Grown Due To BothCorporate And Financial Sponsor ActivityM&A Revenue Has Grown Due To BothCorporate And Financial Sponsor Activity

$159

$302 $306 $309

$494

0

200

400

$600

2002 2003 2004 2005 2006

millions

33% CAGR

Prior period net revenues reclassified to conform to current reporting.


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Financial Sponsor BusinessFinancial 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 tosponsors

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


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Marquee Financial Sponsor TransactionsMarquee Financial Sponsor Transactions

Advised Blackstone on its$36 billion acquisition ofEquity Office Properties

$36 Billion

Acted as joint book runner for$2.1 billion of debt financing

and M&A advisor related to theacquisition of the Burlington

Coat Factory Warehouse Corp.by Bain Capital

$2.1 Billion

Acted as exclusive financialadvisor to Apollo and has

provided committed financingto Apollo on its acquisition of

TNT Logistics

$1.9 Billion

Acted as joint book runner on a21.6 million share IPO for

J.Crew

$376 Million

Acted as sole book runner on a$230 million equity

underwriting forFidelity National Information

Services, Inc.

$230 Million

Acted as sole lead arranger andjoint book runner on a $1.7billion senior secured credit

facility and joint book runneron a $1.0 billion senior notes

offering for MetroPCS

$2.7 Billion


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Strategic Finance Seamless Delivery ofFinancing Products to Our ClientsStrategic Finance Seamless Delivery ofFinancing 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 OpportunitiesInternational 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 vehiclesplay to our strengths

Starting to make selective key hires and transfers

2006 saw a variety of successful transactions proving we can execute significantbusiness for clients

Arranged $925 million Phase Ifinancing for construction of

Oman's Blue City. First realestate bond financing in the Gulf

$925 Million

Acted as joint book-runningmanager on its $4.485 billion

inaugural debt offering related toSprint/Nextel merger

$4.485 Billion

Advised Merck KGaA on itsunsolicited public takeover offer to

Schering AG Shareholders to combinethe two companies and provide

committed debt financing for thebridge loan facility

$7.4 Billion


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Growing Producer Base Provides Capacity forFuture Organic GrowthGrowing Producer Base Provides Capacity forFuture Organic Growth

100% 115%

140%

175%

200%

0%

50%

100%

150%

200%

250%

2002 2003 2004 2005 2006

Production greater than $7.5 million

2002 number of producers indexed to 100%.


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Investment Banking at Bear Stearns State ofthe FranchiseInvestment Banking at Bear Stearns State ofthe 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 butnot 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 fullerdiscussion 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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Alan SchwartzAlan Schwartz

President and CoPresident and Co--Chief Operating OfficerChief Operating Officer

Investor Day March 29, 2007

Investment BankingInvestment Banking

Investment Banking Investment Banking2122

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