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Nine analysts and top management from sixteen sector firms examine the consumer sector in this special 119-page Bear, Stearns & Co. 15th Annual Media, Entertainment & Information Conference issue from The Wall Street Transcript, available at (212/952-7433) or http://www.twst.com/info/info502.htm.

TWST: What are your specific areas of coverage?

Mr. Gruneich: Our publishing and information services coverage encompasses three subsectors — diversified newspaper companies, information companies, and diversified magazine companies. In all, we cover 17 different stocks with a very diverse asset mix.

TWST: Has the economic downturn, the September 11th terrorism and the uncertainty of the markets that followed — as well as concerns about consumer confidence — been reflected in advertising and newspapers? How has their top-line and bottom-line performance been affected? How about expectations? Are there short-term effects or will there be a longer-term effect?

Mr. Gruneich: The advertising slowdown in newspapers and all media predated September 11. In fact, we were headed for the worst advertising year in decades prior to September 11. Newspapers got hit quite harshly. We saw advertising revenues down a bit more than 8% in 2001. That’s the worst year we have seen since the Great Depression. The environment worsened by what occurred on September 11. The top line has never looked so soft in the industry, at least, again, in modern times. And bottom line performance was also poor. In fact, our estimates were reduced dramatically throughout the year. If you look at our estimates for the diversified newspaper stocks that we cover, we cut EBITDA from 15% to 39% from January 1, 2001, to December 31, 2001, depending on the newspaper company covered. And EPS estimates during that time went down 20% to 56%.

TWST: Are there specific small or mid-cap companies that investors should review? Is there an investor rationale for looking at players other than the established large cap companies?

Mr. Gruneich: Our favorite small cap name is ProQuest Company (NYSE:PQE), formerly known as Bell & Howell. This is a company that has undergone a dramatic change in the past year or two from a mini-conglomerate to a pure information play. It divested non-core assets in mail and messaging technologies and imaging operations. That helped in two different aspects. First of all, it got ProQuest out of lower growth markets that were historically less predictable. Second, it reduced the company’s debt. So ProQuest was transformed from a highly leveraged mini-conglomerate to a pure play information company with “normal” leverage. It is a company that we think long term could grow its revenues in the high single-digits and its EBIT in the mid-teens. And we think it could grow its EPS very fast. The beauty of it is that it can do that with a relatively high level of visibility, given that 80% of its revenues emanate from its subscriptions and the renewal rate on those subscriptions is about 90%.

TWST: Where do these companies fit into an investment philosophy in 2002? What portfolio strategy fits these companies?

Mr. Gruneich: These companies are generally more defensive in nature than many other sectors. One statistic that we have used is the fact that, looking back at 2001, the weeks that the S&P 500 appreciated, the newspapers stocks tended to underperform and vice versa. In fact, that happened 73% of the weeks in 2001 and seems to be happening with the same consistency thus far in 2002. Again, the information sector tends to have the highest degree of visibility, providing more certainty in the numbers. I think this is going to continue to drive valuations for the information companies going forward. Given the diversity within these three subsectors, there are plenty of unique names that portfolio managers can look at that will fit into a multitude of strategies. We look forward to discussing this rapidly-evolving industry in the years ahead.

This special conference issue includes:

1) Large Cap Entertainment Stocks - In an in-depth (1,100 words) Analyst Interview, Raymond Lee Katz, Senior Managing Director at Bear, Stearns & Co., examines the outlook for the sector and shares specific stock recommendations.

2) Publishing & Information Services - In an in-depth (3,400 words) Analyst Interview, Kevin Gruneich, Senior Managing Director at Bear, Stearns & Co., examines the outlook for the sector and shares specific stock recommendations.

3) Outlook for Broadcasting Stocks - In an in-depth (4,300 words) Analyst Interview, Victor B. Miller, IV, Senior Managing Director at Bear, Stearns & Co., examines the outlook for the sector and shares specific stock recommendations.

4) Advertising & Marketing Services - In an in-depth (1300 words) Analyst Interview, Alexia Quadrani, member of the media equity research team focused on advertising and marketing services, database management, direct mailer, and outsource marketing services stocks at Bear, Stearns & Co., examines the outlook for the sector and shares specific stock recommendations.

5) Outlook for Interactive Entertainment - In an in-depth (1,600 words) Analyst Interview, Jeff Vilensky, Interactive Entertainment and Digital Media Equity Research Analyst at Bear, Stearns & Co., examines the outlook for the sector and shares specific stock recommendations.

6) European Broadcasting & Entertainment - In an in-depth (816 words) Analyst Interview, Nicholas Bell, Analyst that focuses on European media stocks at Bear, Stearns & Co., examines the outlook for the sector and shares specific stock recommendations.

7) European Publishing & Information Services - In an in-depth (3,300 words) Analyst Interview, Brendan Hoey, Associate Director in European equity research at Bear, Stearns & Co., examines the outlook for the sector and shares specific stock recommendations.

8) European Cable Industry - In an in-depth (1,400 words) Analyst Interview, Ruth Belbin, Eastern European Telecommunications Analyst at Bear, Stearns & Co., examines the outlook for the sector and shares specific stock recommendations.

9) Outlook for Asian Media - In an in-depth (706 words) Analyst Interview, Andrew Collier, Asian Media Analyst at Bear, Stearns & Co., examines the outlook for the sector and shares specific stock recommendations.

10) CEO interviews (average 2,500 words). Top management of sixteen sector firms examine the outlook for their firm and the sector.