Event Brief of J.P. Morgan Chase & Co Investor Presentation - Part 1.

(From Fair Disclosure Wire)

CORPORATE PARTICIPANTS . Bill Harrison, JP Morgan Chase & Co, Chairman and CEO . Jamie Dimon, JP Morgan Chase & Co, President and COO . Dina Dublon, JP Morgan Chase & Co, CFO OVERVIEW JP Morgan Chase & Co and Bank One Corporation announced that they have agreed to merge. Bill Harrison will be Chairman and CEO for two years, and Jamie Dimon will be President and COO. The deal is expected to close in 2Q04. Merger related cost is about $3b. Q&A Focus: synergies, integration, overlaps, ROC, and management. FINANCIAL DATA A. Key Data From Call 1. Cost saves total $2.2b. 2. Combined market capitalization of $132b. 3. Pro-forma net income of over $10b. 4. Tangible equity of $53b. PRESENTATION SUMMARY S1. JPM and Bank One Announce Merger (W.H) 1. JPM and Bank One Announce Merger: 1. Strategic rationale: 1. Scale. 2. Leadership positions. 3. Broad base of product and client set is important. 4. JPM was overly weighted on Investment Banking; more market-sensitive business. 2. Expected Impacts of Merger: 1. Merger brings a balanced business model between wholesale and retail. 2. Building leadership positions in both wholesale and retail. 3. Will increase scale and financial strength. 4. Will lead to more consistent earnings. 5. Value of cost saves exceeds the premium. 6. Deep and proven mgt. team to handle integration. 7. Very strong balance sheet and excess capital. 3. Basic structure: 1. The name JP Morgan Chase at the holding company level and wholesale activities under David Coulter will remain as they are. 2. On retail side, companies will continue to operate with respective brands pending a study to see which is the best single brand. 3. HQ will be in NY for the corporation. 4. Retail HQ in Chicago. 4. Management: 1. William B. Harrison will be Chairman and CEO for two years. 2. James Dimon will be President and COO. 3. Two years from close, James Dimon will takeover as CEO, William B. Harrison will take over as Chairman. 4. Board will be 50-50 split; seven outsiders from each side, plus William Harrison and James Dimon. 5. Terms: 1. Exchange ratio of 1.32. 2. Maintain JPM's dividend level. 3. Expected to close in 2Q04. 6. Management Team Depth: 1. Companies report complimentarity on the people side. 2. Donald H. Layton will run Finance, Risk and IT; will report to James Dimon. 3. David A. Coulter will be Vice Chairman of Investment Banking and Asset Management and Private Banking business; will report to William B. Harrison. 4. Key jobs have been decided. 1. Companies have made management decisions across the organizational cut, at l east three levels down; these have been announced. 2. Executive committee of 26 people has been announced. 3. Mgt. team is in place, and has been through prior mergers. 7. Balanced Business Mix: 1. Merger expected to create better balance between wholesale and retail, and between market sensitive businesses which will create lower volatility. 2. Companies report complementarity in leadership positions across the board. 8. Financial Strength: 1. Pro-forma net income of over $10b. 2. Market capitalization of $132b. 3. Tangible common equity value creation of $53b. 4. Companies expect substantial value from cost savings. 5. Cash EPS is expected to be accretive soon. 6. GAAP accretive, once $2.2b of synergies are taken out. 7. On a pre-tax income basis, annualized from 30/9/03 numbers, combined pre-tax of $18b. 9. Private Equity: 1. Combined businesses end up with slightly less private equity than JPM had as a relationship to capital. 1. JPM has reduced to about 16%. 2. Combined pro-forma is about 15% 3. On track to drive that down to 10%. S2. Retail Business (J.D.) 1. Retail Business: 1. Complementarities: 1. Branch networks fit together perfectly. 2. Companies will consolidate the platforms. 3. Add size in middle-market, auto, and mortgage. 4. Didn't add any revenue synergies, but this doesn't mean there won't be any; for example, Bank One didn't have a first mortgage business, JPM has a great…