<PAGE> 1
Filed by The Chase Manhattan Corporation
Pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12 under the
Securities Exchange Act of 1934
Subject Company: J.P. Morgan & Co. Incorporated
Commission File No. 1-5885
Date: November 1, 2000
This filing contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Such statements include, but
are not limited to, statements about the benefits of the merger between Chase
and J.P. Morgan, including future financial and operating results, Chase's
plans, objectives, expectations and intentions and other statements that are not
historical facts. Such statements are based upon the current beliefs and
expectations of J.P. Morgan's and Chase's management and are subject to
significant risks and uncertainties. Actual results may differ from those set
forth in the forward-looking statements.
The following factors, among others, could cause actual results to differ from
those set forth in the forward-looking statements: the risk that the businesses
of Chase and J.P. Morgan will not be combined successfully; the risk that the
growth opportunities and cost savings from the merger may not be fully realized
or may take longer to realize than expected; the risk that the integration
process may result in the disruption of ongoing business or the loss of key
employees or may adversely effect relationships with employees and clients; the
risk that stockholder or required regulatory approvals of the merger will not be
obtained or that adverse regulatory conditions will be imposed in connection
with a regulatory approval of the merger; the risk of adverse impacts from an
economic downturn; the risks associated with increased competition, unfavorable
political or other developments in foreign markets, adverse governmental or
regulatory policies, and volatility in securities markets, interest or foreign
exchange rates or indices; or other factors impacting operational plans..
Additional factors that could cause Chase's and J.P. Morgan's results to differ
materially from those described in the forward-looking statements can be found
in the 1999 Annual Reports on Forms 10-K of Chase and J.P. Morgan, filed with
the Securities and Exchange Commission and available at the Securities and
Exchange Commission's internet site (http://www.sec.gov) and in Chase's
Registration Statement on Form S-4 referred to below.
Chase has filed a Registration Statement on Form S-4 with the Securities and
Exchange Commission containing a preliminary joint proxy statement-prospectus
regarding the proposed transaction. Stockholders are urged to read the
definitive joint proxy statement-prospectus when it becomes available because it
will contain important information. The definitive joint proxy
statement-prospectus will be sent to stockholders of Chase and J.P. Morgan
seeking their approval of the proposed transaction. Stockholders also will be
able to obtain a free copy of the definitive joint proxy statement-prospectus,
as well as other filings containing information about Chase and J.P. Morgan,
without charge, at the SEC's internet site (http://www.sec.gov). Copies of the
definitive joint proxy statement-prospectus and the SEC filings that will be
incorporated by reference in the definitive joint proxy statement-prospectus can
also be obtained, without charge, by directing a request to The Chase Manhattan
Corporation, 270 Park Avenue, New York, NY 10017, Attention: Office of the
Corporate Secretary (212-270-6000), or to J.P. Morgan & Co. Incorporated, 60
Wall Street, New York, NY 10260, Attention: Investor Relations (212-483-2323).
Information regarding the participants in the proxy solicitation and a
description of their direct and indirect interests, by security holdings or
otherwise, is contained in the materials filed with the SEC by J.P. Morgan and
Chase on September 13, 2000 and September 14, 2000, respectively.
<PAGE> 2
[Materials used at ongoing Investor Conferences.]
[J.P. Morgan Logo] [Chase Logo]
<PAGE> 3
Meets the criteria for successful mergers
--------------------------------------------------------------------------------
> STRATEGIC FIT
> Experience drives execution and integration
> Financially beneficial
2
<PAGE> 4
Key Drivers of Growth
--------------------------------------------------------------------------------
> UNPARALLELED CLIENT BASE
PEOPLE EXTENDS
> LEADING GLOBAL CAPABILITIES & > COMPETITIVE
TECHNOLOGOY ADVANTAGE
> PRODUCT LEADERSHIP IN GROWTH MARKETS
3
<PAGE> 5
The new competitive model
--------------------------------------------------------------------------------
SERVING THE SPECTRUM OF CLIENTS' NEEDS GLOBALLY
<TABLE>
<S> <C> <C>
--------- ----------
M&A Equity
--------- ----------
-----------
Private --------------
Equity Public Debt
----------- --------------
----------- ---------------
FX & CLIENT -----------
Derivatives ADVISORY Bank Debt
----------- RELATIONSHIP -----------
--------------
---------- ---------
Research Sales &
---------- Trading
---------
------------ -------------
Operating Structuring
Services -------------
-----------
------------
Wealth
management
------------
</TABLE>
4
<PAGE> 6
Complementary strengths
--------------------------------------------------------------------------------
UNPARALLELED CLIENT BASE
J.P. MORGAN CHASE
----------- -----
[X] BLUE CHIP INVESTMENT GRADE [X] NON-INVESTMENT GRADE
[X] EUROPE [X] NEW ECONOMY/EMERGING GROWTH
[X] JAPAN [X] ASIA (EX-JAPAN)
[X] FINANCIAL SPONSORS
J.P. MORGAN AND CHASE
---------------------
[X] LATIN AMERICA
[X] U.S. CORPORATES
[X] HIGH NET WORTH
[X] FINANCIAL INSTITUTIONS
[X] INSTITUTIONAL INVESTORS
5
<PAGE> 7
Complementary strengths: client base
--------------------------------------------------------------------------------
> PRELIMINARY OVERLAP OF PRIMARY INVESTMENT BANKING CLIENTS:
<TABLE>
<S> <C>
GENERAL INDUSTRIES 12%
FINANCIAL INSTITUTIONS 10%
TMT 9%
</TABLE>
> WHERE OVERLAP, OFTEN DIFFERENT FOCUS
6
<PAGE> 8
Complementary strengths
--------------------------------------------------------------------------------
PRODUCT LEADERSHIP IN GROWTH MARKETS
<TABLE>
<CAPTION>
J.P. MORGAN CHASE
----------- -----
<S> <C>
[X] EQUITY UNDERWRITING [X] NEW ECONOMY AND ASIAN EQUITIES
[X] EQUITY & STRUCTURED DERIVATIVES [X] FX & INTEREST RATE DERIVATIVES
[X] GLOBAL M&A - EUROPE [X] GLOBAL M&A
[X] EUROPE FIXED INCOME [X] SYNDICATED & LEVERAGED FINANCE
[X] U.S. ASSET MANAGEMENT [X] EUROPEAN & ASIAN ASSET MGMT.
[X] LABMORGAN [X] CHASE.COM
[X] OPERATING SERVICES
</TABLE>
7
<PAGE> 9
PRODUCT LEADERSHIP IN GROWTH MARKETS
-------------------------------------------------------------------------------
1995-1999
COMPOUND
MARKET 1999 MARKET SIZE ANNUAL GROWTH
-------------------------------------------------------------------------------
Derivatives - OTC $88 trillion 35%
Global FX market turnover 574 trillion 26
Global corporate debt issuance 3 trillion 22
Global syndicated finance 1.8 trillion 10
Global equity issuance 467 billion 25
Global M&A 3.4 trillion 40
European M&A 1.5 trillion 50
European capital markets issuance 1.3 trillion 31
Emerging markets debt trading(1) 2.2 trillion 17
Private pension fund assets 5.6 trillion 13
Mutual fund assets (U.S.) 6.8 trillion 25
Private equity investments 182 billion 50
Affluent households (U.S.) 7.1 million 19
Notes:
------
Sources: Various
(1) 1992-1999
8
<PAGE> 10
Complementary strengths - products
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRO FORMA
PRODUCT REVENUE CONTRIBUTION(1)
------- -----------------------
<S> <C>
EQUITY DERIVATIVES 90% J.P. MORGAN
SYNDICATION 80% CHASE
CREDIT DERIVATIVES 80% J.P. MORGAN
COMMODITY DERIVATIVES 80% CHASE
FUTURES/OPTIONS DERIVATIVES 100% J.P. MORGAN
</TABLE>
(1) BASED ON SEPTEMBER 2000 YTD NUMBERS
9
<PAGE> 11
Product leadership in growth markets
--------------------------------------------------------------------------------
Summary League Table Rankings
<TABLE>
<CAPTION>
PRO FORMA
9 MOS. 00
---------
<S> <C>
GLOBAL SYNDICATED LOANS(1) 1
U.S. INVESTMENT GRADE(1)(2) 2
HIGH YIELD GLOBAL OFFERINGS(1)(2) 5
European Completed Transactions 4
M&A(3)
Worldwide Completed Transactions 4
COMMON US Offerings 6
STOCK(1)
Global Offerings 7
</TABLE>
NOTES:
Sources: Loanware, MCM, SDC; pro forma for CSFB's acquisition of DLJ
(1) Full Credit to Book Manager, equal if joint
(2) Includes Public 144A
(3) Credit to target and acquiring advisors
10
<PAGE> 12
Product leadership in growth markets
--------------------------------------------------------------------------------
AWARDS AND RANKINGS IN RISK MANAGEMENT
<TABLE>
<CAPTION>
J.P. MORGAN CHASE
----------- -----
<S> <C>
Derivatives House of the Year(1) #1 FX Bank Overall(4)
#1 Credit Derivatives(2) #1 Interbank Market-Making in London(3)
#1 Complex Risk Management Strategies(3) Top House Currency Products Overall(5)
#1 Overall Risk Management(3) Best Overall Derivatives Dealer(6)
</TABLE>
Sources:
(1) IFR, Corporate Finance
(2) Institutional Investor
(3) Euromoney
(4) Global Investor
(5) Risk
(6) Derivatives Strategy
11
<PAGE> 13
A leader in wealth management
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ASSETS UNDER MANAGEMENT AS OF 12/31/99(1)
-----------------------------------------
RANK US INSTITUTIONS AUM ($B)
---- --------------- --------
<S> <C> <C>
1 Fidelity Investments $956
2 Barclays Global Advisors 783
3 J.P. MORGAN/CHASE PRO FORMA(2) 720
4 State Street Global Advisors 672
5 Capital Group Cos. 558
6 Merrill Lynch Asset Mgmt 557
7 Mellon Financial 463
8 AXA Financial 463
9 Morgan Stanley Dean Witter 420
10 Citigroup 419
</TABLE>
NOTES:
Source: Institutional Investor
(1) Global rankings of investment management firms by assets under management
("AUM")
(2) Includes $48 billion for pro rata share of American Century; pro forma for
Robert Fleming
12
<PAGE> 14
A leader in wealth management
--------------------------------------------------------------------------------
A BALANCED BUSINESS
<TABLE>
<CAPTION>
PRO FORMA BY ASSET CLASS(1) PRO FORMA BY GEOGRAPHIC REGION(1)
------------------------------ ------------------------------------
<S> <C> <C> <C>
CASH/OTHER 23% USA 65%
EQUITIES 52% INTERNATIONAL 35%
FIXED INCOME 25%
[PRO FORMA BY GEOGRAPHIC REGION(1) PIE CHART]
[PRO FORMA BY ASSET CLASS PIE CHART]
</TABLE>
<TABLE>
<CAPTION>
PRO FORMA BY CLIENT(1)
----------------------
<S> <C>
INSTITUTIONAL 60%
PRIVATE CLIENT 40%
</TABLE>
[PRO FORMA BY CLIENT(1) PIE CHART]
Note:
(1) Assets under management as of 12/31/99. Includes $48 billion for pro rata
share of American Century; pro forma for Robert Fleming
13
<PAGE> 15
Meets the criteria for successful mergers
--------------------------------------------------------------------------------
> Strategic fit
> EXPERIENCE DRIVES EXECUTION AND INTEGRATION
> Financially beneficial
14
<PAGE> 16
Ability to integrate and execute
--------------------------------------------------------------------------------
> TRACK RECORD OF SUCCESSFUL INTEGRATIONS
> INCLUSIVE APPROACH TO INTEGRATION
> COMMON CULTURAL ELEMENTS
> MORE FOCUSED, LESS COMPLEX THAN PRIOR MERGERS
> RETENTION DRIVEN BY OPPORTUNITY AND INCENTIVES
15
<PAGE> 17
Execution at a fast pace is on track
--------------------------------------------------------------------------------
> FRAMEWORK FOR MANAGING THE INTEGRATION IN PLACE
> UNIFORM TRACKING TOOLS DESIGNED TO MEASURE SYNERGIES
> MAJOR U.S. REGULATORY APPLICATIONS FILED
> SYSTEMS AND REAL ESTATE INVENTORIES UNDER WAY
> 250 TOP JOBS AT INVESTMENT BANK NAMED
> CORPORATE STAFF ANNOUNCEMENT IN PROCESS
> STRONG CULTURAL FIT
16
<PAGE> 18
Meets the criteria for successful mergers
--------------------------------------------------------------------------------
> Strategic fit
> Experience drives execution and integration
> FINANCIALLY BENEFICIAL
17
<PAGE> 19
Accretive to EPS as synergies realized
--------------------------------------------------------------------------------
<TABLE>
<S> <C>
J.P. Morgan fully diluted shares 186 million
Exchange 3.7x
----
Chase Shares Issued 688 million
Chase 2001 consensus EPS(1) $4.45
Required earnings from J.P. Morgan $3.1 billion
J.P. Morgan 2001 consensus earnings(1) 2.2 billion
----
Required break even synergies $0.9 billion
--------------------------------------------------------------------------------------
BASELINE SYNERGIES (AFTER-TAX) $1.2 BILLION
--------------------------------------------------------------------------------------
</TABLE>
NOTE:
(1) As published by First Call (9/00). J.P. Morgan 2001 consensus estimate of
$12.06 per share. For analytical purposes only. Does not constitute
endorsement of, or concurrence with, any of the estimates by J.P. Morgan or
Chase
18
<PAGE> 20
Synergies drive profitability and growth
--------------------------------------------------------------------------------
> INCREMENTAL REVENUE OF $1 BILLION
- net $400 million after incremental expenses
> SAVINGS OF $1.5 BILLION
- 11% of total relevant combined expenses
- Fully in place by end of year 2
- Business by business review under way
19
<PAGE> 21
Pro forma Line of Business Results
--------------------------------------------------------------------------------
($ in billions)
<TABLE>
<CAPTION>
LTM PRO FORMA(1)
----------------
PRE-TAX
REVENUES CASH EARNINGS
-------- -------------
<S> <C> <C> <C>
Investment Banking $16.6 $6.1
WELL BALANCED
Wealth Management 4.0 0.9
>
Private Equity 2.6 2.2
HIGHER GROWTH
Operating Services 3.4 0.9
National Consumer Svcs. 9.9 2.7
</TABLE>
NOTE:
(1) Last twelve months (LTM) ending September 30, 2000; pro forma, including
Robert Fleming
20
<PAGE> 22
[BAR GRAPH]
Pro forma J.P. Morgan Chase & Co vs. Domestic Competitors
--------------------------------------------------------------------------------
($ in billions)
Cash Operating Income - 9MOS 00
Global Services
<TABLE>
<CAPTION>
Citigroup (1) J.P. Morgan Chase & Co (2) MSDW (3) Merrill Lynch Goldman Sachs
<S> <C> <C> <C> <C>
5.7 4.2 3.7 3.1 2.7
</TABLE>
Note: Cash income is after-tax
(1) Includes SSB, Global Relationship Banking, Emerging Markets, Private
Banking, Asset Management and Investment Activities
(2) Includes Investment Bank, Wealth Management, Private Equity and Global
Services; Includes Robert Fleming results since 8/1/00
(3) Excluses Discover Credit Services
21
<PAGE> 23
The case for higher valuation
--------------------------------------------------------------------------------
- Higher growth
- Leadership drives higher returns
- Greater diversification/risk reduction
- Free cash flow generation
- Completes the platform
22
<PAGE> 24
--------------------------------------------------------------------------------
Supplemental Information
23
<PAGE> 25
J.P. Morgan Chase & Co.
--------------------------------------------------------------------------------
PRO FORMA KEY FINANCIAL HIGHLIGHTS
($ in millions, except for per share data)
<TABLE>
<CAPTION>
INCLUDING PRIVATE EQUITY BUSINESS THIRD QUARTER NINE MONTHS
--------------------------------- ------------- -----------
2000 O/(U) 99 2000 O/(U) 99
-------------------- --------------------
<S> <C> <C> <C> <C>
LESS-MARKET SENSITIVE REVENUE $5,214 14% $15,033 10%
MARKET SENSITIVE REVENUE
Trading Revenue 1,616 27% 5,650 9%
Investment Banking Fees 1,013 15% 3,311 26%
Securities Gains 90 NM 111 NM
Private Equity Gains (20) NM 1,113 (27%)
---- ------ -----
Total Market Sensitive Revenue 2,699 (4%) 10,185 9%
Total Revenue 7,913 7% 25,218 9%
Operating Noninterest Expense(1) 5,273 22% 15,651 18%
Operating Earnings 1,419 (13%) 5,164 (2%)
Cash Operating Earnings 1,576 (8%) 5,506 0%
Operating Earnings Per Share (Diluted) 0.70 (13%) 2.60 1%
Cash Operating Earnings Per Share (Diluted) 0.78 (7%) 2.78 3%
</TABLE>
Note:
(1) Excludes Restructuring Costs
24
<PAGE> 26
J.P. Morgan Chase & Co.
--------------------------------------------------------------------------------
PRO FORMA KEY FINANCIAL HIGHLIGHTS
($ in millions, except for per share data)
<TABLE>
<CAPTION>
EXCLUDING PRIVATE EQUITY BUSINESS THIRD QUARTER NINE MONTHS
--------------------------------- ------------- -----------
2000 O/(U) 99 2000 O/(U) 99
------------------- ------------------
<S> <C> <C> <C> <C>
LESS-MARKET SENSITIVE REVENUE $5,276 14% $15,188 10%
MARKET SENSITIVE REVENUE
Trading Revenue 1,617 27% 5,652 9%
Investment Banking Fees 1,013 15% 3,311 26%
Securities Gains 90 NM 111 NM
------ ------
Total Market Sensitive Revenue 2,720 12% 9,074 16%
Total Revenue 7,996 19% 24,262 12%
Operating Noninterest Expense(1) 5,155 22% 15,328 18%
Operating Earnings 1,540 22% 4,910 7%
Cash Operating Earnings 1,691 26% 5,241 9%
Operating Earnings Per Share (Diluted) 0.77 24% 2.41 11%
Cash Operating Earnings Per Share (Diluted) 0.84 27% 2.58 13%
</TABLE>
Note:
(1) Excludes Restructuring Costs
25
<PAGE> 27
J.P. Morgan Chase & Co.
--------------------------------------------------------------------------------
PRO FORMA KEY FINANCIAL HIGHLIGHTS
($ in millions)
<TABLE>
<CAPTION>
NINE MONTHS
-----------
2000 O/(U) 99
---- --------
<S> <C> <C>
SELECTED BALANCE SHEET ITEMS:
-----------------------------
Total Loans 214,496 10%
Total Assets 707,497 13%
Total Deposits 269,785 --
Total Equity 39,602 15%
</TABLE>
26
<PAGE> 28
--------------------------------------------------------------------------------
J.P. MORGAN
3Q00 FINANCIAL SUMMARY
27
<PAGE> 29
Summary of third quarter results
--------------------------------------------------------------------------------
$ MILLIONS, EXCEPT PER SHARE
<TABLE>
<CAPTION>
% CHANGE
3Q00 2Q00 3Q99
-------------------------------------------------------------------------------
<S> <C> <C> <C>
Net income $514 (5%) 16%
EPS $2.77 (4%) 25%
EVA (after-tax) $227 (12%) 170%
ROCE 18.2%
Total revenues $2,322 (6%) 17%
Total expenses $1,609 (3%) 20%
-------------------------------------------------------------------------------
3Q00 2Q00 3Q99
-------------------------------------------------------------------------------
Comp. expense to revenue 48% 44% 45%
Non-comp. expense to revenue 21% 23% 23%
Total expense to revenue 69% 67% 68%
-------------------------------------------------------------------------------
</TABLE>
28
<PAGE> 30
Client-focused segments results
--------------------------------------------------------------------------------
$ MILLIONS
<TABLE>
<CAPTION>
REVENUE
-------------------------------
3Q00 $ CHANGE PRE-TAX INCOME PRE-TAX EVA
------------------ -------------- -----------
2Q00 3Q99 3Q00 3Q00
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$390 ($19) $40 Asset management $88 $60
$426 $0 $60 Investment banking $58 $22
$448 ($56) $196 Equities $185 $152
$426 $42 $105 Interest rate markets $144 $64
$346 ($2) ($79) Credit markets $157 $6
------------------------------------------------------------------------------------------------
$2,036 ($35) $322 Total $632 $304
------------------------------------------------------------------------------------------------
</TABLE>
- REVENUES INCREASED 19% YOY AND WERE FLAT TO SECOND QUARTER, DRIVING CHANGES IN
PRE-TAX INCOME AND EVA
- BALANCED BUSINESS BASE DELIVERED SOLID RESULTS
29
<PAGE> 31
Proprietary segments results
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
REVENUE
---------------------------
3Q00 $ CHANGE PRE-TAX INCOME PRE-TAX EVA
----------------- ---------------- -------------
2Q00 3Q99 3Q00 3Q00
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$14 ($131) ($327) Equity investments ($14) ($115)
$310 $27 $304 Proprietary positioning $238 $235
-----------------------------------------------------------------------------------------------------
$324 ($104) ($23) Total $224 $120
-----------------------------------------------------------------------------------------------------
</TABLE>
- DECREASE IN UNREALIZED GAINS DROVE EQUITY INVESTMENTS RESULTS, OFFSETTING
SOLID REALIZED GAINS
- PROPRIETARY POSITIONING RESULTS CONTINUED THIS YEAR'S STRONG TREND, WITH LOWER
REQUIRED CAPITAL
30
<PAGE> 32
Summary of year-to-date results
--------------------------------------------------------------------------------
$ MILLIONS
<TABLE>
<CAPTION>
% CHANGE
YTD 2000 FROM YTD 1999
------------------------------------------------------------------------------------
<S> <C> <C>
Net income $1,684 9%
EPS $9.05 17%
EVA (after-tax) $843 49%
ROCE 20.4% 180 bps
Total revenues $7,637 15%
Total expenses $5,124 18%
------------------------------------------------------------------------------------
YTD 2000
------------------------------------------------------------------------------------
Comp. expense to revenue 46%
Non-comp. expense to revenue 21%
Total expense to revenue 67%
------------------------------------------------------------------------------------
</TABLE>
31
<PAGE> 33
Credit risk exposures(1)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------
$ BILLIONS 9/30/00
--------------------------------------------
CARRYING VALUE NET OF COLLATERAL
---------------------------------------------------------------------------------------------------
<S> <C> <C>
Loans 26.6 18.8
Derivatives 35.5 30.2
--------------------------------------------
Total on balance sheet exposure(2) 62.1 49.0
COUNTER PARTY CREDIT QUALITY(3) DERIVATIVES LOANS & COMTS.
---------------------------------------------------------------------------------------------------
Investment grade 95% 89%
Non-investment grade 5% 11%
---------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------
$ MILLIONS 9/30/00 6/30/00 9/30/99
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Total Impaired Loans $128 $140 $169
---------------------------------------------------------------------------------------------------
</TABLE>
(1) Preliminary
(2) Net of allowance for credit losses and credit valuation adjustment
(3) Based on internal credit ratings and exposure after benefit of netting
arrangements, collateral and purchased credit protection
32
<PAGE> 34
--------------------------------------------------------------------------------
CHASE
3Q00 FINANCIAL SUMMARY
33
<PAGE> 35
3Q00 Key Themes
--------------------------------------------------------------------------------
> Private equity unrealized mark to market write-downs
> Investment Banking results driven by revenue/expense imbalance
- not a credit or market issue
> Record earnings in Wealth Management, Global Services and National Consumer
> Long term business outlook unchanged
34
<PAGE> 36
Private Equity Gain(Loss)
--------------------------------------------------------------------------------
($ in millions)
<TABLE>
<CAPTION>
3Q00 2Q00 3Q99 9MOS 00 9MOS 99
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
REALIZED $538 $350 $250 $1,229 $883
UNREALIZED GAIN(LOSS) (563) (52) 127 (456) 332
----- -------------------------------------
TOTAL $(25) $298 $377 $773 $1,215
--------------------------------------------------------------------------------
</TABLE>
35
<PAGE> 37
Private Equity Public Portfolio*
--------------------------------------------------------------------------------
($ in billions)
<TABLE>
<CAPTION>
AT 9/30/00
----------------------------------------------------
QUOTED CARRYING
COST VALUE VALUE
----------------------------------------------------
<S> <C> <C> <C>
Total Public $0.8 $3.1 $2.1
----------------------------------------------------
</TABLE>
Public Securities are 20% of total portfolio
* Includes Chase Capital Partners and Chase H&Q investment portfolios
36
<PAGE> 38
Chase Capital Partners
Excellent Returns: By Crop Year
--------------------------------------------------------------------------------
RETURNS ON LIQUIDATED DIRECT INVESTMENTS
<TABLE>
<CAPTION>
CROP
YEAR Pre-1989 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
52% 22% 30% 45% 36% 49% 19% 30% 112% 77% 44%
</TABLE>
INCEPTION TO DATE: 43% IRR
37
<PAGE> 39
Investment Bank Results
--------------------------------------------------------------------------------
($ in millions)
<TABLE>
<CAPTION>
================================================================================
3Q 9MOS
-- ----
00 O(U) 99 00 O(U) 99
-- ------- -- -------
<S> <C> <C> <C> <C>
Revenue $1,870 16 % $5,989 14%
Cash Earnings 384 (9) 1,531 (1)
<CAPTION>
3Q00 3Q99 9MOS 00 9MOS 99
---- ---- ------- -------
<S> <C> <C> <C> <C>
SVA $46 $139 $628 $681
Cash Overhead Ratio 67% 53% 58% 48%
Cash ROCE 15 20 22 24
================================================================================
</TABLE>
> Softer trading volumes and leveraged finance activity
> Revenue and market share gains in other investment banking products
> Management committed to more disciplined spending
38
<PAGE> 40
Investment Bank Revenue Growth
--------------------------------------------------------------------------------
($ in millions)
<TABLE>
<CAPTION>
%0(U) %O(U)
3Q00 2Q00 3Q99 9MOS 00 9MOS 99
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Trading (incl. NII) $680 (19%) 0% $2,566 14%
Investment Banking Fees 613 (4%) 26% 1,900 37%
Securities Gains 96 68% NM 167 4%
------------------------------------------------------------------------------------------------
</TABLE>
39
<PAGE> 41
Commercial Credit Costs
--------------------------------------------------------------------------------
($ in millions)
<TABLE>
<CAPTION>
3Q00 2Q00 3Q99
---- ---- ----
<S> <C> <C> <C>
Domestic $62 $74 $66
Foreign 3 18 36
-----------------------
======================================================
TOTAL COMMERCIAL $65 $92 $102
======================================================
YTD Charge-off ratio* 33bp 36bp 42bp
--------------------------------------------------------------------------------
Nonperforming Assets(1) $1,816 $1,899 $2,015
</TABLE>
* Annualized for quarterly data and based on average commercial loan
outstandings
(1) Includes consumer loans of $396 million (3Q00), $401 million (2Q00) and $416
million (3Q99)
40
<PAGE> 42
Wealth Management
--------------------------------------------------------------------------------
Private Banking
> OVER $180 B IN CLIENT ASSETS
- 20% growth from 12/99
> 36% REVENUE GROWTH
- Strong in every geography
- Strong in broker & investment related revenues
> 16% EARNINGS GROWTH
- Investments in technology, internet, and talent
--------------------------------------------------------------------------------
Asset Management
> COMPLETED FLEMINGS ACQUISITION AUGUST 1, 2000
> OVER $300B AUM
- Positive net cash flow
- Efficiencies & consolidations drive income growth
- Increase in equity for goodwill drive ROE & SVA decline
41
<PAGE> 43
Global Services
--------------------------------------------------------------------------------
($ in millions)
<TABLE>
<CAPTION>
================================================================================
3Q 9MOS
-- ----
00 O(U) 99 00 O(U) 99
-- ------- -- -------
<S> <C> <C> <C> <C>
Revenue $875 9% $2,604 13%
Cash Earnings 183 24 495 26
<CAPTION>
3Q00 3Q99 9MOS 00 9MOS 99
---- ---- ------- -------
<S> <C> <C> <C> <C>
SVA $93 $51 $227 $104
Cash Overhead Ratio 67% 71% 70% 73%
Cash ROCE 27 20 24 18
================================================================================
</TABLE>
> Record earnings driven by both trust and custody
> Expense discipline leads to double digit earnings growth
42
<PAGE> 44
National Consumer Services Growth
--------------------------------------------------------------------------------
Growth vs. Prior Year
<TABLE>
<CAPTION>
3Q00
-----------------------------
Revenue Earnings
----------------------------------------------------------------
<S> <C> <C>
CARD 0% 14%
REGIONAL BANKING 7% 36%
HOME FINANCE 13% 21%
DIVERSIFIED CONSUMER 5% 24%
------------
MIDDLE MARKETS 4% 13%
----------------------------------------------------------------
</TABLE>
43
<PAGE> 45
National Consumer Services
--------------------------------------------------------------------------------
($ in millions)
<TABLE>
<CAPTION>
================================================================================
3Q 9MOS
-- ----
00 O(U) 99 00 O(U) 99
-- ------- -- -------
<S> <C> <C> <C> <C>
Revenue $2,587 3% $7,487 1%
Cash Earnings 492 13 1,287 3
<CAPTION>
3Q00 3Q99 9MOS 00 9MOS 99
---- ---- ------- -------
<S> <C> <C> <C> <C>
SVA $227 $175 $487 $482
Cash Overhead Ratio 50% 51% 52% 50%
Cash ROCE 24 22 21 21
================================================================================
</TABLE>
> Record earnings driven by contributions from all 5 businesses
44
<PAGE> 46
3Q00 Line of Business Results
--------------------------------------------------------------------------------
($ in millions)
<TABLE>
<CAPTION>
CASH OPERATING
REVENUES EARNINGS
---------------------- ---------------------
2000 %O/(U) 99 2000 %O/(U) 99
--------- ---------- ---------- ---------
<S> <C> <C> <C> <C>
INVESTMENT BANKING $1,870 16% $384 (9%)
WEALTH MANAGEMENT(1) 470 76 95 116
GLOBAL SERVICES 875 9 183 24
NATIONAL CONSUMER 2,587 3 492 13
==============================================================================
TOTAL CHASE (EXCL CCP)(2) 5,678 11 1,160 7
==============================================================================
CHASE CAPITAL PARTNERS (88) NM (106) NM
TOTAL CHASE(2) $5,590 3% $1,054 (16%)
</TABLE>
(1) INCLUDES FLEMINGS' RELEVANT RESULTS SINCE 8/1/00
(2) INCLUDES CORPORATE RESULTS
45
<PAGE> 47
Operating Earnings Per Share
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
3Q00 O/(U)99 9MOS 00 O/(U)99
---- ------- ------- -------
<S> <C> <C> <C> <C>
===========================================
Operating EPS $0.68 ($0.24) $2.68 ($0.15)
===========================================
Chase Capital Partners (0.09) 0.23 0.19 (0.30)
------ --------------------------
Operating EPS (excl. CCP) $0.77 ($0.01) $2.49 $0.15
Amortization 0.11 0.05 0.24 0.07
-----------------------------------------
======================================================================
CASH EPS (EXCL. CCP) $0.88 $0.04 $2.73 $0.22
======================================================================
</TABLE>
OPERATING BASIS: EXCLUDES NON-RECURRING ITEMS, EPS SHOWN ON A DILUTED BASIS
46
<PAGE> 48
--------------------------------------------------------------------------------
This presentation contains statements that are forward-looking within the
meaning of the Private Securities Litigation Reform Act of 1995. Such statements
are based upon the current beliefs and expectations of Chase's and J.P Morgan's
management and are subject to significant risks and uncertainties. Actual
results may differ from those set forth in the forward-looking statements. These
uncertainties include: the risk that the businesses of Chase and J.P. Morgan
will not be combined successfully; the risk that the growth opportunities and
cost savings from the merger may not be fully realized or may take longer to
realize than expected; the risk that the integration process may result in the
disruption of ongoing business or the loss of key employees or may adversely
effect relationships with employees and clients; the risk that stockholder or
required regulatory approvals of the merger will not be obtained or that adverse
regulatory conditions will be imposed in connection with a regulatory approval
of the merger; the risk of adverse impacts from an economic downturn; the risks
associated with increased competition, unfavorable political or other
developments in foreign markets, adverse governmental or regulatory policies,
and volatility in securities markets, interest or foreign exchange rates or
indices; or other factors impacting operational plans. Additional factors that
could cause Chase's and J.P. Morgan's results to differ materially from those
described in the forward-looking statements can be found in the 1999 Annual
Reports on Form 10-K of Chase and J.P. Morgan and in the Registration Statement
on Form S-4 filed by Chase on October 5, 2000 with the Securities and Exchange
Commission.
The proposed transaction will be submitted to Chase's and J.P. Morgan's
stockholders for their consideration. Such stockholders should read the
definitive joint proxy statement/prospectus regarding the proposed transaction
when it becomes available, because it will contain important information.
Stockholders will be able to obtain a free copy of the definitive joint proxy
statement/prospectus, as well as other filings containing information about
Chase and J.P. Morgan, without charge, at the SEC's internet site
(http://www.sec.gov). Copies of the definitive joint proxy statement/prospectus
and the SEC filings that will be incorporated by reference in the definitive
joint proxy statement/prospectus can also be obtained, without charge, by
directing a request to The Chase Manhattan Corporation, 270 Park Avenue, New
York, NY 10017, Attention: Office of the Corporate Secretary (212-270-6000) or
to J.P. Morgan, 60 Wall Street, New York, NY 10260, Attention: Investor
Relations (212-483-2323). Information regarding the participants in the proxy
solicitation and a description of their direct and indirect interest, by
security holdings or otherwise, is contained in the materials filed with the SEC
by each of J.P. Morgan and Chase on September 13 and 14, 2000, respectively.
47
