EX-99.(C)(1) 11 dex99c1.htm MATERIALS PROVIDED BY MORGAN STANLEY TO MUFG AND PURCHASER ON AUGUST 9, 2008 Materials provided by Morgan Stanley to MUFG and Purchaser on August 9, 2008
Internal Draft -
Preliminary Analysis
Discussion Materials
9 August 2008
Project Rubicon
Exhibit (c)

Internal Draft -
Preliminary Analysis
Table of Contents
Project Rubicon
2
Section 1
Review of Results / Budget
Section 2
Trading Review
Section 3
Premiums Paid In Precedent Transactions
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Internal Draft -
Preliminary Analysis
Project Rubicon
3
Section 1
Review of Results / Budget
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Internal Draft -
Preliminary Analysis
Public Guidance - 1Q
Actual
Delivered on Jan. 25
1Q
Net Interest Income
0%
5%
Non-interest Income
(2%) - (4%)
(8%)
(1)
Non-interest Expense ($MM)
$425
$410
(2) (3)
Provision for Credit Losses ($MM)
$20
$80
EPS
$0.94 - $0.99
$0.79
Average Shares (MM)
139
                          
138
                         
Average Non-interest Bearing Deposits
(3%) - (5%)
(4%)
Average Total Loans
1% - 2%
4%
Public Guidance vs. Actual Performance –
1Q’08
Milano
Missed
1
Quarter
EPS
Guidance
Project Rubicon
REVIEW OF RESULTS / BUDGET
4
Notes
1.
Excluding the Visa gain recorded in 1Q
2.
Excludes the write down of goodwill in 1Q related to the assessment of the valuation of the insurance brokerage business
3.
Includes expenses of the insurance brokerage business and excludes provision for losses on off-balance sheet commitments in 1Q
•
Milano
missed
its
1
quarter
public guidance in several
important areas
–
Non-interest income
–
Provision
–
EPS
X
X
X
Source
Company Filings, Earnings Call Transcript
st
st
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Internal Draft -
Preliminary Analysis
Public
Guidance
vs.
Actual
Performance
–
2Q’08
Milano
Missed
2
Quarter
EPS
Guidance
Project Rubicon
REVIEW OF RESULTS / BUDGET
5
Notes
1.
For continuing operations basis (excludes gain on the sale of the insurance brokerage business in 2Q and the related write down of goodwill in 1Q)
2.
Excluding the Visa gain recorded in 1Q
3.
Excluding MasterCard recorded gain in 2Q
4.
Excludes provision for losses on off-balance sheet commitments in 2Q
•
Milano
missed
its
2
quarter
guidance on provision and EPS
X
X
Source
Company Filings, Earnings Call Transcript
nd
nd
Public Guidance -
2Q
(1)
Actual
Delivered on Apr. 24
2Q
Net Interest Income
6%
11%
Non-interest Income
6% -
8%
6%
(2) (3)
Non-interest Expense ($MM)
$410 -
$415
$414
(4)
Provision for Credit Losses ($MM)
$60 -
$80
$100
EPS
$0.95 -
$1.05
$0.94
(3)
Average Shares (MM)
138
138
Average Non-interest Bearing Deposits
1% -
2%
2%
Average Total Loans
4%
7%
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Internal Draft -
Preliminary Analysis
2008E / 2007A
(1)
Milano
Management
Avg. Analyst
Variance
Variance
Base Case
Models
(2)
to Analysts
Peers
(3)
to Peers
Net Interest Income
18%
18%
0%
7%
11%
Non-interest Income
1%
(1%)
2%
9%
(7%)
Non-interest Expense
6%
7%
1%
5%
(1%)
Actual Provision ($MM)
302
347
(45)
-
-
Growth
273%
328%
(55%)
224%
49%
EPS
(4)
5%
(7%)
12%
(42%)
47%
Average Loans
17%
15%
1%
10%
6%
Average Deposits
4%
4%
0%
9%
(5%)
Sharecount
(1%)
(1%)
0%
0%
(1%)
Projected Growth
2008 Estimates
Project Rubicon
REVIEW OF RESULTS / BUDGET
6
Notes
1.
2007A based on restated historical financials from Milano’s forecast materials
2.
Except where otherwise noted based on research analyst models available (7 analysts) as of 8/8/08
3.
Based on available analyst research reports for Peers which include banks $4Bn -$15Bn in market value as of 4/25/08; excludes NCC, HBAN, pending acquisition
targets and banks headquartered in Puerto Rico
4.
Average analyst figure based on IBES EPS
•
Street expectations for Milano
basically in-line except for 2008
credit provision which drives
lower EPS estimate
•
Milano’s forecast for 2008 net
interest income and balance
sheet growth significantly more
optimistic than Street
expectations for peers
•
Analyst peer forecasts more
consistent with recessionary
environment
Source
FactSet; SNL, Milano Projections, Wall Street Research
X
X
X
X
X
X
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Internal Draft -
Preliminary Analysis
2009E / 2008E
Milano
Management
Avg. Analyst
Variance
Variance
Base Case
Models
(1)
to Analysts
Peers
(2)
to Peers
Net Interest Income
4%
7%
(3%)
6%
(2%)
Non-interest Income
4%
2%
2%
5%
(2%)
Non-interest Expense
3%
5%
2%
5%
1%
Actual Provision ($MM)
180
331
(151)
-
-
Growth
(40%)
(4%)
(36%)
(14%)
(26%)
EPS
(3)
33%
16%
17%
26%
7%
Average Loans
14%
10%
4%
5%
9%
Average Deposits
12%
5%
7%
4%
7%
Sharecount
(9%)
0%
(9%)
2%
(10%)
Projected Growth
2009 Estimates
Project Rubicon
REVIEW OF RESULTS / BUDGET
7
•
Milano estimates significantly
more optimistic than analysts
and / or peers in several
categories
–
Provision
–
EPS
–
Loan and deposit growth
•
Significant repurchases in
Management Case vs. none
expected in Street Case
–
Expectation for banks to build
capital not increase leverage
•
Analyst peer forecasts more
consistent with recessionary
environment
Notes
1.
Except where otherwise noted, based on research analyst models available (7 analysts) as of 8/8/08
2.
Basedonavailableanalyst
research
reports
forPeers
whichincludebanks
$4Bn
-$15Bninmarket
value
as
of
4/25/08;
excludes
NCC,
HBAN,pending acquisition
targets and banks headquartered in Puerto Rico
3.
Average analyst figure based on IBES EPS
Source
FactSet; SNL, Milano Projections, Wall Street Research
X
X
X
X
X
X
X
X
X
X
X
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Internal Draft -
Preliminary Analysis
Project Rubicon
8
Section 2
Trading Review
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Internal Draft -
Preliminary Analysis
2009 Analyst Estimates
2008 Analyst Estimates
$3.84
Milano Analyst EPS Outlook
As of 8/8/08
Project Rubicon
TRADING REVIEW
9
Notes
1.
Per Milano Earnings Release on July 21, 2008
2.
Excluded from IBES mean
0.71
1.05
1.14
1.28
0.50
0.70
0.90
1.10
1.30
1.50
3Q
4Q
Quarterly Research Estimates
Detail
Source
FactSet (IBES)
Average
3.50
4.50
5.50
6.50
7.50
1/1/06
7/1/06
1/1/07
7/1/07
1/1/08
8/8/08
FY08
2008 IBES Estimates
EPS ($)
Source
FactSet (IBES)
Source
FactSet (IBES)
Source
FactSet (IBES)
Source
FactSet (IBES)
Milano ’08 Public Guidance:
$4.20 -
$4.45
(1)
3.50
4.50
5.50
6.50
7.50
1/1/06
7/1/06
1/1/07
7/1/07
1/1/08
8/8/08
FY09
2009 IBES Estimates
EPS ($)
$6.75
$4.46
$5.59
0.90
1.00
1.10
1.20
1.30
1.40
6/29/07
9/28/07
12/31/07
3/31/08
8/8/08
3Q
4Q
3Q / 4Q IBES Estimates
EPS ($)
Source
FactSet (IBES)
$1.06
$1.26
$1.16
$1.31
•
Variance in analyst EPS
estimates remains at all-time
highs
–
$1.06 and $1.78 spread from
low to high estimate for 2008
and 2009, respectively
•
IBES currently excludes 5
estimates from the 2008 EPS
mean due to accounting
differences
–
Difference is $3.94 (all) vs.
$3.84 (subset)
–
All estimates included for
2009
Milano
Guidance
Date of
'08 EPS
Since
Broker
Report
($)
Last Rpt.
Morgan Stanley
7/31/08
3.95
BMO
(2)
7/24/08
3.90
RBC
(2)
7/23/08
4.07
Merrill Lynch
7/23/08
3.08
Lehman Brothers
(2)
7/23/08
4.06
Ladenburg
(2)
7/23/08
4.14
JP Morgan
7/23/08
4.11
Fox-Pitt
7/23/08
4.05
Credit Suisse
7/23/08
4.00
Miller Tabak
(2)
7/22/08
4.02
Reported IBES
3.84
Average
3.94
Range
3.08 -4.14
Range / Avg. (%)
26.9
'09 EPS
Since
'08-'09
Broker
($)
Last Rpt.
Growth (%)
Morgan Stanley
4.43
12.2
BMO
4.30
10.3
RBC
4.75
16.7
Merrill Lynch
3.30
7.1
Lehman Brothers
4.65
14.5
Ladenburg
5.08
22.7
JP Morgan
4.80
16.8
Fox-Pitt
4.60
13.6
Credit Suisse
4.40
10.0
Miller Tabak
4.29
6.7
Reported IBES
4.46
16.2
Average
4.46
13.3
Range
3.30 -5.08
Range / Avg. (%)
39.9
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Internal Draft -
Preliminary Analysis
Milano Median 12-Month Price Target is $45
Project Rubicon
TRADING REVIEW
10
Source
Bloomberg
Source
Bloomberg
($)
Discount Rate
Price Target
11.00%
12.50%
14.00%
High
61
         
55
         
54
         
54
         
Median
45
         
41
         
40
         
39
         
Low
35
         
32
         
31
         
31
         
Implied Current Value
Analyst Price Target
Note
1.
As of report date
Price
(1)
Since
Target
Broker
Date
($)
2Q Earnings
($)
Landenburg
7/23/08
50.84
61.00
Lehman Brothers
5/8/08
53.14
60.00
RBC
7/22/08
50.44
50.00
Morgan Stanley
7/31/08
53.72
50.00
BMO
8/7/08
54.68
40.00
Credit Suisse
7/21/08
48.81
40.00
Fox-Pitt
4/25/08
53.02
38.00
Merrill Lynch
7/21/08
48.81
35.00
Range
35.00 -
61.00
Median
45.00
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Internal Draft -
Preliminary Analysis
20
30
40
50
60
4/25/08
5/13/08
5/29/08
6/16/08
7/2/08
7/24/08
8/8/08
Milano
Peers
(2)
Regional Banks
(3)
Stock Price Performance
Since Initial Contact
(1)
Indexed to Milano ($)
$57.25
(31%)
(6%)
+8%
Project Rubicon
TRADING REVIEW
Recent Stock Price Performance
Notes
1.
4/25/08
2.
Peers
include
banks
$4Bn
-$15Bninmarket
value
as
of4/25/08;
excludes
NCC,
HBAN,pending
acquisition
targets
and
banksheadquartered
in
PuertoRico
3.
KRX index of top 50 regional banks and thrifts
11
Source
FactSet
Source
FactSet
$58.00
25
50
75
100
125
8/8/07
10/8/07
12/8/07
2/8/08
4/8/08
6/8/08
8/8/08
Milano
Peers
(2)
Regional Banks
(3)
Relative Stock Price Performance
Last 12 Months
Indexed to 100%
0%
(55%)
(25%)
•
Milano is up 8% since initial
contact was made on 4/25
–
Peers and regional banks are
down 31% and 6%,
respectively
•
Over the last 12 months, Milano
is flat vs. down 25% for regional
banks and down 55% for peers

Internal Draft -
Preliminary Analysis
4
8
12
16
4/25/08
5/13/08
5/30/08
6/17/08
7/3/08
7/21/08
8/8/08
Milano
Peers
(3)
Regional Banks
(4)
Next Twelve Months P/E
(1)
Since Initial Contact
(2)
x
Project Rubicon
TRADING REVIEW
Price / Earnings Multiples have been Extremely Volatile
12
Source
FactSet (IBES)
Source
FactSet (IBES)
13.5x
12.9x
Notes
1.
As of 8/8/08
2.
4/25/08
3.
Peers
include
banks
$4Bn
-$15Bninmarket
value
as
of4/25/08;
excludes
NCC,
HBAN,pending
acquisition
targets
and
banksheadquartered
in
PuertoRico
4.
KRX index of top 50 regional banks and thrifts
13.8x
Source
FactSet (IBES)
6
10
14
18
8/8/03
2/8/04
8/8/04
2/8/05
8/8/05
2/8/06
8/8/06
2/8/07
8/8/07
2/8/08
8/8/08
Milano
Peers
(3)
Regional Banks
(4)
Next Twelve Months P/E
(1)
x
Source
FactSet (IBES)
Since Initial Contact
(2)
Regional
x
Milano
Peers
(3)
Banks
(4)
High
14.3
12.9
13.8
Low
8.8
6.7
8.7
Avg.
11.8
10.1
12.1
Current
13.5
12.9
13.8
Next Twelve Months P/E
(1)
13.5x
12.9x
13.8x
Regional
x
Milano
Peers
(3)
Banks
(4)
5-Yr. Avg.
12.4
12.9
14.4
3-Yr. Avg.
12.3
12.4
13.9
1-Yr. Avg.
11.7
10.4
12.6
At Initial Contact
(2)
12.9
11.0
12.9
Current
13.5
12.9
13.8
Next Twelve Months P/E
(1)

Internal Draft -
Preliminary Analysis
Most Bank Stocks Driven By Changes in EPS Estimates
Project Rubicon
TRADING REVIEW
13
Notes
1.
Peers
include
banks
$4Bn
-$15Bninmarket
value
as
of4/25/08;
excludes
NCC,
HBAN,pending
acquisition
targets
and
banksheadquartered
in
PuertoRico
2.
KRX index of top 50 regional banks and thrifts
Source
FactSet
(1)
(2)
’08 & ’09 IBES EPS Change
Stock Price Change
(26)
(8)
(4)
(32)
(12)
2
(40)
(30)
(20)
(10)
0
10
Peers
Regional Banks
Milano
(31)
(6)
8
EPS Estimates and Price Change
4/25/08 to 8/8/08
%
4/25/08 to 8/8/08
EPS Estimates
2008
2009
Price
Peers
(1)
(26%)
(32%)
(31%)
Regional Banks
(2)
(8%)
(12%)
(6%)
Milano
(4%)
2%
8%
EPS Est. & Price Change
Source
FactSet (IBES)
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Internal Draft -
Preliminary Analysis
Comparable Companies Analysis
(1)
Trading Analysis
Project Rubicon
TRADING REVIEW
14
Notes
1.
Market data as of 8/8/08; financial information as of most recent quarter available
2.
Peers
include
banks
$4Bn
-$15Bninmarket
value
as
of4/25/08;
excludes
NCC,
HBAN,pending
acquisition
targets
and
banksheadquartered
in
PuertoRico
3.
KRX index of top 50 regional banks and thrifts median
2008 Price / Earnings
x
Source
FactSet
Price / Book Value
x
Source
FactSet; SNL
Price / Tangible Book Value
x
Source
FactSet; SNL
14.9
14.0
15.1
13.5
14.0
14.5
15.0
15.5
Milano
Peers
(2)
Regional Banks
(3)
1.8
1.1
1.8
1.0
1.2
1.4
1.6
1.8
2.0
Milano
Peers
(2)
Regional Banks
(3)
1.7
0.8
1.2
0.0
0.5
1.0
1.5
2.0
Milano
Peers
(2)
Regional Banks
(3)
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Internal Draft -
Preliminary Analysis
TRADING REVIEW
Comparable Companies Analysis
(1)
Financial Performance
Project Rubicon
15
Source
SNL, press releases
Notes
1.
Peers
include
banks
$4Bn
-$15Bninmarket
value
as
of4/25/08;
excludes
NCC,
HBAN,pending
acquisition
targets
and
banksheadquartered
in
PuertoRico
2.
Comparable companies sorted by market cap
3.
Core
income
definedasnetincomebefore
extraordinary
items
less
the
after-tax
portion
of
investmentsecurities
andnonrecurringitems.The
assumed
tax
rateis
35%
4.
Adjusted for $1.0Bn after-tax charges associated with leveraged lease tax litigation
5.
Excludes NCC and HBAN
6.
KRXindex
oftop50
regional
banksand
thrifts
median
2Q'08
Profitability
Capital
Asset Quality
Assets
Core
(3)
Net Interest
Efficiency
Tang. Eq
Tier 1
LLR /
LLR /
NPAs / Lns
NCOs /
$Bn
ROA (%)
ROE (%)
Margin (%)
Ratio (%)
Ratio (%)
Ratio (%)
Loans (%)
NPAs (%)
+ OREO (%)
Loans (%)
Milano
61
       
0.87
          
11.2
          
3.74
          
59.4
          
7.2
            
8.0
            
1.14
          
234
           
0.5
            
0.27
          
National City
154
     
(4.55)
        
(40.1)
        
2.97
          
76.2
          
8.9
            
11.1
          
2.97
          
110
           
2.7
            
2.53
          
Fifth Third
115
     
(0.67)
        
(7.8)
          
3.04
          
57.3
          
6.3
            
8.5
            
1.83
          
72
             
2.5
            
1.61
          
M&T Bank
66
       
1.00
          
10.1
          
3.39
          
52.4
          
5.0
            
7.8
            
1.58
          
126
           
1.3
            
0.80
          
KeyCorp
102
     
(4.32)
        
(51.8)
        
3.32
          
(4)
NM
7.0
            
8.5
            
1.83
          
117
           
1.6
            
2.69
          
Comerica
66
       
0.28
          
3.6
            
2.91
          
63.0
          
7.5
            
7.4
            
1.28
          
89
             
1.4
            
0.86
          
Marshall & Ilsley
64
       
(2.48)
        
(22.6)
        
3.14
          
59.3
          
6.9
            
NA
2.05
          
84
             
2.4
            
3.21
          
Zions
55
       
0.77
          
7.7
            
4.18
          
56.7
          
6.0
            
7.5
            
1.31
          
79
             
1.7
            
0.67
          
Huntington
55
       
0.81
          
7.1
            
3.29
          
54.2
          
5.7
            
8.8
            
1.64
          
75
             
2.4
            
0.63
          
Median
(5)
(0.20)
        
(2.1)
          
3.23
          
57.3
          
6.6
            
7.8
            
1.71
          
86
             
1.6
            
1.24
          
Regional Banks
(6)
0.81
          
7.6
            
3.62
          
59.2
          
6.5
            
10.2
          
1.29
          
92
             
1.2
            
0.49
          
Comparable Companies Analysis
(2)

Internal Draft -
Preliminary Analysis
TRADING REVIEW
Comparable Companies Analysis
(1)
Market Performance
Project Rubicon
Notes
1.
Market
dataas
of8/8/08;
financialinformation
as
ofmost
recent
quarteravailable;
peersincludebanks
$4Bn
-
$15Bn
in
market
value
as
of
4/25/08;
excludes
NCC, HBAN, pending
acquisition targets and banks headquartered in Puerto Rico
2.
Change from estimate on 1/1/07
3.
2008E IBES EPS divided by assets (ROA) or equity (ROE) per share
4.
Pro forma for pending conversion of 1.3Bn shares of common stock
5.
Excludes NCC and HBAN
6.
KRX index of top 50 regional banks and thrifts median
16
Source
FactSet (IBES)  and SNL
As of 8/8/08 and 2Q'08
Price/
Market
52wk High
'08 EPS
'09 EPS
Book
Tang. Book
Dividend
'08 EPS
(2)
'09 / '08 EPS
Long Term
Est. ROA
(3)
Est. ROE
(3)
Cap ($Bn)
(%)
x
x
x
x
Yield (%)
Change (%)
Growth (%)
Growth (%)
(%)
(%)
Milano
7.9
           
(6.3)
         
14.9
         
12.8
         
1.7
           
1.8
           
3.6
           
(24.3)
       
16.2
         
6.5
           
0.87
         
11.3
         
National City
(4)
10.5
         
(83.8)
       
NM
NM
0.6
           
0.8
           
0.8
           
NM
NM
9.0
           
NM
NM
Fifth Third
9.1
           
(61.9)
       
21.8
         
12.6
         
0.8
           
1.4
           
3.8
           
(77.1)
       
73.3
         
5.9
           
0.36
         
3.9
           
M&T Bank
8.4
           
(34.3)
       
13.4
         
12.6
         
1.3
           
2.7
           
3.7
           
(34.6)
       
6.3
           
5.5
           
0.95
         
9.6
           
KeyCorp
5.8
           
(67.7)
       
NM
11.0
         
0.7
           
0.9
           
6.3
           
NM
NM
5.3
           
NM
NM
Comerica
4.7
           
(47.2)
       
14.6
         
11.6
         
0.9
           
1.0
           
8.4
           
(58.4)
       
26.2
         
5.3
           
0.49
         
6.4
           
Marshall & Ilsley
4.2
           
(56.4)
       
NM
10.9
         
0.6
           
1.0
           
7.8
           
NM
NM
7.4
           
NM
NM
Zions
3.4
           
(60.0)
       
10.7
         
8.4
           
0.7
           
1.2
           
5.4
           
(55.0)
       
26.9
         
7.7
           
0.59
         
6.4
           
Huntington
2.9
           
(59.1)
       
7.0
           
6.7
           
0.5
           
1.1
           
6.8
           
(43.8)
       
4.4
           
5.4
           
0.74
         
7.1
           
Median
(5)
(58.2)
       
14.0
         
11.3
         
0.8
           
1.1
           
5.8
           
(56.7)
       
26.5
         
5.7
           
0.54
         
6.4
           
Regional Banks
(6)
(33.2)
       
15.1
         
13.3
         
1.2
           
1.8
           
4.1
           
(36.2)
       
15.6
         
7.5
           
0.91
         
9.2
           
Comparable Companies Analysis

Internal Draft -
Preliminary Analysis
TRADING REVIEW
Dividend Discount Model Analysis
IBES
Project Rubicon
17
Notes
1.
As of 8/8/08
2.
Based on research analyst models available (7 analysts) as of 8/8/08
Base Case Assumptions
•
Consensus IBES ‘08 EPS of $3.84 and ’09 EPS of $4.46
(1)
–
IBES long-term EPS growth rate of 6.5% applied to 2010 onwards
–
2008 & 2009 assets based on research analyst models average
(2)
–
Long-term asset growth in 2010 onwards is 4.5%
–
Assumes no share repurchases
•
Targeted tangible common ratio of 7.0%
–
Excess capital returned to shareholders 
–
5.0% pre-tax cost of excess equity distributions
•
Cash flows projected out until 2013
•
Terminal value calculated in 2013 based on terminal multiple range of 11.0x
to 13.0x
•
Discount rate range assumed as 11% to 14%
L:\FIG_NY\DEPT_ONLY\BANK\COMPANY\MUFG\0802 -Project Rubicon\PowerPoint\8-7-08 Meeting\8-7-08 Meetingv4.ppt\A2XP\07 AUG 2008\9:37 PM\17

Internal Draft -
Preliminary Analysis
Net Present Value per Share Ranges
Project Rubicon
TRADING REVIEW
18
•
Net present values use
assumptions on previous page
except as noted
Net Present Value per Share
($) Discounted to 6/30/08
Scenario
Range
Change
Base Case - Previous Page
$46 - $58
-
Base Case - Tangible Common Ratio of 6.5%
$49 - $61
+$3
Base Case - Tangible Common Ratio of 6.0%
$51 - $63
+$5
Base Case - 2010+ EPS Growth Rate of 8%
(1)
$47 - $60
+$1 - +$2
Base Case - 2010+ EPS Growth Rate of 10%
(1)
$49 - $63
+$3 - +$5
Note
1.
2010+ asset growth rate of 2% less than EPS growth rate
L:\FIG_NY\DEPT_ONLY\BANK\COMPANY\MUFG\0802 -Project Rubicon\PowerPoint\8-7-08 Meeting\8-7-08 Meetingv4.ppt\A2XP\07 AUG 2008\9:37 PM\18

Internal Draft -
Preliminary Analysis
Project Rubicon
19
Section 3
Premiums Paid In Precedent Transactions
L:\FIG_NY\DEPT_ONLY\BANK\COMPANY\MUFG\0802 -Project Rubicon\PowerPoint\8-7-08 Meeting\8-7-08 Meetingv4.ppt\A2XP\07 AUG 2008\9:37 PM\19

Internal Draft -
Preliminary Analysis
PREMIUMS PAID IN PRECEDENT TRANSACTIONS
Precedent Observations
Project Rubicon
20
•
28 minority buy-in deals greater than $500MM since 2000
–
Median deal size: $1,339MM
–
Median ownership of buyer: 67%
–
Median percentage sought: 33%
–
Median premium to market: 20.8%
•
12 financial institution minority buy-in deals greater than $250MM since
1995
–
Median deal size: $1,128MM
–
Median ownership of buyer: 63%
–
Median percentage sought: 37%
–
Median premium to market: 25.1%
•
Vatican/Rome currently own
65% of Milano and seek to
purchase the remaining 35%

Internal Draft -
Preliminary Analysis
PREMIUMS PAID IN PRECEDENT TRANSACTIONS
Nationwide Mutual / Nationwide Financial Services
Merger
Agreement
Reached
–
Pending
Shareholder
Approval
21
•
Nationwide Mutual to acquire remaining 34% of Nationwide Financial
Services
–
Announced: 3/10/08 subject to negotiations
–
Merger agreement announced on 8/7/08
–
Structure: Merger
–
Consideration: Cash
–
Parent owns 66%
–
Initial offer price: $47.20
–
Initial premium: 24% on $37.93
–
The
day
of
announcement
the
stock
closed
at
$47.72
–
up
24%
–
Final offer price: $52.25 –
11% bump from initial offer
–
Final premium: 38%
–
Deal value: $2.50Bn
Source
Company Filings

Internal Draft -
Preliminary Analysis
NFS Relative Price Performance
Since Offer
Project Rubicon
PREMIUMS PAID IN PRECEDENT TRANSACTIONS
22
Note
1.
Peers include MET, PRU, LNK, GNW, TMK, PL and PNX
30
35
40
45
50
55
3/7/08
3/27/08
4/15/08
5/2/08
5/21/08
6/10/08
6/27/08
7/17/08
8/8/08
NFS
Peers
(1)
S&P 500
Initial Offer
Final Offer
Stock Price Performance Since Offer
Indexed to NFS
$
Source
FactSet
•
Price performance since offer
–
NFS: 35%
–
Peers
(1)
: (3%)
–
S&P 500: 0%
$51.15
(0%)
(3%)
$47.20
$52.25
+35%
8/6/08: $46.45
8/7/08: Merger
agreement
announced
L:\FIG_NY\DEPT_ONLY\BANK\COMPANY\MUFG\0802 -Project Rubicon\PowerPoint\8-7-08 Meeting\8-7-08 Meetingv4.ppt\A2XP\07 AUG 2008\9:37 PM\22

Internal Draft -
Preliminary Analysis
Date
Trans.
Initial
Initial
Final
Price per
Premium to
Premium to
Premium to
Premium to
Announced
Target
Acquiror
Value ($MM)
Consideration
Ownership (%)
% Sought
Premium (%)
Premium (%)
Share ($)
1 Wk. Avg. (%)
4 Wk. Avg. (%)
3 Mo. Avg. (%)
52-Wk. High (%)
3/10/2008
Nationwide Financial Services
(2)
Nationwide Mutual
2,450
Cash
66
34
24.4
37.8
52.25
27.6
23.7
22.1
(19.1)
7/17/2007
Alfa Corp
Alfa Mutual Group
890
Cash
55
45
15.8
44.7
22.00
44.5
39.5
30.7
10.8
1/24/2007
21st Century Insurance
AIG
931
Cash
57
43
19.0
32.6
22.00
33.9
26.1
30.1
22.6
11/20/2006
TD Banknorth
Toronto-Dominion Bank
3,232
Cash
55
45
2.1
6.5
32.33
7.1
8.8
9.9
3.2
9/1/2005
7-Eleven
Seven-Eleven Japan
1,301
Cash
73
27
14.7
32.3
37.50
32.8
26.3
20.0
7.9
2/21/2005
Eon Labs
Novartis
989
Cash
65
35
1.2
11.0
31.00
9.8
18.2
17.1
(30.3)
1/17/2005
UnitedGlobalCom
Liberty Media International
3,488
Mix
53
47
(9.4)
(2.3)
9.42
0.4
(0.5)
10.9
(11.2)
1/10/2005
Fox Entertainment
News Corporation
5,978
Stock
82
18
7.4
15.3
36.01
15.4
15.4
19.7
11.9
8/2/2004
Cox Communications
Cox Enterprises
8,390
Cash
62
38
16.0
26.0
34.75
24.0
24.1
17.4
(5.4)
10/6/2003
UGC Europe
United GlobalCom
1,352
Stock
67
33
9.8
25.6
67.57
26.6
21.1
20.3
11.7
6/3/2002
Expedia
USA Interactive
3,636
Stock
58
42
7.5
54.6
55.25
43.0
40.2
53.3
31.5
6/3/2002
Hotels.com
USA Interactive
1,237
Stock
62
38
7.5
42.8
68.40
36.3
27.5
15.6
(0.9)
6/3/2002
Ticketmaster
USA Interactive
841
Stock
63
37
7.5
24.6
26.65
21.5
17.3
4.5
(11.1)
2/15/2002
NRG Energy
Xcel Energy
673
Stock
74
26
15.0
18.7
11.87
22.1
4.0
(17.9)
(67.4)
2/5/2002
Intimate Brands
Limited
1,645
Stock
82
18
6.1
11.6
19.53
12.6
20.4
32.6
7.0
6/4/2001
Liberty Financial
Liberty Mutual
536
Cash
66
34
0.7
0.7
33.70
0.4
(2.1)
(16.3)
(28.6)
2/15/2001
Westfield America
Westfield America Trust
598
Cash
56
44
9.9
12.5
16.25
12.7
12.9
17.2
5.3
9/21/2000
Hertz
Ford Motor
734
Cash
81
19
23.7
46.4
35.50
43.7
29.5
18.5
(30.1)
8/30/2000
AXA Financial
AXA-UAP
9,400
Mix
60
40
2.4
4.6
54.63
8.9
18.8
33.1
4.6
8/15/2000
Infinity Broadcasting
Viacom
13,649
Stock
62
38
13.6
19.2
42.03
16.3
17.6
22.2
2.8
8/14/2000
BHC Communication
News Corporation
888
Mix
76
24
16.4
16.4
165.00
11.3
10.6
9.6
(2.4)
7/9/2000
Life Technologies
Invitrogen
1,444
Mix
72
28
22.4
22.4
60.00
20.2
21.0
18.2
9.1
3/27/2000
Hartford Life
Hartford Fin Svcs
1,325
Cash
80
20
8.6
24.7
50.50
28.4
44.1
32.4
(8.2)
3/21/2000
Travelers Property Casualty
Citigroup
2,449
Cash
85
15
23.2
24.5
41.95
29.9
32.2
25.2
1.5
3/16/2000
Vastar Resources
BP Amoco
1,576
Cash
80
20
12.5
31.5
83.00
34.9
50.2
49.0
18.7
3/8/2000
Thermo Instrument Systems
Thermo Electron
832
Stock
89
11
2.3
2.3
20.40
11.4
15.2
41.6
2.3
2/22/2000
IXnet
Global Crossing
877
Stock
72
28
18.1
18.1
62.01
22.4
41.2
92.9
18.1
2/14/2000
Carelnsite
Healtheon / WebMD
1,884
Stock
67
33
1.3
5.3
71.50
2.7
(2.3)
1.8
(14.2)
Median
1,339
67
33
9.8
20.8
21.8
20.7
19.8
2.6
Average
2,615
69
31
10.7
21.8
21.5
21.5
22.6
(2.1)
Range
(9.4) - 24.4
(2.3) - 54.6
0.4 - 44.5
(2.3) - 50.2
(17.9) - 92.9
(67.4) - 31.5
Minority Buy-In Transactions (Deals of $500MM or more since 2000)
PREMIUMS PAID IN PRECEDENT TRANSACTIONS
Precedent Minority Buy-In Transactions
Deals Greater than $500MM since 2000
Project Rubicon
23
(1)
(1)
Notes
1.
Premium to closing price prior to announcement
2.
Transaction pending
3.
Merger agreement was reached with price of $33.44 subject to minor adjustments; final price was adjusted to $33.70 at close and is used to calculate
premium
Source
Company filings, Thomson Financial and FactSet
(3)
(3)

Internal Draft -
Preliminary Analysis
U.S. Financial Services Deals >$250MM Since 1995
PREMIUMS PAID IN PRECEDENT TRANSACTIONS
Precedent FIG Minority Buy-In Transactions
Deals Greater than $250MM since 1995
Project Rubicon
24
(1)
(1)
Source
Company Filings, Thomson Financial and FactSet
Notes
1.
Premium to closing price prior to announcement
2.
Transaction pending
3.
Merger agreement was reached with price of $33.44 subject to minor adjustments; final price was adjusted to $33.70 at close and is used to calculate
premium
4.
Acquiror offered $36.00 in a tender offer; subsequently, the offer was increased to $39.50 and is used to calculate premium
(3)
(3)
(4)
Initial
Final
Premium /
Premium /
Premium /
Premium /
Acquiror
Name
Date Announced
Target Name
Size
($MM)
% Bought Back
Premium
(%)
Premium
(%)
1 Week
Avg
(%)
4 Week
Avg
(%)
3 Month
Avg
(%)
52-Wk. High
(%)
Nationwide Mutual
(2)
03/10/08
Nationwide Financial
2,450
34
24.4
37.8
27.6
23.7
22.1
(19.1)
Alfa Mutual Group
07/17/07
Alfa Corp
890
45
15.8
44.7
44.5
39.5
30.7
10.8
AIG
01/24/07
21st Century Ins
931
43
19.0
32.6
33.9
26.1
30.1
22.6
Toronto-Dominion Bank
11/20/06
TD Banknorth
3,232
45
2.1
6.5
7.1
8.8
9.9
3.2
Toronto-Dominion Bank
10/10/01
TD Waterhouse
403
11
45.2
53.2
50.2
49.8
15.7
(47.0)
Liberty Mutual
06/04/01
Liberty Financial
536
34
0.7
0.7
0.4
(2.1)
(16.3)
(28.6)
AXA
08/30/00
AXA Financial
9,400
40
2.4
4.6
8.9
18.8
33.1
4.6
Hartford Fin Svc
03/27/00
Hartford Life
1,325
20
8.6
24.7
28.4
44.1
32.4
(8.2)
Citigroup
03/21/00
Travelers P&C
2,449
15
23.2
24.5
29.9
32.2
25.2
1.5
Zurich Versicherungs
01/13/97
Zurich Reinsurance
319
34
17.1
28.5
29.1
25.2
27.4
20.6
Allmerica Financial
12/17/96
Allmerica P&C
817
41
1.8
15.8
14.0
14.1
13.6
8.2
Berkshire Hathaway
08/25/95
GEICO
2,349
47
25.6
25.6
24.2
24.9
24.6
18.4
Median
1,128
37
16.4
25.1
28.0
25.0
24.9
3.9
Average
2,092
34
15.5
24.9
24.9
25.4
20.7
(1.1)
Range
0.7 -
45.2
0.7 -
53.2
0.4 -
50.2
(2.1) -
49.8
(16.3) -
33.1
(47.0) -
22.6

Internal Draft -
Preliminary Analysis
Matrix
Project Rubicon
PREMIUMS PAID IN PRECEDENT TRANSACTIONS
25
Source
FactSet (IBES), SNL
As of 8/8/08
Offer Price ($)
Metric
50.00
52.00
54.00
56.00
58.00
60.00
62.00
64.00
66.00
Implied Premiums
Current
$57.25
(12.7%)
(9.2%)
(5.7%)
(2.2%)
1.3%
4.8%
8.3%
11.8%
15.3%
1-Week Avg.
$56.19
(11.0%)
(7.5%)
(3.9%)
(0.3%)
3.2%
6.8%
10.3%
13.9%
17.5%
10-Day Avg.
$54.89
(8.9%)
(5.3%)
(1.6%)
2.0%
5.7%
9.3%
12.9%
16.6%
20.2%
4-Week Avg.
$50.23
(0.5%)
3.5%
7.5%
11.5%
15.5%
19.5%
23.4%
27.4%
31.4%
Implied Multiples
Price / Tang. Book
$31.50
1.6x
1.7x
1.7x
1.8x
1.8x
1.9x
2.0x
2.0x
2.1x
Price / Book
$34.11
1.5x
1.5x
1.6x
1.6x
1.7x
1.8x
1.8x
1.9x
1.9x
2008E P/E
$3.84
13.0x
13.5x
14.1x
14.6x
15.1x
15.6x
16.1x
16.7x
17.2x
2009E P/E
$4.46
11.2x
11.7x
12.1x
12.6x
13.0x
13.5x
13.9x
14.3x
14.8x
Implied Premiums and Multiples
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