1. FOR INSTITUTIONAL INVESTORS ONLY. NOT FOR PUBLIC DISTRIBUTION. Investment policies in practice Greg Romano, Executive Director, J.P. Morgan Asset Management 312-732-6608, gregory.w.romano@jpmorgan.com

2. FOR INSTITUTIONAL INVESTORS ONLY. NOT FOR PUBLIC DISTRIBUTION. 1 Current landscape Cash levels Corporate investment behavior

3. FOR INSTITUTIONAL INVESTORS ONLY. NOT FOR PUBLIC DISTRIBUTION. Corporate cash balances remain high 18% have balances in excess of $1 billion. 2 Source: J.P. Morgan Asset Management Global Liquidity Investment Survey 2011. As in 2010, 30% of treasury departments have an average cash balance of more than $500 million.

4. FOR INSTITUTIONAL INVESTORS ONLY. NOT FOR PUBLIC DISTRIBUTION. Corporate investment behavior has evolved 3 Since the liquidity crisis, there is greater focus on due diligence and investment policies. Focus on yield Outdated policies – no systematic reviews Decisions made by treasury team with little or no oversight by board or management team Limited emphasis on due diligence Pre-liquidity crisis Heightened focus on due diligence and investment policies Increased concern and uncertainty regarding investment portfolios Re-evaluated investment philosophies – determined whether to manage in-house or outsource Updated and revised investment policies Increased due diligence on investment providers Integrated investment oversight Post-liquidity crisis

5. STRICTLY PRIVATE/CONFIDENTIAL 4 A disciplined approach for evaluating investment solutions

6. FOR INSTITUTIONAL INVESTORS ONLY. NOT FOR PUBLIC DISTRIBUTION. Benefits of a well-executed investment policy Ensures consistent approach in all market conditions Provides clarity so that everyone understands the policy Imposes transparency for internal control Helps you meet your corporate investment goals 5 With consistency and clarity, an investment policy sets the strategy for your investment decisions.

7. FOR INSTITUTIONAL INVESTORS ONLY. NOT FOR PUBLIC DISTRIBUTION. Creating a cash governance framework 6 Two key actions may help organization protect their cash investments. Develop an investment policy that clearly and fully documents the acceptable parameters of all cash investments. 1 Institute a rigorous and systemic due diligence process to review and ensure compliance with the investment policy. 2

8. FOR INSTITUTIONAL INVESTORS ONLY. NOT FOR PUBLIC DISTRIBUTION. How do you measure investment policy success? 7 Base: 447. Other included FX losses, liquidity, FFP/interest, return on risk. *New choices this year. Source: J.P. Morgan Asset Management Global Liquidity Investment Survey 2011. For most organizations, an effective policy can help ensure return on investment and principal preservation.

9. 8 Weighing the risks and rewards for cash investments — a rigorous, ongoing, sequential process Steps toward creating an investment policy

10. FOR INSTITUTIONAL AND PROFESSIONAL USE | NOT FOR PUBLIC DISTRIBUTION Performance as of May 17, 2012 The performance quoted is past performance and is not a guarantee of future results. Current performance may be higher or lower than the performance data shown. For performance current to the most recent month-end please call 1- 800-766-7722. Money market fund performance may reflect the waiver of a portion of the fund's fees. The unsubsidized 7-day SEC yield shows the fund’s performance if fees had not been waived. Performance may reflect the waiver of a portion of the fund's fees. If fees had not been waived, the 7-day SEC yield would have JPMorgan Prime Money market Fund, 0.02, JPMorgan U.S. Government Money market Fund -0.15, JPMorgan 100% Treasury Securities Money Market Fund -0.22. ** Muni Yields grossed up at a 35% tax rate * The yield shown is the 7 day SEC yield on the stated as-of-date As of May 17, 20127 Day SEC1 Month3 Months6 Months9 Months1 Year2 Years3 Years5 Years Prime Money Market Fund (Cap Shrs)*0.19 US Government MMF (Cap Shrs)*0.01 Tax Free Money Market Fund (Inst Shrs)*0.07 AAA-GO's** 0.320.510.681.20 AA-GO's** 0.570.801.081.66 Pre-Refunded Securities** 0.310.510.69 Treasuries 0.070.090.140.160.190.290.400.73 Agencies0.060.090.110.160.170.200.390.611.20 Commercial Paper (A-1/P-1) ABCP0.160.200.250.400.55 Commercial Paper (A-1/P-1) Financials0.160.150.250.350.50 Commercial Paper (A-1/P-1) Industrials0.07 0.150.200.35 Certificates of Deposit (A-1)0.160.150.250.350.480.50 Time Deposits0.16 AA Corporate Industrials 0.300.370.440.591.001.58 AA Corporate Financials 0.460.570.691.091.802.33 A Corporate Industrials 0.300.420.490.741.101.83 A Corporate Financials 0.510.620.841.191.952.51 BBB Corporate Industrials 0.480.620.741.291.652.43 BBB Corporate Financials 1.051.271.692.293.204.23 AAA-Rated Credit Card Receivables (WAL) 0.620.770.92

11. FOR INSTITUTIONAL INVESTORS ONLY. NOT FOR PUBLIC DISTRIBUTION. Defining parameters of permissible investments 10 Set the characteristics of each investment, such as credit quality and maximum maturity. U.S. treasury securities Minimum credit rating  AAA/Aaa Maximum maturity  3 months  6 months  1 year  3 years  5 years Maximum portfolio exposure  No limit Maximum issuer exposure  No limit U.S. government agency obligations Minimum credit rating  AAA/Aaa Maximum maturity  3 months  6 months  1 year  3 years  5 years Maximum portfolio exposure  No limit  50%  25% Maximum issuer exposure  No limit Commercial paper (include all applicable currencies USD, EUR, GBP, JPY, etc.) Minimum credit rating  A-1+/P-1  A-1/P-1  A-2/P-2 Maximum maturity  1 month  3 months  6 months  13 months Maximum portfolio exposure  No limit  50%  25%  15% Maximum issuer exposure  5%  3%

12. FOR INSTITUTIONAL INVESTORS ONLY. NOT FOR PUBLIC DISTRIBUTION. Segmenting cash by liquidity need and profile 11 This is the first step in determining your investment strategy and ensuring optimal return. Risk profile Total balance sheet cash Operating Cash typically used for daily operating needs may be subject to unforeseen volatility Requires preservation of principal Late-day access Same-day liquidity Reserve Investment horizon of 6 to 9 months or longer Fairly static, same-day access not needed Cash set aside for possible acquisition, stock buy back or R&D Strategic cash Restricted cash Operating cash Reserve cash Restricted Balances trapped in highly regulated jurisdictions or with repatriation-related tax issues Cash collateral tied to credit agreements or derivative contracts Strategic No short-term forecasted use Cash on balance sheet that has not been historically used Investment horizon of 1 year or longer The above chart is for illustrative purposes only.

13. 12 Assess your tolerance for interest rate volatility Considerations Do you have any tolerance for volatility? What is your maximum acceptable realized loss in a given period? Should you have any restrictions on gains? What data will you need to assess potential volatility in an investment strategy? What is an appropriate impairment policy?

14. 13 Assess your tolerance for interest rate volatility All data as of December 31, 2011 Total rate of return 1 Year 0.10 3 Years 0.14 5 Years 1.48 10 Years 1.95 StDev* 0.52 Frequency of negative returns (rolling) 1 Month3.33% 3 Months0.83% 1 Year0.00% Avg 1M Negative Return (0.01) Avg 3M Negative Return- Avg 1Y Negative Return- Benchmark returns (rolling) PeriodWorstAverageBest 3 Months0.000.491.34 6 Months0.021.012.70 1 Year0.102.135.29 2 Years0.112.405.15 3 Years0.142.675.07 5 Years1.483.085.14 10 Years1.953.133.81 BofA Merrill Lynch 3-Month Treasury Bill Total rate of return 1 Year 0.27 3 Years 0.40 5 Years 2.06 10 Years 2.29 StDev* 0.59 Frequency of negative returns (rolling) 1 Month1.67% 3 Months0.00% 1 Year0.00% Avg 1M Negative Return (0.01) Avg 3M Negative Return - Avg 1Y Negative Return - Benchmark returns (rolling) PeriodWorstAverageBest 3 Months0.030.571.82 6 Months0.111.183.40 1 Year0.272.496.08 2 Years0.312.795.71 3 Years0.403.065.37 5 Years2.063.415.43 10 Years2.293.444.03 BofA Merrill Lynch 6-Month Treasury Bill Total rate of return 1 Year 0.54 3 Years 0.72 5 Years 2.55 10 Years 2.49 StDev* 0.82 Frequency of negative returns (rolling) 1 Month16.67% 3 Months4.17% 1 Year0.00% Avg 1M Negative Return (0.08) Avg 3M Negative Return (0.14) Avg 1Y Negative Return - Benchmark returns (rolling) PeriodWorstAverageBest 3 Months-0.300.622.52 6 Months0.151.294.15 1 Year0.522.776.91 2 Years0.623.157.19 3 Years0.723.416.18 5 Years2.383.735.99 10 Years2.493.764.34 BofA Merrill Lynch 1-Year Treasury Note Total rate of return 1 Year 1.55 3 Years 1.55 5 Years 3.68 10 Years 3.25 StDev* 1.55 Frequency of negative returns (rolling) 1 Month25.00% 3 Months13.33% 1 Year1.67% Avg 1M Negative Return (0.27) Avg 3M Negative Return (0.35) Avg 1Y Negative Return (0.19) Benchmark returns (rolling) PeriodWorstAverageBest 3 Months-1.060.803.75 6 Months-0.331.675.95 1 Year-0.353.539.16 2 Years0.973.938.28 3 Years1.394.157.35 5 Years2.684.376.58 10 Years3.224.384.93 BofA Merrill Lynch 1-3 Year Treasuries Above data is based on 120 monthly observations. * Annualized standard deviation of monthly returns on a trailing 10-year basis. Source: BofA Merrill Lynch; Bloomberg

15. 14 Assess whether greater credit risk is acceptable Considerations Besides using agency ratings, how will you assess and monitor credit quality of potential investments/issuers? Do you have the ability and resources in-house to assess credit quality or should you outsource? What will be your guidelines for credit allocation? How often will you review credit quality and your credit risk exposures? What is the agreed course of action if a security or issuer is downgraded, put on watch or falls below your minimum credit quality standards? Consider also how you expect to be notified of a downgrade event or threat in a timely way. Is this information that can be captured in-house or tasked to a third party?

16. 15 Assess whether greater credit risk is acceptable Source: Barclays Live; Bloomberg; BofA Merrill Lynch Please note that Loss Frequencies and Benchmark Returns data is based on 120 monthly observations. * Annualized standard deviation of monthly returns on a trailing 10-year basis. Charts are shown for illustrative and discussion purposes only. Interest rate spreads can alter perceptions on credit risk Total rate of return 1 Year 1.71 3 Years 3.58 5 Years 4.39 10 Years 3.95 StDev* 2.18 Frequency of negative returns (rolling) 1 Month26.67% 3 Months15.00% 1 Year0.83% Avg 1M Negative Return (0.38) Avg 3M Negative Return (0.70) Avg 1Y Negative Return (0.43) Benchmark returns (rolling) PeriodWorstAverageBest 3 Months-2.430.994.30 6 Months-2.192.055.76 1 Year-0.434.338.78 BofA ML 1-3 Yr Corp AAA rated Total rate of return 1 Year 1.45 3 Years 4.44 5 Years 4.23 10 Years 3.90 StDev* 2.16 Frequency of negative returns (rolling) 1 Month25.00% 3 Months16.67% 1 Year1.67% Avg 1M Negative Return (0.43) Avg 3M Negative Return (0.66) Avg 1Y Negative Return (0.48) Benchmark returns (rolling) PeriodWorstAverageBest 3 Months-2.960.974.74 6 Months-2.432.017.27 1 Year-0.734.3010.51 BofA ML1-3 Yr Corp AA rated Total rate of return 1 Year 1.67 3 Years 6.42 5 Years 3.76 10 Years 3.84 StDev* 3.64 Frequency of negative returns (rolling) 1 Month25.00% 3 Months15.00% 1 Year8.33% Avg 1M Negative Return (0.69) Avg 3M Negative Return (1.82) Avg 1Y Negative Return (5.07) Benchmark returns (rolling) PeriodWorstAverageBest 3 Months-10.220.977.34 6 Months-10.272.0011.32 1 Year-8.054.2516.90 BofA ML 1-3 Yr Corp A rated Total rate of return 1 Year 2.18 3 Years 9.54 5 Years 5.86 10 Years 5.10 StDev* 3.41 Frequency of negative returns (rolling) 1 Month24.17% 3 Months15.83% 1 Year5.00% Avg 1M Negative Return (0.56) Avg 3M Negative Return (1.34) Avg 1Y Negative Return (3.35) Benchmark returns (rolling) PeriodWorstAverageBest 3 Months-7.481.279.51 6 Months-7.192.5915.08 1 Year-5.045.4523.11 BofA ML 1-3 Yr Corp BBB rated basis points All data as of December 31, 2011

17. 16 Assess whether to extend maturity both at the security and portfolio level Considerations Does the yield curve merit longer-term investment? What proportion of the portfolio should you allocate to different maturities, given your liquidity requirements? What should be the maximum duration for the overall portfolio? What will be the agreed course of action if immediate liquidity requirements cannot be met?

18. 17 Review your investment policy How and by whom in the company will the investment policy be approved, reviewed and modified? On what frequency will the investment policy be formally reviewed? In what circumstances, if any, can exceptions to the investment policy be made – and how would these be approved? Considerations Compliance ObjectiveBenchmark Permissible investments Tax-aware investing Credit quality Maximum portfolio exposures Maximum issuer exposures Realized gain Realized lossLiquidity targetsReportingCustody EvaluationCompliance Disaster recovery Periodic reviews Investment Policy

19. 18 Decide how your investment strategy will be executed Do you want an investment strategy imposed and managed locally, regionally or globally? Do you want to use in-house resources or outsource? What will be the process and criteria for selecting and monitoring third- party providers? What type of metrics and reports will be required and how frequently? Considerations Local Held to maturity Available for sale In-house Outsource Regional Global Yield versus total return

20. FOR INSTITUTIONAL INVESTORS ONLY. NOT FOR PUBLIC DISTRIBUTION. 19 Wrap-up

21. FOR INSTITUTIONAL INVESTORS ONLY. NOT FOR PUBLIC DISTRIBUTION. Establishing broad investment parameters 20 When developing your investment policy, consider your objectives, benchmarks and scope. Objectives Necessary liquidity Required preservation of capital Maximizing returns Fiduciary control Compliance Diversification Benchmarks Risk and volatility tolerance Investment horizon Return expectations Scope Global coverage – or, are all subsidiaries and corporate entities separate Manage in-house, use external managers, or both Segmentation differences (e.g., working capital, reserve cash and strategic cash) Global policy – investment options in multiple currencies and jurisdictions

22. FOR INSTITUTIONAL INVESTORS ONLY. NOT FOR PUBLIC DISTRIBUTION. Monitoring your investments 21 Ongoing monitoring is essential to ensure that your portfolio remains within guidelines. Reporting Board of directors Senior management Accounting Frequency Format Compliance Approvals Updates Exceptions Remediation Evaluation Performance Reporting Frequency

23. FOR INSTITUTIONAL INVESTORS ONLY. NOT FOR PUBLIC DISTRIBUTION. Review 1.Consider cash segmentation 2.Create a governance framework 3.Establish investment parameters, including objectives, benchmarks and scope 4.Determine permissible investments 5.Define characteristics of investments, such as credit rating and diversification by security type 6.Monitor investments 7.Ensure compliance with rigorous due diligence 22 7 steps to establishing and maintaining an effective investment policy.

24. FOR INSTITUTIONAL INVESTORS ONLY. NOT FOR PUBLIC DISTRIBUTION. Conclusion 23 The “right” investment policy can vary significantly from one organization to another, depending on these factors: Liquidity requirement Cash flows Comfort level Treasury resources

25. FOR INSTITUTIONAL INVESTORS ONLY. NOT FOR PUBLIC DISTRIBUTION. Important information 24 This material is intended to report solely on the investment strategies and opportunities identified by J.P. Morgan Asset Management. Additional information is available upon request. Information herein is believed to be reliable but J.P. Morgan Asset Management does not warrant its completeness or accuracy. Opinions and estimates constitute our judgment and are subject to change without notice. The material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. J.P. Morgan Asset Management and/or its affiliates and employees may hold a position or act as market maker in the financial instruments of any issuer discussed herein or act as underwriter, placement agent, advisor or lender to such issuer. The investments and strategies discussed herein may not be suitable for all investors; if you have any doubts you should consult your J.P. Morgan Asset Management Client Adviser, Broker or Portfolio Manager. The material is not intended to provide, and should not be relied on for, accounting, legal or tax advice, or investment recommendations. You should consult your tax or legal adviser about the issues discussed herein. The investments discussed may fluctuate in price or value. Investors may get back less than they invested. Changes in rates of exchange may have an adverse effect on the value, price or income of investments. J.P. Morgan Asset Management is the marketing name for the asset management businesses of JPMorgan Chase & Co. Those businesses include, but are not limited to, J.P. Morgan Investment Management Inc., Security Capital Research & Management Incorporated and J.P. Morgan Alternative Asset Management, Inc.