CONFIDENTIAL Exhibit (c)(3) PRESENTATION TO LIBERTY FINANCIAL COMPANIES, INC. BOARD OF DIRECTORS JUNE 4, 2001 CONFIDENTIAL 1 DISCUSSION OUTLINE - - Asset Management Segment Transaction - - Public Shareholder Transaction ASSET MANAGEMENT SEGMENT TRANSACTION CONFIDENTIAL 2 RECENT ASSET MANAGEMENT SEGMENT OPERATING PERFORMANCE - - $7.9 billion reduction to AUM in Q4 2000 and Q1 2001 from market action - - Resulting in Q1 earnings 30% below management plan - - Greater than $2.0 billion increase in AUM since April 1, 2001 2001P Q1 2001 REVISED ($ in millions) 2000A(1) AT 9/30/00 Q1 2001A ANNUALIZED 2001P(2) ----------------------------------------------------------------------------------------------------------------- Revenues $383.9 $460.8 $105.6 $422.4 NA Operating Expenses(3) (261.3) (297.3) (76.6) (306.4) NA EBITDA 79.7 122.1 17.0 68.0 $80.0 -$90.0 AUM $51.8BN $60.9BN $48.9 BN NA NA ----------------------------------------------------------------------------------------------------------------- (1) Includes Wanger for 3 months. (2) Revised plan reflects Q1 results and current asset levels. (3) Excludes amortization of deferred distribution costs and depreciation expense. Source: LFC Management CONFIDENTIAL 3 ASSET MANAGEMENT SEGMENT TRANSACTION - - FleetBoston is proposing to acquire the Asset Management Segment for $900 million in cash, subject to certain adjustments - - Adjusted for the assumption of liabilities totaling $218 million, FleetBoston's proposal equates to approximately $1.1 billion - - The adjusted purchase price of approximately $1.1 billion implies multiples of: LTM EBITDA 12.5x LTM Revenue 2.6x 3/31/2001 AUM 2.3% Note: Multiples based on financial data provided by LFC management. CONFIDENTIAL 4 SUMMARY OF ASSET MANAGEMENT PROPOSAL - - Adjusted for the assumption of the following liabilities, FleetBoston's $900 million proposal equates to approximately $1.1 billion ($ in millions) - --------------------------------------------------------------------------------------- --------- Cash bid from FleetBoston $900 ASSUMED LIABILITIES: NPV of Wanger Earn-out(1) 91 NPV of Progress Earn-out(2) 11 12b-1 Debt 108 External Debt 8 --------- Adjusted Purchase Price $1,118 - --------------------------------------------------------------------------------------- --------- (1) Assumes maximum earn-out potential of $170MM discounted at 18%. (2) Assumes maximum earn-out potential of $16MM discounted at 13%. Source: LFC management. CONFIDENTIAL 5 SUMMARY FINANCIAL ANALYSIS - ASSET MANAGEMENT SEGMENT OVERALL VALUATION ANALYSIS IMPLIES AN ENTERPRISE REFERENCE RANGE OF APPROXIMATELY $950 MILLION TO $1.25 BILLION ($ in millions) - ------------------------------------------------------------------------------------------------------------------------- Comparable Company Analysis Without Control Premium $900 - $1,100 With Control Premium 1,100 - 1,300 Comparable Acquisition Analysis 900 - 1,200 Discounted Cash Flow Analysis 1,033 - 1,280 - ------------------------------------------------------------------------------------------------------------------------- PRELIMINARY ENTERPRISE REFERENCE RANGE $950 - $1,250 - ------------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------------- FLEETBOSTON PROPOSAL $1,118 - ------------------------------------------------------------------------------------------------------------------------- CONFIDENTIAL 6 COMPARABLE PUBLIC COMPANIES ANALYSIS METHODOLOGY - - Analyzed Enterprise Value to AUM, Revenues and EBITDA for companies with similar business to the Asset Management segment - - Applied relevant multiples to historical and projected LFC data (provided by LFC Management) to estimate unaffected price range for the Asset Management segment - - Added representative control premium CONFIDENTIAL 7 COMPARABLE PUBLIC COMPANIES ANALYSIS COMPARABLE PUBLIC COMPANIES ANALYSIS IMPLIES AN ENTERPRISE REFERENCE RANGE OF APPROXIMATELY $1.1 BILLION TO $1.3 BILLION COMPANY IMPLIED ENTERPRISE ($ in millions) DATA(1) MULTIPLE RANGE REFERENCE RANGE - --------------------------------------------------------------------------------------------------------------------------------- LTM EBITDA $89 10.0x - 12.5x $894 - $1,118 Q1 2001 Annualized EBITDA 68 10.0 - 13.0 680 - 884 2001P EBITDA(2) 85 10.0 - 12.0 850 - 1,020 LTM Revenue 427 3.1 - 3.5 1,323 - 1,494 3/31/2001 AUM 48,939 2.0% - 2.5% 979 - 1,223 - --------------------------------------------------------------------------------------------------------------------------------- IMPLIED ENTERPRISE REFERENCE RANGE $900 - $1,100 - --------------------------------------------------------------------------------------------------------------------------------- IMPLIED ENTERPRISE REFERENCE RANGE WITH CONTROL PREMIUM 15% $1,035 - $1,265 25% 1,125 - 1,375 35% 1,215 - 1,485 - --------------------------------------------------------------------------------------------------------------------------------- ENTERPRISE REFERENCE RANGE WITH CONTROL PREMIUM $1,100 - $1,300 - --------------------------------------------------------------------------------------------------------------------------------- (1) Company data provided by LFC management. (2) 2001P EBITDA based on midpoint of management's projected range of $80 - $90 million. CONFIDENTIAL 8 COMPARABLE PUBLIC COMPANIES Market data as of 5/29/2001 ENTERPRISE VALUE TO -------------------------------------------------------------------------------------- Q1 2001 LTM LTM ANNUALIZED 2001P 3/31/2001 AUM REVENUE EBITDA EBITDA EBITDA - -------------------------------------------------------------------------------------------------------------------------- Affiliated Managers 1.99% 3.1x 9.8x 14.8x 10.9x Eaton Vance 5.10 5.6 13.4 12.9 13.3 Federated Investors 2.52 5.4 15.9 12.8 13.4 Franklin Resources 5.15 4.8 14.0 7.0 10.4 John Nuveen 2.80 4.9 9.1 8.8 10.0 T. Rowe Price 3.15 4.0 12.1 12.3 14.5 Waddell & Reed 8.39 5.3 11.0 11.9 13.8 - -------------------------------------------------------------------------------------------------------------------------- High 8.39% 5.6x 15.9 14.8x 14.5x Mean 4.16 4.7 12.2 11.5 12.3 Median 3.15 4.9 12.1 12.3 13.3 Low 1.99 3.1 9.1 7.0 10.0 - -------------------------------------------------------------------------------------------------------------------------- Note: LTM data ending 3/31/01, except for Eaton Vance, which is as of 1/31/01. Source: FactSet Research Systems. CONFIDENTIAL 9 COMPARABLE ACQUISITIONS ANALYSIS METHODOLOGY - - Analyzed acquisitions of businesses similar to Asset Management segment - - Reviewed aggregate transaction value and implied multiples of selected financial data - - Applied relevant multiples to segment's historical and projected data (provided by LFC) to estimate an implied enterprise reference range for the Asset Management segment CONFIDENTIAL 10 COMPARABLE ACQUISITIONS ANALYSIS COMPARABLE ACQUISITION ANALYSIS IMPLIES AN ENTERPRISE REFERENCE RANGE OF APPROXIMATELY $900 MILLION TO $1.2 BILLION ($ in millions) COMPANY DATA(1) MULTIPLE RANGE IMPLIED ENTERPRISE REFERENCE RANGE - ----------------------------------------------------------------------------------------------------------------------------------- LTM EBITDA $89 9.0x - 13.5x $805 - $1,208 Q1 2001 Annualized EBITDA 68 9.0 - 13.5 612 - 918 2001P EBITDA(2) 85 9.0 - 13.5 765 - 1,148 LTM Revenue 427 2.5 - 3.9 1,067 - 1,665 3/31/2001 AUM 48,939 1.8% - 3.2% 881 - 1,566 - ----------------------------------------------------------------------------------------------------------------------------------- IMPLIED ENTERPRISE REFERENCE RANGE $900 - $1,200 - ----------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- (1) Company data provided by LFC management. (2) 2001P EBITDA based on midpoint of management's projected range of $80 - $90 million. CONFIDENTIAL 11 COMPARABLE ACQUISITIONS ANALYSIS TRANSACTION VALUE TO: TRANSACTION ------------------------------ ACQUIROR TARGET DATE VALUE ($MM) AUM REVENUES EBITDA - -------------------------------------------------------------------------------------------------------------------------------- Robeco Group N.V. Harbor Capital 03/01 $490 2.9% NA NA ABN Amro Alleghany Asset Management 10/00 825 1.8 4.7x 14.9x Alliance Capital Mgmt. Sanford Bernstein 06/00 3,500 4.0 NA 10.5 Old Mutual United Asset Management 06/00 2,225 1.1 2.5 7.4 CDC Asset Management Nvest Companies 06/00 2,184 1.6 3.3 12.1 Liberty Financial Wanger 06/00 371 4.8 6.8 12.4 Unicredito Italiano Pioneer Group 05/00 1,314 5.5 6.1 19.1 Affiliated Managers Frontier Capital 10/99 100 3.5 5.1 9.5 UBS Global Asset Management 09/99 625 4.5 NA NA ReliaStar Pilgrim Capital 07/99 258 3.6 5.0 10.1 AMVESCAP LGT Asset Mgmt 01/98 1,300 2.4 3.9 14.8 ------------------------------------------------------------ High 5.5% 6.8x 19.1x Mean 3.2 4.7 12.5 Median 3.5 4.8 12.3 Low 1.1 2.5 7.4 ------------------------------------------------------------ - -------------------------------------------------------------------------------------------------------------------------------- (1) Assumes PV of maximum earn-out potential of $170MM discounted at 18%. CONFIDENTIAL 12 DISCOUNTED CASH FLOW ANALYSIS METHODOLOGY - - Forecasted Asset Management segment financial results for a five-year period - - Discounted to present value the cash flow available for distribution and estimated terminal value in final year - - Estimated terminal value based on exit multiples of 9.0x - 11.0x of final year's projected EBITDA - - Applied discount rate range of 13.0% to 15.0% CONFIDENTIAL 13 DISCOUNTED CASH FLOW SUMMARY TERMINAL MULTIPLE 9.0X 10.0X 11.0X ----------------------------------------------- --------------------------------------------------- 13.0% $324 $324 $324 Value of Interim Cash Flows 781 868 955 Terminal Value $1,106 $1,193 $1,280 Total ---------- ---------- ------------- 13.0X 14.0X 15.1X IMPLIED MULTIPLE TO MID-POINT OF MANAGEMENT'S 2001 PLAN EBITDA RANGE DISCOUNT RATE 14.0% $317 $317 $317 Value of Interim Cash Flows 751 835 918 Terminal Value ---------- ---------- ------------- $1,068 $1,152 $1,235 Total 12.6X 13.6X 14.5X IMPLIED MULTIPLE TO MID-POINT OF MANAGEMENT'S 2001 PLAN EBITDA RANGE 15.0% $311 $311 $311 Value of Interim Cash Flows 722 802 883 Terminal Value ---------- ---------- ------------- $1,033 $1,113 $1,193 Total 12.1X 13.1X 14.0X IMPLIED MULTIPLE TO MID-POINT OF MANAGEMENT'S 2001 PLAN EBITDA RANGE CONFIDENTIAL 14 ASSET MANAGEMENT SEGMENT TRANSACTION OTHER MAJOR FINANCIAL TERMS: - - 338 (h) (10) Election - - Assumption of all material liabilities associated with the business - Includes Severance Plan for segment's employees - Excludes Retention Plan for segment's employees - Excludes restricted stock and stock option liabilities - - Transition Services Agreement with Sun Life to be assumed by FleetBoston - - Break-up fee of 5% (approximately $45 million) CONFIDENTIAL 15 CSFB'S OPINION THE CONSIDERATION TO BE RECEIVED IS FAIR, AS OF THE DATE HEREOF, FROM A FINANCIAL POINT OF VIEW, TO LIBERTY FINANCIAL COMPANIES CSFB'S OPINIONS ARE QUALIFIED IN THEIR ENTIRETY BY THE SIGNED, WRITTEN OPINION LETTER DELIVERED TO THE BOARD OF DIRECTORS PUBLIC SHAREHOLDER TRANSACTION CONFIDENTIAL 16 PUBLIC SHAREHOLDER TRANSACTION [PUBLIC SHAREHOLDER TRANSACTION CHART] CONFIDENTIAL 17 PUBLIC SHAREHOLDER TRANSACTION - - LMIC to purchase all shares of LFC not already owned by LMIC - Net proceeds per share on a fully diluted basis is $32.25 - Public shareholders will receive $33.44 - - Price, on a per outstanding share basis, is equal to: Actual verses Estimated Estimate Proceeds +/- After-tax Differences = Final Proceeds Estimated FleetBoston Proceeds - - Estimated taxes on Asset Management sale + Sun Life after-tax proceeds - - Other net adjustments (after-tax) o Stock option cost o Transaction costs o Net corporate assets o Other tax adjustments CONFIDENTIAL 20 IMPLIED PER SHARE IMPACT OF TRANSACTIONS TO MINORITY ------------------------------------------------------------------------------------------------------------------------------- ($ IN MILLIONS, EXCEPT PER SHARE DATA) ASSET MANAGEMENT ANNUITIES ------------------------------------------------------------------------------------------------------------------------------- Cash Price from Bidder $ 900 $1,702 After-Tax Retention Payments (53) - Tax Payable on Gain (141) (215) ----------------- ----------------- After-Tax Proceeds $ 706 $1,487 After-Tax Proceeds $2,193 Holding Company Adjustments: Corporate Debt (650) After-Tax Cost of Options (20) After-Tax Transaction Costs (15) Estimated Net Corporate Assets 68 ------------- Total Gross Proceeds Available to Shareholders 1,576 Eliminate Asset Management Segment Estimated Taxes 141 Decrease Asset Management Segment Purchase Price by Benefit from Step-up in Tax Basis (79) ------------- Total Net Proceeds $1,638 Shares Outstanding (MM) 49.0 ------------------------------------------------------------------------------------------------------------------------------- Per Share Proceeds to Public $33.44 ------------------------------------------------------------------------------------------------------------------------------- Source: LFC Management. CONFIDENTIAL 21 ESTIMATED NET CORPORATE ASSETS ($ in millions) --------------------------------------------------------------------------------------------------------------------------- Cash $79 Tax Receivable from Asset Management Entities - (Settled at Closing) 60 LFC Corporate (Severance, retention, etc. after-tax) (25) Taxes Payable (Excluding transaction taxes) (17) Interest Payable (21) Other, Net (8) ---------------- Net Corporate Assets $68 --------------------------------------------------------------------------------------------------------- SOURCE: LFC MANAGEMENT. CONFIDENTIAL 22 CALCULATION OF ADDITIONAL BENEFIT TO PUBLIC MINORITY ($ in millions) -------------------------------------------------------------------------------------------------------- Cash Price from Bidder $900 Inside Basis 546 -------------------------------------------------------------------------------------------------------- Tax Payable on Gain at 40% Tax Rate 141 -------------------------------------------------------------------------------------------------------- Benefit from Step-up in Tax Basis Estimated Tax Deduction $354 Estimated Annual Tax Deduction over 15 years 24 Tax Effected Amount at 40% Tax Rate 9 -------------------------------------------------------------------------------------------------------- Present Value of Tax Benefit at 10% Discount Rate 79 -------------------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------------------------------- CONFIDENTIAL 19 TREATMENT OF PUBLIC SENIOR INDEBTEDNESS - - General statement in the Fleet transaction announcement that bondholders will be treated fairly CONFIDENTIAL 18 PUBLIC SHAREHOLDER TRANSACTION OTHER MAJOR PROVISION: - Conditioned on closing of both Asset Management and Annuities Segment transactions CONFIDENTIAL 23 CSFB'S OPINION THE CONSIDERATION TO BE RECEIVED BY THE PUBLIC HOLDERS OF LFC COMMON STOCK OTHER THAN LIBERTY MUTUAL IS FAIR, AS OF THE DATE HEREOF, FROM A FINANCIAL POINT OF VIEW, TO SUCH SHAREHOLDERS CSFB'S OPINIONS ARE QUALIFIED IN THEIR ENTIRETY BY THE SIGNED, WRITTEN OPINION LETTER DELIVERED TO THE BOARD OF DIRECTORS