JPMorgan Chase & Co. (JPM) 8-K Jpmorgan Chase Reports 2002 Second Quarter Results

PRESS RELEASE FINANCIAL SUPPLEMENT

SECOND QUARTER 2002

J.P. MORGAN CHASE & CO.
TABLE OF CONTENTS

	Page
JPMorgan Chase Consolidated
Statement of Income — Reported Basis		3
Lines of Business Financial Highlights Summary		4
Statement of Income — Operating Basis Excluding JPMorgan Partners		5
Statement of Income — Operating Basis		6
Reconciliation from Reported to Operating Basis		7
Segment Detail
Investment Bank		8
Treasury & Securities Services		9
Investment Management & Private Banking		10
JPMorgan Partners		11
Investment Portfolio — Private and Public Securities		12
Retail & Middle Market Financial Services		13
Business-Related Metrics		14
Supplemental Detail
Noninterest Revenue and Noninterest Expense Detail		15
Consolidated Balance Sheet		16
Condensed Average Balance Sheet and Annualized Yields		17
Credit-Related Information		18-19
Capital		20
Glossary of Terms		21

Page 2

J.P. MORGAN CHASE & CO.
STATEMENT OF INCOME — REPORTED BASIS
(in millions, except per share and ratio data)
  

																	2QTR 2002												YTD 2002
		2QTR			1QTR			4QTR			3QTR			2QTR			Over (Under)						YEAR TO DATE						Over (Under)
		2002			2002			2001			2001			2001			1Q 2002			2Q 2001			2002			2001			2001
REVENUE
Investment Banking Fees		$	785		$	755		$	931		$	811		$	929			4	%		(16	)%	$	1,540		$	1,870			(18	)%
Trading Revenue			731			1,299			355			1,301			1,261			(44	)		(42	)		2,030			3,262			(38	)
Fees and Commissions			2,885			2,584			2,493			2,397			2,460			12			17			5,469			4,591			19
Private Equity — Realized Gains (Losses)			(10	)		(10	)		81			204			(46	)		—			78			(20	)		366			NM
Private Equity — Unrealized Gains (Losses)			(115	)		(228	)		(505	)		(311	)		(783	)		50			85			(343	)		(1,068	)		68
Securities Gains			124			114			202			142			67			9			85			238			522			(54	)
Other Revenue			292			157			151			218			280			86			4			449			532			(16	)
Total Noninterest Revenue			4,692			4,671			3,708			4,762			4,168			—			13			9,363			10,075			(7	)
Interest Income			6,498			6,286			6,823			7,709			8,469			3			(23	)		12,784			17,649			(28	)
Interest Expense			3,616			3,359			3,879			5,050			5,688			8			(36	)		6,975			12,450			(44	)
Net Interest Income			2,882			2,927			2,944			2,659			2,781			(2	)		4			5,809			5,199			12
Revenue before Provision for Loan Losses			7,574			7,598			6,652			7,421			6,949			—			9			15,172			15,274			(1	)
Provision for Loan Losses			821			753			1,468			745			525			9			56			1,574			972			62
	TOTAL NET REVENUE		6,753			6,845			5,184			6,676			6,424			(1	)		5			13,598			14,302			(5	)
EXPENSE
Compensation Expense			2,761			2,823			2,622			2,860			3,026			(2	)		(9	)		5,584			6,362			(12	)
Occupancy Expense			365			338			334			339			327			8			12			703			675			4
Technology and Communications Expense			629			665			640			663			674			(5	)		(7	)		1,294			1,328			(3	)
Merger and Restructuring Costs			229			255			841			876			478			(10	)		(52	)		484			806			(40	)
Amortization of Intangibles			92			69			187			182			183			33			(50	)		161			360			(55	)
Other Expense			1,118			1,208			1,128			1,087			1,151			(7	)		(3	)		2,326			2,306			1
	TOTAL NONINTEREST EXPENSE		5,194			5,358			5,752			6,007			5,839			(3	)		(11	)		10,552			11,837			(11	)
Income (Loss) before Income Tax Expense and Effect of Accounting Change			1,559			1,487			(568	)		669			585			5			166			3,046			2,465			24
Income Tax Expense (Benefit)			531			505			(236	)		220			207			5			157			1,036			863			20
INCOME BEFORE EFFECT OF ACCOUNTING CHANGE			1,028			982			(332	)		449			378			5			172			2,010			1,602			25
Net Effect of Change in Accounting Principle			—			—			—			—			—			NM			NM			—			(25	)		NM
NET INCOME (LOSS)		$	1,028		$	982		$	(332	)	$	449		$	378			5			172		$	2,010		$	1,577			27
NET INCOME (LOSS) PER SHARE (a)
Basic		$	0.51		$	0.49		$	(0.18	)	$	0.22		$	0.18			4			183		$	1.00		$	0.78			28
Diluted			0.50			0.48			(0.18	)		0.22			0.18			4			178			0.99			0.76			30
PERFORMANCE RATIOS
Return on Average Assets			0.56	%		0.55	%		NM			0.24	%		0.21	%		1	bp		35	bp		0.56	%		0.43	%		13	bp
Return on Average Common Equity			10.0			9.7			NM			4.2			3.5			30			650			9.8			7.5			230
FULL-TIME EQUIVALENT EMPLOYEES (b)			95,878			96,938			95,812			96,633			97,224			(1	)%		(1	)%

Note: Prior periods have been restated to conform with current methodologies.

(a)	Basic and diluted earnings per share have been reduced by $0.01 in the first six months of 2001 due to the impact of the adoption of SFAS 133 relating to the accounting for derivative instruments and hedging activities.
(b)	Represents actual period end amount for each respective quarter.

Page 3

J.P. MORGAN CHASE & CO.
LINES OF BUSINESS FINANCIAL HIGHLIGHTS SUMMARY
(in millions, except per share and ratio data)

																			2QTR 2002												YTD 2002
				2QTR			1QTR			4QTR			3QTR			2QTR			Over (Under)						YEAR TO DATE						Over (Under)
				2002			2002			2001			2001			2001			1Q 2002			2Q 2001			2002			2001			2001
OPERATING REVENUE
Investment Bank				$	3,093		$	3,608		$	3,080		$	3,542		$	3,711			(14	)%		(17	)%	$	6,701		$	8,034			(17	)%
Treasury & Securities Services					985			934			937			973			962			5			2			1,919			1,915			—
Investment Management & Private Banking					691			729			719			726			789			(5	)		(12	)		1,420			1,592			(11	)
Retail & Middle Market Financial Services					3,504			3,154			2,953			2,877			2,769			11			27			6,658			5,448			22
Corporate (a)					(186	)		(203	)		(321	)		(250	)		(123	)		8			(51	)		(389	)		(402	)		3
	OPERATING REVENUE EXCLUDING JPMP				8,087			8,222			7,368			7,868			8,108			(2	)		—			16,309			16,587			(2	)
JPMorgan Partners					(179	)		(303	)		(452	)		(177	)		(886	)		41			80			(482	)		(799	)		40
		OPERATING REVENUE (b)		$	7,908		$	7,919		$	6,916		$	7,691		$	7,222			—			9		$	15,827		$	15,788			—
EARNINGS
Investment Bank				$	485		$	750		$	372		$	706		$	785			(35	)		(38	)	$	1,235		$	1,812			(32	)
Treasury & Securities Services					177			145			157			172			152			22			16			322			314			3
Investment Management & Private Banking					118			125			95			118			116			(6	)		2			243			217			12
Retail & Middle Market Financial Services					686			533			335			427			428			29			60			1,219			854			43
Corporate (a)					(122	)		(155	)		(258	)		(136	)		(85	)		21			(44	)		(277	)		(270	)		(3	)
		OPERATING EARNINGS EXCLUDING JPMP			1,344			1,398			701			1,287			1,396			(4	)		(4	)		2,742			2,927			(6	)
JPMorgan Partners					(165	)		(248	)		(345	)		(154	)		(610	)		33			73			(413	)		(614	)		33
		OPERATING EARNINGS (b)			1,179			1,150			356			1,133			786			3			50			2,329			2,313			1
Special Items & Net Effect of Change in Acctng Principle					(151	)		(168	)		(579	)		(587	)		(312	)		10			52			(319	)		(549	)		42
Amortization of Goodwill, Net of Taxes					—			—			(109	)		(97	)		(96	)		NM			NM			—			(187	)		NM
			NET INCOME (LOSS) (b)	$	1,028		$	982		$	(332	)	$	449		$	378			5			172		$	2,010		$	1,577			27
EARNINGS PER SHARE — DILUTED
OPERATING EARNINGS EXCLUDING JPMP				$	0.66		$	0.69		$	0.34		$	0.63		$	0.68			(4	)		(3	)	$	1.35		$	1.42			(5	)
Impact of JPMP					(0.08	)		(0.12	)		(0.17	)		(0.08	)		(0.30	)		33			73			(0.20	)		(0.30	)		33
OPERATING EARNINGS (b)					0.58			0.57			0.17			0.55			0.38			2			53			1.15			1.12			3
Special Items & Net Effect of Change in Acctng Principle					(0.08	)		(0.09	)		(0.29	)		(0.29	)		(0.15	)		11			47			(0.16	)		(0.27	)		41
Amortization of Goodwill, Net of Taxes					—			—			(0.05	)		(0.04	)		(0.05	)		NM			NM			—			(0.09	)		NM
NET INCOME (LOSS) (b)				$	0.50		$	0.48		$	(0.18	)(c)	$	0.22		$	0.18			4			178		$	0.99		$	0.76			30
OPERATING RETURN ON COMMON EQUITY
Investment Bank					10.4	%		15.9	%		7.7	%		15.2	%		16.7	%		(550	)bp		(630	)bp		13.2	%		18.7	%		(550	)bp
Treasury & Securities Services					22.9			19.8			21.5			23.3			19.8			310			310			21.4			21.2			20
Investment Management & Private Banking					7.8			8.4			6.1			7.6			7.3			(60	)		50			8.1			6.7			140
Retail & Middle Market Financial Services					26.0			20.9			13.7			17.8			18.5			510			750			23.5			18.9			460
OPERATING RETURN ON COMMON EQUITY (b)					11.4			11.4			3.3			10.7			7.4			—			400			11.4			11.0			40

(a)	Includes Support Units and the effects remaining at the corporate level after the implementation of management accounting policies.
(b)	Represents consolidated JPMorgan Chase.
(c)	Diluted EPS is reported as $(0.18) which is the same as basic EPS, instead of $(0.17), since using diluted average shares outstanding would cause antidilution. As a result, the net loss earnings per share does not foot by $(0.01).

Page 4

J.P. MORGAN CHASE & CO.
STATEMENT OF INCOME — OPERATING BASIS EXCLUDING JPMORGAN PARTNERS
(in millions, except per share and ratio data)

																		2QTR 2002												YTD 2002
			2QTR			1QTR			4QTR			3QTR			2QTR			Over (Under)						YEAR TO DATE						Over (Under)
			2002			2002			2001			2001			2001			1Q 2002			2Q 2001			2002			2001			2001
OPERATING REVENUE
Investment Banking Fees			$	785		$	755		$	932		$	812		$	928			4	%		(15	)%	$	1,540		$	1,870			(18	)%
Trading-Related Revenue (Including Trading NII)				1,123			1,710			896			1,608			1,587			(34	)		(29	)		2,833			3,735			(24	)
Fees and Commissions				2,725			2,466			2,297			2,289			2,403			11			13			5,191			4,472			16
Private Equity — Realized Gains (Losses)				1			3			(26	)		—			10			(67	)		(90	)		4			2			100
Private Equity — Unrealized Gains (Losses)				(1	)		14			—			(5	)		(16	)		NM			94			13			(20	)		NM
Securities Gains				124			114			202			142			67			9			85			238			522			(54	)
Other Revenue				277			134			158			206			284			107			(2	)		411			533			(23	)
Net Interest Income (Excluding Trading NII)				3,053			3,026			2,909			2,816			2,845			1			7			6,079			5,473			11
		TOTAL OPERATING REVENUE		8,087			8,222			7,368			7,868			8,108			(2	)		—			16,309			16,587			(2	)
OPERATING EXPENSE
Compensation Expense				2,723			2,782			2,583			2,826			2,993			(2	)		(9	)		5,505			6,286			(12	)
Noncompensation Expense				2,158			2,232			2,085			2,092			2,150			(3	)		—			4,390			4,288			2
	TOTAL OPERATING EXPENSE			4,881			5,014			4,668			4,918			5,143			(3	)		(5	)		9,895			10,574			(6	)
Credit Costs				1,155			1,074			1,732			1,015			798			8			45			2,229			1,486			50
Operating Income before Taxes				2,051			2,134			968			1,935			2,167			(4	)		(5	)		4,185			4,527			(8	)
Income Taxes				707			736			267			648			771			(4	)		(8	)		1,443			1,600			(10	)
OPERATING EARNINGS			$	1,344		$	1,398		$	701		$	1,287		$	1,396			(4	)		(4	)	$	2,742		$	2,927			(6	)
OPERATING BASIS
Diluted Earnings per Share			$	0.66		$	0.69		$	0.34		$	0.63		$	0.68			(4	)		(3	)	$	1.35		$	1.42			(5	)
Return on Common Equity				15.1	%		16.2	%		7.7	%		14.3	%		15.8	%		(110	)bp		(70	)bp		15.6	%		16.8	%		(120	)bp
Overhead Ratio				60			61			63			63			63			(100	)		(300	)		61			64			(300	)
Compensation Expense as a % of Operating Revenue				34			34			35			36			37			—			(300	)		34			38			(400	)
Noncompensation Expense as a % of Operating Revenue				27			27			28			27			27			—			—			27			26			100

Page 5

J.P. MORGAN CHASE & CO.
STATEMENT OF INCOME — OPERATING BASIS
(in millions, except per share and ratio data)

																		2QTR 2002												YTD 2002
			2QTR			1QTR			4QTR			3QTR			2QTR			Over (Under)						YEAR TO DATE						Over (Under)
			2002			2002			2001			2001			2001			1Q 2002			2Q 2001			2002			2001			2001
OPERATING REVENUE
Investment Banking Fees			$	785		$	755		$	931		$	811		$	929			4	%		(16	)%	$	1,540		$	1,870			(18	)%
Trading-Related Revenue (Including Trading NII)				1,136			1,720			904			1,614			1,594			(34	)		(29	)		2,856			3,761			(24	)
Fees and Commissions				2,745			2,493			2,340			2,297			2,422			10			13			5,238			4,504			16
Private Equity — Realized Gains (Losses)				(10	)		(10	)		81			204			(46	)		—			78			(20	)		366			NM
Private Equity — Unrealized Gains (Losses)				(115	)		(228	)		(505	)		(311	)		(783	)		50			85			(343	)		(1,068	)		68
Securities Gains				124			114			202			142			67			9			85			238			522			(54	)
Other Revenue				273			137			138			209			280			99			(3	)		410			537			(24	)
Net Interest Income (Excluding Trading NII)				2,970			2,938			2,825			2,725			2,759			1			8			5,908			5,296			12
		TOTAL OPERATING REVENUE		7,908			7,919			6,916			7,691			7,222			—			9			15,827			15,788			—
OPERATING EXPENSE
Compensation Expense				2,761			2,823			2,622			2,860			3,026			(2	)		(9	)		5,584			6,362			(12	)
Noncompensation Expense				2,204			2,280			2,138			2,125			2,188			(3	)		1			4,484			4,381			2
	TOTAL OPERATING EXPENSE			4,965			5,103			4,760			4,985			5,214			(3	)		(5	)		10,068			10,743			(6	)
Credit Costs				1,155			1,074			1,732			1,015			798			8			45			2,229			1,486			50
Operating Income before Taxes				1,788			1,742			424			1,691			1,210			3			48			3,530			3,559			(1	)
Income Taxes				609			592			68			558			424			3			44			1,201			1,246			(4	)
OPERATING EARNINGS			$	1,179		$	1,150		$	356		$	1,133		$	786			3			50		$	2,329		$	2,313			1
OPERATING BASIS
Diluted Earnings per Share			$	0.58		$	0.57		$	0.17		$	0.55		$	0.38			2			53		$	1.15		$	1.12			3
SVA				(57	)		(59	)		(915	)		(136	)		(481	)		3			88			(116	)		(196	)		41
Return on Managed Assets				0.62	%		0.63	%		0.19	%		0.59	%		0.42	%		(1	)bp		20	bp		0.63	%		0.62	%		1	bp
Return on Common Equity				11.4			11.4			3.3			10.7			7.4			—			400			11.4			11.0			40
Overhead Ratio				63			64			69			65			72			(100	)		(900	)		64			68			(400	)
Common Dividend Payout Ratio				59			60			199			61			89			(100	)		(3,000	)		60			60			—
Effective Tax Rate				34			34			16			33			35			—			(100	)		34			35			(100	)
Compensation Expense as a % of Operating Revenue				35			36			38			37			42			(100	)		(700	)		35			40			(500	)
Noncompensation Expense as a % of Operating Revenue				28			29			31			28			30			(100	)		(200	)		28			28			—

Note: Prior periods have been restated to conform with current methodologies.

Page 6

J.P. MORGAN CHASE & CO.
RECONCILIATION FROM REPORTED TO OPERATING BASIS
(in millions)

																		2QTR 2002												YTD 2002
			2QTR			1QTR			4QTR			3QTR			2QTR			Over (Under)						YEAR TO DATE						Over (Under)
			2002			2002			2001			2001			2001			1Q 2002			2Q 2001			2002			2001			2001
REVENUE
TRADING REVENUE
		Reported	$	731		$	1,299		$	355		$	1,301		$	1,261			(44	)%		(42	)%	$	2,030		$	3,262			(38	)%
		Trading-Related NII		405			421			549			313			333			(4	)		22			826			499			66
		Operating	$	1,136		$	1,720		$	904		$	1,614		$	1,594			(34	)		(29	)	$	2,856		$	3,761			(24	)
CREDIT CARD REVENUE (a)
		Reported	$	669		$	587		$	662		$	548		$	465			14			44		$	1,256		$	898			40
		Credit Card Securitizations		(140	)		(91	)		(153	)		(100	)		(38	)		54			NM			(231	)		(87	)		166
		Operating	$	529		$	496		$	509		$	448		$	427			7			24		$	1,025		$	811			26
OTHER REVENUE
		Reported	$	292		$	157		$	151		$	218		$	280			86			4		$	449		$	532			(16	)
		Credit Card Securitizations		(19	)		(20	)		(13	)		(9	)		—			(5	)		NM			(39	)		5			NM
		Operating	$	273		$	137		$	138		$	209		$	280			99			(3	)	$	410		$	537			(24	)
NET INTEREST INCOME
		Reported	$	2,882		$	2,927		$	2,944		$	2,659		$	2,781			(2	)		4		$	5,809		$	5,199			12
		Credit Card Securitizations		493			432			430			379			311			14			59			925			596			55
		Trading-Related NII		(405	)		(421	)		(549	)		(313	)		(333	)		(4	)		22			(826	)		(499	)		66
		Operating	$	2,970		$	2,938		$	2,825		$	2,725		$	2,759			1			8		$	5,908		$	5,296			12
TOTAL REVENUE
		Reported	$	7,574		$	7,598		$	6,652		$	7,421		$	6,949			—			9		$	15,172		$	15,274			(1	)
		Credit Card Securitizations		334			321			264			270			273			4			22			655			514			27
		Total Operating Revenue	$	7,908		$	7,919		$	6,916		$	7,691		$	7,222			—			9		$	15,827		$	15,788			—
EXPENSE
	Reported		$	5,194		$	5,358		$	5,752		$	6,007		$	5,839			(3	)		(11	)	$	10,552		$	11,837			(11	)
	Merger and Restructuring Costs			(229	)		(255	)		(841	)		(876	)		(478	)		(10	)		(52	)		(484	)		(806	)		(40	)
	Amortization of Goodwill			—			—			(151	)		(146	)		(147	)		NM			NM			—			(288	)		NM
	Operating Expense		$	4,965		$	5,103		$	4,760		$	4,985		$	5,214			(3	)		(5	)	$	10,068		$	10,743			(6	)
CREDIT COSTS
	Provision for Loan Losses — Reported		$	821		$	753		$	1,468		$	745		$	525			9			56		$	1,574		$	972			62
	Credit Card Securitizations			334			321			264			270			273			4			22			655			514			27
	Credit Costs — Operating		$	1,155		$	1,074		$	1,732		$	1,015		$	798			8			45		$	2,229		$	1,486			50

(a) Included in Fees and Commissions.

Page 7

J.P. MORGAN CHASE & CO.
INVESTMENT BANK
FINANCIAL HIGHLIGHTS
(in millions, except ratios)

																				2QTR 2002												YTD 2002
					2QTR			1QTR			4QTR			3QTR			2QTR			Over (Under)						YEAR TO DATE						Over (Under)
					2002			2002			2001			2001			2001			1Q 2002			2Q 2001			2002			2001			2001
OPERATING INCOME STATEMENT
REVENUE:
Trading Revenue (Including Trading NII)					$	1,105		$	1,694		$	1,020		$	1,500		$	1,551			(35	)%		(29	)%	$	2,799		$	3,646			(23	)%
Investment Banking Fees						783			741			933			806			920			6			(15	)		1,524			1,859			(18	)
Net Interest Income						638			715			786			758			707			(11	)		(10	)		1,353			1,389			(3	)
Fees and Commissions						419			380			363			349			357			10			17			799			778			3
All Other Revenue						148			78			(22	)		129			176			90			(16	)		226			362			(38	)
				TOTAL OPERATING REVENUE		3,093			3,608			3,080			3,542			3,711			(14	)		(17	)		6,701			8,034			(17	)
EXPENSE:
Compensation Expense						1,157			1,181			1,136			1,256			1,349			(2	)		(14	)		2,338			2,952			(21	)
Noncompensation Expense						859			929			741			891			925			(8	)		(7	)		1,788			1,884			(5	)
			TOTAL OPERATING EXPENSE			2,016			2,110			1,877			2,147			2,274			(4	)		(11	)		4,126			4,836			(15	)
Operating Margin						1,077			1,498			1,203			1,395			1,437			(28	)		(25	)		2,575			3,198			(19	)
Credit Costs						306			282			617			268			167			9			83			588			262			124
Operating Income Before Taxes						771			1,216			586			1,127			1,270			(37	)		(39	)		1,987			2,936			(32	)
Income Taxes						286			466			214			421			485			(39	)		(41	)		752			1,124			(33	)
OPERATING EARNINGS					$	485		$	750		$	372		$	706		$	785			(35	)		(38	)	$	1,235		$	1,812			(32	)
Average Common Equity					$	18,564		$	19,018		$	18,812		$	18,309		$	18,711			(2	)		(1	)	$	18,790		$	19,355			(3	)
Average Assets						503,526			467,117			510,573			513,143			506,204			8			(1	)		485,422			508,469			(5	)
SVA						(75	)		182			(202	)		147			217			NM			NM			107			643			(83	)
Return on Common Equity						10.4	%		15.9	%		7.7	%		15.2	%		16.7	%		(550	)bp		(630	)bp		13.2	%		18.7	%		(550	)bp
Overhead Ratio						65			58			61			61			61			700			400			62			60			200
Compensation Expense as a % of Operating Revenue						37			33			37			35			36			400			100			35			37			(200	)
TRADING-RELATED REVENUE AND COMMISSIONS (a)
Equities					$	355		$	419		$	290		$	425		$	645			(15	)%		(45	)%	$	774		$	1,390			(44	)%
Fixed Income and Other						1,051			1,538			995			1,308			1,177			(32	)		(11	)		2,589			2,834			(9	)
		Total			$	1,406		$	1,957		$	1,285		$	1,733		$	1,822			(28	)		(23	)	$	3,363		$	4,224			(20	)
INVESTMENT BANKING FEES
Advisory					$	192		$	191		$	268		$	330		$	303			1			(37	)	$	383		$	647			(41	)%
Underwriting and Other Fees						591			550			665			476			617			7			(4	)		1,141			1,212			(6	)
		Total			$	783		$	741		$	933		$	806		$	920			6			(15	)	$	1,524		$	1,859			(18	)
MARKET SHARE/ RANKINGS: (b)
	Global Syndicated Loans					28.8%/#1			21.9%/#1			24.5%/#1			21.8%/#1			30.9%/#1									25.9%/#1			29.2%/#1
	U.S. Investment Grade Bonds					17.7%/#2			15.9%/#2			13.2%/#2			14.7%/#2			13.5%/#2									16.7%/#2			14.5%/#2
	Euro-Denominated Corporate International Bonds					5.4%/#7			5.8%/#4			6.1%/#7			9.5%/#1			8.3%/#2									5.6%/#5			6.8%/#2
	Global Equity and Equity-Related					6.1%/#6			4.9%/#6			5.0%/#8			5.0%/#7			1.7%/#9									5.5%/#7			2.1%/#10
	U.S. Equity and Equity-Related					8.4%/#6			4.5%/#7			7.8%/#5			5.5%/#7			1.8%/#8									6.2%/#6			1.5%/#9
	Global Announced M&A					19.5%/#1			11.6%/#8			26.2%/#4			30.9%/#5			12.2%/#8									16.0%/#5			15.6%/#6

Note: Prior periods have been restated to conform with current methodologies.

(a)	Includes Trading Revenue (including trading NII), and brokerage commissions which are primarily reported within Fees and Commissions.
(b)	Derived from Thomson Financial Securities Data. Global announced M&A based on rank value; all others based on proceeds, with full credit to each book manager/equal if joint.

Page 8

J.P. MORGAN CHASE & CO.
TREASURY & SECURITIES SERVICES
FINANCIAL HIGHLIGHTS
(in millions, except ratios)

																				2QTR 2002												YTD 2002
					2QTR			1QTR			4QTR			3QTR			2QTR			Over (Under)						YEAR TO DATE						Over (Under)
					2002			2002			2001			2001			2001			1Q 2002			2Q 2001			2002			2001			2001
	OPERATING INCOME STATEMENT
	REVENUE:
	Fees and Commissions				$	609		$	587		$	565		$	556		$	568			4	%		7	%	$	1,196		$	1,116			7	%
	Net Interest Income					323			313			327			354			337			3			(4	)		636			693			(8	)
	All Other Revenue					53			34			45			63			57			56			(7	)		87			106			(18	)
				TOTAL OPERATING REVENUE		985			934			937			973			962			5			2			1,919			1,915			—
	EXPENSE:
	Compensation Expense					301			304			275			288			289			(1	)		4			605			588			3
	Noncompensation Expense					411			405			419			419			438			1			(6	)		816			840			(3	)
			TOTAL OPERATING EXPENSE			712			709			694			707			727			—			(2	)		1,421			1,428			—
	Operating Margin					273			225			243			266			235			21			16			498			487			2
	Credit Costs					(1	)		1			4			1			2			NM			NM			—			2			NM
	Operating Income Before Taxes					274			224			239			265			233			22			18			498			485			3
	Income Taxes					97			79			82			93			81			23			20			176			171			3
	OPERATING EARNINGS				$	177		$	145		$	157		$	172		$	152			22			16		$	322		$	314			3
Average Common Equity					$	3,081		$	2,960		$	2,877		$	2,910		$	3,054			4			1		$	3,021		$	2,969			2
Average Assets						18,321			16,373			17,823			18,378			18,558			12			(1	)		17,352			17,831			(3	)
SVA						84			56			69			83			60			50			40			140			135			4
Return on Common Equity						22.9	%		19.8	%		21.5	%		23.3	%		19.8	%		310	bp		310	bp		21.4	%		21.2	%		20	bp
Overhead Ratio						72			76			74			73			76			(400	)		(400	)		74			75			(100	)
OPERATING REVENUE BY BUSINESS:
		Treasury Services			$	331		$	334		$	350		$	345		$	333			(1)	%		(1)	%	$	665		$	655			2	%
		Investor Services				428			392			392			434			427			9			—			820			862			(5	)
		Institutional Trust Services				221			203			190			189			197			9			12			424			388			9
		Other				5			5			5			5			5			—			—			10			10			—
		Total Treasury & Securities Services			$	985		$	934		$	937		$	973		$	962			5			2		$	1,919		$	1,915			—

Note: Prior periods have been restated to conform with current methodologies.

Page 9

J.P. MORGAN CHASE & CO.
INVESTMENT MANAGEMENT & PRIVATE BANKING
FINANCIAL HIGHLIGHTS
(in millions, except ratios)

																				2QTR 2002												YTD 2002
					2QTR			1QTR			4QTR			3QTR			2QTR			Over (Under)						YEAR TO DATE						Over (Under)
					2002			2002			2001			2001			2001			1Q 2002			2Q 2001			2002			2001			2001
	OPERATING INCOME STATEMENT
	REVENUE:
	Fees and Commissions				$	532		$	561		$	552		$	554		$	586			(5	)%		(9	)%	$	1,093		$	1,176			(7	)%
	Net Interest Income					106			105			131			122			132			1			(20	)		211			266			(21	)
	All Other Revenue					53			63			36			50			71			(16	)		(25	)		116			150			(23	)
				TOTAL OPERATING REVENUE		691			729			719			726			789			(5	)		(12	)		1,420			1,592			(11	)
	EXPENSE:
	Compensation Expense					239			271			279			292			328			(12	)		(27	)		510			695			(27	)
	Noncompensation Expense					281			275			296			279			310			2			(9	)		556			621			(10	)
			TOTAL OPERATING EXPENSE			520			546			575			571			638			(5	)		(18	)		1,066			1,316			(19	)
	Operating Margin					171			183			144			155			151			(7	)		13			354			276			28
	Credit Costs					23			23			30			3			2			—			NM			46			2			NM
	Operating Income Before Taxes					148			160			114			152			149			(8	)		(1	)		308			274			12
	Income Taxes					30			35			19			34			33			(14	)		(9	)		65			57			14
	OPERATING EARNINGS				$	118		$	125		$	95		$	118		$	116			(6	)		2		$	243		$	217			12
Average Common Equity					$	6,012		$	5,975		$	6,013		$	6,070		$	6,227			1			(3	)	$	5,993		$	6,333			(5	)
Average Assets						32,989			34,690			33,602			33,951			33,329			(5	)		(1	)		33,835			34,038			(1	)
SVA						(64	)		(53	)		(89	)		(67	)		(73	)		(21	)		12			(117	)		(165	)		29
Return on Common Equity						7.8	%		8.4	%		6.1	%		7.6	%		7.3	%		(60	)bp		50	bp		8.1	%		6.7	%		140	bp
Overhead Ratio						75			75			80			79			81			—			(600	)		75			83			(800	)
(in billions)
ASSETS UNDER MANAGEMENT (a)(b)					$	541	(c)	$	581		$	602		$	582		$	609			(7	)%		(11	)%
		Private Banking				132	(c)		139			138			135			142			(5	)		(7	)
		Institutional				341	(c)		373			404			390			406			(9	)		(16	)
		Retail				68	(c)		69			60			57			61			(1	)		11
ASSETS UNDER MANAGEMENT					$	541	(c)	$	581		$	602		$	582		$	609			(7	)		(11	)
		Americas				375	(c)		417			438			421			431			(10	)		(13	)
		Europe and Asia				166	(c)		164			164			161			178			1			(7	)
ASSETS UNDER MANAGEMENT					$	541	(c)	$	581		$	602		$	582		$	609			(7	)		(11	)
		Fixed Income and Cash				293	(c)		312			328			313			312			(6	)		(6	)
		Equities and Other				248	(c)		269			274			269			297			(8	)		(16	)
CLIENT POSITIONS (b)(d)
		Private Banking			$	277	(c)	$	276		$	299		$	300		$	314			—			(12	)

Note: Prior periods have been restated to conform with current methodologies.

(a)	Assets under management represent assets actively managed by Investment Management & Private Banking on behalf of institutional and Private Banking clients. Excludes assets managed at American Century Companies Inc.
(b)	Assets under management and client positions restated for transfer of certain clients to RMMFS.
(c)	Estimated
(d)	Client Positions represent assets under management as well as custody, restricted stock, deposit, brokerage and loan accounts.

Page 10

J.P. MORGAN CHASE & CO.
JPMORGAN PARTNERS
FINANCIAL HIGHLIGHTS
(in millions, except ratios)

																	2QTR 2002												YTD 2002
																	Over (Under)						YEAR TO DATE						Over (Under)
		2QTR 2002			1QTR 2002			4QTR 2001			3QTR 2001			2QTR 2001			1Q 2002			2Q 2001			2002			2001			2001
OPERATING INCOME STATEMENT
REVENUE:
Private Equity:
	Realized Gains (Losses)	$	(11	)	$	(13	)	$	107		$	204		$	(56	)		15	%		80	%	$	(24	)	$	364		NM
	Unrealized Gains (Losses)		(114	)		(242	)		(505	)		(306	)		(767	)		53			85			(356	)		(1,048	)		66	%
Total Private Equity Gains (Losses)			(125	)		(255	)		(398	)		(102	)		(823	)		51			85			(380	)		(684	)		44
Net Interest Income (Loss)			(83	)		(88	)		(84	)		(91	)		(86	)		6			3			(171	)		(177	)		3
Fees and Other Revenue			29			40			30			16			23			(28	)		26			69			62			11
	TOTAL OPERATING REVENUE		(179	)		(303	)		(452	)		(177	)		(886	)		41			80			(482	)		(799	)		40
EXPENSE:
Compensation Expense			38			41			39			34			33			(7	)		15			79			76			4
Noncompensation Expense			46			48			53			33			38			(4	)		21			94			93			1
	TOTAL OPERATING EXPENSE		84			89			92			67			71			(6	)		18			173			169			2
Operating Income (Loss) Before Taxes			(263	)		(392	)		(544	)		(244	)		(957	)		33			73			(655	)		(968	)		32
Income Taxes (Benefit)			(98	)		(144	)		(199	)		(90	)		(347	)		(32	)		(72	)		(242	)		(354	)		(32	)
OPERATING EARNINGS (LOSS)		$	(165	)	$	(248	)	$	(345	)	$	(154	)	$	(610	)		33			73		$	(413	)	$	(614	)		33
Average Common Equity		$	5,493		$	5,708		$	6,131		$	6,120		$	6,601			(4	)		(17	)	$	5,600		$	6,868			(18	)
Average Assets			10,153			10,599			11,717			11,357			12,235			(4	)		(17	)		10,375			12,940			(20	)
SVA			(372	)		(461	)		(579	)		(387	)		(860	)		19			57			(833	)		(1,131	)		26

Note: Prior periods have been restated to conform with current methodologies.

Page 11

J.P. MORGAN CHASE & CO.
JPMORGAN PARTNERS
INVESTMENT PORTFOLIO — PRIVATE AND PUBLIC SECURITIES
(in millions, except ratios)

												Jun 30, 2002
												Over (Under)
		Jun 30th 2002		Mar 31st 2002		Dec 31st 2001		Sep 30th 2001		Jun 30th 2001		Mar 31, 02			Jun 30, 01
PORTFOLIO INFORMATION
Public Securities (133 companies)(a)(b)
	Carrying Value	$	695	$	705	$	998	$	1,149	$	1,680		(1	)%		(59	)%
	Cost		860		809		802		829		974		6			(12	)
Private Direct Securities (949 companies)(b)
	Carrying Value		5,707		6,054		6,289		6,371		6,089		(6	)		(6	)
	Cost		7,066		7,317		7,544		7,322		6,998		(3	)		1
Private Fund Investments (319 funds)(b)
	Carrying Value		1,827		1,794		1,910		2,108		2,086		2			(12	)
	Cost		2,164		2,119		2,182		2,217		2,201		2			(2	)
Total Investment Portfolio - Carrying Value		$	8,229	$	8,553	$	9,197	$	9,628	$	9,855		(4	)		(16	)
Total Investment Portfolio - Cost		$	10,090	$	10,245	$	10,528	$	10,368	$	10,173		(2	)		(1	)

Public Securities Investments at June 30, 2002
(dollars and shares in millions)

					Quoted
					Public
		Symbol	Shares		Value		Cost
JetBlue Airways Corporation		JBLU		3.4	$	157	$	20
Encore Acquisition Company		EAC		4.9		85		34
Guitar Center Inc.		GTRC		3.6		67		39
Fisher Scientific International, Inc.		FSH		2.4		66		21
Triton PCS Holdings, Inc.		TPC		16.0		62		70
dj Orthopedics, Inc.		DJO		5.9		48		54
1-800-FLOWERS.COM, Inc.		FLWS		3.9		44		14
United Auto Group, Inc.		UAG		2.0		42		24
AT&T Wireless Services, Inc. (c)		AWE		7.0		41		5
Wild Oats Markets, Inc.		OATS		2.3		38		19
	Top Ten Public Securities				$	650	$	300
Other Public Securities (123 companies)						356		560
	Total Public Securities(133 companies)				$	1,006	$	860

(a)  Publicly traded positions only.

(b)  Represents the number of companies and funds at June 30, 2002.

(c)  Does not include 3.3 million shares held directly by the holding company, received upon a distribution from JPMP.

Page 12

J.P. MORGAN CHASE & CO.
RETAIL & MIDDLE MARKET FINANCIAL SERVICES
FINANCIAL HIGHLIGHTS
(in millions, except ratios)

																													YTD
																													2002
																	2QTR 2002												Over
																	Over (Under)						YEAR TO DATE						(Under)
		2QTR 2002			1QTR 2002			4QTR 2001			3QTR 2001			2QTR 2001			1Q 2002			2Q 2001			2002			2001			2001
OPERATING INCOME STATEMENT
REVENUE:
Net Interest Income		$	2,141		$	2,049		$	1,859		$	1,823		$	1,761			4	%		22	%	$	4,190		$	3,439			22	%
Fees and Commissions			1,169			931			809			820			879			26			33			2,100			1,384			52
Securities Gains			19			(13	)		61			1			—		NM			NM				6			316			(98	)
All Other Revenue			175			187			224			233			129			(6	)		36			362			309			17
	TOTAL OPERATING REVENUE		3,504			3,154			2,953			2,877			2,769			11			27			6,658			5,448			22
EXPENSE:
Compensation Expense			689			656			608			623			603			5			14			1,345			1,176			14
Noncompensation Expense			981			911			896			847			842			8			17			1,892			1,662			14
	TOTAL OPERATING EXPENSE		1,670			1,567			1,504			1,470			1,445			7			16			3,237			2,838			14
Operating Margin			1,834			1,587			1,449			1,407			1,324			16			39			3,421			2,610			31
Credit Costs			736			726			925			722			629			1			17			1,462			1,226			19
Operating Income Before Taxes			1,098			861			524			685			695			28			58			1,959			1,384			42
Income Taxes			412			328			189			258			267			26			54			740			530			40
OPERATING EARNINGS		$	686		$	533		$	335		$	427		$	428			29			60		$	1,219		$	854			43
Average Common Equity		$	10,558		$	10,261		$	9,596		$	9,449		$	9,215			3			15		$	10,410		$	9,002			16
Average Managed Assets(a)			179,483			179,535			169,828			167,961			168,023			—			7			179,509			164,534			9
SVA			368			225			42			139			148			64			149			593			310			91
Return on Common Equity			26.0	%		20.9	%		13.7	%		17.8	%		18.5	%	510bp			750bp				23.5	%		18.9	%	460 bp
Overhead Ratio			48			50			51			51			52			(200	)		(400	)		49			52			(300	)
RETAIL & MIDDLE MARKET FINANCIAL SERVICES’ BUSINESSES
CARDMEMBER SERVICES:
Operating Revenues		$	1,492		$	1,359		$	1,261		$	1,149		$	1,072			10	%		39	%	$	2,851		$	2,072			38	%
Operating Earnings			178			151			176			129			113			18			58			329			208			58
HOME FINANCE:
Operating Revenues		$	772		$	527		$	441		$	467		$	413			46			87		$	1,299		$	774			68
Operating Earnings			268			132			89			122			99			103			171			400			189			112
REGIONAL BANKING GROUP:
Operating Revenues		$	726		$	743		$	754		$	789		$	809			(2	)		(10	)	$	1,469		$	1,630			(10	)
Operating Earnings			90			126			108			126			131			(29	)		(31	)		216			273			(21	)
MIDDLE MARKETS:
Operating Revenues		$	329		$	335		$	313		$	322		$	321			(2	)		2		$	664		$	650			2
Operating Earnings			94			84			66			76			62			12			52			178			131			36
AUTO FINANCE:
Operating Revenues		$	167		$	171		$	164		$	140		$	136			(2	)		23		$	338		$	248			36
Operating Earnings			82			33			36			33			36			148			128			115			58			98

Note: Prior periods have been restated to conform with current methodologies.

(a)  Excludes the impact of credit card securitizations.

Page 13

J.P. MORGAN CHASE & CO.
RETAIL & MIDDLE MARKET FINANCIAL SERVICES
BUSINESS-RELATED METRICS

																												YTD
																												2002
																2QTR 2002												Over
																Over (Under)						YEAR TO DATE						(Under)
	2QTR			1QTR			4QTR			3QTR			2QTR
	2002			2002			2001			2001			2001			1Q 2002			2Q 2001			2002			2001			2001
Cardmember Services - Managed Basis
End-of-Period Outstandings (in billions)	$	49.5		$	48.9		$	41.6		$	38.9		$	38.3			1	%		29	%	$	49.5		$	38.3			29	%
Total Purchases & Cash Advances (a) (in billions)		20.9			18.9			20.3			17.9			17.8			11			17			39.8			34.0			17
Total Accounts (in millions)		28.1			27.7			23.9			23.4			22.4			1			25			28.1			22.4			25
Net Charge-Off Ratio		6.41	%		5.82	%		5.56	%		5.74	%		5.57	%		59	bp		84	bp		6.13	%		5.49	%		64	bp
Overhead Ratio		34			34			34			34			34			—			—			34			36			(200	)
Regional Banking Group
Total Average Deposits (in billions)	$	71.4		$	70.5		$	67.1		$	66.5		$	66.6			1	%		7	%	$	70.9		$	66.6			6	%
Total Average Assets Under Management(b) (in billions)		103.5			103.1			101.2			100.3			100.0			—			4			103.3			100.1			3
Number of Branches		533			538			531			533			537			(1	)		(1	)		533			537			(1	)
Number of ATMs		1,878			1,895			1,907			1,875			1,904			(1	)		(1	)		1,878			1,904			(1	)
Number of Online Customers (in thousands)		1,066			1,003			937			876			811			6			31			1,066			811			31
Overhead Ratio		78	%		74	%		73	%		70	%		69	%		400	bp		900	bp		76	%		68	%		800	bp
Home Finance
Originations (in billions)	$	26.5		$	32.7		$	50.4		$	47.4		$	54.4			(19	)%		(51	)%	$	59.2		$	86.4			(31	)%
Loans Serviced (in billions)		436	(c)		426			430			427			409			2			7			436			409			7
Total Average Loans Owned (in billions)		54.1			56.9			57.3			57.0			55.8			(5	)		(3	)		55.5			53.8			3
Number of Customers (in millions)		4.0	(c)		4.0			4.0			4.1			4.0			—			—			4.0			4.0			—
Net Charge-Off Ratio		0.30	%		0.21	%		0.21	%		0.20	%		0.14	%		9	bp		16	bp		0.25	%		0.15	%		10	bp
Overhead Ratio		39			55			64			55			60			(1,600	)		(2,100	)		46			59			(1,300	)
Middle Markets
Total Average Loans (in billions)	$	13.7		$	13.9		$	14.5		$	14.6		$	14.7			(1	)%		(7	)%	$	13.8		$	14.8			(7	)%
Total Average Deposits (in billions)		25.2			23.6			20.9			18.9			18.8			7			34			24.4			18.7			30
Nonperforming Average Loans as a % of Total Average Loans		1.88	%		2.16	%		2.16	%		2.15	%		2.28	%		(28	)bp		(40	)bp		2.02	%		2.42	%		(40	)bp
Overhead Ratio		53			51			58			53			56			200			(300	)		52			54			(200	)
Auto Finance
Loan and Lease Receivables (in billions)	$	29.3		$	28.8		$	28.4		$	27.2		$	26.2			2	%		12	%	$	29.3		$	26.2			12	%
Origination Volume (in billions)		5.2			5.8			5.6			5.2			4.8			(10	)		8			10.9			9.1			20
Market Share		4.2	%(c)		5.2	%		5.2	%		4.2	%		3.9	%		(100	)bp		30	bp		5.0	%		3.9	%		110	bp
Net Charge-Off Ratio		0.38			0.55			0.71			0.50			0.42			(17	)		(4	)		0.46			0.46			—
Overhead Ratio		35			34			33			37			37			100			(200	)		34			38			(400	)

(a)  Sum of total customer purchases, cash advances and balance transfers.

(b)  Assets under management includes deposits.

(c)  Estimated

Page 14

SUPPLEMENTAL DETAIL

J.P. MORGAN CHASE & CO.
NONINTEREST REVENUE AND NONINTEREST EXPENSE DETAIL ON A REPORTED BASIS
(in millions)

																								YTD
																								2002
													2QTR 2002											Over
													Over (Under)						YEAR TO DATE					(Under)
		2QTR		1QTR		4QTR			3QTR		2QTR
		2002		2002		2001			2001		2001		1Q 2002			2Q 2001			2002		2001			2001
NONINTEREST REVENUE
Investment Banking Fees:
	Advisory	$	189	$	191	$	271		$	329	$	308		(1	)%		(39	)%	$	380	$	648			(41	)%
	Underwriting and Other Fees		596		564		660			482		621		6			(4	)		1,160		1,222			(5	)
	Total	$	785	$	755	$	931		$	811	$	929		4			(16	)	$	1,540	$	1,870			(18	)
Trading-Related Revenue:(a)
	Equities	$	120	$	223	$	101		$	251	$	450		(46	)		(73	)	$	343	$	955			(64	)
	Fixed Income and Other		1,016		1,497		803			1,363		1,144		(32	)		(11	)		2,513		2,806			(10	)
	Total	$	1,136	$	1,720	$	904		$	1,614	$	1,594		(34	)		(29	)	$	2,856	$	3,761			(24	)
Fees and Commissions:
	Investment Management, Custody and Processing Services	$	981	$	992	$	987		$	960	$	988		(1	)		(1	)	$	1,973	$	2,004			(2	)
	Credit Card Revenue		669		587		662			548		465		14			44			1,256		898			40
	Brokerage and Investment Services		333		304		305			268		308		10			8			637		671			(5	)
	Mortgage Servicing Fees, Net of Amortization and Writedowns		257		48		(81	)		9		75	NM			NM				305		(158	)	NM
	Other Lending-Related Service Fees		128		130		118			125		122		(2	)		5			258		252			2
	Deposit Service Charges		273		290		277			262		258		(6	)		6			563		484			16
	Other Fees		244		233		225			225		244		5			—			477		440			8
	Total	$	2,885	$	2,584	$	2,493		$	2,397	$	2,460		12			17		$	5,469	$	4,591			19
Other Revenue:
	Residential Mortgage Origination/Sales Activities	$	146	$	100	$	162		$	157	$	152		46			(4	)	$	246	$	257			(4	)
	All Other Revenue		146		57		(11	)		61		128		156			14			203		275			(26	)
	Total	$	292	$	157	$	151		$	218	$	280		86			4		$	449	$	532			(16	)
NONINTEREST EXPENSE
Other Expense:
Professional Services		$	311	$	307	$	289		$	267	$	288		1			8		$	618	$	583			6
Outside Services			240		249		213			232		220		(4	)		9			489		443			10
Marketing			144		146		179			137		144		(1	)		—			290		285			2
Travel and Entertainment			112		101		78			116		137		11			(18	)		213		259			(18	)
All Other			311		405		369			335		362		(23	)		(14	)		716		736			(3	)
Total		$	1,118	$	1,208	$	1,128		$	1,087	$	1,151		(7	)		(3	)	$	2,326	$	2,306			1

Note: Prior periods have been restated to conform with current methodologies.

(a)  Includes trading-related net interest income.

Page 15

J.P. MORGAN CHASE & CO.
CONSOLIDATED BALANCE SHEET
(in millions)

																		Jun 30, 2002
																		Over (Under)
			Jun 30th 2002			Mar 31st 2002			Dec 31st 2001			Sep 30th 2001			Jun 30th 2001			Mar 31, 02			Jun 30, 01
ASSETS
Cash and Due from Banks			$	21,878		$	22,637		$	22,600		$	22,299		$	24,219			(3	)%		(10	)%
Deposits with Banks				10,517			9,691			12,743			9,341			11,903			9			(12	)
Federal Funds Sold and Securities Purchased under Resale Agreements				71,740			76,719			63,727			78,997			61,308			(6	)		17
Securities Borrowed				48,429			40,880			36,580			37,499			38,296			18			26
Trading Assets:
	Debt and Equity Instruments			159,746			144,992			118,248			165,143			139,135			10			15
	Derivative Receivables			69,858			63,224			71,157			85,407			68,910			10			1
Securities				64,526			61,225			59,760			66,468			68,488			5			(6	)
Loans (Net of Allowance for Loan Losses)				207,080			209,541			212,920			219,411			216,245			(1	)		(4	)
Goodwill				8,089			8,055			8,336			8,477			8,640			—			(6	)
Other Intangibles:
	Mortgage Servicing Rights			5,689			6,918			6,579			5,731			7,073			(18	)		(20	)
	Purchased Credit Card Relationships			1,426			1,508			519			542			568			(5	)		151
	All Other Intangibles			313			327			44			64			74			(4	)	NM
Private Equity Investments				8,229			8,553			9,197			9,628			9,855			(4	)		(16	)
Other Assets				63,026			58,238			71,165			90,293			57,988			8			9
TOTAL ASSETS			$	740,546		$	712,508		$	693,575		$	799,300		$	712,702			4			4
LIABILITIES
Deposits:
	Noninterest-Bearing		$	73,529		$	72,659		$	76,974		$	72,734		$	64,231			1			14
	Interest-Bearing			220,300			209,378			216,676			208,870			212,573			5			4
		Total Deposits		293,829			282,037			293,650			281,604			276,804			4			6
Federal Funds Purchased and Securities Sold under Repurchase Agreements				162,656			152,837			128,445			181,775			155,062			6			5
Commercial Paper				14,561			23,726			18,510			19,299			19,985			(39	)		(27	)
Other Borrowed Funds				17,352			16,968			10,835			21,941			18,418			2			(6	)
Trading Liabilities:
	Debt and Equity Instruments			67,952			71,141			52,988			58,594			53,571			(4	)		27
	Derivative Payables			55,575			44,997			56,063			70,817			62,373			24			(11	)
Accounts Payable, Accrued Expenses and Other Liabilities (Including the Allowance for Credit Losses)				38,083			36,910			47,813			75,231			38,157			3			—
Long-Term Debt				42,363			37,322			39,183			42,315			40,917			14			4
Guaranteed Preferred Beneficial Interests in the Firm’s Junior Subordinated Deferrable Interest Debentures				5,439			5,439			4,439			4,439			4,439			—			23
TOTAL LIABILITIES				697,810			671,377			651,926			756,015			669,726			4			4
PREFERRED STOCK OF SUBSIDIARY				—			—			550			550			550		NM			NM
STOCKHOLDERS’ EQUITY
Preferred Stock				1,009			1,009			1,009			1,009			1,025			—			(2	)
Common Stock				2,020			2,016			1,997			1,993			1,990			—			2
Capital Surplus				13,111			12,783			12,495			12,244			12,000			3			9
Retained Earnings				27,605			27,278			26,993			28,021			28,265			1			(2	)
Accumulated Other Comprehensive Income (Loss)				79			(909	)		(442	)		267			(834	)	NM			NM
Treasury Stock, at Cost				(1,088	)		(1,046	)		(953	)		(799	)		(20	)		(4	)	NM
TOTAL STOCKHOLDERS’ EQUITY				42,736			41,131			41,099			42,735			42,426			4			1
TOTAL LIABILITIES, PREFERRED STOCK OF SUBSIDIARY AND STOCKHOLDERS’ EQUITY			$	740,546		$	712,508		$	693,575		$	799,300		$	712,702			4			4

Note: Prior periods have been restated to conform with current methodologies.

Page 16

J.P. MORGAN CHASE & CO.
CONDENSED AVERAGE BALANCE SHEET AND ANNUALIZED YIELDS
(in millions, except rates)

																												YTD
																												2002
																2QTR 2002												Over
																Over (Under)						YEAR TO DATE						(Under)
	2QTR 2002			1QTR 2002			4QTR 2001			3QTR 2001			2QTR 2001			1Q 2002			2Q 2001			2002			2001			2001
AVERAGE BALANCES
ASSETS
Deposits with Banks	$	9,287		$	12,326		$	10,810		$	8,583		$	9,535			(25	)%		(3	)%	$	10,798		$	8,531			27	%
Federal Funds Sold and Securities Purchased under Resale Agreements		83,317			81,004			85,582			80,396			86,556			3			(4	)		82,166			84,706			(3	)
Securities and Trading Assets		201,512			180,951			188,988			200,161			194,736			11			3			191,288			197,789			(3	)
Securities Borrowed		46,537			41,739			39,213			38,122			38,006			11			22			44,152			37,635			17
Loans		211,495			217,847			218,625			224,125			217,447			(3	)		(3	)		214,654			218,285			(2	)
Total Interest- Earning Assets		552,148			533,867			543,218			551,387			546,280			3			1			543,058			546,946			(1	)
Noninterest- Earning Assets		182,798			184,779			196,557			185,891			189,488			(1	)		(4	)		183,783			186,430			(1	)
TOTAL ASSETS	$	734,946		$	718,646		$	739,775		$	737,278		$	735,768			2			—		$	726,841		$	733,376			(1	)
LIABILITIES
Interest-Bearing Deposits	$	221,687		$	218,049		$	223,314		$	207,430		$	215,987			2			3		$	219,879		$	216,366			2
Federal Funds Purchased and Securities Sold under Repurchase Agreements		166,919			153,662			164,714			170,708			167,126			9			—			160,327			159,940			—
Commercial Paper		18,514			18,901			17,134			21,307			17,818			(2	)		4			18,706			17,890			5
Other Borrowings(a)		78,614			67,408			55,388			67,218			63,038			17			25			73,042			66,801			9
Long-Term Debt		42,482			43,046			44,964			44,788			45,173			(1	)		(6	)		42,762			46,303			(8	)
Total Interest- Bearing Liabilities		528,216			501,066			505,514			511,451			509,142			5			4			514,716			507,300			1
Noninterest- Bearing Liabilities		164,832			175,800			191,098			182,757			183,118			(6	)		(10	)		170,285			182,670			(7	)
TOTAL LIABILITIES		693,048			676,866			696,612			694,208			692,260			2			—			685,001			689,970			(1	)
PREFERRED STOCK OF SUBSIDIARY		—			354			550			550			550		NM			NM				176			550			(68	)
Preferred Stock		1,009			1,009			1,009			1,017			1,239			—			(19	)		1,009			1,362			(26	)
Common Stockholders’ Equity		40,889			40,417			41,604			41,503			41,719			1			(2	)		40,655			41,494			(2	)
TOTAL STOCKHOLDERS’ EQUITY		41,898			41,426			42,613			42,520			42,958			1			(2	)		41,664			42,856			(3	)
TOTAL LIABILITIES, PREFERRED STOCK OF SUBSIDIARY AND STOCKHOLDERS’ EQUITY	$	734,946		$	718,646		$	739,775		$	737,278		$	735,768			2			—		$	726,841		$	733,376			(1	)
AVERAGE RATES
INTEREST- EARNING ASSETS
Deposits with Banks		3.31	%		2.96	%		3.76	%		4.64	%		4.65	%	35bp			(134)bp				3.11	%		5.90	%	(279)bp
Federal Funds Sold and Securities Purchased under Resale Agreements		2.58			2.45			3.18			4.19			4.98			13			(240	)		2.52			5.41			(289	)
Securities and Trading Assets		5.18			5.35			5.40			5.51			5.90			(17	)		(72	)		5.26			5.88			(62	)
Securities Borrowed		1.49			1.77			2.00			3.17			3.66			(28	)		(217	)		1.63			4.50			(287	)
Loans		5.95			5.87			5.97			6.54			7.55			8			(160	)		5.91			7.91			(200	)
Total Interest- Earning Assets		4.74			4.79			5.00			5.56			6.23			(5	)		(149	)		4.76			6.52			(176	)
INTEREST- BEARING LIABILITIES
Interest-Bearing Deposits		2.38			2.49			2.52			3.48			3.94			(11	)		(156	)		2.44			4.43			(199	)
Federal Funds Purchased and Securities Sold under Repurchase Agreements		2.06			2.07			2.63			3.81			4.29			(1	)		(223	)		2.07			4.95			(288	)
Commercial Paper		1.84			1.76			2.30			3.53			4.39			8			(255	)		1.80			5.18			(338	)
Other Borrowings		5.24			4.81			6.17			5.31			6.04			43			(80	)		5.04			5.83			(79	)
Long-Term Debt		3.10			3.35			3.58			4.43			5.63			(25	)		(253	)		3.22			6.00			(278	)
Total Interest- Bearing Liabilities		2.75			2.72			3.04			3.92			4.48			3			(173	)		2.73			4.95			(222	)
TOTAL INVESTABLE FUNDS		2.63			2.55			2.83			3.63			4.17			8			(154	)		2.59			4.59			(200	)
INTEREST RATE SPREAD		1.99	%		2.07	%		1.96	%		1.64	%		1.75	%		(8	)		24			2.03	%		1.57	%		46
NET INTEREST MARGIN		2.11	%		2.24	%		2.17	%		1.93	%		2.06	%		(13	)		5			2.17	%		1.93	%		24
NET INTEREST MARGIN ADJUSTED FOR SECURITIZATIONS		2.36	%		2.47	%		2.39	%		2.13	%		2.22	%		(11	)		14			2.41	%		2.09	%		32

(a) Includes securities sold but not yet purchased.

Page 17

J.P. MORGAN CHASE & CO.
CREDIT-RELATED INFORMATION
(in millions, except ratios)

																June 30, 2002
																Over (Under)
	Jun 30th 2002			Mar 31st 2002			Dec 31st 2001			Sep 30th 2001			Jun 30th 2001			Mar 31, 02			Jun 30, 01
CREDIT-RELATED ASSETS
COMMERCIAL LOANS
Domestic Commercial	$	67,124		$	64,068		$	66,436		$	77,712		$	74,563			5	%		(10	)%
Foreign Commercial		37,577			37,684			38,428			38,866			38,227			—			(2	)
Total Commercial Loans		104,701			101,752			104,864			116,578			112,790			3			(7	)
Derivative and FX Contracts		69,858			63,224			71,157			85,407			68,910			10			1
TOTAL COMMERCIAL CREDIT-RELATED		174,559			164,976			176,021			201,985			181,700			6			(4	)
CONSUMER LOANS
Credit Card - Reported		21,036			24,746			19,387			19,255			19,531			(15	)		8
Credit Card - Securitizations		27,499			23,225			21,424			18,724			17,753			18			55
Credit Card - Managed		48,535			47,971			40,811			37,979			37,284			1			30
1-4 Family Residential Mortgages		52,669			54,460			59,430			55,160			56,743			(3	)		(7	)
Auto Financings		26,666			26,002			25,667			24,448			23,322			3			14
Other Consumer(a)		7,014			7,586			8,096			7,844			7,532			(8	)		(7	)
TOTAL MANAGED CONSUMER LOANS		134,884			136,019			134,004			125,431			124,881			(1	)		8
TOTAL MANAGED CREDIT- RELATED ASSETS	$	309,443		$	300,995		$	310,025		$	327,416		$	306,581			3			1
NONPERFORMING ASSETS AND RATIOS
COMMERCIAL LOANS
Domestic Commercial	$	1,402		$	1,399		$	1,275		$	1,438		$	1,528			—			(8	)
Foreign Commercial		1,110			960			722			580			362			16			207
Total Commercial Loans		2,512			2,359			1,997			2,018			1,890			6			33
Derivative and FX Contracts		144			155			170			46			88			(7	)		64
TOTAL		2,656			2,514			2,167			2,064			1,978			6			34
CONSUMER LOANS
Credit Card - Reported		18			19			22			23			25			(5	)		(28	)
Credit Card - Securitizations		—			—			—			—			—		NM			NM
Credit Card - Managed		18			19			22			23			25			(5	)		(28	)
1-4 Family Residential Mortgages		275			351			280			273			263			(22	)		5
Auto Financings		103			98			118			110			97			5			6
Other Consumer (a)		54			66			79			53			16			(18	)		238
Total Consumer Loans		450			534			499			459			401			(16	)		12
TOTAL		3,106			3,048			2,666			2,523			2,379			2			31
Assets Acquired in Loan Satisfactions		142			130			124			123			119			9			19
TOTAL		3,248			3,178			2,790			2,646			2,498			2			30
Other Receivables (b)		1,130			1,130			1,130			—			—			—		NM
TOTAL NONPERFORMING ASSETS	$	4,378	(c)	$	4,308		$	3,920		$	2,646		$	2,498			2			75
TOTAL NONPERFORMING ASSETS TO TOTAL ASSETS		0.59	%		0.60	%		0.57	%		0.33	%		0.35	%	(1)bp			24bp
PAST DUE 90 DAYS AND OVER AND ACCRUING
COMMERCIAL LOANS
Domestic Commercial	$	29		$	42		$	30		$	19		$	48			(31	)%		(40	)%
Foreign Commercial		2			10			5			44			34			(80	)		(94	)
TOTAL COMMERCIAL CREDIT-RELATED		31			52			35			63			82			(40	)		(62	)
CONSUMER LOANS
Credit Card - Reported		505			619			449			394			326			(18	)		55
Credit Card - Securitizations		457			478			457			348			374			(4	)		22
Credit Card - Managed		962			1,097			906			742			700			(12	)		37
1-4 Family Residential Mortgages		—			—			—			—			—		NM			NM
Auto Financings		—			—			1			1			1		NM			NM
Other Consumer (a)		37			45			36			28			66			(18	)		(44	)
TOTAL CONSUMER LOANS		999			1,142			943			771			767			(13	)		30
TOTAL CR.-REL. ACCRUING ASSETS PAST DUE 90 DAYS	$	1,030		$	1,194		$	978		$	834		$	849			(14	)		21

(a)	Consists of installment loans (direct and indirect types of consumer finance), student loans, unsecured revolving lines of credit and foreign consumer loans.
(b)	This amount relates to the Enron-related surety receivables and letter of credit, which are the subject of litigation with credit-worthy entities. These receivables are classified in Other Assets at June 30, 2002.
(c)	Nonperforming assets have not been reduced for credit protection (single name credit default swaps and collateralized loan obligations) aggregating $37 million related to nonperforming counterparties. Nonperforming assets exclude nonaccrual loans held for sale (“HFS”) of $126 million, including $44 million of nonaccrual residential mortgages transferred to the HFS portfolio after recording charge-offs of $15 million during the second quarter of 2002. HFS loans are carried at lower of cost or market and declines in value are recorded in Other Revenue.

Page 18

J.P. MORGAN CHASE & CO.
CREDIT-RELATED INFORMATION (CONT.)
(in millions, except ratios)

																													YTD
																													2002
																	2QTR 2002												Over
																	Over (Under)						YEAR TO DATE						(Under)
		2QTR			1QTR			4QTR			3QTR			2QTR
		2002			2002			2001			2001			2001			1Q 2002			2Q 2001			2002			2001			2001
NET CHARGE-OFFS
COMMERCIAL LOANS
Domestic Commercial		$	181		$	207		$	388		$	126		$	177			(13	)%		2	%	$	388		$	303			28	%
Foreign Commercial			112			113			45			63			35			(1	)		220			225			57			295
TOTAL COMMERCIAL LOANS			293			320			433			189			212			(8	)		38			613			360			70
CONSUMER LOANS
Credit Card - Reported			433			337			274			264			234			28			85			770			452			70
Credit Card - Securitizations			334			321			264			270			273			4			22			655			514			27
Credit Card - Managed			767			658			538			534			507			17			51			1,425			966			48
1-4 Family Residential Mortgages			21			13			18			15			7			62			200			34			17			100
Auto Financings			29			38			50			32			26			(24	)		12			67			55			22
Other Consumer			45			45			43			45			46			—			(2	)		90			88			2
TOTAL CONSUMER LOANS			862			754			649			626			586			14			47			1,616			1,126			44
TOTAL MANAGED NET CHARGE-OFFS		$	1,155		$	1,074		$	1,082		$	815		$	798			8			45		$	2,229		$	1,486			50
NET CHARGE-OFF RATES - ANNUALIZED
COMMERCIAL LOANS
Domestic Commercial			1.13	%		1.24	%		2.04	%		0.59	%		0.90	%	(11)bp			23bp				1.18	%		0.76	%	42bp
Foreign Commercial			1.24			1.34			0.53			0.79			0.46			(10	)		78			1.29			0.35			94
TOTAL COMMERCIAL LOANS			1.17			1.27			1.58			0.65			0.77			(10	)		40			1.22			0.64			58
CONSUMER LOANS
Credit Card - Reported			7.67			5.78			5.74			5.47			4.69			189			298			6.71			4.59			212
Credit Card - Securitizations			5.30			5.98			5.23			5.82			6.55			(68	)		(125	)		5.61			6.20			(59	)
Credit Card - Managed			6.42			5.87			5.48			5.64			5.54			55			88			6.15			5.33			82
1-4 Family Residential Mortgages			0.16			0.09			0.12			0.10			0.05			7			11			0.12			0.06			6
Auto Financings			0.43			0.58			0.79			0.53			0.46			(15	)		(3	)		0.50			0.51			(1	)
Other Consumer			2.35			2.16			2.12			2.33			2.30			19			5			2.25			2.11			14
TOTAL CONSUMER LOANS			2.53			2.22			1.98			1.96			1.89			31			64			2.38			1.87			51
TOTAL MANAGED NET CHARGE-OFF RATES			1.96			1.82			1.80			1.33			1.37			14			59			1.89			1.28			61
ALLOWANCE FOR LOAN LOSSES AND RATIOS
Allowance for Loan Losses (a)		$	5,006		$	5,005		$	4,524		$	3,874		$	3,673			—	%		36	%
	To Total Loans		2.36	%		2.33	%		2.08	%		1.74	%		1.67	%	3bp			69bp
	To Total Nonperforming Loans		169			173			181			156			160			(400	)		900
	To Total Nonperforming Assets		114			116			115			146			147			(200	)		(3,300	)
ALLOWANCE COMPONENTS (a)
Commercial Specific and Expected		$	1,806		$	1,798		$	1,724		$	1,768		$	1,650			—	%		9	%
Consumer Expected			2,387			2,518			2,105			1,694			1,637			(5	)		46
Total Specific and Expected			4,193			4,316			3,829			3,462			3,287			(3	)		28
Residual Component			813			689			695			412			386			18			111
Total		$	5,006		$	5,005		$	4,524		$	3,874		$	3,673			—			36

(a)  Represents period end balances for each respective quarter.

Page 19

J.P. MORGAN CHASE & CO.
CAPITAL

																														YTD
																														2002
																		2QTR 2002												Over
																		Over (Under)						YEAR TO DATE						(Under)
			2QTR			1QTR			4QTR			3QTR			2QTR
			2002			2002			2001			2001			2001			1Q 2002			2Q 2001			2002			2001			2001
SOURCES AND USES OF TIER 1 CAPITAL
	(in billions)
Sources of Free Cash Flow
	Operating Earnings Less Dividends		$	0.5	(a)	$	0.5		$	(0.3	)	$	0.4		$	0.1			—	%	NM			$	1.0	(a)	$	0.9			11	%
		Plus: Preferred Stock and Equivalents/Other Items		(0.6	)(a)		0.2			(0.7	)		(0.4	)		(0.6	)	NM				—	%		(0.4	)(a)		(0.4	)		—
		Less: Capital for Internal Asset Growth		0.4	(a)		0.5			1.4			(1.3	)		(0.5	)		(20	)	NM				0.9	(a)		(1.0	)	NM
Total Sources of Free Cash Flow			$	0.3		$	1.2		$	0.4		$	(1.3	)	$	(1.0	)		(75	)	NM			$	1.5		$	(0.5	)	NM
Uses of Free Cash Flow
		Increases (Decreases) in Capital Ratios	$	0.6	(a)	$	1.4		$	0.5		$	(1.8	)	$	(0.7	)		(57	)	NM			$	2.0	(a)	$	0.4		NM
		Acquisitions		—	(a)		—			—			—			—		NM			NM				—	(a)		0.1		NM
		Repurchases Net of Stock Issuances		(0.3	)(a)		(0.2	)		(0.1	)		0.5			(0.3	)		(50	)		—			(0.5	)(a)		(1.0	)		50
Total Uses of Free Cash Flow			$	0.3		$	1.2		$	0.4		$	(1.3	)	$	(1.0	)		(75	)	NM			$	1.5		$	(0.5	)	NM
COMMON SHARES OUTSTANDING
	(in millions)
Basic Weighted- Average Shares Outstanding				1,982.6			1,978.2			1,969.6			1,975.3			1,978.4			—			—			1,980.4			1,972.6			—
Diluted Weighted- Average Shares Outstanding				2,016.0			2,005.8			2,007.4			2,020.9			2,033.6			1			(1	)		2,011.0			2,033.0			(1	)
Common Shares Outstanding - at Period End				1,993.4			1,990.2			1,973.4			1,972.9			1,989.2			—			—			1,993.4			1,989.2			—
CASH DIVIDENDS DECLARED PER SHARE			$	0.34		$	0.34		$	0.34		$	0.34		$	0.34			—			—		$	0.68		$	0.68			—
BOOK VALUE PER SHARE				20.93			20.16			20.32			21.15			20.81			4			1
SHARE PRICE
	High		$	38.75		$	39.68		$	40.95		$	46.01		$	50.60			(2	)		(23	)	$	39.68		$	59.19			(33	)
	Low			30.15			26.70			31.30			29.04			39.21			13			(23	)		26.70			37.58			(29	)
	Close			33.92			35.65			36.35			34.15			44.60			(5	)		(24	)		33.92			44.60			(24	)
CAPITAL RATIOS
Tier I Capital Ratio				8.7	%(a)		8.6	%		8.3	%		8.2	%		8.7	%	10bp			—bp
Total Capital Ratio				12.6	(a)		12.5			11.9			11.6			12.2			10			40
Tier I Leverage				5.4	(a)		5.4			5.2			5.3			5.4			—			—

Note: Prior periods have been restated to conform with current methodologies.

(a)  Estimated

Page 20

J.P. MORGAN CHASE & CO.
Glossary of Terms

Average Managed Assets:Excludes the impact of credit card securitizations.

bp:Denotes basis points; 100 bp equals 1%.

Corporate:Includes Support Units and the effects remaining at the corporate level after the implementation of management accounting policies.

JPMorgan Partners (“JPMP”):JPMorgan Chase’s private equity business. Public securities held by JPMP are marked-to-market at the quoted public value less liquidity discounts, with the resulting unrealized gains/losses included in the income statement. JPMP’s valuation policy for public securities incorporates the use of liquidity discounts and price averaging methodologies in certain circumstances to take into account the fact that JPMP cannot immediately realize the quoted public values as a result of the regulatory, corporate, or other contractual sales restrictions generally imposed on these holdings. Private investments are initially carried at cost, which is viewed as an approximation of fair value. The carrying value of private investments is adjusted to reflect valuation changes resulting from unaffiliated party transactions and for evidence of a decline in value.

Managed Credit Card Receivables or Managed Basis:JPMorgan Chase uses this terminology to refer to its credit card receivables on the balance sheet plus securitized credit card receivables.

NM:Not meaningful

Operating Basis or Operating Earnings:Reported results excluding the impact of merger and restructuring costs, special items, credit card securitizations and the amortization of goodwill.

Other Consumer Loans:Consists of installment loans (direct and indirect types of consumer finance), student loans, unsecured lines of credit and foreign consumer.

Overhead Ratio:Operating expense (excluding merger and restructuring costs and special items) as a percentage of the operating revenues.

Reported Basis:Financial statements prepared under generally accepted accounting principles. The reported basis includes the impact of credit card securitizations, merger and restructuring costs, special items, and the net effect of the change in accounting principle.

Segment Results- All periods are on a comparable basis, although restatements may occur in future periods to reflect further alignment of management accounting policies or changes in organizational structures between businesses.

SFAS 133:As a result of the adoption of Statement of Financial Accounting Standards (“SFAS”) No. 133 “Accounting for Derivative Instruments and Hedging Activities”, net income for the first half of 2001 includes the cumulative effect of a transition adjustment of $(25) million, net of taxes. The impact on each of basic and diluted earnings per share was $(0.01).

SFAS 142:Statement of Financial Accounting Standards No. 142, “Goodwill and Other Intangible Assets.”

Shareholder Value Added (“SVA”):Represents operating earnings minus preferred dividends and an explicit charge for capital.

Special Items:Includes merger and restructuring costs and special items.

Trading-Related Revenue:Includes net interest income (“NII”) attributable to trading activities.

Unaudited:The financial statements and information included throughout this document are unaudited.

Page 21