JPMorgan Chase & Co. (JPM) 8-K Jpmorgan Chase Reports 2002 Fourth Quarter and Full Year Results

PRESS RELEASE FINANCIAL SUPPLEMENT
FOURTH 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		5
Reconciliation from Reported to Operating Basis		6
Segment Detail
Investment Bank		7
Business-Related Metrics		8
Treasury & Securities Services		9
Investment Management & Private Banking		10
JPMorgan Partners		11
Investment Portfolio — Private and Public Securities		12
Chase 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		18-20
Capital		21
Glossary of Terms		22

Page 2

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

																		4QTR 2002												2002
			4QTR			3QTR			2QTR			1QTR			4QTR			Over (Under)						FULL YEAR						Over (Under)
			2002			2002			2002			2002			2001			3Q 2002			4Q 2001			2002			2001			2001
REVENUE
Investment Banking Fees			$	678		$	545		$	785		$	755		$	931			24	%		(27	)%	$	2,763		$	3,612			(24	)%
Trading Revenue				585			(21	)		731			1,299			355		NM				65			2,594			4,918			(47	)
Fees and Commissions				2,282			3,005			2,885			2,584			2,493			(24	)		(8	)		10,756			9,481			13
Private Equity — Realized Gains (Losses)				(45	)		(40	)		(10	)		(10	)		81			(13	)	NM				(105	)		651		NM
Private Equity — Unrealized Gains (Losses)				(23	)		(275	)		(115	)		(228	)		(505	)		92			95			(641	)		(1,884	)		66
Securities Gains				747			578			124			114			202			29			270			1,563			866			80
Other Revenue (a)				290			419			292			157			151			(31	)		92			1,158			898			29
Total Noninterest Revenue				4,514			4,211			4,692			4,671			3,708			7			22			18,088			18,542			(2	)
Interest Income				6,184			6,316			6,498			6,286			6,823			(2	)		(9	)		25,284			32,181			(21	)
Interest Expense				3,203			3,580			3,616			3,359			3,879			(11	)		(17	)		13,758			21,379			(36	)
Net Interest Income				2,981			2,736			2,882			2,927			2,944			9			1			11,526			10,802			7
Revenue before Provision for Credit Losses				7,495			6,947			7,574			7,598			6,652			8			13			29,614			29,344			1
Provision for Credit Losses (a)				921			1,836			821			753			1,468			(50	)		(37	)		4,331			3,182			36
	TOTAL NET REVENUE			6,574			5,111			6,753			6,845			5,184			29			27			25,283			26,162			(3	)
NONINTEREST EXPENSE
Compensation Expense				3,032			2,367			2,761			2,823			2,622			28			16			10,983			11,844			(7	)
Occupancy Expense (b)				425			478			365			338			334			(11	)		27			1,606			1,348			19
Technology and Communications Expense				635			625			629			665			640			2			(1	)		2,554			2,631			(3	)
Amortization of Intangibles				82			80			92			69			187			3			(56	)		323			729			(56	)
Other Expense				1,294			1,168			1,118			1,208			1,128			11			15			4,788			4,521			6
Surety Settlement and Litigation Reserve (b)				1,300			—			—			—			—		NM			NM				1,300			—		NM
Merger and Restructuring Costs				393			333			229			255			841			18			(53	)		1,210			2,523			(52	)
		TOTAL NONINTEREST EXPENSE		7,161			5,051			5,194			5,358			5,752			42			24			22,764			23,596			(4	)
Income (Loss) before Income Tax Expense and Effect
		of Accounting Change		(587	)		60			1,559			1,487			(568	)	NM				(3	)		2,519			2,566			(2	)
Income Tax Expense (Benefit)				(200	)		20			531			505			(236	)	NM				15			856			847			1
INCOME (LOSS) BEFORE EFFECT OF ACCTG. CHG				(387	)		40			1,028			982			(332	)	NM				(17	)		1,663			1,719			(3	)
Net Effect of Change in Accounting Principle				—			—			—			—			—		NM			NM				—			(25	)	NM
NET INCOME (LOSS)			$	(387	)	$	40		$	1,028		$	982		$	(332	)	NM				(17	)	$	1,663		$	1,694			(2	)
NET INCOME (LOSS) PER COMMON SHARE (c)
Basic			$	(0.20	)	$	0.01		$	0.51		$	0.49		$	(0.18	)	NM				(11	)	$	0.81		$	0.83			(2	)
Diluted				(0.20	)		0.01			0.50			0.48			(0.18	)	NM				(11	)		0.80			0.80			—
PERFORMANCE RATIOS
Return on Average Assets			NM				0.02	%		0.56	%		0.55	%	NM			NM			NM				0.23	%		0.23	%		—	bp
Return on Average Common Equity			NM				0.3			10.0			9.7		NM			NM			NM				3.9			3.9			—
FULL-TIME EQUIVALENT EMPLOYEES (d)				94,335			95,637			95,878			96,938			95,812			(1	)%		(2	)%

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

(a)	In the third quarter of 2002, the “Provision for Loan Losses” was renamed “Provision for Credit Losses” and now includes the aggregate amount of the provisions for loan losses and for lending-related commitments. The prior period provision for lending-related commitments was reclassified from “Other Revenue” to the “Provision for Credit Losses”.
(b)	In the fourth quarter of 2002, a $1,300 million (pre-tax) charge was recorded related to the settlement of the Enron surety litigation and the establishment of a litigation reserve for certain material litigation, proceedings and investigations. In the third quarter of 2002, $98 million (pre-tax) in real estate charges were recorded in “Occupancy Expense” on a reported basis.
(c)	Basic and diluted earnings per share have been reduced by $0.01 in full year 2001 due to the impact of the adoption of SFAS 133 relating to the accounting for derivative instruments and hedging activities.
(d)	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)

				4QTR			3QTR			2QTR			1QTR			4QTR			4QTR 2002 Over (Under)						FULL YEAR						2002 Over (Under)
				2002			2002			2002			2002			2001			3Q 2002			4Q 2001			2002			2001			2001
OPERATING REVENUE
Investment Bank				$	3,299		$	2,419		$	3,086		$	3,595		$	3,089			36	%		7	%	$	12,399		$	14,671			(15	)%
Treasury & Securities Services					968			1,068			1,031			979			969			(9	)		—			4,046			3,978			2
Investment Management & Private Banking					655			700			739			774			764			(6	)		(14	)		2,868			3,226			(11	)
Chase Financial Services					3,356			3,690			3,421			3,074			2,884			(9	)		16			13,541			10,951			24
JPMorgan Partners					(79	)		(370	)		(193	)		(312	)		(469	)		79			83			(954	)		(1,470	)		35
Corporate (a)					(274	)		(206	)		(176	)		(191	)		(321	)		(33	)		15			(847	)		(964	)		12
		OPERATING REVENUE (b)		$	7,925		$	7,301		$	7,908		$	7,919		$	6,916			9			15		$	31,053		$	30,392			2
EARNINGS
Investment Bank				$	361		$	(250	)	$	493		$	761		$	382		NM				(5	)	$	1,365		$	2,918			(53	)
Treasury & Securities Services					140			214			178			145			150			(35	)		(7	)		677			632			7
Investment Management & Private Banking					43			99			113			129			103			(57	)		(58	)		384			479			(20	)
Chase Financial Services					500			797			679			514			324			(37	)		54			2,490			1,538			62
JPMorgan Partners					(91	)		(283	)		(168	)		(247	)		(348	)		68			74			(789	)		(1,116	)		29
Corporate (a)					(223	)		(252	)		(116	)		(152	)		(255	)		12			13			(743	)		(649	)		(14	)
		OPERATING EARNINGS (b)			730			325			1,179			1,150			356			125			105			3,384			3,802			(11	)
Net Effect of Change in Accounting Principle					—			—			—			—			—		NM			NM				—			(25	)	NM
Special Items (Net of Taxes):
	Merger and Restructuring Costs				(259	)		(220	)		(151	)		(168	)		(579	)		(18	)		55			(798	)		(1,690	)		53
	Real Estate Charge				—			(65	)		—			—			—		NM			NM				(65	)		—		NM
	Surety Settlement and Litigation Reserve				(858	)		—			—			—			—		NM			NM				(858	)		—		NM
Amortization of Goodwill, Net of Taxes					—			—			—			—			(109	)	NM			NM				—			(393	)	NM
			NET INCOME (LOSS) (b)	$	(387	)	$	40		$	1,028		$	982		$	(332	)	NM				(17	)	$	1,663		$	1,694			(2	)
EARNINGS PER SHARE — DILUTED
OPERATING EARNINGS (b)				$	0.36		$	0.16		$	0.58		$	0.57		$	0.17			125			112		$	1.66		$	1.85			(10	)
Net Effect of Change in Accounting Principle					—			—			—			—			—		NM			NM				—			(0.01	)	NM
Special Items (Net of Taxes):
	Merger and Restructuring Costs				(0.13	)		(0.12	)		(0.08	)		(0.09	)		(0.29	)		(8	)		55			(0.40	)		(0.85	)		53
	Real Estate Charge				—			(0.03	)		—			—			—		NM			NM				(0.03	)		—		NM
	Surety Settlement and Litigation Reserve				(0.43	)		—			—			—			—		NM			NM				(0.43	)		—		NM
Amortization of Goodwill, Net of Taxes					—			—			—			—			(0.05	)	NM			NM				—			(0.19	)	NM
NET INCOME (LOSS)(b)(c)				$	(0.20	)	$	0.01		$	0.50		$	0.48		$	(0.18	)	NM				(11	)	$	0.80		$	0.80			—
OPERATING RETURN ON COMMON EQUITY
Investment Bank					7.6	%	NM				10.7	%		16.3	%		7.9	%	NM				(30)	bp		7.4	%		15.2	%		(780	)bp
Treasury & Securities Services					18.8			28.2	%		23.1			19.5			20.7			(940)	bp		(190	)		22.5			21.2			130
Investment Management & Private Banking					2.6			6.4			7.2			8.5			6.6			(380	)		(400	)		6.2			7.5			(130	)
Chase Financial Services					19.2			30.2			26.1			20.5			13.5			(1,100	)		570			24.1			16.7			740
OPERATING RETURN ON COMMON EQUITY(b)					6.8			2.9			11.4			11.4			3.3			390			350			8.1			9.0			(90	)

(a)	Includes Support Units and the effect remaining at the corporate level after the implementation of management accounting policies.
(b)	Represents consolidated JPMorgan Chase.
(c)	Diluted EPS for the fourth quarter of 2001 is reported as $(0.18) which equals 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
(in millions, except per share and ratio data)

																		4QTR 2002												2002
																		Over (Under)						FULL YEAR						Over (Under)
			4QTR			3QTR			2QTR			1QTR			4QTR
			2002			2002			2002			2002			2001			3Q 2002			4Q 2001			2002			2001			2001
OPERATING REVENUE
Investment Banking Fees			$	678		$	545		$	785		$	755		$	931			24	%		(27	)%	$	2,763		$	3,612			(24	)%
Trading-Related Revenue (Includes Trading NII)				1,253			365			1,136			1,720			904			243			39			4,474			6,279			(29	)
Fees and Commissions				2,052			2,768			2,745			2,493			2,340			(26	)		(12	)		10,058			9,141			10
Private Equity — Realized Gains (Losses)				(45	)		(40	)		(10	)		(10	)		81			(13	)	NM				(105	)		651		NM
Private Equity — Unrealized Gains (Losses)				(23	)		(275	)		(115	)		(228	)		(505	)		92			95			(641	)		(1,884	)		66
Securities Gains				747			578			124			114			202			29			270			1,563			866			80
Other Revenue				303			409			273			137			138			(26	)		120			1,122			881			27
Net Interest Income (Excludes Trading NII)				2,960			2,951			2,970			2,938			2,825			—			5			11,819			10,846			9
		TOTAL OPERATING REVENUE		7,925			7,301			7,908			7,919			6,916			9			15			31,053			30,392			2
OPERATING EXPENSE
Compensation Expense (a)				2,593			2,259			2,642			2,743			2,622			15			(1	)		10,237			11,844			(14	)
Noncompensation Expense (a) (b)				2,375			2,239			2,161			2,254			2,138			6			11			9,029			8,644			4
	Operating Expense (Excludes Severance and Related Costs)			4,968			4,498			4,803			4,997			4,760			10			4			19,266			20,488			(6	)
Severance and Related Costs				500			122			162			106			—			310		NM				890			—		NM
	TOTAL OPERATING EXPENSE			5,468			4,620			4,965			5,103			4,760			18			15			20,156			20,488			(2	)
Credit Costs				1,351			2,190			1,155			1,074			1,732			(38	)		(22	)		5,770			4,230			36
Operating Income before Income Tax Expense				1,106			491			1,788			1,742			424			125			161			5,127			5,674			(10	)
Income Tax Expense				376			166			609			592			68			127		NM				1,743			1,872			(7	)
OPERATING EARNINGS			$	730		$	325		$	1,179		$	1,150		$	356			125			105		$	3,384		$	3,802			(11	)
OPERATING BASIS
Diluted Earnings per Share			$	0.36		$	0.16		$	0.58		$	0.57		$	0.17			125			112		$	1.66		$	1.85			(10	)
Shareholder Value Added				(551	)		(964	)		(57	)		(59	)		(915	)		43			40			(1,631	)		(1,247	)		(31	)
Return on Average Managed Assets				0.37	%		0.17	%		0.62	%		0.63	%		0.19	%		20	bp		18	bp		0.45	%		0.50	%		(5	)bp
Return on Common Equity				6.8			2.9			11.4			11.4			3.3			390			350			8.1			9.0			(90	)
Common Dividend Payout Ratio				96			222			59			60			199		NM			NM				83			73			1,000
Effective Income Tax Rate				34			34			34			34			16			—			1,800			34			33			100
Compensation Expense as a % of Operating Revenue				33			31			33			35			38			200			(500	)		33			39			(600	)
Noncompensation Expense as a % of Operating Revenue				30			31			27			28			31			(100	)		(100	)		29			28			100
Overhead Ratio				69			63			63			64			69			600			—			65			67			(200	)
Overhead Ratio (Excl. Severance and Related Costs)				63			62			61			63			69			100			(600	)		62			67			(500	)

Note: Prior periods have been adjusted to conform with current methodologies.
(a)	The Compensation and Noncompensation Expense categories include severance and other related costs associated with expense containment programs implemented in 2002. For purposes of reviewing results on an operating basis, these costs have been reclassified to a separate line.
(b)	Includes Occupancy Expense, Technology and Communications Expense, Amortization of Intangibles and Other Expense.

Page 5

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

																		4QTR 2002												2002
																		Over (Under)						FULL YEAR						Over (Under)
			4QTR			3QTR			2QTR			1QTR			4QTR
			2002			2002			2002			2002			2001			3Q 2002			4Q 2001			2002			2001			2001
REVENUE
TRADING REVENUE
		Reported	$	585		$	(21	)	$	731		$	1,299		$	355		NM				65	%	$	2,594		$	4,918			(47	)%
		Trading-Related NII		668			386			405			421			549			73	%		22			1,880			1,361			38
		Operating	$	1,253		$	365		$	1,136		$	1,720		$	904			243			39		$	4,474		$	6,279			(29	)
CREDIT CARD REVENUE (a)
		Reported	$	807		$	806		$	669		$	587		$	662			—			22		$	2,869		$	2,108			36
		Credit Card Securitizations		(230	)		(237	)		(140	)		(91	)		(153	)		3			(50	)		(698	)		(340	)		(105	)
		Operating	$	577		$	569		$	529		$	496		$	509			1			13		$	2,171		$	1,768			23
OTHER REVENUE
		Reported	$	290		$	419		$	292		$	157		$	151			(31	)		92		$	1,158		$	898			29
		Credit Card Securitizations		13			(10	)		(19	)		(20	)		(13	)	NM			NM				(36	)		(17	)		112
		Operating	$	303		$	409		$	273		$	137		$	138			(26	)		120		$	1,122		$	881			27
NET INTEREST INCOME
		Reported	$	2,981		$	2,736		$	2,882		$	2,927		$	2,944			9			1		$	11,526		$	10,802			7
		Credit Card Securitizations		647			601			493			432			430			8			50			2,173			1,405			55
		Trading-Related NII		(668	)		(386	)		(405	)		(421	)		(549	)		73			22			(1,880	)		(1,361	)		38
		Operating	$	2,960		$	2,951		$	2,970		$	2,938		$	2,825			—			5		$	11,819		$	10,846			9
TOTAL REVENUE
		Reported	$	7,495		$	6,947		$	7,574		$	7,598		$	6,652			8			13		$	29,614		$	29,344			1
		Credit Card Securitizations		430			354			334			321			264			21			63			1,439			1,048			37
		Total Operating Revenue	$	7,925		$	7,301		$	7,908		$	7,919		$	6,916			9			15		$	31,053		$	30,392			2
NONINTEREST EXPENSE
	Reported		$	7,161		$	5,051		$	5,194		$	5,358		$	5,752			42			24		$	22,764		$	23,596			(4	)
	Merger and Restructuring Costs			(393	)		(333	)		(229	)		(255	)		(841	)		18			(53	)		(1,210	)		(2,523	)		(52	)
	Surety Settlement and Litigation Reserve			(1,300	)		—			—			—			—		NM			NM				(1,300	)		—		NM
	Real Estate Reserves			—			(98	)		—			—			—		NM			NM				(98	)		—		NM
	Amortization of Goodwill			—			—			—			—			(151	)	NM			NM				—			(585	)	NM
	Total Operating Expense		$	5,468		$	4,620		$	4,965		$	5,103		$	4,760			18			15		$	20,156		$	20,488			(2	)
CREDIT COSTS
	Provision for Credit Losses — Reported		$	921		$	1,836		$	821		$	753		$	1,468			(50	)		(37	)	$	4,331		$	3,182			36
	Credit Card Securitizations			430			354			334			321			264			21			63			1,439			1,048			37
	Credit Costs — Operating		$	1,351		$	2,190		$	1,155		$	1,074		$	1,732			(38	)		(22	)	$	5,770		$	4,230			36

(a) Included in Fees and Commissions.

Page 6

SEGMENT DETAIL

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

																	4QTR 2002												2002
																	Over (Under)						FULL YEAR						Over (Under)
		4QTR			3QTR			2QTR			1QTR			4QTR
		2002			2002			2002			2002			2001			3Q 2002			4Q 2001			2002			2001			2001
OPERATING INCOME STATEMENT
REVENUE:
Trading Revenue (Includes Trading NII):
	Fixed Income and Other	$	1,284		$	629		$	1,022		$	1,493		$	957			104	%		34	%	$	4,428		$	4,979			(11	)%
	Equities		(30	)		(255	)		95			201			63			88		NM				11			1,189			(99	)
			1,254			374			1,117			1,694			1,020			235			23			4,439			6,168			(28	)
Investment Banking Fees			650			529			781			736			931			23			(30	)		2,696			3,591			(25	)
Net Interest Income			629			632			637			715			789			—			(20	)		2,613			2,943			(11	)
Fees and Commissions			357			422			420			385			370			(15	)		(4	)		1,584			1,501			6
Securities Gains			376			465			108			127			165			(19	)		128			1,076			538			100
All Other Revenue			33			(3	)		23			(62	)		(186	)	NM			NM				(9	)		(70	)		87
	TOTAL OPERATING REVENUE		3,299			2,419			3,086			3,595			3,089			36			7			12,399			14,671			(15	)
EXPENSE:
Compensation Expense			1,058			715			1,053			1,126			1,124			48			(6	)		3,952			5,286			(25	)
Noncompensation Expense			876			830			824			909			733			6			20			3,439			3,496			(2	)
	Operating Expense (Excludes Severance and Related Costs)		1,934			1,545			1,877			2,035			1,857			25			4			7,391			8,782			(16	)
Severance and Related Costs (a)			338			79			124			46			—			328		NM				587			—		NM
	TOTAL OPERATING EXPENSE		2,272			1,624			2,001			2,081			1,857			40			22			7,978			8,782			(9	)
Operating Margin			1,027			795			1,085			1,514			1,232			29			(17	)		4,421			5,889			(25	)
Credit Costs			489			1,315			306			282			618			(63	)		(21	)		2,392			1,148			108
Operating Income (Loss) Before Income Tax Expense			538			(520	)		779			1,232			614		NM				(12	)		2,029			4,741			(57	)
Income Tax Expense (Benefit)			177			(270	)		286			471			232		NM				(24	)		664			1,823			(64	)
OPERATING EARNINGS (LOSS)		$	361		$	(250	)	$	493		$	761		$	382		NM				(5	)	$	1,365		$	2,918			(53	)
Average Common Equity		$	18,643		$	17,566		$	18,293		$	18,798		$	18,858			6			(1	)	$	18,323		$	18,964			(3	)
Average Assets			514,993			494,259			502,847			467,214			510,608			4			1			494,958			510,282			(3	)
Shareholder Value Added			(207	)		(787	)		(59	)		200			(194	)		74			(7	)		(853	)		615		NM
Return on Common Equity			7.6	%	NM				10.7	%		16.3	%		7.9	%	NM			(30		)bp		7.4	%		15.2	%	(780		)bp
Overhead Ratio			69			67	%		65			58			60		200		bp		900			64			60			400
Overhead Ratio Excl. Severance and Related Costs			59			64			61			57			60			(500	)		(100	)		60			60			—
Compensation Expense as a % of Operating Revenue Excl. Severance and Related Costs			32			30			34			31			36			200			(400	)		32			36			(400	)
FULL-TIME EQUIVALENT EMPLOYEES (b)			14,837			16,051			16,407			17,367			17,619			(8	)%		(16	)%

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

(a)	For the full year 2002, includes $503 million of severance and $84 million of related costs.
(b)	Represents actual period end amount for each respective quarter.

Page 7

J.P. MORGAN CHASE & CO.
INVESTMENT BANK
BUSINESS-RELATED METRICS
(in millions)

													4QTR 2002										2002
													Over (Under)						FULL YEAR				Over (Under)
		4QTR		3QTR			2QTR		1QTR		4QTR
		2002		2002			2002		2002		2001		3Q 2002			4Q 2001			2002		2001		2001
BUSINESS REVENUE:
INVESTMENT BANKING FEES
	Advisory	$	216	$	139		$	194	$	194	$	269		55	%		(20	)%	$	743	$	1,248		(40	)%
	Underwriting and Other Fees		434		390			587		542		662		11			(34	)		1,953		2,343		(17	)
TOTAL			650		529			781		736		931		23			(30	)		2,696		3,591		(25	)
CAPITAL MARKETS & LENDING
	Fixed Income		1,552		882			1,250		1,733		1,288		76			20			5,417		6,215		(13	)
	Treasury		580		606			268		385		487		(4	)		19			1,839		1,521		21
	Credit Portfolio		323		409			412		299		66		(21	)		389			1,443		1,092		32
	Equities		194		(7	)		375		442		317	NM				(39	)		1,004		2,252		(55	)
TOTAL			2,649		1,890			2,305		2,859		2,158		40			23			9,703		11,080		(12	)
TOTAL OPERATING REVENUE		$	3,299	$	2,419		$	3,086	$	3,595	$	3,089		36			7		$	12,399	$	14,671		(15	)
MEMO:
CAPITAL MARKETS & LENDING TOTAL RETURN REVENUE (a)
	Fixed Income	$	1,467	$	915		$	1,322	$	1,690	$	1,319		60			11		$	5,394	$	6,301		(14	)
	Treasury		467		363			215		469		309		29			51			1,514		950		59
	Credit Portfolio		323		409			412		299		66		(21	)		389			1,443		1,092		32
	Equities		194		(7	)		375		442		317	NM				(39	)		1,004		2,252		(55	)
TOTAL		$	2,451	$	1,680		$	2,324	$	2,900	$	2,011		46			22		$	9,355	$	10,595		(12	)
MARKET SHARE / RANKINGS: (b)
Global Syndicated Loans			19% / #1		21% / #1			28% / #1		21% / #1		25% / #1								23% / #1		27% / #1
U.S. Investment Grade Bonds			14% / #2		14% / #2			18% / #2		16% / #2		13% / #2								16% / #2		14% / #2
Euro-Denominated Corporate International Bonds			7% / #5		5% / #9			5% / #7		6% / #4		6% / #6								6% / #4		7% / #3
Global Equity and Equity-Related			4% / #9		2% / #12			6% / #6		5% / #6		5% / #8								5% / #8		4% / #9
U.S. Equity and Equity-Related			5% / #7		3% / #7			9% / #5		5% / #7		8% / #6								6% / #6		4% / #8
Global Announced M&A			15% / #5		12% / #9			19% / #2		13% / #7		33% / #1								15% / #5		22% / #4

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

(a)	Total return revenues include operating revenues plus the unrealized gains or losses on third-party or internally transfer priced assets and liabilities in treasury and fixed income activities, which are not accounted for on a mark-to-market basis through earnings.
(b)	Derived from Thomson Financial Securities Data which reflects subsequent updates to prior period information. Global announced M&A is based on rank value; all other rankings are based on proceeds, with full credit to each book manager/equal if joint. U.S. Equity and Equity-Related adjusted to reflect all equity issuances in the U.S. market for both U.S. and foreign issuers.

Page 8

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

																	4QTR 2002												2002
																	Over (Under)						FULL YEAR						Over (Under)
		4QTR			3QTR			2QTR			1QTR			4QTR
		2002			2002			2002			2002			2001			3Q 2002			4Q 2001			2002			2001			2001
OPERATING INCOME STATEMENT
REVENUE:
Fees and Commissions		$	593		$	615		$	630		$	608		$	576			(4	)%		3	%	$	2,446		$	2,291			7	%
Net Interest Income			354			351			348			337			349			1			1			1,390			1,472			(6	)
All Other Revenue			21			102			53			34			44			(79	)		(52	)		210			215			(2	)
	TOTAL OPERATING REVENUE		968			1,068			1,031			979			969			(9	)		—			4,046			3,978			2
EXPENSE:
Compensation Expense			284			290			301			304			275			(2	)		3			1,179			1,150			3
Noncompensation Expense			465			450			456			451			464			3			—			1,822			1,856			(2	)
	TOTAL OPERATING EXPENSE		749			740			757			755			739			1			1			3,001			3,006			—
Operating Margin			219			328			274			224			230			(33	)		(5	)		1,045			972			8
Credit Costs			2			(1	)		(1	)		1			2		NM				—			1			7			(86	)
Operating Income Before Income Tax Expense			217			329			275			223			228			(34	)		(5	)		1,044			965			8
Income Tax Expense			77			115			97			78			78			(33	)		(1	)		367			333			10
OPERATING EARNINGS		$	140		$	214		$	178		$	145		$	150			(35	)		(7	)	$	677		$	632			7
Average Common Equity		$	2,937		$	2,994		$	3,075		$	2,987		$	2,862			(2	)		3		$	2,998		$	2,958			1
Average Assets			19,535			16,170			19,139			17,225			18,684			21			5			18,018			18,794			(4	)
Shareholder Value Added			50			122			85			56			63			(59	)		(21	)		313			272			15
Return on Common Equity			18.8	%		28.2	%		23.1	%		19.5	%		20.7	%	(940		)bp	(190		)bp		22.5	%		21.2	%	130		bp
Overhead Ratio			77			69			73			77			76			800			100			74			76			(200	)
FULL-TIME EQUIVALENT EMPLOYEES (a)			14,416			14,716			14,840			15,216			14,367			(2	)%		—	%
OPERATING REVENUE BY BUSINESS:
	Treasury Services	$	503		$	506		$	478		$	481		$	476			(1	)		6		$	1,968		$	1,873			5	%
	Investor Services		333			389			422			386			389			(14	)		(14	)		1,530			1,676			(9	)
	Institutional Trust Services		228			223			224			206			192			2			19			881			774			14
	Other		(96	)		(50	)		(93	)		(94	)		(88	)		(92	)		(9	)		(333	)		(345	)		3
	Total Treasury & Securities Services	$	968		$	1,068		$	1,031		$	979		$	969			(9	)		—		$	4,046		$	3,978			2

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

(a) Represents actual period end amount for each respective quarter.

Page 9

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

																	4QTR 2002												2002
																	Over (Under)						FULL YEAR						Over (Under)
		4QTR			3QTR			2QTR			1QTR			4QTR
		2002			2002			2002			2002			2001			3Q 2002			4Q 2001			2002			2001			2001
OPERATING INCOME STATEMENT
REVENUE:
Fees and Commissions		$	507		$	519		$	560		$	590		$	581			(2	)%		(13	)%	$	2,176		$	2,399			(9	)%
Net Interest Income			114			125			123			121			144			(9	)		(21	)		483			587			(18	)
All Other Revenue			34			56			56			63			39			(39	)		(13	)		209			240			(13	)
	TOTAL OPERATING REVENUE		655			700			739			774			764			(6	)		(14	)		2,868			3,226			(11	)
EXPENSE:
Compensation Expense			310			267			261			286			287			16			8			1,124			1,303			(14	)
Noncompensation Expense			308			290			316			298			319			6			(3	)		1,212			1,267			(4	)
	TOTAL OPERATING EXPENSE		618			557			577			584			606			11			2			2,336			2,570			(9	)
Operating Margin			37			143			162			190			158			(74	)		(77	)		532			656			(19	)
Credit Costs			13			26			23			23			30			(50	)		(57	)		85			35			143
Operating Income Before Income Tax Expense			24			117			139			167			128			(79	)		(81	)		447			621			(28	)
Income Tax Expense			(19	)		18			26			38			25		NM			NM				63			142			(56	)
OPERATING EARNINGS		$	43		$	99		$	113		$	129		$	103			(57	)		(58	)	$	384		$	479			(20	)
Average Common Equity		$	6,134		$	6,039		$	6,179		$	6,110		$	6,106			2			—		$	6,115		$	6,275			(3	)
Average Assets			33,522			34,968			36,478			38,007			36,529			(4	)		(8	)		35,729			36,896			(3	)
Shareholder Value Added			(145	)		(85	)		(74	)		(53	)		(83	)		(71	)		(75	)		(357	)		(284	)		(26	)
Return on Common Equity			2.6	%		6.4	%		7.2	%		8.5	%		6.6	%	(380		)bp	(400		)bp		6.2	%		7.5	%	(130		)bp
Overhead Ratio			94			80			78			75			79			1,400			1,500			81			80			100
FULL-TIME EQUIVALENT EMPLOYEES (a)			7,793			8,046			8,075			8,002			8,162			(3	)%		(5	)%
(in billions)
ASSETS UNDER MANAGEMENT (b)		$	516	(c)	$	497		$	545		$	585		$	606			4			(15	)
	Private Banking		129	(c)		121			135			142			142			7			(9	)
	Institutional		324	(c)		314			343			374			405			3			(20	)
	Retail		63	(c)		62			67			69			59			2			7
ASSETS UNDER MANAGEMENT		$	516	(c)	$	497		$	545		$	585		$	606			4			(15	)
	Americas		362	(c)		348			380			421			442			4			(18	)
	Europe and Asia		154	(c)		149			165			164			164			3			(6	)
ASSETS UNDER MANAGEMENT		$	516	(c)	$	497		$	545		$	585		$	606			4			(15	)
	Fixed Income and Cash		297	(c)		283			293			312			329			5			(10	)
	Equities and Other		219	(c)		214			252			273			277			2			(21	)
ASSETS UNDER SUPERVISION (d)		$	636	(c)	$	615		$	686		$	722		$	756			3			(16	)

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

(a)	Represents actual period end amount for each respective quarter.
(b)	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., in which the Firm has a 45% ownership interest.
(c)	Estimated
(d)	Assets under supervision represent assets under management as well as custody, restricted stock, deposit, and brokerage accounts.

Page 10

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

																		4QTR 2002												2002
																		Over (Under)						FULL YEAR						Over (Under)
			4QTR			3QTR			2QTR			1QTR			4QTR
			2002			2002			2002			2002			2001			3Q 2002			4Q 2001			2002			2001			2001
OPERATING INCOME STATEMENT
REVENUE:
Private Equity:
	Realized Gains (Losses)		$	(26	)	$	(40	)	$	(12	)	$	(13	)	$	107			35	%	NM			$	(91	)	$	675		NM
	Unrealized Gains (Losses)			(27	)		(259	)		(114	)		(242	)		(505	)		90			95	%		(642	)		(1,858	)		65	%
Total Private Equity Gains (Losses)				(53	)		(299	)		(126	)		(255	)		(398	)		82			87			(733	)		(1,183	)		38
Net Interest Income (Loss)				(71	)		(76	)		(87	)		(87	)		(83	)		7			14			(321	)		(350	)		8
Fees and Other Revenue				45			5			20			30			12		NM				275			100			63			59
		TOTAL OPERATING REVENUE		(79	)		(370	)		(193	)		(312	)		(469	)		79			83			(954	)		(1,470	)		35
EXPENSE:
Compensation Expense				24			33			34			37			36			(27	)		(33	)		128			144			(11	)
Noncompensation Expense				44			45			40			41			44			(2	)		—			170			149			14
	TOTAL OPERATING EXPENSE			68			78			74			78			80			(13	)		(15	)		298			293			2
Operating Income (Loss) Before Income Tax Expense				(147	)		(448	)		(267	)		(390	)		(549	)		67			73			(1,252	)		(1,763	)		29
Income Tax Expense (Benefit)				(56	)		(165	)		(99	)		(143	)		(201	)		66			72			(463	)		(647	)		28
OPERATING EARNINGS (LOSS)			$	(91	)	$	(283	)	$	(168	)	$	(247	)	$	(348	)		68			74		$	(789	)	$	(1,116	)		29
Average Common Equity			$	5,300		$	5,366		$	5,470		$	5,687		$	6,105			(1	)		(13	)	$	5,454		$	6,475			(16	)
Average Assets				10,223			9,938			10,122			10,565			11,618			3			(12	)		10,210			12,143			(16	)
Shareholder Value Added				(293	)		(488	)		(374	)		(459	)		(581	)		40			50			(1,614	)		(2,097	)		23
FULL-TIME EQUIVALENT EMPLOYEES (a)				361			367			359			340			320			(2	)		13

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

(a) Represents actual period end amount for each respective quarter.

Page 11

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

												Dec 31, 2002
												Over (Under)
		Dec 31		Sep 30		Jun 30		Mar 31		Dec 31		Sep 30			Dec 31
		2002		2002		2002		2002		2001		2002			2001
PORTFOLIO INFORMATION
Public Securities (101 companies) (a) (b)
	Carrying Value	$	520	$	488	$	695	$	705	$	998		7	%		(48	)%
	Cost		663		764		860		809		802		(13	)		(17	)
Private Direct Securities (945 companies) (b)
	Carrying Value		5,865		5,694		5,707		6,054		6,289		3			(7	)
	Cost		7,316		7,186		7,066		7,317		7,544		2			(3	)
Private Fund Investments (324 funds) (b)
	Carrying Value		1,843		1,831		1,827		1,794		1,910		1			(4	)
	Cost		2,333		2,216		2,164		2,119		2,182		5			7
Total Investment Portfolio — Carrying Value		$	8,228	$	8,013	$	8,229	$	8,553	$	9,197		3			(11	)
Total Investment Portfolio — Cost		$	10,312	$	10,166	$	10,090	$	10,245	$	10,528		1			(2	)

Public Securities Investments at December 31, 2002
(dollars and shares in millions)

					Quoted
					Public
		Symbol	Shares		Value		Cost
Seagate Technology		STX		15.9	$	171	$	22
Encore Acquisition Company		EAC		4.9		90		34
Triton PCS Holdings, Inc.		TPC		16.0		63		71
Fisher Scientific International, Inc.		FSH		2.0		55		16
Guitar Center Inc.		GTRC		3.2		54		35
AT&T Wireless Services, Inc. (c)		AWE		5.8		33		4
United Auto Group, Inc.		UAG		2.6		32		30
1-800-FLOWERS.COM, Inc.		FLWS		3.9		24		14
Wesco International, Inc.		WCC		4.4		24		47
dj Orthopedics, Inc.		DJO		6.0		23		55
	Top Ten Public Securities				$	569	$	328
Other Public Securities (91 companies)						192		335
	Total Public Securities(101 companies)				$	761	$	663

(a)	Publicly traded positions only.
(b)	Represents the number of companies and funds at December 31, 2002.
(c)	Excludes 3.6 million shares held directly by the holding company and 0.9 million shares held by JPMorgan Chase Bank, which were received upon distribution from JPMP.

Page 12

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

																		4QTR 2002												2002
																		Over (Under)						FULL YEAR						Over (Under)
			4QTR			3QTR			2QTR			1QTR			4QTR
		2002			2002			2002			2002			2001			3Q 2002			4Q 2001			2002			2001			2001
OPERATING INCOME STATEMENT
REVENUE:
Net Interest Income		$	2,154		$	2,134		$	2,098		$	2,009		$	1,822			1	%		18	%	$	8,395		$	6,933			21	%
Fees and Commissions			599			1,228			1,129			890			778			(51	)		(23	)		3,846			2,875			34
Securities Gains			375			112			19			(13	)		61			235		NM				493			378			30
All Other Revenue			228			216			175			188			223			6			2			807			765			5
	TOTAL OPERATING REVENUE		3,356			3,690			3,421			3,074			2,884			(9	)		16			13,541			10,951			24
EXPENSE:
Compensation Expense			632			677			668			645			599			(7	)		6			2,622			2,367			11
Noncompensation Expense			1,049			946			931			873			854			11			23			3,799			3,250			17
	TOTAL OPERATING EXPENSE		1,681			1,623			1,599			1,518			1,453			4			16			6,421			5,617			14
Operating Margin			1,675			2,067			1,822			1,556			1,431			(19	)		17			7,120			5,334			33
Credit Costs			874			823			736			726			926			6			(6	)		3,159			2,873			10
Operating Income Before Income Tax Expense			801			1,244			1,086			830			505			(36	)		59			3,961			2,461			61
Income Tax Expense			301			447			407			316			181			(33	)		66			1,471			923			59
OPERATING EARNINGS		$	500		$	797		$	679		$	514		$	324			(37	)		54		$	2,490		$	1,538			62
Average Common Equity		$	10,279		$	10,414		$	10,380		$	10,095		$	9,458			(1	)		9		$	10,293		$	9,118			13
Average Managed Assets (a)			188,219			178,595			175,329			175,340			165,926			5			13			179,404			162,753			10
Shareholder Value Added			187			477			366			212			35			(61	)	NM				1,242			430			189
Return on Common Equity			19.2	%		30.2	%		26.1	%		20.5	%		13.5	%	(1,100)bp			570bp				24.1	%		16.7	%	740bp
Overhead Ratio			50			44			47			49			50			600			—			47			51			(400	)
FULL-TIME EQUIVALENT EMPLOYEES (b)			43,607			42,901			42,632			42,317			41,195			2	%		6	%
CHASE FINANCIAL SERVICES’ BUSINESSES																						��
CHASE CARDMEMBER SERVICES:
Operating Revenues		$	1,578		$	1,563		$	1,492		$	1,359		$	1,261			1			25		$	5,992		$	4,482			34	%
Operating Earnings			152			242			175			147			172			(37	)		(12	)		716			497			44
CHASE HOME FINANCE:
Operating Revenues		$	642		$	975		$	773		$	529		$	442			(34	)		45		$	2,919		$	1,687			73
Operating Earnings			154			393			268			133			89			(61	)		73			948			401			136
CHASE REGIONAL BANKING:
Operating Revenues		$	684		$	690		$	702		$	719		$	734			(1	)		(7	)	$	2,795		$	3,056			(9	)
Operating Earnings			89			87			99			124			105			2			(15	)		399			470			(15	)
CHASE MIDDLE MARKET:
Operating Revenues		$	365		$	384		$	368		$	376		$	356			(5	)		3		$	1,493		$	1,435			4
Operating Earnings			66			104			98			91			73			(37	)		(10	)		359			294			22
CHASE AUTO FINANCE:
Operating Revenues		$	190		$	167		$	167		$	172		$	164			14			16		$	696		$	552			26
Operating Earnings			38			27			82			33			36			41			6			180			128			41

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

(a)	Excludes the impact of credit card securitizations.
(b)	Represents actual period end amount for each respective quarter.

Page 13

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

																4QTR 2002												2002
	4QTR			3QTR			2QTR			1QTR			4QTR			Over (Under)						FULL YEAR						Over (Under)
	2002			2002			2002			2002			2001			3Q 2002			4Q 2001			2002			2001			2001
Chase Cardmember Services — Managed Basis
End-of-Period Outstandings (in billions)	$	51.1		$	51.1		$	49.5		$	48.9		$	41.6			—	%		23	%	$	51.1		$	41.6			23	%
Total Purchases & Cash Advances (a) (in billions)		21.2			23.0			20.9			18.9			20.3			(8	)		4			84.0			72.2			16
Total Accounts (in millions)		29.2			28.6			28.1			27.7			23.9			2			22			29.2			23.9			22
Net Charge-Off Ratio		5.75	%		5.59	%		6.41	%		5.82	%		5.56	%	16bp			19bp				5.89	%		5.49	%	40bp
30+ Day Delinquency Rate		4.67			4.47			4.17			4.58			4.77			20			(10	)		4.67			4.77			(10	)
Overhead Ratio		38			34			34			34			34			400			400			35			36			(100	)
Chase Regional Banking
Total Average Deposits (in billions)	$	70.6		$	70.4		$	70.0		$	69.1		$	66.3			—	%		6	%	$	70.0		$	65.8			6	%
Total Average Assets Under Management (b) (in billions)		103.0	(c)		102.9			104.4			104.8			102.9			—			—			103.8			102.6			1
Number of Branches		528			533			533			538			531			(1	)		(1	)		528			531			(1	)
Number of ATMs		1,876			1,884			1,878			1,895			1,907			—			(2	)		1,876			1,907			(2	)
Number of Online Customers (in thousands)		1,185			1,128			1,066			1,003			937			5			26			1,185			937			26
Overhead Ratio		79	%		75	%		75	%		74	%		73	%	400bp			600bp				76	%		70	%	600bp
Chase Home Finance
Originations (in billions)	$	60.9		$	35.4		$	26.5		$	32.7		$	50.4			72	%		21	%	$	155.5		$	184.2			(16	)%
Loans Serviced (in billions)		426			435			436			426			430			(2	)		(1	)		426			430			(1	)
Total Average Loans Owned (in billions)		59.7			54.2			54.1			56.9			57.3			10			4			56.2			55.7			1
Number of Customers (in millions)		4.0			4.1			4.1			4.0			4.0			(2	)		—			4.0			4.0			—
Net Charge-Off Ratio		0.27	%		0.21	%		0.30	%		0.21	%		0.21	%	6bp			6bp				0.25	%		0.18	%	7bp
Overhead Ratio		58			31			39			55			63			2,700			(500	)		44			59			(1,500	)
Chase Middle Market
Total Average Loans (in billions)	$	14.1		$	13.7		$	13.5		$	13.6		$	14.1			3	%		—	%	$	13.7		$	14.3			(4	)%
Total Average Deposits (in billions)		25.8			24.0			24.0			22.7			20.1			8			28			24.1			18.5			30
Nonperforming Average Loans as a % of Total Average Loans		1.59	%		1.95	%		1.89	%		2.20	%		2.21	%	(36)bp			(62)bp				1.91	%		2.35	%	(44)bp
Overhead Ratio		60			51			56			53			60			900			—			55			57			(200	)
Chase Auto Finance
Loan and Lease Receivables (in billions)	$	36.4		$	33.2		$	29.3		$	28.8		$	28.4			10	%		28	%	$	36.4		$	28.4			28	%
Origination Volume (in billions)		6.8			7.6			5.2			5.8			5.6			(11	)		21			25.4			19.9			28
Market Share		5.7	%(c)		5.8	%		5.1	%		5.2	%		5.2	%	(10)bp			50bp				5.7	%		5.2	%	50bp
Net Charge-Off Ratio		0.53			0.59			0.38			0.53			0.70			(6	)		(17	)		0.51			0.53			(2	)
Overhead Ratio		33			35			35			34			33			(200	)		—			34			37			(300	)

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

(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)

																4QTR 2002											2002
																Over (Under)						FULL YEAR					Over (Under)
			4QTR			3QTR			2QTR		1QTR		4QTR
			2002			2002			2002		2002		2001			3Q 2002			4Q 2001			2002		2001			2001
NONINTEREST REVENUE
Investment Banking Fees:
	Advisory		$	233		$	143		$	189	$	191	$	271			63	%		(14	)%	$	756	$	1,248			(39	)%
	Underwriting:
		Equity		84			57			184		139		205			47			(59	)		464		525			(12	)
		Debt		361			345			412		425		455			5			(21	)		1,543		1,839			(16	)
	Total		$	678		$	545		$	785	$	755	$	931			24			(27	)	$	2,763	$	3,612			(24	)
Trading-Related Revenue: (a)
	Equities		$	(20	)	$	(211	)	$	120	$	223	$	101			91		NM			$	112	$	1,307			(91	)
	Fixed Income and Other			1,273			576			1,016		1,497		803			121			59			4,362		4,972			(12	)
	Total		$	1,253		$	365		$	1,136	$	1,720	$	904			243			39		$	4,474	$	6,279			(29	)
Fees and Commissions:
	Investment Management, Custody and Processing Services		$	863		$	923		$	981	$	992	$	987			(7	)		(13	)	$	3,759	$	3,951			(5	)
	Credit Card Revenue			807			806			669		587		662			—			22			2,869		2,108			36
	Brokerage and Investment Services			273			321			333		304		305			(15	)		(10	)		1,231		1,244			(1	)
	Mortgage Servicing Fees, Net of Amortization and Writedowns			(330	)		323			257		48		(81	)	NM				(307	)		298		(230	)	NM
	Other Lending-Related Service Fees			160			128			128		130		118			25			36			546		495			10
	Deposit Service Charges			277			288			273		290		277			(4	)		—			1,128		1,023			10
	Other Fees			232			216			244		233		225			7			3			925		890			4
	Total		$	2,282		$	3,005		$	2,885	$	2,584	$	2,493			(24	)		(8	)	$	10,756	$	9,481			13
Other Revenue: (b)
	Residential Mortgage Origination/Sales Activities		$	212		$	213		$	146	$	100	$	162			—			31		$	671	$	576			16
	All Other Revenue			78			206			146		57		(11	)		(62	)	NM				487		322			51
	Total		$	290		$	419		$	292	$	157	$	151			(31	)		92		$	1,158	$	898			29
NONINTEREST EXPENSE
Other Expense:
Professional Services			$	378		$	307		$	311	$	307	$	289			23			31		$	1,303	$	1,139			14
Outside Services				249			256			240		249		213			(3	)		17			994		888			12
Marketing				220			179			144		146		179			23			23			689		601			15
Travel and Entertainment				96			102			112		101		78			(6	)		23			411		453			(9	)
All Other				351			324			311		405		369			8			(5	)		1,391		1,440			(3	)
Total			$	1,294		$	1,168		$	1,118	$	1,208	$	1,128			11			15		$	4,788	$	4,521			6

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

(a)	Includes trading-related net interest income. See reconciliation from reported to operating basis on page 6.
(b)	In the third quarter of 2002, the “Provision for Loan Losses” was renamed “Provision for Credit Losses” and now includes the aggregate amount of the provision for loan losses and provision for lending-related commitments. The prior period provision for lending-related commitments was reclassified from “Other Revenue” to the “Provision for Credit Losses” category.

Page 15

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

																		Dec 31, 2002
																		Over (Under)
			Dec 31			Sep 30			Jun 30			Mar 31			Dec 31			Sep 30			Dec 31
			2002			2002			2002			2002			2001			2002			2001
ASSETS
Cash and Due from Banks			$	19,218		$	18,159		$	21,878		$	22,637		$	22,600			6	%		(15	)%
Deposits with Banks				8,942			13,447			10,517			9,691			12,743			(34	)		(30	)
Federal Funds Sold and Securities Purchased under Resale Agreements				65,809			63,748			71,740			76,719			63,727			3			3
Securities Borrowed				34,143			35,283			48,429			40,880			36,580			(3	)		(7	)
Trading Assets:
	Debt and Equity Instruments			165,199			151,264			159,746			144,992			118,248			9			40
	Derivative Receivables			83,102			87,518			69,858			63,224			71,157			(5	)		17
Securities				84,463			79,768			64,526			61,225			59,760			6			41
Loans (Net of Allowance for Loan Losses)				211,014			206,215			207,080			209,541			212,920			2			(1	)
Private Equity Investments				8,228			8,013			8,229			8,553			9,197			3			(11	)
Goodwill				8,096			8,108			8,089			8,055			8,336			—			(3	)
Other Intangibles:
	Mortgage Servicing Rights			3,230			3,606			5,689			6,918			6,579			(10	)		(51	)
	Purchased Credit Card Relationships			1,269			1,337			1,426			1,508			519			(5	)		145
	All Other Intangibles			307			311			313			327			44			(1	)	NM
Other Assets				65,780			64,982			63,026			58,238			71,165			1			(8	)
TOTAL ASSETS			$	758,800		$	741,759		$	740,546		$	712,508		$	693,575			2			9
LIABILITIES
Deposits:
	Noninterest-Bearing		$	82,029		$	74,724		$	73,529		$	72,659		$	76,974			10			7
	Interest-Bearing			222,724			217,447			220,300			209,378			216,676			2			3
		Total Deposits		304,753			292,171			293,829			282,037			293,650			4			4
Federal Funds Purchased and Securities Sold under Repurchase Agreements				169,483			154,745			162,656			152,837			128,445			10			32
Commercial Paper				16,591			13,775			14,561			23,726			18,510			20			(10	)
Other Borrowed Funds				8,946			12,646			17,352			16,968			10,835			(29	)		(17	)
Trading Liabilities:
	Debt and Equity Instruments			66,864			71,607			67,952			71,141			52,988			(7	)		26
	Derivative Payables			66,227			70,593			55,575			44,997			56,063			(6	)		18
Accounts Payable, Accrued Expenses and Other Liabilities (including the Allowance for Lending-Related Commitments)				38,440			38,233			38,083			36,910			47,813			1			(20	)
Long-Term Debt				39,751			39,113			42,363			37,322			39,183			2			1
Guaranteed Preferred Beneficial Interests in the Firm’s Junior Subordinated Deferrable Interest Debentures				5,439			5,439			5,439			5,439			4,439			—			23
TOTAL LIABILITIES				716,494			698,322			697,810			671,377			651,926			3			10
PREFERRED STOCK OF SUBSIDIARY				—			—			—			—			550		NM			NM
STOCKHOLDERS’ EQUITY
Preferred Stock				1,009			1,009			1,009			1,009			1,009			—			—
Common Stock				2,024			2,023			2,020			2,016			1,997			—			1
Capital Surplus				13,222			13,113			13,111			12,783			12,495			1			6
Retained Earnings				25,851			26,940			27,605			27,278			26,993			(4	)		(4	)
Accumulated Other Comprehensive Income (Loss)				1,227			1,465			79			(909	)		(442	)		(16	)	NM
Treasury Stock, at Cost				(1,027	)		(1,113	)		(1,088	)		(1,046	)		(953	)		8			(8	)
TOTAL STOCKHOLDERS’ EQUITY				42,306			43,437			42,736			41,131			41,099			(3	)		3
TOTAL LIABILITIES, PREFERRED STOCK OF SUBSIDIARY AND STOCKHOLDERS’ EQUITY			$	758,800		$	741,759		$	740,546		$	712,508		$	693,575			2			9

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

Page 16

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

																4QTR 2002												2002
																Over (Under)						FULL YEAR						Over (Under)
	4QTR			3QTR			2QTR			1QTR			4QTR
	2002			2002			2002			2002			2001			3Q 2002			4Q 2001			2002			2001			2001
AVERAGE BALANCES
ASSETS
Deposits with Banks	$	13,074		$	13,071		$	9,287		$	12,326		$	10,810			—	%		21	%	$	11,945		$	9,119			31	%
Federal Funds Sold and Securities Purchased under Resale Agreements		88,974			83,402			83,317			81,004			85,582			7			4			84,194			83,841			—
Securities and Trading Assets		229,120			205,232			201,512			180,951			188,988			12			21			204,337			196,166			4
Securities Borrowed		40,673			41,881			46,537			41,739			39,213			(3	)		4			42,703			38,156			12
Loans		211,489			205,037			211,495			217,847			218,625			3			(3	)		211,432			219,843			(4	)
Total Interest-Earning Assets		583,330			548,623			552,148			533,867			543,218			6			7			554,611			547,125			1
Noninterest-Earning Assets		171,836			175,743			182,798			184,779			196,557			(2	)		(13	)		178,746			188,848			(5	)
TOTAL ASSETS	$	755,166		$	724,366		$	734,946		$	718,646		$	739,775			4			2		$	733,357		$	735,973			—
LIABILITIES
Interest-Bearing Deposits	$	215,061		$	214,932		$	221,687		$	218,049		$	223,314			—			(4	)	$	217,417		$	215,865			1
Federal Funds Purchased and Securities Sold under Repurchase Agreements		182,526			170,266			166,919			153,662			164,714			7			11			168,428			163,858			3
Commercial Paper		13,469			13,740			18,514			18,901			17,134			(2	)		(21	)		16,134			18,561			(13	)
Other Borrowings (a)		65,591			66,014			78,614			67,408			55,388			(1	)		18			69,393			64,029			8
Long-Term Debt		44,621			45,525			42,482			43,046			44,964			(2	)		(1	)		43,927			45,583			(4	)
Total Interest-Bearing Liabilities		521,268			510,477			528,216			501,066			505,514			2			3			515,299			507,896			1
Noninterest-Bearing Liabilities		190,919			170,712			164,832			175,800			191,098			12			—			175,594			184,817			(5	)
TOTAL LIABILITIES		712,187			681,189			693,048			676,866			696,612			5			2			690,893			692,713			—
PREFERRED STOCK OF SUBSIDIARY		—			—			—			354			550		NM			NM				87			550			(84	)
Preferred Stock		1,009			1,009			1,009			1,009			1,009			—			—			1,009			1,186			(15	)
Common Stockholders’ Equity		41,970			42,168			40,889			40,417			41,604			—			1			41,368			41,524			—
TOTAL STOCKHOLDERS’ EQUITY		42,979			43,177			41,898			41,426			42,613			—			1			42,377			42,710			(1	)
TOTAL LIABILITIES, PREFERRED STOCK OF SUBSIDIARY AND STOCKHOLDERS’ EQUITY	$	755,166		$	724,366		$	734,946		$	718,646		$	739,775			4			2		$	733,357		$	735,973			—
AVERAGE RATES
INTEREST-EARNING ASSETS
Deposits with Banks		1.48	%		2.65	%		3.31	%		2.96	%		3.76	%	(117)bp			(228)bp				2.54	%		4.96	%	(242)bp
Federal Funds Sold and Securities Purchased under Resale Agreements		2.33			2.52			2.58			2.45			3.18			(19	)		(85	)		2.47			4.54			(207	)
Securities and Trading Assets		4.62			4.98			5.18			5.35			5.40			(36	)		(78	)		5.01			5.67			(66	)
Securities Borrowed		1.42			1.70			1.49			1.77			2.00			(28	)		(58	)		1.59			3.52			(193	)
Loans		5.29			5.73			5.95			5.87			5.97			(44	)		(68	)		5.71			7.07			(136	)
Total Interest-Earning Assets		4.22			4.58			4.74			4.79			5.00			(36	)		(78	)		4.57			5.90			(133	)
INTEREST-BEARING LIABILITIES
Interest-Bearing Deposits		2.17			2.62			2.38			2.49			2.52			(45	)		(35	)		2.42			3.70			(128	)
Federal Funds Purchased and Securities Sold under Repurchase Agreements		1.71			2.06			2.06			2.07			2.63			(35	)		(92	)		1.97			4.06			(209	)
Commercial Paper		1.53			1.81			1.84			1.76			2.30			(28	)		(77	)		1.74			4.03			(229	)
Other Borrowings		4.69			5.06			5.24			4.81			6.17			(37	)		(148	)		4.96			5.77			(81	)
Long-Term Debt		3.68			3.22			3.10			3.35			3.58			46			10			3.34			5.01			(167	)
Total Interest-Bearing Liabilities		2.44			2.78			2.75			2.72			3.04			(34	)		(60	)		2.67			4.21			(154	)
TOTAL INVESTABLE FUNDS		2.18			2.59			2.63			2.55			2.83			(41	)		(65	)		2.48			3.91			(143	)
INTEREST RATE SPREAD		1.78	%		1.80	%		1.99	%		2.07	%		1.96	%		(2	)		(18	)		1.90	%		1.69	%		21
NET INTEREST MARGIN		2.04	%		1.99	%		2.11	%		2.24	%		2.17	%		5			(13	)		2.09	%		1.99	%		10
NET INTEREST MARGIN ADJUSTED FOR SECURITIZATIONS		2.36	%		2.31	%		2.36	%		2.47	%		2.39	%		5			(3	)		2.37	%		2.18	%		19

(a) Includes securities sold but not yet purchased.

Page 17

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

																December 31, 2002
																Over (Under)
	Dec 31			Sep 30			Jun 30			Mar 31			Dec 31			Sep 30			Dec 31
	2002			2002			2002			2002			2001			2002			2001
CREDIT-RELATED ASSETS
COMMERCIAL LOANS
Domestic Commercial	$	56,667		$	62,901		$	67,124		$	64,068		$	66,436			(10	)%		(15	)%
Foreign Commercial		34,881			34,585			37,577			37,684			38,428			1			(9	)
Total Commercial Loans		91,548			97,486			104,701			101,752			104,864			(6	)		(13	)
Derivative Receivables		83,102			87,518			69,858			63,224			71,157			(5	)		17
TOTAL COMMERCIAL CREDIT-RELATED		174,650			185,004			174,559			164,976			176,021			(6	)		(1	)
CONSUMER LOANS
Credit Card — Reported		19,677			20,508			21,036			24,746			19,387			(4	)		1
Credit Card — Securitizations		30,722			29,843			27,499			23,225			21,424			3			43
Credit Card — Managed		50,399			50,351			48,535			47,971			40,811			—			23
1-4 Family Residential Mortgages		64,000			55,675			52,669			54,460			59,430			15			8
Auto Financings		33,615			30,612			26,666			26,002			25,667			10			31
Other Consumer (a)		7,524			7,197			7,014			7,586			8,096			5			(7	)
TOTAL MANAGED CONSUMER LOANS		155,538			143,835			134,884			136,019			134,004			8			16
TOTAL MANAGED CREDIT-RELATED ASSETS	$	330,188		$	328,839		$	309,443		$	300,995		$	310,025			—			7
NONPERFORMING ASSETS AND RATIOS
COMMERCIAL LOANS
Domestic Commercial	$	2,059		$	1,865		$	1,402		$	1,399		$	1,275			10			61
Foreign Commercial		1,613			1,731			1,110			960			722			(7	)		123
Total Commercial Loans		3,672			3,596			2,512			2,359			1,997			2			84
Derivative Receivables (b)		289			169			144			155			170			71			70
TOTAL		3,961			3,765			2,656			2,514			2,167			5			83
CONSUMER LOANS
Credit Card — Reported		15			17			18			19			22			(12	)		(32	)
Credit Card — Securitizations		—			—			—			—			—		NM			NM
Credit Card — Managed		15			17			18			19			22			(12	)		(32	)
1-4 Family Residential Mortgages		312			314			275			351			280			(1	)		11
Auto Financings		118			108			103			98			118			9			—
Other Consumer (a)		76			68			54			66			79			12			(4	)
Total Consumer Loans		521			507			450			534			499			3			4
TOTAL		4,482			4,272			3,106			3,048			2,666			5			68
Assets Acquired in Loan Satisfactions		190			140			142			130			124			36			53
TOTAL		4,672			4,412			3,248			3,178			2,790			6			67
Other Receivables (c)		108			1,130			1,130			1,130			1,130			(90	)		(90	)
TOTAL NONPERFORMING ASSETS (d)	$	4,780		$	5,542		$	4,378		$	4,308		$	3,920			(14	)		22
TOTAL NONPERFORMING ASSETS TO TOTAL ASSETS		0.63	%		0.75	%		0.59	%		0.60	%		0.57	%	(12)bp			6bp
PAST DUE 90 DAYS AND OVER AND ACCRUING
COMMERCIAL LOANS
Domestic Commercial	$	57		$	32		$	29		$	42		$	30			78	%		90	%
Foreign Commercial		—			1			2			10			5		NM			NM
TOTAL COMMERCIAL CREDIT-RELATED		57			33			31			52			35			73			63
CONSUMER LOANS
Credit Card — Reported		451			447			505			619			449			1			—
Credit Card — Securitizations		630			526			457			478			457			20			38
Credit Card — Managed		1,081			973			962			1,097			906			11			19
1-4 Family Residential Mortgages		—			1			—			—			—		NM			NM
Auto Financings		—			—			—			—			1		NM			NM
Other Consumer (a)		22			26			37			45			36			(15	)		(39	)
TOTAL CONSUMER LOANS		1,103			1,000			999			1,142			943			10			17
TOTAL CR.-REL. ACCRUING ASSETS PAST DUE 90 DAYS	$	1,160		$	1,033		$	1,030		$	1,194		$	978			12			19

(a)	Consists of installment loans (direct and indirect types of consumer finance), student loans, unsecured revolving lines of credit and foreign consumer loans.
(b)	Includes $125 million of Enron-related surety receivables at December 31, 2002 that were the subject of recently settled litigation with credit-worthy entities.
(c)	These receivables at December 31, 2002 relate to the Enron-related letter of credit, which is the subject of litigation with a credit-worthy entity and are classified in Other Assets.
(d)	Nonperforming assets at December 31, 2002 have not been reduced for credit protection (single name credit default swaps and collateralized loan obligations) relating to nonperforming counterparties in amounts aggregating $66 million. Nonperforming assets exclude nonaccrual loans held for sale (“HFS”) of $43 million. HFS loans are carried at the 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)

																4QTR 2002												2002
																Over (Under)						FULL YEAR						Over (Under)
	4QTR			3QTR			2QTR			1QTR			4QTR
	2002			2002			2002			2002			2001			3Q 2002			4Q 2001			2002			2001			2001
NET LOAN CHARGE-OFFS
COMMERCIAL LOANS
Domestic Commercial	$	226		$	307		$	181		$	207		$	388			(26	)%		(42	)%	$	921		$	817			13	%
Foreign Commercial		208			527			112			113			45			(61	)	NM				960			165		NM
TOTAL COMMERCIAL LOANS		434			834			293			320			433			(48	)		—			1,881			982			92
CONSUMER LOANS
Credit Card — Reported		286			333			433			337			274			(14	)		4			1,389			990			40
Credit Card — Securitizations		430			354			334			321			264			21			63			1,439			1,048			37
Credit Card — Managed		716			687			767			658			538			4			33			2,828			2,038			39
1-4 Family Residential Mortgages		15			7			21			13			18			114			(17	)		56			50			12
Auto Financings		47			47			29			38			50			—			(6	)		161			137			18
Other Consumer (a)		54			45			45			45			43			20			26			189			176			7
TOTAL CONSUMER LOANS		832			786			862			754			649			6			28			3,234			2,401			35
TOTAL MANAGED NET LOAN CHARGE-OFFS	$	1,266		$	1,620		$	1,155		$	1,074		$	1,082			(22	)		17		$	5,115		$	3,383			51
NET LOAN CHARGE-OFF RATES — ANNUALIZED
COMMERCIAL LOANS
Domestic Commercial		1.61	%		1.95	%		1.13	%		1.24	%		2.04	%	(34)bp			(43)bp				1.52	%		1.02	%	50bp
Foreign Commercial		2.30			6.66			1.24			1.34			0.53			(436	)		177			2.63			0.50			213
TOTAL COMMERCIAL LOANS		1.88			3.53			1.17			1.27			1.58			(165	)		30			1.93			0.87			106
CONSUMER LOANS
Credit Card — Reported		5.90			6.27			7.67			5.78			5.74			(37	)		16			6.42			5.09			133
Credit Card — Securitizations		5.58			4.95			5.30			5.98			5.23			63			35			5.43			5.83			(40	)
Credit Card — Managed		5.70			5.51			6.42			5.87			5.48			19			22			5.87			5.45			42
1-4 Family Residential Mortgages		0.10			0.05			0.16			0.09			0.12			5			(2	)		0.10			0.09			1
Auto Financings		0.58			0.64			0.43			0.58			0.79			(6	)		(21	)		0.57			0.59			(2	)
Other Consumer (a)		2.77			2.53			2.35			2.16			2.12			24			65			2.41			2.17			24
TOTAL CONSUMER LOANS		2.20			2.23			2.53			2.22			1.98			(3	)		22			2.30			1.92			38
TOTAL MANAGED NET LOAN CHARGE-OFF RATES		2.08			2.75			1.96			1.82			1.80			(67	)		28			2.15			1.42			73
ALLOWANCE FOR LOAN LOSSES AND RATIOS
Allowance for Loan Losses (b)	$	5,350		$	5,263		$	5,006		$	5,005		$	4,524			2	%		18	%
To Total Loans		2.47	%		2.49	%		2.36	%		2.33	%		2.08	%	(2)bp			39bp
To Total Nonperforming Loans		128			128			169			173			181			—			(5,300	)
To Total Nonperforming Assets		112			95			114			116			115			1,700			(300	)
ALLOWANCE COMPONENTS (b)
Commercial Specific and Expected	$	2,216		$	2,079		$	1,806		$	1,798		$	1,724			7	%		29	%
Consumer Expected		2,360			2,365			2,387			2,518			2,105			—			12
Total Specific and Expected		4,576			4,444			4,193			4,316			3,829			3			20
Residual Component		774			819			813			689			695			(5	)		11
Total	$	5,350		$	5,263		$	5,006		$	5,005		$	4,524			2			18

(a)	Consists of installment loans (direct and indirect types of consumer finance), student loans, unsecured revolving lines of credit and foreign consumer loans.
(b)	Represents period end balances for each respective quarter.

Page 19

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

	Dec 31		Sep 30		Dec 31
	2002		2002		2001
TELECOM AND RELATED INDUSTRIES (a)
CREDIT-RELATED ASSETS
Investment Grade	$	3,069	$	4,226	$	4,050
Non-Investment Grade:
Non-Criticized		3,116		2,887		3,553
Criticized, Performing		773		962		1,107
Nonperforming		831		752		236
Total Non-Investment Grade		4,720		4,601		4,896
Total Credit-Related Assets	$	7,789	$	8,827	$	8,946
COMMITMENTS
Investment Grade	$	6,307	$	5,881	$	7,191
Non-Investment Grade:
Non-Criticized		1,960		2,041		3,494
Criticized, Performing		714		1,459		799
Total Non-Investment Grade		2,674		3,500		4,293
Total Commitments	$	8,981	$	9,381	$	11,484
CABLE INDUSTRY
CREDIT-RELATED ASSETS
Investment Grade	$	1,697	$	1,095	$	1,057
Non-Investment Grade:
Non-Criticized		699		807		1,896
Criticized, Performing		1,416		1,441		63
Nonperforming		532		394		39
Total Non-Investment Grade		2,647		2,642		1,998
Total Credit-Related Assets	$	4,344	$	3,737	$	3,055
COMMITMENTS
Investment Grade	$	984	$	818	$	926
Non-Investment Grade:
Non-Criticized		397		578		997
Criticized, Performing		257		294		39
Total Non-Investment Grade		654		872		1,036
Total Commitments	$	1,638	$	1,690	$	1,962
MERCHANT ENERGY AND RELATED INDUSTRIES (b)
CREDIT-RELATED ASSETS
Investment Grade	$	816	$	859	$	640
Non-Investment Grade:
Non-Criticized		260		546		723
Criticized, Performing		1,059		659		43
Nonperforming		378		170		—
Total Non-Investment Grade		1,697		1,375		766
Total Credit-Related Assets	$	2,513	$	2,234	$	1,406
COMMITMENTS
Investment Grade	$	2,764	$	2,611	$	3,207
Non-Investment Grade:
Non-Criticized		163		650		946
Criticized, Performing		790		746		50
Total Non-Investment Grade		953		1,396		996
Total Commitments	$	3,717	$	4,007	$	4,203

Note — Investment grade: JPMorgan Chase’s internal risk ratings generally corresponds to that of a BBB-/Baa3 or better rating as defined by independent rating agencies, such as Standard & Poor’s or Moody’s.

Criticized: JPMorgan Chase’s internal risk ratings generally corresponds to that of a CCC+/Caa1 or below rating as defined by independent rating agencies.

(a) Telecom and Related Industries includes other companies with an interdependence upon the telecommunications sector. Prior periods presented herein are on a comparable basis.

(b) These amounts exclude Enron-related exposure.

Page 20

J.P. MORGAN CHASE & CO.
CAPITAL

																4QTR 2002												2002
																Over (Under)						FULL YEAR						Over (Under)
	4QTR			3QTR			2QTR			1QTR			4QTR
	2002			2002			2002			2002			2001			3Q 2002			4Q 2001			2002			2001			2001
SOURCES AND USES OF TIER 1 CAPITAL
(in billions)
Sources of Free Cash Flow
Operating Earnings Less Dividends	$	—	(a)	$	(0.4	)	$	0.5		$	0.5		$	(0.3	)	NM			NM			$	0.6	(a)	$	1.0			(40	)%
Preferred Stock and Equivalents/Other Items		(1.2	)(a)		(0.1	)		(0.5	)		0.2			(0.7	)	NM				(71	)%		(1.6	)(a)		(1.5	)		(7	)
Capital for Internal Asset Growth		(1.3	)(a)		(0.1	)		0.6			0.5			1.4		NM			NM				(0.3	)(a)		(0.9	)		67
Total Sources of Free Cash Flow	$	(2.5	)	$	(0.6	)	$	0.6		$	1.2		$	0.4			(317	)%	NM			$	(1.3	)	$	(1.4	)		7
Uses of Free Cash Flow
Increases (Decreases) in Capital Ratios	$	(2.3	)(a)	$	(0.6	)	$	0.9		$	1.4		$	0.5			(283	)	NM			$	(0.6	)(a)	$	(0.9	)		33
Acquisitions		—	(a)		—			—			—			—		NM			NM				—	(a)		0.1		NM
Repurchases Net of Stock Issuances		(0.2	)(a)		—			(0.3	)		(0.2	)		(0.1	)	NM				(100	)		(0.7	)(a)		(0.6	)		(17	)
Total Uses of Free Cash Flow	$	(2.5	)	$	(0.6	)	$	0.6		$	1.2		$	0.4			(317	)	NM			$	(1.3	)	$	(1.4	)		7
COMMON SHARES OUTSTANDING
(in millions)
Basic Weighted-Average Shares Outstanding		1,990.0			1,986.0			1,982.6			1,978.2			1,969.6			—			1			1,984.3			1,972.4			1
Diluted Weighted-Average Shares Outstanding		2,008.5			2,005.8			2,016.0			2,005.8			2,007.4			—			—			2,009.1			2,023.6			(1	)
Common Shares Outstanding — at Period End		1,998.7			1,995.9			1,993.4			1,990.2			1,973.4			—			1			1,998.7			1,973.4			1
CASH DIVIDENDS DECLARED PER SHARE	$	0.34		$	0.34		$	0.34		$	0.34		$	0.34			—			—		$	1.36		$	1.36			—
BOOK VALUE PER SHARE		20.66			21.26			20.93			20.16			20.32			(3	)		2
SHARE PRICE
High	$	26.14		$	33.68		$	38.75		$	39.68		$	40.95			(22	)		(36	)	$	39.68		$	59.19			(33	)
Low		15.26			17.86			30.15			26.70			31.30			(15	)		(51	)		15.26			29.04			(47	)
Close		24.00			18.99			33.92			35.65			36.35			26			(34	)
CAPITAL RATIOS
Tier I Capital Ratio		8.2	%(a)		8.7	%		8.8	%		8.6	%		8.3	%	(50)bp			(10)bp
Total Capital Ratio		11.9	(a)		12.4			12.7			12.5			11.9			(50	)		—
Tier I Leverage Ratio		5.1	(a)		5.4			5.4			5.4			5.2			(30	)		(10	)

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

(a) Estimated

Page 21

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 effect 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 and 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. Evidence of valuation changes are the result of unaffiliated party transactions, or in the case of impairment, regular internal valuation reviews by senior investment professionals. Such reviews consider external market and industry indicators of value.

Managed Credit Card Receivables or Managed Basis:Refer to the credit card receivables on JPMorgan Chase’s balance sheet plus securitized credit card receivables.

NM:Not meaningful

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

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 in 2001 includes the cumulative effect of a transition adjustment of $(25) million, net of taxes. The impact on 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 less 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.

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