1 EXHIBIT 12 Computation of Ratio of Earnings to Fixed Charges J.P. Morgan & Co. Incorporated Consolidated - -------------------------------------------------------------------------------- Six Months Dollars in millions 1998 - -------------------------------------------------------------------------------- Earnings: Net income $ 718 Add: income taxes 384 Less: equity in undistributed income of all affiliates accounted for by the equity method 9 Add: fixed charges, excluding interest on deposits 4 275 - -------------------------------------------------------------------------------- Earnings available for fixed charges, excluding interest on deposits 5 368 Add: interest on deposits 1 493 - -------------------------------------------------------------------------------- Earnings available for fixed charges, including interest on deposits 6 861 - -------------------------------------------------------------------------------- Fixed charges: Interest expense, excluding interest on deposits 4 249 Interest factor in net rental expense 26 - -------------------------------------------------------------------------------- Total fixed charges, excluding interest on deposits 4 275 Add: interest on deposits 1 493 - -------------------------------------------------------------------------------- Total fixed charges, including interest on deposits 5 768 - -------------------------------------------------------------------------------- Ratio of earnings to fixed charges: Excluding interest on deposits 1.26(a) Including interest on deposits 1.19(a) - -------------------------------------------------------------------------------- (a) For the six months ended June 30, 1998, the ratio of earnings to fixed charges, excluding the second quarter 1998 after tax gain of $79 million ($131 million before tax) related to the sale of the firm's global trust and agency services business and excluding the first quarter 1998 after tax charge of $129 million ($215 million before tax) related to restructuring of business activities,was 1.27 excluding interest on deposits and 1.20 including interest on deposits. 2 EXHIBIT 12 Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends J.P. Morgan & Co. Incorporated Consolidated - -------------------------------------------------------------------------------- Six Months Dollars in millions 1998 - -------------------------------------------------------------------------------- Earnings: Net income $ 718 Add: income taxes 384 Less: equity in undistributed income of all affiliates accounted for by the equity method 9 Add: fixed charges, excluding interest on deposits and preferred stock dividends 4 303 - -------------------------------------------------------------------------------- Earnings available for fixed charges, excluding interest on deposits 5 396 Add: interest on deposits 1 493 - -------------------------------------------------------------------------------- Earnings available for fixed charges, including interest on deposits 6 889 - -------------------------------------------------------------------------------- Fixed charges: Interest expense, excluding interest on deposits 4 249 Interest factor in net rental expense 26 Preferred stock dividends 28 - -------------------------------------------------------------------------------- Total fixed charges, excluding interest on deposits 4 303 Add: interest on deposits 1 493 - -------------------------------------------------------------------------------- Total fixed charges, including interest on deposits 5 796 - -------------------------------------------------------------------------------- Ratio of earnings to fixed charges: Excluding interest on deposits 1.25(a) Including interest on deposits 1.19(a) - -------------------------------------------------------------------------------- (a) For the six months ended June 30, 1998, the ratio of earnings to fixed charges, excluding the second quarter 1998 after tax gain of $79 million ($131 million before tax) related to the sale of the firm's global trust and agency services business and excluding the first quarter 1998 after tax charge of $129 million ($215 million before tax) related to restructuring of business activities,was 1.27 excluding interest on deposits and 1.20 including interest on deposits.