UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 8-K

CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

Registrant’s telephone number, including area code: (212) 270-6000

 

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Item 7. Financial Statements and Exhibits

(c) Exhibits

Item 9. Regulation FD Disclosure

On October 22, 2003, J.P. Morgan Chase & Co. (“JPMorgan Chase” or the “Firm”) will hold an investor presentation to review 2003 third quarter earnings.

Exhibit 99.3 is a copy of slides furnished at, and posted on the Firm’s website in connection with, the presentation. The slides are being furnished pursuant to Item 9, and the information contained therein shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liabilities under that Section. Furthermore, the information in Exhibit 99.3 shall not be deemed to be incorporated by reference into the filings of the Firm under the Securities Act of 1933.

Item 12. Results of Operations and Financial Condition

On October 22, 2003, JPMorgan Chase reported third quarter 2003 net income of $1.63 billion, or $0.78 per share. Net income for the third quarter of 2002 was $40 million, or $0.01 per share, and net income for the second quarter of 2003 was $1.83 billion, or $0.89 per share. A copy of the 2003 third quarter earnings press release is attached hereto as Exhibit 99.1, and a copy of the supplemental financial schedules is attached hereto as Exhibit 99.2.

The earnings press release contains statements that are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are based upon the current beliefs and expectations of JPMorgan Chase’s management and are subject to significant risks and uncertainties. These risks and uncertainties could cause JPMorgan Chase’s results to differ materially from those set forth in such forward-looking statements. Such risks and uncertainties are described in JPMorgan Chase’s Quarterly Report on Form 10-Q for the quarters ended June 30, 2003 and March 31, 2003, and in the 2002 Annual Report on Form 10-K, each filed with the Securities and Exchange Commission, which are available at the Securities and Exchange Commission’s internet site (www.sec.gov), and to which reference is hereby made.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: October 22, 2003

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EXHIBIT INDEX

4

 

EXHIBIT 12.1

J.P. MORGAN CHASE & CO.

Computation of Ratio of Earnings to Fixed Charges
(in millions, except ratios)

(a) The proportion deemed representative of the interest factor.

 

 

EXHIBIT 12.2

J.P. MORGAN CHASE & CO.

Computation of Ratio of Earnings to Fixed Charges
and Preferred Stock Dividend Requirements
(in millions, except ratios)

(a) The proportion deemed representative of the interest factor.

 

 

JPMORGAN CHASE REPORTS 2003 THIRD QUARTER RESULTS

New York, October 22, 2003 - J.P. Morgan Chase & Co. (NYSE: JPM) today reported 2003 third quarter net income of $1.63 billion, or $0.78 per share. Net income for the third quarter of 2002 was $40 million, or $0.01 per share, and net income for the second quarter of 2003 was $1.83 billion, or $0.89 per share. Return on average common equity for the quarter was 15%.

Last year, results were provided on both a reported basis and an operating basis, which excluded merger and restructuring costs and special items. Operating earnings for the third quarter of 2002 were $325 million, or $0.16 per share.

For the first nine months of 2003, reported net income was $4.86 billion, or $2.35 per share, 137% above last year’s reported results of $2.05 billion, or $1.00 per share, and 83% higher than last year’s operating results of $2.65 billion, or $1.30 per share. Return on average common equity was 15% for the first nine months of 2003.

“Our results for the quarter and the first nine months of 2003 show the substantial progress we have made this year. Our focus on execution against the backdrop of an improving economy has resulted in significant reductions in risk concentrations, strong year-over-year earnings growth and improved competitive positions. I am especially pleased by the improvements in our commercial credit portfolio,” said William B. Harrison, Jr., Chairman and Chief Executive Officer.

 

Highlights for the third quarter of 2003:

•

Commercial credit costs were approximately $1.5 billion lower than in the third quarter of 2002, while commercial non-performing assets were down 39%.

•

The Investment Bank and Chase Financial Services posted returns on allocated capital of 19% and 20%, respectively.

•

Treasury & Securities Services and Investment Management & Private Banking posted higher revenues, earnings and returns on allocated capital compared to the second quarter of 2003. JPMorgan Partners had private equity gains of $120 million.

 

 

 

 

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J.P. Morgan Chase & Co.
News Release

Investment Bank (“IB”)

•

Investment banking fees of $636 million were 20% higher than in the third quarter of 2002 because of higher equity underwriting fees and advisory fees, driven by market share gains. Compared to the second quarter of 2003, investment banking fees were down 17% due to lower debt underwriting and loan syndication fees, reflecting lower market volumes. For the first nine months of the year, the firm improved its rankings in Global Announced M&A to #3 and Global Equity & Equity Related to #4 and maintained its #1 ranking in Global Loan Syndications and its #2 ranking in U.S. Investment Grade Bonds.1

•

Capital markets and lending revenues for the quarter were $2.57 billion, up 32% from the third quarter of 2002 and down 26% from the second quarter of 2003.

•

Capital markets and lending total return revenues for the quarter were $2.76 billion. Total return revenues represent financial revenues plus the unrealized gains or losses on investment securities and hedges (included in comprehensive income) and internally transfer-priced assets and liabilities. The primary contributor to the difference between financial revenues and total return revenues is Global Treasury. Fixed income capital markets revenues were up 62% from the third quarter of 2002, driven by increased client revenues and significantly higher portfolio management revenues, which related to market making and proprietary risk taking activities. Fixed income revenues were down 28% from the strong levels in the second quarter of 2003 as higher client revenues were more than offset by lower portfolio management revenues, primarily in our global interest rate businesses. Equity capital markets revenues were up substantially from the third quarter of 2002. Compared to the second quarter of 2003, equity capital markets revenues declined 13% with higher revenues in the cash business more than offset by lower revenues in equity derivatives. Global Treasury had revenues of $492 million, up from both the third quarter of 2002 and the second quarter of 2003.

•

Credit costs, reflecting a reduction in the allowance for credit losses, were negative $181 million for the quarter and negative $4 million for the second quarter of 2003. The lower provision resulted from restructurings of several non-performing commercial loans and improvement in the overall credit quality of the portfolio. In the third quarter of 2002, credit costs were $1.32 billion.

•

Expenses of $1.83 billion increased 11% from the third quarter of 2002 primarily driven by higher incentives resulting from improved financial performance, partially offset by lower non-compensation expenses and severance and related costs. Expenses declined 26% from the second quarter of 2003.

Chase Financial Services (“CFS”)

•

Revenues were $3.35 billion for the quarter, down 9% from the third quarter of 2002 and 16% from the second quarter of 2003. Home Finance revenues of $662 million, comprised of operating and mortgage servicing hedging revenues, were down 32% from the third quarter of 2002. While markets were extremely volatile during the quarter, the hedging of mortgage servicing rights generated a small net loss of $6 million compared to excess hedging gains of $263 million in the third quarter of 2002 and

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1

Derived from Thomson Financial Securities Data

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J.P. Morgan Chase & Co.
News Release

$233 million last quarter. Operating revenues were adversely affected by losses from the hedging of pipeline and warehouse loans and by customer rate lock extensions to accommodate record origination volumes. Year to date, Home Finance had record revenues, up 37% over the first nine months of 2002. Auto Finance revenues were $218 million, up 32% from the third quarter of 2002 reflecting continued strong origination volumes. Cardmember Services revenues were up 1% compared to the third quarter of 2002, reflecting slower growth in receivables. Regional Banking and Middle Market average deposits grew 8% and 20%, respectively, from the third quarter of 2002. However, both reported declining revenues as lower interest rates over the last year resulted in reduced net interest income, despite the higher balances.

•

Expenses of $1.74 billion for the quarter were up 5% from the third quarter of 2002 reflecting higher business volumes and higher salaries and benefits.

•

Credit costs of $883 million were 7% higher than the third quarter of 2002. Charge-offs increased 6% from the third quarter of 2002 as average managed loans increased 24%.

Treasury & Securities Services (“T&SS”)

•

Revenues for the third quarter were $1.01 billion, down 2% from the third quarter of 2002, but up 3% from the second quarter of 2003. Adjusting for the gain last year, revenues were up 3% compared to the third quarter of 2002. Treasury Services revenues increased 7% from the third quarter of 2002 due to higher deposit balances, purchase card revenues and deposit balance deficiency fees. Institutional Trust Services revenues increased 8% from the prior year reflecting increased activity in the asset servicing business, higher deposit balances and the impact of acquisitions. Investor Services revenues declined 3% from the prior year, but increased 3% from the second quarter of 2003.

•

Expenses increased 5% from the third quarter of 2002, reflecting the impact of acquisitions, the cost associated with expensing of options and increased pension costs.

Investment Management & Private Banking (“IMPB”)

•

Revenues of $737 million were 6% above the same period last year and 9% higher than the second quarter of 2003 due primarily to higher global equity valuations and the acquisition of Retirement Plan Services (which closed in the second quarter of 2003).

•

Expenses of $613 million were 9% above the third quarter of 2002 primarily as a result of the acquisition of Retirement Plan Services and higher compensation expenses related to improved performance.

•

Credit costs were negative $7 million for the third quarter of 2003, reflecting recoveries and improved portfolio credit quality. This compared to credit costs of $26 million in the third quarter of 2002.

•

Total assets under supervision were $720 billion at September 30, 2003, up 14% from the third quarter of 2002 and 4% higher than the second quarter of 2003. Not reflected in assets under supervision is the firm’s 44% interest in American Century Companies, Inc., which had assets under management of $80 billion as of the end of the third quarter of 2003.

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J.P. Morgan Chase & Co.
News Release

JPMorgan Partners (“JPMP”)

•

During the quarter, JPMP’s direct private equity investments recorded net gains of $161 million compared to net losses of $239 million in the third quarter of 2002. The net gains included $134 million in realized cash gains, $26 million in mark-to-market gains on public securities and positive net valuation changes on private investments. The net valuation changes reflected writedowns of $65 million, which were entirely offset by $66 million of writeups related to investments for which recently completed financing activity provided indications of increased value.

•

Limited partner interests held in third-party private equity funds resulted in net losses of $41 million compared to net losses of $60 million in the third quarter of 2002.

Total Expenses

•

Expenses were $5.10 billion, up 10% from operating expenses in the third quarter of 2002. The increase was primarily driven by higher compensation expenses resulting from higher performance-related incentive accruals. Expenses were down 13% from the second quarter of 2003 primarily reflecting lower incentive accruals.

•

For the first nine months of 2003, expenses were $16.47 billion, an increase of 12% from operating expenses for the first nine months of last year. Expenses in the first nine months of 2003 included $100 million added to litigation reserves and $447 million in severance and related, including vacant real estate charges. Operating expenses in the first nine months of 2002 included $390 million in severance and related costs.

  Credit

•

Commercial loan net charge-offs in the third quarter of 2003 were $259 million compared to $834 million in the third quarter of 2002 and $257 million in the second quarter of 2003. The charge-off ratio for commercial loans was 1.09% in the third quarter of 2003, compared to 3.53% in the third quarter of 2002 and 1.20% in the second quarter of 2003.

•

Consumer loan net charge-offs on a managed basis, which includes credit card securitizations, were $826 million, up from $786 million in the third quarter of 2002 and down from $837 million in the second quarter of 2003. On a managed basis, the credit card net charge-off ratio was 5.80% for the third quarter of 2003, compared to 5.51% for the third quarter of 2002 and 6.01% for the second quarter of 2003. Excluding credit card securitizations, consumer net charge-offs were $355 million in the third quarter of 2003 compared to $432 million in the third quarter of 2002 and $357 million in the second quarter of 2003.

•

Credit costs on a managed basis were $694 million in the third quarter of 2003 compared to $2.19 billion in the third quarter of 2002 and $915 million in the second quarter of 2003. In the third quarter of 2003, managed credit costs were $834 million for consumer loans and negative $140 million for commercial loans and lending-related commitments.

•

Allowance for credit losses was $5.08 billion at September 30, 2003, compared to $5.84 billion at September 30, 2002 and $5.47 billion at June 30, 2003.

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J.P. Morgan Chase & Co.
News Release

•

Total nonperforming assets were $3.68 billion at September 30, 2003, down 34% from the third quarter of 2002 and 9% from the second quarter of 2003. Commercial criticized exposures (including loans, derivative receivables and unfunded commitments) declined $6.4 billion, or 36%, since September 30, 2002 and $1.5 billion, or 12%, since June 30, 2003.

Total assets and capital

•

Total assets as of September 30, 2003 were $793 billion, compared with $742 billion as of September 30, 2002 and $803 billion as of June 30, 2003. The firm adopted FIN 46 related to variable interest entities in July 2003; prior periods are not restated. Total assets include the effect of adopting FIN 46, which added $15 billion in assets. Commercial loans, excluding the impact of FIN 46, were $77 billion, $20 billion lower than on September 30, 2002 and $14 billion lower than on June 30, 2003. Commercial loans were $88 billion, including $11 billion related to consolidated variable interest entities primarily associated with multi-seller asset-backed commercial paper conduits. Managed consumer loans increased 27% from September 30, 2002 and 7% from June 30, 2003, primarily from increases in mortgage loans. The Tier 1 capital ratio was 8.7% at September 30, 2003. The June 30, 2003 capital ratio was previously reported as 8.7%. The firm changed the way it calculates risk-weighted assets this quarter, and calculating the June 30, 2003 ratio on the same basis as for September 30 would produce a ratio of 8.4% for June 30.

Other financial information (on a pre-tax basis)

•

There were no items characterized by management as non-operating in the first nine months of 2003, as restructuring costs are now included in reported results. Special items in the third quarter of 2002 and the first nine months of 2002 were $431 million and $915 million, respectively, in merger and restructuring costs and real estate charges.

The line of business operating results set forth above for the quarter and for prior periods reflect the revised internal management reporting policies previously disclosed in the firm’s Form 8-K dated July 11, 2003. The line of business results set forth above are presented on an operating or managed basis, which enables management to assess each business and measure overall firm results against targeted goals. The definition of operating basis starts with the reported U.S. GAAP results and then excludes the impact of merger and restructuring costs, credit card securitizations and special items (which management defined as significant nonrecurring gains or losses of $75 million or more during 2002). Both restructuring charges and special items are viewed by management as transactions that are not part of the firm’s normal daily business operations or are unusual in nature and therefore are not indicative of trends.

J.P. Morgan Chase & Co. is a leading global financial services firm with assets of $793 billion and operations in more than 50 countries. The firm is a leader in investment banking, financial services for consumers and businesses, financial transaction processing, investment management, private banking and private equity. A component of the Dow Jones Industrial Average, JPMorgan Chase is headquartered in New York and serves more than 30 million consumers nationwide, and many of the world’s most prominent corporate, institutional and government clients. Information about JPMorgan Chase is available on the Internet at www.jpmorganchase.com.

JPMorgan Chase will hold a conference call for the investment community on Wednesday, October 22, 2003 at 11:00 a.m. (Eastern Daylight Time) to review third quarter 2003 financial results. The dial-in number is (973) 628-9554. A live audio webcast of the call will be available on www.jpmorganchase.com. Slides for the call will also be available on www.jpmorganchase.com. A telephone replay of the presentation will be available beginning at 1:30 p.m. (EDT) on October 22, 2003 and continuing through 6:00 p.m. (EST) on October 28, 2003 at (973) 341-3080 pin #4205256. The replay also will be available on www.jpmorganchase.com beginning at 1:30 p.m. (EDT) on October 22, 2003. Additional detailed financial, statistical and business-related information is included in a financial supplement. The earnings

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J.P. Morgan Chase & Co.
News Release

release and the financial supplement are available on the JPMorgan Chase web site (www.jpmorganchase.com).

This press release contains statements that are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are based upon the current beliefs and expectations of JPMorgan Chase’s management and are subject to significant risks and uncertainties. These risks and uncertainties could cause our results to differ materially from those set forth in such forward-looking statements. Such risks and uncertainties are described in our Quarterly Report on Form 10-Q for the quarters ended June 30, 2003 and March 31, 2003 and in the 2002 Annual Report on Form 10-K, each filed with the Securities and Exchange Commission and available at the Securities and Exchange Commission’s internet site (www.sec.gov), to which reference is hereby made.

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(a)		Includes all mortgage-related noninterest revenues except Securities Gains. Third quarter 2003 amounts reflect $209 million of Mortgage Servicing Fees, Net of Amortization, Writedowns and Derivatives Hedging (previously recorded in Fees and Commissions), $(86) million of Residential Mortgage Origination/Sales Activities (Other Revenue), $(161) million of hedging of pipeline activities (Trading Revenue), and $21 million of all other revenues (Fees and Commissions and Other Revenue).
(b)		Included in the second quarter of 2003 was a $100 million addition to the Enron-related litigation reserve.
(c)		Ratios are based on annualized amounts.
(d)		Estimated
(e)		The Firm changed the way it calculates risk-weighted assets during the third quarter of 2003. The June 30, 2003 Tier 1 and Total Capital ratios of 8.4% and 12.0%, respectively, are calculated on the same basis as for September 30, 2003. The June 30, 2003 Tier 1 and Total Capital ratios were previously reported as 8.7% and 12.4%, respectively. Prior quarters have not been restated.
(f)		Includes Junior Subordinated Deferrable Interest Debentures Held by Trusts that Issued Guaranteed Capital Debt Securities and Guaranteed Preferred Beneficial Interests in Capital Debt Securities Issued by Consolidated Trusts. Excludes Beneficial Interests of Consolidated Variable Interest Entities.

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(a)		Represents condensed results as reported in JPMorgan Chase’s financial statements.
(b)		Represents the impact of credit card securitizations. For securitized receivables, amounts that normally would be reported as net interest income and as provision for credit losses are reported as noninterest revenue.
(c)		Includes merger and restructuring costs and other special items. There were no special items reported in the third quarter of 2003. The 2002 third quarter included $333 million (pre-tax) of merger and restructuring costs, and a $98 million (pre-tax) charge for excess real estate capacity.
(d)		On an operating basis, JPMorgan Chase reclassifies trading-related net interest income from Net Interest Income to Trading Revenue.
(e)		In addition to analyzing the Firm’s results on a reported basis, management looks at results on an “operating basis” (or “managed basis”) to assess each of its businesses and to measure overall Firm results against targeted goals. The definition of operating basis starts with the reported U.S. GAAP results and then excludes the impact of merger and restructuring costs, credit card securitizations, and special items (which management defined as significant nonrecurring gains or losses of $75 million or more during 2002). Both restructuring charges and special items are viewed by management as transactions that are not part of the Firm’s normal daily business operations or are unusual in nature and therefore are not indicative of trends. For a more detailed explanation of how the Firm looks at results on an “operating basis,” see Reconciliation from Reported Results to Operating Basis on page 32 of JPMorgan Chase’s June 30, 2003, Quarterly Report on Form 10-Q and on page 22 of JPMorgan Chase’s 2002 Annual Report.
(f)		Includes severance and other related costs associated with expense containment programs implemented in 2002.
(g)		Includes Occupancy Expense, Technology and Communications Expense, Other Expense and Surety Settlement and Litigation Reserve.

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(a)		Represents condensed results as reported in JPMorgan Chase’s financial statements.
(b)		Represents the impact of credit card securitizations. For securitized receivables, amounts that normally would be reported as net interest income and as provision for credit losses are reported as noninterest revenue.
(c)		Includes merger and restructuring costs and other special items. There were no special items reported in the first nine months of 2003. The first nine months of 2002 included $817 million (pre-tax) of merger and restructuring costs, and a $98 million (pre-tax) charge for excess real estate capacity.
(d)		On an operating basis, JPMorgan Chase reclassifies trading-related net interest income from Net Interest Income to Trading Revenue.
(e)		In addition to analyzing the Firm’s results on a reported basis, management looks at results on an “operating basis” (or “managed basis”) to assess each of its businesses and to measure overall Firm results against targeted goals. The definition of operating basis starts with the reported U.S. GAAP results and then excludes the impact of merger and restructuring costs, credit card securitizations, and special items (which management defined as significant nonrecurring gains or losses of $75 million or more during 2002). Both restructuring charges and special items are viewed by management as transactions that are not part of the Firm’s normal daily business operations or are unusual in nature and therefore are not indicative of trends. For a more detailed explanation of how the Firm looks at results on an “operating basis,” see Reconciliation from Reported Results to Operating Basis on page 32 of JPMorgan Chase’s June 30, 2003, Quarterly Report on Form 10-Q and on page 22 of JPMorgan Chase’s 2002 Annual Report.
(f)		Includes severance and other related costs associated with expense containment programs implemented in 2002.
(g)		Includes Occupancy Expense, Technology and Communications Expense, Other Expense and Surety Settlement and Litigation Reserve.

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(a)		See pages 8 and 9 for a reconciliation of reported results to operating basis.
(b)		Includes severance and other related costs associated with expense containment programs implemented in 2002.
(c)		Includes Occupancy Expense, Technology and Communications Expense, Amortization of Intangibles, Other Expense and Surety Settlement and Litigation Reserve.
(d)		Ratios are based on annualized amounts.

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(a)

At September 30, 2003, includes an incremental $15 billion related to variable interest entities that were consolidated during the third quarter of 2003 in accordance with FIN 46. Also includes approximately $3 billion of variable interest entities consolidated prior to the third quarter of 2003 that continue to be consolidated in accordance with FIN 46.

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(a)		At September 30, 2003, includes $10.9 billion of exposure related to consolidated variable interest entities in accordance with FIN 46, of which $10.4 billion is associated with multi-seller asset-backed commercial paper conduits.
(b)		At September 30, 2003, Derivative Receivables decreased $360 million in accordance with FIN 46.
(c)		Represents, at September 30, 2003, the Enron-related letter of credit, which continues to be the subject of litigation with a credit-worthy entity and which was classified in Other Assets.
(d)		At September 30, 2003, total commitments related to asset-backed commercial paper conduits consolidated in accordance with FIN 46 are $18.7 billion, of which $6.8 billion is included in Lending-Related Commitments. The remaining $11.9 billion of commitments related to these variable interest entities were excluded as their underlying assets are reported as follows: $10.4 billion in Loans and $1.5 billion in Available-for-sale Securities.
(e)		Includes unused advised lines of credit of $20 billion at September 30, 2003, $19 billion at June 30, 2003, and $18 billion at September 30, 2002.
(f)		Includes all Enron-related credit exposures. Credit exposure excludes risk participations and does not reflect the benefit of credit derivative hedges or liquid collateral held against derivatives contracts.
(g)		Includes securitized credit card receivables.
(h)		Nonperforming assets exclude nonaccrual loans held for sale (“HFS”) of $192 million at September 30, 2003. HFS loans are carried at the lower of cost or market, and declines in value are recorded in Other Revenue.

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PRESS RELEASE FINANCIAL SUPPLEMENT

THIRD QUARTER 2003

 

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

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(a)		Includes all mortgage-related noninterest revenues except Securities Gains. Third quarter 2003 amounts reflect $209 million of Mortgage Servicing Fees, Net of Amortization, Writedowns and Derivatives Hedging (previously recorded in Fees and Commissions), $(86) million of Residential Mortgage Origination/Sales Activities (Other Revenue), $(161) million of hedging of pipeline activities (Trading Revenue), and $21 million of all other revenues (Fees and Commissions and Other Revenue).
(b)		Included in the second quarter of 2003 was a $100 million addition to the Enron-related litigation reserve. In the fourth quarter of 2002, a $1,300 million (pre-tax) charge was recorded for the settlement of the Enron surety litigation and the establishment of a reserve for certain material litigation, proceedings and investigations.
(c)		Ratios are based on annualized amounts.

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(a)		Includes severance and other related costs associated with expense containment programs implemented in 2002.
(b)		Includes Occupancy Expense, Technology and Communications Expense, Other Expense and Surety Settlement and Litigation Reserve.
(c)		The Firm uses the shareholder value added (“SVA”) framework to measure performance of its business segments. To derive SVA, a non-GAAP financial measure, the Firm applies a cost of capital to each business segment. The capital elements and resultant capital charges provide the businesses with the financial framework to evaluate the trade-off between the use of capital by each business unit versus its return to shareholders. The table above provides a reconciliation of net income on a consolidated basis to the Firm’s SVA.
(d)		Ratios are based on annualized amounts.
(e)		A 12% (after-tax) cost of capital, based on average economic capital, is used for the Firm. To derive shareholder value added for the business segments, a 12% (after-tax) cost of capital is applied for each business segment, except for JPMorgan Partners, which is charged a 15% (after-tax) cost of capital.

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(a)

Included in Fees and Commissions.

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SEGMENT DETAIL

 

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Page 7

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(a)		Total return revenue represents financial revenues plus the unrealized gains or losses on investment securities and hedges (included in comprehensive income) and internally transfer-priced assets and liabilities.
(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.

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Page 9

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(a)		In addition to shareholder value added (“SVA”), the Firm uses tangible SVA, a non-GAAP financial measure, as an additional measure of the economics of the IMPB business segment. To derive tangible SVA, the impact of goodwill is excluded.
(b)		Estimated

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(a)		Includes mark-to-market gains (losses) and reversals of mark-to-market gains (losses) due to public securities sales.
(b)		Includes the impact of portfolio hedging activities.

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(a)		The quoted public value was $1.1 billion at September 30, 2003.
(b)		Represents the number of companies and funds at September 30, 2003.
(c)		Unfunded commitments to private third-party equity funds were $1.7 billion at September 30, 2003.
(d)		For purposes of calculating this ratio, the JPMP carrying value excludes the post-December 31, 2002 impact of public mark-to-market valuation adjustments, and the Firm’s common equity excludes SFAS 115 equity balances.

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(a)		Includes all mortgage-related noninterest revenues except Securities Gains. Third quarter 2003 amounts reflect $209 million of Mortgage Servicing Fees, Net of Amortization, Writedowns and Derivatives Hedging (previously recorded in Fees and Commissions), $(86) million of Residential Mortgage Origination/Sales Activities (Other Revenue), $(161) million of hedging of pipeline activities (Trading Revenue), and $21 million of all other revenues (Fees and Commissions and Other Revenue).
(b)		Includes credit card receivables that have been securitized.

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(a)

MSR represents Mortgage Servicing Rights.

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(a)		Sum of total customer purchases, cash advances and balance transfers.
(b)		Prior periods have been restated to conform to current presentation.
(c)		Assets under management includes deposits.
(d)		Estimated

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SUPPLEMENTAL DETAIL

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(a)

Includes trading-related net interest income. See reconciliation from reported to operating basis on page 6.

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(a)

At September 30, 2003, includes an incremental $15 billion related to variable interest entities that were consolidated during the third quarter of 2003 in accordance with FIN 46. Also includes approximately $3 billion of variable interest entities consolidated prior to the third quarter of 2003 that continue to be consolidated in accordance with FIN 46.

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(a)		Includes securities sold but not yet purchased.
(b)		On February 28, 2002, all outstanding shares were redeemed.

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(a)		At September 30, 2003, includes $10.9 billion of exposure related to consolidated variable interest entities in accordance with FIN 46, of which $10.4 billion is associated with multi-seller asset-backed commercial paper conduits.
(b)		At September 30, 2003, Derivative Receivables decreased $360 million in accordance with FIN 46.
(c)		Represents at September 30, 2003 the Enron-related letter of credit, which continues to be the subject of litigation with a credit-worthy entity and which was classified in Other Assets.
(d)		At September 30, 2003, total commitments related to asset-backed commercial paper conduits consolidated in accordance with FIN 46 are $18.7 billion, of which $6.8 billion is included in Lending-Related Commitments. The remaining $11.9 billion of commitments related to these variable interest entities were excluded as their underlying assets are reported as follows: $10.4 billion in Loans-U.S. and $1.5 billion in Available-for-Sale Securities.
(e)		Includes all Enron-related credit exposures. Credit exposure excludes risk participations and does not reflect the benefit of credit derivative hedges or liquid collateral held against derivatives contracts.
(f)		At September 30, 2003, credit card securitizations includes $1.1 billion of accrued interest and fees on securitized credit card loans that were classified in Other Assets, consistent with the FASB Staff Position, Accounting for Accrued Interest Receivable Related to Securitized and Sold Receivables under SFAS 140. Prior to March 31, 2003, these balances were classified in Credit Card Loans.
(g)		Consists of manufactured housing loans, installment loans (direct and indirect types of consumer finance), student loans, unsecured revolving lines of credit and non-U.S. consumer loans.

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(a)		Represents at September 30, 2003 the Enron-related letter of credit, which continues to be the subject of litigation with a credit-worthy entity and which was classified in Other Assets.
(b)		Consists of manufactured housing loans, installment loans (direct and indirect types of consumer finance), student loans, unsecured revolving lines of credit and non-U.S. consumer loans.
(c)		Nonperforming assets exclude nonaccrual loans held for sale (“HFS”) of $192 million at September 30, 2003. HFS loans are carried at the lower of cost or market, and declines in value are recorded in Other Revenue.
(d)		At September 30, 2003, credit card securitizations includes $151 million of accrued interest and fees on securitized credit card loans past due 90 days and over and accruing that were classified in Other Assets, consistent with the FASB Staff Position, Accounting for Accrued Interest Receivable Related to Securitized and Sold Receivables under SFAS 140. Prior to March 31, 2003, these balances were classified in Credit Card Loans.

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(a)		Consists of manufactured housing loans, installment loans (direct and indirect types of consumer finance), student loans, unsecured revolving lines of credit and non-U.S. consumer loans.
(b)		Reflects the impact of consolidated variable interest entities in accordance with FIN 46. Excluding the exposures related to the FIN 46 adoption, the net charge-off rate would have been 1.49% for Loans-U.S. and 1.24% for Total Commercial Loans.

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(a)

Reflects the impact of consolidated variable interest entities in accordance with FIN 46. Excluding the exposures related to the FIN 46 adoption, the ratio would have been 2.11%.

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Note:

The risk profile is based on JPMorgan Chase’s internal risk ratings, which generally correspond to the following ratings as defined by Standard & Poor’s / Moody’s:      Investment Grade: AAA / Aaa to BBB- / Baa3      Noninvestment Grade: BB+ / Ba1 to B- / B3      Criticized: CCC+ / Caa1 & below

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(a)		Telecom and Related Industries includes other companies with an interdependence upon the telecommunications sector.
(b)		Credit exposure excludes risk participations and does not reflect the benefit of credit derivative hedges or liquid collateral held against derivatives contracts.
(c)		Nonperforming assets exclude nonaccrual HFS loans; HFS loans are carried at the lower of cost or market and declines in value are recorded in Other Revenue.
(d)		Cable Industry includes companies with material investments in cable systems.
(e)		Merchant Energy and Related Industries includes merchant generation or energy trading entities, unregulated subsidiaries of power companies and holding companies which derive a material percentage of earnings from unregulated power businesses. These amounts exclude Enron-related exposure.
(f)		Investment Grade includes $10.5 billion of loan and derivative exposure related to consolidated variable interest entities in accordance with FIN 46.

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(a)		Estimated
(b)		The Firm changed the way it calculates risk-weighted assets during the third quarter of 2003. The June 30, 2003 Tier 1 and Total Capital ratios of 8.4% and 12.0%, respectively, are calculated on the same basis as for September 30, 2003. The June 30, 2003 Tier 1 and Total Capital ratios were previously reported as 8.7% and 12.4%, respectively. Prior quarters have not been restated.

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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 44% ownership interest.

Assets Under Supervision: Represent assets under management as well as custody, brokerage, administration and deposit accounts.

Average Allocated Capital: Represents the portion of average common stockholders’ equity allocated to the business segments. The total average allocated capital of all business segments equals the total average common stockholders’ equity of the Firm.

Average Goodwill Capital: The Firm allocates capital to businesses equal to 100% of the carrying value of goodwill. Average goodwill capital is equal to the average carrying value of goodwill.

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.

FIN 46: FASB Interpretation No. 46, “Consolidation of Variable Interest Entities, an interpretation of Accounting Research Bulletin No. 51.”

JPMorgan Partners (“JPMP”): JPMorgan Chase’s private equity business. The fair value of public investments held by JPMP are marked-to-market at the quoted public value. To determine the carrying values of these investments, JPMP incorporates the use of liquidity discounts to take into account the fact that it cannot immediately realize or hedge the quoted public values as a result of regulatory, corporate and/or contractual sales restrictions imposed on these holdings. Private investments are initially valued based on cost. The carrying values of private investments are adjusted from cost to reflect both positive and negative changes evidenced by financing events with third-party capital providers. In addition, these investments are subject to ongoing impairment reviews by JPMP’s senior investment professionals. A variety of factors are reviewed and monitored to assess impairment including, but not limited to, operating performance and future expectations, comparable industry valuations of public companies, changes in market outlook and changes in the third-party financing environment.

Managed Credit Card Receivables or Managed Basis: Refers to credit card receivables on the Firm’s balance sheet plus credit card receivables that have been securitized.

NM: Not meaningful

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

Other Consumer Loans: Consists of manufactured housing loans, installment loans (direct and indirect types of consumer finance), student loans, unsecured revolving lines of credit and non-U.S. consumer loans.

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

Reported Basis: Financial statements prepared under accounting principles generally accepted in the United States of America (“U.S. GAAP”). The reported basis includes the impact of credit card securitizations, merger and restructuring costs and special items.

Return on Tangible Allocated Capital: Excludes the impact of goodwill on operating earnings and average allocated capital.

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.

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

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

Tangible Shareholder Value Added: Excludes the impact of goodwill on operating earnings and capital charges.

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

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

Value-at-Risk (“VAR”): A measure of the dollar amount of potential loss from adverse market moves in an ordinary market environment.

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Exhibit 99.3

O C T O B E R 2 2, 2 0 0 3 T H I R D Q U A R T E R 2 0 0 3 Financial results

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3Q03 and YTD 2003 Significant improvement in performance from last year Lower risk in commercial credit and private equity Strong earnings rebound Drivers: fixed income, mortgage revenues, commercial credit YTD results include unusual benefits & costs Upside potential from continuing recovery and strong franchise

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$ billions Operating results 1 Actual ROE for all periods, not over/under. 3Q03 EPS of $0.78, YTD EPS of $2.35 YTD ROE of 15% compared to 8% in YTD 02

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YTD reduced risk concentrations Significant reduction in commercial credit risk Secondary loan sales and credit derivative hedging of $11BN Continued reduction in single name concentrations Loans (excluding FIN 46) down 15% to $77BN FIN 46 adds $11BN of (collateralized) conduit loans More diversified, smaller private equity portfolio

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Nonperforming assets and credit costs Nonperforming Assets ($ in BN) Credit Costs ($ in MM, managed basis) Commercial Consumer Note: Y-Axix is set to 16.5. Update scale when updating data 12/31/2001 3.297 0.623 3.92 9/30/2002 4.895 0.647 5.542 12/31/2002 4.069 0.711 4.78 9/30/2003 2.966 0.716 3.682

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$ in billions Investment Bank 1Actual ROE for all periods, not over/under.

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Investment Bank trading revenue Nonclient 500 Client 950 Distribution over last 11 quarters Client/Nonclient Revenue - 11 quarter average ($ in millions) Client revenue at highest level since merger; steady and growing Nonclient revenue down from 2Q03, up from 3Q02 Average trading VAR up from 2Q03, down from 3Q02

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Investment Bank fees and league table summary Source: Thomson Financial; arrow indicates ranking change vs. FY2002

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$ in billions Chase Financial Services 1Actual ROE for all periods, not over/under.

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Chase Home Finance revenue $ in millions Record origination volumes in 3Q but declining production revenue Relative to last year higher warehouse loans and NII Loss on hedge of pipeline and rate lock extensions No net gains from MSR hedging

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Investment Mgmt & Private Banking Operating Earnings 3Q02 68 2Q03 67 3Q03 85 ROE 5% 5% 6% ROTE1 19% 20% 25% T&SS and IM&PB earnings ($ in millions) Strength in Treasury Services and Institutional Trust; Investor Services turning $50MM pretax gain on sale in 3Q02 Revenue growth, positive asset flows Pretax margin improvement to 18% Treasury & Securities Services Operating Earnings 3Q02 201 2Q03 126 3Q03 157 1Return on tangible equity OH 72% 81% 77% ROE 31% 18% 24%

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JPMorgan Partners YTD close to 25% reduction in 3rd party funds Positive bottom line Turning around? Still slow pace of realizations, but lower writedowns $ in millions

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Earnings and shareholder returns 9 month operating EPS of $2.35 up 81%; shareholder return up 48% Earnings reflect unusual market opportunities and costs Fixed income trading and securities gains; mortgage revenues High real estate and litigation costs Negative commercial credit costs Potential earnings and shareholder upside Equity market and corporate finance rebound impacting wholesale businesses and JPMP Stable growth in retail businesses Revaluation

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Summary Significant improvement in performance from last year Delivering value to clients Consistent execution

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This presentation contains statements that are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are based upon the current beliefs and expectations of JPMorgan Chase's management and are subject to significant risks and uncertainties. These risks and uncertainties could cause our results to differ materially from those set forth in such forward looking statements. Such risks and uncertainties are described in our Quarterly Report on Form 10-Q for the quarters ended June 30, 2003 and March 31, 2003 and in the 2002 Annual Report on Form 10-K, each filed with the Securities and Exchange Commission and available at the Securities and Exchange Commission's internet site (http://www.sec.gov), to which reference is hereby made.