SEC Filing | JPMorgan Chase & Co.

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FORM 8-K

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


Date of Report:		Commission file number
January 22, 2003		1-5805

J.P. MORGAN CHASE & CO.

(Exact name of registrant as specified in its charter)


Delaware (State or other jurisdiction of incorporation or organization)		13-2624428 (I.R.S. Employer Identification No.)


270 Park Avenue, New York, NY (Address of principal executive offices)		10017 (Zip Code)

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

TABLE OF CONTENTS


	Item 5. Other Events
	Item 7. Financial Statements, Pro forma Financial Information and Exhibits
	Item 9. Regulation FD Disclosure
SIGNATURE
EXHIBIT INDEX
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
PRESS RELEASE
2002 FOURTH QUARTER FINANCIAL SUPPLEMENT
INVESTOR PRESENTATION SLIDES

Item 5. Other Events

On January 22, 2003, J.P. Morgan Chase & Co. (“JPMorgan Chase” or the “Firm”) reported a net loss of $387 million, or ($0.20) per share, in the fourth quarter of 2002, compared with net income of $40 million, or $0.01 per share, in the third quarter of 2002 and a net loss of $332 million, or ($0.18) per share, in the fourth quarter of 2001.

As previously announced, earnings this quarter were affected negatively by the impact of the charges taken in connection with the settlement of the Enron surety litigation and the establishment of a litigation reserve related to certain material litigation, proceedings and investigations. Excluding these charges, which totaled $1.30 billion or $0.43 per share, and the previously disclosed merger and relocation costs of $393 million or $0.13 per share, earnings for the 2002 fourth quarter would have been $0.36 per share, in line with the guidance provided on the Firm’s January 2, 2003 investor call.

For the full year, net income was $1.66 billion, or $0.80 per share, compared with net income of $1.69 billion and earnings per share of $0.80 in 2001. Earnings before litigation-related charges and merger and relocation costs were $3.38 billion or $1.66 per share this year compared with earnings of $3.80 billion or $1.85 per share in 2001.

A copy of the 2002 fourth quarter earnings press release is attached hereto as Exhibit 99.1.

That 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 Reports on Form 10-Q for the quarters ended September 30, 2002, June 30, 2002 and March 31, 2002 and in the 2001 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.

Item 7. Financial Statements, Pro forma Financial Information and Exhibits


Exhibit Number		Description
12.1		Computation of Ratio of Earnings to Fixed Charges
12.2		Computation of Ratio of Earnings to Fixed Charges and Preferred Stock Dividend Requirements
99.1		Press Release — 2002 Fourth Quarter Earnings

Item 9. Regulation FD Disclosure

Exhibit 99.2 are copies of supplemental financial schedules. Those schedules are furnished pursuant to Item 9 and the information contained in Exhibit 99.2 shall not be deemed “filed” for the 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 99.2 shall not be deemed to be incorporated by reference into the filings of the Company under the Securities Act of 1933.

Exhibit 99.3 are copies of slides presented at an investors’ presentation on January 22, 2003 reviewing 2002 fourth quarter earnings. Those slides are furnished pursuant to Item 9 and the information contained in Exhibit 99.3 shall not be deemed “filed” for the 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 Company under the Securities Act of 1933.

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.


		J.P. MORGAN CHASE & CO. (Registrant)

		By: /s/ Joseph L. Sclafani

		Joseph L. Sclafani

		Executive Vice President and Controller [Principal Accounting Officer]

Dated: January 24, 2003

EXHIBIT INDEX


Exhibit No.	Description	Page
12.1	Computation of Ratio of Earnings to Fixed Charges	6
12.2	Computation of Ratio of Earnings to Fixed Charges and Preferred Stock Dividend Requirements	7
99.1	Press Release — 2002 Fourth Quarter Earnings	8
99.2	2002 Fourth Quarter Financial Supplement	9
99.3	Investor Presentation Slides	10

COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES

TABLE OF CONTENTS


EXHIBIT 12.1
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
PRESS RELEASE
2002 FOURTH QUARTER FINANCIAL SUPPLEMENT
INVESTOR PRESENTATION SLIDES

EXHIBIT 12.1

J.P. MORGAN CHASE & CO.

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


		Full Year
		2002

Excluding Interest on Deposits
Income before income taxes		$	2,519

Fixed charges:
	Interest expense		8,505
	One-third of rents, net of income from subleases (a)		293

Total fixed charges			8,798

Less: Equity in undistributed income of affiliates			(85	)

Earnings before taxes and fixed charges, excluding capitalized interest		$	11,232

Fixed charges, as above		$	8,798

Ratio of earnings to fixed charges			1.28

Including Interest on Deposits
Fixed charges, as above		$	8,798
Add: Interest on deposits			5,253

Total fixed charges and interest on deposits		$	14,051

Earnings before taxes and fixed charges, excluding capitalized interest, as above		$	11,232
Add: Interest on deposits			5,253

Total earnings before taxes, fixed charges and interest on deposits		$	16,485

Ratio of earnings to fixed charges			1.17

(a)

The proportion deemed representative of the interest factor.

COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES

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)


		Full Year
		2002
Excluding Interest on Deposits
Income before income taxes		$	2,519

Fixed charges:
	Interest expense		8,505
	One-third of rents, net of income from subleases (a)		293

Total fixed charges			8,798

Less: Equity in undistributed income of affiliates			(85	)

Earnings before taxes and fixed charges, excluding capitalized interest		$	11,232

Fixed charges, as above		$	8,798
Preferred stock dividends (pre-tax)			77

Fixed charges including preferred stock dividends		$	8,875

Ratio of earnings to fixed charges and preferred stock dividend requirements			1.27

Including Interest on Deposits
Fixed charges including preferred stock dividends, as above		$	8,875
Add: Interest on deposits			5,253

Total fixed charges including preferred stock dividends and interest on deposits		$	14,128

Earnings before taxes and fixed charges, excluding capitalized interest, as above		$	11,232
Add: Interest on deposits			5,253

Total earnings before taxes, fixed charges and interest on deposits		$	16,485

Ratio of earnings to fixed charges and preferred stock dividend requirements			1.17

(a)

The proportion deemed representative of the interest factor.

PRESS RELEASE

J.P. Morgan Chase & Co.
270 Park Avenue, New York, NY 10017-2070
NYSE symbol: JPM
www.jpmorganchase.com

News release: IMMEDIATE RELEASE

JPMORGAN CHASE REPORTS 2002 FOURTH QUARTER
AND FULL YEAR RESULTS

New York, January 22, 2003 – J.P. Morgan Chase & Co. (NYSE: JPM) today reported a net loss of $387 million, or ($0.20) per share, in the fourth quarter of 2002, compared with net income of $40 million, or $0.01 per share, in the third quarter of 2002 and a net loss of $332 million, or ($0.18) per share, in the fourth quarter of 2001.

“2002 tested the strength and tenacity of JPMorgan Chase. While operating revenues were up 2% from 2001, the impact of sluggish capital markets and our concentrations in private equity and in segments of our commercial credit portfolio led to a disappointing year,” said William B. Harrison, Jr., Chairman and Chief Executive Officer. “Fourth quarter results are a step in the right direction. Our consumer and operating services businesses continued to perform well, capital markets performance improved, and the credit picture stabilized. We enter 2003 with our product and client leadership positions intact, an adjusted expense baseline, and a focus on disciplined execution.”

Highlights for the fourth quarter of 2002:

•		Investment Bank revenues improved sharply from weak third quarter levels due to a rebound in trading revenues and higher investment banking fees.

•		Both Chase Financial Services (formerly Retail & Middle Market Financial Services) and Treasury & Securities Services generated operating returns on equity of 19%.

•		Credit costs were significantly below 2002 third quarter and 2001 fourth quarter levels, but continued to be high. Nonperforming loans increased marginally from the third quarter.

•		Operating expenses were higher, driven by severance and related costs of $500 million, as well as higher incentives reflecting improved revenues and lower credit costs.

•		The Enron surety case with insurance companies was settled and reserves for litigation costs were established.


Investor Contact:		Ann Borowiec (212) 270-7318		Media Contact:		Joe Evangelisti (212) 270-7438

J.P. Morgan Chase & Co.
News Release

		Business segment results

		*Chase Financial Services* had operating earnings of $500 million, an increase of 54% from the fourth quarter of 2001. For the full year, operating earnings were a record $2.49 billion, an increase of 62% from 2001. Operating ROE was 19% for the fourth quarter and 24% for the full year, compared to 14% and 17% for the respective periods in 2001.

		Operating revenues of $3.36 billion were up 16% from the fourth quarter of 2001. Operating revenues and operating earnings were down from the 2002 third quarter, reflecting the absence of large gains from the hedging of mortgage servicing rights. For the full year, operating revenues of $13.54 billion were 24% higher than the prior year. Both the quarterly and full year operating revenue increases from 2001 reflected high production volumes across all consumer credit businesses. Home Finance revenues for the year were up 73% over 2001 due to strong mortgage originations and gains on the hedging of mortgage servicing rights. In Cardmember Services, managed credit card outstandings increased 23% from December 31, 2001 to $51.1 billion due to organic growth and the Providian acquisition in the first quarter of 2002. There were close to one million new accounts originated during the fourth quarter and 3.7 million originated during the year. For the year, Auto Finance revenues increased 26% from 2001 driven by higher originations and improved margins. In Regional Banking, average deposits grew 6% from 2001 levels; however, lower interest rates resulted in lower spreads and lower revenues. In Middle Market, average deposits grew by 30% from 2001.

		Operating expenses of $1.68 billion for the quarter were up 16% from the fourth quarter of 2001 and full year expenses of $6.42 billion increased by 14% from 2001. The increases reflected the impact of higher business volumes. Savings generated by Six Sigma productivity programs continued to partially offset the growth in expenses.

		Managed (retained and securitized) credit costs of $874 million were 6% lower than the fourth quarter of 2001, while full year credit costs increased 10% from 2001. The year-on-year growth was driven by a 16% increase in managed consumer loans and the inclusion of the Providian credit card portfolio.

		*The Investment Bank* had operating earnings of $361 million in the fourth quarter, compared to an operating loss of $250 million in the 2002 third quarter and operating earnings of $382 million in the fourth quarter of 2001. For the year, operating earnings were $1.37 billion, compared to $2.92 billion in 2001. The year-on-year decline in operating earnings was driven by higher credit costs, lower revenues and the inclusion of $587 million of severance and related costs in operating expenses.

		Operating revenues of $3.30 billion were 36% higher than the 2002 third quarter and 7% higher than the fourth quarter of 2001; full year operating revenues of $12.40 billion were down 15% from 2001.

		Investment banking fees of $650 million were 23% higher than the prior quarter, but 30% lower than the fourth quarter of 2001. For the full year, investment banking revenues were 25% lower than 2001. The decreases from the prior year reflected industry-wide weakness in M&A activity and in underwriting volumes in the equity and debt markets.

		Advisory revenues in the fourth quarter were down 20% from the same period in 2001, but were the highest for the year. Advisory revenues for the full year were down 40%. For the year, the Investment Bank ranked #5 in global announced M&A.¹

1 Derived from Thomson Financial Securities Data

J.P. Morgan Chase & Co.
News Release

		Underwriting revenues and other fees were up 11% from the third quarter, but down 34% from the fourth quarter of 2001. For the year, underwriting revenues and other fees were down 17% from 2001. The declines from the prior year were due to weakness in debt and equity underwriting activity. The firm maintained its #2 ranking in underwriting U.S. investment grade bonds, improved to #3 in global high yield bonds from #4 in 2001, and was ranked #1 in asset-backed securities for the first time ever.²

		Trading revenues (including related net interest income) of $1.25 billion were up significantly from the third quarter and increased by 23% from the fourth quarter of 2001. For the full year, trading revenues (including related net interest income) declined by 28%. Fixed income results increased 34% from the fourth quarter of 2001, while full year fixed income results were down 11% from the prior year. The year-on-year decline was due to lower portfolio management results primarily in interest rate trading, which offset an increase in client flow. The decline in equities was due to lower portfolio management results primarily in equity derivatives.

		Securities gains for the fourth quarter were $376 million compared to $465 million in the 2002 third quarter and $165 million in the fourth quarter of 2001. For the full year, securities gains totaled $1.08 billion compared with $538 million for the prior year. These gains resulted from the strong performance of Global Treasury, which manages the firm’s interest rate exposures and investment securities activities. Global Treasury’s activities complement and offer a strategic balance and diversification benefit to the firm’s trading activities. Global Treasury manages the interest rate risk of the firm on a “total return” basis, which measures both realized income (securities gains or losses and net interest income) and unrealized gains or losses on assets and liabilities of the firm. The total return from these activities was $467 million in the fourth quarter, up 51% from the fourth quarter of 2001.

		Credit costs were $489 million, down from $1.32 billion in the 2002 third quarter and down from $618 million in the fourth quarter of 2001. For the year, credit costs of $2.39 billion were up from $1.15 billion in 2001 driven by significantly higher charge-offs, primarily in the telecommunications and cable sectors, and provisions in excess of charge-offs for loans.

		Operating expenses for the fourth quarter of $2.27 billion increased by 22% from the fourth quarter of 2001. The increase was driven by severance and related costs of $338 million, primarily due to a reduction in staffing levels as part of initiatives announced in the fourth quarter. The initiatives, once completed, will reduce staffing levels by over 2,000 and are expected to generate annual savings of approximately $700 million. Additional severance and related costs to complete this program are estimated at $150 million. For the year, operating expenses were $7.98 billion, down 9% from 2001, reflecting lower incentive compensation as a result of lower operating earnings and the impact of lower staff levels, partially offset by higher severance costs. The overhead ratio for the fourth quarter was 69% and, excluding $338 million of severance and related costs, was 59%. The overhead ratio excluding severance and related costs for the third quarter of 2002 was 64%, and was 60% for the fourth quarter of 2001. For the full year, the overhead ratio was 64% and, excluding $587 million in severance and related costs, was 60%, compared to 60% for 2001.

		*Treasury & Securities Services* had operating earnings of $140 million, down 7% from the fourth quarter of 2001. For the full year, operating earnings were a record $677 million, up 7% from the prior year. ROE for the quarter was 19% compared to 21% in the fourth quarter of 2001 and for the full year was 23% compared to 21% in 2001.

2 Derived from Thomson Financial Securities Data

J.P. Morgan Chase & Co.
News Release

		Operating revenues for the fourth quarter were $968 million, virtually unchanged from the fourth quarter of 2001. For the full year, operating revenues were up 2% driven by a 14% improvement in Institutional Trust Services reflecting acquisitions, new business wins and increased balances, which more than offset the effect of lower interest rates. Treasury Services revenues increased 5%, principally in the middle market segment despite lower revenues on non-interest bearing balances due to the low interest rate environment. Investor Services revenues declined 9% from the prior year driven by weak equity markets resulting in reduced deposit balances, custody fees, foreign exchange revenue and securities lending activity.

		Operating expenses were flat for the full year and were up 1% from the fourth quarter of 2001, reflecting continued cost containment measures that included Six Sigma programs and selected reductions in staff.

		*Investment Management & Private Banking* had fourth quarter operating earnings of $43 million, down 58% from the fourth quarter 2001. For the year, operating earnings were $384 million or 20% lower than 2001. Pre-tax margin in the fourth quarter was 4% and was 16% for the full year, compared with 17% in the fourth quarter of 2001 and 19% for full year 2001.

		Operating revenues of $655 million in the fourth quarter were 14% below the same period last year, while full year operating revenues of $2.87 billion were down 11% from 2001. Lower global equity valuations, lower investor activity and decreased net interest income from deposits and credit products accounted for the decline. Revenues in the fourth quarter also reflected the impact of non-operating charges, taken at American Century Companies, Inc. Operating expenses of $618 million for the quarter were 2% higher than the fourth quarter of 2001 and included $25 million in severance and related expenses. For the year, operating expenses totaled $2.34 billion, 9% lower than 2001, and included $47 million in severance and related costs.

		Total assets under management at year-end of $516 billion increased 4% from September 2002, but were down 15% from year-end 2001. Assets under management increased from third quarter levels reflecting improving equity markets and net inflows into the private bank. Assets under management declined from the prior year due to market depreciation and institutional outflows. Retail mutual funds assets increased from the prior year. Not reflected in assets under management is the firm’s 45% interest in American Century, whose assets under management were $72 billion at 2002 year-end, $70 billion as of September 30, 2002 and $89 billion as of year-end 2001.

		*JPMorgan Partners* had an operating loss of $91 million for the quarter compared to operating losses of $283 million in the third quarter and $348 million in the fourth quarter of 2001. For the full year, the operating loss was $789 million as compared to an operating loss of $1.12 billion in 2001.

		Total net private equity gains were negative $53 million, compared to negative $299 million in the third quarter and negative $398 million in the fourth quarter of 2001. The quarter’s activities included $169 million in net realized gains, primarily from sales of public and private securities, and $108 million in mark-to-market gains on JPMP’s public portfolio, which included gains from holdings in an IPO completed this quarter. These revenues were offset by negative valuation adjustments taken on JPMP’s direct portfolio holdings ($225 million) and losses recorded on its limited partner interests in third-party private equity funds ($105 million) due to sales activity and declining asset valuations at such funds.

J.P. Morgan Chase & Co.
News Release

		For the full year, private equity gains were negative $733 million as compared to a negative $1.18 billion in 2001. The private equity market continues to show modest improvement but exit opportunities remain limited.

		Expenses

		Operating expenses were $5.47 billion, an 18% increase from the 2002 third quarter driven by severance and related costs of $500 million associated with expense reduction programs and by higher incentives reflecting improved Investment Bank trading performance and lower credit costs. The third quarter included $122 million of severance and related costs.

		For the full year, operating expenses were $20.16 billion, down 2% from the prior year reflecting lower operating expenses in the Investment Bank and Investment Management & Private Banking, but higher operating expenses at Chase Financial Services. Severance and related costs included in operating expenses totaled $890 million in 2002.

		During the quarter, the Firm announced a technology outsourcing agreement with IBM Global Services that will provide cost savings, increased cost variability, strong technical solutions, improved service quality and reliability, and innovation.

		Credit

		*Commercial* net charge-offs in the fourth quarter of 2002 were $646 million, compared to $834 million in the 2002 third quarter and $433 million in the fourth quarter of 2001. Net commercial loan charge-offs in the fourth quarter were $434 million and for lending-related commitments were $212 million. For the full year, total commercial net charge-offs totaled $2.09 billion compared to $979 million in 2001. The charge-off ratio for commercial loans was 1.88% for the fourth quarter of 2002, 3.53% for the third quarter and 1.93% for the full year.

		*Consumer* net charge-offs on a managed basis were $832 million, up from $649 million in the fourth quarter of 2001. For the full year, consumer net charge-offs totaled $3.23 billion compared with $2.40 billion in 2001. The year-over-year increase was due primarily to the inclusion of the Providian portfolio acquired during the first quarter of 2002 and higher volumes. On a managed basis, the credit card net charge-off ratio was 5.70% for the fourth quarter of 2002, compared to 5.51% for the third quarter and 5.48% for the fourth quarter of 2001.

		*Provision for Credit Losses* was $921 million in the fourth quarter of 2002 compared to $1.84 billion in the 2002 third quarter and $1.47 billion in the fourth quarter of 2001. For the year, the provision was $4.33 billion compared with $3.18 billion in 2001. The provision in excess of net charge-offs was $443 million for the year compared to a provision in excess of net charge-offs of $850 million in 2001.

		*Total Nonperforming Assets* were $4.78 billion at December 31, 2002, compared to $5.54 billion at September 30, 2002 and $3.92 billion as of December 31, 2001. The three month decline was driven by the settlement of the Enron surety litigation. Excluding the Enron surety receivable there was an increase in nonperforming loans from the third quarter of 2002 related primarily to nonperforming merchant energy and telecommunications and related loans.

J.P. Morgan Chase & Co.
News Release

		Total assets and capital

		Total assets as of December 31, 2002 were $759 billion, compared with $742 billion as of September 30, 2002 and $694 billion as of December 31, 2001. Commercial loans were down 6%, or $5.9 billion, from the third quarter and decreased 13%, or $13.3 billion from December 31, 2001. Managed consumer loans increased 8% from the third quarter and increased 16% from December 31, 2001. The Tier 1 capital ratio was 8.2% at December 31, 2002, compared to 8.7% at September 30, 2002 and 8.3% at December 31, 2001. The decrease from September 30, 2002 was driven primarily by the Enron settlement and litigation reserve as well as regulatory changes requiring the holding of capital against certain securitization related accounts.

		Other financial information (on a pre-tax basis)

		*Special Items* in the fourth quarter of 2002 included a $400 million charge in connection with the Enron surety litigation settlement and the establishment of litigation reserves of $900 million, as well as $393 million in merger and relocation costs. This compares to $333 million in merger and relocation costs and $98 million in real estate reserves for excess facilities capacity in the third quarter. Special items in the fourth quarter of 2001 included merger and restructuring costs of $841 million. For full year 2002, special items included $1.30 billion in charges related to the Enron surety settlement and establishment of litigation reserves, $98 million in real estate reserves and $1.21 billion in merger and relocation costs. For the full year 2001, special items included $2.52 billion in merger and relocation costs and the cumulative effect of a transition adjustment of a negative $25 million (after-tax) related to the adoption of SFAS 133.

		J.P. Morgan Chase & Co. is a leading global financial services firm with assets of $759 billion and operations in more than 50 countries. The firm is a leader in investment banking, asset management, private banking, private equity, custody and transaction services and retail and middle market financial services. A component of the Dow Jones Industrial Average, JPMorgan Chase is headquartered in New York and serves more than 30 million consumer customers and 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, January 22, 2003 at 11:00 a.m. (Eastern Time) to review fourth quarter 2002 financial results. The dial in number is (973) 582-2754. A live audio webcast of the call will be available on www.jpmorganchase.com. Slides for the call are also available on www.jpmorganchase.com. A telephone replay of the presentation will be available beginning at 1:30 p.m. (ET) on January 22, 2003 and continuing through 6:00 p.m. (ET) on January 28, 2003 at (973) 341-3080 pin #3668851. The replay also will be available on www.jpmorganchase.com. Additional detailed financial, statistical and business-related information is included in a financial supplement. The earnings 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 quarter ended September 30, 2002 and in the 2001 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.


J.P. MORGAN CHASE & CO. CONSOLIDATED FINANCIAL HIGHLIGHTS — REPORTED BASIS (in millions, except per share and ratio data)


											4QTR 2002												2002
											Over (Under)						FULL YEAR						Over (Under)
		4QTR			3QTR			4QTR
		2002			2002			2001			3Q 2002			4Q 2001			2002			2001			2001

INCOME STATEMENT (a)
REVENUE:
Investment Banking Fees		$	678		$	545		$	931			24	%		(27	)%	$	2,763		$	3,612			(24	)%
Trading Revenue			585			(21	)		355		NM				65			2,594			4,918			(47	)
Fees and Commissions			2,282			3,005			2,493			(24	)		(8	)		10,756			9,481			13
Private Equity — Realized Gains (Losses)			(45	)		(40	)		81			(13	)	NM				(105	)		651		NM
Private Equity — Unrealized Gains (Losses)			(23	)		(275	)		(505	)		92			95			(641	)		(1,884	)		66
Securities Gains			747			578			202			29			270			1,563			866			80
Other Revenue (b)			290			419			151			(31	)		92			1,158			898			29

Total Noninterest Revenue			4,514			4,211			3,708			7			22			18,088			18,542			(2	)
Net Interest Income			2,981			2,736			2,944			9			1			11,526			10,802			7

Revenue before Provision for Credit Losses			7,495			6,947			6,652			8			13			29,614			29,344			1
Provision for Credit Losses (b)			921			1,836			1,468			(50	)		(37	)		4,331			3,182			36

TOTAL NET REVENUE			6,574			5,111			5,184			29			27			25,283			26,162			(3	)

NONINTEREST EXPENSE:
Compensation Expense			3,032			2,367			2,622			28			16			10,983			11,844			(7	)
Occupancy Expense			425			478			334			(11	)		27			1,606			1,348			19
Technology and Communications Expense			635			625			640			2			(1	)		2,554			2,631			(3	)
Amortization of Intangibles			82			80			187			3			(56	)		323			729			(56	)
Other Expense			1,294			1,168			1,128			11			15			4,788			4,521			6
Surety Settlement and Litigation Reserve (c)			1,300			—			—		NM			NM				1,300			—		NM
Merger and Restructuring Costs			393			333			841			18			(53	)		1,210			2,523			(52	)

TOTAL NONINTEREST EXPENSE			7,161			5,051			5,752			42			24			22,764			23,596			(4	)

Income (Loss) before Income Tax Expense and Effect of Accounting Change			(587	)		60			(568	)	NM				(3	)		2,519			2,566			(2	)
Income Tax Expense (Benefit)			(200	)		20			(236	)	NM				15			856			847			1

INCOME (LOSS) BEFORE EFFECT OF ACCOUNTING CHANGE			(387	)		40			(332	)	NM				(17	)		1,663			1,719			(3	)
Net Effect of Change in Accounting Principle			—			—			—		NM			NM				—			(25	)	NM

NET INCOME (LOSS) (d)		$	(387	)	$	40		$	(332	)	NM				(17	)	$	1,663		$	1,694			(2	)

PER COMMON SHARE
Net Income (Loss):
	Basic (d)	$	(0.20	)	$	0.01		$	(0.18	)	NM				(11	)%	$	0.81		$	0.83			(2	)%
	Diluted (d)		(0.20	)		0.01			(0.18	)	NM				(11	)		0.80			0.80			—
Cash Dividends Declared			0.34			0.34			0.34			—	%		—			1.36			1.36			—
Share Price at Period End			24.00			18.99			36.35			26			(34	)
Book Value at Period End			20.66			21.26			20.32			(3	)		2
COMMON SHARES OUTSTANDING
Average Common Shares:
	Basic		1,990.0			1,986.0			1,969.6			—	%		1	%		1,984.3			1,972.4			1	%
	Diluted		2,008.5			2,005.8			2,007.4			—			—			2,009.1			2,023.6			(1	)
Common Shares at Period End			1,998.7			1,995.9			1,973.4			—			1
PERFORMANCE RATIOS
Return on Average Assets (e)		NM				0.02	%	NM			NM			NM				0.23	%		0.23	%	—		bp
Return on Average Common Equity (e)		NM				0.3		NM			NM			NM				3.9			3.9			—
CAPITAL RATIOS
Tier I Capital Ratio			8.2	%(f)		8.7	%		8.3	%		(50	) bp		(10	) bp
Total Capital Ratio			11.9	(f)		12.4			11.9			(50	)		—
Tier I Leverage Ratio			5.1	(f)		5.4			5.2			(30	)		(10	)
SELECTED BALANCE SHEET ITEMS
Net Loans		$	211,014		$	206,215		$	212,920			2	%		(1	)%
Total Assets			758,800			741,759			693,575			2			9
Deposits			304,753			292,171			293,650			4			4
Long-Term Debt (g)			45,190			44,552			43,622			1			4
Common Stockholders’ Equity			41,297			42,428			40,090			(3	)		3
Total Stockholders’ Equity			42,306			43,437			41,099			(3	)		3
FULL-TIME EQUIVALENT EMPLOYEES (h)			94,335			95,637			95,812			(1	)		(2	)

(a)		In the first quarter of 2002, the Firm implemented EITF 01-14, “Income Statement Characterization of Reimbursements Received for ‘Out-of-Pocket’ Expenses Incurred (Formerly EITF Abstracts, Topic D-103).” Prior period amounts have been adjusted.

(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 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”.

(c)		Represents a charge related to the settlement of the Enron surety litigation and the establishment of a litigation reserve for certain material litigation, proceedings and investigations.

(d)		2001 includes the cumulative effect of a transition adjustment of $(25) million, net of taxes, related to the adoption of SFAS 133, relating to the accounting for derivative instruments and hedging activities. The impact on both basic and diluted earnings per share was $(0.01).

(e)		Quarterly ratios are based on annualized amounts.

(f)		Estimated

(g)		Includes Guaranteed Preferred Beneficial Interests in the Firm’s Junior Subordinated Deferrable Interest Debentures.

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

bp		— Denotes basis points; 100 bp equals 1%

NM		— Not meaningful

Page 7



J.P. MORGAN CHASE & CO. RECONCILIATION OF QUARTERLY REPORTED TO OPERATING RESULTS (in millions, except per share data)

In addition to analyzing the Firm’s results on a reported basis, management utilizes “operating 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 GAAP results and then excludes the impact of merger and restructuring costs and special items, which management currently defines as significant nonrecurring gains or losses of $75 million or more. 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 are therefore not indicative of trends.


			FOURTH QUARTER 2002

			REPORTED			CREDIT			SPECIAL			AMORTIZATION					OPERATING
			BASIS			CARD			ITEMS			OF GOODWILL		RECLASSES			BASIS
			(a)			(b)			(c)			(d)

INCOME STATEMENT
Revenue
	Investment Banking Fees		$	678		$	—		$	—		$	—	$	—		$	678
	Trading Revenue (e)			585			—			—			—		668			1,253
	Fees and Commissions			2,282			(230	)		—			—		—			2,052
	Private Equity — Realized Gains (Losses)			(45	)		—			—			—		—			(45	)
	Private Equity — Unrealized Gains (Losses)			(23	)		—			—			—		—			(23	)
	Securities Gains			747			—			—			—		—			747
	Other Revenue			290			13			—			—		—			303
	Net Interest Income (e)			2,981			647			—			—		(668	)		2,960

Total Revenue				7,495			430			—			—		—			7,925
Noninterest Expense
		Compensation Expense (f)		3,032			—			—			—		(439	)		2,593
		Noncompensation Expense (f) (g)		3,736			—			(1,300	)		—		(61	)		2,375
		Merger and Restructuring Costs		393			—			(393	)		—		—			—
		Severance and Related Costs (f)		—			—			—			—		500			500

Total Expense				7,161			—			(1,693	)		—		—			5,468
Operating Margin				334			430			1,693			—		—			2,457
Credit Costs				921			430			—			—		—			1,351

Income (Loss) before Income Tax Expense				(587	)		—			1,693			—		—			1,106
Income Tax Expense (Benefit)				(200	)		—			576			—		—			376

Net Income (Loss)			$	(387	)	$	—		$	1,117		$	—	$	—		$	730

EARNINGS (LOSS) PER SHARE — DILUTED			$	(0.20	)				$	0.56							$	0.36


		FOURTH QUARTER 2001

		REPORTED			CREDIT			SPECIAL			AMORTIZATION						OPERATING
		RESULTS			CARD			ITEMS			OF GOODWILL			RECLASSES			BASIS
		(a)			(b)			(c)			(d)

INCOME STATEMENT
Revenue
	Investment Banking Fees	$	931		$	—		$	—		$	—		$	—		$	931
	Trading Revenue (e)		355			—			—			—			549			904
	Fees and Commissions		2,493			(153	)		—			—			—			2,340
	Private Equity — Realized Gains (Losses)		81			—			—			—			—			81
	Private Equity — Unrealized Gains (Losses)		(505	)		—			—			—			—			(505	)
	Securities Gains		202			—			—			—			—			202
	Other Revenue		151			(13	)		—			—			—			138
	Net Interest Income (e)		2,944			430			—			—			(549	)		2,825

Total Revenue			6,652			264			—			—			—			6,916
Noninterest Expense
	Compensation Expense		2,622			—			—			—			—			2,622
	Noncompensation Expense (g)		2,289			—			—			(151	)		—			2,138
	Merger and Restructuring Costs		841			—			(841	)		—			—			—
	Severance and Related Costs		—			—			—			—			—			—

Total Expense			5,752			—			(841	)		(151	)		—			4,760
Operating Margin			900			264			841			151			—			2,156
Credit Costs			1,468			264			—			—			—			1,732

Income (Loss) before Income Tax Expense			(568	)		—			841			151			—			424
Income Tax Expense (Benefit)			(236	)		—			262			42			—			68

Net Income (Loss)		$	(332	)	$	—		$	579		$	109		$	—		$	356

EARNINGS (LOSS) PER SHARE — DILUTED (h)		$	(0.18	)				$	0.29		$	0.05					$	0.17

(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. The 2002 fourth quarter includes $393 million (pre-tax) of merger and restructuring costs, and $1,300 million (pre-tax) for the Enron surety settlement and litigation reserve. The 2001 fourth quarter includes $841 million (pre-tax) of merger and restructuring costs. See page 11 for a reconciliation of the effect of special items on earnings per share.

(d)		Reported net income for 2002 reflects the adoption of SFAS 142 and, accordingly, the Firm ceased amortizing goodwill effective January 1, 2002. There was no impairment of goodwill upon adoption of SFAS 142. Prior period operating earnings for 2001 have been adjusted by adding back goodwill amortization to report results on a basis comparable to 2002.

(e)		On an operating basis, JPMorgan Chase reclassifies trading-related net interest income from Net Interest Income to Trading Revenue.

(f)		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.

(g)		Includes Occupancy Expense, Technology and Communications Expense, Amortization of Intangibles, Other Expense and Surety Settlement and Litigation Reserve.

(h)		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 per share does not foot by $(0.01).

Page 8


J.P. MORGAN CHASE & CO. RECONCILIATION OF FULL YEAR REPORTED TO OPERATING RESULTS (in millions, except per share data)


		FULL YEAR 2002

		REPORTED			CREDIT			SPECIAL			AMORTIZATION					OPERATING
		RESULTS			CARD			ITEMS			OF GOODWILL		RECLASSES			BASIS
		(a)			(b)			(c)			(d)

INCOME STATEMENT
	Revenue
	Investment Banking Fees	$	2,763		$	—		$	—		$	—	$	—		$	2,763
	Trading Revenue (e)		2,594			—			—			—		1,880			4,474
	Fees and Commissions		10,756			(698	)		—			—		—			10,058
	Private Equity — Realized Gains (Losses)		(105	)		—			—			—		—			(105	)
	Private Equity — Unrealized Gains (Losses)		(641	)		—			—			—		—			(641	)
	Securities Gains		1,563			—			—			—		—			1,563
	Other Revenue		1,158			(36	)		—			—		—			1,122
	Net Interest Income (e)		11,526			2,173			—			—		(1,880	)		11,819

Total Revenue			29,614			1,439			—			—		—			31,053
	Noninterest Expense
	Compensation Expense (f)		10,983			—			—			—		(746	)		10,237
	Noncompensation Expense (f)(g)		10,571			—			(1,398	)		—		(144	)		9,029
	Merger and Restructuring Costs		1,210			—			(1,210	)		—		—			—
	Severance and Related Costs (f)		—			—			—			—		890			890

Total Expense			22,764			—			(2,608	)		—		—			20,156
Operating Margin			6,850			1,439			2,608			—		—			10,897
Credit Costs			4,331			1,439			—			—		—			5,770

Income before Income Tax Expense and Effect of Accounting Change			2,519			—			2,608			—		—			5,127
Income Tax Expense			856			—			887			—		—			1,743

Income before Effect of Accounting Change			1,663			—			1,721			—		—			3,384
Net Effect of Change in Accounting Principle			—			—			—			—		—			—

Net Income		$	1,663		$	—		$	1,721		$	—	$	—		$	3,384

EARNINGS PER SHARE — DILUTED		$	0.80					$	0.86							$	1.66


		FULL YEAR 2001

		REPORTED			CREDIT			SPECIAL			AMORTIZATION						OPERATING
		RESULTS			CARD			ITEMS			OF GOODWILL			RECLASSES			BASIS
		(a)			(b)			(c)			(d)

INCOME STATEMENT
	Revenue
	Investment Banking Fees	$	3,612		$	—		$	—		$	—		$	—		$	3,612
	Trading Revenue (e)		4,918			—			—			—			1,361			6,279
	Fees and Commissions		9,481			(340	)		—			—			—			9,141
	Private Equity — Realized Gains (Losses)		651			—			—			—			—			651
	Private Equity — Unrealized Gains (Losses)		(1,884	)		—			—			—			—			(1,884	)
	Securities Gains		866			—			—			—			—			866
	Other Revenue		898			(17	)		—			—			—			881
	Net Interest Income (e)		10,802			1,405			—			—			(1,361	)		10,846

Total Revenue			29,344			1,048			—			—			—			30,392
Noninterest Expense
	Compensation Expense		11,844			—			—			—			—			11,844
	Noncompensation Expense (g)		9,229			—			—			(585	)		—			8,644
	Merger and Restructuring Costs		2,523			—			(2,523	)		—			—			—
	Severance and Related Costs		—			—			—			—			—			—

Total Expense			23,596			—			(2,523	)		(585	)		—			20,488
Operating Margin			5,748			1,048			2,523			585			—			9,904
Credit Costs			3,182			1,048			—			—			—			4,230

Income before Income Tax Expense and Effect of Accounting Change			2,566			—			2,523			585			—			5,674
Income Tax Expense			847			—			833			192			—			1,872

Income before Effect of Accounting Change			1,719			—			1,690			393			—			3,802
Net Effect of Change in Accounting Principle			(25	)		—			25			—			—			—

Net Income		$	1,694		$	—		$	1,715		$	393		$	—		$	3,802

EARNINGS PER SHARE — DILUTED		$	0.80					$	0.86		$	0.19					$	1.85

(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. 2002 includes $1,210 million (pre-tax) of merger and restructuring costs, and $1,300 million (pre-tax) for the Enron surety settlement and litigation reserve. 2002 also includes $98 million (pre-tax) for real estate charges that was recorded in Occupancy Expense in the reported results. 2001 includes $2,523 million (pre-tax) of merger and restructuring costs. See page 11 for a reconciliation of the effect of special items on earnings per share.

(d)		Reported net income for 2002 reflects the adoption of SFAS 142 and, accordingly, the Firm ceased amortizing goodwill effective January 1, 2002. There was no impairment of goodwill upon adoption of SFAS 142. Prior period operating earnings for 2001 have been adjusted by adding back goodwill amortization to report results on a basis comparable to 2002.

(e)		On an operating basis, JPMorgan Chase reclassifies trading-related net interest income from Net Interest Income to Trading Revenue.

(f)		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.

(g)		Includes Occupancy Expense, Technology and Communications Expense, Amortization of Intangibles, Other Expense and Surety Settlement and Litigation Reserve.

Page 9


J.P. MORGAN CHASE & CO
CONSOLIDATED FINANCIAL HIGHLIGHTS — OPERATING BASIS
(in millions, except per share and ratio data)


											4QTR 2002													2002
											Over (Under)							FULL YEAR						Over (Under)
		4QTR			3QTR			4QTR
		2002			2002			2001			3Q 2002				4Q 2001			2002			2001			2001

OPERATING INCOME STATEMENT (a)(b)
OPERATING REVENUE:
Investment Banking Fees		$	678		$	545		$	931			24	%			(27	)%	$	2,763		$	3,612			(24	)%
Trading-Related Revenue (Includes Trading NII)			1,253			365			904			243				39			4,474			6,279			(29	)
Fees and Commissions			2,052			2,768			2,340			(26	)			(12	)		10,058			9,141			10
Private Equity — Realized Gains (Losses)			(45	)		(40	)		81			(13	)		NM			(105		)		651		NM
Private Equity — Unrealized Gains (Losses)			(23	)		(275	)		(505	)		92				95			(641	)		(1,884	)		66
Securities Gains			747			578			202			29				270			1,563			866			80
Other Revenue (c)			303			409			138			(26	)			120			1,122			881			27
Net Interest Income (Excludes Trading NII)			2,960			2,951			2,825			—				5			11,819			10,846			9

	TOTAL OPERATING REVENUE		7,925			7,301			6,916			9				15			31,053			30,392			2
OPERATING EXPENSE:
Compensation Expense			2,593			2,259			2,622			15				(1	)		10,237			11,844			(14	)
Noncompensation Expense (d)			2,375			2,239			2,138			6				11			9,029			8,644			4

Operating Expense (Excluding Severance and Related Costs)			4,968			4,498			4,760			10				4			19,266			20,488			(6	)
Severance and Related Costs (e)			500			122			—			310			NM			890				—		NM

	TOTAL OPERATING EXPENSE		5,468			4,620			4,760			18				15			20,156			20,488			(2	)
Credit Costs (c)			1,351			2,190			1,732			(38	)			(22	)		5,770			4,230			36

Operating Income before Income Tax Expense			1,106			491			424			125				161			5,127			5,674			(10	)
Income Tax Expense			376			166			68			127			NM			1,743				1,872			(7	)

OPERATING EARNINGS		$	730		$	325		$	356			125				105		$	3,384		$	3,802			(11	)
Special Items & Change in Accounting Principle			(1,117	)		(285	)		(579	)		(292	)			(93	)		(1,721	)		(1,715	)		—
Amortization of Goodwill (Net of Taxes) (f)			—			—			(109	)	NM			NM				—				(393	)	NM

NET INCOME (LOSS)		$	(387	)	$	40		$	(332	)	NM					(17	)	$	1,663		$	1,694			(2	)

OPERATING BASIS
Diluted Earnings per Share		$	0.36		$	0.16		$	0.17			125				112		$	1.66		$	1.85			(10	)
Shareholder Value Added			(551	)		(964	)		(915	)		43				40			(1,631	)		(1,247	)		(31	)
Return on Average Managed Assets (g)			0.37	%		0.17	%		0.19	%	20		bp	18			bp	0.45		%		0.50	%	(5)		bp
Return on Common Equity(g)			6.8			2.9			3.3			390				350			8.1			9.0			(90	)
Common Dividend Payout Ratio			96			222			199		NM				NM				83			73			1,000
Compensation Expense as a % of Revenue			33			31			38			200				(500	)		33			39			(600	)
Noncompensation Expense as a % of Revenue			30			31			31			(100	)			(100	)		29			28			100
Overhead Ratio			69			63			69			600				—			65			67			(200	)
Overhead Ratio (Excl. Severance and Related Costs)			63			62			69			100				(600	)		62			67			(500	)

(a)		See pages 8 and 9 for a reconciliation of reported results to operating basis.

(b)		In the first quarter of 2002, the Firm implemented EITF 01-14, “Income Statement Characterization of Reimbursements Received for ‘Out-of-Pocket’ Expenses Incurred (Formerly EITF Abstracts, Topic D-103).” Prior period amounts have been adjusted.

(c)		“Credit Costs” include the aggregate provision for credit losses and credit card securitizations. Prior period amounts have been adjusted.

(d)		Includes Occupancy Expense, Technology and Communications Expense, Amortization of Intangibles and Other Expense.

(e)		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.

(f)		Reported net income for 2002 reflects the adoption of SFAS 142 and, accordingly, the Firm ceased amortizing goodwill effective January 1, 2002. There was no impairment of goodwill upon adoption of SFAS 142. Prior period operating earnings for 2001 have been adjusted by adding back goodwill amortization to report 2001 results on a basis comparable to 2002.

(g)		Quarterly ratios are based on annualized amounts.

Page 10


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


											4QTR 2002													2002
											Over (Under)							FULL YEAR						Over (Under)
		4QTR			3QTR			4QTR
		2002			2002			2001			3Q 2002				4Q 2001			2002			2001			2001

OPERATING REVENUE
Investment Bank		$	3,299		$	2,419		$	3,089			36	%			7	%	$	12,399		$	14,671			(15	)%
Treasury & Securities Services			968			1,068			969			(9	)			—			4,046			3,978			2
Investment Management & Private Banking			655			700			764			(6	)			(14	)		2,868			3,226			(11	)
Chase Financial Services			3,356			3,690			2,884			(9	)			16			13,541			10,951			24
JPMorgan Partners			(79	)		(370	)		(469	)		79				83			(954	)		(1,470	)		35
Corporate (a)			(274	)		(206	)		(321	)		(33	)			15			(847	)		(964	)		12

OPERATING REVENUE (b)		$	7,925		$	7,301		$	6,916			9				15		$	31,053		$	30,392			2

EARNINGS
Investment Bank		$	361		$	(250	)	$	382		NM					(5	)	$	1,365		$	2,918			(53	)
Treasury & Securities Services			140			214			150			(35	)			(7	)		677			632			7
Investment Management & Private Banking			43			99			103			(57	)			(58	)		384			479			(20	)
Chase Financial Services			500			797			324			(37	)			54			2,490			1,538			62
JPMorgan Partners			(91	)		(283	)		(348	)		68				74			(789	)		(1,116	)		29
Corporate (a)			(223	)		(252	)		(255	)		12				13			(743	)		(649	)		(14	)

OPERATING EARNINGS (b)			730			325			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	)		(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) (c)			—			—			(109	)	NM				NM				—			(393	)	NM

NET INCOME (LOSS) (b)		$	(387	)	$	40		$	(332	)	NM					(17	)	$	1,663		$	1,694			(2	)

EARNINGS PER SHARE — DILUTED
OPERATING EARNINGS (b)		$	0.36		$	0.16		$	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	)		(0.29	)		(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) (c)			—			—			(0.05	)	NM				NM				—			(0.19	)	NM

NET INCOME (LOSS) (b) (d)		$	(0.20	)	$	0.01		$	(0.18	)	NM					(11	)	$	0.80		$	0.80			—

OPERATING RETURN ON COMMON EQUITY
Investment Bank			7.6	%	NM			7.9		%	NM				(30) bp				7.4	%		15.2	%	(780) bp
Treasury & Securities Services			18.8			28.2	%		20.7		(940) bp					(190	)		22.5			21.2			130
Investment Management & Private Banking			2.6			6.4			6.6			(380	)			(400	)		6.2			7.5			(130	)
Chase Financial Services			19.2			30.2			13.5			(1,100	)			570			24.1			16.7			740
OPERATING RETURN ON COMMON EQUITY (b)			6.8			2.9			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)		Reported net income for 2002 reflects the adoption of SFAS 142 and, accordingly, the Firm ceased amortizing goodwill effective January 1, 2002. There was no impairment of goodwill upon adoption of SFAS 142. Prior period operating earnings for 2001 have been adjusted by adding back amortization of goodwill to report 2001 results on a basis comparable with 2002.

(d)		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 per share does not foot by $(0.01).

Page 11


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


											Dec 31, 2002
											Over (Under)

		Dec 31			Sep 30			Dec 31			Sep 30				Dec 31
		2002			2002			2001			2002				2001

ASSETS
Cash and Due from Banks		$	19,218		$	18,159		$	22,600			6	%			(15	)%
Deposits with Banks			8,942			13,447			12,743			(34	)			(30	)
Federal Funds Sold and Securities Purchased under Resale Agreements			65,809			63,748			63,727			3				3
Securities Borrowed			34,143			35,283			36,580			(3	)			(7	)
Trading Assets:
	Debt and Equity Instruments		165,199			151,264			118,248			9				40
	Derivative Receivables		83,102			87,518			71,157			(5	)			17
Securities			84,463			79,768			59,760			6				41
Loans (Net of Allowance for Loan Losses)			211,014			206,215			212,920			2				(1	)
Private Equity Investments			8,228			8,013			9,197			3				(11	)
Goodwill			8,096			8,108			8,336			—				(3	)
Other Intangibles:
	Mortgage Servicing Rights		3,230			3,606			6,579			(10	)			(51	)
	Purchased Credit Card Relationships		1,269			1,337			519			(5	)			145
	All Other Intangibles		307			311			44			(1	)		NM
Other Assets			65,780			64,982			71,165			1				(8	)

TOTAL ASSETS		$	758,800		$	741,759		$	693,575			2				9

LIABILITIES
Deposits		$	304,753		$	292,171		$	293,650			4				4
Federal Funds Purchased and Securities Sold under Repurchase Agreements			169,483			154,745			128,445			10				32
Commercial Paper			16,591			13,775			18,510			20				(10	)
Other Borrowed Funds			8,946			12,646			10,835			(29	)			(17	)
Trading Liabilities:
	Debt and Equity Instruments		66,864			71,607			52,988			(7	)			26
	Derivative Payables		66,227			70,593			56,063			(6	)			18
Accounts Payable, Accrued Expenses and Other Liabilities (including the Allowance for Lending-Related Commitments)			38,440			38,233			47,813			1				(20	)
Long-Term Debt			39,751			39,113			39,183			2				1
Guaranteed Preferred Beneficial Interests in the Firm’s Junior Subordinated Deferrable Interest Debentures			5,439			5,439			4,439			—				23

TOTAL LIABILITIES			716,494			698,322			651,926			3				10

PREFERRED STOCK OF SUBSIDIARY			—			—			550		NM			NM

STOCKHOLDERS’ EQUITY
Preferred Stock			1,009			1,009			1,009			—				—
Common Stock			2,024			2,023			1,997			—				1
Capital Surplus			13,222			13,113			12,495			1				6
Retained Earnings			25,851			26,940			26,993			(4	)			(4	)
Accumulated Other Comprehensive Income			1,227			1,465			(442	)		(16	)		NM
Treasury Stock, at Cost			(1,027	)		(1,113	)		(953	)		8				(8	)

TOTAL STOCKHOLDERS’ EQUITY			42,306			43,437			41,099			(3	)			3

TOTAL LIABILITIES, PREFERRED STOCK OF SUBSIDIARY AND STOCKHOLDERS’ EQUITY		$	758,800		$	741,759		$	693,575			2				9

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

Page 12


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


											Dec 31, 2002
											Over (Under)

		Dec 31			Sep 30			Dec 31			Sep 30			Dec 31
		2002			2002			2001			2002			2001

CREDIT-RELATED ASSETS:
Commercial Loans		$	91,548		$	97,486		$	104,864			(6	)%		(13	)%
Derivative Receivables			83,102			87,518			71,157			(5	)		17

	Total Commercial Credit-Related Assets (a)		174,650			185,004			176,021			(6	)		(1	)
Managed Consumer Loans (b)			155,538			143,835			134,004			8			16

	Total Managed Credit-Related Assets	$	330,188		$	328,839		$	310,025			—			7

NET LOAN CHARGE-OFFS: (c)
Commercial Loans		$	434		$	834		$	433			(48	)		—

Managed Credit Card (b)			716			687			538			4			33
All Other Consumer			116			99			111			17			5

Managed Consumer Loans			832			786			649			6			28

	Total Managed Net Loan Charge-offs	$	1,266		$	1,620		$	1,082			(22	)		17

NET LOAN CHARGE-OFF RATES — ANNUALIZED:
Total Commercial Loans			1.88	%		3.53	%		1.58	%	(165) bp			30 bp
Managed Credit Card			5.70			5.51			5.48			19			22
Total Managed Loans			2.08			2.75			1.80			(67	)		28
NONPERFORMING ASSETS:
Commercial Loans		$	3,672		$	3,596		$	1,997			2	%		84	%
Derivative Receivables (d)			289			169			170			71			70
Consumer Loans			521			507			499			3			4
Assets Acquired in Loan Satisfactions			190			140			124			36			53

	Total		4,672			4,412			2,790			6			67
Other Receivables (d) (e)			108			1,130			1,130			(90	)		(90	)

	Total Nonperforming Assets (f)	$	4,780		$	5,542		$	3,920			(14	)		22

SELECTED COUNTRY EXPOSURE
(in billions)
Argentina		$	0.4	(g)	$	0.3		$	0.6			33			(33	)
Brazil			2.2	(g)		1.9			3.3			16			(33	)
Venezuela			0.4	(g)		0.3			0.3			33			33

(a)		Excludes unfunded commercial lending-related commitments of $240 billion at December 31, 2002 and September 30, 2002 and $248 billion at December 31, 2001. Unused advised lines of credit of $22 billion at December 31, 2002, $18 billion at September 30, 2002, and $19 billion at December 31, 2001 are included in unfunded commercial lending-related commitments.

(b)		Includes securitized credit card receivables.

(c)		Net charge-offs are presented for the quarter ended as of the date indicated.

(d)		Includes $125 million of Enron-related surety receivables at December 31, 2002 that were the subject of recently settled litigation with credit-worthy entities. These receivables were classified in Other Receivables at September 30, 2002 and December 31, 2001, respectively.

(e)		These receivables relate to the Enron-related letter of credit at December 31, 2002, which is the subject of litigation with a credit-worthy entity and are classified in Other Assets. Other Receivables at September 30, 2002 and December 31, 2001 included the Enron-related surety receivables and letter of credit, which were classified in Other Assets at September 30, 2002 and Derivative Receivables at December 31, 2001, respectively.

(f)		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.

(g)		Estimated

Page 13

2002 FOURTH QUARTER FINANCIAL SUPPLEMENT

(JPMORGANCHASE LOGO)

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

(JPMORGANCHASE)

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

(JPMORGANCHASE LOGO)

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.

Page 22

INVESTOR PRESENTATION SLIDES

Exhibit 99.3

Fourth Quarter and Full Year 2002 Financial Results January 22, 2003

4Q02 Trading revenue rebound Lower commercial credit costs Expenses up: incentives & severance Full year 2002 Retail and operating services perform well Weakness in securities business, lending and private equity Fundamental progress - - better operating margin, maintaining leadership positions Large nonrecurring charges - - merger & litigation Operating Results

4Q02 Reported Net Income ($0.20) $0.80 Non Operating Charges Merger & Relocation 0.13 0.43 Surety settlement & litigation 0.43 0.43 Operating Earnings $0.36 $1.66 O(U) Prior year $0.19 ($0.19) FY02 4Q and Full Year EPS ($ per share)

4Q Operating Results ($ in billions) 4Q02 3Q02 4Q01 Revenues $7.9 9% 15% Expenses 5.5 18% 15% Credit Costs 1.4 (38%) (22%) Earnings $0.7 125% 105% ROE 7% 3% 3% O/(U)

4Q Operating Expenses Op Expense Severance & related costs 1Q02 4.997 0.106 2Q02 4.803 0.162 3Q02 4.499 0.122 4Q02 4.987 0.48 $5.1 $5.0 $4.6 $5.5 Severance and related costs, 70% in Investment Banking $500mm or $0.16 a share for 4Q $890mm or $0.29 for full year $250mm or $0.08 a share in 2003 Incentives vary with Investment Bank revenues and credit costs ($ in billions)

Investment Bank $390 $880 Chase Financial Svcs 50 (330) JPMorgan Partners (10) 290 All Other (2) 40 (220) Total ex. Severance & related costs $470 $620 Severance & related costs 378 4Q Large Operating Variances Variances $O/(U) 3Q02 Revenue Expense(1) ($ in millions, rounded) (1)Excludes severance & related costs in operating expenses (2) All Other includes TSS, IMPB, Support units and Corporate segments

4Q01 3Q02 4Q02 TSS 150 214 140 ROE 21% 28% 19% 4Q Operating Results by Business 4Q01 3Q02 4Q02 Ex Severance Investment Bank 382 -250 361 588 ROE 8% NM 8% 12% 4Q01 3Q02 4Q02 RMFFS 324 797 500 ROE 14% 30% 19% 4Q01 3Q02 4Q02 IMPB 103 99 43 ROE 7% 6% 3% 4Q01 3Q02 4Q02 JPMP Gains/Losses ($398) ($299) ($53) ($ in millions)

Commercial & Residual $0.6 ($0.8) $2.8 $1.3 Consumer 0.8 0.0 3.0 0.3 Total Credit Costs $1.4 ($0.8) $5.8 $1.6 Loan Loss Reserve $5.4 $0.1 $0.8 Nonperforming Loans 4.2 0.1 1.7 4Q02 FY02 Credit Costs ($ in billions) $O(U) 3Q02 Credit costs related to telecom portfolio were $1.2bn in FY02 Credit Card charge-off ratio of 5.7% and 5.9% in 4Q and FY02 respectively $O(U) FY01

Telecom -- exposures down from restructurings Merchant energy -- increase in nonperformers Airlines -- actively reduced & collateralized exposures Industry View

12/31/2001 9/30/2002 12/31/2002 Contingents 262 259 255 Commercial Loans 105 97 92 MTM 71 88 83 438 444 430 Risk Migration Trends - Commercial Exposure ($ in billions) Total Criticized Exposures* 12/31/2001 9/30/2002 12/31/2002 All Other 9.8 8.6 8.4 Emerging Markets 1.2 1.2 Cable 0.141 2.1 2.2 Telecom & Related 2.142 3.2 2.3 Credit Exposure All Other Emerging Mkts Telecom Cable Merchant Energy & related *Criticized: JPMorgan Chase's internal risk assessment which generally represents a risk profile similar to that of a CCC+/Caa1 or below rating as defined by independent rating agencies, such as Standard & Poor's or Moody's. Excludes Enron-related Surety and L/C claims

Revenue $31.1 2% Expenses 20.2 (2%) (6%) Operating Margin $10.9 10% 19% Credit Costs 5.8 36% Earnings $3.4 (11%) Full Year Operating Results ($ in billions) FY02 %O/(U) FY01 %O/(U) FY01 Ex.Severance & related Costs ROE 8% 9%

Full Year Operating Results by Business 2000 2001 2002 RMFFS 1638 1538 2490 ROE 19% 17% 24% 2000 2001 2002 JPMP Gains/Losses $997 ($1,183) ($733) ($ in millions) 2000 2001 2002 TSS 671 632 677 ROE 23% 21% 23% 2000 2001 2002 IMPB 711 479 384 ROE 11% 8% 6% 2000 2001 2002 IB 3586 2918 1365 ROE 18% 15% 7% Note: FY2000 numbers are pro-forma Flemings

Chase Financial Services Key Drivers ROE 24% 17% Adjusted ROE 20% Adjusted Overhead Ratio 50% Operating Earnings FY02 %O/(U) FY01 ($ in billions) Consumer Credit $1.8 80% Regional Bkg & Middle Mkt. 0.8 (1%) Total* $2.5 62% Total Adjusted for MSR Hedge Gains* $2.1 37% *Total includes Other Chase Financial Services

ROE 7% 15% Overhead 64% 60% Investment Bank Results ($ in billions, operating basis) Revenue $12.4 (15%) Total Expense 8.0 (9%) Credit Costs 2.4 108% Earnings 1.4 (53%) FY02 FY01 %O(U) Weak revenues, high credit and severance Expenses excluding severance down 16%, overhead at 60% residual severance related costs in '03

Rank Global Syndicated Loans 1 23% U.S. Investment Grade Bonds 2 16% Global High Yield Corp Debt 3 11% Global Announced M&A 5 15% U.S. Equity and Equity Related 6 6% Investment Bank League Table Summary %Share Source: Thomson Financial Full Year 2002

JPMP Private Equity Gains/Losses FY02 FY01 FY00 MTM ($0.2) ($0.5) ($1.1) Writedowns/Write-offs (1.1) (1.7) (0.3) Realized Gains 0.6 1.0 2.4 Total Private Equity Gains/Losses ($0.7) ($1.2) $1.0 ($ in billions)

Tier 1 Ratio 12/31/2001 0.083 9/30/2002 0.086 12/31/2002 0.082 Assets $694 $742 $759 RWA $455 $443 $458 Total Capital ($ in billions) *estimated * Surety settlement & litigation (20bp) Regulatory changes Capital for securitizations effective 12/02 New FASB on SPE effective 7/03 No change for ratings or internal economic capital Tier 1 Capital Ratio

Revenue environment Capital markets - no turnaround, lower loss at JPMP Rates within range, lower mortgage origination & hedging gains Credit Costs Commercial credit remains high but declines from 2002 Consumer increases driven by volumes Operating expenses slightly higher despite Investment Bank savings 2003 Assumptions

2003 Operating Expense Drivers Options & performance stock, pension, & occupancy costs Retail & TSS growth Consolidation of Retirement Plan Services from American Century - - in negotiation Investment Bank Savings Lower severance and related costs Technology outsourcing to IBM Increases Decreases

Difficult operating environment Continued focus on risk management, expenses, capital Today's cyclical impacts - Future leverage points Credit Capital markets activity JPMorgan Partners Improved operating margin Strong franchise -- determined to win Summary

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 Reports on Form 10-Q for the quarters ended September 30, 2002 , June 30, 2002 and March 31, 2002 and in the 2001 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.

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