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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 | |
| July 16, 2003 | 1-5805 |
J.P. MORGAN CHASE & CO.
(Exact name of registrant as specified in its charter)
| Delaware | 13-2624428 | |
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| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
| 270 Park Avenue, New York, NY | 10017 | |
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| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (212) 270-6000
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Item 7. Financial Statements and Exhibits
| (c) | Exhibits |
| Exhibit Number | Description of Exhibit | |
| 99.1 |
Analyst Presentation Slides – Second Quarter 2003 Financial Results |
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| 99.2 | Press Release – 2003 Second Quarter Earnings Revision |
Item 9. Regulation FD Disclosure
On July 16, 2003, J.P. Morgan Chase & Co. (“JPMorgan Chase” or the “Firm”) held an investor presentation to review 2003 second quarter earnings.
Exhibit 99.1 is a copy of slides furnished at, and posted on the Firm’s website in connection with, the presentation. The slides are being furnished pursuant to Item 9, and the information contained therein shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liabilities under that Section. Furthermore, the information in Exhibit 99.1 shall not be deemed to be incorporated by reference into the filings of the Firm under the Securities Act of 1933.
Item 9. Regulation FD Disclosure (and Item 12. Results of Operations and Financial Condition)
On July 16, 2003, J.P. Morgan Chase & Co. furnished to the Securities and Exchange Commission a Form 8-K containing its 2003 second quarter earnings release as Exhibit 99.1. The fourth bullet point on page 2 of Exhibit 99.1, under the heading “Investment Bank,” contained a typographical error. Accordingly, the fourth bullet point on page 2 has been revised and restated in its entirety on Exhibit 99.2.
The information included in this section and Exhibit 99.2 attached hereto are intended to be furnished under “Item 12. Results of Operations and Financial Condition” and is included under Item 9 in accordance with SEC Release No. 33-8216.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| J.P. MORGAN CHASE & CO. | |
| (Registrant) | |
| By: /s/ Joseph L. Sclafani | |
| Joseph L. Sclafani | |
| Executive Vice President and Controller [Principal Accounting Officer] |
Dated: July 18, 2003
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EXHIBIT INDEX
| Exhibit No. | Description | |
| 99.1 |
Analyst Presentation Slides – Second Quarter 2003 Financial Results |
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| 99.2 | Press Release – 2003 Second Quarter Earnings Revision |
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| J U L Y 1 6, 2 0 0 3 S E C O N D Q U A R T E R 2 0 0 3 Financial results |
| Highlights: 2Q03 Reported income up 78% from year-ago, 31% from 1Q; ROE of 17% LOB results IB: Strong trading, improving credit, market share gains CFS: Record results driven by mortgage JPMP: Narrower loss on MTM gains Expenses include addition to litigation reserve and real estate charges Strong liquidity and capital positions MIS changes implemented |
| Earnings per share $ per share |
| $ billions Operating results 1Actual ROE for all periods, not over/under. ROE 1H03 15% |
| Investment Bank Continued strength in trading with controlled risk Improvement in credit quality High legal & vacant real estate charges $ millions Revenue of $4.3bn (?5% vs 1Q03) Fixed Income Capital Mkts 0.5 Equity Capital Mkts 0.1 IB Fees 0.18 Credit Portfolio 0.07 Treasury 0.15 Fixed Income Capital Mkts Treasury Credit Portfolio Equity Cap Mkts IB Fees 9% growth 11% decline 23% growth 28% decline 3% growth 1Actual numbers for all periods, not over/under. |
| Investment Bank league table summary U.S. Equity & Equity-Related FY2002 1H03 Mkt Share 0.06 0.13 #6 #3 U.S. Investment Grade Bonds FY2002 1H03 Mkt Share 0.16 0.15 #2 #2 Global Syndicated Loans FY2002 1H03 Mkt Share 0.23 0.2 #1 #1 Global Announced M&A FY2002 1H03 Mkt Share 0.14 0.17 #5 #3 Source: Thomson Financial |
| Chase Financial Services Record volumes, revenues and profits in Home Finance, with strong risk management revenues Deposit growth but continuing spread compression Stable credit costs in Card and overall $ millions Revenue of $4.0bn (?8% vs 1Q03) 16% growth 3% growth 12% growth 4% growth 2% decline 1Actual numbers for all periods, not over/under. |
| JPMorgan Partners Book Value ($bn) Gains on direct investments reflect MTM as well as increase in cash realized gains Continue to reduce exposure 1Does not reflect agreement to sell current book value of $350mm. Private Equity Losses ($mm) |
| T&SS and IM&PB earnings ($ in millions) Growth in Treasury Services and Institutional Trust offset by weakness in Investor Services Investment Mgmt & Private Banking Operating Earnings 2Q02 82 1Q03 36 2Q03 69 ROE 6% 3% 5% ROTE1 21% 12% 21% Increase in revenues and pretax margin over 1Q03 Improved 3-year performance of core equity and fixed income Treasury and Securities Services Operating Earnings 2Q02 165 1Q03 131 2Q03 127 ROE 25% 19% 18% 1Return on tangible equity |
| Higher incentive compensation on higher revenues Increased litigation reserve for expected Enron regulatory settlement and high vacant real estate charges $ billions Operating expense |
| Risk migration trends All Other Telecom Cable Merchant Energy Emerging Markets Note: Y-Axix is set to 16.5. Update scale when updating data 12/31/2002 8.7 2.3 2.2 2.2 1.2 16.6 3/31/2003 7.8 2.3 2.2 1.4 0.9 14.6 6/30/2003 7.4 2.1 2.3 0.7 0.3 12.8 1 Criticized: JPMorgan Chase's internal risk assessment, which generally represents a risk profile similar to that of a rating CCC+/Caa1 or lower, as defined by independent rating agencies, such as Standard & Poor's or Moody's. Includes all Enron-related credit exposures, inclusive of $108mm subject to litigation with a credit-worthy entity. All Other Telecom Merchant Energy Emerging Markets Cable Total Criticized Exposure1 ($bn) Commercial Consumer Note: Y-Axix is set to 16.5. Update scale when updating data 12/31/2002 4.069 0.711 4.8 3/31/2003 3.671 0.72 4.4 6/30/2003 3.4 0.72 4.1 Nonperforming Assets ($bn) |
| Credit costs trend $ millions |
| Payout ratio 40% Growth in nominal and risk weighted assets VIE consolidation in 3Q - - potential changes in structures; no immediate regulatory impact Column 1 12/31/2002 0.082 3/31/2003 0.084 6/30/031 0.0852 Tier 1 Capital Ratio Assets $759 $755 $803 RWA $456 $456 $483 1 Estimated Capital and assets ($ in billions) |
| Summary Strength in trading and mortgage -- will moderate Improving risk profile Commercial credit Expected regulatory settlement of Enron Private equity exposure Strong franchise -- benefiting from positive operating leverage and market share gains |
| This presentation contains statements that are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are based upon the current beliefs and expectations of JPMorgan Chase's management and are subject to significant risks and uncertainties. These risks and uncertainties could cause our results to differ materially from those set forth in such forward looking statements. Such risks and uncertainties are described in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2003 and in the 2002 Annual Report on Form 10-K, each filed with the Securities and Exchange Commission and available at the Securities and Exchange Commission's internet site (http://www.sec.gov), to which reference is hereby made. |
Exhibit 99.2
On July 16, 2003, J.P. Morgan Chase & Co. furnished to the Securities and Exchange Commission a Form 8-K containing its 2003 second quarter earnings release as Exhibit 99.1. The fourth bullet point on page 2 of Exhibit 99.1, under the heading “Investment Bank,” contained a typographical error. Accordingly, the fourth bullet point on page 2 has been revised and restated in its entirety as follows:
Operating expenses of $2.46 billion increased 23% from the second quarter of 2002 primarily driven by higher incentives resulting from improved financial performance. Non-compensation expenses increased 12% from the second quarter of 2002 as a result of the $100 million addition to the Enron-related litigation reserve. Excluding the litigation reserve, non-compensation expenses decreased 1%. Severance and related costs increased 21% from the second quarter of 2002 primarily driven by $104 million in charges to provide for anticipated losses on subletting unoccupied excess real estate.