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: July 19, 2000 Commission file number 1-5805 THE CHASE MANHATTAN CORPORATION (Exact name of registrant as specified in its charter) Delaware 13-2624428 (State or other jurisdiction (I.R.S. Employer of incorporation) Identification No.) 270 Park Avenue, New York, NY 10017 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (212) 270-6000 1
Item 5. Other Events - -------------------- On July 19, 2000, The Chase Manhattan Corporation ("Chase") announced diluted operating earnings per share of $0.95 for the second quarter of 2000, down eight percent from $1.03 per share for the same 1999 period. For the first six months of 2000, diluted operating earnings per share rose five percent to $2.01 from $1.91 in the first six months of 1999. Operating earnings in the 2000 second quarter were $1.22 billion, compared to $1.35 billion in the same 1999 quarter. For the first six months of 2000, operating earnings rose to $2.58 billion. Reported net income per share, which includes nonrecurring items, was $0.85 and $1.92 for the second quarter and first half of 2000, respectively, compared with $1.06 and $1.95 in the 1999 second quarter and first half, respectively. Reported net income in the 2000 second quarter was $1.09 billion compared with $1.39 billion in the 1999 second quarter; net income for the first half of 2000 was $2.45 billion and $2.57 billion in the same period of 1999. A copy of Chase's press release is attached as an exhibit hereto.That press release may contain statements that are forward looking within the meaning of the Private Securities Litigation Act of 1995. Such statements are subject to risks and uncertainties and Chase's actual results may differ materially from those set forth in the forward-looking statements. Those uncertainties may include, among others, the risk of adverse impacts from an economic downturn; increased competition; unfavorable political or other developments in foreign markets, governmental or regulatory policies; market volatility in securities markets, interest or foreign exchange rates; other factors impacting Chase's operational plans or the adequacy of Chase's allowance for credit losses; the fact that the anticipated cost-savings and revenue synergies from the Flemings transaction may not be fully realized or may take longer to realize than expected; or that there may be changes in general economic, financial, monetary or other business indicators that adversely affect the businesses and markets in which Chase operates. For a more detailed discussion of those uncertainties, reference is made to Chase's reports filed with the Securities and Exchange Commission, in particular Chase's Annual Report on Form 10-K for the year ended December 31, 1999.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits The following exhibit is filed with this report: Exhibit Number Description 99.1 Press Release - 2000 Second Quarter Earnings. 3
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. THE CHASE MANHATTAN CORPORATION (Registrant) Dated July 19, 2000 by /S/ DINA DUBLON - -------------------- ---------------------------------- Dina Dublon Chief Financial Officer 4
EXHIBIT INDEX Exhibit Number Description Page at Which Located 99.1 Press Release - 2000 Second Quarter Earnings 6 5
The Chase Manhattan Corporation 270 Park Avenue New York, NY 10017-2070 Investor Contact: John Borden Press Contact: Jon Diat 212-270-7318 212-270-5089 {Chase Letterhead} News Release CHASE REPORTS SECOND QUARTER OPERATING EPS OF $0.95; CASH RETURN ON EQUITY OF 23 PERCENT New York, July 19, 2000 - The Chase Manhattan Corporation (NYSE:CMB) today announced diluted operating earnings per share of $0.95 for the second quarter of 2000, down eight percent from $1.03 per share for the same 1999 period. For the first six months of 2000, diluted operating earnings per share rose five percent to $2.01 from $1.91 in the first six months of 1999. Operating earnings in the 2000 second quarter were $1.22 billion, compared to $1.35 billion in the same 1999 quarter. For the first six months of 2000, operating earnings rose to $2.58 billion. Reported net income per share, which includes nonrecurring items, was $0.85 and $1.92 for the second quarter and first half of 2000, respectively, compared with $1.06 and $1.95 in the 1999 second quarter and first half, respectively. Reported net income in the 2000 second quarter was $1.09 billion compared with $1.39 billion in the 1999 second quarter; net income for the first half of 2000 was $2.45 billion and $2.57 billion in the same period of 1999. "Our cash return on equity of twenty-three percent this quarter demonstrates the resilience and strong competitive position of Chase's businesses," said William B. Harrison, Jr., Chairman and Chief Executive Officer. "And with the acquisition of The Beacon Group on July 6 and the anticipated acquisition of Flemings on August 1, we are strengthening Chase's ability to benefit from the growth occurring in the global securities markets. We will continue to reposition and strengthen our franchises with a focus on financial discipline."
Financial Performance - ----------------------------------------------- ------------------------------------------ ---------------------------------- THE CHASE MANHATTAN CORP Second Quarter Six Months - ----------------------------------------------- ------------------------------------------ ---------------------------------- (dollars in millions,except per share 2000 O(U)1999 2000 O(U)1999 amounts) Operating Revenues $5,799 2% $11,978 8% Cash Operating Earnings 1,299 (9) 2,744 3 Cash Operating Earnings Per Share* 1.02 (6) 2.15 6 Shareholder Value Added 542 (22) 1,243 4 Cash Return on Common Equity 23% (320)bp 24% 20bp - ----------------------------------------------- --------------------- -------------------- ------------------ ------------------ * All per share results are on a diluted basis and reflect a three-for-two stock split that became effective June 9, 2000. Line-Of-Business Results - --------------------------------------------- ------------------------------------------ -------------------------------------- GLOBAL BANK * Second Quarter Six Months - --------------------------------------------- ------------------------------------------ -------------------------------------- (dollars in millions) 2000 O(U)1999 O(U)1Q2000 2000 O(U) 1999 Operating Revenues $2,257 11% (12)% $4,833 $700 17% Cash Operating Earnings 559 (2) (22) 1,272 84 7 Shareholder Value Added 246 (5) (38) 642 86 15 Cash Return on Common Equity 23% (60)bp (610)bp 27% 180bp -- - --------------------------------------------- ----------- -------------- --------------- ------------ ------------- ----------- *excludes Chase Capital Partners Operating revenues in the Global Bank, excluding Chase Capital Partners, were $2.26 billion in the second quarter of 2000, 11 percent higher than in the 1999 second quarter. On the same basis, cash operating earnings in the second quarter of 2000 were $559 million, compared with $571 million in the second quarter of 1999, reflecting increased cash expenses. - Total trading revenues, including related net interest income, were $841 million, up 15 percent from the second quarter of 1999, driven by foreign exchange and equity trading. For the first six months of 2000, trading revenues were up 20 percent. - Investment banking fees were $639 million, up nine percent from second quarter 1999 levels. This increase was driven by record merger and acquisition advisory fees and equity underwriting fees, partially offset by a decline from last year's record loan syndication and corporate bond underwriting fees. For the first six months of the year, investment banking fees rose 43 percent to $1.29 billion. - Global Private Bank revenues increased to $285 million, a 33 percent increase from the same period a year ago, due to broad-based growth globally and the inclusion of the revenues from the Executive Financial Services Division at Chase H&Q. As of June 30, the Global Private Bank had over $170 billion in client assets.
- Cash expenses of $1.32 billion in the second quarter of 2000 were up 26 percent from the second quarter of last year, but down $60 million from the first quarter of 2000. The principal reasons for the increase were higher incentives related to market sensitive revenue growth and the acquisition of Hambrecht & Quist. - --------------------------------------------- ------------------------------------------ -------------------------------------- CHASE CAPITAL PARTNERS Second Quarter Six Months - --------------------------------------------- ------------------------------------------ -------------------------------------- (dollars in millions) 2000 O(U)1999 O(U)1Q2000 2000 O(U) 1999 Operating Revenues* $249 (50)% (45)% $698 $(110) (14)% Cash Operating Earnings 130 (56) (46) 370 (99) (21) Shareholder Value Added (78) n/m n/m (35) (261) n/m Cash Return on Common Equity 8% (2300)bp (790)bp 12% (1350)bp -- - --------------------------------------------- ----------- -------------- --------------- ------------ ------------- ----------- *Operating revenues include private equity gains and other income net of borrowing costs to fund the portfolio of investments Net gains on private equity-related investments in the second quarter of 2000 were $298 million, down from $513 million in the same 1999 quarter and $500 million in the 2000 first quarter. Net gains include cash realized from the sale of both public and private securities that were held in the portfolio and unrealized changes in the market value of securities including, appreciation as a result of initial public offerings. Realized cash gains on the sale of securities in the second quarter of 2000 were $350 million, compared with $207 million in the same period a year ago and $341 million in the first quarter of 2000. Approximately 75 percent of the carrying value of the Chase Capital Partners portfolio consists of privately-held securities. Volatility in the financial markets during the second quarter principally affected the remaining 25 percent of the portfolio, which is publicly-held. - --------------------------------------------- ------------------------------------------ -------------------------------------- GLOBAL SERVICES Second Quarter Six Months - --------------------------------------------- ------------------------------------------ -------------------------------------- (dollars in millions) 2000 O(U)1999 O(U)1Q2000 2000 O(U)1999 Operating Revenues $877 14% 3% $1,726 $231 15% Cash Operating Earnings 163 20 9 313 69 28 Shareholder Value Added 75 83 25 135 82 155 Cash Return on Common Equity 24% 540bp 230bp 23% 630bp -- - --------------------------------------------- ----------- -------------- --------------- ------------ ------------- ----------- In the second quarter of 2000, Global Services' operating revenues increased 14 percent over the prior-year quarter to $877 million, reflecting increased activity in all of its businesses. Operating revenues in Global Investor Services (custody), Capital Markets Fiduciary Services (institutional trust) and Chase Treasury Solutions (cash management) were up 18 percent, 14 percent and eight percent, respectively, compared with the 1999 second quarter. Cash operating earnings for Global Services for the second quarter of 2000 were up 20 percent compared with the 1999 second quarter. Shareholder value added increased to $75 million, an 83 percent increase over the prior-year quarter.
- --------------------------------------------- ----------------------------------------- -------------------------------------- NATIONAL CONSUMER SERVICES Second Quarter Six Months - ---------------------------------------------- ----------------------------------------- -------------------------------------- (dollars in millions) 2000 O(U)1999 O(U)1Q2000 2000 O(U)1999 Operating Revenues $2,507 1% 5% $4,899 $24 --% Cash Operating Earnings 443 6 26 795 (15) (2) Shareholder Value Added 175 8 106 260 (47) (15) Cash Return on Common Equity 22% 20bp 450bp 19% (170)bp -- - ---------------------------------------------- ---------- -------------- --------------- ------------ ------------- ----------- Operating revenues for National Consumer Services increased to $2.5 billion, an increase of one percent over the second quarter of 1999. Cash operating earnings of $443 million increased by six percent. This increase was driven by regional banking, the retail investment businesses and middle market banking, partially offset by continuing weak auto origination volumes and pressures on credit card margins due to rising interest rates. - Cash operating earnings for cardmember services for the second quarter of 2000 were up three percent compared with the second quarter of 1999, reflecting significantly improved credit quality. Operating revenues declined six percent, reflecting reduced net interest spreads due to rising interest rates and a lower level of late and overlimit fees, partly offset by higher consumer purchase volumes. Expenses were down in the second quarter despite higher technology and e-commerce investments. - Home finance revenues increased to $318 million, an eight percent increase from second quarter 1999. Cash operating earnings remained flat. Growth in servicing fee income was partially offset by declines in mortgage production activities due to the rising interest rate environment. - Regional banking group revenues rose 11 percent from the second quarter of 1999 and cash operating earnings grew by 26 percent, reflecting higher deposit levels in the small business sector, the benefit from higher interest rates, growth in fees and disciplined expense management. - Revenues from diversified consumer services were $281 million in the second quarter, down one percent from the same 1999 quarter. Continued growth in the investment businesses were partially offset by the effect of higher interest rates and weak auto lease origination activity. Brown & Co., Chase's online trading business, averaged over 46,000 trades per day during the second quarter of 2000 versus 33,000 trades per day during the same period in 1999. - Middle Market revenues were $270 million, up four percent from the second quarter of 1999. Cash operating earnings increased 11 percent over the prior year quarter. These results reflect disciplined expense management and continued strength in new business and financing activity.
Additional Financial Information - Total assets at June 30, 2000 were $396 billion compared with $391 billion at March 31, 2000 and $357 billion from a year ago. Chase's Tier One capital ratio was 8.6 percent at June 30, 2000, compared with 8.6 percent on March 31, 2000. There were no repurchases of Chase common stock during the 2000 second quarter in anticipation of the acquisition of Robert Fleming Holdings Limited. - On a managed basis, including securitizations, net credit losses were $574 million in the second quarter of 2000, down from $596 million in the first quarter of 2000 and down from $634 million from the second quarter of 1999. Consumer net charge-offs on a managed basis were $482 million, down from $524 million in the first quarter of 2000 and $523 million in the fourth quarter of 1999, primarily reflecting a decline in the second quarter of 2000 in the credit card net charge-off ratio to 5.09 percent. Commercial net charge-offs in the second quarter of 2000 were $92 million, compared with $72 million in the first quarter of 2000 and $86 million in the second quarter of 1999. For the second quarter of 2000, total net charge-offs on a reported basis were $332 million, and the provision for loan losses was $332 million. The allowance for loan losses was $3.46 billion at the end of the second quarter, unchanged from the prior quarter. Nonperforming assets at June 30, 2000 were $1.90 billion compared with $1.70 billion at March 31, 2000 and $1.63 billion at June 30, 1999. - Total operating noninterest expenses increased 13 percent to $3.36 billion in the second quarter of 2000, reflecting higher incentives related to increased business volumes, the impact of acquisitions and the build up of the investment banking business platform. - Operating results (revenues, expenses and earnings) exclude the impact of credit card securitizations, restructuring costs and special items. In the second quarter of 2000, special items include a loss of $92 million (after tax) resulting from the economic hedge of the purchase price of Fleming prior to its acquisition and $32 million (after tax) of restructuring costs associated with previously announced relocation initiatives. In the second quarter of 1999, special items included a $61 million (after tax) gain on the sale of a building, a $46 million (after tax) gain on the sale of branches in Texas, and a $65 million (after tax) special contribution to The Chase Manhattan Foundation. - Chase's 2000 results include the results for Chase H&Q, which was acquired on December 9, 1999 and the mortgage business of Mellon Bank N.A., which was acquired on September 30, 1999. Chase's proposed acquisition of Robert Fleming Holdings Limited, is expected to be completed on August 1, 2000. The acquisition of The Beacon Group, LLC, a privately-held investment firm, closed on July 6. - Shareholders approved a three-for-two stock split at the corporation's annual meeting on May 16, 2000. The record date for the split was May 17, 2000 and the additional shares issued as a result of the split were distributed on June 9, 2000. All per share results have been restated to reflect the three-for-two stock split.
The Chase Manhattan Corporation (www.chase.com) is a premier global financial services firm with assets in excess of $396 billion. Chase combines the best of commercial and investment banking, offers world-class information and transaction processing services, and has a leading U.S. consumer franchise that serves over 30 million customers. Through its newly formed business unit Chase.com, Chase is successfully creating innovative business models for the New Economy. Chase, with offices in more than 45 countries, has a presence in all of the principal financial centers around the world. A live audio webcast of Chase's second quarter analyst presentation will be available in the investor relations site of www.chase.com at 11 a.m. on July 19, 2000. This press release contains forward-looking statements. Those statements are based on management's current expectations or beliefs and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. For a discussion of certain factors that could cause actual results to differ materially from those described in the forward-looking statements, please refer to Chase's filings with the Securities and Exchange Commission, particularly the section entitled "Important Factors that May Affect Future Results" in Chase's Annual Report on Form 10-K for the year ended December 31, 1999.
THE CHASE MANHATTAN CORPORATION SUMMARY OF SELECTED FINANCIAL HIGHLIGHTS (in millions, except per share and ratio data) % % As of or for the period ended Second Quarter Over/(Under) Six Months Over/(Under) ------------------------- --------------------------- ---------- ---------- 2000 1999 1999 2000 1999 1999 --------- ---------- ---------- ------------ ----------- --------- OPERATING BASIS (a) Operating Revenue $ 5,799 $ 5,696 2% $ 11,978 $ 11,109 8% Operating Noninterest Expense 3,357 2,968 13% 6,847 5,913 16% Credit Costs (b) 574 634 (9%) 1,170 1,284 (9%) Operating Earnings $ 1,215 $ 1,351 (10%) $ 2,575 $ 2,524 2% Operating Earnings Per Share: Basic $ 0.98 $ 1.07 (8%) $ 2.08 $ 1.98 5% Diluted 0.95 1.03 (8%) 2.01 1.91 5% Cash Operating Earnings $ 1,299 $ 1,427 (9%) $ 2,744 $ 2,673 3% Cash Operating Earnings Per Share - Diluted 1.02 1.09 (6%) 2.15 2.03 6% Shareholder Value Added (SVA) 542 696 (22%) 1,243 1,197 4% Operating Performance Ratios: Return on Average Managed Assets (c) 1.18 % 1.43 % 1.26 % 1.33 % Cash Return on Average Common Equity (c) 22.5 25.7 24.0 23.8 Common Dividend Payout Ratio 33 26 31 28 Overhead Ratio (d) 58 52 57 53 Selected Balance Sheet Items at Period End: (e) Managed Loans $ 200,033 $ 191,985 4% Total Managed Assets 415,906 373,812 11% ------------------------------------------------------------------------------------------------------------------------------- REPORTED BASIS Revenue $ 5,416 $ 5,616 (4%) $ 11,341 $ 10,760 5% Noninterest Expense(Excluding Restructuring Costs) 3,357 3,068 9% 6,847 6,013 14% Restructuring Costs 50 - NM 50 - NM Provision for Loan Losses 332 388 (14%) 674 769 (12%) Net Income $ 1,091 $ 1,393 (22%) $ 2,451 $ 2,566 (4%) Net Income Per Share: Basic $ 0.88 $ 1.10 (20%) $ 1.98 $ 2.01 (1%) Diluted 0.85 1.06 (20%) 1.92 1.95 (2%) Cash Dividends Declared 0.32 0.27 19% 0.64 0.54 19% Share Price at Period End 46.06 57.67 (20%) Book Value at Period End 19.43 17.36 12% Common Shares Outstanding: Average Common Shares: Basic 1,217.8 1,249.3 (3%) 1,219.2 1,257.3 (3%) Diluted 1,259.5 1,292.0 (3%) 1,262.6 1,299.9 (3%) Common Shares at Period End 1,238.2 1,248.7 (1%) Performance Ratios: Return on Average Total Assets (c) 1.11 % 1.55 % 1.25 % 1.42 % Return on Average Common Equity (c) 18.9 25.1 21.4 22.8 Selected Balance Sheet Items at Period End: Loans $ 180,172 $ 175,041 3% Total Assets 396,045 356,868 11% Deposits 224,405 209,502 7% Total Stockholders' Equity 24,884 22,708 10% Capital Ratios: Tier I Capital Ratio 8.6 %(f) 8.4 % Total Capital Ratio 12.3 (f) 12.0 Tier I Leverage 6.8 (f) 6.8 Note: On May 16, 2000, stockholders of Chase approved a 3-for-2 common stock split. The additional shares issued as a result of the split were distributed on June 9, 2000 to stockholders of record at the close of business on May 17, 2000. Share-related data for all periods have been restated. (a) Excludes the impact of credit card securitizations, restructuring costs and special items. For a reconciliation of Reported Results as shown on the Consolidated Statement of Income to results on an Operating Basis, see page 12. (b) Includes provision for loan losses and credit costs related to the securitized credit card portfolio. (c) Based on annualized amounts. (d) Noninterest expense as a percentage of the total of net interest income and noninterest revenue (excluding restructuring costs,special items and costs associated with the REIT). (e) Excludes the impact of credit card securitizations. (f) Estimated NM - Not meaningful Unaudited
THE CHASE MANHATTAN CORPORATION LINES OF BUSINESS RESULTS (in millions, except ratios) Global Bank (a) Chase Capital Partners National Consumer Services Global Services ----------------- ---------------------- ---------------------------- ----------------- Second Quarter Over/ Over/ Over/ Over/ 2000 (Under) 1999 2000 (Under) 1999 2000 (Under) 1999 2000 (Under) 1999 ------------------ ------------------ ------------------ ------------------ Operating Revenue $ 2,257 $ 217 11% $ 249 $ (254) (50)% $ 2,507 $ 34 1% $ 877 $ 106 14% Operating Earnings 540 (19) (3) 128 (169) (57) 406 32 9 147 27 23 Cash Operating Earnings 559 (12) (2) 130 (167) (56) 443 27 6 163 27 20 Average Common Equity 9,485 66 1 6,297 2,492 65 8,117 483 6 2,677 (176) (6) Average Managed Assets(b) 240,129 20,649 9 11,780 4,172 55 144,259 15,345 12 15,737 (767) (5) Shareholder Value Added (SVA) 246 (12) (5) (78) (249) NM 175 13 8 75 34 83 Cash Return on Common Equity 23.4% (60)bp 8.0% (2,300)bp 21.7% 20bp 24.2% 540bp Cash Overhead Ratio 58 700 20 1,200 51 100 71 (100) GLOBAL BANK - KEY FINANCIAL MEASURES (a) Second Quarter 2000 Over/(Under) 1999 -------------------------------------- ------------------------------------- Operating Cash Cash Operating Cash Cash Revenues Operating Overhead Revenues Operating Overhead Earnings Ratio Earnings Ratio --------------------------------------------------------------------------------- Global Markets $ 996 $ 294 55% (1)% (10)% 600bp Global Investment Banking 650 121 68 37 5 1,000 Corporate Lending and Portfolio Management 363 125 29 (3) (3) 100 Global Private Bank 285 56 66 33 44 (200) Other Global Bank (37) (37) NM NM NM NM ----------- ---------- =========== ========== Totals $ 2,257 $ 559 58% 11% (2)% 700bp =========== ========== NATIONAL CONSUMER SERVICES - KEY FINANCIAL MEASURES Second Quarter 2000 Over/(Under) 1999 ------------------------------------------ ------------------------------------------ Operating Cash Cash Operating Cash Cash Revenues Operating Overhead Revenues Operating Overhead Earnings Ratio Earnings Ratio ------------------------------------------- ------------------------------------------------ Chase Cardmember Services $ 941 $ 133 36% (6)% 3% 200bp Regional Banking Group 647 123 65 11 26 (500) Chase Home Finance 318 74 60 8 - 400 Diversified Consumer Services 281 40 60 (1) (2) 300 Middle Markets 270 63 55 4 11 (100) Other NCS 50 10 NM NM NM NM ============ ============ Totals $ 2,507 $ 443 51% 1% 6% 100bp ============ ============ Note: SVA is Chase's primary measure of business unit performance. SVA represents operating earnings excluding the impact of amortization of goodwill and certain other intangibles (i.e., cash operating earnings), minus preferred dividends and an explicit charge for capital. Lines of business results are subject to restatement as appropriate whenever there are refinements to Chase's risk measurement methodology or in management reporting policies or changes to the management organization. For example, in the second quarter 2000 Chase Capital Partners ("CCP") is disclosed separately from the remainder of the Global Bank. In addition, the private equity business of Chase H&Q has been moved to CCP from Global Investment Banking. Prior periods have been restated to reflect these changes. (a) Excluding Chase Capital Partners. (b) Excludes the impact of credit card securitizations. NM - Not meaningful bp - basis points Unaudited
THE CHASE MANHATTAN CORPORATION LINES OF BUSINESS RESULTS (in millions, except ratios) Global Bank (a) Chase Capital Partners National Consumer Services Global Services ----------------- ---------------------- ---------------------------- ----------------- Over/ Over/ Over/ Over/ 2000 (Under) 1999 2000 (Under) 1999 2000 (Under) 1999 2000 (Under) 1999 --------------------- ------------------ ------------------ ---------------------- Six Months Operating Revenue $ 4,833 $ 700 17% $ 698 $ (110) (14)% $ 4,899 $ 24 - % $ 1,726 $ 231 15% Operating Earnings 1,235 69 6 367 (102) (22) 721 (6) (1) 281 68 32 Cash Operating Earnings 1,272 84 7 370 (99) (21) 795 (15) (2) 313 69 28 Average Common Equity 9,564 (12) - 6,154 2,473 67 8,114 498 7 2,701 (196) (7) Average Managed Assets (b) 238,854 15,910 7 11,601 4,134 55 142,766 15,393 12 15,744 (982) (6) Shareholder Value Added (SVA) 642 86 15 (35) (261) NM 260 (47) (15) 135 82 155 Cash Return on Common Equity 26.5% 180bp 11.9% (1,350)bp 19.4% (170)bp 23.0% 630bp Cash Overhead Ratio 56 600 18 900 53 300 72 (200) GLOBAL BANK - KEY FINANCIAL MEASURES (a) Six Months 2000 Over/(Under) 1999 -------------------------------------- ------------------------------------- Operating Cash Cash Operating Cash Cash Revenues Operating Overhead Revenues Operating Overhead Earnings Ratio Earnings Ratio --------------------------------------------------------------------------------- Global Markets $ 2,233 $ 714 51% (3)% (11)% 700bp Global Investment Banking 1,312 243 68 86 106 (300) Corporate Lending and Portfolio Management 733 257 29 (3) (3) 200 Global Private Bank 614 132 64 46 67 (300) Other Global Bank (59) (74) NM NM NM NM ----------- ---------- =========== ========== Totals $ 4,833 $ 1,272 56% 17% 7% 600bp =========== ========== NATIONAL CONSUMER SERVICES - KEY FINANCIAL MEASURES Six Months 2000 Over/(Under) 1999 ------------------------------------------ ------------------------------------------ Operating Cash Cash Operating Cash Cash Revenues Operating Overhea Revenues Operating Overhead Earnings Ratio Earnings Ratio ---------------------------------------------------------------------------------------- Chase Cardmember Services $ 1,883 $ 238 36% (5)% (2)% 200bp Regional Banking Group 1,268 240 66 10 25 (400) Chase Home Finance 642 143 61 12 2 400 Diversified Consumer Services 479 28 69 (12) (63) 1,200 Middle Markets 538 126 55 7 19 (300) Other NCS 89 20 NM NM NM NM ============ ============ Totals $ 4,899 $ 7959 53% - % (2)% 300bp ============ ============ Note: SVA is Chase's primary measure of business unit performance. SVA represents operating earnings excluding the impact of amortization of goodwill and certain other intangibles (i.e., cash operating earnings), minus preferred dividends and an explicit charge for capital. Lines of business results are subject to restatement as appropriate whenever there are refinements to Chase's risk measurement methodology or in management reporting policies or changes to the management organization. For example, in the second quarter 2000 Chase Capital Partners ("CCP") is disclosed separately from the remainder of the Global Bank. In addition, the private equity business of Chase H&Q has been moved to CCP from Global Investment Banking. Prior periods have been restated to reflect these changes. (a) Excluding Chase Capital Partners. (b) Excludes the impact of credit card securitizations. NM - Not meaningful bp - basis points Unaudited
THE CHASE MANHATTAN CORPORATION CONSOLIDATED STATEMENT OF INCOME (in millions, except per share data) % % Second Quarter Over/(Under) Six Months Over/(Under) ----------------------- ------------------------- ---------- ---------- ---------- ----------- 2000 1999 1999 2000 1999 1999 ---------- ---------- -------- ---------- ----------- --------- INTEREST INCOME Loans $ 3,631 $ 3,165 $ 7,111 $ 6,374 Securities 952 747 1,885 1,582 Trading Assets 479 411 895 829 Federal Funds Sold and Securities Purchased Under Resale Agreements 451 389 897 770 Deposits with Banks 101 161 235 345 ---------- ---------- ---------- ----------- Total Interest Income 5,614 4,873 11,023 9,900 ---------- ---------- ---------- ----------- INTEREST EXPENSE Deposits 2,086 1,558 4,051 3,156 Short-Term and Other Borrowings 1,216 851 2,345 1,765 Long-Term Debt 397 319 751 630 --------- ---------- ---------- ----------- ---------- ---------- ---------- ----------- Total Interest Expense 3,699 2,728 7,147 5,551 ---------- ---------- ---------- ----------- NET INTEREST INCOME 1,915 2,145 (11%) 3,876 4,349 (11%) Provision for Loan Losses 332 388 (14%) 674 769 (12%) ---------- ---------- ---------- ----------- NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 1,583 1,757 (10%) 3,202 3,580 (11%) ---------- ---------- ---------- ----------- NONINTEREST REVENUE Investment Banking Fees 639 585 9% 1,287 902 43% Trust, Custody and Investment Management Fees 545 461 18% 1,054 875 20% Credit Card Revenue 443 438 1% 840 817 3% Fees for Other Financial Services 695 587 18% 1,426 1,140 25% Trading Revenue 824 526 57% 1,845 1,144 61% Securities Gains 57 5 NM 71 161 (56%) Private Equity Gains 298 513 (42%) 798 838 (5%) Other Revenue -- 356 NM 144 534 (73%) ---------- ---------- ---------- ----------- Total Noninterest Revenue 3,501 3,471 1% 7,465 6,411 16% ---------- ---------- ---------- ----------- NONINTEREST EXPENSE Salaries 1,614 1,416 14% 3,367 2,800 20% Employee Benefits 252 238 6% 539 493 9% Occupancy Expense 216 206 5% 442 424 4% Equipment Expense 274 239 15% 559 482 16% Other Expense 1,001 969 3% 1,940 1,814 7% ---------- ---------- ---------- ----------- Total Noninterest Expense Before Restructuring Costs 3,357 3,068 9% 6,847 6,013 14% Restructuring Costs 50 -- NM 50 -- NM ---------- ---------- ---------- ----------- ---------- ---------- ---------- ----------- Total Noninterest Expense 3,407 3,068 11% 6,897 6,013 15% ---------- ---------- ---------- ----------- INCOME BEFORE INCOME TAX EXPENSE 1,677 2,160 (22%) 3,770 3,978 (5%) Income Tax Expense 586 767 (24%) 1,319 1,412 (7%) ---------- ---------- ---------- ----------- ========== ========== ========== =========== NET INCOME $ 1,091 $ 1,393 (22%) $ 2,451 $ 2,566 (4%) ========== ========== ========== =========== ========== ========== ========== =========== NET INCOME APPLICABLE TO COMMON STOCK $ 1,074 $ 1,375 (22%) $ 2,418 $ 2,530 (4%) ========== ========== ========== =========== NET INCOME PER COMMON SHARE: Basic $ 0.88 $ 1.10 (20%) $ 1.98 $ 2.01 (1%) Diluted $ 0.85 $ 1.06 (20%) $ 1.92 $ 1.95 (2%) NM - Not meaningful Unaudited
THE CHASE MANHATTAN CORPORATION NONINTEREST REVENUE AND NONINTEREST EXPENSE DETAIL (in millions) % % Second Quarter Over/(Under) Six Months Over/(Under) ---------------------- ----------------------- ---------- --------- ---------- --------- NONINTEREST REVENUE 2000 1999 1999 2000 1999 1999 ---------- --------- ---------- ---------- --------- ---------- Fees for Other Financial Services: Mortgage Servicing Fees $ 131 $ 77 70% $ 281 $ 142 98% Service Charges on Deposit Accounts 103 96 7% 202 185 9% Fees in Lieu of Compensating Balances 88 94 (6%) 175 181 (3%) Brokerage and Investment Services 76 50 52% 183 93 97% Commissions on Letters of Credit and Acceptances 61 69 (12%) 128 138 (7%) Insurance Fees 47 41 15% 96 80 20% Loan Commitment Fees 38 36 6% 72 67 7% Other Fees 151 124 22% 289 254 14% ---------- --------- ---------- --------- ========== ========= ========== ========= Total $ 695 $ 587 18% $ 1,426 $ 1,140 25% ========== ========= ========== ========= Trading-Related Revenue: (a) Interest Rate Contracts $ 231 $ 260 (11%) $ 537 $ 582 (8%) Foreign Exchange Revenue 258 218 18% 537 417 29% Equities and Commodities 182 91 100% 407 174 134% Debt Instruments and Other 170 164 4% 405 397 2% ---------- --------- ---------- --------- Total $ 841 $ 733 15% $ 1,886 $ 1,570 20% ========== ========= ========== ========= Other Revenue: Residential Mortgage Origination/Sales Activities $ 41 $ 88 (53%) $ 85 $ 180 (53%) Loss on Economic Hedge of the Flemings Purchase (b) (141) -- NM (141) -- NM Gains on Sales of Nonstrategic Assets (c) -- 166 NM -- 166 NM All Other Revenue 100 102 (2%) 200 188 6% ---------- --------- ---------- --------- ========== ========= ========== ========= Total -- $ 356 NM $ 144 $ 534 (73%) ========== ========= ========== ========= -------------------------------------------------------------------------------------------------------------------------------- NONINTEREST EXPENSE Other Expense: Professional Services $ 186 $ 178 4% $ 357 $ 340 5% Marketing Expense 121 114 6% 221 228 (3%) Telecommunications 99 97 2% 204 188 9% Amortization of Intangibles 84 76 11% 169 149 13% Travel and Entertainment 81 59 37% 143 109 31% Minority Interest (d) 18 12 50% 30 25 20% Foreclosed Property Expense (3) 3 NM (3) 8 NM Special Contribution to the Foundation (e) -- 100 NM -- 100 NM All Other 415 330 26% 819 667 23% ---------- --------- ---------- --------- ========== ========= ========== ========= Total $ 1,001 $ 969 3% $ 1,940 $ 1,814 7% ========== ========= ========== ========= (a) Trading-related revenue includes net interest income attributable to trading activities. (b) Loss is the result of the economic hedge of the purchase price of Fleming prior to its acquisition. (c) Includes a $95 million gain on the sale of One New York Plaza and a $71 million gain on the sale of branches in Beaumont,Texas. (d) Includes REIT minority interest of $11 million in each quarter and $22 million in each six months. (e) Represents a $100 million special contribution to The Chase Manhattan Foundation. NM - Not meaningful Unaudited
THE CHASE MANHATTAN CORPORATION OPERATING INCOME RECONCILIATION (in millions, except per share data) SECOND QUARTER 2000 SECOND QUARTER 1999 ------------------------------------------- ------------------------------------------- REPORTED CREDIT SPECIAL OPERATING REPORTED CREDIT SPECIAL OPERATING RESULTS CARD ITEMS BASIS RESULTS CARD ITEMS BASIS (a) (b) (c) (a) (b) (c) -------- -------- -------- -------- -------- -------- -------- --------- EARNINGS Market-Sensitive Revenue $ 1,835 $ - $ - $ 1,835 $ 1,836 $ - $ - $ 1,836 Less Market-Sensitive Revenue 3,581 242 141 3,964 3,780 246 (166) 3,860 -------- -------- -------- -------- -------- -------- -------- --------- Total Revenue 5,416 242 141 5,799 5,616 246 (166) 5,696 Noninterest Expense 3,357 - - 3,357 3,068 - (100) 2,968 -------- -------- -------- -------- ------- -------- -------- --------- Operating Margin 2,059 242 141 2,442 2,548 246 (66) 2,728 Credit Costs 332 242 - 574 388 246 - 634 -------- -------- -------- -------- -------- -------- -------- --------- Income Before Restructuring Costs 1,727 - 141 1,868 2,160 - (66) 2,094 Restructuring Costs 50 - (50) - - - - - -------- -------- -------- -------- -------- -------- -------- --------- Income Before Income Tax Expense 1,677 - 191 1,868 2,160 - (66) 2,094 Tax Expense 586 - 67 653 767 - (24) 743 -------- -------- -------- -------- ------- -------- -------- -------- Net Income $ 1,091 $ - $ 124 $ 1,215 $ 1,393 $ - $ (42) $ 1,351 -------- -------- -------- -------- -------- -------- -------- --------- NET INCOME PER COMMON SHARE Basic $ 0.88 $ 0.98 $ 1.10 $ 1.07 Diluted $ 0.85 $ 0.95 $ 1.06 $ 1.03 -------------------------------------------------------------------------------------------------------------------------------- SIX MONTHS 2000 SIX MONTHS 1999 ------------------------------------------- ------------------------------------------- REPORTED CREDIT SPECIAL OPERATING REPORTED CREDIT SPECIAL OPERATING RESULTS CARD ITEMS BASIS RESULTS CARD ITEMS BASIS (a) (b) (c) (a) (b) (c) -------- -------- -------- -------- -------- -------- -------- --------- EARNINGS Market-Sensitive Revenue $ 4,042 $ - $ - $ 4,042 $ 3,471 $ - $ - $ 3,471 Less Market-Sensitive Revenue 7,299 496 141 7,936 7,289 515 (166) 7,638 -------- -------- -------- -------- -------- -------- -------- --------- Total Revenue 11,341 496 141 11,978 10,760 515 (166) 11,109 Noninterest Expense 6,847 - - 6,847 6,013 - (100) 5,913 -------- -------- -------- -------- -------- -------- -------- --------- Operating Margin 4,494 496 141 5,131 4,747 515 (66) 5,196 Credit Costs 674 496 - 1,170 769 515 - 1,284 -------- -------- -------- -------- -------- -------- -------- --------- Income Before Restructuring Costs 3,820 - 141 3,961 3,978 - (66) 3,912 Restructuring Costs 50 - (50) - - - - - -------- -------- -------- -------- -------- -------- -------- --------- Income Before Income Tax Expense 3,770 - 191 3,961 3,978 - (66) 3,912 Tax Expense 1,319 - 67 1,386 1,412 - (24) 1,388 -------- -------- -------- -------- -------- -------- -------- -------- Net Income $ 2,451 $ - $ 124 $ 2,575 $ 2,566 $ - $ (42) $ 2,524 -------- -------- -------- -------- -------- -------- -------- -------- NET INCOME PER COMMON SHARE Basic $ 1.98 $ 2.08 $ 2.01 $ 1.98 Diluted $ 1.92 $ 2.01 $ 1.95 $ 1.91 ------------------------------------------------------------------------------------------------------------------------------- (a) Represent results as reported in Chase's financial statements. The only exception is that revenues are categorized between market-sensitive and less market-sensitive revenues. Market-sensitive revenue includes investment banking fees, trading-related revenue (including trading-related net interest income), securities gains and private equity gains. (b) This column excludes the impact of credit card securitizations. For securitized receivables, amounts that previously would have been reported as net interest income and as provision for loan losses are instead reported as components of noninterest revenue. (c) Includes restructuring costs and special items. The 2000 second quarter and six months include a $141 million loss resulting from the economic hedge of the purchase price of Fleming prior to its acquisition and $50 million of restructuring costs associated with previously announced relocation initiatives. The 1999 second quarter and six months included $166 million in gains from sales of nonstrategic assets, of which $95 million was from the sale of a building and $71 million was from the sale of branches in Texas, and a special contribution to The Chase Manhattan Foundation of $100 million. Unaudited
THE CHASE MANHATTAN CORPORATION CONSOLIDATED BALANCE SHEET (in millions) % June 30, Over/(Under) --------------------------------- 2000 1999 1999 -------------- -------------- -------------- ASSETS Cash and Due from Banks $ 18,361 $ 16,037 14% Deposits with Banks 3,646 5,851 (38%) Federal Funds Sold and Securities Purchased Under Resale Agreements 27,733 28,052 (1%) Trading Assets: Debt and Equity Instruments 30,454 26,232 16% Risk Management Instruments 29,613 25,115 18% Securities 65,130 49,190 32% Loans (Net of Allowance for Loan Losses of $3,459 in 2000 and $3,554 in 1999) 176,713 171,487 3% Other Assets 44,395 34,904 27% -------------- -------------- TOTAL ASSETS $ 396,045 $ 356,868 11% ============== ============== LIABILITIES Deposits: Domestic: Noninterest-Bearing $ 49,583 $ 49,874 (1%) Interest-Bearing 79,019 81,068 (3%) Foreign: Noninterest-Bearing 5,683 4,645 22% Interest-Bearing 90,120 73,915 22% ------- ------- Total Deposits 224,405 209,502 7% Federal Funds Purchased and Securities Sold Under Repurchase Agreements 57,637 40,899 41% Commercial Paper 5,202 5,047 3% Other Borrowed Funds 5,415 6,613 (18%) Trading Liabilities 36,713 36,835 -- Accounts Payable, Accrued Expenses and Other Liabilities, Including the Allowance for Credit Losses of $170 in 2000 and 1999 17,185 15,145 13% Long-Term Debt 21,515 17,031 26% Guaranteed Preferred Beneficial Interests in Corporation's Junior Subordinated Deferrable Interest Debentures 2,539 2,538 -- -------------- -------------- TOTAL LIABILITIES 370,611 333,610 11% -------------- -------------- PREFERRED STOCK OF SUBSIDIARY 550 550 -- -------------- -------------- STOCKHOLDERS' EQUITY Preferred Stock 828 1,028 (19%) Common Stock 1,323 882 50% Capital Surplus 9,065 9,628 (6%) Retained Earnings 19,170 15,381 25% Accumulated Other Comprehensive Loss (1,320) (722) 83% Treasury Stock, at Cost (4,182) (3,489) 20% -------------- -------------- TOTAL STOCKHOLDERS' EQUITY 24,884 22,708 10% -------------- -------------- TOTAL LIABILITIES, PREFERRED STOCK OF SUBSIDIARY AND STOCKHOLDERS' EQUITY $ 396,045 $ 356,868 11% ============== ============== Unaudited
THE CHASE MANHATTAN CORPORATION CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (in millions) Six Months ---------------------------------- ------------ ------------- 2000 1999 ------------ ------------- Preferred Stock Balance at Beginning of Year $ 928 $ 1,028 Redemption of Stock (100) - ------------ ------------- Balance at End of Period $ 828 $ 1,028 ------------ ------------- Common Stock Balance at Beginning of Year $ 882 $ 882 Issuance of Common Stock for a Three-for-Two Stock Split 441 - ------------ ------------- Balance at End of Period $ 1,323 $ 882 ------------ ------------- Capital Surplus Balance at Beginning of Year $ 9,714 $ 9,836 Issuance of Common Stock for a Three-for-Two Stock Split (441) -- Shares Issued and Commitments to Issue Common Stock for Employee Stock-Based Awards and Related Tax Effects (208) (208) ------------ ------------- Balance at End of Period $ 9,065 $ 9,628 ------------ ------------- Retained Earnings Balance at Beginning of Year $ 17,547 $ 13,544 Net Income 2,451 2,566 Cash Dividends Declared: Preferred Stock (33) (36) Common Stock (795) (693) ------------ ------------- Balance at End of Period $ 19,170 $ 15,381 ------------ ------------- Accumulated Other Comprehensive Loss Balance at Beginning of Year $(1,454) $ 392 Other Comprehensive Income (Loss) 134 (1,114) ------------ ------------- Balance at End of Period $(1,320) $ (722) ------------ ------------- Treasury Stock, at Cost Balance at Beginning of Year $(4,000) $(1,844) Purchase of Treasury Stock (1,072) (3,057) Reissuance of Treasury Stock 890 1,412 ------------ ------------- Balance at End of Period $(4,182) $(3,489) ------------ ------------- Total Stockholders' Equity $ 24,884 $ 22,708 ============ ============= ---------------------------------------------------------------------------------------------------------------------------- Comprehensive Income Net Income $ 2,451 $ 2,566 Other Comprehensive Income (Loss) 134 (1,114) ------------ ------------- ============ ============= Comprehensive Income $ 2,585 $ 1,452 ============ ============= Unaudited
THE CHASE MANHATTAN CORPORATION CREDIT RELATED INFORMATION (in millions) % % Credit-Related Assets Over/(Under) Nonperforming Assets Over/(Under) --------------------------- -------------------------- JUNE 30, 2000 1999 1999 2000 1999 1999 - -------------------------------------------- ------------ ------------ ---------- ------------ ---------- --------- CONSUMER LOANS Domestic Consumer: 1-4 Family Residential Mortgages $ 47,557 $42,003 13% $ 269 $ 303 (11%) Credit Card - Reported 12,095 15,270 (21%) 33 (a) -- NM Credit Card Securitizations (b) 19,861 16,944 17% -- -- NM ------------ ------------ ------------ ----------- Credit Card - Managed 31,956 32,214 (1%) 33 -- NM Auto Financings 18,788 18,301 3% 70 59 19% Other Consumer 6,399 6,299 2% 4 5 (20%) ------------ ------------ ------------ ----------- Total Domestic Consumer 104,700 98,817 6% 376 367 2% Total Foreign Consumer 2,928 2,860 2% 25 27 (7%) ------------ ------------ ------------ ----------- Total Consumer Loans 107,628 101,677 6% 401 394 2% ------------ ------------ ------------ ----------- COMMERCIAL LOANS Domestic Commercial: Commercial and Industrial 56,824 52,037 9% 510 405 26% Commercial Real Estate 3,070 3,733 (18%) 42 52 (19%) ------------ ------------ ------------ ----------- Total Domestic Commercial 59,894 55,770 7% 552 457 21% Total Foreign Commercial 32,511 34,538 (6%) 799 641 25% ------------ ------------ ------------ ----------- Total Commercial Loans 92,405 90,308 2% 1,351 1,098 23% Derivative and FX Contracts (c) 29,915 25,558 17% 53 36 47% ------------ ------------ ------------ ----------- Total Commercial Credit-Related 122,320 115,866 6% 1,404 1,134 24% ------------ ------------ ------------ ----------- ============ ============ Total Managed Credit-Related $229,948 $217,543 6% 1,805 1,528 18% ============ ============ ------------ ----------- Assets Acquired as Loan Satisfactions 94 105 (10%) ------------ ----------- ============ =========== Total Nonperforming Assets $ 1,899 $ 1,633 16% ============ =========== - ----------------------------------------------------------------------------------------------------------------------------------- % % Second Quarter Over/(Under) Six Months Over/(Under) ------------ ------------ ------------ ----------- NET CHARGE-OFFS 2000 1999 1999 2000 1999 1999 - -------------------------------------------- ------------ ------------ ---------- ------------ ----------- --------- CONSUMER LOANS Domestic Consumer: 1-4 Family Residential Mortgages $ 10 $ 9 11% $ 19 $ 10 90% Credit Card - Reported 166 218 (24%) 354 434 (18%) Credit Card Securitizations (b) 242 246 (2%) 496 515 (4%) ------------ ------------ ------------ ----------- Credit Card - Managed (d) 408 464 (12%) 850 949 (10%) Auto Financings 22 19 16% 43 38 13% Other Consumer 32 47 (32%) 75 95 (21%) ------------ ------------ ------------ ----------- Total Domestic Consumer 472 539 (12%) 987 1,092 (10%) Total Foreign Consumer 10 9 11% 19 18 6% ------------ ------------ ------------ ----------- Total Consumer Loans 482 548 (12%) 1,006 1,110 (9%) ------------ ------------ ------------ ----------- COMMERCIAL LOANS Domestic Commercial: Commercial and Industrial 75 32 134% 119 77 55% Commercial Real Estate (1) (2) NM (3) (11) NM ------------ ------------ ------------ ----------- Total Domestic Commercial 74 30 147% 116 66 76% Total Foreign Commercial 18 56 (68%) 48 107 (55%) ------------ ------------ ------------ ----------- Total Commercial Loans 92 86 7% 164 173 (5%) ------------ ------------ ------------ ----------- Total Managed Net Charge-offs $ 574 $ 634 (9%) $ 1,170 $ 1,283 (9%) ============ ============ ============ =========== (a) Includes currently performing loans placed on a cash basis because of concerns as to collectibility. (b) Represents the portion of Chase's credit card receivables that have been securitized. (c) Charge-offs for risk management instruments are included in trading revenue. (d) Including domestic and international consumer and commercial credit card activity, net charge-offs as a percentage of average managed credit card receivables for the second quarter of 2000 and 1999 and first six months of 2000 and 1999 were 5.09%, 5.80%, 5.25% and 5.95%, respectively. NM - Not meaningful Unaudited
THE CHASE MANHATTAN CORPORATION CONDENSED AVERAGE CONSOLIDATED BALANCE SHEET, INTEREST AND RATES (Taxable-Equivalent Interest and Rates; in millions) Second Quarter 2000 Second Quarter 1999 ------------------------------------- -------------------------------------- Average Rate Average Rate Balance Interest (Annualized) Balance Interest (Annualized) ASSETS Liquid Interest-Earning Assets $ 69,269 $ 1,030 5.98% $ 63,168 $ 961 6.10% Securities 63,293 959 6.09% 52,767 749 5.70% Loans 179,020 3,634 8.16% 173,067 3,168 7.34% Total Interest-Earning Assets 311,582 5,623 7.26% 289,002 4,878 6.77% Noninterest-Earning Assets 84,502 72,055 Total Assets $396,084 $361,057 LIABILITIES Interest-Bearing Deposits $170,691 2,086 4.92% $158,656 1,558 3.94% Short-Term and Long-Term Debt 108,100 1,613 6.00% 90,516 1,170 5.18% Total Interest-Bearing Liabilities 278,791 3,699 5.34% 249,172 2,728 4.39% Noninterest-Bearing Deposits 50,780 47,652 Other Noninterest-Bearing Liabilities 42,129 40,669 Total Liabilities 371,700 337,493 PREFERRED STOCK OF SUBSIDIARY 550 550 STOCKHOLDERS' EQUITY Preferred Stock 926 1,028 Common Stockholders' Equity 22,908 21,986 Total Stockholders' Equity 23,834 23,014 Total Liabilities, Preferred Stock of Subsidiary and Stockholders' Equity $396,084 $361,057 INTEREST RATE SPREAD 1.92% 2.38% NET INTEREST INCOME AND NET YIELD ON INTEREST-EARNING ASSETS $ 1,924 2.48% $ 2,150 2.98% NET INTEREST INCOME AND NET YIELD ON INTEREST-EARNING ASSETS (a) $ 2,273 2.76% $ 2,491 3.26% -------------------------------------------------------------------------------------------------------------------------------- Six Months 2000 Six Months 1999 ------------------------------------- ------------------------------------ Average Rate Average Rate Balance Interest (Annualized) Balance Interest (Annualized) ASSETS Liquid Interest-Earning Assets $ 67,748 $ 2,027 6.02% $ 60,986 $ 1,944 6.43% Securities 62,736 1,898 6.08% 55,931 1,588 5.73% Loans 178,029 7,114 8.04% 172,993 6,377 7.43% Total Interest-Earning Assets 308,513 11,039 7.20% 289,910 9,909 6.89% Noninterest-Earning Assets 85,099 74,067 Total Assets $393,612 $363,977 LIABILITIES Interest-Bearing Deposits $171,793 4,051 4.74% $160,804 3,156 3.96% Short-Term and Long-Term Debt 105,210 3,096 5.92% 89,387 2,395 5.40% Total Interest-Bearing Liabilities 277,003 7,147 5.19% 250,191 5,551 4.47% Noninterest-Bearing Deposits 50,828 47,815 Other Noninterest-Bearing Liabilities 41,591 42,056 Total Liabilities 369,422 340,062 PREFERRED STOCK OF SUBSIDIARY 550 550 STOCKHOLDERS' EQUITY Preferred Stock 927 1,028 Common Stockholders' Equity 22,713 22,337 Total Stockholders' Equity 23,640 23,365 Total Liabilities, Preferred Stock of Subsidiary and Stockholders' Equity $393,612 $363,977 INTEREST RATE SPREAD 2.01% 2.42% NET INTEREST INCOME AND NET YIELD ON INTEREST-EARNING ASSETS $ 3,892 2.54% $ 4,358 3.03% NET INTEREST INCOME AND NET YIELD ON INTEREST-EARNING ASSETS (a) $ 4,569 2.81% $ 5,026 3.29% (a) Excludes the impact of the credit card securitizations. Unaudited
THE CHASE MANHATTAN CORPORATION Chase Capital Partners (including Chase H&Q) - --------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------- Investment Portfolio (in millions) June 30, 2000 December 31, 1999 --------------------------- ----------------------------- Carrying Carrying Value Cost Value Cost ------------ ------------ ------------- ------------ Total Public Securities (209 companies) $ 2,778 $ 789 $ 2,735 $ 741 Total Private Direct Investments (867 companies) 5,764 5,736 4,275 4,406 Total Private Fund Investments (373 funds) 2,353 2,337 1,881 1,899 ------------ ------------ ------------- ------------ ============ ============ ============= ============ Total Investment Portfolio $ 10,895 $ 8,862 $ 8,891 $ 7,046 ============ ============ ============= ============ - --------------------------------------------------------------------------------------------------------------------------- ------------------------------------------------------------------------------------------------- Public Securities Investments at June 30, 2000 * (dollars and shares in millions) Quoted Public Symbol Shares Value Cost --------- ------------ ------------ ------------- TRITON PCS HOLDING, INC. TPCS 11.7 $ 675 $ 50 TELECORP PCS TLCP 12.4 498 8 ONI SYSTEMS CORP ONIS 2.8 332 3 AMERICAN TOWER SYSTEMS AMT 5.8 240 15 STARMEDIA NETWORK, INC. STRM 11.1 210 27 SEAT - PATINE GIALLE SPA SPG IM ** 208 12 PRAECIS PHARMACEUTICALS INC. PRCS 6.1 170 26 IXL ENTERPRISES, INC. IIXL 7.6 110 28 DIGITAL ISLAND ISLD 2.3 110 9 ITXC ITXC 2.9 104 5 ------------ ------------- Top Ten Public Securities $ 2,657 $ 183 Other Public Securities (199 companies) 1,604 606 ------------ ------------- ============ ============= Total Public Securities (209 companies) $ 4,261 $ 789 ============ ============= * - Publicly traded positions only. ** - Owned through a limited partnership. ------------------------------------------------------------------------------------------------- Policy: Public securities held by Chase Capital Partners are marked-to-market at the quoted public value less liquidity discounts, with the resulting unrealized gains/losses included in the income statement. Chase's valuation policy for public securities incorporates the use of these liquidity discounts and price averaging methodologies in certain circumstances to take into account the fact that Chase can not immediately realize such public quoted values due to the numerous regulatory, corporate and contractual sales restrictions. Private investments are carried at cost, which is viewed as an approximation of fair value. The carrying value of private investments is adjusted for holdings in which a subsequent investment by an unaffiliated party indicates a valuation in excess of cost and holdings for which evidence of an other-than-temporary decline in value exists.