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1 q08financialsupplement

  1. 1. EARNINGS RELEASE FINANCIAL SUPPLEMENT FIRST QUARTER 2008
  2. 2. JPMORGAN CHASE & CO. TABLE OF CONTENTS Page Consolidated Results Consolidated Financial Highlights Statements of Income Consolidated Balance Sheets Condensed Average Balance Sheets and Annualized Yields Reconciliation from Reported to Managed Summary 2 3 4 5 6 Business Detail Line of Business Financial Highlights - Managed Basis Investment Bank Retail Financial Services Card Services - Managed Basis Commercial Banking Treasury & Securities Services Asset Management Corporate/Private Equity 7 8 10 14 17 19 21 24 Credit-Related Information 26 Supplemental Detail Capital, Intangible Assets and Deposits 31 Glossary of Terms 32 Page 1
  3. 3. JPMORGAN CHASE & CO. CONSOLIDATED FINANCIAL HIGHLIGHTS (in millions, except per share, ratio and headcount data) QUARTERLY TRENDS 1Q08 SELECTED INCOME STATEMENT DATA Total net revenue Provision for credit losses Total noninterest expense Net income $ PER COMMON SHARE: Net income per share - basic Net income per share - diluted 4Q07 16,890 4,424 8,931 2,373 $ 3Q07 17,384 2,542 10,720 2,971 $ 2Q07 16,112 1,785 9,327 3,373 $ 1Q08 Change 4Q07 1Q07 1Q07 18,908 1,529 11,028 4,234 $ 18,968 1,008 10,628 4,787 (3) % 74 (17) (20) (11) % 339 (16) (50) 0.70 0.68 0.88 0.86 1.00 0.97 1.24 1.20 1.38 1.34 (20) (21) (49) (49) Cash dividends declared Book value Closing share price Market capitalization 0.38 36.94 42.95 146,066 0.38 36.59 43.65 146,986 0.38 35.72 45.82 153,901 0.38 35.08 48.45 164,659 0.34 34.45 48.38 165,280 1 (2) (1) 12 7 (11) (12) COMMON SHARES OUTSTANDING: Weighted-average diluted shares outstanding Common shares outstanding at period-end 3,494.7 3,400.8 3,471.8 3,367.4 3,477.7 3,358.8 3,521.6 3,398.5 3,559.5 3,416.3 1 1 (2) - 5 9 3 2 17 38 9 22 7 1 3 FINANCIAL RATIOS: (a) Return on common equity ("ROE") Return on equity-goodwill ("ROE-GW") (b) Return on assets ("ROA") 8 12 0.61 % 10 15 0.77 CAPITAL RATIOS: Tier 1 capital ratio Total capital ratio 8.3 12.5 (d) (d) 8.4 12.6 8.4 12.5 8.4 12.0 8.5 11.8 $1,642,862 231,297 305,759 761,626 125,627 $ 1,562,147 213,076 306,298 740,728 123,221 $ 1,479,575 197,728 288,592 678,091 119,978 $ 1,458,042 181,968 283,069 651,370 119,211 $ 1,408,918 168,194 281,571 626,428 117,704 182,166 180,667 179,847 179,664 176,314 SELECTED BALANCE SHEET DATA (Period-end) Total assets Wholesale loans Consumer loans Deposits Common stockholders' equity Headcount LINE OF BUSINESS NET INCOME Investment Bank Retail Financial Services Card Services Commercial Banking Treasury & Securities Services Asset Management Corporate (c) Net income $ $ (87) (227) 609 292 403 356 1,027 2,373 $ $ 124 752 609 288 422 527 249 2,971 % 11 18 0.91 $ $ 296 639 786 258 360 521 513 3,373 % 14 23 1.19 $ $ 1,179 785 759 284 352 493 382 4,234 % 17 27 1.41 $ $ 1,540 859 765 304 263 425 631 4,787 % NM NM 1 (5) (32) 312 (20) NM NM (20) (4) 53 (16) 63 (50) (a) Quarterly ratios are based upon annualized amounts. (b) Net income applicable to common stock divided by total average common equity (net of goodwill). The Firm uses return on equity less goodwill, a non-GAAP financial measure, to evaluate the operating performance of the Firm. The Firm also utilizes this measure to facilitate comparisons to competitors. (c) Included the after-tax impact of material litigation actions, tax audit benefits and merger costs. See Corporate Financial Highlights for additional details. (d) Estimated. Page 2
  4. 4. JPMORGAN CHASE & CO. STATEMENTS OF INCOME (in millions, except per share and ratio data) QUARTERLY TRENDS 1Q08 REVENUE Investment banking fees Principal transactions Lending & deposit related fees Asset management, administration and commissions Securities gains (losses) Mortgage fees and related income Credit card income Other income Noninterest revenue $ Interest income Interest expense Net interest income 4Q07 1,216 (803) 1,039 3,596 33 525 1,796 1,829 9,231 $ 3Q07 1,662 165 1,066 3,896 148 898 1,857 469 10,161 $ 2Q07 1,336 650 1,026 3,663 237 221 1,777 289 9,199 $ 1Q08 Change 4Q07 1Q07 1Q07 1,898 3,713 951 3,611 (223) 523 1,714 553 12,740 $ 1,739 4,487 895 3,186 2 476 1,563 518 12,866 (27) % NM (3) (8) (78) (42) (3) 290 (9) (6) (13) 6 17,532 9,873 7,659 18,619 11,396 7,223 18,806 11,893 6,913 17,342 11,174 6,168 16,620 10,518 6,102 (30) % NM 16 13 NM 10 15 253 (28) 5 (6) 26 TOTAL NET REVENUE 16,890 17,384 16,112 18,908 18,968 (3) (11) Provision for credit losses 4,424 2,542 1,785 1,529 1,008 74 339 NONINTEREST EXPENSE Compensation expense Occupancy expense Technology, communications and equipment expense Professional & outside services Marketing Other expense Amortization of intangibles Merger costs TOTAL NONINTEREST EXPENSE 4,951 648 968 1,333 546 169 316 8,931 5,469 659 986 1,421 570 1,254 339 22 10,720 4,677 657 950 1,260 561 812 349 61 9,327 6,309 652 921 1,259 457 1,013 353 64 11,028 6,234 640 922 1,200 482 735 353 62 10,628 (9) (2) (2) (6) (4) (87) (7) NM (17) (21) 1 5 11 13 (77) (10) NM (16) Income before income tax expense Income tax expense NET INCOME $ 3,535 1,162 2,373 $ 4,122 1,151 2,971 $ 5,000 1,627 3,373 $ 6,351 2,117 4,234 $ 7,332 2,545 4,787 (14) 1 (20) (52) (54) (50) DILUTED EARNINGS PER SHARE $ 0.68 $ 0.86 $ 0.97 $ 1.20 $ 1.34 (21) (49) 4,787 38 4,825 (20) NM (21) (50) NM (51) 1.34 0.01 1.35 (21) (21) (49) NM (50) FINANCIAL RATIOS ROE ROE-GW ROA Effective income tax rate Overhead ratio EXCLUDING IMPACT OF MERGER COSTS (a) Net income Less merger costs (after-tax) Net income excluding merger costs Diluted Per Share: Net income Less merger costs (after-tax) Net income excluding merger costs 8 12 0.61 33 53 $ $ $ $ 2,373 2,373 0.68 0.68 % 10 15 0.77 28 62 $ $ $ $ 2,971 14 2,985 0.86 0.86 % 11 18 0.91 33 58 $ $ $ $ 3,373 38 3,411 0.97 0.01 0.98 % 14 23 1.19 33 58 $ $ $ $ 4,234 40 4,274 1.20 0.01 1.21 % 17 27 1.41 35 56 $ $ $ $ % (a) Net income excluding merger costs, a non-GAAP financial measure, is used by the Firm to facilitate comparison of results against the Firm's ongoing operations and with other companies' U.S. GAAP financial statements. Page 3
  5. 5. JPMORGAN CHASE & CO. CONSOLIDATED BALANCE SHEETS (in millions) Mar 31 2008 ASSETS Cash and due from banks Deposits with banks Federal funds sold and securities purchased under resale agreements Securities borrowed Trading assets: Debt and equity instruments Derivative receivables Securities Loans (net of allowance for loan losses) Accrued interest and accounts receivable Premises and equipment Goodwill Other intangible assets: Mortgage servicing rights Purchased credit card relationships All other intangibles Other assets TOTAL ASSETS LIABILITIES Deposits Federal funds purchased and securities sold under repurchase agreements Commercial paper Other borrowed funds Trading liabilities: Debt and equity instruments Derivative payables Accounts payable, accrued expenses and other liabilities (including the allowance for lending-related commitments) Beneficial interests issued by consolidated VIEs Long-term debt Junior subordinated deferrable interest debentures held by trusts that issued guaranteed capital debt securities TOTAL LIABILITIES STOCKHOLDERS' EQUITY Common stock Capital surplus Retained earnings Accumulated other comprehensive income (loss) Treasury stock, at cost TOTAL STOCKHOLDERS' EQUITY TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 46,888 12,414 203,176 81,014 Dec 31 2007 $ 40,144 11,466 170,897 84,184 Sep 30 2007 $ 32,766 26,714 135,589 84,697 Jun 30 2007 $ 35,449 41,736 125,930 88,360 Mar 31 2007 $ 31,836 30,973 144,306 84,800 Mar 31, 2008 Change Dec 31 Mar 31 2007 2007 17 % 8 19 (4) 47 % (60) 41 (4) 386,170 99,110 101,647 525,310 50,989 9,457 45,695 $ $ 414,273 77,136 85,450 510,140 24,823 9,319 45,270 389,119 64,592 97,706 478,207 26,401 8,892 45,335 391,508 59,038 95,984 457,404 26,716 9,044 45,254 373,684 49,647 97,029 442,465 23,663 8,728 45,063 (7) 28 19 3 105 1 1 3 100 5 19 115 8 1 8,419 2,140 3,815 66,618 1,642,862 8,632 2,303 3,796 74,314 1,562,147 9,114 2,427 3,959 74,057 1,479,575 9,499 2,591 4,103 65,426 1,458,042 7,937 2,758 4,205 61,824 1,408,918 (2) (7) 1 (10) 5 6 (22) (9) 8 17 626,428 218,917 25,354 19,871 3 25 2 (1) 22 (12) 100 43 761,626 192,633 50,602 28,430 $ $ 740,728 154,398 49,596 28,835 $ $ 678,091 178,767 33,978 31,154 $ $ 651,370 205,961 25,116 29,263 $ $ 78,982 78,983 80,748 68,426 93,969 61,396 94,309 50,316 (11) 15 (16) 57 106,088 14,524 189,995 94,476 14,016 183,862 86,524 13,283 173,696 84,785 14,808 159,493 87,603 13,109 143,274 12 4 3 21 11 33 15,372 1,517,235 $ 89,162 68,705 15,148 1,438,926 14,930 1,359,597 12,670 1,338,831 12,033 1,291,214 1 5 28 18 3,658 78,072 55,762 (512) (11,353) 125,627 1,642,862 3,658 78,597 54,715 (917) (12,832) 123,221 1,562,147 3,658 78,295 53,064 (1,830) (13,209) 119,978 1,479,575 3,658 78,020 51,011 (2,080) (11,398) 119,211 1,458,042 3,658 77,760 48,105 (1,482) (10,337) 117,704 1,408,918 (1) 2 44 12 2 5 16 65 (10) 7 17 $ $ $ $ Page 4
  6. 6. JPMORGAN CHASE & CO. CONDENSED AVERAGE BALANCE SHEETS AND ANNUALIZED YIELDS (in millions, except rates) QUARTERLY TRENDS 1Q08 AVERAGE BALANCES ASSETS Deposits with banks Federal funds sold and securities purchased under resale agreements Securities borrowed Trading assets - debt instruments Securities Loans Total interest-earning assets Trading assets - equity instruments Goodwill Other intangible assets: Mortgage servicing rights All other intangible assets All other noninterest-earning assets TOTAL ASSETS LIABILITIES Interest-bearing deposits Federal funds purchased and securities sold under repurchase agreements Commercial paper Other borrowings (a) Beneficial interests issued by consolidated VIEs Long-term debt Total interest-bearing liabilities Noninterest-bearing liabilities TOTAL LIABILITIES TOTAL STOCKHOLDERS' EQUITY TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 4Q07 31,975 $ 3Q07 41,363 $ 2Q07 39,906 $ 1Q08 Change 4Q07 1Q07 1Q07 18,153 $ 16,224 (23) % 97 153,864 83,490 322,986 89,757 526,598 1,208,670 78,810 45,699 140,622 86,649 308,175 93,236 508,172 1,178,217 93,453 45,321 133,780 87,955 310,445 95,694 476,912 1,144,692 86,177 45,276 132,768 90,810 294,931 96,921 465,763 1,099,346 85,830 45,181 135,499 78,768 257,079 95,326 467,453 1,050,349 88,791 45,125 9 (4) 5 (4) 4 3 (16) 1 14 6 26 (6) 13 15 (11) 1 $ 8,273 6,202 222,143 1,569,797 $ 8,795 6,220 198,031 1,530,037 $ 9,290 6,532 185,367 1,477,334 8,371 6,854 186,404 $ 1,431,986 7,784 7,139 179,727 $ 1,378,915 (6) 12 3 6 (13) 24 14 $ 600,132 $ 587,297 $ 540,937 $ $ 2 20 5 (3) 8 (1) 4 3 3 2 (10) 113 12 (12) 35 17 5 14 7 3 % 14 179,897 47,584 107,552 14,082 200,354 1,149,601 295,616 1,445,217 124,580 $ 171,450 48,821 99,259 14,183 191,797 1,112,807 295,670 1,408,477 121,560 1,569,797 $ 513,451 498,717 206,174 26,511 104,995 14,454 177,851 1,070,922 287,436 1,358,358 118,976 1,530,037 $ 209,323 25,282 100,715 13,641 162,465 1,024,877 289,058 1,313,935 118,051 199,252 22,339 95,664 15,993 148,146 980,111 282,559 1,262,670 116,245 1,477,334 $ 1,431,986 $ 1,378,915 AVERAGE RATES INTEREST-EARNING ASSETS Deposits with banks Federal funds sold and securities purchased under resale agreements Securities borrowed Trading assets - debt instruments Securities Loans Total interest-earning assets INTEREST-BEARING LIABILITIES Interest-bearing deposits Federal funds purchased and securities sold under repurchase agreements Commercial paper Other borrowings (a) Beneficial interests issued by consolidated VIEs Long-term debt Total interest-bearing liabilities INTEREST RATE SPREAD NET YIELD ON INTEREST-EARNING ASSETS NET YIELD ON INTEREST-EARNING ASSETS ADJUSTED FOR SECURITIZATIONS 4.22 % 4.95 % 5.06 % 4.56 % 4.65 3.80 3.56 5.75 5.47 7.10 5.88 4.41 4.77 5.84 5.58 7.60 6.30 4.83 5.60 6.09 5.69 7.80 6.55 4.99 5.31 5.65 5.68 7.65 6.37 4.95 5.42 5.96 5.68 7.53 6.44 3.09 3.84 4.13 4.17 4.06 3.31 3.41 5.03 3.78 3.82 3.45 4.35 4.40 5.02 4.36 3.90 4.06 5.18 4.68 4.90 4.52 3.99 4.41 5.19 4.92 4.69 3.22 3.77 4.37 5.09 4.89 5.07 3.82 3.85 4.35 2.43% 2.59% 2.24% 2.46% 2.14% 2.43% 2.00% 2.30% 2.09% 2.38% 2.95% 2.80% 2.75% 2.63% % 2.73% (a) Includes securities sold but not yet purchased. Page 5
  7. 7. JPMORGAN CHASE & CO. RECONCILIATION FROM REPORTED TO MANAGED SUMMARY (in millions) The Firm prepares its Consolidated financial statements using accounting principles generally accepted in the United States of America ("U.S. GAAP"). That presentation, which is referred to as "reported basis," provides the reader with an understanding of the Firm's results that can be tracked consistently from year to year and enables a comparison of the Firm's performance with other companies' U.S. GAAP financial statements. In addition to analyzing the Firm's results on a reported basis, management reviews the Firm's and the lines' of business results on a "managed" basis, which is a non-GAAP financial measure. The Firm's definition of managed basis starts with the reported U.S. GAAP results and includes certain reclassifications that assume credit card loans securitized by Card Services remain on the balance sheet and presents revenue on a fully taxable-equivalent ("FTE") basis. These adjustments do not have any impact on net income as reported by the lines of business or by the Firm as a whole. The impact of these adjustments are summarized below. For additional information about managed basis, please refer to the Glossary of Terms on page 32. QUARTERLY TRENDS 1Q08 CREDIT CARD INCOME Credit card income - reported Impact of: Credit card securitizations Credit card income - managed OTHER INCOME Other income - reported Impact of: Tax-equivalent adjustments Other income - managed TOTAL NONINTEREST REVENUE Total noninterest revenue - reported Impact of: Credit card securitizations Tax-equivalent adjustments Total noninterest revenue - managed NET INTEREST INCOME Net interest income - reported Impact of: Credit card securitizations Tax-equivalent adjustments Net interest income - managed TOTAL NET REVENUE Total net revenue - reported Impact of: Credit card securitizations Tax-equivalent adjustments Total net revenue - managed PROVISION FOR CREDIT LOSSES Provision for credit losses - reported Impact of: Credit card securitizations Provision for credit losses - managed INCOME TAX EXPENSE Income tax expense - reported Impact of: Tax-equivalent adjustments Income tax expense - managed $ $ 1,796 (937) 859 4Q07 $ 1,857 3Q07 $ 1,777 2Q07 $ 1,714 1Q07 $ 1,563 1Q08 Change 4Q07 1Q07 (3) % 15 $ (885) 972 $ (836) 941 $ (788) 926 $ (746) 817 (6) (12) % (26) 5 $ 1,829 $ 469 $ 289 $ 553 $ 518 290 253 $ 203 2,032 $ 182 651 $ 192 481 $ 199 752 $ 110 628 12 212 85 224 $ 9,231 $ 10,161 $ 9,199 $ 12,740 $ 12,866 (9) (28) $ (937) 203 8,497 $ (885) 182 9,458 $ (836) 192 8,555 $ (788) 199 12,151 $ (746) 110 12,230 (6) 12 (10) (26) 85 (31) $ 7,659 $ 7,223 $ 6,913 $ 6,168 $ 6,102 6 26 $ 1,618 124 9,401 $ 1,504 90 8,817 $ 1,414 95 8,422 $ 1,378 122 7,668 $ 1,339 70 7,511 8 38 7 21 77 25 $ 16,890 $ 17,384 $ 16,112 $ 18,908 $ 18,968 (3) (11) $ 681 327 17,898 $ 619 272 18,275 $ 578 287 16,977 $ 590 321 19,819 $ 593 180 19,741 10 20 (2) 15 82 (9) $ 4,424 $ 2,542 $ 1,785 $ 1,529 $ 1,008 74 339 $ 681 5,105 $ 619 3,161 $ 578 2,363 $ 590 2,119 $ 593 1,601 10 61 15 219 $ 1,162 $ 1,151 $ 1,627 $ 2,117 $ 2,545 1 (54) $ 327 1,489 $ 272 1,423 $ 287 1,914 $ 321 2,438 $ 180 2,725 20 5 82 (45) Page 6
  8. 8. JPMORGAN CHASE & CO. LINE OF BUSINESS FINANCIAL HIGHLIGHTS - MANAGED BASIS (in millions, except ratio data) QUARTERLY TRENDS 1Q08 TOTAL NET REVENUE (FTE) Investment Bank Retail Financial Services Card Services Commercial Banking Treasury & Securities Services Asset Management Corporate TOTAL NET REVENUE NET INCOME Investment Bank Retail Financial Services Card Services Commercial Banking Treasury & Securities Services Asset Management Corporate (a) TOTAL NET INCOME AVERAGE EQUITY (b) Investment Bank Retail Financial Services Card Services Commercial Banking Treasury & Securities Services Asset Management Corporate TOTAL AVERAGE EQUITY RETURN ON EQUITY (b) Investment Bank Retail Financial Services Card Services Commercial Banking Treasury & Securities Services Asset Management $ $ $ $ 4Q07 3,011 4,702 3,904 1,067 1,913 1,901 1,400 17,898 (87) (227) 609 292 403 356 1,027 2,373 $ 22,000 17,000 14,100 7,000 3,500 5,000 55,980 $ 124,580 (2) % (5) 17 17 46 29 $ $ $ $ $ $ 3Q07 3,172 4,815 3,971 1,084 1,930 2,389 914 18,275 $ $ 124 752 609 288 422 527 249 2,971 $ $ 21,000 16,000 14,100 6,700 3,000 4,000 56,760 121,560 2 19 17 17 56 52 $ $ % 2Q07 2,946 4,201 3,867 1,009 1,748 2,205 1,001 16,977 $ $ 296 639 786 258 360 521 513 3,373 $ $ 21,000 16,000 14,100 6,700 3,000 4,000 54,176 118,976 6 16 22 15 48 52 $ $ % 1Q08 Change 4Q07 1Q07 1Q07 5,798 4,357 3,717 1,007 1,741 2,137 1,062 19,819 $ $ 1,179 785 759 284 352 493 382 4,234 $ $ 21,000 16,000 14,100 6,300 3,000 3,750 53,901 118,051 23 20 22 18 47 53 $ $ % 6,254 4,106 3,680 1,003 1,526 1,904 1,268 19,741 (5) % (2) (2) (2) (1) (20) 53 (2) (52) % 15 6 6 25 10 (9) 1,540 859 765 304 263 425 631 4,787 NM NM 1 (5) (32) 312 (20) NM NM (20) (4) 53 (16) 63 (50) 21,000 16,000 14,100 6,300 3,000 3,750 52,095 116,245 5 6 4 17 25 (1) 2 5 6 11 17 33 7 7 30 22 22 20 36 46 % (a) Included the after-tax impact of material litigation actions, tax audit benefits and merger costs. See Corporate Financial Highlights for additional details. (b) Each business segment is allocated capital by taking into consideration stand-alone peer comparisons, economic risk measures and regulatory capital requirements. The amount of capital assigned to each business is referred to as equity. Page 7
  9. 9. JPMORGAN CHASE & CO. INVESTMENT BANK FINANCIAL HIGHLIGHTS (in millions, except ratio data) QUARTERLY TRENDS 1Q08 INCOME STATEMENT REVENUE Investment banking fees Principal transactions Lending & deposit related fees Asset management, administration and commissions All other income Noninterest revenue Net interest income TOTAL NET REVENUE (a) $ Provision for credit losses Credit reimbursement from TSS (b) REVENUE BY REGION Americas Europe/Middle East/Africa Asia/Pacific Total net revenue 1,657 (623) 142 705 (166) 1,715 1,457 3,172 $ 2Q07 1,330 (435) 118 712 (76) 1,649 1,297 2,946 $ 1Q08 Change 4Q07 1Q07 1Q07 1,900 2,325 93 643 122 5,083 715 5,798 $ 1,729 3,142 93 641 42 5,647 607 6,254 (27) % (28) (28) 6 60 (31) 25 (5) (30) % NM 10 16 NM (79) 200 (52) $ 200 30 227 31 164 30 63 30 209 - NM - 1,241 1,312 2,553 FINANCIAL RATIOS ROE ROA Overhead ratio Compensation expense as a % of total net revenue REVENUE BY BUSINESS Investment banking fees: Advisory Equity underwriting Debt underwriting Total investment banking fees Fixed income markets Equity markets Credit portfolio Total net revenue $ 3Q07 618 30 NONINTEREST EXPENSE Compensation expense Noncompensation expense TOTAL NONINTEREST EXPENSE Income (loss) before income tax expense Income tax expense (benefit) NET INCOME (LOSS) 1,206 (798) 102 744 (66) 1,188 1,823 3,011 4Q07 1,561 1,450 3,011 1,178 1,200 2,378 2,589 1,265 3,854 2,637 1,194 3,831 (20) (10) (15) (53) 10 (33) 372 76 296 1,810 631 1,179 2,390 850 1,540 NM 68 NM NM NM NM 472 393 864 1,729 2,592 1,539 394 6,254 (25) (34) (22) (27) (24) 69 13 (5) 2 (9) (58) (30) (82) (37) (8) (52) 3,366 2,251 637 6,254 (52) 23 17 (5) (84) (27) 31 (52) (130) (43) (87) $ (2) % (0.05) 85 41 $ $ $ $ 483 359 364 1,206 466 976 363 3,011 536 1,641 834 3,011 (9) (133) 124 2 0.07 95 49 $ $ $ $ 646 544 467 1,657 615 578 322 3,172 1,128 1,334 710 3,172 $ % 6 0.17 81 40 $ $ $ $ 595 267 468 1,330 687 537 392 2,946 1,016 1,389 541 2,946 $ % 23 0.68 66 45 $ $ $ $ 560 509 831 1,900 2,445 1,249 204 5,798 2,655 2,327 816 5,798 $ % 30 0.95 61 42 $ $ $ $ % (a) Total net revenue included tax-equivalent adjustments, primarily due to tax-exempt income from municipal bond investments and income tax credits related to affordable housing investments, of $289 million, $230 million, $255 million, $290 million and $152 million for the quarters ended March 31, 2008, December 31, 2007, September 30, 2007, June 30, 2007 and March 31, 2007, respectively. (b) Treasury & Securities Services ("TSS") was charged a credit reimbursement related to certain exposures managed within the Investment Bank credit portfolio on behalf of clients shared with TSS. Page 8
  10. 10. JPMORGAN CHASE & CO. INVESTMENT BANK FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except headcount, ratio and rankings data) QUARTERLY TRENDS 1Q08 SELECTED BALANCE SHEETS DATA (Average) Total assets Trading assets - debt and equity instruments Trading assets - derivative receivables Loans: Loans retained (a) Loans held-for-sale & loans at fair value Total loans Adjusted assets (b) Equity $ 755,828 369,456 90,234 735,685 371,842 74,659 $ 2Q07 710,665 372,212 63,017 $ 1Q08 Change 4Q07 1Q07 1Q07 696,230 359,387 58,520 $ 658,724 335,118 56,398 3 % (1) 21 15 10 60 68,928 24,977 93,905 644,573 21,000 61,919 17,315 79,234 625,619 21,000 59,065 14,794 73,859 603,839 21,000 58,973 13,684 72,657 572,017 21,000 8 (21) 3 5 25,780 25,543 25,691 25,356 23,892 1 8 (6) NM NM (9) 18 249 228 42 8 32 82 96 85 45 19 42 34 (58) 82 17 13 (51) (3) 10 (2) 167 84 (26) (18) (59) 49 13 (12) 83 15 (11) (1) 131 (150) 47 $ 13 $ (9) $ 67 $ (16) $ 321 118 353 100 265 60 72 47 92 36 1,891 607 2,498 1,329 560 1,889 1,112 568 1,680 1,037 487 1,524 1,037 310 1,347 (0.11) % 1.76 2,206 0.10 (0.04) % 1.76 1,178 0.13 0.07 2.55 683 0.34 MARKET RISK - AVERAGE TRADING AND CREDIT PORTFOLIO VAR Trading activities: Fixed income $ Foreign exchange Equities Commodities and other Diversification (e) Total trading VAR (f) 120 35 31 28 (92) 122 Credit portfolio VAR (g) Diversification (e) Total trading and credit portfolio VAR 30 (30) 122 $ % 26 43 29 16 5 Net charge-off (recovery) rate (a) (d) Allowance for loan losses to average loans (a) (d) Allowance for loan losses to nonperforming loans (c) Nonperforming loans to average loans MARKET SHARES AND RANKINGS (h) Global debt, equity and equity-related Global syndicated loans Global long-term debt Global equity and equity-related (i) Global announced M&A U.S. debt, equity and equity-related U.S. syndicated loans U.S. long-term debt U.S. equity and equity-related (i) U.S. announced M&A $ 3Q07 74,106 19,612 93,718 662,419 22,000 Headcount CREDIT DATA AND QUALITY STATISTICS Net charge-offs (recoveries) Nonperforming assets: Nonperforming loans (c) Other nonperforming assets Allowance for credit losses: Allowance for loan losses Allowance for lending-related commitments Total allowance for credit losses 4Q07 % (0.05) % 1.93 439 0.38 $ $ 103 31 63 29 (102) 124 26 (27) 123 March 31, 2008 YTD Market Share Rankings 10% #1 11% #1 10% #1 7% #4 27% #4 15% #1 27% #1 15% #1 9% #4 40% #3 0.43 1.80 585 0.33 $ $ 98 23 35 28 (72) 112 17 (22) 107 % $ $ 74 20 51 40 (73) 112 12 (14) 110 $ $ Full Year 2007 Market Share Rankings 8% #2 13% #1 7% #3 9% #2 27% #4 10% #2 24% #1 12% #2 11% #5 28% #3 (a) Loans retained included credit portfolio loans, leveraged leases and other accrual loans, and excluded loans at fair value. (b) Adjusted assets, a non-GAAP financial measure, equals total assets minus (1) securities purchased under resale agreements and securities borrowed less securities sold, not yet purchased; (2) assets of variable interest entities ("VIEs") consolidated under FIN 46R; (3) cash and securities segregated and on deposit for regulatory and other purposes; and (4) goodwill and intangibles. The amount of adjusted assets is presented to assist the reader in comparing the IB’s asset and capital levels to other investment banks in the securities industry. Asset-to-equity leverage ratios are commonly used as one measure to assess a company’s capital adequacy. The IB believes an adjusted asset amount that excludes the assets discussed above, which are considered to have a low risk profile, provides a more meaningful measure of balance sheet leverage in the securities industry. (c) Nonperforming loans included loans held-for-sale and loans at fair value of $44 million, $50 million, $75 million, $25 million and $4 million at March 31, 2008, December 31, 2007, September 30, 2007, June 30, 2007 and March 31, 2007, respectively, which which were excluded from the allowance coverage ratios. Nonperforming loans excluded distressed loans held-for-sale that were purchased as part of IB's proprietary activities. (d) Loans held-for-sale & loans at fair value were excluded when calculating the allowance coverage ratio and net charge-off (recovery) rate. (e) Average VARs were less than the sum of the VARs of their market risk components, which was due to risk offsets resulting from portfolio diversification. The diversification effect reflected the fact that the risks were not perfectly correlated. The risk of a portfolio of positions is usually less than the sum of the risks of the positions themselves. (f) Trading VAR includes substantially all trading activities in IB; however, particular risk parameters of certain products are not fully captured, for example, correlation risk or the credit spread sensitivity of certain mortgage products. Trading VAR does not include VAR related to held-for-sale funded loans and unfunded commitments, nor the debit valuation adjustments ("DVA") taken on derivative and structured liabilities to reflect the credit quality of the Firm. Trading VAR also does not include the MSR portfolio or VAR related to other corporate functions, such as Treasury and Private Equity. (g) Includes VAR on derivative credit valuation adjustments, hedges of the credit valuation adjustment and mark-to-market hedges of the retained loan portfolio, which are all reported in principal transactions revenue. This VAR does not include the retained loan portfolio, which is not marked to market. (h) Source: Thomson Financial Securities data. Global announced M&A was based on rank value; all other rankings were based upon proceeds, with full credit to each book manager/equal if joint. Because of joint assignments, market share of all participants will add up to more than 100%. Global and U.S. announced M&A market share and ranking for 2007 include transactions withdrawn since December 31, 2007. (i) Includes rights offerings; U.S. domiciled equity and equity-related transactions, per Thomson Financial. Page 9
  11. 11. JPMORGAN CHASE & CO. RETAIL FINANCIAL SERVICES FINANCIAL HIGHLIGHTS (in millions, except ratio and headcount data) QUARTERLY TRENDS 1Q08 INCOME STATEMENT REVENUE Lending & deposit related fees Asset management, administration and commissions Securities gains (losses) Mortgage fees and related income Credit card income All other income Noninterest revenue Net interest income TOTAL NET REVENUE $ 4Q07 461 377 525 174 154 1,691 3,011 4,702 $ 3Q07 496 332 1 888 174 219 2,110 2,705 4,815 $ 2Q07 492 336 229 167 296 1,520 2,681 4,201 $ 1Q08 Change 4Q07 1Q07 1Q07 470 344 495 163 212 1,684 2,673 4,357 $ 423 263 482 142 179 1,489 2,617 4,106 9 43 (7) % 14 NM (41) (30) (20) 11 (2) 9 23 (14) 14 15 15 Provision for credit losses 2,492 1,051 680 587 292 137 NM NONINTEREST EXPENSE Compensation expense Noncompensation expense Amortization of intangibles TOTAL NONINTEREST EXPENSE 1,160 1,310 100 2,570 1,113 1,313 114 2,540 1,087 1,265 117 2,469 1,104 1,264 116 2,484 1,065 1,224 118 2,407 4 (12) 1 9 7 (15) 7 1,224 472 752 1,052 413 639 1,286 501 785 1,407 548 859 NM NM NM % NM NM NM Income (loss) before income tax expense Income tax expense (benefit) NET INCOME (LOSS) $ FINANCIAL RATIOS ROE Overhead ratio Overhead ratio excluding core deposit intangibles (a) SELECTED BALANCE SHEETS (Ending) Assets Loans: Loans retained Loans held-for-sale & loans at fair value (b) Total loans Deposits SELECTED BALANCE SHEETS (Average) Assets Loans: Loans retained Loans held-for-sale & loans at fair value (b) Total loans Deposits Equity Net charge-off rate (e) (f) Allowance for loan losses to ending loans (e) Allowance for loan losses to nonperforming loans (e) Nonperforming loans to total loans $ (5) % 55 53 $ 227,916 19 53 50 $ 184,211 18,000 202,211 230,854 $ $ % 225,908 16 59 56 $ 181,016 16,541 197,557 221,129 $ % 216,754 20 57 54 $ 172,498 18,274 190,772 216,135 217,421 22 59 56 $ 13 (28) 7 4 3 5 162,744 28,235 190,979 216,933 16,000 3 2 3 3 6 12 (37) 5 4 6 69,465 68,528 68,254 67,247 1 4 185 1,655 1,910 1,453 51 22 20 60 326 99 100 190 1.71 2.28 133 1.63 % 1.17 1.46 100 1.37 % 350 1,991 2,404 2,105 0.82 1.22 107 1.04 $ % $ 7 2 9 2 4 217,135 $ 216,692 1 165,136 25,166 190,302 219,171 16,000 522 2,704 3,190 2,634 $ 212,997 163,462 25,006 188,468 221,840 166,992 23,501 190,493 217,689 214,852 % 168,495 19,560 188,055 216,904 16,000 $ $ % 176,140 17,538 193,678 219,226 16,000 789 3,292 3,824 4,208 221,557 $ 70,095 $ 227,560 $ 182,220 17,841 200,061 225,555 17,000 Headcount CREDIT DATA AND QUALITY STATISTICS Net charge-offs Nonperforming loans (c) (d) Nonperforming assets (c) (d) Allowance for loan losses (360) (133) (227) 270 1,760 2,099 1,772 0.66 1.06 115 0.92 $ % 0.46 0.89 94 0.88 % (a) Retail Financial Services uses the overhead ratio (excluding the amortization of core deposit intangibles ("CDI")), a non-GAAP financial measure, to evaluate the underlying expense trends of the business. Including CDI amortization expense in the overhead ratio calculation results in a higher overhead ratio in the earlier years and a lower overhead ratio in later years; this method would result in an improving overhead ratio over time, all things remaining equal. This non-GAAP ratio excludes Regional Banking's core deposit intangible amortization expense related to The Bank of New York transaction and the Bank One merger of $99 million, $113 million, $116 million, $115 million and $116 million for the quarters ending March 31, 2008, December 31, 2007, September 30, 2007, June 30, 2007 and March 31, 2007, respectively. (b) Loans included prime mortgage loans originated with the intent to sell, which were accounted for at fair value under SFAS 159. These loans, classified as trading assets on the Consolidated balance sheets, totaled $13.5 billion, $12.6 billion, $14.4 billion, $15.2 billion, and $11.6 billion at March 31, 2008, December 31, 2007, September 30, 2007, June 30, 2007 and March 31, 2007, respectively. Average loans included prime mortgage loans, classified as trading assets on the Consolidated balance sheets, of $13.4 billion, $13.5 billion, $14.1 billion, $13.5 billion and $6.5 billion for the quarters ended March 31, 2008, December 31, 2007, September 30, 2007, June 30, 2007 and March 31, 2007, respectively. (c) Nonperforming loans included loans held-for-sale and loans accounted for at fair value under SFAS 159 of $129 million, $69 million, $17 million, $217 million and $112 million at March 31, 2008, December 31, 2007, September 30, 2007, June 30, 2007 and March 31, 2007, respectively. Certain of these loans are classified as trading assets on the Consolidated balance sheets. (d) Nonperforming loans and assets excluded (1) loans eligible for repurchase as well as loans repurchased from Governmental National Mortgage Association ("GNMA") pools that are insured by U.S. government agencies of $1.8 billion, $1.5 billion, $1.3 billion, $1.2 billion and $1.3 billion at March 31, 2008, December 31, 2007, September 30, 2007, June 30, 2007 and March 31, 2007, respectively, and (2) education loans that are 90 days past due and still accruing, which are insured by U.S. government agencies under the Federal Family Education Loan Program of $252 million, $279 million, $241 million, $200 million and $178 million at March 31, 2008, December 31, 2007, September 30, 2007, June 30, 2007, and March 31, 2007, respectively. These amounts for GNMA and education loans are excluded, as reimbursement is proceeding normally. (e) Loans held-for-sale and loans accounted for at fair value under SFAS 159 were excluded when calculating the allowance coverage ratio and the net charge-off rate. (f) The net charge-off rate for the first quarter of 2008 and for the fourth quarter of 2007 excluded $14 million and $2 million, respectively, of charge-offs related to prime mortgage loans held by Treasury in the Corporate sector. Page 10
  12. 12. JPMORGAN CHASE & CO. RETAIL FINANCIAL SERVICES FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except ratio data and where otherwise noted) QUARTERLY TRENDS 1Q08 4Q07 3Q07 2Q07 1Q08 Change 4Q07 1Q07 1Q07 REGIONAL BANKING Noninterest revenue Net interest income Total net revenue Provision for credit losses Noninterest expense Income (loss) before income tax expense Net income (loss) $ ROE Overhead ratio Overhead ratio excluding core deposit intangibles (a) BUSINESS METRICS (in billions) Home equity origination volume End of period loans owned: Home equity Mortgage (b) Business banking Education Other loans (c) Total end of period loans End of period deposits: Checking Savings Time and other Total end of period deposits Average loans owned: Home equity Mortgage loans (b) Business banking Education Other loans (c) Total average loans (d) Average deposits: Checking Savings Time and other Total average deposits Average assets Average equity 878 2,543 3,421 2,324 1,794 (697) (433) $ (14) % 52 50 940 2,363 3,303 915 1,785 603 371 12 54 51 $ % 1,013 2,325 3,338 574 1,760 1,004 611 21 53 49 $ % 977 2,296 3,273 494 1,749 1,030 629 21 53 50 $ % (7) % 8 4 154 1 NM NM 793 2,299 3,092 233 1,729 1,130 690 24 56 52 11 % 11 11 NM 4 NM NM % $ 6.7 $ 9.8 $ 11.2 $ 14.6 $ 12.7 (32) (47) $ 95.0 15.9 15.8 12.4 1.1 140.2 $ 94.8 15.7 15.4 11.0 2.3 139.2 $ 93.0 12.3 14.9 10.2 2.4 132.8 $ 91.0 8.8 14.6 10.2 2.5 127.1 $ 87.7 9.2 14.3 11.1 2.7 125.0 1 3 13 (52) 1 8 73 10 12 (59) 12 $ 69.1 105.4 44.6 219.1 $ 67.0 96.0 48.7 211.7 $ 64.5 95.7 46.5 206.7 $ 67.3 97.7 41.9 206.9 $ 69.3 100.1 42.2 211.6 3 10 (8) 3 5 6 4 $ 95.0 15.8 15.6 12.0 1.5 139.9 $ 94.0 13.7 15.1 10.6 2.3 135.7 $ 91.8 9.9 14.8 9.8 2.4 128.7 $ 89.2 8.8 14.5 10.5 2.4 125.4 $ 86.3 8.9 14.3 11.0 3.0 123.5 1 15 3 13 (35) 3 10 78 9 9 (50) 13 $ 66.3 100.3 47.7 214.3 149.9 12.4 $ 64.5 96.3 47.7 208.5 147.1 11.8 $ 64.9 97.1 43.3 205.3 140.6 11.8 $ 67.2 98.4 41.7 207.3 137.7 11.8 $ 67.3 96.7 42.5 206.5 135.9 11.8 3 4 3 2 5 (1) 4 12 4 10 5 Page 11
  13. 13. JPMORGAN CHASE & CO. RETAIL FINANCIAL SERVICES FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except ratio data and where otherwise noted) QUARTERLY TRENDS 1Q08 4Q07 3Q07 2Q07 1Q08 Change 4Q07 1Q07 1Q07 REGIONAL BANKING (continued) CREDIT DATA AND QUALITY STATISTICS 30+ day delinquency rate (e) (f) Net charge-offs Home equity Mortgage Business banking Other loans Total net charge-offs Net charge-off rate Home equity Mortgage (g) Business banking Other loans Total net charge-off rate (d) (g) 3.23 $ 447 163 40 21 671 1.89 3.79 1.03 0.89 1.94 3.03 % $ 248 73 38 28 387 1.05 2.06 1.00 1.21 1.16 % 2.39 % $ 150 40 33 23 246 0.65 1.60 0.88 1.01 0.78 % 1.88 % $ 98 26 30 52 206 0.44 1.19 0.83 2.32 0.68 % 1.84 % $ 68 20 25 13 126 0.32 0.91 0.71 0.55 0.43 % % 80 % 123 5 (25) 73 NM % NM 60 62 433 % Nonperforming assets (h) $ 3,348 $ 2,879 $ 2,206 $ 1,751 $ 1,688 16 98 RETAIL BRANCH BUSINESS METRICS Investment sales volume $ 4,084 $ 4,114 $ 4,346 $ 5,117 $ 4,783 (1) (15) 3,071 8,560 7,846 3,712 5,295 10,158 (6) 51 176 28 536 229 # 75 677 1,980 421 1,159 910 # 400 79 % 44 % 601 (5) 108 (378) (270) (127) 204 604 468 136 84 17 (8) 9 (51) (76) (29) 3 (60) (60) NM (12) (291) NM (14) 24 15 58 57 Number of: Branches ATMs Personal bankers (i) Sales specialists (i) Active online customers (in thousands) (j) Checking accounts (in thousands) 3,146 9,237 9,826 4,133 6,454 11,068 3,152 9,186 9,650 4,105 5,918 10,839 3,096 8,943 9,503 4,025 5,706 10,644 3,089 8,649 9,025 3,915 5,448 10,356 MORTGAGE BANKING Production revenue Net mortgage servicing revenue: Loan servicing revenue Changes in MSR asset fair value: Due to inputs or assumptions in model Other changes in fair value Total changes in MSR asset fair value Derivative valuation adjustments and other Total net mortgage servicing revenue Total net revenue Noninterest expense Income (loss) before income tax expense Net income (loss) $ Mortgage origination volume by channel (in billions) Retail Wholesale Correspondent CNT (negotiated transactions) Total (l) $ 22 321 $ 665 (632) (425) (1,057) 598 175 751 536 215 132 ROE Business metrics (in billions) Third-party mortgage loans serviced (ending) MSR net carrying value (ending) Avg mortgage loans held-for-sale & loans at fair value (k) Average assets Average equity 576 634 66 $ 629 (766) (393) (1,159) 1,232 738 1,059 518 541 332 % 176 $ 615 (810) (377) (1,187) 788 230 406 485 (79) (48) % 463 952 (383) 569 (1,014) 170 633 516 117 71 NM 14 % 17 5 % $ 627.1 8.4 13.8 32.2 2.4 $ 614.7 8.6 13.8 30.6 2.0 $ 600.0 9.1 16.4 31.4 2.0 $ 572.4 9.5 21.3 35.6 2.0 $ 546.1 7.9 23.8 38.0 2.0 2 (2) 5 20 15 6 (42) (15) 20 $ 12.6 10.6 12.0 11.9 47.1 $ 9.9 10.2 9.5 10.4 40.0 $ 11.1 9.8 7.2 11.1 39.2 $ 13.6 12.8 6.4 11.3 44.1 $ 10.9 9.9 4.8 10.5 36.1 27 4 26 14 18 16 7 150 13 30 $ 151 379 530 168 240 122 74 $ 142 308 450 133 237 80 49 $ 140 307 447 96 224 127 76 $ 138 312 450 92 219 139 85 $ 131 279 410 59 210 141 85 6 23 18 26 1 53 51 15 36 29 185 14 (13) (13) AUTO FINANCE Noninterest revenue Net interest income Total net revenue Provision for credit losses Noninterest expense Income before income tax expense Net income ROE ROA 13 0.65 % 9 0.44 % 14 0.70 % 15 0.79 % 16 0.80 % Page 12
  14. 14. JPMORGAN CHASE & CO. RETAIL FINANCIAL SERVICES FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except ratio data and where otherwise noted) QUARTERLY TRENDS 1Q08 4Q07 3Q07 2Q07 1Q08 Change 4Q07 1Q07 1Q07 AUTO FINANCE (continued) Business metrics (in billions) Auto origination volume End-of-period loans and lease related assets Loans outstanding Lease financing receivables Operating lease assets Total end-of-period loans and lease related assets Average loans and lease related assets Loans outstanding Lease financing receivables Operating lease assets Total average loans and lease related assets Average assets Average equity Credit quality statistics 30+ day delinquency rate Net charge-offs Loans Lease receivables Total net charge-offs Net charge-off rate Loans Lease receivables Total net charge-off rate Nonperforming assets $ 7.2 $ 5.6 $ 5.2 $ 5.3 $ 5.2 $ 44.4 0.3 2.0 46.7 $ 42.0 0.3 1.9 44.2 $ 40.3 0.6 1.8 42.7 $ 40.4 0.8 1.8 43.0 $ 39.7 1.2 1.7 42.6 6 5 6 12 (75) 18 10 $ 42.9 0.3 1.9 45.1 45.5 2.3 $ 41.1 0.5 1.9 43.5 43.8 2.2 $ 39.9 0.7 1.8 42.4 42.9 2.2 $ 40.1 1.0 1.7 42.8 43.4 2.2 $ 39.4 1.5 1.6 42.5 43.2 2.2 4 (40) 4 4 5 9 (80) 19 6 5 5 (11) (11) 102 100 (15) 14 1.44 $ $ % 117 1 118 1.10 1.34 1.10 160 1.85 $ % $ % 132 1 133 1.27 0.79 1.27 188 1.65 $ % $ % 98 1 99 0.97 0.57 0.97 156 1.43 $ % $ % 62 1 63 0.62 0.40 0.61 131 1.33 $ % $ 29 38 % % 58 1 59 0.60 0.27 0.59 140 % % (a) Regional Banking uses the overhead ratio (excluding the amortization of core deposit intangibles ("CDI")), a non-GAAP financial measure, to evaluate the underlying expense trends of the business. Including CDI amortization expense in the overhead ratio calculation results in a higher overhead ratio in the earlier years and a lower overhead ratio in later years; this inclusion would result in an improving overhead ratio over time, all things remaining equal. This non-GAAP ratio excludes Regional Banking's core deposit intangible amortization expense related to The Bank of New York transaction and the Bank One merger of $99 million, $113 million, $116 million, $115 million and $116 million for the quarters ended March 31, 2008, December 31, 2007, September 30, 2007, June 30, 2007 and March 31, 2007, respectively. (b) Balance reported primarily reflected subprime mortgage loans owned. (c) Included commercial loans derived from community development activities prior to March 31, 2008. (d) Average loans included loans held-for-sale of $4.0 billion, $3.7 billion, $3.2 billion, $3.9 billion and $4.4 billion for the quarters ended March 31, 2008, December 31, 2007, September 30, 2007, June 30, 2007 and March 31, 2007, respectively. These amounts were excluded when calculating the net charge-off rate. (e) Excluded loans eligible for repurchase as well as loans repurchased from GNMA pools that are insured by U.S. government agencies of $1.5 billion, $1.2 billion, $979 million, $879 million and $975 million at March 31, 2008, December 31, 2007, September 30, 2007, June 30, 2007 and March 31, 2007, respectively. These amounts are excluded as reimbursement is proceeding normally. (f) Excluded loans that are 30 days past due and still accruing, which are insured by U.S. government agencies under the Federal Family Education Loan Program of $534 million, $663 million, $590 million, $523 million and $519 million at March 31, 2008, December 31, 2007, September 30, 2007, June 30, 2007 and March 31, 2007, respectively. These amounts are excluded as reimbursement is proceeding normally. (g) The mortgage and total net charge-off rate for the first quarter of 2008 and for the fourth quarter of 2007 excluded $14 million and $2 million, respectively, of charge-offs related to prime mortgage loans held by Treasury in the Corporate sector. (h) Excluded nonperforming assets related to education loans that are 90 days past due and still accruing, which were insured by U.S. government agencies under the Federal Family Education Loan Program of $252 million, $279 million, $241 million, $200 million and $178 million at March 31, 2008, December 31, 2007, September 30, 2007, June 30, 2007 and March 31, 2007, respectively. These amounts are excluded as reimbursement is proceeding normally. (i) Employees acquired as part of The Bank of New York transaction are included beginning June 30, 2007. (j) During the quarter ended June 30, 2007, RFS changed the methodology for determining active online customers to include all individual RFS customers with one or more online accounts that have been active within 90 days of period end, including customers who also have online accounts with Card Services. Prior periods have been restated to conform to this new methodology. (k) Included $13.4 billion, $13.5 billion, $14.1 billion, $13.5 billion and $6.5 billion of prime mortgage loans at fair value for the quarters ended March 31, 2008, December 31, 2007, September 30, 2007, June 30, 2007, and March 31, 2007, respectively. These loans are classified as trading assets on the Consolidated balance sheets. (l) During the second quarter of 2007, RFS changed its definition of mortgage originations to include all newly originated mortgage loans sourced through RFS channels, and to exclude all mortgage loan originations sourced through IB channels. Prior periods have been restated to conform to this new definition. Page 13
  15. 15. JPMORGAN CHASE & CO. CARD SERVICES - MANAGED BASIS FINANCIAL HIGHLIGHTS (in millions, except ratio data and where otherwise noted) QUARTERLY TRENDS 1Q08 INCOME STATEMENT REVENUE Credit card income All other income Noninterest revenue Net interest income TOTAL NET REVENUE $ 4Q07 600 119 719 3,185 3,904 $ 3Q07 712 122 834 3,137 3,971 $ 2Q07 692 67 759 3,108 3,867 $ 1Q08 Change 4Q07 1Q07 1Q07 682 80 762 2,955 3,717 $ 599 92 691 2,989 3,680 (16) % (2) (14) 2 (2) - % 29 4 7 6 Provision for credit losses 1,670 1,788 1,363 1,331 1,229 (7) 36 NONINTEREST EXPENSE Compensation expense Noncompensation expense Amortization of intangibles TOTAL NONINTEREST EXPENSE 267 841 164 1,272 260 790 173 1,223 256 827 179 1,262 251 753 184 1,188 254 803 184 1,241 3 6 (5) 4 5 5 (11) 2 Income before income tax expense Income tax expense NET INCOME $ 962 353 609 $ 960 351 609 $ 1,242 456 786 $ 1,198 439 759 $ 1,210 445 765 1 - (20) (21) (20) Memo: Net securitization gains $ 70 $ 28 $ - $ 16 $ 23 FINANCIAL METRICS ROE Overhead ratio % of average managed outstandings: Net interest income Provision for credit losses Noninterest revenue Risk adjusted margin (a) Noninterest expense Pretax income (ROO) (b) Net income BUSINESS METRICS Charge volume (in billions) Net accounts opened (in millions) Credit cards issued (in millions) Number of registered internet customers (in millions) Merchant acquiring business (c) Bank card volume (in billions) Total transactions (in billions) 17 33 % 17 31 8.34 4.37 1.88 5.85 3.33 2.52 1.60 % 22 33 8.20 4.67 2.18 5.71 3.20 2.51 1.59 % 22 32 8.29 3.64 2.03 6.68 3.37 3.31 2.10 % 22 34 8.04 3.62 2.07 6.49 3.23 3.26 2.06 150 204 % 8.11 3.34 1.88 6.65 3.37 3.28 2.08 $ 85.4 3.4 156.4 26.7 $ 95.5 5.3 155.0 28.3 $ 89.8 4.0 153.6 26.4 $ 88.0 3.7 150.9 24.6 $ 81.3 3.4 152.1 24.3 (11) (36) 1 (6) 5 3 10 $ 182.4 5.2 $ 194.4 5.4 $ 181.4 5.0 $ 179.7 4.8 $ 163.6 4.5 (6) (4) 11 16 (a) Represents total net revenue less provision for credit losses. (b) Pretax return on average managed outstandings. (c) Represents 100% of the merchant acquiring business. Page 14
  16. 16. JPMORGAN CHASE & CO. CARD SERVICES - MANAGED BASIS FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except headcount and ratio data) QUARTERLY TRENDS 1Q08 SELECTED ENDING BALANCES Loans: Loans on balance sheets Securitized loans Managed loans $ $ 75,888 75,062 150,950 $ $ 4Q07 $ 84,352 72,701 157,053 159,602 $ $ SELECTED AVERAGE BALANCES Managed assets Loans: Loans on balance sheets Securitized loans Managed average loans $ $ Headcount MANAGED CREDIT QUALITY STATISTICS Net charge-offs Net charge-off rate 158,183 $ 79,028 72,715 151,743 $ 14,100 18,931 $ Managed delinquency ratios 30+ days 90+ days Allowance for loan losses (a) Allowance for loan losses to period-end loans (a) $ $ 14,100 1,670 4.37 3.66 1.84 $ 3,404 4.49 $ $ % % 1,488 3.89 3.48 1.65 $ 3,407 4.04 $ 1Q08 Change 4Q07 1Q07 1Q07 $ 80,495 67,506 148,001 $ 78,173 68,403 146,576 154,956 $ 154,406 $ 156,271 1 2 $ $ 79,000 68,428 147,428 $ $ 79,993 68,673 148,666 $ 81,932 67,485 149,417 1 2 1 (3) 10 3 $ 14,100 $ 14,100 $ 14,100 18,554 % 2Q07 79,409 69,643 149,052 $ 79,445 74,108 153,553 Equity $ 3Q07 18,887 $ % % 3.25 1.50 $ % 1,363 3.64 3,107 3.91 $ 18,913 $ % % 3.00 1.42 $ % 1,331 3.62 3,096 3.85 (10) % 3 (4) - 18,749 $ % % 3.07 1.52 $ % 1,314 3.57 3,092 3.96 (3) % 10 3 - 2 1 12 27 % % - 10 % (a) Loans on a reported basis. Page 15
  17. 17. JPMORGAN CHASE & CO. CARD RECONCILIATION OF REPORTED AND MANAGED DATA (in millions) QUARTERLY TRENDS 1Q08 INCOME STATEMENT DATA (a) Credit card income Reported Securitization adjustments Managed credit card income Net interest income Reported Securitization adjustments Managed net interest income Total net revenue Reported Securitization adjustments Managed total net revenue Provision for credit losses Reported Securitization adjustments Managed provision for credit losses BALANCE SHEETS - AVERAGE BALANCES (a) Total average assets Reported Securitization adjustments Managed average assets CREDIT QUALITY STATISTICS (a) Net charge-offs Reported Securitization adjustments Managed net charge-offs $ $ $ $ $ $ $ $ $ $ $ $ 1,537 (937) 600 1,567 1,618 3,185 4Q07 $ $ $ $ 3,223 681 3,904 $ 989 681 1,670 $ 88,013 71,589 159,602 989 681 1,670 $ $ $ $ $ $ 1,597 (885) 712 1,633 1,504 3,137 3Q07 $ $ $ $ 3,352 619 3,971 $ 1,169 619 1,788 $ 88,244 69,939 158,183 869 619 1,488 $ $ $ $ $ $ 1,528 (836) 692 1,694 1,414 3,108 2Q07 $ $ $ $ 3,289 578 3,867 $ 785 578 1,363 $ 88,856 66,100 154,956 785 578 1,363 $ $ $ $ $ $ 1,470 (788) 682 1,577 1,378 2,955 1Q07 $ $ $ $ 3,127 590 3,717 $ 741 590 1,331 $ 88,486 65,920 154,406 741 590 1,331 $ $ $ $ $ $ 1,345 (746) 599 1Q08 Change 4Q07 1Q07 (4) % (6) (16) 14 % (26) - 1,650 1,339 2,989 (4) 8 2 (5) 21 7 3,087 593 3,680 (4) 10 (2) 4 15 6 636 593 1,229 (15) 10 (7) 56 15 36 91,157 65,114 156,271 2 1 721 593 1,314 14 10 12 (3) 10 2 37 15 27 (a) JPMorgan Chase uses the concept of “managed receivables” to evaluate the credit performance and overall performance of the underlying credit card loans, both sold and not sold; as the same borrower is continuing to use the credit card for ongoing charges, a borrower’s credit performance will affect both the receivables sold under SFAS 140 and those not sold. Thus, in its disclosures regarding managed receivables, JPMorgan Chase treats the sold receivables as if they were still on the balance sheet in order to disclose the credit performance (such as net charge-off rates) of the entire managed credit card portfolio. Managed results exclude the impact of credit card securitizations on total net revenue, the provision for credit losses, net charge-offs and loan receivables. Securitization does not change reported net income versus managed earnings; however, it does affect the classification of items on the Consolidated statements of income and Consolidated balance sheets. Page 16
  18. 18. JPMORGAN CHASE & CO. COMMERCIAL BANKING FINANCIAL HIGHLIGHTS (in millions, except ratio data) QUARTERLY TRENDS 1Q08 INCOME STATEMENT REVENUE Lending & deposit related fees Asset management, administration and commissions All other income (a) Noninterest revenue Net interest income TOTAL NET REVENUE $ 4Q07 193 26 115 334 733 1,067 $ 3Q07 172 24 130 326 758 1,084 $ 2Q07 159 24 107 290 719 1,009 $ 1Q08 Change 4Q07 1Q07 1Q07 158 21 133 312 695 1,007 $ 158 23 154 335 668 1,003 12 % 8 (12) 2 (3) (2) 22 % 13 (25) 10 6 Provision for credit losses 101 105 112 45 17 (4) 494 NONINTEREST EXPENSE Compensation expense Noncompensation expense Amortization of intangibles TOTAL NONINTEREST EXPENSE 178 294 13 485 184 307 13 504 160 300 13 473 182 300 14 496 180 290 15 485 (3) (4) (4) (1) 1 (13) - Income before income tax expense Income tax expense NET INCOME 481 189 292 475 187 288 424 166 258 466 182 284 501 197 304 1 1 1 (4) (4) (4) (2) (3) 33 (2) 9 11 (11) (83) 6 MEMO: Revenue by product: Lending Treasury services Investment banking Other Total Commercial Banking revenue IB revenues, gross (b) Revenue by business: Middle Market Banking Mid-Corporate Banking Real Estate Banking Other Total Commercial Banking revenue FINANCIAL RATIOS ROE Overhead ratio $ $ $ $ $ 379 616 68 4 1,067 $ $ $ $ $ $ 380 631 70 3 1,084 203 $ 706 207 97 57 1,067 $ 17 45 $ % $ $ $ 343 594 64 8 1,009 227 $ 695 239 102 48 1,084 $ 17 46 $ % $ $ $ 348 569 82 8 1,007 $ 348 556 76 23 1,003 194 $ 236 $ 231 (11) (12) 680 167 108 54 1,009 $ 653 197 109 48 1,007 $ 661 212 102 28 1,003 2 (13) (5) 19 (2) 7 (2) (5) 104 6 15 47 $ % 18 49 $ % 20 48 % (a) IB-related and commercial card revenue is included in all other income. (b) Represents the total revenue related to investment banking products sold to Commercial Banking ("CB") clients. Page 17
  19. 19. JPMORGAN CHASE & CO. COMMERCIAL BANKING FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except ratio and headcount data) QUARTERLY TRENDS 1Q08 SELECTED BALANCE SHEETS DATA (Average) Total assets Loans: Loans retained Loans held-for-sale & loans at fair value Total loans (a) Liability balances (b) Equity MEMO: Loans by business: Middle Market Banking Mid-Corporate Banking Real Estate Banking Other Total Commercial Banking loans $ Net charge-off (recovery) rate (a) Allowance for loan losses to average loans (a) Allowance for loan losses to nonperforming loans (c) Nonperforming loans to average loans 101,979 $ 67,510 521 68,031 99,477 7,000 $ $ Headcount CREDIT DATA AND QUALITY STATISTICS Net charge-offs (recoveries) Nonperforming loans (c) Allowance for credit losses: Allowance for loan losses Allowance for lending-related commitments Total allowance for credit losses 4Q07 40,111 15,150 7,457 5,313 68,031 $ $ $ $ 1,790 200 1,990 38,275 15,440 7,347 4,482 65,544 $ $ 33 146 0.21 2.66 1,161 0.22 86,652 $ $ 37,617 12,076 7,144 4,435 61,272 $ $ 20 134 0.13 2.67 1,211 0.22 $ 37,099 11,692 6,894 4,127 59,812 $ (8) 135 $ $ 8 6 (71) 4 3 4 18 10 18 22 11 36,317 10,669 7,074 3,600 57,660 5 (2) 1 19 4 10 42 5 48 18 4,281 $ 82,545 (1) (5) (1) 141 1,551 222 1,773 % 1Q08 Change 4Q07 1Q07 57,185 475 57,660 81,752 6,300 4,295 1,623 236 1,859 % 84,687 1Q07 59,071 741 59,812 84,187 6,300 4,158 1,695 236 1,931 % 2Q07 60,839 433 61,272 88,081 6,700 4,125 81 446 0.48 2.65 426 0.66 94,550 63,749 1,795 65,544 96,716 6,700 4,075 $ 3Q07 1,531 187 1,718 (0.05) % 2.63 1,149 0.23 % 24 145 205 NM 216 6 (15) 3 % 17 7 16 (0.01) % 2.68 1,086 0.24 (a) Loans held-for-sale and loans accounted for at fair value under SFAS 159 were excluded when calculating the allowance coverage ratios and the net charge-off rate. (b) Liability balances include deposits and deposits swept to on-balance sheet liabilities such as commercial paper, Federal funds purchased, and repurchase agreements. (c) Nonperforming loans held-for-sale were $26 million at March 31, 2008. This amount was excluded when calculating the allowance coverage ratios. There were no nonperforming loans held-for-sale at December 31, 2007, September 30, 2007, June 30, 2007 and March 31, 2007, respectively. Page 18
  20. 20. JPMORGAN CHASE & CO. TREASURY & SECURITIES SERVICES FINANCIAL HIGHLIGHTS (in millions, except ratio data and where otherwise noted) QUARTERLY TRENDS 1Q08 INCOME STATEMENT REVENUE Lending & deposit related fees Asset management, administration and commissions All other income Noninterest revenue Net interest income TOTAL NET REVENUE $ Provision for credit losses Credit reimbursement to IB (a) REVENUE BY BUSINESS Treasury Services Worldwide Securities Services TOTAL NET REVENUE Number of: US$ ACH transactions originated (in millions) Total US$ clearing volume (in thousands) International electronic funds transfer volume (in thousands) (c) Wholesale check volume (in millions) Wholesale cards issued (in thousands) (d) $ 3Q07 247 806 228 1,281 649 1,930 $ 4 (30) 2Q07 244 730 171 1,145 603 1,748 $ 9 (31) 1Q08 Change 4Q07 1Q07 1Q07 219 828 184 1,231 510 1,741 $ (30) 213 686 125 1,024 502 1,526 9 % 2 (12) 1 (4) (1) 6 (30) 200 - 26 20 60 26 24 25 $ $ $ 607 598 17 1,222 579 538 17 1,134 609 523 17 1,149 558 502 15 1,075 6 (5) (6) - 15 14 7 14 643 240 403 674 252 422 574 214 360 562 210 352 415 152 263 (5) (5) (5) 55 58 53 689 837 1,526 (1) (1) (1) 18 31 25 14,661 (2) 7 971 26,840 42,399 771 17,146 2 (1) (6) (5) 2 3 5 (6) (19) 12 $ 813 1,100 1,913 46 64 34 $ % 100 - 641 571 16 1,228 FINANCIAL RATIOS ROE Overhead ratio Pretax margin ratio (b) FIRMWIDE BUSINESS METRICS Assets under custody (in billions) 269 820 200 1,289 624 1,913 12 (30) NONINTEREST EXPENSE Compensation expense Noncompensation expense Amortization of intangibles TOTAL NONINTEREST EXPENSE Income before income tax expense Income tax expense NET INCOME 4Q07 15,690 1,004 28,056 40,039 623 19,122 $ $ % 824 1,106 1,930 56 63 35 $ $ 15,946 984 28,386 42,723 656 18,722 $ $ % 780 968 1,748 48 65 33 $ $ 15,614 943 28,031 41,415 731 18,108 $ $ % 720 1,021 1,741 47 66 32 $ $ 15,203 972 27,779 42,068 767 17,535 $ $ % 36 70 27 $ % Page 19
  21. 21. JPMORGAN CHASE & CO. TREASURY & SECURITIES SERVICES FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except headcount and ratio data) QUARTERLY TRENDS 1Q08 SELECTED BALANCE SHEETS (Average) Total assets Loans (e) Liability balances (f) Equity $ Headcount TSS FIRMWIDE METRICS Treasury Services firmwide revenue (g) Treasury & Securities Services firmwide revenue (g) Treasury Services firmwide overhead ratio (h) Treasury & Securities Services firmwide overhead ratio (h) Treasury Services Firmwide liability balances (average) (i) Treasury & Securities Services firmwide liability balances (average) (i) 4Q07 57,204 23,086 254,369 3,500 $ 26,561 $ $ 221,716 353,845 60,830 23,489 250,645 3,000 $ 25,669 1,498 2,598 55 58 3Q07 $ % $ 218,416 347,361 55,688 20,602 236,381 3,000 $ 25,209 1,530 2,636 53 57 2Q07 $ % 54 59 $ 201,671 324,462 50,687 20,195 217,514 3,000 $ 25,206 1,444 2,412 $ % 1Q08 Change 4Q07 1Q07 1Q07 (6) % (2) 1 17 24 22 21 17 24,875 1,354 2,375 59 60 46,005 18,948 210,639 3,000 $ % $ 189,214 301,701 3 7 1,305 2,142 (2) (1) 15 21 2 2 % 19 21 59 63 $ 186,631 292,391 % FOOTNOTES (a) TSS was charged a credit reimbursement related to certain exposures managed within the IB credit portfolio on behalf of clients shared with TSS. (b) Pretax margin represents income before income tax expense divided by total net revenue, which is a measure of pretax performance and another basis by which management evaluates its performance and that of its competitors. (c) International electronic funds transfer includes non-US$ ACH and clearing volume. (d) Wholesale cards issued include domestic commercial card, stored value card, prepaid card, and government electronic benefit card products. (e) Loan balances include wholesale overdrafts, commercial cards and trade finance loans. (f) Liability balances include deposits and deposits swept to on-balance sheet liabilities such as commercial paper, Federal funds purchased, and repurchase agreements. TSS FIRMWIDE METRICS TSS firmwide metrics include certain TSS product revenue and liability balances reported in other lines of business for customers who are also customers of those lines of business. In order to capture the firmwide impact of Treasury Services ("TS") and TSS products and revenue, management reviews firmwide metrics such as liability balances, revenues and overhead ratios in assessing financial performance for TSS. Firmwide metrics are necessary in order to understand the aggregate TSS business. (g) Firmwide revenue includes TS revenue recorded in the CB, Regional Banking and Asset Management ("AM") lines of business (see below) and excludes FX revenue recorded in the IB for TSS-related FX activity. QUARTERLY TRENDS Treasury Services revenue reported in CB Treasury Services revenue reported in other lines of business 1Q08 $ 616 69 4Q07 $ 631 75 3Q07 $ 594 70 2Q07 $ 569 65 1Q07 $ 556 60 1Q08 Change 4Q07 1Q07 11 (2) % (8) 15 % TSS firmwide FX revenue, which includes FX revenue recorded in TSS and FX revenue associated with TSS customers who are FX customers of the IB, was $191 million, $157 million, $144 million, $139 million and $112 million for the quarters ended March 31, 2008, December 31, 2007, September 30, 2007, June 30, 2007 and March 31, 2007, respectively. (h) Overhead ratios have been calculated based upon firmwide revenue and TSS and TS expense, respectively, including those allocated to certain other lines of business. FX revenue and expense recorded in the IB for TSS-related FX activity are not included in this ratio. (i) Firmwide liability balances include TS' liability balances recorded in certain other lines of business. Liability balances associated with TS customers who are also customers of the CB line of business are not included in TS liability balances. Page 20
  22. 22. JPMORGAN CHASE & CO. ASSET MANAGEMENT FINANCIAL HIGHLIGHTS (in millions, except ratio, ranking and headcount data) QUARTERLY TRENDS 1Q08 INCOME STATEMENT REVENUE Asset management, administration and commissions All other income Noninterest revenue Net interest income TOTAL NET REVENUE $ Provision for credit losses REVENUE BY CLIENT SEGMENT Private Bank Institutional Retail Private Client Services Total net revenue 1,531 59 1,590 311 1,901 $ 16 NONINTEREST EXPENSE Compensation expense Noncompensation expense Amortization of intangibles TOTAL NONINTEREST EXPENSE Income before income tax expense Income tax expense NET INCOME 4Q07 $ $ FINANCIAL RATIOS ROE Overhead ratio Pretax margin ratio (a) BUSINESS METRICS Number of: Client advisors Retirement planning services participants $ $ 655 490 466 290 1,901 $ $ % 1,744 1,519,000 1,760 152 1,912 293 2,205 $ $ 713 754 640 282 2,389 $ $ % 1,729 1,501,000 $ 686 603 639 277 2,205 52 62 38 1,671 173 1,844 293 2,137 $ $ $ % 1,680 1,495,000 (19) % (63) (23) (5) (20) 3 % (65) (4) 27 - NM NM 764 451 20 1,235 793 300 493 $ 646 617 602 272 2,137 53 63 37 1,489 170 1,659 245 1,904 (20) (6) 11 (15) 8 6 5 7 678 253 425 (32) (32) (32) (17) (19) (16) 560 551 527 266 1,904 (8) (35) (27) 3 (20) 17 (11) (12) 9 - 1 1 14 7 (9) 879 456 20 1,355 836 315 521 1Q08 Change 4Q07 1Q07 1Q07 (11) 848 498 20 1,366 831 304 527 52 65 35 2Q07 3 1,030 510 19 1,559 562 206 356 29 70 30 1,901 159 2,060 329 2,389 (1) 825 477 21 1,323 $ 3Q07 $ $ % 46 65 36 1,582 1,477,000 % 1,533 1,423,000 % of customer assets in 4 & 5 Star Funds (b) 49 % 55 % 55 % 65 % 61 % (11) (20) % of AUM in 1st and 2nd quartiles: (c) 1 year 3 years 5 years 52 73 75 % % % 57 75 76 % % % 47 73 76 % % % 65 77 76 % % % 76 76 81 % % % (9) (3) (1) (32) (4) (7) 45,816 25,640 54,816 3,750 8 12 5 25 32 43 24 33 13,568 1 10 NM (8) 16 (14) NM (68) 14 20 SELECTED BALANCE SHEETS DATA (Average) Total assets Loans (d) Deposits Equity $ Headcount CREDIT DATA AND QUALITY STATISTICS Net charge-offs (recoveries) Nonperforming loans Allowance for loan losses Allowance for lending related commitments Net charge-off (recovery) rate Allowance for loan losses to average loans Allowance for loan losses to nonperforming loans Nonperforming loans to average loans 60,286 36,628 68,184 5,000 $ 14,955 $ (2) 11 130 6 (0.02) % 0.35 1,182 0.03 55,989 32,627 64,630 4,000 $ 14,799 $ $ 14,510 2 12 112 7 0.02 0.34 933 0.04 53,879 30,928 59,907 4,000 $ % (5) 28 115 6 (0.06) % 0.37 411 0.09 51,710 28,695 55,981 3,750 $ 14,108 $ (5) 21 105 7 (0.07) % 0.37 500 0.07 $ 34 114 5 0.44 335 0.13 % (a) Pretax margin represents income before income tax expense divided by total net revenue, which is a measure of pretax performance and another basis by which management evaluates its performance and that of its competitors. (b) Derived from the following rating services: Morningstar for the United States; Micropal for the United Kingdom, Luxembourg, Hong Kong and Taiwan; and Nomura for Japan. (c) Derived from the following rating services: Lipper for the United States and Taiwan; Micropal for the United Kingdom, Luxembourg and Hong Kong; and Nomura for Japan. (d) Reflects the transfer in 2007 of held-for-investment prime mortgage loans from AM to Treasury within the Corporate segment. Page 21
  23. 23. JPMORGAN CHASE & CO. ASSET MANAGEMENT FINANCIAL HIGHLIGHTS, CONTINUED (in billions) Mar 31 2008 Assets by asset class Liquidity Fixed income Equities & balanced Alternatives TOTAL ASSETS UNDER MANAGEMENT Custody / brokerage / administration / deposits TOTAL ASSETS UNDER SUPERVISION Assets by client segment Institutional Private Bank Retail Private Client Services TOTAL ASSETS UNDER MANAGEMENT Institutional Private Bank Retail Private Client Services TOTAL ASSETS UNDER SUPERVISION Assets by geographic region U.S. / Canada International TOTAL ASSETS UNDER MANAGEMENT U.S. / Canada International TOTAL ASSETS UNDER SUPERVISION Mutual fund assets by asset class Liquidity Fixed income Equities TOTAL MUTUAL FUND ASSETS $ $ $ $ $ $ $ $ $ $ $ $ 471 200 390 126 1,187 382 1,569 652 196 279 60 1,187 652 441 366 110 1,569 773 414 1,187 1,063 506 1,569 405 45 186 636 Dec 31 2007 $ $ $ $ $ $ $ $ $ $ $ $ 400 200 472 121 1,193 379 1,572 632 201 300 60 1,193 633 433 394 112 1,572 760 433 1,193 1,032 540 1,572 339 46 224 609 Sep 30 2007 $ $ $ $ $ $ $ $ $ $ $ $ 368 195 481 119 1,163 376 1,539 603 196 304 60 1,163 604 423 399 113 1,539 745 418 1,163 1,022 517 1,539 308 46 235 589 Jun 30 2007 $ $ $ $ $ $ $ $ $ $ $ $ 333 190 467 119 1,109 363 1,472 565 185 300 59 1,109 566 402 393 111 1,472 700 409 1,109 971 501 1,472 268 49 235 552 Mar 31 2007 $ $ $ $ $ $ $ $ $ $ $ $ 318 180 446 109 1,053 342 1,395 Mar 31, 2008 Change Dec 31 Mar 31 2007 2007 18 % (17) 4 (1) 1 - 48 % 11 (13) 16 13 12 12 550 170 274 59 1,053 3 (2) (7) (1) 19 15 2 2 13 551 374 361 109 1,395 3 2 (7) (2) - 18 18 1 1 12 664 389 1,053 2 (4) (1) 16 6 13 929 466 1,395 3 (6) - 14 9 12 257 48 219 524 19 (2) (17) 4 58 (6) (15) 21 Page 22
  24. 24. JPMORGAN CHASE & CO. ASSET MANAGEMENT FINANCIAL HIGHLIGHTS, CONTINUED (in billions) QUARTERLY TRENDS 1Q08 ASSETS UNDER SUPERVISION (continued) Assets under management rollforward Beginning balance Net asset flows: Liquidity Fixed income Equities, balanced & alternative Market / performance / other impacts TOTAL ASSETS UNDER MANAGEMENT Assets under supervision rollforward Beginning balance Net asset flows Market / performance / other impacts TOTAL ASSETS UNDER SUPERVISION $ 1,193 $ 68 (21) (53) 1,187 $ $ 1,572 52 (55) 1,569 4Q07 $ 1,163 $ 26 3 4 (3) 1,193 $ $ 1,539 37 (4) 1,572 3Q07 $ 1,109 $ 33 (2) 2 21 1,163 $ $ 1,472 41 26 1,539 2Q07 $ 1,053 $ 12 6 12 26 1,109 $ $ 1,395 38 39 1,472 1Q07 $ 1,013 $ 7 2 10 21 1,053 $ $ 1,347 27 21 1,395 Page 23
  25. 25. JPMORGAN CHASE & CO. CORPORATE/PRIVATE EQUITY FINANCIAL HIGHLIGHTS (in millions, except headcount data) QUARTERLY TRENDS 1Q08 INCOME STATEMENT REVENUE Principal transactions Securities gains (losses) All other income (a) Noninterest revenue Net interest income (expense) TOTAL NET REVENUE $ Provision for credit losses MEMO: TOTAL NET REVENUE Private equity Treasury and Corporate other TOTAL NET REVENUE NET INCOME (LOSS) Private equity Treasury and Corporate other Merger costs TOTAL NET INCOME (LOSS) $ 196 NONINTEREST EXPENSE Compensation expense Noncompensation expense (b) Merger costs Subtotal Net expense allocated to other businesses TOTAL NONINTEREST EXPENSE Income before income tax expense Income tax expense (benefit) NET INCOME 5 42 1,639 1,686 (286) 1,400 4Q07 $ $ $ $ $ Headcount $ $ $ 57 970 1,027 $ $ $ 239 (10) 249 688 226 914 356 (93) (14) 249 22,512 1,082 128 70 1,280 (279) 1,001 2Q07 $ (31) 714 982 22 1,718 (1,057) 661 163 1,237 1,400 21,769 773 146 213 1,132 (218) 914 14 639 (82) 557 (1,057) (500) 1,704 677 1,027 3Q07 $ $ $ $ $ 787 274 513 733 268 1,001 409 142 (38) 513 22,864 1,372 (227) 90 1,235 (173) 1,062 $ 3 569 674 61 1,304 (1,059) 245 $ $ $ $ 557 175 382 1,293 (231) 1,062 702 (280) (40) 382 23,532 1,325 (8) 68 1,385 (117) 1,268 3 695 818 64 1,577 (1,075) 502 $ 1Q08 Change 4Q07 1Q07 1Q07 $ $ $ $ (100) % NM NM 22 (144) 10 NM NM (11) NM NM (68) NM (18) NM NM (60) (2) NM 911 280 631 NM NM 312 87 142 63 1,253 15 1,268 (76) 447 53 (87) NM 10 698 (29) (38) 631 (84) NM NM 312 (92) NM NM 63 23,702 (3) (8) 776 556 62 1,394 (1,040) 354 $ (99) % (71) NM 49 (31) 53 (a) Included proceeds from the sale of VISA shares in its initial public offering. (b) Included a release of credit card litigation reserves in the first quarter of 2008. Page 24
  26. 26. JPMORGAN CHASE & CO. CORPORATE/PRIVATE EQUITY FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except ratio data) QUARTERLY TRENDS 1Q08 4Q07 3Q07 2Q07 1Q07 1Q08 Change 4Q07 1Q07 SUPPLEMENTAL TREASURY Securities gains (losses) (a) Investment securities portfolio (average) Investment securities portfolio (ending) Mortgage loans (average) (b) Mortgage loans (ending) (b) PRIVATE EQUITY Private equity gains (losses) Direct investments Realized gains Unrealized gains (losses) Total direct investments Third-party fund investments Total private equity gains (c) Private equity portfolio information Direct investments Publicly-held securities Carrying value Cost Quoted public value Privately-held direct securities Carrying value Cost Third-party fund investments Carrying value Cost $ $ $ $ 42 80,443 91,323 39,096 41,125 1,120 (888) 232 (43) 189 603 499 720 $ 146 82,445 76,200 34,436 36,942 $ 126 85,470 86,495 29,854 32,804 $ (227) 87,760 86,821 26,830 27,299 $ (8) 86,436 88,681 25,244 26,499 $ 100 569 669 43 712 $ 504 227 731 35 766 $ 985 290 1,275 53 1,328 $ 723 521 1,244 34 1,278 $ $ 390 288 536 $ $ 409 291 560 $ $ 465 367 600 $ $ 389 366 493 (71) % (2) 20 14 11 NM % (7) 3 55 55 NM NM (65) NM (73) 55 NM (81) NM (85) 55 73 34 55 36 46 5,191 4,973 5,914 4,867 5,336 5,003 5,247 5,228 5,294 5,574 (12) 2 (2) (11) 811 1,064 849 1,076 839 1,078 812 1,067 744 1,026 (4) (1) 9 4 Total private equity portfolio - Carrying value $ 6,605 $ 7,153 $ 6,584 $ 6,524 $ 6,427 (8) 3 Total private equity portfolio - Cost $ 6,536 $ 6,231 $ 6,372 $ 6,662 $ 6,966 5 (6) (a) Reflects repositioning of the Treasury investment securities portfolio. Excludes gains/losses on securities used to manage risk associated with MSRs. (b) Held-for-investment prime mortgage loans were transferred from RFS and AM to the Corporate segment for risk management and reporting purposes. The transfers had no material impact on the financial results of Corporate. (c) Included in principal transactions revenue in the Consolidated statements of income. Page 25
  27. 27. JPMORGAN CHASE & CO. CREDIT-RELATED INFORMATION (in millions) Mar 31 2008 CREDIT EXPOSURE WHOLESALE (a) Loans - U.S. Loans - Non-U.S. TOTAL WHOLESALE LOANS - REPORTED (b) $ CONSUMER (c) Home equity Mortgage (includes RFS and Corporate) Auto loans and leases Credit card - reported Other loans TOTAL CONSUMER LOANS - REPORTED TOTAL LOANS - REPORTED Credit card - securitized TOTAL LOANS - MANAGED Derivative receivables TOTAL CREDIT-RELATED ASSETS Wholesale lending-related commitments TOTAL Memo: Total by category Total wholesale exposure (d) Total consumer managed loans (e) Total 141,921 89,376 231,297 Dec 31 2007 $ 133,253 79,823 213,076 Sep 30 2007 $ 126,343 71,385 197,728 Jun 30 2007 $ 111,082 70,886 181,968 Mar 31 2007 $ Mar 31, 2008 Change Dec 31 Mar 31 2007 2007 108,627 59,567 168,194 7 12 9 % 31 50 38 94,968 60,855 44,714 75,888 29,334 305,759 $ $ 94,832 56,031 42,350 84,352 28,733 306,298 93,026 47,730 40,871 79,409 27,556 288,592 90,989 43,114 41,231 80,495 27,240 283,069 87,741 46,574 40,937 78,173 28,146 281,571 9 6 (10) 2 - 537,056 75,062 612,118 99,110 711,228 438,392 1,149,620 519,374 72,701 592,075 77,136 669,211 446,652 1,115,863 486,320 69,643 555,963 64,592 620,555 468,145 1,088,700 465,037 67,506 532,543 59,038 591,581 435,718 1,027,299 449,765 68,403 518,168 49,647 567,815 412,382 980,197 3 3 3 28 6 (2) 3 19 10 18 100 25 6 17 4 3 % 22 9 17 $ 768,799 380,821 1,149,620 $ 590,439 $ $ $ 736,864 378,999 1,115,863 $ 571,394 $ $ 730,465 358,235 1,088,700 $ 548,663 $ $ $ $ $ 8 31 9 (3) 4 9 $ 676,724 350,575 1,027,299 $ 630,223 349,974 980,197 $ 532,134 $ 487,309 3 21 121,981 5,090 263 127,334 9 53 30 11 21 88 182 24 15,580 630,223 (14) 4 30 22 Risk profile of wholesale credit exposure: Investment-grade (f) Noninvestment-grade: (f) Noncriticized Criticized performing Criticized nonperforming Total Noninvestment-grade Loans held-for-sale & loans at fair value Total wholesale exposure 147,771 9,570 742 158,083 $ 20,277 768,799 134,983 6,267 571 141,821 $ 23,649 736,864 155,172 5,605 414 161,191 $ 20,611 730,465 127,818 4,964 252 133,034 $ 11,556 676,724 $ (a) Includes Investment Bank, Commercial Banking, Treasury & Securities Services and Asset Management. (b) Includes loans held-for-sale & loans at fair value. (c) Includes Retail Financial Services, Card Services and residential mortgage loans reported in the Corporate segment to be risk managed by the Chief Investment Office. (d) Represents total wholesale loans, derivative receivables and wholesale lending-related commitments. (e) Represents total consumer loans plus credit card securitizations, and excludes consumer lending-related commitments. (f) Excludes loans held-for-sale & loans at fair value. Note: The risk profile is based on JPMorgan Chase's internal risk ratings, which generally correspond to the following ratings as defined by Standard & Poor's / Moody's: Investment-Grade: AAA / Aaa to BBB- / Baa3 Noninvestment-Grade: BB+ / Ba1 and below Page 26
  28. 28. JPMORGAN CHASE & CO. CREDIT-RELATED INFORMATION, CONTINUED (in millions, except ratio data) Mar 31 2008 NONPERFORMING ASSETS AND RATIOS WHOLESALE LOANS (a) Loans - U.S. Loans - Non-U.S. TOTAL WHOLESALE LOANS-REPORTED $ Dec 31 2007 761 20 781 $ Sep 30 2007 490 24 514 $ Jun 30 2007 401 26 427 $ Mar 31, 2008 Change Dec 31 Mar 31 2007 2007 Mar 31 2007 190 38 228 $ 205 62 267 55 % (17) 52 271 % (68) 193 CONSUMER LOANS (b) Home equity Mortgage (includes RFS and Corporate) Auto loans and leases Credit card - reported Other loans TOTAL CONSUMER LOANS-REPORTED (c) 948 2,537 94 6 335 3,920 810 1,798 116 7 341 3,072 576 1,224 92 7 336 2,235 483 1,034 81 8 335 1,941 459 960 95 9 326 1,849 17 41 (19) (14) (2) 28 107 164 (1) (33) 3 112 TOTAL LOANS REPORTED Derivative receivables Assets acquired in loan satisfactions TOTAL NONPERFORMING ASSETS 4,701 31 711 5,443 3,586 29 622 4,237 2,662 34 485 3,181 2,169 30 387 2,586 2,116 36 269 2,421 31 7 14 28 122 (14) 164 125 (3) 18 (14) 206 (8) 69 28 243 93 (33) 219 (69) 326 125 $ TOTAL NONPERFORMING LOANS TO TOTAL LOANS NONPERFORMING ASSETS BY LOB Investment Bank Retail Financial Services Card Services Commercial Banking Treasury & Securities Services Asset Management Corporate (d) TOTAL 0.88 $ $ 439 3,695 6 453 11 839 5,443 $ % 0.69 $ $ 453 3,121 7 148 12 496 4,237 $ % 0.55 $ $ 325 2,387 7 136 28 298 3,181 $ % 0.47 $ $ 119 2,097 8 137 21 204 2,586 $ % 0.47 $ $ 128 1,910 9 142 35 197 2,421 % (a) Included nonperforming loans held-for-sale & loans at fair value of $70 million , $50 million , $75 million, $25 million and $4 million at March 31, 2008, December 31, 2007, September 30, 2007, June 30, 2007 and March 31, 2007, respectively. Excluded purchased held-for-sale wholesale loans. (b) There were no nonperforming loans held-for-sale at March 31, 2008, December 31, 2007 and September 30, 2007, while there were $215 million and $112 million at June 30, 2007 and March 31, 2007, respectively. (c) Nonperforming loans and assets excluded (1) loans eligible for repurchase as well as loans repurchased from GNMA pools that are insured by U.S. government agencies of $1.8 billion, $1.5 billion, $1.3 billion, $1.2 billion and $1.3 billion at March 31, 2008, December 31, 2007, September 30, 2007, June 30, 2007, and March 31, 2007, respectively, and (2) education loans that are 90 days past due and still accruing, which are insured by U.S. government agencies under the Federal Family Education Loan Program of $252 million, $279 million, $241 million, $200 million and $178 million at March 31, 2008, December 31, 2007, September 30, 2007, June 30, 2007 and March 31, 2007, respectively. These amounts for GNMA and education loans are excluded, as reimbursement is proceeding normally. (d) Primarily relates to held-for-investment prime mortgage loans transferred from RFS and AM to the Corporate segment. Page 27
  29. 29. JPMORGAN CHASE & CO. CREDIT-RELATED INFORMATION, CONTINUED (in millions, except ratio data) QUARTERLY TRENDS 1Q08 4Q07 3Q07 2Q07 1Q07 1Q08 Change 4Q07 1Q07 GROSS CHARGE-OFFS Wholesale loans Consumer (includes RFS and Corporate) Credit card - reported Total loans - reported Credit card - securitized Total loans - managed $ 130 880 1,144 2,154 791 2,945 $ 54 582 1,000 1,636 716 2,352 $ 101 403 911 1,415 679 2,094 $ 13 321 877 1,211 704 1,915 $ 17 241 847 1,105 702 1,807 141 51 14 32 10 25 42 48 136 226 114 340 23 53 126 202 109 311 31 17 18 20 13 18 65 4 23 23 1 15 (29) 273 741 985 590 1,575 (6) 188 721 903 593 1,496 268 54 14 33 10 26 NM 339 37 111 15 73 % NM % 265 35 95 13 63 RECOVERIES Wholesale loans Consumer (includes RFS and Corporate) Credit card - reported Total loans - reported Credit card - securitized Total loans - managed 38 55 155 248 110 358 29 47 131 207 97 304 19 49 126 194 101 295 92 825 989 1,906 681 2,587 25 535 869 1,429 619 2,048 82 354 785 1,221 578 1,799 NET CHARGE-OFFS Wholesale loans Consumer (includes RFS and Corporate) Credit card - reported Total loans - reported Credit card - securitized Total loans - managed $ NET CHARGE-OFF RATES - ANNUALIZED Wholesale loans (a) Consumer (includes RFS and Corporate) (b) Credit card - reported Total loans - reported (a) (b) Credit card - securitized Total loans - managed (a) (b) 0.18 1.50 5.01 1.53 3.70 1.81 Memo: Credit card - managed 4.37 $ % 0.05 1.01 4.36 1.19 3.38 1.48 3.89 $ % 0.19 0.70 3.89 1.07 3.34 1.37 3.64 $ % (0.07) % 0.57 3.76 0.90 3.46 1.25 3.62 $ (0.02) % 0.47 3.57 0.85 3.56 1.22 3.57 (a) Average wholesale loans held-for-sale & loans at fair value were $20.1 billion, $26.8 billion, $17.8 billion, $15.5 billion and $14.2 billion for the quarters ended March 31, 2008, December 31, 2007, September 30, 2007, June 30, 2007 and March 31, 2007, respectively. These amounts were excluded when calculating the net charge-off rates. (b) Average consumer (excluding card) loans held-for-sale & loans at fair value were $4.4 billion, $4.0 billion, $5.4 billion, $11.7 billion and $21.7 billion for the quarters ended March 31, 2008, December 31, 2007, September 30, 2007, June 30, 2007 and March 31, 2007, respectively. These amounts were excluded when calculating the net charge-off rates. Page 28
  30. 30. JPMORGAN CHASE & CO. CREDIT-RELATED INFORMATION, CONTINUED (in millions, except ratio data) QUARTERLY TRENDS 1Q08 SUMMARY OF CHANGES IN THE ALLOWANCE FOR LOAN LOSSES Beginning balance Net charge-offs Provision for loan losses Other (a) Ending balance SUMMARY OF CHANGES IN THE ALLOWANCE FOR LENDING-RELATED COMMITMENTS Beginning balance Provision for lending-related commitments Ending balance ALLOWANCE COMPONENTS AND RATIOS ALLOWANCE FOR LOAN LOSSES Wholesale Asset specific Formula - based Total wholesale Consumer Asset specific Formula - based Total consumer Total allowance for loan losses Allowance for lending-related commitments Total allowance for credit losses $ $ $ 9,234 (1,906) 4,419 (1) 11,746 $ $ 3Q07 8,113 (1,429) 2,550 9,234 $ 858 (8) 850 $ 850 5 855 $ $ 146 3,691 3,837 $ $ 75 7,834 7,909 $ $ 108 3,046 3,154 80 6,000 6,080 $ $ Wholesale allowance for loan losses to total wholesale loans (b) Consumer allowance for loan losses to total consumer loans (c) Allowance for loan losses to total loans (b) (c) Allowance for loan losses to total nonperforming loans (d) ALLOWANCE FOR LOAN LOSSES BY LOB Investment Bank Retail Financial Services Card Services Commercial Banking Treasury & Securities Services Asset Management Corporate Total 4Q07 11,746 855 12,601 1.82 2.63 2.29 254 $ $ $ 1,891 4,208 3,404 1,790 26 130 297 11,746 $ % $ $ 1,329 2,634 3,407 1,695 18 112 39 9,234 7,633 (1,221) 1,693 8 8,113 $ $ 7,300 (985) 1,316 2 7,633 $ 553 213 766 $ $ $ $ 53 2,810 2,863 $ 52 2,650 2,702 $ $ 70 5,180 5,250 $ 81 4,850 4,931 $ $ % 8,113 858 8,971 1.62 1.84 1.76 314 $ $ $ 1,112 2,105 3,107 1,623 13 115 38 8,113 $ % $ $ $ 7,633 766 8,399 1.59 1.79 1.71 396 1,037 1,772 3,096 1,551 9 105 63 7,633 1Q08 Change 4Q07 1Q07 1Q07 766 92 858 $ 9,234 850 10,084 1.67 2.01 1.88 261 2Q07 $ % 7,279 (903) 979 (55) 7,300 524 29 553 $ 27 % (111) 351 98 61 (1) NM 1 62 (83) 55 54 2,639 2,693 35 21 22 170 40 42 70 4,537 4,607 (6) 31 30 7 73 72 7,300 553 7,853 27 1 25 61 55 60 42 60 6 44 16 NM 27 82 190 10 17 136 14 379 61 1.76 1.72 1.74 365 $ 14 % (33) 73 NM 27 1,037 1,453 3,092 1,531 11 114 62 7,300 % (a) First quarter of 2007 primarily relates to the Firm's adoption of SFAS 159, effective January 1, 2007. (b) Wholesale loans held-for-sale & loans at fair value were $20.3 billion, $23.6 billion, $20.6 billion, $11.6 billion and $15.6 billion at March 31, 2008, December 31, 2007, September 30, 2007, June 30, 2007 and March 31, 2007, respectively. These amounts were excluded when calculating the allowance coverage ratios. (c) Consumer loans held-for-sale were $4.5 billion, $4.0 billion, $3.9 billion, $8.3 billion and $13.4 billion at March 31, 2008, December 31, 2007, September 30, 2007, June 30, 2007 and March 31, 2007, respectively. These amounts were excluded when calculating the allowance coverage ratios. (d) Nonperforming loans held-for-sale & loans at fair value were $70 million, $50 million, $75 million, $240 million and $116 million at March 31, 2008, December 31, 2007, September 30, 2007, June 30, 2007 and March 31, 2007, respectively. These amounts were excluded when calculating the allowance coverage ratios. Page 29
  31. 31. JPMORGAN CHASE & CO. CREDIT-RELATED INFORMATION, CONTINUED (in millions) QUARTERLY TRENDS 1Q08 PROVISION FOR CREDIT LOSSES LOANS Investment Bank Commercial Banking Treasury & Securities Services Asset Management Total wholesale Retail Financial Services Card Services - reported Corporate (a) Total consumer Total provision for loan losses LENDING-RELATED COMMITMENTS Investment Bank Commercial Banking Treasury & Securities Services Asset Management Total wholesale Retail Financial Services Card Services - reported Total consumer Total provision for lending-related commitments TOTAL PROVISION FOR CREDIT LOSSES Investment Bank Commercial Banking Treasury & Securities Services Asset Management Total wholesale Retail Financial Services Card Services - reported Corporate (a) Total consumer Total provision for credit losses Card Services - securitized Managed provision for credit losses $ $ $ $ $ $ 571 143 11 17 742 2,492 989 196 3,677 4,419 47 (42) 1 (1) 5 5 618 101 12 16 747 2,492 989 196 3,677 4,424 681 5,105 4Q07 $ $ 3Q07 208 105 5 (2) 316 1,051 1,169 14 2,234 2,550 $ (8) $ $ $ (1) 1 (8) $ (8) $ $ 200 105 4 (1) 308 1,051 1,169 14 2,234 2,542 619 3,161 $ $ $ 146 98 3 4 251 688 785 (31) 1,442 1,693 2Q07 $ $ 81 14 6 (1) 100 (8) (8) 92 $ 227 112 9 3 351 680 785 (31) 1,434 1,785 578 2,363 $ $ $ (13) 10 (1) (13) (17) 589 741 3 1,333 1,316 1Q07 $ $ 177 35 1 2 215 (2) (2) 213 $ 164 45 (11) 198 587 741 3 1,331 1,529 590 2,119 $ $ $ 35 17 4 (8) 48 292 636 3 931 979 1Q08 Change 4Q07 1Q07 175 % 36 120 NM 135 137 (15) NM 65 73 NM % NM 175 NM NM NM 56 NM 295 351 28 2 (1) 29 29 NM NM NM NM NM NM 68 NM (50) (83) (83) 63 17 6 (9) 77 292 636 3 931 1,008 593 1,601 209 (4) 200 NM 143 137 (15) NM 65 74 10 61 NM 494 100 NM NM NM 56 NM 295 339 15 219 (a) Includes amounts related to held-for-investment prime mortgages transferred from RFS and AM to the Corporate segment during 2007. Page 30
  32. 32. JPMORGAN CHASE & CO. CAPITAL, INTANGIBLE ASSETS AND DEPOSITS (in millions, except per share and ratio data) QUARTERLY TRENDS 1Q08 COMMON SHARES OUTSTANDING Weighted-average basic shares outstanding Weighted-average diluted shares outstanding Common shares outstanding - at period end 4Q07 3,396.0 3,494.7 3,400.8 Cash dividends declared per share Book value per share Dividend payout (a) $ 0.38 36.94 56 NET INCOME $ 3,367.1 3,471.8 3,367.4 2,373 NET INCOME PER SHARE Basic Diluted SHARE PRICE High Low Close Market capitalization STOCK REPURCHASE PROGRAM (b) Aggregate repurchases Common shares repurchased Average purchase price CAPITAL RATIOS Tier 1 capital Total capital Risk-weighted assets Adjusted average assets Tier 1 capital ratio Total capital ratio Tier 1 leverage ratio INTANGIBLE ASSETS (PERIOD-END) Goodwill Mortgage servicing rights Purchased credit card relationships All other intangibles Total intangibles DEPOSITS U.S. offices: Noninterest-bearing Interest-bearing Non-U.S. offices: Noninterest-bearing Interest-bearing Total deposits $ 0.38 36.59 44 $ $ $ $ $ $ 45,695 8,419 2,140 3,815 60,069 $ 132,072 394,613 7,232 227,709 $ 761,626 0.38 35.72 39 $ 3,415.1 3,521.6 3,398.5 3,373 % 1Q07 $ 0.38 35.08 31 $ 3,456.4 3,559.5 3,416.3 4,234 % 1.00 0.97 1Q08 Change 4Q07 1Q07 1 1 1 (2) % (2) - $ 0.34 34.45 25 % $ 4,787 (20) (50) 1.38 1.34 (20) (21) (49) (49) % 1.24 1.20 1 % 12 7 $ 48.02 40.15 43.65 146,986 $ 50.48 42.16 45.82 153,901 $ 53.25 47.70 48.45 164,659 $ 51.95 45.91 48.38 165,280 3 (10) (2) (1) (5) (22) (11) (12) $ 89,612 134,948 1,075,922 1,505,688 8.3 12.5 6.0 $ 0.88 0.86 49.29 36.01 42.95 146,066 2Q07 3,375.9 3,477.7 3,358.8 2,971 % 0.70 0.68 $ 3Q07 163.3 3.6 45.29 $ 2,135.4 47.0 45.42 $ 1,875.3 36.7 51.13 $ 4,000.9 80.9 49.45 NM NM NM NM NM NM (c) $ 88,746 (c) 132,242 (c) 1,051,879 (c) 1,473,541 (c) 8.4 (c) 12.6 (c) 6.0 $ 86,096 128,543 1,028,551 1,423,171 8.4 12.5 6.0 $ 85,096 122,276 1,016,031 1,376,727 8.4 % 12.0 6.2 $ 82,538 115,142 972,813 1,324,145 8.5 % 11.8 6.2 1 2 2 2 9 17 11 14 $ 45,254 9,499 2,591 4,103 61,447 $ 45,063 7,937 2,758 4,205 59,963 1 (2) (7) 1 - 1 6 (22) (9) - 123,942 342,368 2 5 7 15 8,104 152,014 626,428 14 3 (11) 50 22 $ % $ $ $ $ 45,270 8,632 2,303 3,796 60,001 129,406 376,194 6,342 228,786 740,728 $ % $ $ $ $ 45,335 9,114 2,427 3,959 60,835 115,036 354,459 6,559 202,037 678,091 $ % $ $ $ 120,470 342,079 5,919 182,902 651,370 $ $ $ $ (a) Based on net income amounts. (b) Excludes commission costs. (c) Estimated. Page 31
  33. 33. JPMORGAN CHASE & CO. Glossary of Terms ACH: Automated Clearing House Average Managed Assets: Refers to total assets on the Firm's Consolidated balance sheets plus credit card receivables that have been securitized. Beneficial interest issued by consolidated VIEs: Represents the interest of third-party holders of debt/equity securities, or other obligations, issued by VIEs that JPMorgan Chase consolidates under FIN 46R. The underlying obligations of the VIEs consist of short-term borrowings, commercial paper and long-term debt. The related assets consist of trading assets, availablefor-sale securities, loans and other assets. Contractual Credit Card Charge-off: In accordance with the Federal Financial Institutions Examination Council policy, credit card loans are charged off by the end of the month in which the account becomes 180 days past due or within 60 days from receiving notification of the filing of bankruptcy, whichever is earlier. Corporate: Includes Private Equity, Treasury and Corporate Other, which includes other centrally managed expenses and discontinued operations. Credit card securitizations: Card Services' managed results excludes the impact of credit card securitizations on total net revenue, the provision for credit losses, net charge-offs and loan receivables. Through securitization, the Firm transforms a portion of its credit card receivables into securities, which are sold to investors. The credit card receivables are removed from the Consolidated balance sheets through the transfer of the receivables to a trust, and the sale of undivided interests to investors that entitle the investors to specific cash flows generated from the credit card receivables. The Firm retains the remaining undivided interests as seller’s interests, which are recorded in loans on the Consolidated balance sheets. A gain or loss on the sale of credit card receivables to investors is recorded in other income. Securitization also affects the Firm’s Consolidated statements of income as the aggregate amount of interest income, certain fee revenue and recoveries that is in excess of the aggregate amount of interest paid to the investors, gross credit losses and other trust expenses related to the securitized receivables are reclassified into credit card income in the Consolidated statements of income. Mark-to-market exposure: A measure, at a point in time, of the value of a derivative or foreign exchange contract in the open market. When the mark-to-market value is positive, it indicates the counterparty owes JPMorgan Chase and, therefore, creates a repayment risk for the Firm. When the mark-to-market value is negative, JPMorgan Chase owes the counterparty. In this situation, the Firm does not have repayment risk. MSR Risk Management Revenue: Includes changes in MSR asset fair value due to inputs or assumptions in model and derivative valuation adjustments and other. Net yield on interest-earning assets: The average rate for interest-earning assets less the average rate paid for all sources of funds. NM: Not meaningful. Overhead Ratio: Noninterest expense as a percentage of total net revenue. Principal Transactions (Revenue): Realized and unrealized gains and losses from trading activities (including physical commodities inventories that are accounted for at the lower of cost or fair value) and changes in fair value associated with financial instruments held by the Investment Bank for which the SFAS 159 fair value option was elected. Principal transactions revenue also include private equity gains and losses. Reported Basis: Financial statements prepared under accounting principles generally accepted in the United States of America ("U.S. GAAP"). The reported basis includes the impact of credit card securitizations, but excludes the impact of taxable equivalent adjustments. SFAS: Statement of Financial Accounting Standards. SFAS 140: "Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities - a replacement of FASB Statement No. 125." SFAS 157: “Fair Value Measurements." FIN 46(R): FASB Interpretation No. 46 (revised December 2003), “Consolidation of Variable Interest Entities, an interpretation of Accounting Research Bulletin No. 51.” SFAS 159: “The Fair Value Option for Financial Assets and Financial Liabilities – Including an amendment of FASB Statement No. 115.” Investment-grade: An indication of credit quality based upon JPMorgan Chase’s internal risk assessment system. “Investment-grade” generally represents a risk profile similar to a rating of a "BBB-"/"Baa3" or better, as defined by independent rating agencies. Taxable-Equivalent Basis: Total net revenue for each of the business segments and the Firm is presented on a tax-equivalent basis. Accordingly, revenue from tax-exempt securities and investments that receive tax credits is presented in the managed results on a basis comparable to fully taxable securities and investments. This non-GAAP financial measure allows management to assess the comparability of revenues arising from both taxable and tax-exempt sources. The corresponding income tax impact related to these items is recorded within income tax expense. Managed Basis: A non-GAAP presentation of financial results that includes reclassifications related to credit card securitizations and to present revenue on a fully taxable-equivalent basis. Management uses this non-GAAP financial measure at the segment level because it believes this provides information to enable investors to understand the underlying operational performance and trends of the particular business segment and facilitates a comparison of the business segment with the performance of competitors. Unaudited: Financial statements and information that have not been subjected to auditing procedures sufficient to permit an independent certified public accountant to express an opinion. U.S. GAAP: Accounting principles generally accepted in the United States of America. Managed Credit Card Receivables: Refers to credit card receivables on the Firm's Consolidated balance sheets plus credit card receivables that have been securitized. Value-at-Risk ("VAR"): A measure of the dollar amount of potential loss from adverse market moves in an ordinary market environment. Page 32
  34. 34. JPMORGAN CHASE & CO. Line of Business Metrics Investment Banking Retail Financial Services (continued) IB'S REVENUES COMPRISE THE FOLLOWING: MORTGAGE BANKING'S ORIGINATION CHANNELS COMPRISE THE FOLLOWING: 1. Investment banking fees includes advisory, equity underwriting, bond underwriting and loan syndication fees. 1. Retail – Borrowers who are buying or refinancing a home through direct contact with a mortgage banker employed by the Firm using a branch office, the Internet or by phone. Borrowers are frequently referred to a mortgage banker by real estate brokers, home builders or other third parties. 2. Fixed income markets includes client and portfolio management revenue related to both market-making and proprietary risk-taking across global fixed income markets, including foreign exchange, interest rate, credit and commodities markets. 3. Equities markets includes client and portfolio management revenue related to market-making and proprietary risk-taking across global equity products, including cash instruments, derivatives and convertibles. 4. Credit portfolio revenue includes Net interest income, fees and loan sale activity, as well as gains or losses on securities received as part of a loan restructuring, for the IB’s credit portfolio. Credit portfolio revenue also includes the results of risk management related to the Firm's lending and derivative activities, and changes in the credit valuation adjustment, which is the component of the fair value of a derivative that reflects the credit quality of the counterparty. 2. Wholesale – A third-party mortgage broker refers loan applications to a mortgage banker at the Firm. Brokers are independent loan originators that specialize in finding and counseling borrowers but do not provide funding for loans. 3. Correspondent – Correspondents are banks, thrifts, other mortgage banks and other financial institutions that sell closed loans to the Firm. 4. Correspondent negotiated transactions ("CNT") – These transactions occur when mid- to large-sized mortgage lenders, banks and bank-owned mortgage companies sell servicing to the Firm on an as-originated basis, and exclude purchased bulk servicing transactions. These transactions supplement traditional production channels and provide growth opportunities in the servicing portfolio in stable and rising-rate periods. Retail Financial Services Card Services DESCRIPTION OF SELECTED BUSINESS METRICS WITHIN REGIONAL BANKING: DESCRIPTION OF SELECTED BUSINESS METRICS WITHIN CARD SERVICES: 1. Personal bankers - Retail branch office personnel who acquire, retain and expand new and existing customer relationships by assessing customer needs and recommending and selling appropriate banking products and services. 1. Charge volume - Represents the dollar amount of cardmember purchases, balance transfers and cash advance activity. 2. Net accounts opened - Includes originations, purchases and sales. 2. Sales specialists - Retail branch office personnel who specialize in the marketing of a single product, including mortgages, investments, and business banking, by partnering with the personal bankers. 3. Merchant acquiring business - Represents an entity that processes bank card transactions for merchants. JPMorgan Chase is a partner in Chase Paymentech Solutions, LLC, a merchant acquiring business. MORTGAGE BANKING REVENUES COMPRISE THE FOLLOWING: 4. Bank card volume – Represents the dollar amount of transactions processed for merchants. 1. Production revenue includes net gains or losses on originations and sales of prime and subprime mortgage loans and other production-related fees. 5. Total transactions - Represents the number of transactions and authorizations processed for merchants. 2. Net mortgage servicing revenue a) Servicing revenue represents all gross income earned from servicing third-party mortgage loans including stated service fees, excess service fees, late fees and other ancillary fees. b) Changes in MSR asset fair value due to: -- market-based inputs such as interest rates and volatility, as well as updates to assumptions used in the MSR valuation model. -- modeled servicing portfolio runoff (or time decay) c) Derivative valuation adjustments and other, which represents changes in the fair value of derivative instruments used to offset the impact of changes in the market-based inputs to the MSR valuation model. 3. MSR risk management results include changes in the MSR asset fair value due to inputs or assumptions and derivative valuation adjustments and other. Page 33

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