8-KOther Events

JPMORGAN CHASE & CO 8-K Report (Jan 24, 2003)

Filed January 24, 2003For Securities:JPMJPM-PCJPM-PDJPM-PKJPM-PLJPM-PMJPM-PJAMJBVYLD

Summary

JPMorgan Chase & Co. (JPM) reported a net loss of $387 million, or ($0.20) per share, for the fourth quarter of 2002. This contrasts with a modest net income of $40 million in the third quarter of 2002 and a net loss of $332 million in the prior year's fourth quarter. The reported loss was significantly impacted by substantial charges related to the settlement of Enron surety litigation and the establishment of a litigation reserve for other material proceedings. Excluding these one-time charges totaling $1.30 billion ($0.43 per share) and merger and relocation costs of $393 million ($0.13 per share), the company's adjusted earnings for the fourth quarter would have been $0.36 per share, aligning with previously issued guidance. For the full fiscal year 2002, net income was $1.66 billion ($0.80 per share), a slight decrease from $1.69 billion ($0.80 per share) in 2001. Investors should note the significant impact of litigation and restructuring costs on the quarterly results, while also considering the underlying operational performance when adjusted for these items.

Key Highlights

  • 1Reported a net loss of $387 million ($0.20 per share) for Q4 2002.
  • 2Q4 2002 results were heavily impacted by $1.30 billion in charges for Enron surety litigation settlement and litigation reserves.
  • 3Additional charges of $393 million for merger and relocation costs also affected Q4 2002 earnings.
  • 4Adjusted for these charges, Q4 2002 earnings would have been $0.36 per share, meeting prior guidance.
  • 5Full-year 2002 net income was $1.66 billion ($0.80 per share), slightly down from $1.69 billion ($0.80 per share) in 2001.
  • 6The filing includes exhibits such as the Q4 2002 earnings press release, supplemental financial schedules, and investor presentation slides.

Frequently Asked Questions

The net loss of $387 million in Q4 2002 was primarily due to significant charges related to the settlement of Enron surety litigation and the establishment of a reserve for other material litigation, proceedings, and investigations. Merger and relocation costs also contributed to the loss.

Excluding the combined charges of $1.30 billion for litigation and $393 million for merger and relocation costs, JPMorgan Chase's earnings for the fourth quarter of 2002 would have been $0.36 per share, which was in line with their previously provided guidance.

For the full year 2002, JPMorgan Chase reported a net income of $1.66 billion ($0.80 per share), which was a slight decrease compared to the $1.69 billion ($0.80 per share) net income reported for the full year 2001.

More detailed information can be found in the attached exhibits, specifically the 2002 Fourth Quarter Earnings Press Release (Exhibit 99.1), supplemental financial schedules (Exhibit 99.2), and the investor presentation slides (Exhibit 99.3).